WLI

Weekly negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $144/cwt. in the Southern Plains, $145-$148 in Nebraska and $145-$149 in the western Corn Belt. Dressed prices were $230.

Cattle futures edged higher, though, with the mainly friendly World Agricultural Supply and Demand Estimates (see below).

Feeder Cattle futures closed an average of 29¢ higher, except for unchanged and 12¢ lower in two away contracts.

Live Cattle futures closed an average of 31¢ higher, except for 12¢ lower in near Dec.

Corn futures closed mostly fractionally mixed through May ‘24 then mostly 1¢ to 3¢ higher.

Soybean futures closed 12¢ to 19¢ higher through Jly ‘23, and then mostly fractionally lower to 2¢ lower.

Choice Boxed beef cutout value was 9¢ lower Wednesday afternoon at $246.66/cwt. Select was $1.41 higher at $214.26/cwt.

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Major U.S. financial indices closed little changed again Wednesday after another whipsaw session.

The Dow Jones Industrial Average closed 28 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 9 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.54 to $2.08 lower through the front six contracts.

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USDA raised the expected annual five-area direct fed steer price for this year to $143.15/cwt., in the latest World Agricultural Supply and Demand Estimates (WASDE). That was 35¢ more than the previous month’s estimate, based on current strength in packer demand

Projected fed steer prices are $148 in the fourth quarter. Next year’s annual price projection is $154, with prices at $151 in the first quarter and $152 in the second quarter.

Beef production next year is projected to be 1.77 billion lbs. less than this year (-6.3%) at 26.43 billion lbs.

Compared to the previous month’s estimates:

Corn

USDA reduced expected 2022-23 corn production 49 million bu. to 13.895 billion bu. with reduced yield of 171.9 bu./acre. Corn ending stocks for 2022-23 were cut 47 million bu.

The season-average price received by producers was raised 5¢ to $6.80/bu.

Soybeans

Soybean production was forecast at 4.3 billion bu., down 65 million bu. on lower yields. Soybean yield was projected 0.7 bu. less at 49.8 bu./acre.

The U.S. season-average soybean price for 2022-23 was forecast at $14.00/bu., down 35¢. Soybean meal and oil prices were unchanged at $390.00/short ton and 69¢/lb., respectively.

Wheat

Production for 2022-23 was reduced 133 million bu. to 1,650 million on lower harvested area and yield. Projected ending stocks were lowered 34 million bu. to 576 million, which would be the lowest since 2007-08.

The season-average farm price was raised 20¢/bu. to $9.20 on reported NASS prices to date and expectations for futures and cash prices for the remainder of 2022-23.

Feeder Cattle futures bounced an average of $2.34 higher Tuesday, regaining some of the recent losses. Support included Corn futures closing 3¢ to 5¢ lower through Sep ’23 and then mostly 1¢ lower.

Feeder Cattle also received support from Live Cattle futures closing an average of 91¢ higher (22¢ higher at the back to $1.57 higher toward the front), likely due in part to notions that cash fed cattle prices can build on last week’s advance.

Negotiated cash fed cattle trade ranged from a standstill to limited on light demand through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few early live sales in the western Corn Belt at $146/cwt., but too few to trend.

Last week, live prices were $144/cwt. in the Southern Plains, $145-$148 in Nebraska and $145-$149 in the western Corn Belt. Dressed prices were $230.

Choice Boxed beef cutout value was $2.12 higher Tuesday afternoon at $246.75/cwt. Select was 97¢ lower at $212.85/cwt.

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Major U.S. financial indices closed little changed Tuesday with investors apparently waiting for more direction from weekly economic reports.

The Dow Jones Industrial Average closed 36 points higher. The S&P 500 closed 23 points lower. The NASDAQ was down 115 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.75 to $1.84 lower though the front six contracts.

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Drought continues to expand and deepen, according to the latest U.S. Drought Monitor for the week of Oct. 4.

77.4% of the nation was classified from abnormally dry (D0) to exceptional drought (D4), compared to 62.4% at the same time last year. 52.6% was ranged from moderate (D1) to exceptional drought compared to 47.5% a year earlier. However, 32.4% was classified as severe (D2) to exceptional drought compared to 36.5% for the same week in 2021.

Approximately 66% of the U.S. cattle inventory was in areas experiencing drought, according to U.S. Crop and Livestock in Drought from NOAA and the National Integrated Drought Information System. At the same time last year, 35% of the nation’s cattle were in areas experiencing drought.

Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides some state perspective in his weekly market comments; virtually all of Oklahoma was in some stage of drought.

“There is little prospect for winter wheat grazing this fall. Hay supplies are very tight and a wide range of hay types and qualities are being offered. Failed summer crops are being baled for hay including grain sorghum and soybeans,” Peel says. “The water situation may soon be the most critical, even more than forage, for many producers. Water quantity and quality is low and decreasing rapidly. Oklahoma relies heavily on surface water ponds, which are filled by spring and summer thunderstorms. Ponds rarely get replenished in the winter, even in a normal year.” 

Surging Corn futures prices took Feeder Cattle futures down a peg Monday.

Feeder Cattle futures closed an average of $2.10 lower (80¢ lower toward the back to $2.75 lower toward the front).

Grain futures spiked higher with heightened concerns about Russia’s ongoing war on Ukraine.

Corn futures closed 10¢ to 15¢ higher through Sep ’23 then mostly 8¢ to 9¢ higher.

Soybean futures closed 5¢ to 7¢ higher through Sep ’23 and then mostly 2¢ to 3¢ higher.

Live Cattle futures were unable to fade the strong pressure, closing an average of 75¢ lower (52¢ to $1.05 lower).

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

Last week, live prices were $144/cwt. in the Southern Plains, $145-$148 in Nebraska and $145-$149 in the western Corn Belt. Dressed prices were $230.

Choice Boxed beef cutout value was $1.44 lower Monday afternoon at $244.63/cwt. Select was $2.31 lower at $213.82/cwt.

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Major U.S. financial indices continued to soften Monday with hangover pressure from the previous week’s bullish employment summary prompted further concern about the aggressiveness of Fed interest rate increases.

The Dow Jones Industrial Average closed 93 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 110 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.42 to $1.51 lower  though the front six contracts.

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Cattle grading and increased cattle slaughter imply Choice beef production is 4% higher year over year, which is one reason for lower Choice beef prices in recent weeks, according to David Anderson, livestock economist with Texas A&M AgriLife Extension Service.

“The Choice beef cutout has been sliding lower for a number of weeks. Last week’s average Choice cutout was $247/cwt., which is an $18/cwt. decline over the last eight weeks. It is also the lowest since the first week of April 2021,” Anderson says, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center. “Increasing supplies of Choice beef may be one reason for the decline, but it can also be an implication of some shifting demand.”

On the other hand, even with increased cattle slaughter, Prime beef production declined over the last eight weeks, leading to a $16/cwt. increase in Prime cutout value, according to Anderson.

“While consumers may be switching around between cuts of beef and other meats based on relative prices and budget constraints, available supplies certainly provide ample reason for changing cutout values,” Anderson says.

Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions 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 $143/cwt. and $1-$3 higher in Nebraska and the western Corn belt at $146-$148. Dressed prices were $2 higher at $230.

Choice Boxed beef cutout value $1.29 lower Friday afternoon at $246.07/cwt. Select was 86¢ lower at $216.13.

Cattle futures limped to a narrowly mixed close on Friday.

Feeder Cattle futures closed mixed from an average of 38¢ lower through May ’23, then up 13¢ to 38¢.

Live Cattle futures closed mixed, down 15¢ to up 28¢.

The strong U.S. dollar capped Grain and Soybean futures Friday.

Corn futures closed mixed, 4¢ to 8¢ higher through Jul ’24 then down 1¢.

Soybean futures closed 3¢ to 9¢ higher through Sep ’24 and then 3¢ lower.

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Major U.S. financial indices sank Friday with investors apparently viewing the strong as another reason for the Fed to keep aggressively shoving interest rates higher.

Total non-farm payroll employment increased by 263,000 in September, and the unemployment rate edged down to 3.5%, according to the U.S. Bureau of Labor Statistics.

In September, average hourly earnings for all employees on private non-farm payrolls rose by 10¢ to $32.46. Over the past 12 months, average hourly earnings have

increased by 5.0%.

The Dow Jones Industrial Average closed 630 points lower. The S&P 500 closed 105 points lower. The NASDAQ was down 421 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.50 to $4.19 higher higher though the front six contracts.

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“The lack of available grazing and a low hay supply is likely to bring cattle to market a few weeks early as many producers are facing conditions that may force them to begin feeding hay earlier than is typical,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The price of freshly weaned calves has been declining the past several weeks and will likely continue to decline through the month of October. The driver of lower prices is not simply the seasonal tendency due to the seasonal increase in supply. Higher feed prices and increased concern of the general economy have many folks concerned about the consumers ability to purchase beef, which has resulted in a softening of price expectations for calves and feeder cattle moving through the spring months.”

Although declining cattle supplies ahead will support prices, Griffith explains continuing high feed costs and lower cash fed cattle prices than previously suggested by Cattle futures pose headwinds.

“If feed costs continue to maintain current price levels and finished cattle prices do not increase considerably then cattle feeders will be forced to continue leaning on lower feeder cattle prices,” Griffith says. “There should be some positive price movement closer to the end of the year, but prices are unlikely to make a large move through the month of October and early November.”

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

So far this week, live prices are $1 higher in the Southern Plains at $143/cwt. and $1-$2 higher in Nebraska at $146-$147. Dressed prices are $2 higher at $230. Live prices in the western Corn Belt last week were $145.

Despite stronger cash prices, Cattle futures faded a bit.

Feeder Cattle futures closed an average of 37¢ lower (17¢ to 82¢ lower) except for an average of 25¢ higher in the back two contracts.

Live Cattle futures closed an average of 10¢ lower except for unchanged in one contract and 65¢ higher in spot Oct.

Choice Boxed beef cutout value was 30¢ higher Thursday afternoon at $247.36/cwt. Select was $2.23 lower at $216.99/cwt.

Grain futures weakened Thursday, pressured by slowing exports impeded by the strength of the U.S. Dollar.

Corn futures closed 6¢ to 8¢ lower through Jly ‘23 and then mostly 1¢ lower to 3¢ higher.

Soybean futures closed 7¢ to 11¢ lower through Jly ‘23 and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices softened Thursday with jitters ahead of Friday’s national employment summary. 

The Dow Jones Industrial Average closed 346 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 75 points.

West Texas Intermediate Crude Oil futures (CME) closed 69¢ to $1.04 higher though the first six contracts.

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U.S. beef export value topped $1 billion in August for the seventh time this year, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

August beef exports totaled 133,832 mt, up 1% year-over-year and the second largest volume on record – trailing only May 2022. Export value was just under $1.04 billion, slightly below the then-record total achieved in August 2021, which was the first time monthly exports topped the $1 billion mark.

“We speak often about the importance of developing a wide range of markets for U.S. red meat, and the August export results are a great illustration of that,” says USMEF President and CEO Dan Halstrom. “Exports face significant headwinds in some key destinations, with weakened currencies topping the list. But the emphasis on broad-based growth really pays dividends in these situations, allowing the overall export picture to remain very positive. I also cannot say enough about the loyalty of our international customers, many of whom have diminished purchasing power but continue to show a strong preference for U.S. red meat.”

For the first eight months of 2022, beef exports increased 5% from a year ago to 1.004 million mt, valued at $8.23 billion – a remarkable 24% above last year’s record pace. August beef export value equated to $437.98 per head of fed slaughter, down 7% from a year ago, but the January-August average was up 23% to $471.18.