The five-area direct average fed steer price last week was $103.54/cwt. on a live basis, which was $2.33 more than the previous week. The average steer price in the beef was $163.25, which was $2.59 higher.
However, sharply lower outside markets and likely profit taking pressured Cattle futures Monday.
Live Cattle futures closed an average of 89¢ lower (65¢ to $1.25 lower).
Except for 20¢ higher in spot Sep and Nov, Feeder Cattle futures closed an average of 58¢ lower.
Wholesale beef prices found some traction, though.
Choice boxed beef cutout value was 58¢ higher Monday afternoon at $216.22/cwt. Select was $1.88 higher at $205.82.
Lower outside markets and harvest pressure pushed grain futures lower Monday.
Corn futures closed 8¢ lower through May ’21 and then mostly 4¢ to 5¢ lower.
Soybean futures closed 17¢ to 21¢ lower through Mar ’21 and then mostly 10¢ to 12¢ lower.
Major U.S. financial indices closed sharply lower on Monday, but well off of session lows. Pressure included worries about another surge of COVID-19 leading to renewed shutdowns in different parts of the world, as well as the inability of Congress to come to terms on more economic stimulus for businesses and individuals.
The Dow Jones Industrial Average closed 509 points lower. The S&P 500 closed 38 points lower. The NASDAQ closed 14 points lower.
Analysts with the Livestock Marketing Information Center (LMIC) expect fourth-quarter beef production to be more than in 2019, but note cattle flows will also contend with smaller placements in March and April.
“The supply situation for beef is still unfolding,” say LMIC analysts, in the latest Livestock Monitor. “Dressed weights have not followed the normal seasonal pattern through the summer but look to be closing the gap between last year and 2020. In the latest week of data, steer dressed weights are only 25 lbs. heavier than a year ago. This is a significant decrease compared to summer increases of 40 lbs. or more in June. Slaughter levels in August were below a year ago, but the last two weeks of actual slaughter data has picked up.”
USDA estimated total cattle slaughter last week at 645,000 head, which was 71,000 head more than the previous week, but 16,000 head fewer than the same week last year. Estimated total cattle slaughter year to date of 22.85 million head is still 1.07 million fewer (-4.49%) than the same time last year.
On the other side of the trade, LMIC points to the odds of a weaker economy pressuring beef demand.
“Corporate holiday parties and other holiday gatherings had been a boost to beef demand in recent years; the frequency of those events will likely decrease significantly in 2020,” LMIC analysts explain. “Retail featuring high-end meat cuts is expected this holiday season as the Restaurant Expectation and Performance Index remains in contraction territory and those cuts have struggled to move quantities. But, it seems unlikely the retail all fresh beef demand index will take out the record set in 2019. First and second quarter indexes have been above a year ago in 2020, but none were record highs. Third quarter data is still pending.”
USDA estimated beef production last week of 540.1 million lbs., which was 60.4 million lbs. more than the previous week and just 3.8 million lbs. less than the same week last year.