Daily-May 8

Daily-May 8

Cattle futures continued to crumble on Friday—mainly limit down for Feeder Cattle and $2.55 lower for Live Cattle—as those in a position to take profit did so, while others on the literal short end of the stick continued to exit and take take losses. Even with the volatility seen the last couple of years, the last couple of weeks was stunning.

Live Cattle futures closed an average of $2.55 lower ($1.92 to $3.00 lower).

Feeder Cattle futures closed an average of $4.44 lower (limit down in all but the last two contracts). That’s about $8 lower in the last two sessions.

Choice boxed beef cutout value was $3.29 higher Friday afternoon to the highest level since September of 2015. Select was $2.73 higher. Corn futures closed 3¢-4¢ higher.

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“Weather seems to a big driving factor recently as news of more rain in the forecast for the Corn Belt added to the higher tone seen today,” said analysts with the Daily National Grain market Summary on Friday. “Brazilian farmers seem to be holding out on selling much of their freshly harvested soybean crop, leading to higher demand for U.S. beans. However, there is still speculation as to how this will change once Brazil’s stocks hit the market.”

Wheat bids were mostly 5¢-6¢ higher. Soybean bids were 1¢ lower to 2¢ higher. Sorghum bids were 7¢ higher. Corn bids were mostly 4¢-5¢ higher.

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Robust employment growth last month helped lift major U.S. financial indices on Friday (see below). Apparently some investors were also betting on a favorable outcome to the French presidential election this weekend. The Dow Jones Industrial Average closed 55 points higher. The S&P 500 closed 9 pointw higher. The NASDAQ closed 25 points higher.

Total non-farm payroll employment increased by 211,000 jobs in April, according to the U.S. Bureau of Labor Statistics. That was more than the trade expected. The nation’s unemployment rate is 4.4%.

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U.S. beef exports (105,310 mt) were 18% higher in March compared to last year and value was up 22% at $588.2 million. First-quarter beef exports were up 15% in volume (292,215 mt) and 19% in value ($1.61 billion).

“Entering 2017 with record-large pork production and an uptick in beef slaughter, we knew this ‘wall of U.S. meat’ presented a challenge for our industry,” says USMEF President and CEO Philip Seng. “So the fact that first-quarter export volumes are higher than a year ago is not surprising, but it’s important to look beyond that – to the higher percentage of production being exported and the strong return on those exports. The U.S. is not just moving more meat internationally because we have more available. Our products are commanding solid prices and winning back market share in many key destinations, even with a strong U.S. dollar and many trade barriers still in place. But our competitors are working every day to reverse this trend, so we must aggressively expand and defend our international customer base.”

March exports accounted for 12.5% of total beef production and just under 10% for muscle cuts only, each up slightly from last year. Export value per head of fed slaughter averaged $270.14 in March, up 11% from a year ago, while the first-quarter average increased 10% to $267.71 per head.

Exports are also moving other meats from the domestic market. Year-to-year U.S. pork exports were 16% higher and a new record for the month. First-quarter pork exports were 17% higher.

2017-05-30T13:40:06-05:00

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