Cattle futures closed narrowly mixed on Tuesday, amid lackluster trade and little direction.
Other than 2¢ higher in spot Feb, Live Cattle futures close an average of 9¢ lower.
Feeder Cattle futures closed narrowly mixed, from an average of 26¢ lower across the front half of the board to an average of 20¢ higher across the back half.
Wholesale beef values were steady on moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 13¢ lower Tuesday afternoon at $214.51/cwt. Select was 1¢ lower at $213.47. Other than a single day last February, the Choice-Select spread the past four days ($1.04 to $1.43) is the narrowest since September of 2017.
Corn futures closed 1¢ lower across the front half of the board and then fractionally lower.
Soybean futures closed 10¢ to 13¢ lower through Sep ’20 and then mostly 6¢ to 7¢ lower.
Major U.S. financial indices closed lower Tuesday, with some of the pressure reportedly stemming from confirmation of coronavirus in a Chinese traveler in Seattle and the potential impact on international travel and tourism.
The Dow Jones Industrial Average closed 152 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 18 points.
USDA adjusted forecast fourth-quarter 2019 beef production 15 million lbs. higher than the previous month to 7.0 billion lbs., based on the increased pace of non-fed cattle slaughter in December, especially beef cow slaughter.
In the latest monthly Livestock, Dairy and Poultry Outlook, analysts with USDA’s Economic Research Service (ERS) say beef cow slaughter is significantly higher since the third quarter last year—13% to 25% more than the same period a year earlier, for the first four weeks of December. That’s based on weekly Actual Slaughter Under Federal Inspection reports.
“Since the week ending Nov. 15, prices for live cutter cows have remained more than 10% above prices for the same period a year ago. This, coupled with tight forage supplies for some producers, has likely encouraged higher culling rates” ERS analysts explain.
As for fed cattle, more feedlot placements than expected last month point toward increased fed cattle marketing and beef production in the second quarter this year than originally anticipated, according to ERS.
“However, because those calves were likely placed in feedlots rather than remaining on winter wheat pastures as expected, the placement forecast for first-half 2020 was reduced,” say ERS analysts. “As a result, fewer fed cattle marketings are anticipated in second-half 2020, contributing to less expected beef production during that time.”