WLI

Feeder Cattle futures continued to adjust lower, down an average of $2.32 amid a bounce in Corn futures.

Live Cattle futures closed an average of 39¢ lower with apparent pressure from sliding seasonal wholesale beef values.

Corn futures bounced back Thursday with a gloomier weather outlook. They closed 12¢ to 18¢ higher through Jly ‘24, and then 6¢ to 7¢ higher.

Soybean futures closed lower on oversold conditions. They were down 15¢ to 24¢ lower through Jan ‘24, and then 7¢ to 12¢ lower.

KC HRW Wheat closed mixed, fractionally lower to 6¢ lower through May ’24 and then 3¢ to 6¢ higher.

Negotiated cash fed cattle trade ranged from slow on light demand to mostly inactive on very light demand through Thursday afternoon, according to the Agricultural Marketing Service.

On light trade, live prices were steady to $1 lower in the Southern Plains at $178/cwt. and unevenly steady in the western Corn Belt at $179-$184, where dressed prices last week were $290.

Last week, live prices in Nebraska were $180-$183 on a live basis and $290 in the beef.

Choice boxed beef cutout value was $2.91 lower Thursday afternoon at $319.87/cwt. Select was $2.72 lower at $289.97/cwt.

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Major U.S. financial indices closed lower Thursday with worries that positive employment data will fuel more interest rate hikes. Private sector employment increased by 497,000 in June, according to the ADP National Employment report. That was significantly more than expected.

The Dow Jones Industrial Average closed 366 points lower. The S&P 500 closed 35 points lower. The NASDAQ was down 112 points.

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

Cattle futures showed signs of modest correction Wednesday as traders await direction from the week’s cash market.

Feeder Cattle futures closed an average of $2.79 lower ($2.17 to $3.25 lower).

Live Cattle futures closed an average of $1.14 lower (72¢ to $1.87 lower).

Negotiated cash fed cattle trade ranged from mostly inactive with very light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $179/cwt. in the Texas Panhandle, $178 in Kansas, $182-$185 in Nebraska and $180-$183 in the western Corn Belt at $180-$183. Dressed prices were $290.

Choice boxed beef cutout value was $5.56 lower Wednesday afternoon at $322.78/cwt. Select was $1.61 lower at $292.69/cwt.

Wheat futures bounced higher Wednesday amid selling fatigue and concerns about Russia’s sword rattling.

KC HRW Wheat closed 25¢ to 50¢ higher.

Corn and Soybean futures held their own with static week over week crop conditions.

Corn futures closed mostly 1¢ to 3¢ higher, except for the front two contracts.

Soybean futures closed mostly 1¢ to 8¢ higher through Aug ‘24, and then 11¢ to 13¢ higher.

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Major U.S. financial indices resumed the trading week with softer tones Wednesday.

The Dow Jones Industrial Average closed 129 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 25 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.80 to $2.00 higher through the front six contracts.

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Agricultural producer sentiment improved last month, according to the Purdue University/CME Group Ag Economy Barometer index. It rose 17 points from the May reading to 121 in June. Producers’ perceptions of current conditions was unchanged but they were more optimistic about the future with Index of Future Expectations increasing 25 points to 123.

“Optimism about U.S. agriculture’s future and a more sanguine interest rate outlook help explain producers’ more positive view of the future expressed in June’s survey,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “However, current conditions in the farming economy continue to present a challenge for some producers. This month four out of 10 producers stated that their financial situation has deteriorated compared to a year ago.”

The Farm Financial Performance Index also rose this month, up 10-points from May and was likely a result of a late-May to early-June rally in harvest time prices for corn and soybeans, as well as optimism towards positive returns for cattle producers.

In June, 50% of respondents said they expect “good times” for livestock producers in the next five years, up from 37% in May. Optimism about positive returns for cattle producers, especially cow-calf operations, was likely a key factor behind the positive livestock outlook.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between June 12-16.

Negotiated cash fed cattle trade was at a standstill through Monday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $1 lower in the Texas Panhandle at $179/cwt., $2 lower in Kansas at $178, steady in Nebraska at $182-$185 and $2-$4 lower in the western Corn belt at $180-$183. Dressed prices were steady at $290.

The weighted average five-area direct fed steer price last week was $181.33/cwt. on a live basis, which was $1.24 lower than the previous week. The average fed steer price in the beef was 47¢ lower at $289.34.

Choice boxed beef cutout value was 62¢ higher Monday afternoon at $328.34/cwt. Select was 67¢ higher at $294.30/cwt.

Cattle futures mostly held their ground Monday.

Feeder Cattle futures closed an average of 63¢ higher (32¢ to $1.17 higher).

Live Cattle futures closed narrowly mixed, from an average of 17¢ lower in the front four contracts to an average of 34¢ higher.

Corn futures firmed some Monday with likely support from rallying Soybeans.

Corn futures closed mixed, mostly 2¢ lower to 1¢ higher.

Soybean futures closed mostly 22¢ to 31¢ higher, building on Fridays Acreage report.

KC HRW Wheat closed mostly 1¢ to 6¢ lower.

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Major U.S. financial indices edged higher Monday after the holiday-shortened trading session.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 28 points.

West Texas Intermediate Crude Oil futures (CME) closed 85¢ to $1.02 lower through the front six contracts.

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Saying that cattle markets have been bullish so far this year is an understatement.

In his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University explains Oklahoma auction prices for steer calves weighing less than 600 pounds averaged 41.9% higher year over year in June; 39.7% higher for feeder steers weighing more than 600 pounds. He adds that the five-area fed cattle price averaged 30.3% higher year over year over the past four weeks. 

“The June cattle on feed report showed that feedlot inventories have been lower for nine consecutive months,” Peel says. “The decline in feedlot inventory has been relatively slow with May feedlot placements higher than expected based on lingering drought impacts and strong feeder demand as feedlots attempt to maintain inventories. However, feeder supplies and feedlot numbers will continue to decline as the reality of smaller cattle supplies builds. Increased heifer retention is likely to squeeze feeder supplies more sharply in the second half of the year.”

As it is, Peel points out beef production through the first 24 weeks of this year was 4.9% less than last year’s record pace. So far this year, he says yearling slaughter (steer + heifer) is 3.0% less year over year with steer slaughter down 4.7% and heifer slaughter down 0.4%.

“However, heifer slaughter is down 4.9% year over year in the last four weeks and combines with a 5.9% decrease in steer slaughter to reduce total yearling slaughter 5.5% in the most recent four weeks of data,” Peel explains. “Total cow slaughter is down 4.4% for the year to date with a 12.1% decrease in beef cow slaughter … Bull slaughter is down 8.4% thus far in 2023.”

The primary question about markets in the second half of the year revolves around the extent to which herd rebuilding begins — increased heifer retention and continued reductions in beef cow slaughter, according to Peel. He notes producer expectations and remaining drought conditions will impact the timing of herd rebuilding efforts.

“The upcoming July Cattle on Feed report (with quarterly steer and heifer feedlot inventories) and the July Cattle report are expected to provide important clues as to how cattle market conditions may change in the second half of the year,” Peel says.

Cattle futures climbed Friday as Corn futures slid on the bearish Acreage report (see below).

Feeder Cattle futures closed an average of $4.03 higher ($3.15 to $5.20 higher).

Live Cattle futures closed an average of $1.51 higher (65¢ higher at the back to $2.67 higher in new spot Aug).

Week to week on Friday, Feeder Cattle futures were up an average of $11.10 and Live Cattle futures were up an average of $3.68.

Negotiated cash fed cattle trade was mostly slow with light to moderate demand through Friday afternoon, according to the Agricultural Marketing Service.

Although too few to trend, there were a few live trades in the Texas Panhandle at $179/cwt. and at $182-$183 in the western Corn Belt. There were a few dressed trades in Nebraska at $290.

The only established trade for the week was in Kansas where live prices were $2 lower at $178.

Last week, live prices were $180/cwt. in the Southern Plains $182-$185 in Nebraska and $184-$185 in the western Corn Belt. Dressed prices were $290.

Choice boxed beef cutout value was 33¢ lower Friday afternoon at $327.72/cwt. Select was $3.55 lower at $293.63/cwt.

Estimated total cattle slaughter last week of 644,000 head was 5,000 head fewer than the previous week but 3,000 more than the same week last year. Year-to-date estimated total cattle slaughter of 16.3 million head was 580,000 head (-3.4%) less. Estimated year-to-date beef production of 13.34 billion pounds was 635.6 million pounds less (-4.5%).

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Corn futures tumbled Friday, closing 26¢ to 35¢ lower through Jly ’24 and then mostly 4¢ to 10¢ lower after USDA released the Acreage report, showing significantly more corn acres than expected (see below).

USDA estimated corn planted area for all purposes this year at 94.1 million acres, in the Acreage report. That was 5.52 million acres more (+6%) than last year, and 2.1 million acres more than the March Prospective Plantings report. Corn acres would be the third highest planted acreage in the United States since 1944. Projected area harvested for grain of 86.3 million acres would be 9% more than last year.

Conversely, soybean planted area for 2023 was estimated at 83.5 million acres, down 5% from last year and 4 million acres fewer than the Prospective Plantings report.

All wheat planted area for 2023 was estimated at 49.6 million acres, up 9% from last year. The 2023 winter wheat planted area of 37.0 million acres was 11% more than last year but 1% less than the previous estimate.

On Friday, Soybean futures closed 72¢ to 77¢ higher through Jan ‘24 and then 28¢ to 56¢ higher through Aug ‘24.

Week to week on Friday, Corn futures were an average of 86’9¢ lower through the front six contracts, while the front six contracts for Soybean were 34’5¢ higher.

USDA estimated all acres for hay harvested this year at 51.98 million acres, which would be 2.4 million acres more (+4.9%) than last year

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Major U.S. financial indices closed higher Friday, boosted by another gauge of cooling inflation.

The Personal Consumption Expenditures (PCE) price index, excluding food and energy, increased 0.3% month over month in May and 4.6% year over year, which was less than expected.

The Dow Jones Industrial Average closed 285 points higher. The S&P 500 closed 53 points higher. The NASDAQ was up 196 points.

West Texas Intermediate Crude Oil futures (CME) closed 52¢ to 78¢ higher through the front six contracts.

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The quarterly Grain Stocks report issued Friday continued to paint a picture of snugger on-hand supplies.

Corn stocks in all positions on June 1, 2023 totaled 4.11 billion bushels, down 6% year over year. Of the total stocks, 2.22 billion bushels were stored on farms, up 5% from a year earlier. Off-farm stocks of 1.89 billion bushels were 15% less than a year ago.

Soybeans stored in all positions on June 1, 2023 totaled 796 million bushels, down 18% from the same time last year. On-farm stocks totaled 323 million bushels, down 3% from a year ago. Off-farm stocks of 473 million bushels were 26% less than a year ago.

Old-crop all wheat stored in all positions on June 1, 2023 totaled 580 million bushels, down 17% from a year ago. On-farm stocks were estimated at 124 million bushels, up 34% from last year. Off-farm stocks of 456 million bushels were 25% less than a year ago.

Cattle futures continued to gain Thursday on Corn weakness.

Feeder Cattle futures closed an average of $1.41 higher (90¢ to $2.12 higher).

Live Cattle futures closed an average of 43¢ higher.

Corn futures closed 6¢ to 9¢ lower.

Soybean futures closed mostly fractionally lower to 4¢ lower, except for gains in the front four contracts.

KC HRW Wheat closed mostly 7¢ to 10¢ lower.

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

There were a few live trades in Nebraska at $182/cwt., but too few to trend.

So far this week, live sales in Kansas are $2 lower at $178.

Last week, live prices were $180/cwt. in the Southern Plains $182-$185 in Nebraska and $184-$185 in the western Corn Belt. Dressed prices were $290.

Choice boxed beef cutout value 15¢ higher Thursday afternoon at $328.05/cwt. Select was 50¢ higher at $297.18/cwt.

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Major U.S. financial indices closed mostly higher Thursday, buoyed by banks’ successful passage of stress testing.

The Dow Jones Industrial Average closed 296 points higher. The S&P 500 closed 19 points higher. The NASDAQ was fractionally lower.

West Texas Intermediate Crude Oil futures (CME) closed 18¢ to 30¢ higher through the front six contracts.

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Per capita red meat and poultry disappearance—often used as a proxy for consumption—is forecast to decline 1% next year, mostly due to an 8% projected decline in per capita disappearance of beef, according to USDA’s Economic Research Service.

For pork, a very slight decrease in pork production, combined with higher expected exports, result in a very small decrease in forecast per capita disappearance next year.