Cattle futures on Thursday paused from the week’s rally, but stronger cash prices and indicators of feedlot marketing currentness suggest there’s room to roam higher.
For instance, the dressed steer weight the week ending Oct. 23 was 918 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 4 lbs. lighter than the previous week and 13 lbs. lighter year over year. The average dressed heifer weight of 842 lbs. was 2 lbs. heavier week to week but 5 lbs. lighter year over year.
Live Cattle futures closed an average of 43¢ lower (12¢ lower toward the back to $1.02 lower in spot Dec).
Feeder Cattle futures closed an average of 87¢ lower (47¢ lower at the back to $1.15 lower in spot Nov).
That was despite another day of lower Corn futures which were down mostly 2¢ to 4¢. Weakness came in the face of increased net U.S. corn export sales the week ending Oct. 28, according to USDA’s weekly U.S. Export Sales report. Net U.S. export sales of 1.22 million metric tons for 2021-22 were 37% more than the previous week and 10% more than the prior 4-week average.
U.S. net soybean exports of 1.86 million metric tons were 58% more than the previous week and 19% more than the prior four-week average, but Soybean futures closed 19¢ to 22¢ lower through Sep ‘22 and then mostly 14¢ to 17¢ lower, pressured by oil prices and chatter about a potential record crop in Brazil.
Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Thursday afternoon. So far this week, the only established sales are $2 higher in the Southern Plains at $128/cwt., according to the Agricultural Marketing Service
Last week, live prices were at $124-$126/cwt. in the Texas Panhandle, at $126 in Kansas, $127 in Nebraska and at $126-$127 in the western Corn Belt. Dressed trade was at $200.
Choice boxed beef cutout values were $1.73 higher Thursday afternoon at $290.22/cwt. Select was 50¢ higher at $268.22/cwt.
Net U.S. beef export sales for the week ending Oct. 28 of 16,700 metric tons were 13% less than the prior week but 15% more than the previous four-week average. Increases were primarily for South Korea, China, Japan, Taiwan, and Canada.
Major U.S. financial indices were mixed Thursday, as investors await the monthly employment report due out Friday.
Positive news included initial weekly unemployment insurance claims of 269,000 for the week ending Oct. 30, according to the U.S. Department of Labor. That was the fewest since March 14 last year and fewer than expected.
The Dow Jones Industrial Average closed 33 points lower. The S&P 500 closed 19 points higher. The NASDAQ was up 128 points.
CME WTI Crude Oil futures closed 94¢ to $2.05 lower in the front six contracts, with follow-through pressure from the previous session.
Beef and pork demand indexes reflected strength in the second quarter but weakened during the summer months as rising wholesale beef prices started to dampen retail enthusiasm, according to the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.
“The third-quarter all-fresh beef demand index fell from 124 last year to 121 this year, but 2021 was the second highest level behind 2020,” according to LMIC analysts. “The pork demand index for the third quarter posted a significant reduction falling from 124 last year (a record) to 100…Record retail price levels will likely be a headwind to demand in the near term, but meat demand indexes are still showing relatively strong levels.”
As mentioned previously in Cattle Current, retail prices in September were record high for beef, pork and broilers. According to LMIC, the all-fresh beef retail price was 17.8% more year over year in September at $7.40/lb. Retail pork prices were 16.4% higher at $4.72/lb. and the broiler composite price was 8.0% higher at $2.16/lb.
The September Consumer Price Index (CPI) was 5.4% more year over year.
“The meat index reported a jump of 12.6% over last year, while the poultry index increased 6.1% from a year ago,” say LMIC analysts. “The September CPI and retail price data also provide the information needed to calculate third-quarter demand indexes. Livestock Marketing Information Center demand indexes use a base year of 2000. Demand indexes, although not exact, do give an indication as to relative changes. Given the record levels for beef, pork, and broiler prices, the third-quarter demand indexes showed a slight pull back from the second quarter and a year ago.”