WLI

Cattle futures extended gains Wednesday, buoyed by stronger wholesale beef prices, upward cash momentum and weaker Corn futures.

Feeder Cattle futures closed an average of 89¢ higher (25¢ to $1.65 higher).

Live Cattle futures closed an average of $1.20 higher (88¢ to $1.83 higher).

Choice Boxed beef cutout value was $2.61 higher Wednesday afternoon at $253.39/cwt. Select was 91¢ higher at $222.19/cwt.

Negotiated cash fed cattle trade ranged from very limited on moderate demand to inactive on light to moderate demand through Wednesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. There were some early live sales at $147/cwt. in the Southern Plains and at $150 in the western Corn Belt

Last week, live prices were $145/cwt. in the Southern Plains and $148 in Nebraska and the Western Corn Belt. Dressed prices were $232 in Nebraska and $230-$232 in the western Corn Belt.

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Major U.S. financial indices paused the recent rally Wednesday as the U.S. 10-year treasury note traded at its highest level in 14 years.

The Dow Jones Industrial Average closed 99 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 91 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.60 to $2.73 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) raised estimated U.S. beef exports for next year — compared to the previous month’s forecast — based on strong Asian demand.

“Demand for U.S. beef in East and Southeast Asia has been especially strong this year,” explains ERS analysts in the monthly Livestock, Dairy and Poultry Outlook. The increase in exports to the top 10 Asian markets has accounted for 85% of the year-over-year increase in exports through August. The increase in exports to China alone has accounted for 76% of the overall increase and was more than enough to offset the decrease in exports to Hong Kong and Japan. Exports to South Korea, Taiwan, and the Philippines have also shown significant increases.”

ERS increased the third-quarter U.S. beef export forecast 10 million lbs. to 925 million based on August trade data showing stronger-than-expected shipments to China. The fourth-quarter projection was unchanged. Based on expected global demand for next year, the forecast for first-quarter 2023 was raised 50 million lbs. to 740 million and the second-quarter forecast was raised 15 million lbs. to 775 million. The annual forecast was raised to 3.070 billion lbs.

Stronger cash fed cattle prices last week, the prospect for further gains this week and recently higher wholesale beef prices helped Cattle futures extend gains Tuesday.

Feeder Cattle futures closed an average of $1.73 higher, except for 7¢ higher in spot Oct.

Live Cattle futures closed an average of 50¢ higher (15¢ to 60¢ higher), except for unchanged in the back contract.

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Nebraska through Tuesday afternoon, according to the Agricultural Marketing Service. In the Western Corn Belt, trade was limited on light demand.

Last week, live prices were $145/cwt. in the Southern Plains and $148 in Nebraska and the Western Corn Belt. Dressed prices were $232 in Nebraska and $230-$232 in the western Corn Belt.

Choice Boxed beef cutout value was $2.64 higher Tuesday afternoon at $250.78/cwt. Select was $1.67 higher at $221.28/cwt.

Corn futures closed 2¢ to 3¢ lower. Soybean futures closed mostly 9¢ to 13¢ lower through Jly ’23 and then mostly 4¢ lower.

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Major U.S. financial indices extended gains Tuesday with positive quarterly corporate earnings reports, led by tech stocks.

The Dow Jones Industrial Average closed 337 points higher. The S&P 500 closed 42 points higher. The NASDAQ was up 98 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.47 to $2.64 lower through the front six contracts.

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Despite firm feedlot demand expected for the remainder of this year, between current price data and higher projected feed prices than in last month’s forecast, USDA’s Economic Research Service lowered the fourth-quarter price projection for feeder steers $4 to $173/cwt. with an annual average price of $164.93. That’s basis 750-800 lbs. steers selling at Oklahoma City.

“Based on a weaker outlook than last month for winter grazing on small grains, expected feeder calf placements were raised for the remainder of 2022, tempering expectations for supplies of stocker cattle entering feedlots in early 2023,” ERS analysts say, in the latest Livestock, Dairy and Poultry Outlook. “The price projection in first-quarter 2023 is raised $3 to $175. However, feed prices are forecast to be slightly higher for the 2022-23 crop year and expected feeder calf price increases in the second half of the year were moderated.”

ERS projects feeder steer prices next year at $190 in the second quarter, $214 in the third quarter with an annual average price of $200.75.

Cattle futures caught some wind Monday as traders seemed to focus more on the fundamentals, including recently stronger cash fed cattle prices and the likelihood that wholesale beef prices will begin their seasonal advance.

Feeder Cattle futures closed an average of $2.00 higher (95¢ higher in spot to $2.60 higher).

Live Cattle futures closed an average of 78¢ higher (55¢ to $1.42 higher).

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

Last week, live prices were $145/cwt. in the Southern Plains and $148 in Nebraska and the Western Corn Belt. Dressed prices were $232 in Nebraska and $230-$232 in the western Corn Belt.

The five-area direct weighted average fed steer price last week was $146.99/cwt., which was 76¢ more than the previous week. The average fed steer price in the beef was $1.32 higher at $231.60.

Choice Boxed beef cutout value was $1.16 higher Monday afternoon at $248.14/cwt. Select was $2.67 higher at $219.61/cwt.

Cattle futures were also helped along by Corn futures closing mostly 4¢ to 6¢ lower. Soybean futures closed mostly 3¢ to 7¢ lower.

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Major U.S. financial indices rebounded on Monday with positive corporate earnings reports from key banks.

The Dow Jones Industrial Average closed 550 points higher. The S&P 500 closed 94 points higher. The NASDAQ was up 354 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts (15¢ lower to 9¢ higher).

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Drought continues to intensify across the U.S., according to the latest U.S. Drought Monitor (Oct. 13) with 82% of the nation classified from abnormally dry to exceptional drought.

“This level of arid conditions is the highest on record since the data series began in 2000 and higher than the drought of 2012,” according to analysts with the Agricultural Marketing Service (AMS). “Preliminary year-to-date cattle slaughter numbers for the first three quarters of the year were available this week and are very startling … In 2021, during this same time frame, beef cow slaughter was 9.1% higher than 2020. In 2022, it is 13.1% higher than last year and is now largest on record.”

AMS analysts add that year-to-date heifer slaughter is the largest since 2004 and 750,000 head more than the previous five-year average, as the widespread drought continues pushing replacement heifers into feed yards.

“Not surprisingly, we are tight on hay this year,” says James Mitchell, Extension livestock economist at the University of Arkansas, in the latest Cattle Market Notes Weekly. “The October Crop Production report forecasts hay production (excluding alfalfa) at 63.24 million tons or 11% lower year over year. In the August Crop Production report, USDA expected a 5% decline in hay production. This month’s report reflects a significant departure from earlier estimates.”

Volatile and bearish outside markets weighed on most commodities Friday as shorter supplies battle with demand concerns stemming from steamy inflation, higher interest rates and slowing economic growth.

Feeder Cattle futures closed an average of 79¢ lower (25¢ lower at the back to $1.32 lower toward the front).

Live Cattle futures closed an average of 62¢ lower, except for 50¢ higher in spot Oct.

Corn futures closed mostly 5¢ to 8¢ lower.

Soybean futures closed mostly 8¢ to 12¢ lower.

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 $1 higher in the Southern Plains at $145/cwt., steady to $2 higher in Nebraska at $148 and unevenly steady in the western Corn Belt at $148. Dressed prices were $2 higher at $232.

Choice Boxed beef cutout value was 45¢ higher Friday afternoon at $246.98/cwt. Select was $1.08 higher at $216.94/cwt.

Total estimated cattle slaughter last week of 660,000 head was 4,000 head fewer than the previous week but 21,000 head more than the same week last year. Total estimated year-to-date cattle slaughter of 26.7 million head was 417,000 head more (+1.6%) than the same time last year. Total estimated year-to-date beef production of 22.0 billion lbs. was 306.9 million lbs. more (+1.4%).

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Major U.S. financial indices on Friday gave back much of what was gained in the previous session as the focus returned to current and expected inflation.

The Dow Jones Industrial Average closed 403 points lower. The S&P 500 closed 86 points lower. The NASDAQ was down 327 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.68 to $3.50 lower though the front six contracts.

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Kroger and Albertsons Companies — two of the nation’s top-10 grocery retailers — announced a definitive merger agreement last week. Depending on which list of top grocers in the U.S. by sales you look at, the merger would place the new entity ahead of Costco and in a head-to-head battle with Amazon, while still trailing Walmart by a long way.

Together, Albertsons Cos. and Kroger currently employ more than 710,000 associates and operate a total of 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers, according to joint new release.

“We are bringing together two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders,” says Rodney McMullen, Kroger Chairman and Chief Executive Officer, who will continue serving as Chairman and CEO of the combined company. “Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores. This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors…”

“We have been on a transformational journey to evolve Albertsons Cos. into a modern and efficient omnichannel food and drug retailer focused on building deep and lasting relationships with our customers and communities. I am proud of what our 290,000 associates have accomplished, delivering top-tier performance while furthering our purpose to bring people together around the joys of food and to inspire well-being. Today’s announcement is a testament to their success,” says Vivek Sankaran, CEO of Albertsons Cos.

In connection with obtaining the requisite regulatory clearance necessary to consummate the transaction, Kroger and Albertsons Cos. expect to make store divestitures.

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

So far this week, live prices are $1 higher in the Southern Plains at $145/cwt., steady to $2 higher in Nebraska at $147-$148 and unevenly steady in the western Corn Belt at $148. Dressed prices are $2 higher at $232.

Choice Boxed beef cutout value was 13¢ lower Thursday afternoon at $246.53/cwt. Select was $1.60 higher at $215.86/cwt.

Cattle futures softened Thursday amid volatile outside markets and despite higher cash trade.

Feeder Cattle futures closed an average of 65¢ lower, except for 5¢ higher in Aug.

Live Cattle futures closed an average of 23¢ lower, except for 27¢ higher in spot Oct.

Corn futures closed mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 4¢ to 6¢ higher, except for fractionally lower to 2¢ higher in the front four contracts.

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Major U.S. financial indices sank early Thursday and then boomeranged back in dramatic fashion. Pressure stemmed from higher inflation than expected in the monthly Consumer Price Index (CPI). Apparently, the same information provided support later with speculation that it was the last gasp for price hikes. Energy also provide support.

The CPI for all urban consumers rose 0.4% month to month in September, according to the U.S. Bureau of Economic Analysis. CPI was up 8.2% over the last 12 months.

The Dow Jones Industrial Average closed 827 points higher. The S&P 500 closed 92 points higher. The NASDAQ was up 232 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.81 to $1.91 higher  though the front six contracts.

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Here’s something from the For What It’s Worth Department:

Land O’Lakes, in partnership with Wakefield Research, recently polled a nationally representative sample of U.S. consumers seeking to find out what they know about where their food comes from.

Among the findings:

On average, Americans believe that less than half of U.S. farms are family owned and operated, although the fact is that 98% are. Similarly, just 43% of respondents believe the food they buy comes from these family-owned operation, when in fact 88% does.

Despite some prevailing misconceptions, most Americans express interest in the source of their food with 87% of respondents at least somewhat interested in knowing where their groceries were grown or produced. Millennials were most likely to be extremely or very interested in knowing where their food comes from.

Finally, 94% of respondents say it’s at least somewhat important that their groceries be grown or sourced sustainably — yet when it comes to sustainable farming, 26% are unaware of the potential for sustainability in farming to increase farmers’ profits.