WLI

Negotiated cash fed cattle prices ended the week generally $2 higher on a live basis at mostly $105/cwt. in the five-area feeding region, according to the Agricultural Marketing Service. Dressed trade was $1-$2 higher at mostly $165.

Through Thursday, the five-area direct weighted average steer price was $105.03/cwt. on a live basis, which was $1.49 higher than the previous week. The average steer price in the beef was $164.87, which was $1.94 higher.

Even so, Feeder Cattle futures closed lower on Friday, likely based mostly on expectations of a bearish Cattle on Feed report, which came to fruition (see below). Live Cattle followed along, to a lesser degree.

Live Cattle futures closed an average of 72¢ lower, from 7¢ lower at the back to $1.05 lower.

Feeder Cattle futures closed an average of $1.70 lower, from 97¢ lower at the back to $2.20 lower.

Choice boxed beef cutout value was $1.86 higher Friday afternoon at $219.34/cwt. Select was 76¢ lower at $206.98.

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed 2¢ to 5¢ higher through Nov ’21 and then mostly higher to 1¢ to 4¢ lower.

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Major U.S. financial indices closed higher Friday, buoyed by tech stocks, and despite ongoing wonderments about domestic and international economic recovery.

The Dow Jones Industrial Average closed 358 points higher. The S&P 500 closed 51 points higher. The NASDAQ closed 241 points higher.

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If anything, the monthly USDA Cattle on Feed report issued Friday (feedlots with 1,000 head or more capacity) will likely be viewed as bearish, with 2.06 million head placed in August, which was 173,000 head more (+9.2%) than a year earlier. That’s about 3% more than expectations heading into the report. In terms of weights, 36% went on feed weighing 699 lbs. or less, 48% weighing 700-899 lbs. and 16% weighing 900 lbs. or more.

Marketings in August of 1.89 million head were 61,000 head fewer (-3.1%) than last year, in line with expectations.

Cattle on feed Sept. 1 of 11.39 million head were 412,000 head more (+3.8%) than a year earlier, which was the most for the date since the data series began in 1996.

Although there were too few transactions to trend in any region, early negotiated cash fed cattle sales were at mostly higher prices week to week on Thursday.

There were a few live trades in Kansas at $105/cwt. and a few in the western Corn Belt at $104-$105. Early dressed trades were at $165 in Nebraska and the western Corn Belt.

Cash optimism and another day of higher wholesale beef prices helped Cattle futures extend gains on Thursday.

Live Cattle futures closed an average of 83¢ higher.

Feeder Cattle futures closed an average of 93¢ higher, from 45¢ higher in expiring Sep to $1.20 higher at the back.

Wholesale beef values gained for another day. Choice boxed beef cutout value was $1.61 higher Thursday afternoon at $217.48/cwt. Select was 14¢ higher at $207.74.

The average dressed steer weight of 920 lbs. for the week ending Sept. 12, was 2 lbs. heavier than the previous week and 29 lbs. heavier than the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 836 lbs. was 4 lbs. heavier than the prior week and 14 lbs. heavier than a year earlier.

Net U.S. beef export sales for 2020 of 18,000 metric tons were up 26% from the previous week and 36% from the prior four-week average, according to the Weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service, for the week ending Sept. 17. Increases were primarily for Japan, South Korea, China, Taiwan, and Hong Kong.

Corn futures closed mostly 3¢ to 5¢ lower.

Soybean futures closed 12¢ to 16¢ lower through Sep ’21 and then fractionally higher to 9¢ lower.

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Major U.S. financial indices edged higher Thursday, following the previous session’s selloff.

On the one hand, initial weekly job insurance claims increased by 4,000 week to week to 870,000, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

On the other, new and existing home sales continue at a blistering pace.

Existing-home sales increased in August for the third consecutive month, according to the National Association of Realtors^®. For the month, total existing-home completed transactions rose 2.4% from July. Through July, existing home sales were 10.5% higher year over year.

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” says Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

As for new home sales, they were 4.8% higher from July to August and 43.2% higher year over year.

The Dow Jones Industrial Average closed 52 points higher. The S&P 500 closed 9 points higher. The NASDAQ closed 39 points higher.

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Income growth, reduced trade barriers and technological advancements are driving the increase in global value chains, transforming markets and trade processes, linking farmers to traders and consumers across regions and countries. That’s according to a new report from the Food and Agriculture Organization of the United Nations (FAO).

The State of Agricultural Commodity Markets, 2020 (SOCO 2020) argues that global trade and well-functioning markets lie at the heart of the development process as they can spur inclusive economic growth and sustainable development, and strengthen resilience to shocks.

Global agri-food trade more than doubled since 1995, amounting to $1.5 trillion in 2018, with emerging and developing countries’ exports on the rise and accounting for over one-third of the world’s total, according to the report.

Technological progress, urbanization, population and income growth, lower transport costs, trade policies and a decline in average import tariffs are driving the growth.

“We need to rely on markets as an integral part of the global food system. This is all the more important in the face of major disruptions, whether they come from COVID-19, locust outbreaks or climate change,” according to FAO Director-General QU Dongyu in his introduction to the report.

The report estimates that about one-third of global agricultural and food exports are traded within a global value chain and cross borders at least twice.

Among the report highlights:

Upper and lower middle income countries, together, increased their share in global agri-food exports from about 25% in 2001 to 36% in 2018.

Although global agri-food trade doubled since 1995 in real value, its growth rate slowed since the 2008 financial crisis. This is expected to be further impacted by the COVID-19 pandemic.

Digital technologies are transforming all stages of the food value chain from farm to table. They improve efficiency, create jobs and save resources. But it is difficult to foresee all the impacts technological innovation can have on how food is grown, processed, traded and consumed.  

While countries in Europe and Central Asia, and East Asia and the Pacific tend to trade within the same regions, countries in South Asia, Latin America and the Caribbean, sub-Saharan Africa, North America, and the Middle East and North Africa trade more globally.

Cattle feeders offered 683 head in the weekly Fed Cattle Exchange Auction, all from the Southern Plains. They sold 219 head (two lots) for an average of $104.16/cwt., for delivery at 1-17 days. That was higher than last week’s country trade of $103.00-$103.50.

Similarly, Choice steers and heifers sold 75¢ to $1 higher at the fat auction in Tama, IA. Choice 2-4 steers (217 head) weighing an average of 1,450 lbs. sold for an average price of $105.55/cwt., at the top of last week’s price range for country trade.

On the other hand, slaughter steers sold $2-$3 lower at Sioux Falls Regional in South Dakota, where 332 Choice 2-3 steers weighing an average of 1,490 lbs. brought an average price of $102.92.

The notion of firm to higher cash prices helped support Cattle futures Wednesday, although trade was sluggish.

Live Cattle futures closed an average of 51¢ higher (10¢ to $1.02 higher).

Feeder Cattle futures closed an average of 55¢ higher.

Choice boxed beef cutout value was 43¢ higher Wednesday afternoon at $215.87/cwt. Select was $1.30 higher at $207.60.

Corn futures closed fractionally lower to 1¢ lower.

Soybean futures closed 3¢ to 5¢ lower through Nov ’21 and then mostly fractionally higher.

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Major U.S. financial indices closed lower Wednesday, hamstrung by big tech stocks and wariness over the pace of economic recovery.

The Dow Jones Industrial Average closed 525 points lower. The S&P 500 closed 78 points lower. The NASDAQ closed 330 points lower.

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As the COVID-19 pandemic continues to unfold, some researchers are getting their arms wrapped around the resulting economic damage so far, and into the future.

For instance, a recent Texas A&M AgriLife coordinated study suggests the pandemic will reduce U.S. gross domestic product (GDP), by $2.5 trillion and employment by 19 million full-time equivalent jobs over the next year.

The study includes researchers from Texas A&M’s Department of Homeland Security (DHS) Center of Excellence Cross-Border Threat Screening and Supply Chain Defense (CBTS), Arizona State University’s DHS Center of Excellence, the Center for Accelerating Operational Efficiency, and researchers at the Victoria University in Australia.

Researchers utilized a model of the U.S. economy with a special emphasis on major food and agriculture sectors.

Compared to most other sectors–tourism, air transport, education, restaurants and lodging–the report concludes U.S. food and agricultural sectors will experience smaller economic impacts because they were not subject to shutdowns and reductions in aggregate consumer spending brought on by job losses.

Researchers also suggests livestock operations will suffer economically more than crop operations. They explain USDA’s latest figures show that animal product receipts in 2020 are down just over 8.1%, while cash receipts for crops are expected to increase 6.9%.

“This analysis gives us a critical and realistic evaluation of how the pandemic has and will continue to impact our nation’s and the world’s food supply,” says Patrick J. Stover, vice chancellor of Texas A&M AgriLife, dean of the College of Agriculture and Life Sciences and director of Texas A&M AgriLife Research. “It will be critical that we work together to elevate food system concerns and develop solutions that address the economic consequences to serve as a foundation for lasting recovery.”

Here you can read the full article by Kay Ledbetter, associate editor/communication specialist for Texas A&M AgriLife Research.

Cattle futures closed lower Tuesday, especially Feeder Cattle, with the lack of cash direction, demand wonderments and perhaps queasiness over the next Cattle on Feed report due out Friday.

Live Cattle futures closed an average of 64¢ lower (20¢ to $1.02 lower).

Except for 62¢ higher in spot Sep, Feeder Cattle futures closed an average of $1.33 lower (47¢ to $1.67 lower).

Choice boxed beef cutout value was 78¢ lower Tuesday afternoon at $215.44/cwt. Select was 48¢ higher at $206.30.

Corn futures closed unchanged to fractionally mixed.

Soybean futures closed 1¢ to 3¢ lower through Sep ’21 and then 5¢ to 8¢ lower.

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Major U.S. financial indices closed higher Tuesday, with technical buying the apparent driver.

The Dow Jones Industrial Average closed 140 points higher. The S&P 500 closed 34 points higher. The NASDAQ closed 184 points higher.

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Total pounds of beef in freezers as of Aug. 31 were 5% more than the previous month but 2% less than last year, according to the latest Cold Storage report from USDA.

Frozen pork supplies were up 2% from the previous month but down 23% from last year.

Total red meat supplies in freezers were 3% more than the previous month but 13% less than last year.

Total frozen poultry supplies were up 1% from the previous month but down 2% from a year earlier.

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Projected cattle feeding returns improve significantly in September, compared to recent months, according to the latest monthly Historical and Projected Kansas Feedlot Net Returns from Kansas State University.

Net returns for closeouts in August were estimated at -$162.33/head for steers and -$101.76 for heifers. Keep in mind, estimates are on a cash basis and do not include price risk management.

Starting in September, though, net returns for steers are projected to be positive for the next seven months (September through March), ranging from $20.56/head in September to $101.52 in October, with feedlot cost of gain ranging from $80.01/cwt. in September to $84.71 in February.

Projected net returns are positive for heifers during the same period of time, ranging from $8.41/head in January to $66.18 in October, with feedlot cost of gain of $87.67/cwt. in September to $91.42 in March.