Cattle futures finally found some traction Tuesday, gaining back a little better than half of the previous day’s sharp losses, once gain following the same trajectory as equity markets.
Live Cattle futures closed an average of $1.79 higher ($1.10 higher to $2.60 higher in spot Apr).
Feeder Cattle futures closed an average of $2.51 higher ($1.55 higher in spot Mar to $3.10 higher).
Wholesale beef values were weak on Choice and sharply lower on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 27¢ lower Tuesday afternoon at $207.09/cwt. Select was $3.61 lower at $198.71.
Corn futures closed mostly 3¢ to 4¢ higher through Jly ’21 and then 1¢ to 2¢ higher.
Soybean futures closed mostly 4¢ to 7¢ higher.
Major U.S. financial indices closed sharply higher Tuesday after a whipsaw ride and buoyed by chatter out of the White House about economic stimulus to bolster the domestic economy in the wake of coronavirus.
It also helped that crude oil recovered some of the previous day’s sharp selloff.
West Texas Intermediate Crude Oil futures on the CME closed $2.90 to $3.23 higher through the front six contracts.
The Dow Jones Industrial Average closed 1,167 points higher. The S&P 500 closed 135 points higher. The NASDAQ was up 393 points.
U.S. beef exports in January were 2.5% more than a year earlier at 107,347 metric tons (mt) and export value was 5% more at $672.7 million according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
In fact, beef muscle cut exports were the highest ever for the month of January at 81,342 mt, up 4% from a year ago, while muscle cut value increased 5% to $589.2 million.
Export value per head of fed slaughter was $302.93, up 3% from a year ago.
USMEF President and CEO Dan Halstrom notes coronavirus had an impact on red meat exports, which will likely be more evident in February and March data. At the same time, he says a number of supply and demand fundamentals and market access improvements underpinned continued strong export volumes.
“The first quarantine actions in China were taken in late January and the calendar had turned to February before coronavirus became a major health concern in countries such as South Korea and Japan,” Halstrom explains. “But despite logistical challenges, a severe decline in tourism and a notable impact on sit-down dining, overall demand for red meat in these markets is quite resilient. Retail meat sales remained strong and both retailers and restaurateurs are utilizing e-commerce and delivery services at unprecedented levels. While it’s definitely a challenging situation, the Asian food industry is adapting to these conditions and finding creative ways to accommodate consumers.”
Also positive for beef is the fact that U.S. pork exports in January were 36% higher year over year at 273,603 mt, while pork export value was 50% higher at $738.7 million—the second highest levels on record for both volume and value.
Pork exports to China/Hong Kong led the way: 263% more for volume and 361% more for value at $245.3 million.
Pork exports to Mexico, which were hampered by retaliatory duties in the first five months of 2019, increased 6% in volume and jumped 40% in value to $134.7 million.
“The January data really underscore the difficult situation U.S. pork was facing in Mexico a year ago,” Halstrom explains. “Exporters kept much of the volume moving, but the U.S. industry absorbed most of the 20% duty in the form of lower prices. With duty-free access restored and the U.S.-Mexico-Canada Agreement moving toward implementation, we look forward to a continued rebound in Mexico’s demand for U.S. pork.”