Cattle futures continued to plunge lower Monday, fueled by uncertainty created by the federal government’s attempts to lower domestic consumer beef prices (see below).
Toward the close, Live Cattle futures were an average of $9.14 lower. Feeder Cattle futures were an average of $13.22 lower, limit down, except for $9.025 lower in spot Oct.
Negotiated cash fed cattle trade was moderate on Moderate demand in the North through Monday afternoon, according to the Agricultural Marketing Service. FOB live prices were $230/cwt., which was $5-$9 lower in Nebraska and $5-$10 lower in the western Corn Belt. Dressed delivered prices in Nebraska were $9-$10 lower at $358-$360. Last week, dressed delivered prices in the western Corn Belt were $372.
Last week, FOB prices in the Texas Panhandle were $2 lower than the previous week at $238.
The five-area weighted average FOB live fed steer price last week was $1.93 lower at $237.87/cwt. The weighted average dressed delivered fed steer price was $3.13 lower at $369.30.
Choice boxed beef cutout value was $2.12 higher Monday afternoon at $377.88/cwt. Select was $3.69 higher at $361.66.
Soybean futures led the grain complex higher Monday on speculation the U.S. will ink a deal with China.
Toward the close and through Jly contracts, Soybean futures were mostly 18¢ to 24¢ higher. Corn futures were 4¢ to 7¢ higher. KC HRW Wheat 13¢ to 14¢ higher.
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Major U.S. financial indices climbed higher Monday, supported by growing expectations of a trade deal with China and the Fed cutting interest rates at this week’s meeting.
The Dow Jones Industrial Average closed 337 points higher. The S&P 500 closed 83 points higher. The NASDAQ was up 432 points.
West Texas Intermediate Crude Oil futures (CME) closed 5¢ to 18¢ higher through the front six contracts.
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Increasing market uncertainty and volatility, tied mostly to threats and rumors of government intervention to lower domestic consumer beef prices continue to cast a pall over markets.
“There are certainly policy changes that can be made to support an increase in domestic beef production,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee in his weekly market comments. “However, none of those policy changes will result in a short-run change to beef and cattle prices.”
For instance, Griffith notes policy can be changed to reduce the barriers to importing more beef, but he explains nearly all of that beef will be lean grinding beef.
“Thus, it may marginally result in a decrease in the cost of ground beef, but consumers will not know the difference,” Griffith says. “Increasing imports is not going to change the price of high-valued cuts such as steaks or other muscle cuts.”