WLI

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

For the week, live prices were $2-$4 higher in the Texas Panhandle at $165-$167/cwt., $4 higher in Kansas at $167, $4-$7 higher in Nebraska at $168-$172 and $4-$6 higher in the western Corn Belt at $170. Dressed prices were $5-$7 higher at $270-$272.

Estimated total cattle slaughter last week of 651,000 head was 25,000 head more than the previous week and 12,000 more than the same week last year. Estimated year-to-date total cattle slaughter of 8.19 million head was 193,000 head fewer (-2.3%) than the same period last year. Estimated year-to-date beef production of 6.75 billion pounds was 282 million pounds less (-4.0%).

The week’s significantly higher cash fed cattle prices continued to push Cattle futures higher Friday.

Feeder Cattle futures closed an average of $1.03 higher.

Live Cattle futures closed an average of 66¢ higher (10¢ higher at the back to $1.12 higher toward the front).

Cattle futures received added support from wholesale beef prices. Choice boxed beef cutout value was $2.87 higher Friday afternoon at $282.07/cwt. Select was $2.26 higher at $270.72/cwt.

Corn futures closed mostly fractionally lower to 4¢ lower, except for 11¢ and 8¢ higher in the front two contracts. The Perspective Plantings report (see below) applied pressure.

KC HRW Wheat closed 2¢ to 6¢ higher through May ‘24, and then 4¢ to 6¢ lower.

Soybean futures closed 10¢ to 31¢ higher through Aug ‘24, and then mostly 2¢ to 3¢ higher, helped along by the Grain Stocks report (see below).

******************************

Major U.S. financial indices closed higher Friday, buoyed by less increase than expected in the Personal Consumptions Expenditures index (PCE), closely watch by the Fed as an inflation gauge.

The PCE increased 0.3% in February, according to the U.S. Bureau of Economic Analysis. The trade expected an increase of 0.4%.

The Dow Jones Industrial Average closed 415 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 208 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.24 to $1.32 higher through the front six contracts. 

******************************

U.S. farmers intend to plant 4% more corn acres this year than last, according to the Perspective Plantings report issued Friday.

Corn planted area for all purposes in 2023 was estimated at 92.0 million acres, which would be 3.42 million acres more than last year. That was 1.1 million acres more than expectations ahead of the report.

It’s worth noting that 800,000 acres of the added year-over-year corn acres are in North Dakota, where winter looks to linger for a while.

Soybean planted area for 2023 was estimated at 87.5 million acres, up slightly from last year, but 740,000 acres fewer than average expectations ahead of the report.

All wheat planted area for 2023 was estimated at 49.9 million acres, up 9% from 2022 and about 1 million acres more than expectations ahead of the report. Projected 2023 winter wheat planted area was 13% more than last year at 37.5 million acres.

USDA estimated harvested acres of all hay this year to be 50.6 million acres, which would be 1.1 million acres (+2.2%) more than last year.

Stocks Tighten

Overall, corn and soybean stocks were snugger than expectations ahead of the report.

Corn stocks in all positions on March 1, 2023 totaled 7.40 billion bushels, down 5% percent from a year earlier, according to the Grain Stocks report. Of the total stocks, 4.11 billion bushels were stored on farms, which was 1% more year over year.

Soybeans stored in all positions on the same date totaled 1.69 billion bushels, down 13% from a year earlier. Soybean stocks stored on farms were estimated at 750 million bushels, down slightly from a year ago.

All wheat stored in all positions on March 1 totaled 946 million bushels, down 8% from a year ago. On-farm stocks were estimated at 227 million bushels, which was 30% more than a year earlier.

Cash fed cattle prices jumped Thursday with moderate trade and good demand in all regions, according to the Agricultural Marketing Service.

Live prices were $2-$4 higher in the Texas Panhandle at $165-$167/cwt., mostly $4 higher in Kansas at $167, $5-$6 higher in Nebraska at $169-$171 and mostly $4-$5 higher in the western Corn Belt at $170. Dressed prices were mostly $5 higher at $270, with a few up to $275 in Nebraska and a few up to $276 in the western Corn Belt.

Choice boxed beef cutout value was $1.09 lower Thursday afternoon at $279.20/cwt. Select was 44¢ lower at $268.46/cwt.

Stronger cash prices pulled Cattle futures higher.

Feeder Cattle futures closed an average of $1.58 higher, (from 95¢ higher in expiring Mar to $1.92 higher).

Live Cattle futures closed an average of $1.03 higher (80¢ to $1.72 higher).

Corn futures closed mostly 3¢ to 4¢ lower through Jly ‘24, and then mostly 1¢ lower.

KC HRW Wheat closed mostly 1¢ higher.

Soybean futures closed mostly fractionally lower to 3¢ lower.

******************************

Major U.S. financial indices closed higher again Thursday. Support included an increase in weekly unemployment insurance claims, which some viewed as another prompt for the Fed to ease monetary tightening.

Initial claims were 198,000 for the week ending March 25, which was 7,000 more than the previous week, according to the U.S. Department of Labor. The four-week moving average of 198,250 was 2,000 more than the previous four-week average. 

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 87 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.22 to $1.40 higher through the front six contracts. 

******************************

Retail beef prices are historically high but have risen relatively less than competing meat proteins.

“The all fresh retail beef price in February was nearly $7.23 per pound, which is a slight increase from January but 6¢ lower than February of the previous year,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This compares to a price of $6.30 per pound in February 2021 and $5.94 per pound in 2020. Thus, the all fresh retail beef price was 22% higher in February 2023 than it was in February 2020.”

By way of comparison, compared to three years earlier, Griffith says February retail prices were 23% more for pork and 39% more for broilers. Across the same period, he notes a dozen eggs cost 191% more and a gallon of milk is 30% higher.

“These prices demonstrate some of the pressure placed on consumers for staple proteins,” Griffith says. “How consumers shift expenditures of disposable income will determine demand for each of the items.”

Cattle futures took another step higher Wednesday, helped along by more positive outside markets.

Feeder Cattle futures closed an average of $1.48 higher, except for 27¢ lower in expiring spot Mar.

Live Cattle futures closed an average of 68¢ higher (27¢ to 95¢ higher).

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

Last week, live prices were $163/cwt. in the Southern Plains, $164-$165 in Nebraska and $164-$166 in the western Corn Belt. Dressed prices were $265.

Choice boxed beef cutout value was 34¢ lower Wednesday afternoon at $280.29/cwt. Select was $1.46 lower at $268.90/cwt.

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

KC HRW Wheat closed 2¢ to 15¢ lower.

Soybean futures closed 4¢ to 9¢ higher in the front three contracts, and then mostly 2¢ to 5¢ lower.

******************************

Major U.S. financial indices closed higher Wednesday, supported by stronger tech stocks and more confidence in the banking sector.  

The Dow Jones Industrial Average closed 323 points higher. The S&P 500 closed 56 points higher. The NASDAQ was up 210 points.

West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 29¢ lower through the front six contracts. 

******************************

Rural economic growth declined last month, according to the Creighton University Rural Mainstreet Index (RMI). The March index declined to 45.6 from 50.1 in February. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. It was above growth neutral the previous three months.

“The Rural Mainstreet economy continues to experience slow, to no, to negative economic growth. Less than 1% of bankers reported improving economic conditions for the month with 92% indicating no change in economic conditions from February’s slow growth,” according to Ernie Goss, 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. It represents approximately 200 rural communities — average population of 1,300.

“Over the past 12 months, the regional confidence index has fallen to levels indicating a very negative outlook,” Goss says. The slowing economy, higher borrowing costs and labor shortages constrained the business confidence index to a weak 39.1 from 44.4 in February.

Among survey highlights:

• After advancing by more than 9% for 2022, bank CEOs expect farmland prices to expand by only 1% over the next 12 months.
• Only 13.6% of bankers tightened credit standards for farm loans this year.
• Bank savings deposits rose to a record level.

Cattle futures closed narrowly mixed Tuesday following the previous session’s strong showing.

Feeder Cattle futures closed an average of 26¢ lower, except for an average of 10¢ higher in two contracts.

Live Cattle futures closed an average of 26¢ higher, except for unchanged in the back contract.

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

Last week, live prices were $1 lower in the Southern Plains at $163/cwt., steady to $1 higher in Nebraska at $164-$165 and steady to $2 higher in the western Corn Belt at $164-$166. Dressed prices were $1 higher at $265.

Wholesale beef prices seem to be finding some seasonal footing. Choice boxed beef cutout value was 27¢ higher Tuesday afternoon at $280.63/cwt. Select was 64¢ higher at $270.36/cwt.

Short covering, stronger export inspections and a reduced outlook for harvested acres in Brazil helped Soybean close mostly 9¢ to 25¢ higher.

KC HRW Wheat closed 10¢ to 12¢ higher.

Corn futures closed mostly fractionally lower to 2¢ lower, except for mostly 2¢ higher in new-crop contracts.

******************************

Major U.S. financial indices edged lower Tuesday, pressured in part by rising bond yields. 

The Dow Jones Industrial Average closed 37 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 52 points.

West Texas Intermediate Crude Oil futures (CME) closed 36¢ to 41¢ higher through the front six contracts. 

******************************

Although still mostly positive between now and November, projected cattle feeding returns faded a bit from the previous month as cost of gains increased and anticipated fed cattle prices declined, according to Historical and Projected Kansas Feedlot Net Returns from Kansas State University.

Projected fed steer returns range from $8.47 per head in July to $146.15 in May. Returns are negative for September (-$9.31) and November (-$53.50). Feedlot cost of gain ranges from $114.08/cwt. in November to $143.35 in March.

Projected fed heifer returns follow a similar path, ranging from $6.44 in March to $101.24 per head in May. Returns are negative for July (-$11.42) and November (-$96.86). Feedlot cost of gain ranges from $125.62/cwt. in November to $164.24 in March.

The calculation process does not reflect any price risk management.

Whether it was oversold conditions or grass fever, Cattle futures found firm traction amid active trade to start the week.

Feeder Cattle futures closed an average of $2.80 higher ($2.42 to $3.82 higher).

Live Cattle futures closed an average of $1.89 higher ($1.45 to $2.27 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 $1 lower in the Southern Plains at $163/cwt., steady to $1 higher in Nebraska at $164-$165 and steady to $2 higher in the western Corn Belt at $164-$166. Dressed prices were $1 higher at $265.

The five-area direct weighted average fed steer price last week was 17¢ higher on a live basis at $164.41/cwt. The average fed steer price in the beef was $1.24 higher at $265.06.

Choice boxed beef cutout value was 48¢ higher Monday afternoon at $280.36/cwt. Select was 97¢ higher at $269.72/cwt.

Grain and Soybeans futures continued higher Monday with less skittish outside markets and perhaps some early positioning ahead of Friday’s stocks and planting intentions reports.

Corn futures closed 5¢ to 9¢ higher through Jly ‘24 and then mostly 1¢ to 2¢ higher.

KC HRW Wheat closed 11¢ to 13¢ higher.

Soybean futures closed mostly 12¢ to 15¢ higher.

******************************

Major U.S. financial indices closed with a firmer feel Monday, buoyed by recently beleaguered and volatile regional bank stocks.

The Dow Jones Industrial Average closed 194 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 55 points.

Geopolitical tensions and more positive outside markets helped lift Crude Oil futures Monday. Texas Intermediate Crude Oil futures (CME) closed $3.30 to $3.55 higher through the front six contracts. 

******************************

Beef production the last four weeks averaged 6.4% less year over year, stemming from fewer cattle slaughtered and lighter carcass weights, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. 

“Steer slaughter is down 5.3% year over year in the last month and steer carcass weights have averaged 903 pounds, down 16 pounds from one year ago. Heifer slaughter has finally begun to decrease and is down 1.6% in the past month, with heifer carcass weights at 830 pounds, down 20 pounds year over year,” Peel says. “Cow slaughter is down 6.8% year over year in the last four weeks, including a 0.9% increase in dairy cow slaughter and a 13.6% year over year decrease in beef cow slaughter. Cow carcass weights have averaged 646 pounds the last month, 11 pounds lower than the same period last year.  Bull slaughter is down 14.6% from one year ago. Bull carcass weights have averaged 854 pounds in the last four weeks, down 26 pounds compared to one year ago.”

Amid declining production and resilient beef demand, Peel explains Choice boxed beef cutout value over the last month averaged $258.13/cwt., which was 11% more year over year.

“Beef production is expected to drop more sharply for the remainder of the year, adding even more supply pressure to support prices,” Peel explains. “Current estimates for 2023 have beef production decreasing in a range from 4.5% to 6.0% lower year over year. The decrease will depend, in part on whether continued drought causes additional herd liquidation and temporarily moderates declining beef production and resulting in a smaller decrease.”

You can find more of Peel’s market insights here.