WLI

Negotiated cash fed cattle trade ranged from a standstill to limited on light demand through Friday afternoon, according to the Agricultural Marketing Service. Although too few to trend there were some trades in the western Corn Belt at $125/cwt. on a live basis and at $196 in the beef.

In established trade for the week, live prices were $3 higher in the Southern Plains at $120, $5-$7 higher in Nebraska at $125, $5 higher in the western Corn Belt at $123-$125 and $4-$7 higher in Colorado (compared to two weeks earlier) at $120-$123. Dressed prices were $5-$7 higher at $195.

Week to week on Thursday, the five-area direct average steer prices was $4.42 higher at $121.87. The average dressed steer price was $195.21, which was $6.53 higher.

Cattle futures closed lower Friday, amid active trade and likely profit taking from the strong week-to-week gains.

Live Cattle futures closed an average of $1.10 lower (22¢ to $2.45 lower), except for 62¢ higher in the back contract.

Feeder Cattle futures closed an average of $1.55 lower (80¢ lower toward the back to $2.37 lower in spot Apr), except for 45¢ higher in the back contract.

Choice boxed beef cutout value was $1.67 higher Friday afternoon at $272.17/cwt. Select was 24¢ higher at $264.07.

Estimated total cattle slaughter the week ending Apr. 10 was 641,000 head, according to USDA, which was 32,000 head more than the previous week. Year-to-date estimated total cattle slaughter of 9.0 million head is 184,000 head fewer (-2.0%) than the same time last year. Estimated year-to-date beef production of 7.54 billion lbs. is 54.2 million lbs. less (-0.7%) than a year earlier.

Grain futures were mixed Friday, reacting to USDA’s monthly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed mostly 1¢ to 3¢ higher, except for 2¢ lower in spot May.

Soybean futures closed 9¢ to 12¢ lower through the front six contracts, and then mostly 2¢ to 7¢ lower.

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Major U.S. financial indices closed higher Friday. Support included optimism about the pace of domestic COVID-19 vaccinations and further reopening of the economy.

The Dow Jones Industrial Average closed 297 points higher. The S&P 500 closed 31 points higher. The NASDAQ was up 70 points.

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Logistical challenges continued to hamper U.S. beef exports in February, but they should increase as the year progresses, according to the U.S. Meat Export Federation (USMEF).

Beef exports in February were 8% less in volume year over year at 103,493 metric tons (mt), according to data released by USDA and compiled by USMEF. Beef export value was 2% less at $669.5 million. The decline was due mainly to variety meat exports.

For the year, through February, U.S. beef exports are 5% less in volume and 2% less in value at $1.32 billion.

U.S. pork export volume in February was 12% less than a year earlier. Value was 13% less at $629.4 million.

“While February exports were in line with expectations, the results don’t fully reflect global demand for U.S. red meat,” says Dan Halstrom, USMEF president and CEO. “Logistical challenges, including congestion at some U.S. ports, are still a significant headwind. Tight labor supplies at the plant level continue to impact export volumes for certain products, including some variety meat items and labor-intensive muscle cuts.”

Halstrom notes that the flow of exports through U.S. ports is showing some gradual improvement as COVID-impacted crews move closer to full strength, but remains a serious concern for the U.S. agricultural sector.

Negotiated cash fed cattle trade ranged from a standstill to limited on light demand through Thursday afternoon, according to the Agricultural Marketing Service.

For the week so far, live prices are $3 higher in the Southern Plains at $120/cwt., $5 higher in Nebraska at $123, $3-$5 higher in the western Corn Belt at $121-$125 and $4-$7 higher in Colorado (compared to two weeks earlier) at $120-$123. Dressed trade is $5-$7 higher at $195.

Feeder Cattle futures closed mostly slightly lower Thursday, pressured by the surge in Corn futures prices.

Feeder Cattle futures closed an average of 52¢ lower (37¢ to $1.07 lower), except for an average of 42¢ higher in the back two contracts.

Live Cattle futures mostly extended gains, with continued support from cash prices and wholesale beef values, as well as expanding open interest. 

Live Cattle futures closed an average of 56¢ higher (35¢ to $1.00 higher), except for an average of 17¢ lower in two nearby contracts.

Choice boxed beef cutout value was $4.19 higher Thursday afternoon at $270.50/cwt. Select was $8.64 higher at $263.83.

The average dressed steer weight the week ending March 27 was 899 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 2 lbs. lighter than the previous week, but 8 lbs. heavier than the same week last year. The average dressed heifer weight of 830 lbs. was 6 lbs. lighter week to week but 5 lbs. heavier than a year earlier.

Front-month grain futures closed sharply higher Thursday amid likely positioning ahead of USDA’s World Agricultural Supply and Demand Estimates due out Wednesday.

Corn futures closed 10¢ to 19¢ higher in the front three contracts, 8¢ to 9¢ higher in the next four and then mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 1¢ to 2¢ higher, except for 6¢ higher in the front two contracts.

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Major U.S. financial indices closed higher Thursday, led by tech stocks.

The Dow Jones Industrial Average closed 57 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 140 points.

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“For the economy and rural industries, there will be no going back to pre-COVID conditions. A transformed policy environment and awakened commodity markets are making way for a whole new operating environment, according to the new Quarterly report from CoBank’s Knowledge Exchange (CBKE).

“The policy focus in Washington is shifting from crisis management to building for the future,” says Dan Kowalski, CBKE vice president. “And the outcome of the president’s infrastructure plan will have substantial implications for rural water, power and broadband providers. Hundreds of billions of dollars in funding would reshape these industries and intensify the current focus on climate resilience and social equity.”

In terms of economic growth, CBKE analysts explain consensus forecasts point to 7% U.S. GDP growth this year, the fastest rate of expansion since 1984. They note the U.S. economy continues to outperform expectations as stimulus funds fuel robust consumer spending.

On the other side of the ledger, those analysts expect inflation to increase.

“Any inflation that results from resurgent demand will be in addition to the base-effect inflation that we are certain to have in coming months,” according to the CBKE report. “Inflation is typically measured in year-over-year terms, and base effects occur when inflation readings are skewed because of price anomalies in the prior year. In 2020, prices for many goods and services dove in the middle months of the year as demand suddenly dropped. Those 2020 price declines will widen year-over-year inflation over the next couple of quarters, and new upward price pressure should push headline inflation above 3%. We expect this burst of inflation to be short-lived as the economy recalibrates, but we could experience inflation over 2% well into 2022.”

Negotiated cash fed cattle trade and demand were moderate in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were $3 higher than last week at $120/cwt.

In Nebraska, trade was light on light to moderate demand. Although too few to trend, there were some live sales at $120-$123. Prices there last week were at $118 on a live basis and at $190 in the beef.

Also too few to trend, early live prices in Colorado were at $120-$123. The last established market was two weeks ago at $116.

Last week, in the western Corn Belt, prices were at $118-$120 on a live basis and at $188-$190 dressed.

Cattle feeders offered 4,422 head in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 3,277 head sold, all from Texas and Nebraska and all on a live weight basis. Steer prices ranged from $122.00 to $122.75/cwt. in Nebraska and from $120.00 to $120.75 in Texas. Heifer prices ranged from $122.00 to $122.75 in Nebraska and from $120.50 to $121.00 in Texas.

Cattle futures extended gains Wednesday, supported by higher cash fed cattle prices and the continued increase in wholesale beef values. 

Live Cattle futures closed an average of 49¢ higher.

Feeder Cattle futures closed an average of $1.11 higher (90¢ to $1.60 higher).

Choice boxed beef cutout value was $3.54 higher Wednesday afternoon at $266.31/cwt. Select was $3.89 higher at $255.19.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 3¢ to 10¢ lower through the front four contracts, and then mostly fractionally mixed.

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Major U.S. financial indices closed little changed Wednesday.

The Dow Jones Industrial Average closed 16 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 9 points.

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Agricultural producers are growing more optimistic, according to the latest Purdue University/CME Group Ag Economy Barometer. It rose 12 points month to month in March to 177, the highest level since October 2020.

“Even with a rebound in crop production in 2021, it looks like carryover supplies of corn and soybeans will remain tight, providing producers confidence that crop prices will remain strong this year,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “A rebound in the U.S. economy this summer, combined with expectations for a smaller pork supply, is also providing some optimism in the livestock sector.”

The Index of Future Expectations increased 16 points in March to 164 after declining four consecutive months. The Index of Current Conditions rose 2 points to 202, tying the record high.

Producers’ perspective about their operations’ financial position continues to improve, as well. The Farm Financial Performance Index was 125 in March, up from the record low of 55 in April of last year. In turn, that optimism appears to be fueling short-term optimism for land values.

The Short-Term Farmland Value Expectations Index rose for the fourth consecutive month, up 3 points to 148. The Long-Term Farmland Value Index, matched its previous high, up 4 points to 157.

Producer optimism about U.S.-China trade continued to decline. In March, 31% of survey respondents expected the trade dispute to be resolved in a way that’s beneficial to U.S. agriculture. That’s down 50 points from early last year.

Negotiated cash fed cattle trade was at a standstill in Nebraska and the Texas Panhandle through Tuesday afternoon. Elsewhere, trade ranged from limited to mostly inactive on light demand, according to the Agricultural Marketing Service (AMS).

Last week, live prices were at $117/cwt. in the Southern Plains, $118 in Nebraska and $118-$120 in the western Corn Belt. Dressed prices were at $190 in Nebraska and at $188-$190 in the western Corn Belt.

Cattle futures closed mainly higher Tuesday, buoyed by the bullish rise in wholesale beef values. 

Live Cattle futures closed an average of 30¢ higher (5¢ to $1.35 higher), except for 15¢ lower in the back contract

Feeder Cattle futures closed an average of 99¢ higher (2¢ to $1.55 higher), except for unchanged in May.

Choice boxed beef cutout value was $4.10 higher Tuesday afternoon at $262.77/cwt. Select was $1.44 higher at $251.30.

Corn futures closed mostly 4¢ to 5¢ lower, except for 1¢ higher at either end of the board.

Soybean futures closed 1¢ to 6¢ higher.

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Major U.S. financial indices edged lower Tuesday, amid some likely profit taking and rally fatigue.

The Dow Jones Industrial Average closed 96 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 7 points. 

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Economic light continues to shine brighter at the end of the pandemic tunnel.

“Thanks to the ingenuity of the scientific community, hundreds and millions of people are being vaccinated, and this is expected to power recoveries in many countries later this year,” explained Gita Gopinath, Chief Economist and Director of the Research Department at the International Monetary Fund (IMF). “We are now projecting a stronger recovery for the global economy compared with our January forecast.”

Specifically, IMF projects global GDP this year at 6.0% and 4.4% in 2022. That’s from the organization’s latest World Economic Outlook.

“The upgrades in global growth for 2021 and 2022 are mainly due to upgrades for advanced economies, particularly to a sizable upgrade for the United States that is expected to grow at 6.4% this year. This makes the United States the only large economy projected to surpass the level of GDP it was forecast to have in 2022 in the absence of this pandemic,” said Gopinath.

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service (AMS).

Last week, live prices were at $117/cwt. in the Southern Plains, $118 in Nebraska and $118-$120 in the western Corn Belt. Dressed prices were at $190 in Nebraska and at $188-$190 in the western Corn Belt.

The five-area direct average steer price was $118.08/cwt. last week on a live basis. That was $2.49 more than the prior week. The average five-area direct steer price in the beef was $189.36, which was $4.89 more.

Cattle futures closed sharply higher Monday, supported by stronger cash prices, increasing wholesale beef values and higher outside markets.

Live Cattle futures closed an average of $1.32 higher.

Feeder Cattle futures closed an average of $2.07 higher, from $1.35 to $2.57 higher.

Choice boxed beef cutout value was $5.82 higher Monday afternoon at $258.67/cwt. Select was $2.89 higher at $249.86.

Corn futures closed mostly 4¢ to 9¢ higher, except for 6¢ lower in the front two contracts.

Soybean futures closed mostly 5¢ to 9¢ higher.

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Major U.S. financial indices closed sharply higher Monday, buoyed by Friday’s positive national employment outlook.

Total nonfarm payroll employment rose by 916,000, month to month, in March, according to the U.S. Bureau of Labor Statistics. That was significantly more than the trade expected. The unemployment rate edged down to 6.0%.

In March, average hourly earnings for all employees on private nonfarm payrolls fell by 4¢ to $29.96.

The Dow Jones Industrial Average closed 373 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 225 points.

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Significantly higher feed costs than last year will encourage feedlots to place cattle at heavier weights, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. In turn, stocker and backgrounders have more incentive to add more weight to cattle.

In his weekly market comments, Peel points out current weekly average cash corn prices are reported at $5.85/bu. in Dodge City, at $5.99/bu. in Garden City and at $6.01/bu. in the Texas Triangle. He explains those prices are 79-82% more than the lows in August.

“Feedlots will also look for opportunities to adjust feedlot rations using cheaper substitute ingredients, if possible,” Peel says. “Wheat may offer some potential in feedlot rations in the coming weeks and months. Winter wheat prices in the Southern Plains have increased in the last eight months but relatively less than corn.”

Peel uses Dodge City prices as an example. The current cash wheat price (hard red winter) is 41% more than in August at $5.37/bu., but it’s cheaper than corn at $5.85/bu.

“In general, a wheat price of 107% of corn price is equivalent on a price per pound basis (60 lbs. of wheat/bu. versus 56 lbs./bu. for corn),” Peel says. “In some circumstances, wheat may have additional feed value compared to corn due to a higher protein content. However, cattle rations typically do not need the additional protein, so wheat value is based primarily on energy content. Feedlots do not change rations quickly or for short periods of time but will adjust if market conditions suggest that an extended period of alternative feeds is likely.”