WLI

Feeder Cattle futures closed an average of 52¢ higher Wednesday as Corn Futures retreated 8¢ to 10¢ lower through Jly ’23 and then mostly 2¢ to 4¢ lower.

Soybean futures closed mostly 18¢ to 23¢ lower.

Live Cattle futures closed an average of 26¢ lower except for unchanged to an average of 12¢ higher in three contracts.

The looming railroad strike continues to add uncertainty to the mix.

Negotiated cash fed cattle trade ranged from a standstill to limited on light demand through Wednesday afternoon, according to the Agricultural Marketing Service. There were a few dressed trades in Nebraska at $226-$227/cwt. and a few live trades in the western Corn Belt at $143, but too few to trend.

Last week, live prices were $141/cwt. in the Southern Plains, $142-$143 in Nebraska and $143-$146 in the western Corn Belt. Dressed prices were $226 in Nebraska and $225-$230 in the western Corn Belt.

Choice Boxed beef cutout value was $3.19 lower through Wednesday afternoon at $253.47/cwt. Select was $3.47 lower at $230.11/cwt.

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Major U.S. financial indices firmed Wednesday following the previous session’s steep selloff

The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 86 points.

West Texas Intermediate Crude Oil futures on the CME closed 70¢ to $1.17 higher through the front six contracts.

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American Foods Group (AFG), LLC broke ground this week on the a beef processing facility in Warren County, Missouri.

The family-owned company plans to process 2,400 cattle per day and intends to be fully operational by the end of 2024.

AFG is investing $800 million in the new 775,000 sq. ft. facility. The company plans to create more than 1,300 new jobs in the region with an annual payroll of approximately $80 million. Currently, AFG employs more than 4,500 across the U.S.

Sharply lower outside markets pressured by higher inflation than expected compounded the previous day’s lower corn yield estimates, weighing on Cattle futures.

Feeder Cattle futures closed an average of $1.88 lower ($1.10 to $2.60 lower).

Live Cattle futures closed an average of 77¢ lower.

That was with Corn futures retreating on the same macroeconomic news.

Corn futures closed 1¢ to 3¢ lower through Sep ‘23, then mostly fractionally higher.

Soybean futures closed mostly 3¢ to 9¢ lower through Jly ‘23 and then mostly 1¢ higher.

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

Last week, live prices were $141/cwt. in the Southern Plains, $142-$143 in Nebraska and $143-$146 in the western Corn Belt. Dressed prices were $226 in Nebraska and $225-$230 in the western Corn Belt.

Choice Boxed beef cutout value was $2.28 lower through Tuesday afternoon at $256.66/cwt. Select was $2.18 lower at $233.58/cwt.

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As alluded to, Major U.S. financial indices plunged Tuesday on a steamier inflation reading than expected.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1% in August on a seasonally adjusted basis after being unchanged in July, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 8.3% before seasonal adjustment. The all-items less food and energy index rose 6.3% over the last 12 months.

The Dow Jones Industrial Average closed 1,276 points lower. The S&P 500 closed 177 points lower. The NASDAQ was down 632 points.

West Texas Intermediate Crude Oil futures on the CME closed 47¢ to 78¢ lower through the front six contracts.

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The latest World Agricultural Supply and Demand Estimates (WASDE) underscored elevated heifer and cow slaughter by increasing expected beef production this year to 26.33 billion lbs. That’s 70 million lbs. more than the previous month’s projection, with higher anticipated slaughter in the second half of the year offset slightly by lower expected third-quarter carcass weights.

“While increased cow and heifer slaughter totals are contributing to higher beef production this year, the longer-run implications are tighter supplies,” explains Josh Maples, Extension livestock economist at Mississippi State University, in a recent issue of Cattle Market Notes Weekly. “The higher slaughter totals imply fewer cows and fewer replacement heifers to produce calves. The current WASDE projection for 2023 beef production would be about 6% below the current 2022 projection. Price expectations are reflecting these tighter supplies.”

WASDE analysts estimated this year’s annual weighted average five-area direct fed steer price 70¢ higher at $142.80/cwt. Prices are forecast to be $143 in the third quarter and $147 in the fourth quarter. Next year’s projected average price was unchanged at $154.

Corn futures climbed 9¢ to 13¢ through July ’23 Monday, in response to the latest monthly World Agricultural Supply and Demand Estimates, which reduced expected production (see below).

Soybean futures closed 60¢ to 76¢ higher through Jly ‘23 and then mostly 32¢ to 40¢ higher.

Feeder Cattle futures closed an average of $1.32 lower (30¢ lower at the back to $2.45 lower toward the front).

Live Cattle edged an average of 19¢ higher, maintaining the previous session’s gains with some optimism for cash trade this week.

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

Last week, live prices were steady to $1 higher in the Southern Plains at $141/cwt., steady to $3 lower in Nebraska at $142-$143 and steady to $1 higher in the western Corn Belt at $143-$146. Dressed prices were $2-$4 lower in Nebraska at $226 and $2-$3 lower in the western Corn Belt at $225-$230.

The five-area direct fed steer price last week was $142.48 on a live basis, which was 40¢ less than the previous week. The average five-area direct steer price in the beef was $2.10 lower at $226.68.

Choice Boxed beef cutout value was $1.68 higher through Monday afternoon at $258.94/cwt. Select was $1.03 higher at $235.76/cwt.

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Major U.S. financial indices extended gains Monday on what some are terming a relief rally. 

The Dow Jones Industrial Average closed 229 points higher. The S&P 500 closed 43 points higher. The NASDAQ was up 154 points.

West Texas Intermediate Crude Oil futures on the CME closed 99¢ to $1.21 higher  higher through the front six contracts.

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The latest World Agricultural Supply and Demand Estimates (WASDE) provided price support for corn with the estimated season average farm price (SAFP) received by producers 10¢ higher than the previous month’s estimate at $6.75/bu.

WASDE reduced projected 2022-23 production 415 million bu. less at 13.9 billion bu. based on yields down 2.9 bu./acre at 172.5. Harvested area for grain was forecast at 80.8 million acres, down 1.0 million. Ending stocks were projected 169 million bu. less at 1.2 billion.

U.S. soybean production for 2022-23 was projected 152 million bu. less than the previous month at 4.4 billion bu., on yield forecast at 50.5 bu./acre, which was 1.4 bu. less than the previous estimate. Harvested area was also projected to be 0.6 million acres less.

Even so, the projected SAFP remained unchanged with soybeans at $14.35/bu., soybean meal at $390/short ton and soybean oil at 69.0¢/lb.

The outlook for wheat supply and use was unchanged. The expected SAFP declined 25¢ to $9.00/bu., which would be record high.

Corn futures closed 11¢ to 24¢ higher through Sep ’23, then 6¢ to 8¢ higher on expectations Monday’s USDA crop report will show a reduction in yields.

Soybean futures closed mostly 17¢ to 26¢ higher.

Feeder Cattle futures closed an average of 66¢ higher, helped along by strong cash demand.

Live Cattle futures closed an average of $1.00 higher, apparently with some speculation that cash prices will move higher next week, given ho-hum interest from packers the last couple of weeks.

Negotiated cash fed cattle trade ranged from slow on light demand to mostly inactive on light demand through Friday afternoon, according to the Agricultural Marketing Service.

Regionally, negotiated cash fed cattle prices last week were mainly steady to lower. Live prices were steady to $1 higher in the Southern Plains at $141/cwt., steady to $2 lower in Nebraska at $143 and steady in the western Corn Belt at $143-$145. Dressed prices were $2-$4 lower in Nebraska at $226. The previous week, dressed prices were $228-$232 in the western Corn Belt.

Choice Boxed beef cutout value was 75¢ lower at $257.26/cwt. Select was $1.31 lower at $243.73/cwt.

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Major U.S. financial indices closed higher on Friday.

The Dow Jones Industrial Average closed 377 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 250 points.

West Texas Intermediate Crude Oil futures on the CME closed $3.14 to $3.29 higher through the front six contracts.

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In a recent issue of Cattle Market Notes Weekly, Burdine also notes beef cow slaughter levels remain 14% higher year over year. It is significantly more in the Southern Plains and surrounding states.

David Anderson, Extension livestock economist with Texas A&M AgriLife Extension Service provided perspective in the early-September issue of In the Cattle Markets from the Livestock Marketing Information Center. He looked at federally inspected beef and dairy cow slaughter for region 6, which includes Texas, Oklahoma, Louisiana, Arkansas, and New Mexico. He also compared cow slaughter in the region this year to levels during the last major drought (2011-12) in Texas and parts of other states.

“Cow packing plants in region 6 have processed 668,000 beef cows this year, up 31% (or 157,000 head) from last year. They have processed 217,000 dairy cows this year, just slightly below last year,” Anderson explains. “The states in region 6 reported 8.4 million beef cows on January 1, 2022. Those states had 8.8 million beef cows on January 1, 2011. While cows may come into the region for slaughter, it’s likely that a larger proportion of the herd has been culled this year than in the last major drought.”

So far this year, Anderson says 8,000 more beef cows in region 6 have been slaughtered than in 2011; 164,900 head more than in 2012.

Recent rain and moderate temperatures across Texas could slow culling in the near term, according to Anderson.

“Watch national and regional beef cow culling over the next six weeks to better gauge the impact of these storms,” Anderson says. “Seasonally, the largest cow culling weeks of the year nationally occur in October and November. Rain and earlier heavy culling rates could pull back slaughter and boost prices.”

Feeder Cattle futures edged an average of 36¢ higher Thursday, supported by weaker Corn futures that were mostly 2¢ lower.

Live Cattle futures closed mixed, from an average of 27¢ lower to an average of 8¢ higher with pressure from the steady to lower cash trade.

Live prices were steady in the Texas Panhandle and $1 higher in Kansas at $141/cwt. They were $1 lower in Nebraska at $142-$144 with dressed prices mostly $2-$4 lower at $226. Trade and demand were moderate in both regions, according to the Agricultural Marketing Service.

Trade was slow on light to moderate demand in the western Corn Belt. There were a few live trades at $143, but too few to trend. Last week, live prices were $143-$145 and dressed prices were $228-$232.

Choice Boxed beef cutout value was $3.33 lower Thursday afternoon at $258.01/cwt. Select was $1.47 lower at $236.04/cwt.

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Major U.S. financial indices extended gains Thursday for the second consecutive session, but trade was volatile as investors wrestle with inflation wonderments in tandem with economic growth. 

The Dow Jones Industrial Average closed 193 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 70 points.

West Texas Intermediate Crude Oil futures on the CME closed 84¢ to $1.60 higher through the front six contracts.

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U.S. beef exports topped $1 billion in July — for the sixth time this year — and posted the fifth-largest volume on record, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

July beef exports totaled 126,567 metric tons (mt), up 3% year-over-year. Export value increased 7% to $1.006 billion.

For the first seven months of the year, beef exports increased 6% from a year ago to 870,471 mt, valued at $7.2 billion (up 29%). Export value per head of fed slaughter is on a record pace at more than $475.00.

“Global demand for U.S. beef continues to be amazingly resilient, especially at the retail level,” said USMEF President and CEO Dan Halstrom. “Exports have also benefited from a partial rebound in the foodservice sector but this recovery is far from complete. Many markets are still gradually easing COVID restrictions, so we definitely see opportunities for further growth as restaurant traffic returns. Headwinds remain formidable, however, including further devaluation of key trading partner currencies.”

Japan was the pacesetter for July exports, but volumes also increased year over year to China/Hong Kong, the ASEAN region, Central America, the Caribbean and Colombia. July exports eased for South Korea and Taiwan, though both markets remain on a record pace in 2022.