Negotiated cash fed cattle trade continued higher on Friday with dressed trade in Nebraska at $165/cwt., which was $2 higher than earlier in the week and $4-$5 higher than the prior week. Dressed trade was $2-$3 higher in the western Corn Belt at $163.
Live sales for the week ended up $1.50-$2.00 higher in the Southern Plains at $103.00-$103.50, $2.50 higher in Nebraska at $103.50 and $2-$4 higher in the western Corn Belt at $104-$105.
Stronger cash prices to end the week helped lift Cattle futures on Friday.
Live Cattle futures closed an average of 37¢ higher.
Except for 25¢ lower in the back contract, Feeder Cattle futures closed an average of 64¢ higher.
Choice boxed beef cutout value was 59¢ higher Friday afternoon at $215.64/cwt. Select was 55¢ higher at $203.94.
Corn futures closed 2¢ to 3¢ higher.
Soybean futures closed 9¢ to 15¢ higher through Aug ’21 and then mostly 1¢ to 4¢ higher.
Major U.S. financial indices closed lower on Friday, pressured once again by big tech stocks, uncertainty over federal pandemic stimulus and political sabre rattling between the U.S. and China.
The Dow Jones Industrial Average closed 244 points lower. The S&P 500 closed 37 points lower. The NASDAQ closed 117 points lower.
“As consumers continue to eat at home, and the longer sit-down restaurants are closed or at limited capacity, the longer lean beef imports will remain strong,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
Griffith explains most beef imported to the U.S. is lean beef meant for grinding to produce ground beef, hot dogs, taco meat and the like. He notes that U.S. beef imports in July of 376.8 million lbs. represented the largest monthly total in 15 years.
The July total was 41.1% more than a year earlier, pushing imports for the first seven months of the year 8.5% higher year over year, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
“Beef imports were up from each of the four largest beef import sources,” Peel explains, in his weekly market comments. “Canada, the largest source of beef imports, was up 12.7% in July but was down 5.8% for the year to date. Mexico was up 34.3% in July compared to last year and was up 25.5% so far this year. Mexico now exceeds Australia as the number two source of U.S. beef imports. Australia was up 17.1% year over year in July but was down 2.7% for the year to date. New Zealand was up 94.2% in July and was 13.3% higher for the year to date. So far in 2020, Canada and Mexico account for 44.3% of total beef imports. Combined with Australia and New Zealand, the top four source represent 82.4% of total beef imports.”
On the other side of the trade ledger, Griffith points out U.S. beef exports began to recover in July, compared to year-over-year weakness the previous three months.
“Currency exchange rates are important factors affecting international beef trade,” Peel explains. “Since the COVID-19 impacts began in mid-March, the U.S. dollar has been significantly stronger compared to the Argentinian, Brazilian and Mexican currencies and somewhat stronger against the Canadian, Australian and New Zealand dollars. A strong U.S. dollar is a headwind for beef exports and favors beef imports. The U.S. dollar has weakened slightly against the Japanese Yen, and the Hong Kong dollar, which does help support beef exports to those two major markets.”