Plenty of Monday’s market attention was focused beyond cattle to equities and other commodities as Wall Street investors sold heavily, apparently mostly due to concerns tied to China’s property market. Fears are a potential global domino effect in financial markets on top of ongoing worries about the pandemic and economic growth. The Dow Jones Industrial Average was down 614 points, the S&P 500 closed 75 points lower and the NASDAQ was down 330 points.
Despite the heavy outside pressure, Cattle futures held their own.
Feeder Cattle futures closed an average of 29¢ higher, except for unchanged in Mar and 5¢ lower in May.
Live Cattle futures closed an average of 16¢ lower except for 55¢ higher in near Dec.
Corn futures closed 2¢ to 5¢ lower through new-crop contracts and then mostly 1¢ lower to 1¢ higher.
Soybean futures closed mostly 15¢ to 21¢ lower.
Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.
Last week, prices were steady to unevenly steady in the Southern Plains and Nebraska with live prices at $124/cwt. in the Texas Panhandle, $123-$124 in Kansas and $124 in Nebraska. Live prices in the western Corn Belt were $1-$3 lower at $123-$124. Dressed traded was unevenly steady at $200 in Nebraska but unevenly steady to $4 lower in the western Corn Belt at $196-$200.
Choice boxed beef cutout value was $1.19 higher Monday afternoon at $315.66/cwt. Select was $1 higher at $280.75.
Reduced U.S. beef imports from Australia are helping lift domestic ground beef prices, according to USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook.
“While the United States is a major global supplier of beef, it also imports beef and processing-grade beef (used for ground beef) to meet a growing consumer demand,” ERS analysts explain. “Historically, Australia is the predominant supplier of processing-grade beef to the United States, with smaller amounts coming from Brazil, Canada, and New Zealand, among other countries.”
As Australia restocks pastures from a multi-year drought, that nation has less beef to export.
For perspective, the price for 90% lean beef from Australia was $240/cwt. in February of this year, according to ERS. The price was $274 in July.
Although it will take Australia a good while to restock, ERS expects that nation’s cattle inventory to ultimately realign close to former supply levels.
“Meanwhile, as the economy reopens, the demand for beef and ground beef is expected to support beef prices,” say ERS analysts.