WLI

Although Friday’s Cattle on Feed report seemed to bring pressure early in the session, the reaction faded quickly as the day progressed in Cattle futures amid light trade.

Feeder Cattle futures closed an average of 61¢ higher, except for an average of 17¢ lower in the front three contracts.

Live Cattle futures closed narrowly mixed, from an average of 29¢ lower to an average of 13¢ higher.

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

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.

The weighted average five-area direct fed steer price last week was $2.35 lower on a live basis at $182.57/cwt. The average fed steer price in the beef was $6.26 lower at $289.81.

Choice boxed beef cutout value was 97¢ lower Monday afternoon at $333.04/cwt. Select was 29¢ lower at $299.67/cwt.

Grain and Soybean futures closed mostly higher Monday, balancing weekend rains across much of the Corn Belt with geopolitical tensions in Russia.

Corn futures closed mostly 1¢ to 5¢ higher, except for mostly fractionally mixed from near Sep through near May.

Soybean futures closed 12¢ to 26¢ higher through Aug ‘24 and then mostly 9¢ to 12¢ higher. 

KC HRW Wheat closed mostly 5¢ higher.

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Major U.S. financial indices softened Monday with most pressure from tech stocks.

The Dow Jones Industrial Average closed 12 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 156 points.

West Texas Intermediate Crude Oil futures (CME) closed 21¢ to 27¢ higher through the front six contracts.

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Frozen beef stocks continued to decline last month, according to the latest USDA Cold Storage report. Beef in cold storage May 31 was 6% less than the previous month and 20% less than a year earlier.

Frozen pork supplies were 7% less than the previous month and down 4% year over year.

Total red meat supplies in freezers were 7% less than the previous month and 11% less than the previous year.

Total frozen poultry supplies were up 2% from the previous month and 9% higher year over year.

Weather forecasts continued to whipsaw grain markets on Friday with Corn and Soybean futures closing sharply lower on the wet weekend outlook for the Corn Belt, as well as overbought conditions.

Corn futures closed mostly 22¢ to 32¢ lower.

Soybean futures closed 18¢ to 29¢ lower through Jly ‘24 (except for 6¢ and 14¢ lower in the front two contracts) and then mostly 6¢ to 8¢ lower.

KC HRW Wheat closed mostly 10¢ to 18¢ lower.

Feeder Cattle futures surged an average of $2.80 higher Friday ($2.20 to $3.27 higher) as Corn futures slid lower.

Live Cattle futures tread water with pressure from the week’s softer cash trade and lower wholesale beef prices. They closed an average of 17¢ higher, except for an average of 23¢ lower in the front three contracts.

Negotiated cash fed cattle trade was inactive on light demand in all regions through Friday afternoon, with too few transactions to trend in any region, according to the Agricultural Marketing Service.

For the week, live prices were $2 lower in the Southern Plains at $180/cwt., $3-$4 lower in Nebraska at $182-$185 and $2-$3 lower in the western Corn Belt at $184-$185. Dressed prices were $6 lower in Nebraska at $290 and $6-$10 lower in the western Corn Belt at $290.

Choice boxed beef cutout value was 46¢ lower Friday afternoon at $334.01/cwt. Select was $3.84 lower at $299.96/cwt. The Choice Select spread was the highest since last October at $34.05.

Estimated total cattle slaughter last week of 649,000 head was 15,000 head more than the previous week, but 16,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 15.6. million head was 587,000 head less (-3.6%) that the same time last year. Year-to-date estimated beef production of 12.8 billion pounds was 638 million pounds less (-4.7%).

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Major U.S. financial indices slid Friday as investors appeared more concerned about domestic and global economic growth.

The Dow Jones Industrial Average closed 219 points lower. The S&P 500 closed 33 points lower. The NASDAQ was down 138 points.

West Texas Intermediate Crude Oil futures (CME) closed 17¢ to 35¢ lower through the front six contracts.

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Although bullish supply fundamentals remain, markets could view Friday’s monthly Cattle on Feed report as slightly bearish with May placements about 3% more than pre-report estimates. Placements in May of 1.9 million head were 86,000 more (+4.6%) year over year. That’s for feedlots with 1,000 head or more capacity.

In terms of placement weights, 34% went on feed weighing 699 lbs. or less, 51% weighing 700-899 lbs. and 15% weighing 900 lbs. or more.

Marketing in May of 1.9 million head were 1.7% more than last year, about even with expectations.

Cattle on feed June 1 of 11.5 million head were 2.9% less than the previous year. That was 0.5% more than estimates ahead of the report.

Cattle futures found some traction Thursday with a let up in Corn futures and perhaps some short covering.

Live Cattle futures closed an average of $1.24 higher (40¢ to $1.72 higher).

Feeder Cattle futures closed an average of $3.07 higher ($2.55 to $3.45 higher).

Corn and Soybean futures took a breather Thursday from the recent steep run-up.

Corn futures closed mostly 7¢ to 8¢ lower.

Soybean futures closed 14¢ to 40¢ lower through Sep ‘24 and then mostly 6¢ lower.

KC HRW Wheat closed mostly 5¢ to 6¢ higher.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on very light demand through Thursday afternoon, with too few transactions to trend in any region, according to the Agricultural Marketing Service.

So far this week, live prices are $2 lower in the Southern Plains at $180/cwt., $3-$4 lower in Nebraska at $182-$185 and $2-$3 lower in the western Corn Belt at $184-$185.

Last week, dressed prices were $296 in Nebraska and $294-$300 in the western Corn Belt.

Choice boxed beef cutout value was 22¢ higher Thursday afternoon at $334.47/cwt. Select was 45¢ lower at $303.80/cwt

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Major U.S. financial indices firmed Thursday with the most support for tech stocks.

The Dow Jones Industrial Average closed 4 points lower. The S&P 500 closed 16 points higher. The NASDAQ was up 128 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.39 to $3.02 lower through the front six contracts, pressured by central banks around the world raising interest rates, as well as concerns about China’s economic growth and demand.

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Current and recent U.S. Drought Monitors paint a clear picture behind the drought premiums added to grain and soybean futures.

For the week beginning June 20, drought existed across 58.5% of the Midwest, compared to 48.7% a week earlier and 32.1% two weeks earlier.

For the same week, 64% of U.S. corn production was in drought areas, compared to 57% a week earlier and 45% two weeks earlier. The same week last year, drought covered 17% of production.

Likewise, 57% of U.S. soybean production was affected by drought the week beginning June 20, compared to 51% a week earlier, 39% two weeks earlier and 11% a year earlier.

For the same week, drought encompassed 27.1% of the Continental U.S. versus 25.0% a week earlier and 34.5% two weeks earlier. Forty percent of U.S. cattle were in areas affected by drought.

Corn and Soybean futures bounced sharply higher Wednesday, fueled by the eroding crop conditions revealed in the weekly Crop Progress report and spawned by intensifying drought in the Corn Belt.

Corn futures closed mostly 20¢ to 31¢ higher through Sep ‘24 and then mostly 10¢ to 18¢ higher.

Soybean futures closed 23¢ to 37¢ higher through Aug ‘24 and then mostly 15¢ higher.

KC HRW Wheat closed mostly 27¢ to 37¢ higher.

Those gains cast a bearish shadow across Feeder Cattle futures, which closed an average of $3.67 lower ($2.92 to $4.42 lower).

Live Cattle faded most of the heat, supported by current cash premiums and despite lower cash fed cattle prices so far this week and recent sharp declines in wholesale beef values. Live Cattle closed an average of 34¢ lower, except for 12¢ and 5¢ higher in the front two contracts.

Keep in mind the monthly Cattle on Feed report comes out Friday.

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

So far this week, live prices are $2 lower in the Southern Plains at $180/cwt. and $2-$3 lower in the western Corn Belt at $184-$185, where dressed prices last week were $294-$300.

Although too few to trend, there were some live sales in Nebraska at $182-$185. Last week, live prices there were $185-$189 on a live basis and $296 in the beef.

Choice boxed beef cutout value was $2.66 lower Wednesday afternoon at $334.25/cwt. Select was $3.68 lower at $304.25/cwt.

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Major U.S. financial indices closed lower again Wednesday, pressured by hawkish interest rate comments from the Federal Reserve.

“Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” according to FOMC chair, Jerome Powell, in testimony to Congress. “But at last week’s meeting, considering how far and how fast we have moved, we judged it prudent to hold the target range steady to allow the Committee to assess additional information and its implications for monetary policy.”

The Dow Jones Industrial Average closed 102 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 165 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.28 to $1.34 higher through the front six contracts.

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Rural economies are improving, according to the Creighton University Rural Mainstreet Index (RMI). It rose to 56.9 in June, the highest level since May of last year and marking the third consecutive month with a reading above growth neutral (50.0).

“After negative growth during the first quarter of this year, the Rural Mainstreet economy experienced positive, but slow, economic growth for all of the second quarter. Only 3.4% of bankers reported a downturn in economic conditions for the month,” according to Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The RMI is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Bank CEOs ranked Federal Reserve rate hikes as the greatest challenge in the 12 months ahead with rising bank regulations ranked as a distant second.

“Higher short-term interest rates produced by Federal Reserve rate hikes over the past year have posed a significant threat to community banks by expanding the costs of customer deposits while the rates on bank loans have risen little over the same time period,” Goss says.

Cattle futures started the trading week lower with pressure from last week’s weaker fed cattle prices, increasing feed costs, lower wholesale beef values and bearish outside markets.

Live Cattle futures closed an average of $1.49 lower ($1.02 to $2.02 lower).

Feeder Cattle futures closed an average of $2.25 lower ($1.47 to $2.77 lower).

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

Last week, live prices were $182/cwt. in the Southern Plains, $185-$189 in Nebraska and $186-$188 in the western Corn Belt. Dressed prices were $296 in Nebraska and $294-$300 in the western Corn Belt.

Choice boxed beef cutout value was $3.23 lower Tuesday afternoon at $336.91/cwt. Select was $2.83 lower at $307.93/cwt.

Corn and Soybean futures retained last week’s sharp gains on Tuesday as new-crop conditions erode (see below).

Corn futures closed mostly 2¢ to 6¢ higher.

Soybean futures closed mostly 1¢ to 7¢ higher.

KC HRW Wheat closed mostly narrowly mixed from 4¢ lower to 1¢ higher.

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Major U.S. financial indices closed lower Tuesday, led by energy stocks. That was despite positive economic news including more housing starts than expected.

Privately‐owned housing starts in May were at a seasonally adjusted annual rate of 1,631,000, according to the U.S. Census Bureau. That was 21.7% more than the revised April estimate of 1,340,000 and 5.7% more than the May 2022 rate of 1,543,000.

The Dow Jones Industrial Average closed 245 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 22 points.

West Texas Intermediate Crude Oil futures (CME) closed 74¢ to $1.28 lower through the front six contracts.

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Nationwide, pasture and range conditions eroded a touch last week, according to the Crop Progress report from USDA’s National Agricultural Statistics Service.

For the week ending June 18, 44% of pasture and range was rated as Good (35%) or Excellent (9%), which was 1% less than the previous week but 11% more than a year earlier. 21% was rated as Poor (14%) or Very Poor (7%), which was 1% more than a week earlier but 21% less than a year earlier. States with more than 40% of pasture and range rated as Poor or Very Poor include: Illinois (42%); Michigan (56%) and Pennsylvania (48%).

Corn and soybean condition continued to deteriorate.

55% of corn was rated, Good (47%) or Excellent (8%) condition, compared to 61% the previous week and 70% the previous year. 12% was as Poor (9%) or Very Poor (3%), which was 4% more than previous week and 6% more than a year earlier.

54% of soybeans were rated in Good (47%) or Excellent (7%) condition, which was 5% less than the previous week and 14% less than the same week last year. 12% of soybeans were in Poor (9%) or Very Poor (3%) condition, versus 9% the previous week and 6% the previous year.

15% of winter wheat was harvested, which was 8% less than last year and 5% less than the average. 38% was rated in Good (32%) or Excellent (6%) condition, the same as a week earlier and 8% more than a year earlier. 29% was rated Poor (18%) or Very Poor (11%), which was 2% less than the previous week and 14% less than a year earlier.