WLI

Cattle futures mostly softened Friday, unable to shake off the week’s lower cash fed cattle prices and growing concerns about domestic and global economic growth.

Feeder Cattle futures closed an average of 84¢ lower (15¢ to $1.72 lower). They were an average of $7.34 lower week to week on Friday. The CME Feeder Cattle Index was $3.74 lower week to week on Thursday at $199.46.

Live Cattle futures closed an average of 17¢ lower, except for an average of 21¢ higher in the front two contracts. They were an average of $3.38 lower week to week on Friday.

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

For the week, live prices were $1 lower in the Southern Plains at $172/cwt., $2 lower in Nebraska at $176 and $2-$8 lower in the western Corn Belt at $172-$178. Dressed prices were $2-$5 lower in Nebraska at $281. The previous week, dressed prices were $285 in the western Corn Belt.

Choice boxed beef cutout value was 33¢ lower Friday afternoon at $309.19/cwt. Select was 67¢ higher at $288.16/cwt.

Estimated total cattle slaughter for the week was 623,000 head, which was 1,000 head less than the previous week and 38,000 head less than a year earlier. Year-to-date estimated total cattle slaughter of 11.3 million head was 384,000 head fewer (-3.3%). Year-to-date estimate beef production of 9.3 billion pounds was 477.6 million pounds less (-4.9%) than the same time last year.

Grain and Soybean futures continued higher Friday, led by wheat, with more support from worries about renewal of the Black Sea Initiative.

KC HRW Wheat closed mostly 26¢ to 34¢ higher through May ‘24 and then 16¢ to 21¢ higher.

Corn futures closed mostly 3¢ to 7¢ higher.

Soybean futures closed 10¢ to 18¢ higher through Jan ‘24 and then 5¢ to 8¢ higher through Mar ’25.

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Major U.S. financial indices closed higher Friday with support from a rebound in regional banks and Apple beating quarterly earnings estimates.

The Dow Jones Industrial Average closed 546 points higher. The S&P 500 closed 75 points lower. The NASDAQ was up 249 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.56 to $2.78 higher through the front six contracts.

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U.S. beef exports in March showed signs of recovery from weakness during the last several months, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). However, volume and value remained less than last year’s record pace.

Beef exports volume was 120,495 metric tons in March, down 5% from a year ago. Export value fell 17% to $892.6 million, but both volume and value were the highest in five months. Through the first quarter, beef exports were down 8% year-over-year to 326,494 mt, valued at $2.35 billion (down 22%).

March beef export value per head of fed slaughter was 16% less than last year at $397.22. Value per head of fed slaughter through the first quarter was $373.42, which was 21% less year over year.

“U.S. beef exports faced considerable headwinds late last year and at the beginning of 2023, but the March results show some encouraging trends,” says Dan Halstrom, USMEF President and CEO. “Most Asian markets showed renewed momentum in March, while exports continued to trend higher to Mexico, the Caribbean and South Africa.”

March beef exports to Mexico were well above last year, while export growth to the Caribbean was highlighted by a record month for the Dominican Republic. Exports also increased year-over-year to the Philippines, while beef variety meat demand strengthened in South Africa and Peru. March exports to South Korea were below last year but were the largest in 10 months, while exports to China/Hong Kong were the largest since October.

U.S. pork exports also were encouraging; the most since May 2021. Export volume for the months was 17% higher year over year and value was up 18%. Through the first quarter, export volume is 14% more than the same time last year and value is 15% higher at $1.96 billion.

Cattle futures firmed Thursday, albeit narrowly mixed, amid negative outside markets, tied to banking and the week’s lower cash fed cattle prices.

Feeder Cattle futures closed an average of 30¢ higher, except for an average of 22¢ lower in two nearby contracts.

Live Cattle futures closed narrowly mixed, from an average of 12¢ lower in the front three contracts to an average of 22¢ higher.

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

So far this week, live prices are $1 lower in the Southern Plains at $172/cwt., $2 lower in Nebraska at $176 and $2-$8 lower in the western Corn Belt at $172-$178. Dressed prices are $2-$5 lower in Nebraska at $281.

Choice boxed beef cutout value was 43¢ higher Thursday afternoon at $309.52/cwt. Select was 37¢ higher at $287.49/cwt.

Net U.S. beef export sales were 20,100 metric tons the week ending April 27, according to the weekly U.S. Export Sales report. That was up noticeably from the previous week and 59% more than the prior four-week average. Increases primarily were for, Japan South Korea, China Taiwan and Mexico.

Wheat futures (KCH) continued higher Thursday — up mostly 12¢ to 14¢ — with follow-through support from worries about renewal of the Black Sea Initiative.

Corn and Soybean futures eased lower on likely profit taking from the previous session’s strong gains and perhaps some positioning ahead of the weekly U.S. Export Sales report.

Corn futures closed mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 3¢ to 6¢ lower.

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Major U.S. financial indices closed lower on Thursday as investors grew more squeamish about regional bank health.

The Dow Jones Industrial Average closed 286 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 58 points.

West Texas Intermediate Crude Oil futures (CME) closed 4¢ to 18¢ lower through the front six contracts.

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By most every measure, domestic consumer beef demand remains extraordinarily strong in the face of high prices and slowing economic growth.

For instance, in his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee explains most beef items are trading at or above year-ago wholesale prices levels, while pork and poultry prices are significantly lower.

“Pork loin prices have averaged about 10% lower this year compared to last year while wholesale bacon prices have averaged about 45% lower than a year ago. Similarly, chicken breast prices are about 54% lower than 2022,” Griffith says. “These lower prices for competing meat protein products should put pressure on wholesale beef prices if retail prices decline. Despite none of these products being good substitutes for beef, consumers will notice this big difference if it translates to retail.”

Declining open interest, negative outside markets, technical selling and weaker cash fed cattle prices pressured Cattle futures sharply lower for a second consecutive session Wednesday.

Feeder Cattle futures closed an average of $2.21 lower ($3.75 to $4.08 lower).

Live Cattle futures closed an average of $1.04 lower (60¢ to $1.40 lower).

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

So far this week, live prices are $1 lower in the Southern Plains at $172/cwt., $2 lower in Nebraska at $176 and $2-$8 lower in the western Corn Belt at $172-$178. Dressed prices are $2-$5 lower in Nebraska at $281.

Choice boxed beef cutout value was 15¢ lower at $309.09/cwt. Select was $1.54 lower at $287.12/cwt.

On the other side of the coin, grain and Soybean futures plowed higher Wednesday, led by Wheat and fueled by news of an attempted assassination of Russia’s Putin and what that could mean to the Black Sea Initiative.

Corn futures closed mostly 5¢ to 10¢ higher.

KC HRW Wheat closed 25¢ to 56¢ higher.

Soybean futures closed 5¢ to 8¢ higher through Jan’24. And then mostly 7¢ to 12¢ higher.

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Major U.S. financial indices closed lower again on Wednesday with follow-through uncertainty about the health of regional banks, compounded by the Fed’s decision to raise interest rates another 25 basis points.

The Dow Jones Industrial Average closed 270 points lower. The S&P 500 closed 28 points lower. The NASDAQ was down 55 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.52 to $3.06 lower through the front six contracts.

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U.S. agricultural producer sentiment improved modestly in April as measured by the Purdue University/CME Group Ag Economy Barometer. Month to month, it rose 6 points to a reading of 123. Both of the barometer’s sub-indices also increased in April. The Current Conditions Index was up 3 points to 129 and the Future Expectations Index was up 7 points to 120. 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 April 10-14.

“Producers held a more optimistic view of the agricultural economy in April,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “A shift in farmers’ expectations regarding the Fed’s future interest rate policy could be a key reason.”

In April, 34% of respondents said they expect the U.S. prime interest rate to remain unchanged or decline over the next year, compared to 25% of producers who felt that way in February. At the same time, two-thirds (66%) of producers expect interest rates to keep rising, compared to 75% of respondents who felt that way in February. However, the biggest shift was a decline in the percentage of respondents who expect rates to rise between 1% to 2% in the next year, down 6 points since February to 37%.

Producers’ expectations for short-term farmland values increased in April following five-straight months of decline. The Short-Term Farmland Value Expectations Index rose 10 points in April to a reading of 123, while the long-term farmland index held steady at a reading of 142. Even with this month’s rise, the short-term index remains 21 points lower than a year earlier and 36 points lower than two years ago.

Cattle futures crumbled Tuesday with early cash trade taking another step lower, the packers seeming ability to pull dollars off the market by restricting kills and question marks about a seasonal peak for wholesale beef prices.

Feeder Cattle futures closed an average of $3.90 lower ($3.75 to $4.08 lower).

Live Cattle futures closed an average of $1.76 lower ($1.75 to $1.97 lower).

Negotiated cash fed cattle trade was moderate on moderate demand in the Southern Plains through Tuesday afternoon, according to the agricultural Marketing Service. Prices were $1 lower at $172/cwt.

Although too few transactions to trend, there were some early live sales in Nebraska at $281 and a few live sales in the western Corn Belt at $172-$178.

Live prices last week were $178-$180 in Nebraska and $180 in the western Corn Belt. Dressed prices were $283-$286 in Nebraska and $285 in the western Corn Belt.

Choice boxed beef cutout value was 78¢ lower Tuesday afternoon at $309.24/cwt. Select was $2.34 lower at $288.66/cwt.

Corn futures closed mostly 1¢ to 5¢ lower.

KC HRW Wheat closed 16¢ to 20¢ lower through Sep ‘24, and then mostly 8 to 9¢ lower.

Soybean futures closed 7¢ to 16¢ lower through Jan’24.

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Major U.S. financial indices closed lower Tuesday on fears arising from First Republic Bank’s collapse.

The Dow Jones Industrial Average closed 367 points lower. The S&P 500 closed 48 points lower. The NASDAQ was down 132 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.59 to $4.00 lower through the front six contracts.

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“Global beef production is projected to increase slightly in 2023 with decreased production in the U.S., the largest beef producing country, but continued growth in beef production in Brazil, the number two beef producer as well as number three China.,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Based on the most recent Livestock and Poultry: World Markets and Trade report from the USDA Foreign Agricultural Service, Peel explains, total beef consumption is forecast to decrease in the U.S., the largest beef consuming nation.

“China/Hong Kong is the second largest beef consuming region with continued growth in beef consumption projected in 2023,” Peel says. “Brazil and the E.U. are the third and fourth largest beef consuming countries, both expected to have slight growth in beef consumption this year. The top four beef consuming nations are projected to account for 65% of global beef consumption. India is the number five beef consuming country, followed by Argentina and Mexico.”

Cattle futures extended losses on Monday, pressured by last week’s lower cash fed cattle prices and skittishness ahead of this week’s trade.

Feeder Cattle futures closed an average of 92¢ lower (55¢ to $1.27 lower).

Live Cattle futures closed an average of 59¢ lower

Negotiated cash fed cattle trade was mostly inactive with very light demand in all regions through Monday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.

Live prices last week were $173/cwt. in the Southern Plains, $178-$180 in Nebraska and $180 in the western Corn belt. Dressed prices were $283-$286 in Nebraska and $285 in the western Corn Belt.

The five-area direct weighted average fed steer price last week was $177.15/cwt. on a live basis, which was $1.42 lower. The average fed steer price in the beef was $3.37 lower at 284.05.

Choice boxed beef cutout value was $1.42 lower Monday afternoon at $310.02/cwt. Select was $2.66 higher at $291.00/cwt.

Corn futures closed mostly 2¢ to 3¢ lower on Monday.

KC HRW Wheat closed 11¢ to 19¢ lower through Jly ‘24, and then mostly 8 to 9¢ lower.

Soybean futures closed mostly 10¢ to 15¢ higher.

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Major U.S. financial indices closed little changed but lower Monday as investors await the next Fed meeting. 

The Dow Jones Industrial Average closed 46 points lower. The S&P 500 closed 1 point lower. The NASDAQ was down 13 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.06 to $1.12 lower through the front six contracts.

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Nationwide, steers sold steady to $3/cwt. higher in the Southcentral region last week but steady to $3 lower in other regions, according to the Agricultural Marketing Service. Heifers sold from $1 lower to $2 higher.

According to AMS analysts, “Good demand remains for all weights of steers and heifers, but cattle feeders and backgrounders slowed a little in their pursuit of chasing the feeder market higher.”

In his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee notes cattle cash and futures prices have been chasing each other for three months.

“Markets are just like humans or any animal that has run a sprint. They get tired and need to catch their breath,” Griffith says. “These types of runs also tend to lead to exhaustion, which then results in a period of poor performance. This does not mean cattle market prices are going to make some big decline, but a slower and steadier price increase would indicate more stability in the market. The fundamentals of the cattle market certainly support strong cattle prices since beef demand is strong and domestic beef supply is expected to decline due to a smaller cattle inventory.”

Griffith explains the overall economy is the primary factor that could introduce weakness to the cattle markets.

“As leadership in the financial institution continues to attempt to curtail inflation with higher interest rates, there is no way to know for sure how this will influence consumers.” Griffith says. “It will certainly send some sort of ripple effects through the system.”