Cattle Current Daily—Oct. 8, 2019

Cattle Current Daily—Oct. 8, 2019

When all was said and done last week, negotiated cash fed cattle trade ended up mainly $3-$4 higher on a live basis—$106-$107 in the South and $107-$109 in the North—and $5 higher in the beef at $170.

The 5-area direct average steer price was $2.37 higher on a live basis last week at $107.30/cwt., according to the latest USDA report. The average dressed steer price was $169.79, which was $4.50 higher.

Live Cattle futures closed narrowly mixed Monday, while Feeder Cattle closed lower, with pressure including firm grain prices and a sharp sell-off in Lean Hog futures.

Live Cattle futures closed mixed, from and average of 28¢ lower to an average of 40¢ higher (10¢ to 90¢ higher) with the gains coming on both ends of the board.

Feeder Cattle futures closed an average of 95¢ lower (27¢ lower in spot Oct to $1.37 lower).

Wholesale beef values were lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 87¢ lower Monday afternoon at $211.09/cwt. Select was $1.01 lower at $185.91.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly fractionally higher.

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Major U.S. financial indices closed lower on Monday, on likely profit taking and also defensiveness ahead of this week’s scheduled trade talks between the U.S. and China.

The Dow Jones Industrial Average closed 95 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 26 points.

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U.S. beef exports softened in August, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports for the month totaled 114,119 metric tons (mt), a 4% decline from the previous year’s record-large volume. Beef export value of $690.3 million was down 8%. January-August beef exports were slightly below last year’s record pace, declining 2% in volume (881,526 mt) and 1% in value ($5.44 billion).

Beef export value per head of fed slaughter averaged $298.94 in August, down 7% from a year ago, while the January-August average was down 3% to $309.85.

Part of the monthly decline came with 9% fewer beef exports to South Korea than a year earlier, in terms of volume, and 11% less for value at $157.4 million. For the year, however, U.S. beef exports to Korea are 8% ahead of the previous year’s record pace for volume, and 10% higher for value at $1.26 billion.

Exports for the month were less to Japan, too: 15% less for volume and 22% less for value at $164.3 million. Keep in mind that export value the previous August was $209.3 million, a post-BSE record high. For January through August, exports to Japan were 3% below last year’s pace in volume and 4% lower in value at $1.36 billion.

“The U.S. beef industry is extremely excited at the prospect of lower tariffs in Japan, as 38.5% is the highest rate assessed in any major market,” says Dan Halstrom, USEMF president and CEO. “As we’ve seen in Korea, where the tariff rate was once 40% but has been reduced by more than half, lower tariffs make U.S. beef even more affordable for a wider range of customers. While the agreement still needs parliamentary approval in Japan, importers are already enthused and preparing for long-awaited tariff relief.”

Pork exports up significantly

August U.S. pork exports increased 22% from a year ago to 221,586 mt, while export value climbed 19% to $588.8 million. These results pushed January-August export volume 4% ahead of last year’s pace at 1.7 million mt, while value increased 1% to $4.35 billion.

Although still restrained by China’s retaliatory duties, pork exports to China/Hong Kong were three times more than the previous year’s volume at 63,656 mt, while value was up 160% at $137.6 million. For January through August, exports to China/Hong Kong were up 38% in volume (356,322 mt) and 17% in value ($717.9 million).

“China’s demand for imported pork has increased steadily over the past few months and the U.S. industry is well-positioned to help fill that need,” Halstrom explains. “But, the really positive story behind these numbers is that even as U.S. exports to China/Hong Kong have surged and exports to Mexico rebounded after the removal of retaliatory duties, demand in other markets is proving resilient and continues to grow. This is exactly why the U.S. industry invested in emerging markets over the years, and it is definitely paying dividends.”

2019-10-07T18:00:56-06:00

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