WLI

Cattle futures closed lower to start the trading week, pressured by last week’s softer cash fed cattle prices, the lack of direction so far this week and stronger Corn futures.

Live Cattle futures closed an average of 35¢ lower.

Feeder Cattle futures closed an average of $1.08 lower (70¢ to $1.60 lower).

Corn futures closed mostly 3¢ to 5¢ higher.

Soybean futures closed 6¢ to 12¢ higher through Aug ‘23 and then mostly unchanged to 3¢ lower.

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

Last week prices were $156/cwt. on a live basis in the Southern Plains, $156-$157 in Nebraska and $158 in the western Corn Belt. Dressed prices were $250-$252.

Choice boxed beef cutout value was 77¢ lower Tuesday afternoon at $276.66/cwt. Select was $2.02 lower at $254.53/cwt.

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Major U.S. financial indices closed mixed Tuesday. Pressure included less than expected fourth-quarter earnings from Goldman Sachs.

The Dow Jones Industrial Average closed 391 points lower. The S&P 500 closed 8 points lower. The NASDAQ was up 15 points.

West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 35¢ higher through the front six contracts.

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Estimated feedlot returns are positive through September for both steers and heifers, according to the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University.

For steers, estimated net returns range from $27.73 per head in February to $212.49 in May. Feeding cost of gain ranges from $117.78/cwt. in September to $141.13 in January.

On the heifer side of the fence, estimated net returns range from $27.35 per head in July to $189.79 in May. Feeding cost of gain ranges from $128.89/cwt. in September to $147.39 in February.

Projections reflect a cash market situation without implementation of price risk management strategies.

Note: Futures and equity markets were closed yesterday. As well, some AMS reports were unavailable due to the holiday.

Negotiated cash fed cattle prices last week were $156/cwt. on a live basis in the Southern Plains and Nebraska, where dressed prices were $252. Live prices in the western Corn Belt were $157-$159.

Choice boxed beef cutout value was 81¢ higher Monday afternoon at $277.43/cwt. Select was 34¢ lower at $256.55/cwt.

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Historically low hay stocks could prompt more beef cow liquidation this winter, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

He points out Dec. 1 hay stocks for the nation were 16.4% less than the previous 10-year average at 71.9 million tons, in the recent USDA Crop Production report. It was the least on record going back to 1973. Peel notes hay production last year was the lowest on record in data that began in 1974.

“Each of the top 10 states for hay stocks was down compared to the 10-year average and collectively were down 20.8% from the 2012-2021 average Dec. 1 stocks level,” Peel says. “The largest hay stocks on December 1 were in Texas — 25.8% below the 10-year average for the state. Other top 10 states were down from the 10-year average ranging from Tennessee (down 10.9%) to Oklahoma (down 32.7%).” 

Combined total hay production in the top 10 states represents 43% of U.S. total hay production and was down 18.7% compared to the 10-year average for those states, according to Peel. He adds that eight of the top 10 beef cow states are among the top 10 hay production states.

“The December storm already will have taken a chunk out of the reported Dec. 1 hay stocks,” Peel says. “New forage production is several months away in the south and even farther away in northern regions.”

Negotiated cash fed cattle trade ranged from slow to moderate on moderate demand in the Southern Plains and Nebraska through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand.

For the week, in a light test, live prices were $1 lower at $156/cwt. in the Southern Plains and Nebraska, and at $157-$159 in the western Corn Belt. Dressed prices in Nebraska were generally steady at $252; they were $252 in the western Corn Belt a week earlier.

Choice boxed beef cutout value was 87¢ lower Friday afternoon at $276.62/cwt. Select was 12¢ lower at $256.89/cwt.

Live cattle futures firmed Friday despite lower cash fed cattle prices and the seasonal turn lower in wholesale beef prices.

Live Cattle futures closed an average of 31¢ higher, except for 7¢ lower in near Apr.

However, higher Corn futures pressured Feeder Cattle futures an average of 86¢ lower (2¢ to $1.40 lower).

Corn and Soybean futures continued to gain Friday on the bullish WASDE.

Corn futures closed mostly 1¢ to 4¢ higher.

Soybean futures closed 3¢ to 8¢ higher through Aug ‘23 and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices rose again Friday with follow-through support from suggestions of easing inflation.

The Dow Jones Industrial Average closed 112 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 78 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.29 to $1.47 higher through the front six contracts.

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Despite the significantly different year-over-year economic environment in December, consumers were slow to begin spending differently, according to data trends in Consumer Food Insights Reports from Purdue University’s Center for Food Demand Analysis and Sustainability.

The survey-based report assesses food spending, consumer satisfaction and values, support of agricultural and food policies and trust in information sources.

Household food expenditures were up more than 15% in December compared to the previous January. “But it is worth pointing out that our indicators like food security and food satisfaction have not similarly moved in any one direction, which is a good sign that wellbeing has likely not decreased on average,” says Jayson Lusk, the head and Distinguished Professor of Agricultural Economics at Purdue, who leads the center.

Consumer shopping behaviors were similar to July, but consumers were shopping at discount stores more and spending less on discretionary expenses, according to the latest report. As well, 22% said they were switching to cheaper brands, compared to 17% in July.

“Broadly speaking, consumers faced some budget constraints this holiday season,” Lusk says. “About a third said they were worried about being able to afford gifts, but this was far from the majority. When we compare responses to inflation in December to this past summer, most of these behaviors have not increased in frequency.”

The survey results also show that where people spend their dollars has not shifted. However, Lusk notes that the popularity of online grocery shopping appears to be declining, which raises questions about the lower limits of online food shopping and whether it was largely buoyed by the COVID pandemic.

Report data also suggests consumers could readily access most desired food items as supply chain disruptions eased.

“This year, chicken was the most reported item that people were unable to find at the grocery store,” says Sam Polzin, a food and agriculture survey scientist for the center and co-author of the report. “Given that we are in the middle of the deadliest bird flu outbreak, this is unsurprising.”

Cattle futures closed lower Thursday, with pressure from the continued lack of cash fed cattle direction and the Corn-friendly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed to 13¢ to 15¢ higher through the front three contracts, then 5¢ to 7¢ higher through Jly ’24.

Soybean futures closed 14¢ to 25¢ higher through Aug ‘23 and then mostly 1¢ to 3¢ higher.

Feeder Cattle futures closed an average of $1.06 lower through the front half of the board, and then unchanged to an average of 17¢ higher.

Live Cattle futures closed an average of 26¢ lower, except for unchanged and 7¢ higher in two away contracts.

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

Although too few to trend, there were some early dressed sales in Nebraska at $252/cwt. and a few on a live basis in the western Corn Belt at $158-$159.

Live prices last week were $157/cwt. in the Southern Plains and Nebraska and $158-$160 in the western Corn Belt. Dressed prices were $252.

Choice boxed beef cutout value was $3.24 lower Thursday afternoon at $277.49/cwt. Select was $1.09 lower at $257.01/cwt.

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Major U.S. financial indices rose Thursday with support from the monthly Consumer Price Index, which indicated easing inflation.

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1% in December on a seasonally adjusted basis, after increasing 0.1% in November, according to the U.S. Bureau of Labor Statistics. The all items index increased 6.5% over the last 12 months before seasonal adjustment.

The Dow Jones Industrial Average closed 216 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 69 points.

West Texas Intermediate Crude Oil futures (CME) closed 88¢ to 98¢ higher through the front six contracts.

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ERS projected the annual average five-area direct fed steer price for this year at $158.50/cwt., in the January World Agricultural Supply and Demand Estimates. That was $2.50 more than the previous month’s estimate, based on expected demand strength. The price would be $14.10 more than the projected annual average last year. By quarter and compared to the previous month, ERS increased projected prices by $4 to $157 in the first quarter, by $3 to $157 in the second quarter and by $2 to $157 in the third quarter.

Among other WASDE highlights…

Corn

The 2022/23 U.S. corn outlook was reduced for production, food, seed and industrial use, feed and residual use, exports, and ending stocks. Corn production was estimated 200 million bushels lower than the previous month’s estimate, harvested area was trimmed by 1.6 million acres and ending stocks were lowered 15 million bushels. The season-average corn price received by producers was unchanged at $6.70 per bushel.

Soybeans

Soybean production was estimated 69 million bushels lower with estimated harvested area 0.3 million acres less. The U.S. season-average soybean price for 2022/23 was projected 20¢ higher at $14.20 per bushel. Soybean meal was projected $15 higher at $425 per short ton. The soybean oil price was unchanged at 68¢ per pound.

Wheat

The 2022/23 U.S. wheat outlook was for increased supplies, larger domestic use, unchanged exports, and lower ending stocks. The season-average farm price was unchanged at $9.10 per bushel.

Cattle futures closed lower Wednesday with the lack of cash fed cattle direction and firmer Corn futures prices.

Feeder Cattle futures closed an average of 65¢ lower, from 7¢ to $1.17 lower.

Live Cattle futures closed an average of 19¢ lower, except for unchanged in spot Feb.

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

Live prices last week were $157/cwt. in the Southern Plains and Nebraska and $158-$160 in the western Corn Belt. Dressed prices were $252.

Choice boxed beef cutout value was $3.80 lower Wednesday afternoon at $280.73/cwt. Select was 23¢ lower at $258.10/cwt

Corn futures closed fractionally higher to 1¢ higher through Sep ’23 and then mostly 2¢ lower

Soybean futures closed 2¢ to 8¢ higher through Aug ‘23 and then mostly 3¢ to 6¢ lower.

Cattle futures closed lower Wednesday with the lack of cash fed cattle direction and firmer Corn futures prices.

Feeder Cattle futures closed an average of 65¢ lower, from 7¢ to $1.17 lower.

Live Cattle futures closed an average of 19¢ lower, except for unchanged in spot Feb.

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

Live prices last week were $157/cwt. in the Southern Plains and Nebraska and $158-$160 in the western Corn Belt. Dressed prices were $252.

Choice boxed beef cutout value was $3.80 lower Wednesday afternoon at $280.73/cwt. Select was 23¢ lower at $258.10/cwt.

Corn futures closed fractionally higher to 1¢ higher through Sep ’23 and then mostly 2¢ lower

Soybean futures closed 2¢ to 8¢ higher through Aug ‘23 and then mostly 3¢ to 6¢ lower.

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Major U.S. financial indices climbed Wednesday with traders apparently betting that the CPI report will reflect cooling inflation.

The Dow Jones Industrial Average closed 268 points higher. The S&P 500 closed 50 points higher. The NASDAQ was up 189 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.12 to $2.31 higher through the front six contracts.

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Eyes Thursday will focus on the monthly World Agricultural Supply and Demand Estimates, with many interested to see if USDA makes further adjustments on the demand side of the corn ledger, and if so, to what degree.

“Exports for corn and soybeans have been sluggish for the U.S. and tend to pause ahead of the South American crop in an effort to avoid paying high U.S. prices for corn and soybeans,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Corn exports for the 2022/2023 marketing year are off last year’s pace more than 25%.”

Daniel O’Brien, Extension agricultural economist at Kansas State University, explained in last month’s Grain Market Outlook newsletter, “It is possible that in coming USDA WASDE reports U.S. export demand could remain so weak that the USDA is forced to reduce its U.S. corn export projection further yet, which all else being equal would lead to higher forecasts of U.S. corn ending stocks in the current Marketing Year (2022-23).”