When all was said and done last week, negotiated cash fed cattle trade was mainly higher in the North and steady to lower in the South. Live sales were steady in Nebraska at $109-$111/cwt., steady to $3 higher in the western Corn Belt at $110-$111 and steady to $1 lower in the Southern Plains at $108. Dressed trade was mainly $1-$3 higher at $173-$175.
Cattle futures were narrowly mixed on Monday, with steady to strong cash fed cattle prices supporting Live Cattle and extremely light trade allowing Feeder Cattle to drift.
Live Cattle futures closed an average of 19¢ higher.
Feeder Cattle futures closed unchanged to 35¢ lower, except for an average of 40¢ higher in the back three contracts.
Wholesale beef values were sharply higher on Choice and higher on Select, with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $2.09 higher Monday afternoon at $220.13/cwt. Select was $1.40 higher at $194.44.
Corn futures closed 1¢ to 3¢ lower through away Dec and then mostly fractionally lower.
Soybean futures closed fractionally lower in the front months and then mostly 1¢ to 2¢ higher.
Major U.S. financial indices edged higher Monday, with support from positive quarterly earnings reports and deal-friendly chatter from China.
The Dow Jones Industrial Average closed 57 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 73 points.
“Global production of beef, pork and poultry is projected to decline by 1.5% year over year in 2019 and decrease another 2.4% in 2020 as a result of decreased pork production due to African Swine Fever (ASF),” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “At the same time, global meat exports are expected to increase 6.9% in 2019 compared to 2018, and to grow another 6.1% in 2020. As a result, global meat exports are projected to expand from 11.2% of total production to 13.2% in just two years.”
Until ASF, China produced about half of the world’s pork supply.
“Pork production in China is projected to decrease 14.0% in 2019 from 2018 levels with another 25.3% drop year over year in 2020. That implies a 35.7% decrease in Chinese pork production in two years,” Peel says. “This contributes to a 15.7% decrease in global pork production from 2018 to 2020. The losses in China may well exceed these estimates.”
Spun another way, Peel explains pork consumption last year accounted for 74% of total Chinese beef, pork and poultry consumption. Total Chinese consumption of pork, poultry and beef is projected to decrease by 14.9% from 2018 to 2020; with pork dropping to a 59.8% share of total meat consumption.
“Pork imports (to China) are projected to increase 66.6% in 2019 over 2018 and another 34.6% year over year in 2020,” Peel explains. “Global pork imports are expected to grow 13.5% year over year in 2019 and another 11.0% in 2020 as China’s share of global pork imports grows from 19.7% in 2018 to 35.1% in 2020. Global pork exports are expected to grow 11.3% year over year in 2019 and another 10.4% in 2020. The U.S. began to see direct impacts of this with a 479% jump in pork exports to China in July and August.”
As China works to mitigate lost pork production, Peel says Chinese beef imports to that nation are expected to increase 63.6% year over year in 2019 and another 20.8% next year. Chinese imports of poultry meat are projected to increase 82.7% year over year in 2019 and another 20% in 2020 leading to a two-year increase of 119.3%.