Cattle Current Daily—Nov. 9, 2020

Cattle Current Daily—Nov. 9, 2020

Negotiated cash fed cattle trade started the week at lower money Tuesday. Live prices were $2-$4 lower in the Texas Panhandle at $108/cwt. and $2 lower in Nebraska at $108, according to the Agricultural Marketing Service. That was on slow trade and light demand. There were a few dressed sales in the western Corn Belt at $168, but too few to trend. Last week, dressed trade was at $172.

The five-area direct November weighted average fed steer price was $108.85/cwt. on  a live basis, which was $2.20 more than the previous month, but $6.50 less than the previous year. The weighted average steer price in the beef was $170.34, which was $2.87 more than the prior month but $12.20 less than the prior year.

Cattle futures closed narrowly mixed on Tuesday, finding some stability following the strong retreat in the previous session, perhaps helped along by softer grain futures.

Live Cattle futures closed an average of 14¢ lower except for unchanged to 17¢ higher in three contracts.

Feeder Cattle futures closed an average of 45¢ higher except for 22¢ lower in spot Jan.

Choice boxed beef cutout value was $5.78 lower Tuesday afternoon at $225.02/cwt. Select was $4.06 lower at $205.42.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed mostly 6¢ to 12¢ lower through Sep ’21 and then mostly unchanged to 2¢ lower.

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Major U.S. financial indices closed higher Tuesday, apparently buoyed in part by the rollout of COVID-19 vaccinations in the United Kingdom and optimism regarding a federal stimulus package.

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 62 points.

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“Beef production is forecast to decrease in 2021 with cyclically smaller cattle numbers and carcass weights retreating from record 2020 levels,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Beef trade is expected to improve with smaller beef imports and increased beef exports in the coming year. These will combine with decreased production to reduce per capita beef consumption in 2021.”

For this year, David Anderson, Extension livestock economist at Texas A&M University explains total beef production is on par with the same time last year.

“Steer and heifer slaughter is a little over 3% behind 2019 at this point. Total cow slaughter is 1.5% below 2019, but the source of the cows is interesting. Beef cow slaughter is up 2.5% while dairy cow slaughter is down 5.5% from a year ago,” Anderson explains, in the latest issue of In the Cattle Markets. “Low calf prices and drought conditions are acting to increase cow slaughter while higher milk prices have reduced dairy cow culling.”

Anderson adds that heavier fed steer and heifer carcasses continue to support beef production despite less slaughter.

“Steer dressed weights have averaged 906 lbs. this year compared to 876 lbs. last year. Heifer weights have averaged 833 lbs. this year, up 22 lbs. from 2019. Cow and bull dressed weights are within a pound of last year’s average,” Anderson says.

Although beef production is projected lower next year, Peel says total red meat and poultry production is projected to increase to another new record level of 107.2 billion lbs. with increased pork and poultry production offsetting decreased beef production. 

“However, with strong meat exports offsetting increased production, domestic total meat consumption is projected to decrease to 222.1 lbs. per capita, down from 225.3 lbs. in 2020,” Peel says. “Many factors may cause revisions to these forecasts including the speed and effectiveness of controlling the ongoing pandemic; macroeconomic uncertainties in the U.S. and global economies; changing feed market conditions; currency exchange rates; and evolving trade policy, among others. Conditions remain very dynamic and uncertain at the end of 2020 but there is potential for more stability in the second half of 2021.”

2020-12-08T19:57:37-06:00

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