WLI

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

For the week, the only established trade reported by AMS was live prices of $164.50-$165.00/cwt. in the western Corn Belt, which was 50¢ to $1 higher. Dressed prices there the previous week were $260-$262.

Elsewhere the previous week, live prices were mostly at $164/cwt. and dressed prices were $262.

However, various private sources suggested more trade developing in other regions on Friday at $1-$2 higher. For instance, the Texas Cattle Feeders Association reported its members trading steers and heifers about $1 higher at $165.40) and $165.25, respectively.

Through Thursday, the weighted average five-area direct fed steer price was $1.19 higher at $164.84/cwt. The average steer price in the beef was $2.61 higher at $262.54.

Cattle futures gained Friday, supported by stronger cash fed cattle prices.

Feeder Cattle futures closed an average of $1.76 higher ($1.22 to $2.17 higher).

Live Cattle futures closed an average of $1.12 higher.

Choice boxed beef cutout value was 82¢ higher Friday afternoon at 289.32/cwt. Select was 72¢ lower at $276.86/cwt.

Corn futures closed 4¢ to 7¢ higher in old-crop contracts, mostly 1¢ to 3¢ lower.

KC HRW Wheat closed 5¢ to 9¢ lower.

Soybean futures closed mostly 5¢ higher.

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

Major U.S. financial indices closed higher Friday as rates eased for the benchmark 10-year treasury note.   

The Dow Jones Industrial Average closed 387 points higher. The S&P 500 closed 64 points higher. The NASDAQ was up 226 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.47 to $1.52 higher through the front six contracts.

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

Year-over-year beef production continues to decline, supporting cattle and beef prices.

Total cattle slaughter last week of 629,000 head was 11,000 more than the previous week but 30,000 head fewer than the same week last year. Estimated year to-date total cattle slaughter of 5.7 million was 153,000 fewer (-2.6%) than the same time last year. Estimated year-to-date beef production of 4.7 billion pounds was 219.2 million pounds less (-4.5%) than a year earlier.

“Cattle slaughter the first two months of the year is down relative to the same two months a year ago. Heifer slaughter is up ever so slightly while steer slaughter is down 2.2% and beef cow slaughter is down 5.7% compared to last year,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Heifer slaughter rates are sure to begin running lower than year-ago rates as we move through the year due to extremely high rates a year ago and the desire to retain females for breeding. This factor alone will assist cattle feeders in maintaining leverage for the foreseeable future. It means cattle feeders are likely to hold out for higher prices each week until packers are willing to raise bids. The supply is only going to get tighter moving through the next couple of years.”

Widespread moisture is helping improve heifer retention prospects. According to the Feb. 28 U.S. Drought Monitor, 55% of the continental United States was abnormally dry or experiencing drought, versus 73% a year earlier — 38% were experiencing drought versus 59% at the same time last year.

Stable Corn futures and strong cash trends helped Feeder Cattle futures lean mostly higher Thursday. They were up an average of 22¢, except for 17¢ lower and unchanged in two contracts.

Live Cattle futures closed an average of 74¢ lower (40¢ to $1.15 lower) with traders awaiting cash direction.

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

Although too few to trend, there were a few live sales in the western Corn Belt at $165/cwt. — $164.50 to $165.00 on Wednesday. Dressed prices there last week were $260-$262.

Elsewhere, last week, live prices were mostly at $164/cwt. and dressed prices were $262.

Choice boxed beef cutout value was 67¢ higher Thursday afternoon at 288.50/cwt. Select was $1.15 higher at $277.58/cwt.

Weekly beef export sales offered no support to Cattle futures. For the week ending Feb. 23, net U.S. beef export sales were 8,100 metric tons (mt.), according to the latest USDA U.S. Export Sales report. That was 48% less than the previous week and 62% less than the prior four-week average. Increases were primarily for Japan, Taiwan, China and Mexico.

Corn futures closed narrowly mixed, mostly 1¢ lower to 1¢ higher.

KC HRW Wheat closed mostly 6¢ to 7¢ higher.

Soybean futures closed 8¢ to 15¢ higher through Jan ’24 and then mostly 4¢ to 6¢ higher.

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

Major U.S. financial indices closed higher Thursday, fueled in part by comments made by one region Federal Reserve president who suggested the Fed could hold future interest rate hikes at 25 basis points.

The Dow Jones Industrial Average closed 341 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 83 points.

West Texas Intermediate Crude Oil futures (CME) closed 47¢ to 57¢ higher through the front six contracts.

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

U.S. agricultural exports in fiscal year (FY) 2023 were projected at $184.5 billion in the latest quarterly Outlook for U.S. Agricultural Trade from USDA’s Economic Research Service (ERS) and Foreign Agriculture Service (FAS). The projection was $5.5 billion less than the previous report’s estimate. The largest year-over year decreases are expected for corn, sorghum, and soybeans.

Beef and veal exports were forecast $300 million less at $10.0 billion on weaker unit values for fresh and frozen beef muscle cuts and softening demand in East Asia.

Total, livestock, poultry, and dairy exports were projected $900 million less at $40.5 billion.

“The global economic outlook for 2023 has moderately improved since the last forecast in November 2022, as downside risks of recession have lessened,” according to ERS/FAS analysts. “Inflation has begun to ease globally, particularly in the United States, but remains elevated. Economic growth is expected to remain steady but at a slower pace than in recent years. World real gross domestic product (GDP) is projected to increase by 2.8% in 2023…”

Projected growth for U.S. real GDP in 2023 was raised 0.4% to 1.4%.

Cattle futures took a breather Wednesday on likely profit taking and awaiting weekly cash direction.

Feeder Cattle futures closed an average of 61¢ lower.

Live Cattle futures closed narrowly mixed, from an average of 42¢ lower to unchanged to an average of 2¢ higher.

Wholesale beef prices declined on Wednesday for the first time in a while. Choice boxed beef cutout value was $1.12 lower in the afternoon at 287.83/cwt. Select was $2.82 lower at $276.43/cwt.

By all accounts, negotiated cash fed cattle trade remained stuck in the gate Wednesday. There was no afternoon USDA summary available at press time.

Last week, live prices were mostly at $164/cwt. in all regions. Dressed prices were $260-$262.

Grain and Soybean futures found some footing Wednesday.

Corn futures closed mostly fractionally lower to 1¢ lower, except for 3¢ to 11¢ higher in old-crop contracts.

KC HRW Wheat closed 1¢ to 5¢ higher through Sep ’24 and then fractionally lower to 2¢ lower.

Soybean futures closed 10¢ to 15¢ higher through May ’24 and then mostly 4¢ to 5¢ higher.

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

Major U.S. financial indices closed narrowly mixed Wednesday, pressured once again by rising bond yields. 

The Dow Jones Industrial Average closed 5 points higher. The S&P 500 closed 18 points lower. The NASDAQ was down 76 points.

West Texas Intermediate Crude Oil futures (CME) closed 64¢ to 69¢ higher through the front six contracts.

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

Although beef stocks in cold storage Jan. 31 were 2% less than the previous month, they were 1% more year over year and remain historically large, according to David Anderson, Extension livestock economist at Texas A&M University.

“Cold storage stocks of beef tend to peak in December-January and reach a low in June-July,” Anderson explains in the latest In the Cattle Markets from the Livestock Marketing Information Center. “The seasonal decline in stocks has been, on average, about 82 million pounds over the last five years. In 2022, there was very little seasonal decline and supplies grew to 544 million pounds by the end of the year.”

Beef in cold storage at the end of last month was 533 million pounds, according to Anderson

“Putting this level of stocks in context is that 533 million pounds is about 1.6 pounds per person, which is not a lot different than per capita stocks over the last several decades,” Anderson explains. “Per capita cold storage stocks were over 2 pounds back in the early to mid-1970s when the U.S hit peak cattle numbers and beef demand began to decline.”

Keep in mind domestic beef production was record large last year,

Total red meat supplies in freezers Jan. 31 were up 5% from the previous month and up 9% from last year, according to USDA’s Cold Storage report. Frozen pork supplies were 13% higher month to month and 19% more year over year. Total frozen poultry supplies on the same date were 3% more than the previous month and 13% more than the same time last year.

Cattle futures continued higher Tuesday, supported by further downward correction in Corn futures and another day of higher wholesale beef values.

Feeder Cattle futures closed an average of 70¢ higher.

Live Cattle futures closed an average of 47¢ higher, except for $2.50 higher in expiring Feb.

Choice boxed beef cutout value was 61¢ higher Tuesday afternoon at 288.95/cwt. Select was even at $279.25/cwt.

Negotiated cash fed cattle trade ranged from limited on very light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few early live trades in the western Corn Belt at $165/cwt., but too few to trend.

Last week, live prices were mostly at $164/cwt. in all regions, which was $2 higher in the Southern Plains, $3-$4 higher in Nebraska and $2-$4 higher in the western Corn Belt. Dressed prices were $3 higher in Nebraska at $260 and $3-$5 higher in the western Corn belt at $260-$262.

Erosion in grain and Soybean futures continued Tuesday as it appears export demand concerns and the promising domestic production outlook have funds on the defensive.

Corn futures closed 11¢ to 13¢ lower through old crop contracts, and then mostly 6¢ lower.

KC HRW Wheat closed 2¢ to 7¢ lower through Jly ‘24 and then mostly 6¢ higher.

Soybean futures closed mostly 22¢ to 32¢ lower through Aug ’24 and then 17¢ to 19¢ lower.

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

Major U.S. financial indices closed lower Tuesday as traders closed out the month. Rising bond yield rates applied pressure.

The Dow Jones Industrial Average closed 222 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 11 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.13 to $1.38 higher through the front six contracts.

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

The National Cattlemen’s Beef Association (NCBA) is calling on Secretary of Agriculture Tom Vilsack to take immediate action to indefinitely suspend beef imports from Brazil until that nation makes systemic reforms and takes necessary steps to restore confidence in the nation’s ability to participate in the global beef supply.

The move is based on Brazil’s delayed reporting of confirmation of another case of atypical bovine spongiform encephalopathy (BSE) to the World Animal Organization for Animal Health (WOAH). According to the report, 35 days elapsed between when the case was first identified on Jan. 18, 2023, and the date it was confirmed on Feb. 22, 2023.

It’s not the first time Brazil failed to report BSE confirmation in a timely manner.

NCBA representatives say the unacceptable delay is in clear violation of WOAH reporting requirements.

“We have seen Brazil repeatedly fail to meet the 24-hour requirement for reporting of animal diseases listed by WOAH. In order to protect the safety and security of the U.S. herd, and American cattle producers, we demand USDA take immediate steps to block further beef imports from Brazil,” says NCBA president and South Dakota cattleman Todd Wilkinson. “Furthermore, we expect USDA to keep the border closed to Brazil until they can demonstrate that they are willing and able to play by the trade rules that govern all other nations. If they can’t play by the rules, they don’t deserve access. Secretary Vilsack needs to act now, rather than kicking the can down the road.”

On Monday, NCBA sent a letter to USDA, demanding immediate action. NCBA is also supportive of bipartisan Senate legislation to suspend Brazilian beef imports pending a review of Brazil’s standards.

Wholesale beef prices and consumer resilience maintain their strong trends. Choice boxed beef cutout value was $1.06 higher Monday afternoon at 288.34/cwt. Select was $2.17 higher at $279.25/cwt.

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

Last week, live prices were mostly $164/cwt. in all regions, which was $2 higher in the Southern Plains, $3-$4 higher in Nebraska and $2-$4 higher in the western Corn Belt. Dressed prices were $3 higher in Nebraska at $260 and $3-$5 higher in the western Corn belt at $260-$262.

The weighted average five-area direct fed steer price last week was $2.55 higher on a live basis at $163.72/cwt. The average steer price in the beef was $4.19 higher at $260.97.

Softer Corn futures helped lift Feeder Cattle futures an average of 76¢ higher on Monday (10¢ higher in spot Mar to $1.35 higher in the back contract).

Live Cattle futures closed an average of 18¢ lower, except for an average of 9¢ higher in three away contracts.

Corn futures closed mostly fractionally lower, except for 5¢ to 7¢ lower in old-crop contracts.

KC HRW Wheat closed 12¢ to 18¢ lower through May ‘24 and then 4¢ to 6¢ lower.

Soybean futures closed fractionally lower to 10¢ lower through May ’24 and then fractionally higher to 1¢ higher.

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

Major U.S. financial indices eased higher Monday, helped along by a slight decline in treasury yield rates.

The Dow Jones Industrial Average closed 72 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 72 points.

West Texas Intermediate Crude Oil futures (CME) closed 64¢ to 76¢ lower through the front six contracts.

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

Supposing drought abates in much of the country, even with prices encouraging herd rebuilding, scant beef heifer numbers suggest expansion is unlikely this year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel points out the current beef cow herd is the smallest in 61 years. The 5.16 million beef heifers Jan. 1 were 5.8% less year over year; they declined 5.5% the previous year. He explains beef replacement heifers represented 17.9% of the Jan. 1 beef cow herd, the smallest proportion since 2012. For perspective, Peel explains beef replacements reached a cyclical peak level of 21.0% of the beef cow herd.

“Heifers diverted from breeding to feeding contributed to the 4.0% year-over-year increase in 2021 and the 4.8% year-over-year increase in 2022 in heifer slaughter. All of which contributes to the limited number of replacement heifers available in 2023,” Peel says. “The numbers suggest that beef cow herd expansion is not possible in 2023 … More likely in 2023 is increased retention of heifer calves and breeding of yearling heifers that will fuel herd expansion beginning in 2024. If that happens, both beef cow and heifer slaughter will decrease sharply in 2023.”