Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon, but the recent surge in Cattle futures and wholesale beef values bolstered hope for higher prices.
Cattle futures extended gains on Tuesday, supported by the previous session’s optimism and the brighter outlook for cash prices.
Live Cattle futures closed an average of 50¢ higher (10¢ to $1.17 higher) except for 55¢ lower in the back contract.
Feeder Cattle futures closed an average of 50¢ higher except for 2¢ lower in May.
Choice boxed beef cutout value was $2.70 higher Tuesday afternoon at $244.30/cwt. Select was $2.23 higher at $219.71.
Corn futures closed narrowly mixed, mostly from 1¢ lower to 1¢ higher.
Soybean futures closed mostly fractionally higher to 1¢ higher.
Major U.S. financial indices closed higher again Tuesday with follow-through support from the previous session, tied to positive news about COVID-19 vaccines and the outlook toward a bounce in economic recovery in 2021.
The Dow Jones Industrial Average closed 454 points higher. The S&P 500 closed 57 points higher. The NASDAQ was up 156 points.
U.S. beef exports for 2021 are projected to be $7.1 billion, according to the latest quarterly Outlook for U.S. Agricultural Trade, from USDA’s Economic Research Service (ERS). The projection is $200 million more than the previous report in August, based on increased volume offsetting a decline in unit values.
Overall, ERS projects U.S. agricultural exports in Fiscal Year (FY) 2021 at $152.0 billion, up $11.5 billion from the August forecast, fueled by increased soybean and corn export values.
“The projection for soybean exports is up $5.9 billion to a record $26.3 billion due to higher unit values, strong demand from China, and record volumes,” according to the report. “Corn exports are forecast up $4.2 billion to $13.2 billion as a result of reduced competition, higher unit values and record volumes…Wheat exports are projected at $6.2 billion, up $200 million, on higher unit values and slightly larger volumes.”
The forecast suggests China will become the largest market for U.S. agricultural products next year for the first time since 2017. Exports to that nation are projected at a record high $27.0 billion.
All of that is shrouded by the global economic contraction and ongoing uncertainty borne by the pandemic.
“Expectations of real gross domestic product (GDP) numbers have improved from the initial lockdown contractions, but recovery forecasts are still marked by uncertainty and prone to future setbacks,” say ERS analysts. “Overall, global real GDP growth is expected to fall by about 4.4% in 2020. This is slightly less severe than was previously feared back in June. Global trade volume, which declined 9.2% in FY 2020, is expected to increase 7.2% in FY 2021. The expected economic recovery in 2021 will be shaped by both regional and overall global success in containing the COVID-19 pandemic, in addition to boosting consumer spending.”