WLI

The grain complex roared ahead Tuesday, fueled by mounting concerns about yields based on recent crop ratings and private-company assessments (see Crop Progress below).

Corn futures closed 22¢ to 26¢ higher through Jly ‘23 and then mostly 13¢ to 16¢ higher.

Soybean futures closed mostly 17¢ to 25¢ higher.

Feeder Cattle futures sagged beneath the weight of sharply higher grain futures, closing an average of $1.71 lower (50¢ to $2.25 lower).

Live Cattle futures edged an average of 26¢ higher, except for unchanged in two contracts, supported by recently stronger cash prices and the aggressive packing pace.

Choice Boxed beef cutout value was $1.72 lower Tuesday afternoon at $262.80/cwt. Select was 44¢ higher at $238.80/cwt.

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

There were some live sales in the Southern Plains steady to $1 higher at $142/cwt. There were a few live trades in the western Corn Belt at $148 but too few to trend.

Last week, live prices were $146.00-$148.50 in Nebraska and $148-$150 in the western Corn Belt. Dressed prices were $234.

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Major U.S. financial indices extended losses Tuesday but firmed as investors sift through concerns about global economic growth and inflation. 

The Dow Jones Industrial Average closed 154 points lower. The S&P 500 closed 9 points lower. The NASDAQ was fractionally lower.

West Texas Intermediate Crude Oil futures on the CME closed $2.56 to $3.38 higher through the front six contracts. Support included a slightly weaker dollar and suggestions the previous day that OPEC might cut production.

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National pasture and range conditions the week ending Aug. 21 continued to deteriorate compared to the prior year, according to the latest USDA Crop Progress report.

23% of pasture and range was rated as Good (20%) or Excellent (3%), which was 2% less than a week earlier and 6% less than a year earlier. Conversely, 49% was rated as Poor (24%) or Very Poor (25%), which was 2% more than a week earlier and 6% more than a year earlier.

97% of corn was silking, which was 3% less than last year and 2% less than the five-year average. 75% was in the dough stage, compared to 83% last year and 79% for average. 31% was dented, which was 7% less than last year and 4% less than the five-year average. 4% was mature, the same as last year and the average. 55% was rated as Good (43%) or Excellent (12%), which was 2% less than the prior week and 5% less than a year earlier. 18% was rated Poor (11%) or Very Poor (7%) versus 16% a week earlier and 14% a year earlier.

97% of soybeans were blooming, which was the same as last and the average. 84% were setting pods, compared to 87% last year and 86% for average. 57% were rated as Good (47%) or Excellent (10%) which was 1% less than the previous week but 1% more than the prior year. 13% were rated Poor (9%) or Very Poor (4%), which was 2% more than the previous week but 3% less than the prior year.

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

Last week, live prices were $141-$142/cwt. in the Southern Plains, $146.00-$148.50 in Nebraska and $148-$150 in the western Corn Belt. Dressed prices were $234.

The five-area direct weighted average fed steer price last week was $146.88/cwt. on a live basis, which was $2.49 more than the previous week. The weighted average price in the beef was $4.30 higher at $234.23.

Choice Boxed beef cutout value was 24¢ higher Monday afternoon at $264.52/cwt. Select was 42¢ higher at $238.36/cwt.

Apparently, bullish supply fundamentals were enough to help Cattle futures mainly fade the bearish Cattle on Feed report, especially given higher Corn futures prices.

Live Cattle futures closed mixed, from an average of 42¢ lower to an average of 22¢ higher.

Feeder Cattle futures closed an average of 16¢ lower, except for unchanged to an average of 20¢ higher in the back two contracts.

Grain and Soybean futures gained more traction with concerns about drought in China.

Corn futures closed mostly 5¢ to 7¢ higher.

Soybean futures closed mostly 28¢ to 31¢ higher.

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Major U.S. financial indices closed sharply lower Monday amid growing concerns about global economic growth and how more interest rate hikes will impact domestic growth.

The Dow Jones Industrial Average closed 643 points lower. The S&P 500 closed 90 points lower. The NASDAQ was down 323 points.

West Texas Intermediate Crude Oil futures on the CME closed 8¢ to 54¢ lower through the front six contracts.

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Higher-trending feeder cattle prices could significantly reduce or offset the typical seasonal decline in calf prices this fall, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel notes 750 lb. steers at Oklahoma auctions reached their highest levels for the year in mid-August, while 500 lb. steer calves revisited the highs of mid-March. Supplies will continue to tighten, given cow liquidation longer term and increased lightweight feedlot placements in the near term.

“Increased lightweight placements, especially since May, likely includes fall calves marketed right off the cow, early-weaned spring calves and summer stockers marketed ahead of schedule,” Peel says. “Pasture and range conditions are currently rated at 52% poor/very poor, the worst level for this time of year since 2012. It appears that the supply of calves and feeder cattle available this fall will likely be significantly smaller because many cattle have already moved to market.”

For perspective, Peel explains feedlot placements the past six months of 10.91 million head were 0.8% more than the same time in 2021.

“In those six months, placements weighing under 700 lbs. were up 3.5% year over year, while placements over 700 lbs. were down 0.7%. All of this suggests that feedlots are somewhat back-loaded with relatively tighter numbers finishing in the August – October period and recent lightweight placements finishing in November and later,” Peel says.

As noted in the last issue of Cattle Current, placements in July of 1.77 million head were 32,000 head more (+1.8%) than a year earlier and about 3% more than expectations, according to the monthly Cattle on Feed report.

Cattle on feed Aug. 1 of 11.22 million head were 150,000 head more year over year (+1.4%), which was 0.6% more than expectations ahead of the report. Inventory was the second largest for the date since the data series began in 1996.

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

For the week, live prices were $2 higher in the Southern Plains at $142/cwt., 50¢ to $1 higher in Nebraska at $145.00-$148.50 and $2 higher in the western Corn Belt at $148-$150. Dressed prices were $4-$5 higher at $234.

Choice Boxed beef cutout value was 11¢ lower Friday afternoon at $264.28/cwt. Select was 47¢ higher at $237.94/cwt.

Estimated total cattle slaughter last week of 661,000 head was 14,000 head more than the previous week. Estimated total year-to-date total cattle slaughter of 21.4 million head was 239,000 head more (+1.1%) year over year. Estimated year-to-date beef production of 17.65 billion lbs. was 156.1 million lbs. (+0.9%) more.

Stronger cash prices helped Live Cattle edge an average of 22¢ higher on Friday, except for an average of 6¢ lower in two contracts. Week to week they closed an average of 49¢ higher (17¢ to $1.37 higher), except for an average of 7¢ lower in two contracts.

Resurgent Corn futures prices and likely defensiveness ahead of the Cattle on Feed report pressured Feeder Cattle futures an average of 46¢ lower on Friday, except for 12¢ higher in the back contract. Week to week, they closed an average of $1.66 higher (77¢ to $2.32 higher).

Starting the week, traders will likely try to balance recent rains and improved fall grazing prospects in the Southern Plains with Friday’s bearish Cattle on Feed report (see below).

Grain and Soybean futures continued to gain Friday but remained lower week to week with concerns about economic growth in China, as well as the stronger U.S. Dollar.

Corn futures closed 6¢ to 8¢ higher through Sep ‘23 on Friday and then 1¢ to 4¢ higher. They closed an average of 16’6¢ lower through the front six contracts week to week on Friday.

Soybean futures closed mixed, mostly 1¢ lower to 1¢ higher on Friday. Week to week they closed an average of 45’7¢ lower through the front six contracts.

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Major U.S. financial indices closed lower Friday. Pressure appeared to be heightened concern over future interest rate hikes and profit taking ahead of the weekend.

The Dow Jones Industrial Average closed 292 points lower. The S&P 500 closed 55 points lower. The NASDAQ was down 260 points.

West Texas Intermediate Crude Oil futures on the CME closed 27¢ to 56¢ higher through the through the front six contracts.

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Markets will likely view Friday’s monthly Cattle on Feed report as bearish, with July placements and cattle on feed Aug. 1 (feedlots with 1,000 head or more capacity) higher than pre-report expectations.

Placements in July of 1.77 million head were 32,000 head more (+1.8%) than a year earlier and about 3% more than expectations.

In terms of placements, 23.2% went on feed weighing less than 600 lbs., 16% weighing 600-699 lbs., 23% weighing 700-799 lbs., 23% weighing 800-899 lbs., 11% weighing 900-999 lbs and 4% weighing 1,000 lbs. or more.

Marketings in July of 1.82 million head were 74,000 head fewer (-4.0%) less than last year, which was in line with estimates ahead of the report.

Cattle on feed Aug. 1 of 11.22 million head were 150,000 head more year over year (+1.4%), which was 0.6% more than expectations ahead of the report. Inventory was the second largest for the date since the data series began in 1996.

Negotiated cash fed cattle prices continued $2 higher Thursday at $142/cwt. in the Southern Plains and $148-$150 in the western Corn Belt. That was on slow trade and moderate demand, according to the Agricultural Marketing Service. There were a few dressed trades in the western Corn Belt $5 higher than last week at $234, but too few to trend.

Trade was also slow on moderate demand in Nebraska. There were some early live sales at $146-$148 and a few in the beef at $234, but too few to trend. Last week, prices there were at $144-$148 and $229-$230.

Choice Boxed beef cutout value was 5¢ higher Thursday afternoon at $264.39/cwt. Select was 42¢ lower at $237.47/cwt.

Cattle futures softened Thursday amid over-bought conditions and likely positioning ahead of Friday’s Cattle on Feed report. 

Live Cattle futures closed an average of 58¢ lower with most pressure in front contracts.

Feeder Cattle futures closed an average of $1.10 lower, from 10¢ lower at the back to $1.87 lower.

Grain and Soybean futures continued to gain Thursday, supported by international weather concerns for corn and higher oil prices for soybeans.

Corn futures closed mostly 3¢ to 8¢ higher.

Soybean futures closed mostly 12¢ to 16¢ higher.

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Major U.S. financial indices closed marginally higher Thursday.    

The Dow Jones Industrial Average closed 18 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 27 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.95 to $2.42 higher through the through the front six contracts.

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USDA’s Economic Research Service (ERS) increased projected feeder steer prices (750-800 lbs., Oklahoma City) based on recent price strength, in the latest monthly Livestock, Dairy and Poultry Outlook.

Based on anticipated firm feedlot demand in second-half 2022 and current price data, the feeder steer price was forecast $3 higher in the third quarter at $171 and $2 higher in the fourth quarter at $173 for an annual average of $164.60. Prices are forecast at $169 and $186 in the first and second quarters of next year, respectively, with an annual average of $199.25.

ERS analysts point out the Oklahoma City feeder steer price averaged $169.26/cwt. in July, up more than $16 from last year.

Cattle futures extended gains Wednesday, buoyed by strong cash feeder cattle prices and the growing prospects of higher money for cash fed cattle this week.

Feeder Cattle futures closed an average of $1.60 higher. Live Cattle futures edged an average of 36¢ higher.

Negotiated cash fed cattle trade was limited on light demand through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some live trades in the Southern Plains at $141/cwt. and a few in the western Corn Belt at $147.

Last week, live prices were $140/cwt. in the Southern Plains, $144-$148 in Nebraska and $146-$148 in the western Corn Belt. Dressed prices were $229-$230.

On Wednesday, slaughter steers and heifers sold steady to $2 higher at Sioux Falls Regional in South Dakota. At Tama Livestock in Iowa, Choice slaughter steers and heifers sold $3.50-$4.50 higher amid a light offering.

Choice Boxed beef cutout value was $1.10 lower Wednesday afternoon at $264.34/cwt. Select was $1.23 lower at $237.89/cwt.

Grain and Soybean futures firmed Wednesday.

Corn futures closed fractionally higher to 4¢ higher through Jly ‘23 and then 2¢ to 3¢ lower.

Soybean futures closed mostly 6¢ to 9¢ higher through Aug. ’23 and then mostly 1¢ higher.

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Major U.S. financial indices closed lower Wednesday, as investors took a breather from the recent rally. News for the day included mixed quarterly earnings reports for retailers.    

The Dow Jones Industrial Average closed 171 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 164 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.24 to $1.58 higher through the through the front six contracts.

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Plenty of eyes will focus on July feedlot placements in the monthly Cattle on Feed report due out Friday.

“So far, 2022 feedlot placements are averaging 0.4% above 2021. However, when you remove February (Feb. 2021 winter storm), 2022 feedlot placements are averaging 1.5% below 2021,” says James Mitchell, livestock economist at the University of Arkansas, in the latest Cattle Market Notes Weekly. “In June, placements were 2.5% lower year over year. July 1 cattle on feed totaled 11.3 million head or 0.4% above July 1, 2021. Drought-induced placements in July could hold Aug. 1 cattle on feed numbers close to or slightly above August 2021 feedlot inventories.”

Seasonally speaking, Mitchell explains larger placements of feeder cattle weighing more than 700 lbs. usually come in August and September. He notes national feeder and stocker cattle auction receipts in July of 529,000 head were 1.2% less year over year.

“While total auction receipts are lower for July, the breakout by weight group suggests that we are seeing cattle come off summer pasture earlier than normal,” Mitchell says. “Last month 63% of feeder cattle auction receipts were for cattle weighing over 600 lbs. Cattle weighing over 600 lbs. accounted for 58% of auction receipts in July 2021. Auction receipt totals and these percentages imply that we sold 25,421 more head of heavy feeder cattle last month than in July 2021…The longer we delay the decline in feedlot inventories, the more significant it will become.”