WLI

Cattle futures continued to gain Thursday with expectations of higher cash prices and softer nearby Corn futures.

Live Cattle futures closed an average of 40¢ higher (5¢ higher near the back to $1.05 higher in the front two contracts).

Feeder Cattle futures closed an average of 49¢ higher.

Negotiated cash fed cattle trade was light on moderate demand in the Southern Plains and Northern Plains through Thursday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, there were some early live sales in the Southern Plains at $157/cwt.

Last week, live prices were $156 in the Southern Plains, $156-$157 in Nebraska and $157 in the western Corn Belt. Dressed prices were $248-$249.

Choice boxed beef cutout value was 55¢ lower Thursday afternoon at $278.86/cwt. Select was $3.42 higher at $250.70/cwt.

Corn futures closed 2¢ to 3¢ lower in the front three contracts and then 1¢ lower to 1¢ higher.

Soybean futures closed 1¢ to 3¢ higher through Sep ‘24 and then fractionally lower.

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Major U.S. financial indices closed higher Thursday. Analysts credited some of the firmer tone to more jobless claims than expected.

Initial weekly unemployment insurance claims for the week ending Dec. 24 were 9,000 more than the previous week at 225,000, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 345 points higher. The S&P 500 closed 66 points higher. The NASDAQ was up 264 points.

West Texas Intermediate Crude Oil futures (CME) closed 56¢ to 60¢ lower  through the front six contracts.

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Despite economic shocks and uncertainties during the last several years, there is no strong indication that softer global economics have weakened U.S. beef demand in East Asia, according to a recent International Agricultural Trade Report — U.S. Beef Exports to East Asia on Record Pace — from USDA’s Foreign Agricultural Service (FAS).

In spite of supply chain disruptions for U.S. fresh or chilled beef, longer shipping times, and higher costs, FAS analysts say East Asian import demand for beef products should remain steady. Demand from the region was record large in 2021 (both volume and value) and was on pace to set a new record in 2022.

“East Asia’s relatively robust middle class has supported the demand for high-quality beef, and a developed e-commerce retail sector has provided flexible avenues for suppliers to promote beef products during the pandemic,” according to the report.

Cattle futures mostly gained Wednesday, supported by recently stronger wholesale beef prices and expectations from some that cash prices should strengthen this week.

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

Last week, live prices were $156/cwt. in the Southern Plains, $156-$157 in Nebraska and $157 in the western Corn Belt. Dressed prices were $248-$249.

Choice boxed beef cutout value was 63¢ lower Wednesday afternoon at $279.41/cwt. Select was $1.64 higher at $247.28/cwt.

Live Cattle futures closed an average of 57¢ higher (5¢ to 92¢ higher), except for an average of 6¢ lower in two contracts toward the front.

Feeder Cattle futures closed an average of 57¢ higher (5¢ to 92¢ higher).

That was with stronger feed prices.

Corn and Soybean futures gained Wednesday with support from the drier forecast in Argentina and notions that exports could get a boost from China’s easing Covid restrictions.

Corn futures closed 4¢ to 8¢ higher through Jly ‘24 and then mostly fractionally higher to 1¢ higher.

Soybean futures closed 15¢ to 25¢ higher through Jan ‘24 and then mostly 7¢ to 8¢ higher.

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Major U.S. financial indices stumbled lower Wednesday with more indicators of economic slowdown.

Pending home sales slid for the sixth consecutive month in November, according to the National Association of REALTORS® (NAR). All four U.S. regions recorded month-over-month decreases, and all four regions saw year-over-year declines in transactions.

“Pending home sales recorded the second-lowest monthly reading in 20 years as interest rates, which climbed at one of the fastest paces on record this year, drastically cut into the number of contract signings to buy a home,” says NAR Chief Economist Lawrence Yun. “Falling home sales and construction have hurt broader economic activity.”

The Pending Home Sales Index — a forward-looking indicator of home sales based on contract signings — fell 4.0% to 73.9 in November. Year-over-year, pending transactions dropped by 37.8%. An index of 100 is equal to the level of contract activity in 2001.

“The residential investment component of GDP has fallen for six straight quarters,” Yun explains. “There are approximately two months of lag time between mortgage rates and home sales. With mortgage rates falling throughout December, home-buying activity should inevitably rebound in the coming months and help economic growth.”

The Dow Jones Industrial Average closed 365 points lower. The S&P 500 closed 46 points lower. The NASDAQ was down 139 points.

West Texas Intermediate Crude Oil futures (CME) closed 45¢ to 57¢ lower  through the front six contracts.

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Food sales at convenience stores increased during the last three months, ending in November, according to the NPD Group (NPD).

Year over year, during the period, visits to convenience stores for foodservice items, like beverages and prepared foods, were up 2%. Consumer spending on foodservice menu items at convenience stores was up 8%. Units and dollars of foodservice products shipped from broadline foodservice distributors to convenience stores increased by 3% and 13%, respectively.

“Convenience store foodservice is benefitting by more people commuting to and from school and work and generally out and about more,” says David Portalatin, NPD Food Industry Advisor. “The growth in convenience store foodservice visits is a positive sign for the U.S. foodservice industry overall.”

The breakfast and morning snack periods, or morning meal daypart, which accounted for almost 25% of foodservice visits to convenience stores, grew traffic by 3% and was a key contributor to total visit growth in the most recent quarter ending in November. The evening snack period, which increased by 4%, was also vital to foodservice traffic growth at convenience stores during the period. Traffic at lunch, typically most popular for convenience store foodservice, was up 2% compared to a year ago. At dinner, foodservice visits also increased by 2% year-over-year. Traffic at the afternoon snack daypart was flat compared to a year ago. 

Beverage-only orders represent over half of convenience store foodservice visits and drive growth for the channel overall. However, the popularity of burgers and breakfast sandwiches ordered at convenience stores throughout the day has also spurred growth. Burgers are a popular convenience store foodservice item for lunch, dinner, and the afternoon snack period. Burger servings increased by 12% in the quarter ending November compared to a year ago. Servings of different varieties of prepared breakfast sandwiches from convenience stores increased by 8% over a year ago.

Feeder Cattle futures faltered Tuesday, pressured by more feedlot placements than expected in the latest Cattle on Feed report and pricier Corn futures. Feeder Cattle closed an average of 72¢ lower (30¢ to $1.35 lower).

Live Cattle futures paddled on either side of steady, helped along by surging wholesale beef prices and notions that cash trade could be higher this week. They closed from unchanged to an average of 12¢ lower to an average of 11¢ higher.

Choice wholesale beef prices continue to churn higher as buyers scramble to fill orders amid decreased packer production. Choice boxed beef cutout value was $8.09 higher Tuesday afternoon at $280.04/cwt. Select was 17¢ higher at $245.64/cwt. The Choice-Select spread was a whopping $34.40.

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

Last week, live prices were $156/cwt. in the Southern Plains, $156-$157 in Nebraska and $157 in the western Corn Belt. Dressed prices were $248-$249.

The five-area direct weighted average fed steer price last week was 57¢ higher on a live basis at $156.25/cwt. The weighted average steer price in the beef was 90¢ higher at $248.70.

Corn futures surged higher Tuesday, buoyed by the weaker U.S. dollar, weather concerns in South America and perhaps some year-end positioning. They closed 5¢ to 8¢ higher through Dec ‘23 and then mostly 3¢ to 4¢ higher.

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

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Major U.S. financial indices closed mixed Tuesday with the most pressure in tech stocks.

The Dow Jones Industrial Average closed 37 points higher. The S&P 500 closed 15 points lower. The NASDAQ was down 144 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed, from 3¢ lower to 25¢ higher through the front six contracts.

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Reflecting on the recent Cattle on Feed report, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out in his weekly market comments that both feedlot placements and the number of cattle on feed were lower year over year for the third consecutive month.

“Drought pushed more cattle into feedlots earlier this year and kept feedlot totals higher for longer,” Peel says. “Monthly inventories from February through June of 2022 were not only higher year over year but were at record monthly levels in the cattle on feed data series that began in 1996.” 

On average, Peel explains feedlot inventories peaked in December and hit their low in September (2016-20). However, in 2021, the peak came in February and the ebb in September. This year, the ebb came in September and peak numbers may already have been established for a long while.

“Feedlot inventories decreased from November to December. This may signal that the seasonal peak is already in place, although it is too early to be sure,” Peel says. “The last time that December feedlot inventories were lower than November occurred in 2016. In that instance, feedlot inventories decreased in December and January before jumping higher to a belated peak in June 2017. I believe it is unlikely that feedlot inventories will move higher anytime in 2023 and the November 2022 total may be the peak for many months. Time will tell.”

Negotiated cash fed cattle trade had a firmer feel through Friday afternoon.

Live prices in the Texas Panhandle were $1 higher at $156/cwt.

Although too few to trend, there were some live sales in Kansas at $156 and at $157 in the western Corn Belt. Prices the previous week were $155 in Kansas and $155-$157 in the western Corn Belt where dressed prices were $248.

For the week, dressed prices in Nebraska were $1 higher at $249. Live prices there the previous week were $155-$157.

Choice Boxed beef cutout value was $6.74 higher Friday afternoon at $271.95/cwt. Select was $3.66 higher at $245.47/cwt. Both were helped by packers throttling back production.

Total weekly estimated cattle slaughter was 562,000 head, which was 63,000 head fewer than the previous week. However, the estimated total was 75,000 head more than the same week last year. Year-to-date total estimated cattle slaughter of 33.13 million head was 479,000 head more (+1.5%) more than a year earlier. Year-to-date estimated beef production of 27.40 billion lbs. was 363 million lbs. more (+1.3%) than the same time last year.

Cattle futures closed mainly higher Friday, supported by the higher tone to cash prices and the bounce in wholesale beef prices.

Live Cattle futures closed an average of 51¢ higher (20¢ to $1.00 higher), except for unchanged and 17¢ lower in the back two contracts.

Feeder Cattle futures closed an average of 24¢ higher, except for an average of 18¢ lower in the back two contracts.

Grain and Soybean futures found some technical support Friday with positive export news and positioning ahead of the holiday.

Corn futures closed 3¢ to of 5¢ higher through the front three contracts and then mostly fractionally higher.

Soybean futures closed 10¢ to of 14¢ higher through Jan ‘24 and then mostly 6¢ to 8¢ higher.

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Major U.S. financial indices recovered some lost ground Friday with likely week-end positioning and despite another gauge suggesting more work lies ahead to curb inflation.

The personal consumption expenditures (PCE) index increased 0.1% in November, compared to the previous month, according to the U.S. Bureau of Economic Analysis. That was more than expected. Year over year, the index was up 5.5%. Excluding food and energy, the index was 0.2% higher month to month.

The Dow Jones Industrial Average closed 176 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 21 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.07 to $2.46 higher through the front six contracts, supported by chatter that Russia will cut production.

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Markets will likely view Friday’s Cattle on Feed report as neutral to a touch bearish, with slightly more feedlot placements than analysts expected ahead of the report. Keep in mind the report accounts for feedlots with 1,000 head or more one-time capacity.

Placements in November of 1.92 million head were 42,000 head less (-2.1%) than the previous year. Average expectations ahead of the report were for a decline of about 4%.

In terms of placement weights, 52% went on feed weighing 699 lbs. or less, 36% weighing 700-899 lbs. and 12% weighing 900 lbs. or more.

Marketings in November of 1.89 million head were 22,000 head more (+1.2%), which was in line with estimates. Marketings were the most for the month since the series began in 1996, according to USDA’s National Agricultural Statistics Service.

Cattle on feed Dec. 1 of 11.67 million head were 312,000 head less (-2.6%) than the same time last year, which was close to pre-report projections.

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

Although too few to trend, there were some live sales in the Southern Plains at $155/cwt. and in the western Corn Belt at $157. There were a few dressed trades in Nebraska at $249.

Last week, live prices were $155/cwt. in the Southern Plains and $155-$157 in Nebraska and the western Corn Belt. Dressed prices were $248.

Choice Boxed beef cutout value was 35¢ higher Thursday afternoon at $265.21/cwt. Select was $5.52 higher at $241.81/cwt.

Cattle futures mostly maintained the previous session’s strong gains.

Live Cattle futures closed an average of 18¢ higher, except for an average of 36¢ lower in the front two contracts.

Feeder Cattle futures closed an average of 35¢ higher.

Corn futures closed mostly 1¢ lower.

Soybean futures closed 10¢ to 13¢ lower through Aug ‘23 and then mostly 5¢ to 6¢ lower.

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Major U.S. financial indices closed lower Thursday, led by tech stocks, amid renewed market bearishness.

The Dow Jones Industrial Average closed 348 points lower. The S&P 500 closed 56 points lower. The NASDAQ was down 233 points.

West Texas Intermediate Crude Oil futures (CME) closed 80¢ to 83¢ lower through the front six contracts.

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Farm and ranch operators paid hired workers an average gross wage of $17.72/hour during the October 2022 reference week (Oct. 9-15), up 7% from the October 2021 reference week, according to the latest Farm Labor report from USDA’s National Agricultural Statistics Service (NASS).

Livestock workers earned $16.52/hour during the period, which was 7% more. Field workers received an average of $17.04/hour, up 6%.

Farm and ranch operators hired 785,000 workers during the period, which was 2% more than the October 2021 reference week.