WLI

Live Cattle futures continued to grind higher, closing an average of 49¢ higher (5¢ higher at the front to 92¢ higher at the back), supported by stronger cash prices and wholesale beef values.

Feeder Cattle futures closed an average of 75¢ lower in light trade, pressured by the bounce higher in Corn futures.

Grain and Soybean futures closed higher Friday as traders appeared to add weather premium with the dry, hot outlook in the Corn Belt for the next couple of weeks.

Corn futures closed mostly 10¢ to 18¢ higher.

KC HRW Wheat closed 1¢ to 5¢ higher in the front five contracts and then 13¢ to 15¢ higher.

Soybean futures closed 10¢ to 17¢ higher.

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

For the week, live prices were $1 higher in the Southern Plains at $171/cwt., $2-$4 higher in Nebraska at $180-$182 and $4-$5 higher in the western Corn Belt at $182. Dressed prices were $4-$5 higher in Nebraska at $285-$286 and $3-$5 higher in the western Corn Belt at $285.

Choice boxed beef cutout value was $3.99 higher Friday afternoon at $303.93/cwt. Select was 38¢ higher at $284.92/cwt.

Estimated total cattle slaughter last week of 625,000 head was 17,000 head fewer than the prior week and 16,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 13.2 million head was 441,000 head less (-3.2%). Estimated year-to-date beef production of 10.8 billion pounds was 523.7 million pounds less (-4.6%).

U.S. beef exports appear to regaining some momentum. Net U.S. beef sales (2023) for the week ending May 18 totaled 18,300 metric tons. That was 5% more than the previous week and 15% more than the prior four-week average. Increases were primarily for Japan, South Korea, China, Mexico and Taiwan.

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Major U.S. financial indices closed higher Friday with renewed optimism surrounding debt ceiling talks. Tech stocks continued to add support.

The Dow Jones Industrial Average closed 328 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 277 points.

West Texas Intermediate Crude Oil futures (CME) closed 81¢ to 84¢ higher through the front six contracts.

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Fuel and fertilizer prices remain historically high but are lower year over year, according to analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

“Prices have been elevated for the better part of two years, and although they have been trending lower, they are still well above historic levels,” LMIC analysts say. “Anhydrous Ammonia prices started the year at $1,308.33 per ton, which was 12% below prices at the start of 2022. Through mid-May, Anhydrous Ammonia prices have fallen almost 17% to the most recent price reported of $1,089.58 per ton. Typically, Anhydrous Ammonia prices range from about $520 to $575 per ton during the first five months of the year.”

Likewise, based on USDA’s Illinois Production Cost Report, LMIC analysts offer other examples, compared to a year earlier (May 26): Diesel prices are 29% less at $3.27 per gallon; Liquid Nitrogen prices are 17% less at $535.75 per ton; Urea prices are 31% less at $653 per ton.

“Urea prices still need to move lower to get closer to more typical prices, which are usually around $400 per ton for this time of year,” according to LMIC analysts.

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

So far this week, live prices are $1 higher in the Southern Plains at $171/cwt., $2-$4 higher in Nebraska at $180-$182 and $4-$5 higher in the western Corn Belt at $182. Dressed prices are $4-$5 higher in Nebraska at $285-$286 and $3-$5 higher in the western Corn Belt at $285.

Choice boxed beef cutout value was $1.64 higher Thursday afternoon at $299.94/cwt. Select was 75¢ higher at $284.54/cwt.

Cattle futures continued to edge higher Thursday, supported by the week’s stronger cash prices.

Feeder Cattle futures closed an average of 25¢ higher, except for unchanged at either end of the board.

Live Cattle futures closed an average of 51¢ higher (25¢ to $1.20 higher in spot Jun).

Corn futures closed mostly 2¢ to 4¢ lower Thursday with likely profit taking and positioning ahead of the long weekend.

KC HRW Wheat closed mostly unchanged to 5¢ higher.

Soybean futures closed mostly 9¢ to 12¢ lower.

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Major U.S. financial indices closed mixed Thursday with gains in tech stocks but overall uncertainty tied to the debt ceiling talks.

The Dow Jones Industrial Average closed 35 points lower. The S&P 500 closed 36 points higher. The NASDAQ was up 213 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.08 to $2.51 lower through the front six contracts.

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Rural economic growth improved last month, according to the Rural Mainstreet Index, which increased from 50.1 in April to 55.8 in May. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. 

“The Rural Mainstreet economy continues to experience slow economic growth,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “Only 11.5% of bankers reported improving economic conditions for the month, with 88.5% indicating no change in economic conditions from April’s slow growth.”

After declining below growth neutral for March, the overall Rural Mainstreet Index expanded above the threshold for a second straight month, according to the May monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

The region’s farmland price index dropped to 56.3 from April’s 64.6. This was the 32nd straight month that the index has advanced above 50.0. 

Bankers reported that non-pasture farmland prices in their area grew by an average of 4.3% over the past 12 months. Respondents expected no price growth over the next 12 months.

The May loan volume index expanded to a strong 75.0 from 62.5 in April. The checking-deposit index plummeted to a second consecutive low of 22.0 from April’s 25.0, while the index for certificates of deposit and other savings instruments declined to 70.0 from April’s 74.0.

“Two consecutive record low checking deposit indices point to higher deposit outflows, even for community banks,” Goss says. 

Negotiated cash fed cattle trade was slow to moderate on moderate demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Prices were $1 higher at $171/cwt.

In Nebraska, trade was slow to moderate with moderate to good demand. Live prices were $2-$4 higher at $180-$182 and dressed prices were $4-$5 higher at $285-$286.

Although too few to trend, there were some live sales in the western Corn Belt at $180-$182 on slow trade with light to moderate demand. Live prices there last week were $177-$178 on a live basis; $280-$282 in the beef.

Cattle futures blossomed with the higher cash fed cattle prices.

Feeder Cattle futures closed an average of $1.33 higher, (87¢ to $2.17 higher).

Live Cattle futures closed an average of $1.04 higher (60¢ to $1.82 higher).

Choice boxed beef cutout value was $2.44 lower Wednesday afternoon at $298.30/cwt. Select was $2.51 higher at $283.79/cwt.

Corn futures closed mostly fractionally higher to 3¢ higher.

KC HRW Wheat closed mostly 15¢ to 29¢ lower.

Soybean futures closed mostly 2¢ to 4¢ lower.

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Major U.S. financial indices closed lower Wednesday with a negative rating watch for the U.S. AAA rating.

The Dow Jones Industrial Average closed 255 points lower. The S&P 500 closed 30 points lower. The NASDAQ was down 76 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.37 to $1.44 higher through the front six contracts.

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Total pounds of beef in freezers April 30 were down 6% from the previous month and down 16% from last year, according to USDA’s Cold Storage report.

Frozen pork supplies were 6% more than the previous month 6% more than the previous year.

Total red meat supplies in freezers were up slightly from the previous month but down 5% from last year.

Total frozen poultry supplies were up 1% from the previous month and up 9% from a year ago.

Cattle futures traded mixed Monday, holding their own in the face of higher grain futures.

Feeder Cattle futures closed an average of 36¢ higher, except for an average of 15¢ lower in two contracts.

Live Cattle futures closed mixed, from an average of 38¢ lower (10¢ to 70¢ lower) through Feb and then unchanged to an average of 10¢ higher.

Grain and Soybean futures bounced back some Monday with apparent technical resistance to the downside and perhaps some weather premium with the drier, hotter near-term outlook in parts of the Corn Belt.

Corn futures closed mostly 7¢ to 8¢ higher.

KC HRW Wheat closed fractionally higher to 3¢ higher.

Soybean futures closed mostly 15¢ to 21¢ higher.

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

For the week, live prices were steady in the Southern Plains at $170/cwt., $2 higher in Nebraska at $178 and steady to $3 higher in the western Corn Belt at $177-$178. Dressed prices were steady to $2 higher at $280-$282.

The five-area direct weighted average fed steer price was $1.02 higher last week at $175.15/cwt. The weighted average fed steer price in the beef was $1.36 higher at $280.84.

Choice boxed beef cutout value was $2.80 higher Monday afternoon at $303.90/cwt. Select was 51¢ lower at $283.43/cwt.

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Major U.S. financial indices closed mixed Monday, as investors continued to eye debt ceiling negotiations. 

The Dow Jones Industrial Average closed 140 points lower. The S&P 500 closed fractionally higher. The NASDAQ was up 62 points.

West Texas Intermediate Crude Oil futures (CME) closed 32¢ to 44¢ higher through the front six contracts.

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Beef cow slaughter continues less than last year but the year-to-date decline of 11%, with about five months of the year already gone, suggests the herd will continue to liquidate some more this year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“In 2014, beef cow slaughter dropped just over 18% from the previous year to put the brakes on herd liquidation. I suspect that the ongoing drought is masking continued liquidation in some areas up to this point,” Peel explains. “The low bred heifer inventory combined with the relatively slow reduction in beef cow slaughter makes additional beef cow herd liquidation this year probably unavoidable. In other words, if drought conditions continue to improve, 2024 will probably be the low point of the herd similar to 2014, albeit at even lower beef cow inventories.”

Assuming drought continues to fade, Peel explains, “What all of this means is that heifer retention likely will begin in earnest this fall with heifer calves to be bred in 2024. Modest herd expansion is possible next year with faster herd expansion after 2024.”

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

For the week, live prices were steady in the Southern Plains at $170/cwt., $2 higher in Nebraska at $178 and $1-$3 higher in the western Corn Belt at $178. Dressed prices in Nebraska were steady to $2 higher at $280-$282.

Stronger cash fed cattle prices in the North, coupled with erosion in Corn futures helped lift Cattle futures again on Friday.

Feeder Cattle futures closed an average of 64¢ higher (17¢ to 77¢ higher).

Live Cattle futures closed an average of 49¢ higher.

Choice boxed beef cutout value was $2.79 higher Friday afternoon at $301.10/cwt. Select was 33¢ higher at $283.94/cwt.

Estimated total cattle slaughter last week of 642,000 head was 4,000 head fewer than the previous week and 15,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 12.6 million head was 423,000 head fewer (-3.3%) than a year earlier. Estimated year-to-date beef production of 10.3 billion pounds was 513.6 million pounds less (-4.7%).

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As alluded to, market bears continued to pressure the grain complex Friday. Faster than average domestic planting, extension of the Black Sea Grain Initiative and China’s continued cancellation of contracts for U.S. corn all fueled bearishness in grain markets during the week.

Corn futures closed mostly 1¢ lower.

KC HRW Wheat closed 25¢ to 32¢ lower through May ‘24 and then 4¢ to 11¢ lower.

Soybean futures closed mostly 6¢ to 11¢ lower.

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Major U.S. financial indices closed lower Friday, dampened by stalled debt ceiling negotiations.

The Dow Jones Industrial Average closed 109 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 30 points.

West Texas Intermediate Crude Oil futures (CME) closed 25¢ to 39¢ lower through the front six contracts.

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USDA announced confirmation of an atypical case of Bovine Spongiform Encephalopathy (BSE) at a slaughter plant in South Carolina. According to Friday’s announcement, the cow, approximately 5 years old, never entered slaughter channels and at no time presented a risk to the food supply or to human health in the United States. Given the United States’ negligible risk status for BSE, USDA does not expect any trade impacts as a result of the finding.

USDA Animal and Plant Health Inspection Service’s (APHIS) National Veterinary Services Laboratories (NVSL) confirmed the cow was positive for atypical L-type BSE. The animal was tested as part of APHIS’s routine surveillance of cattle that are deemed unsuitable for slaughter.

Atypical BSE generally occurs in older cattle and seems to arise rarely and spontaneously in all cattle populations.

This is the nation’s 7th detection of BSE. Of the six previous U.S. cases, the first, in 2003, was a case of classical BSE in a cow imported from Canada; the rest have been atypical (H- or L-type) BSE.

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Markets will likely view the monthly Cattle on Feed report — feedlots with 1,000 head or more capacity — as neutral.

Placements in April of 1.7 million head were 76,000 head fewer (-4.2%) than a year earlier. That was 0.6% fewer than average estimates ahead of the report.

In terms of placement weights, 35% went on feed weighing less than 600 pounds, 49% weighing 700-899 pounds and 16% weighing 900 pounds or more.

Marketings in April of 1.7 million head were 192,000 head fewer (-10.1%) year over year. That was 0.3% less than pre-report estimates.

Cattle on feed May 1 of 11.6 million head were 414,000 head fewer (-3.4%) than the same time last year, about dead even with expectations.

Year-over-year on-feed numbers May 1 were 10% less in Colorado, 2% less in Kansas, 5% less in Nebraska, 9% less in Oklahoma and 4% less in Texas. Inventory was 5% more in Idaho, 2% more in Iowa and 9% more in Washington.