WLI

Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Tuesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

FOB live prices last week were $178-$179/cwt. in the Texas Panhandle, $179 in Kansas, $185 in Nebraska and $182-$187 in the western Corn Belt. Dressed delivered prices were $292 in Nebraska and $292-$295 in the western Corn Belt.

Choice boxed beef cutout value was $2.68 lower Tuesday afternoon at $314.36/cwt. Select was $2.41 lower at $289.68/cwt.

Cattle futures closed narrowly mixed Tuesday with an apparent consolidation breather.

Feeder Cattle futures closed narrowly mixed. from unchanged to an average of 26¢ lower in two contracts to an average of 17¢ higher.

Live Cattle futures closed narrowly mixed, from an average of 11¢ lower in three contracts to an average of 15¢ higher.

Nearby Corn and Soybean futures gave up the ghost late in the session, presumably fueled in part by more positive weekly crop ratings than expected.

Corn futures closed 9¢ lower through Jly ‘24 and then mostly 5¢ lower.

KC HRW Wheat closed 14¢ to 23¢ lower through Jly ‘24 and then mostly 7¢ to 10¢ lower.

Soybean futures closed 8¢ to 13¢ lower through May ‘24 and then mostly fractionally higher to 2¢ higher.

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Renewed optimism for tech stocks fueled major U.S. financial indices higher again on Tuesday.

The Dow Jones Industrial Average closed 292 points higher. The S&P 500 closed 64 points higher. The NASDAQ was up 238 points.

West Texas Intermediate Crude Oil futures (CME) closed 83¢ to $1.06 higher through the front six contracts.

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Between seasonal demand and reduced production, beef packers successfully pushed wholesale beef prices higher the past nine days to levels last seen soon after Independence Day. The price road will likely get tougher from here.

“The last summer grilling holiday of the year is just around the corner and the increasing wholesale beef price the past few weeks is likely due to spot purchases to fill final meat counter needs for the Labor Day holiday weekend,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Griffith explains some of the recent purchases also may be for restocking meat counters following the holiday. After that, he says there is little to support beef prices until consumer holiday demand at the end of the year.

That’s not saying wholesale beef prices are expected to plunge lower or that they won’t stage a rally along the way, but Griffith says the next significant support will likely come heading into December.

“Turkey will dominate the Thanksgiving holiday, and to a lesser degree ham, but ham and beef tend to find more support during Christmas,” Griffith explains. “Thus, beef supply in the last quarter of the year will be important for December prices.”

Cattle futures rallied higher Monday, apparently buoyed by increasing open interest and trader focus on fundamentals.

Feeder Cattle futures closed an average of $2.60 higher.

Live Cattle futures closed an average of 76¢ higher (2¢ to $1.12 higher).

Negotiated cash fed cattle trade was slow on very light demand in the western Corn Belt through Monday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. Elsewhere, trade was at a standstill.

Last week, FOB live prices were steady in the Southern Plains at $178-$179/cwt., $1-$3 lower in Nebraska at $184-$185 and steady to $3 lower in the western Corn Belt at $185-$186. Dressed delivered prices were steady to $2 lower in Nebraska at $292-$295 and from $3 lower to $2 higher in the western Corn Belt at $292 on a light test.

The five-area direct weighted average steer price last week was $2.29 lower on a live basis at $182.75/cwt. The five-area average steer price in the beef was $1.01 lower at $292.75.

Choice boxed beef cutout value was 86¢ lower Monday afternoon at $317.04/cwt. Select was 58¢ lower at $292.09/cwt.

Turning to the grain complex, Corn futures closed mostly 4¢ to 8¢ higher. KC HRW Wheat closed 10¢ to 16¢ lower through May ‘24 and then 3¢ to 6¢ lower. Soybean futures closed 11¢ to 18¢ higher through Jly ‘24 and then mostly 1¢ to 4¢ higher.

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Major U.S. financial indices extended gains Monday, led by tech stocks.

The Dow Jones Industrial Average closed 213 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 114 points.

West Texas Intermediate Crude Oil futures (CME) closed 1¢ to 27¢ higher through the front six contracts.

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Based on August auction data, prices for replacement females are significantly higher year over year, according to the Livestock marketing Information Center (LMIC).

“Bred cows, 1-3 months along that are classified Medium and Large 1-2, sold on a per head basis, have shown significant uptick across many of the USDA AMS reported August auction data,” say LMIC analysts, in the latest Livestock Monitor. “These cows are generally timing spring-born calves in 2024. Generally speaking, replacement costs have moved substantially higher in the South. The Southeast in particular, has seen upward movement to the tune of 40-60% from a year ago. Kentucky, on the other hand, is one of the few states to see replacement values rise only 21% from last August.”

While data was unavailable for many northern-tier states, LMIC analysts note August replacement prices were 24% year over year at Ozarks Regional Stockyards in West Plains MO and 53% higher at Joplin Regional Stockyards in Missouri. Prices at Oklahoma National Stockyards were 57% higher.

“Bred cows further along in the 4-6 months bred category, which will be calving this year, have seen similar increases,” according to LMIC analysts. “Clovis, NM saw prices jump 29% in August from last year; Colorado was up 21%; West Plains, MO was up 36%; Mississippi was up 11%; and Kentucky, was up 28%.”

“Auction data moved exponentially higher back in 2014 and 2015, however, that expansion effort was propelled by record high profits,” LMIC analysts explain. “Producers are already seeing better calf prices in some areas of the country than they did back then, but costs have increased substantially as well. It is a different environment in which this cattle cycle will turn. Profits are likely to not be as good, and interest rates are substantially higher. While these are not expected to limit expansion, it may be a headwind for some producers.”

Steady Corn futures prices, firmer cash fed cattle prices and the recent uptick in wholesale beef prices helped Cattle futures rise on Friday.

Feeder Cattle futures closed an average of 95¢ higher (45¢ to $1.17 higher).

Live Cattle futures closed an average of 69¢ higher.

Negotiated cash fed cattle trade was moderate on moderate demand in the Texas Panhandle through Friday afternoon, according to the Agricultural Marketing Service. FOB live trades were steady at $178-$179/cwt.

Trade in Kansas was slow on light to moderate demand with FOB live prices steady at $179.

Trade in Nebraska was limited on light demand with too few transactions to trend. For the week, live FOB prices were steady to $3 lower at $185. Dressed delivered prices were steady to $2 lower at $292-$295.

In the western Corn Belt, trade was slow on light demand with too few transactions to trend. For the week, FOB live prices were $1-$3 lower at $185. Dressed delivered prices the previous week were $290-$295.

Choice boxed beef cutout value was 27¢ higher Friday afternoon at $317.90/cwt. Select was 76¢ higher at $292.67/cwt. Week to week on Friday, Choice was $1.79 higher and Select was $4.31 higher.

Estimated total cattle slaughter last week of 626,000 head was 10,000 head more than the previous week but 52,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 21.2 million head was 928,000 head fewer (-4.2%) than the same period last year. Estimated year-to-date beef production of 17.3 billion pounds was 917.8 million pounds less (-5.0%) than the same time last year.

Turning to the grain complex, Corn futures closed mostly fractionally lower. KC HRW Wheat closed 1¢ to 2¢ higher. Soybean futures closed 10¢ to 16¢ higher through Aug ‘24 and then mostly 5¢ to 8¢ higher.

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Major U.S. financial indices rebounded Friday with a more positive economic growth outlook from the Fed.

“So far this year, GDP (gross domestic product) growth has come in above expectations and above its longer-run trend, and recent readings on consumer spending have been especially robust,” according to Federal Reserve chair, Jerome Powell, in his presentation to an economics policy symposium on Friday. “In addition, after decelerating sharply over the past 18 months, the housing sector is showing signs of picking back up.”

The Dow Jones Industrial Average closed 247 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 126 points.

West Texas Intermediate Crude Oil futures (CME) closed 78¢ to 83¢ higher through the front six contracts.

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Reduced beef cow numbers in tandem with remarkably steadfast consumer beef demand may compel dairy producers to leverage beef breed genetics in their reproduction programs and capture an additional revenue stream in the process, according to a new report from CoBank’s Knowledge Exchange.

“We expect the adoption of beef genetics in dairy breeding programs will accelerate as producers capitalize on the opportunity for improved margins, particularly given the reduction in beef calf availability,” says Brian Earnest, lead animal protein economist for CoBank. “And while the impact on the overall beef supply will be relatively small, an increase in beef and dairy crossbred calves entering the beef supply chain is something cattle feeders and packers will want to keep an eye on.”

The practice of leveraging beef genetics in dairy reproductive programs, commonly referred to as “beef on dairy” within the industry, has steadily increased in recent years. On average, day-old beef and dairy crossbred calves entering the beef supply chain sell for $100-$300 more than their 100% dairy-bred counterparts.

Increased adoption of beef on dairy crossbreeding will primarily benefit dairy producers, but other sectors of the beef supply chain stand to benefit as well, according to the CoBank report. Animal genetics companies that provide beef semen for artificial insemination of dairy cows can expect continued sales growth.

According to the National Association of Animal Breeders’ Semen Sales Report, U.S. beef semen sales from 2017 to 2022 increased at a rate nearly equal to the rate that U.S. dairy semen sales decreased. The data suggests rising beef semen sales are largely attributable to increased purchases by dairy operators.

Negotiated cash fed cattle trade was slow to moderate on light to moderate demand in Nebraska through Thursday afternoon, according to the Agricultural Marketing Service. Dressed delivered prices were $2.00 to $2.50 lower at $292-$292.50/cwt. There were a few FOB live trades at $184-$186 and a few delivered live trades at $189.50, but too few to trend. FOB live prices there last week were $185-$188.

Trade was limited on light to moderate demand in the western Corn Belt where FOB live prices were $1-$3 lower $185. There were a few dressed delivered trades at $292, but too few to trend; $290-$295 last week.

In the Southern Plains, trade ranged from inactive on very light demand to a standstill. FOB live prices last week were $178-$179 in the Texas Panhandle and $179 in Kansas.

Choice boxed beef cutout value was 58¢ higher Thursday afternoon at $317.63/cwt. Select was 32¢ higher at $291.91/cwt.

Cattle futures closed higher Thursday, helped along by increasing open interest.

Feeder Cattle futures closed an average of $1.97 higher ($1.47 to $2.37 higher).

Live Cattle futures closed an average of $1.47 higher ($1.22 to $2.05 higher).

Corn futures closed narrowly mixed, from mostly fractionally lower to 1¢ higher.

KC HRW Wheat closed mostly fractionally lower to 5¢ to lower.

Soybean futures closed mostly 8¢ to 12¢ higher.

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Major U.S. financial indices closed sharply lower Thursday amid renewed worries about high Treasury yield rates.

The Dow Jones Industrial Average closed 373 points lower. The S&P 500 closed 59 points lower. The NASDAQ was down 257 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts.

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Cow-calf production became more specialized from 1996 to 2018, according to a recent report from USDA’s Economic Research Service (ERS), entitled Structure, Management Practices and Production Costs of U.S. Beef Cow-calf Farms.

Increased specialization or decreased diversification was revealed across several measures.

* 78% of beef cattle operations produced only cattle in 2018 versus 66% in 2008 and 43% in 1996.

* 78% of beef cow operations producing other crops produced hay in 2018 versus 63% in 2008.

* 63% of cow-calf operations were cow-calf only in 2018 versus 47% in 2008; 29% were cow-calf and stocker in 2018 versus 44% in 2008.

Although more specialized, technology adoption remains low and static across cow-calf operations as a whole.

* 8% of cow-calf producers utilized artificial insemination in 2018, the same as in 2008. Likewise, 2% of producers utilized embryo transplant and/or sexed semen both years.

* 50% of cow-calf producers kept individual cow-calf production records in 2018, which was 4% more than in 2008. 28% used an on-farm computer for cow-calf information in 2018, versus 20% in 2008.

Although sideways, Cattle futures wobbled Wednesday as traders added risk premium back to Corn futures, which closed 9¢ to 11¢ higher through Jly ‘24 and then mostly 3¢ to 5¢ higher.

KC HRW Wheat closed 12¢ to 17¢ higher.

Soybean futures closed 9¢ to 15¢ higher.

Feeder Cattle futures closed an average of 28¢ lower, except for 18¢ higher in May ’24.

Live Cattle futures closed an average of 35¢ higher, except for an average of 16¢ lower in two contracts.

Through mid session today, Cattle futures are stronger.

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Wednesday afternoon with too few transactions to trend, according to the Agricultural Marketing Service

Last week, FOB live prices were $178-$179/cwt. in the Texas Panhandle, $179 in Kansas, $185-$188 in Nebraska and $186-$188 in the western Corn Belt. Dressed delivered prices were $294-$295 in Nebraska and $290-$295 in the western Corn Belt.

Choice boxed beef cutout value was unchanged Wednesday afternoon at $317.05/cwt. Select was $2.08 higher at $291.59/cwt.

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

The Dow Jones Industrial Average closed 184 points higher. The S&P 500 closed 48 points higher. The NASDAQ was up 215 points.

West Texas Intermediate Crude Oil futures (CME) closed 70¢ to 76¢ lower through the front six contracts.

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Frozen beef supplies last month continued significantly lower year over year, according to the most recent USDA Cold Storage report. Total pounds of beef in freezers July 31 were 2% more than the previous month but were 18% less than the same time last year.

Frozen pork supplies were down 3% from the previous month and down 10% from last year.

Total red meat supplies in freezers were down slightly from the previous month and down 14% from last year.

Total frozen poultry supplies were 1% less than the previous month but 4% more year over year.