WLI

Negotiated cash fed cattle prices continued higher Wednesday.

Dressed sales in Nebraska were $8-$15 higher at $300/cwt. on light trade and good demand. There were some early live sales at $188-$194, but too few to trend, according to the Agricultural Marketing Service. Live prices there last week were $183-$189.

Live sales in the western Corn Belt continued $3-$5 higher at $190 on light trade and good demand. Although too few to trend, there were some dressed sales at $300. Dressed prices there last week were $288-$292.

Trade in the Southern Plains was very limited on moderate to good demand with too few transactions to establish the market. Last week, live prices were $175-$180 in the Texas Panhandle and $178-$180 in Kansas.

Wholesale beef prices continued higher. Choice boxed beef cutout value was $3.79 higher Wednesday afternoon at $325.19/cwt. Select was $2.12higher at $301.56/cwt.

Even so, Cattle futures closed sharply lower amid likely technical selling and profit taking.

Live Cattle futures closed an average of $2.34 lower (82¢ lower in spot Jun to $2.82 lower).

Feeder Cattle futures closed an average of $3.76 lower ($2.72 lower at the back to $4.27 lower).

Another day and another forecast — wetter this time — pressured Corn and Soybean futures Wednesday.

Corn futures closed mostly 7¢ to 10¢ lower.

Soybean futures closed mostly 8¢ to 10¢ lower.

KC HRW Wheat closed 21¢ to 32¢ lower through Jly 24 and then 13¢ to 16¢ lower.

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Major U.S. financial indices closed mixed Wednesday with investors continuing to look for direction.

The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 16 points lower. The NASDAQ was down 171 points.

West Texas Intermediate Crude Oil futures (CME) closed 79¢ to 83¢ higher through the front six contracts.

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Pasture and range conditions continued to improve last week, according to the Crop Progress report from USDA’s National Agricultural Statistics Service.

For the week ending June 4, 45% of pasture and range was rated as Good (37%) or Excellent (8%), compared to 43% the previous week and 28% a year earlier. 20% was rated as Poor (14%) or Very Poor (6%), versus 22% a week earlier and 43% a year earlier. States with more than 40% of pasture and range rated as Poor or Very Poor include: Kansas (45%), Missouri (47%) and Oregon (46%).

Corn condition slipped a little week to week.

96% of corn was planted, which was 3% more than the previous year and 5% more than the five-year average. 85% was emerged, compared to 76% last year and 77% for average. 64% was rated in Good (53%) or Excellent (11%) condition, compared to 69% the previous week and 73% the previous year. 6% was as Poor (6%) or Very Poor (1%), compared to 4% a year earlier, which was 1% more than previous week and 2% more than a year earlier.

Negotiated cash fed cattle prices stepped $3-$5 higher in the western Corn Belt Tuesday at $190/cwt. according to the Agricultural Marketing Service. Trade was slow on light to moderate demand. Dressed prices there last week were $288-$292.

There were a few early sales in Nebraska through Tuesday afternoon at $190 on a live basis and $300 in the beef, but too few to trend. Last week, live prices were $183-$189 and dressed prices were $285-$292.

Trade in the Southern Plains was mostly inactive with very light demand. Last week, live prices were $175-$180 in the Texas Panhandle and $178-$180 in Kansas.

Stronger cash fed cattle prices helped lift Cattle futures.

Live Cattle futures closed an average of $1.60 higher (97¢ higher toward the back to $2.67 higher in spot Jun).

Feeder Cattle futures closed an average of $1.27 higher (65¢ higher in spot Aug to $1.57 higher at the back).

Resurgent wholesale beef values added support. Choice boxed beef cutout value was $7.21 higher Tuesday afternoon at $321.40/cwt. Select was $2.71 higher at $299.44/cwt.

Corn futures closed 3¢ to 10¢ higher through Jly ‘24 Tuesday on a more bearish weather outlook.

KC HRW Wheat closed 2¢ to 3¢ lower through May’24 and then 9¢ to 13¢ lower.

Soybean futures closed mostly 3¢ to 5¢ higher.

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Major U.S. financial indices mainly paddled water Tuesday with investors looking for direction.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 46 points.

West Texas Intermediate Crude Oil futures (CME) closed 39¢ to 41¢ lower through the front six contracts.

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Agricultural producer sentiment grew more bearish last month, according to the Purdue University/CME Group Ag Economy Barometer. It fell 19 points in May to 104, the weakest level since July 2022. The Index of Future Expectations was down 22 points to a 98, while the Index of Current Conditions was down 13 points at 116.

Weaker crop prices likely fueled declining producer optimism. In mid-May, compared to a month earlier, new-crop wheat bids for June-Jly delivery were down 50¢ per bushel, soybean bids were $1 per bushel less and Eastern Corn Belt fall delivery bids for corn declined more than 50¢ per bushel.

“Producers are feeling the squeeze from weakened crop prices which has reduced their expectations for strong financial performance in the coming year,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

In May, 38% of respondents said they expected weaker financial performance for their farm this year, compared to 23% who felt that way in April. Higher input cost remains the top concern among producers in the year ahead; however, concern over the risk of lower crop and/or livestock prices is growing.

Producers’ expectations for short-term farmland values fell 13 points to 110 in May, the weakest short-term index reading since August 2020. Just 29% of respondents said they expected farmland values to rise over the next 12 months compared to 54% who felt that way a year earlier.

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 May 15-19.

Cattle futures continued higher Monday, helped along by surging wholesale beef prices and softer Corn futures.

Live Cattle futures closed an average of 47¢ higher.

Feeder Cattle futures closed an average of 68¢ higher.

Corn futures softened a touch Monday, following the previous session’s strong gains, perhaps pressured in part by rain forecast in the Corn Belt.

Corn futures closed mostly 2¢ to 4¢ lower.

KC HRW Wheat closed 4¢ to 10¢ higher.

Soybean futures closed mostly 2¢ to 5¢ lower.

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

Last week, live prices were $175-$180/cwt. in the Texas Panhandle, $178-$180 in Kansas, $183-$189 in Nebraska and $185-$187 in the western Corn Belt. Dressed prices were $285-$292 in Nebraska and $288-$292 in the western Corn Belt.

Choice boxed beef cutout value was $4.26 higher Monday afternoon at $314.19/cwt. Select was $5.80 higher at $296.73/cwt.

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Major U.S. financial indices closed lower Monday, with likely profit taking from last week’s strong gains.

The Dow Jones Industrial Average closed 199 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 11 points.

West Texas Intermediate Crude Oil futures (CME) closed 28¢ to 42¢ higher through the front six contracts.

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Dwindling beef production and resilient wholesale beef demand are lifting cattle prices.

“Tighter supplies of beef and cattle are dominating market fundamentals and will continue to do so,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel points out beef production was 4.8% less year over year for the first 20 weeks of this year, with lighter year-over-year carcass weights magnifying the decline.

“Choice boxed beef prices finished last week at $309.93/cwt., up $6/cwt. from the Friday before Memorial Day,” Peel notes. “Boxed beef prices previously peaked in late April but decreased through May with holiday buying completed. The increase in Choice boxed beef prices into June suggests that post-Memorial Day beef demand remains strong.” 

As cattle slaughter declines, harvest remains weighted toward a higher percentage of females than is typical.

“Total cattle slaughter is down 2.8% so far this year compared to last year, with fed slaughter down 2.4% and total cow slaughter down 4.1% year over year,” Peel says. “However, heifer slaughter remains 0.6% higher year over year for the year to date and total female (heifer plus cow) so far this year accounts for 52.4% of total cattle slaughter.”

Increasing fed cattle, calf and feeder cattle prices are providing economic incentive for herd expansion, and it appears Mother Nature is beginning to cooperate.

“Recent improvement in drought conditions increases the odds that heifer retention will begin in earnest in the second half of the year,” Peel says. “Increased heifer retention, combined with reduced cow culling will increasingly squeeze cattle slaughter for the remainder of the year and into 2024 and beyond.”  

Negotiated cash fed cattle trade ranged from slow with moderate demand to mostly inactive on light demand through Friday afternoon with too few transactions to trend, according to the Agricultural marketing Service.

For the week, live prices were $5-$9 higher in the Texas Panhandle at $175-$180/cwt., $7-$9 higher in Kansas at $178-$180, $3-$6 higher in Nebraska at $183-$188 and $3-$5 higher in the western Corn Belt at $185-$187. Dressed prices were $5-$6 higher in Nebraska at $285-$292 and $3-$7 higher in the western Corn Belt at $288-$292.

Through Thursday, the five-area direct weighted average fed steer price was $3.64 higher week to week at $181.35. The weighted average dressed steer price was $5.30 higher at $289.66.

Choice boxed beef cutout value was $3.49 higher Friday afternoon at $309.93/cwt. Select was $4.61 higher at $290.93/cwt.

Week to week on Friday, Feeder Cattle futures closed an average of $8.32 higher and Live Cattle futures closed an average of $6.12 higher. On Friday, Live Cattle futures closed an average of 31¢ higher and Feeder Cattle futures closed an average of 25¢ higher.

Grain and soybean futures caught a gear higher Friday, with the latest U.S. drought monitor showing expanding dryness in the Corn Belt. It indicates 34% of U.S. corn and 28% of soybean production was affected by drought June 1.

Corn futures closed mostly 10¢ to 16¢ higher through Jly ‘24 and then 2¢ to 5¢ higher.

Soybean futures closed mostly 12¢ to 18¢ higher.

KC HRW Wheat closed 7¢ to 9¢ higher.

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Major U.S. financial indices surged higher Friday, fueled by Senate passage of the Debt Ceiling bill, as well as a stronger jobs report than anticipated.

Total non-farm payroll employment increased by 339,000 in May, according to the U.S. Bureau of Labor Statistics.  The unemployment rate rose by 0.3% to 3.7%. Average hourly earnings for all employees on private non-farm payrolls in May rose by 11¢ cents to $33.44. Over the past 12 months, average hourly earnings have increased by 4.3%.

The Dow Jones Industrial Average closed 701 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 139 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.48 to $1.64 higher through the front six contracts.

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As welcome as significantly higher cattle prices are to producers, Andrew P. Griffith, agricultural economist at the University of Tennessee cautions the economic incentive for rapid herd expansion could add to eventual downside price pain.

“There is no reason to say the prices represented on the futures market are not attainable. However, if cash prices reach such a level in today’s economic environment, it will likely do more harm to cattle industry participants than good over the next five to eight years,” Griffith says, in his weekly market comments. “The concern here is some repeat performance of 2016 through 2018 following the strong prices in 2014 and 2015.”

It was a classic example of feast or famine.

“There is no way to predict what cattle prices will look like in five years, but the price levels being anticipated the next 12 months scream and shout herd expansion at as fast of a rate as possible,” Griffith says. He explains a moderate pace of herd expansion would support stronger prices for a longer period, whereas rapid expansion sets the stage for a steep price decline.

In the meantime, Griffith notes narrowing to negative packer margins amid high fed cattle prices likely point to increased sector consolidation.

“The packers this will be toughest on are the smaller operations and the new operations that are trying to pay down loans,” Griffith says. “The large and established packers can deal with negative margins a little longer than those who are highly leveraged. Red margins are nothing new in the packing industry, but they are something new to many of the operations that have opened the past couple of years. Beef packers will be competing for a relatively small number of cattle the next couple of years, which could lead to buyouts, consolidation, or straight-out closures … This type of price environment will lead to changes in the cattle industry. What those changes are and how they impact the industry will only be revealed with time.”

Negotiated cash fed cattle prices roared higher Thursday.

Trade in the Southern Plains was active with very good demand. Live prices were $5-$9 higher in the Texas Panhandle at $175-$180/cwt. and $7-$9 higher in Kansas at $178-$180.

Elsewhere, trade was moderate with very good demand. Live prices were $3-$6 higher in Nebraska at $183-$188 and $3-$5 higher in the western Corn Belt $185-$187. Dressed prices in Nebraska were $5-$6 higher at $285-$292. Last week, dressed prices in the western Corn Belt were $285.

Choice boxed beef cutout value was 60¢ higher Thursday afternoon at $306.44/cwt. Select was 83¢ lower at $286.32/cwt.

The extraordinary ascent of cash fed cattle prices fueled another bounce in Cattle futures.

Live Cattle futures closed an average of $3.65 higher ($2.25 higher at the back to $5.77 higher in spot Jun).

Feeder Cattle futures closed an average of $3.38 higher ($2.47 to $4.20 higher).

Traders appeared to add weather premium to markets Thursday.

Corn futures closed mostly 5¢ to 8¢ higher.

KC HRW Wheat closed 12¢ to 19¢ higher.

Soybean futures closed 18¢ to 29¢ higher though May ‘24 and then mostly 11¢ to 18¢ higher.

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Major U.S. financial indices closed higher Thursday with optimism fueled by U.S. House passage of a debt ceiling bill. 

The Dow Jones Industrial Average closed 153 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 165 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.79 to $2.01 higher through the front six contracts.

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Ranch and farm labor wages increased in the latest semiannual Farm Labor report from USDA’S NASS.

Operators paid their hired workers an average wage of $18.08 per hour during the April 2023 reference week (April 9-15, 2023), up 5% from the April 2022 reference week. Field workers received an average of $17.26 per hour, up 5%, while livestock workers earned $16.48 per hour, up 4%. The field and livestock worker combined wage rate of $16.99 per hour, was up 4% from the 2022 reference week. Hired laborers worked an average of 40.6 hours during the reference week, up 2% year over year.

Ranch and farm operators hired 651,000 workers directly during the reference week, which was 3% more than the previous year.