WLI

Cattle futures weakened further Monday, along with other commodities and financial markets as fears about a contracting economy, high unabated inflation and increasing interest rates ruled the day.

Feeder Cattle futures closed an average of $1.75 lower ($1.20 lower toward the front to $2.40 lower in the back contract.

Live Cattle futures closed an average of $1.32 lower (77¢ to $1.70 lower).

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

Last week, live prices were $143/cwt. in the Southern Plains, $144-$145 in Nebraska and $145-$148 in the western Corn Belt. Dressed prices were $228-$232 in Nebraska and $227-$243 in the western Corn Belt.

Choice boxed beef cutout value was 79¢ lower Monday afternoon at $247.84/cwt. Select was $4.04 higher at $223.35.

Corn futures closed 8¢ to 11¢ lower through Sep ’23 and then mostly 5¢ lower.

Soybean futures closed mostly 11¢ to 15¢ lower.

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Major U.S. financial indices closed sharply lower again Monday with the surging dollar and continued   worries about climbing interest rates and recessionary fears.

The Dow Jones Industrial Average closed 329 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 65 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.03 to $2.14 lower through the front six contracts.

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“Both feedlot inventories and cattle slaughter have remained stubbornly high this year due to drought-forced movement of cattle out of the country. Total fed cattle slaughter thus far in 2022 is up 0.8% as the 1.7% decrease in steer slaughter for the year to date is offset by a 4.9% increase in heifer slaughter,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Total cow slaughter is up 5.6% so far this year, driven by a 13.4% increase year over year in beef cow slaughter. Total cattle slaughter is up 1.8% year over year thus far in 2022, with female (cow plus heifer slaughter) accounting for 50.9% of total cattle this year. Cattle slaughter and beef production are projected to decrease year over year in the fourth quarter but higher than expected beef production in the first three quarters of the year likely mean that annual totals for beef production will be steady or fractionally higher year over year. Feedlot production, cattle slaughter and beef production are all expected to decrease sharply in 2023.”

Referencing Friday’s Cattle on Feed report, Peel explains, feedlot inventories grow seasonally in the fall but are expected to increase less this year and trail last year’s record levels.

“In the past four months — May – August — total placements were down 0.6% year over year with placements under 700 lbs. up 5.3% and placements over 700 pounds down 3.7% compared to last year. Past placements of lightweight cattle suggest fewer cattle available for placement going forward,” Peel says.

Cattle futures softened again Friday amid sharply lower outside markets, rising interest rates and perhaps some prescient defensiveness ahead of the monthly Cattle on Feed report.

Feeder Cattle futures closed an average of 61¢ lower, except for an average of 28¢ higher in two contracts.

Live Cattle futures closed an average of 89¢ lower.

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

Based on the last established trends, live prices for the week were $1 higher in the Southern Plains at $143/cwt., steady to $4 higher in the western Corn Belt at $148 and $1 higher in Nebraska at $144. Dressed prices were $2-$8 higher in the western Corn Belt at $228-$234 and $2-$5 higher in Nebraska at $228-$232.

Choice Boxed beef cutout value was 23¢ higher Friday afternoon at $248.63/cwt. Select was $2.80 lower at $219.31/cwt.

Corn and Soybean futures softened Friday with outside market concerns, including the impact the climbing U.S. dollar will have on exports.

Corn futures closed 10¢ to 13¢ lower.

Soybean futures closed 28¢ to 31¢ lower through Aug ‘23 and then 20¢ to 25¢ lower.

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Major U.S. financial indices closed sharply lower Friday as investors focused on climbing interest rates and recessionary fears.

The Dow Jones Industrial Average closed 468 points lower. The S&P 500 closed 64 points lower. The NASDAQ was down 198 points.

CME WTI Crude Oil futures closed $4.29 to $4.78 lower through the front six contracts.

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Feedlot placements were higher than expected again in August, according to the latest monthly Cattle on Feed report for feedlots with 1,000 head or more capacity. Placements in August of 2.11 million head were 9,000 head more year over year (+0.4%) but almost 2% more than pre-report expectations.

In terms of placement weights, 35% went on feed weighing 699 lbs. or less, 47% were 700-899 lbs. and 18% weighed 900 lbs. or more.

Marketings in August of 2.00 million head were 120,000 head more (+6.4%), which was in line with expectations.

Cattle on feed Sept 1 of 11.3. million head were 45,000 head more (+0.4%) than the previous year, which also mirrored expectations ahead of the report. It was the second largest inventory for the date since the data series began in 1996.

Negotiated cash fed trade ranged from slow to moderate on moderate demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service. Prices so far this week are $1 higher at $143/cwt.

Elsewhere, trade was moderate on moderate to good demand.

Dressed trade in Nebraska was $2-$5 higher at $228-$232. Live prices there last week were $143.

In the western Corn Belt, live prices this week are steady to $1 higher at $144-$145 and $2 higher in the beef at $228

Even so, Cattle futures continued to weaken Thursday with pressure from struggling outside markets and likely positioning ahead of Friday’s Cattle on Feed report. Pre-report estimates expect placement to be down 1% or so compared to last year and on-feed numbers to be about even.

Feeder Cattle futures closed an average of $1.41 lower, except for 2¢ higher in spot Sep.

Live Cattle futures closed an average of 85¢ lower (30¢ to $1.40 lower).

Cattle futures are weaker again through noon today.

Corn and Soybean futures paddled in place Thursday with ongoing pressure from lower outside markets and the higher U.S. dollar, but also speculation about lower yields.

Corn futures closed mostly fractionally higher to 2¢ higher.

Soybean futures closed 2¢ to 4¢ lower through Jly ‘23 and then mostly fractionally mixed.

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Major U.S. financial indices closed lower again Thursday with growing concern about recession as the Fed battles inflation.

The Dow Jones Industrial Average closed 107 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 153 points.

CME WTI Crude Oil futures closed 55¢ to 66¢ higher through the front six contracts.

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“August cutout data showed a strong resurgence in interest for Prime graded beef, approaching levels not seen since January of 2022,” according to analysts with the Livestock Marketing information Center, in its Livestock Monitor. “The Prime cutout value was $330.57/cwt., up from July’s $317.51 value, and just short of January’s peak for the year of $341.12. Interestingly, other grades of beef cutout failed to rally and were even with the month before. Branded, Choice, and Select cutout values have held the $275-$250 range since March 2022.”

The loin and rib drove increased Prime cutout value.

“The strong interest in prime rib and loin values is associated with a seasonal component that has become much more pronounced since 2017 in the premiums between Prime and other grades of beef,” LMIC analysts say. “Fall of 2021 was one of the largest historical cutout spreads, in which Prime commanded more than $80/cwt. over Choice. Prime Rib values are on pace to approach last year’s high point, while Prime loin values are slightly weaker.” 

LMIC analysts point out 7.6% of carcasses graded Prime in August versus 8.7% the prior year.

Cattle futures weakened Wednesday with likely spillover pessimism from lower outside markets, the lack of cash direction and perhaps some defensiveness in the face of Friday’s Cattle on Feed report.

Feeder Cattle futures closed an average of 74¢ lower, except for 57¢ higher in the back contract.

Live Cattle futures closed an average of 25¢ lower, except for 17¢ higher in the back contract.

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. There were a few trades at $145/cwt. in Nebraska and the western Corn Belt but too few to trend.

Live prices last week were $142/cwt. in the Southern Plains, $143 in Nebraska and $143-$145 in the western Corn Belt. Dressed prices were $226-$227 in Nebraska and $226 in the western Corn Belt.

Choice Boxed beef cutout value was $2.51 lower Wednesday afternoon at $249.13/cwt. Select was $1.09 lower at $226.14/cwt.

Corn futures closed 3¢ to 6¢ lower Wednesday with pressure from lower outside markets and the export-adverse rise in the U.S. dollar.

Soybean futures closed 13¢ to 17¢ lower through Aug ‘23 and then mostly 8¢ to 9¢ lower.

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Major U.S. financial indices closed sharply lower Wednesday after a volatile trading session as investors first awaited the Fed’s latest interest rate decision and then parsed through the announcement.

As widely expected, the Federal Operating Markets Committee (FOMC) increased interest rates by 75 basis points and anticipated further tightening to rein back inflation.

“Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures,” according to the FOMC statement. “Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks.”

The Dow Jones Industrial Average closed 522 points lower. The S&P 500 closed 66 points lower. The NASDAQ was down 204 points.

CME WTI Crude Oil futures closed 63¢ to $1.00 lower through the front six contracts.

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Nearly three in four beef-eating Americans can’t imagine giving up the taste of beef, according to new research from Midan Marketing, a full-service agency dedicated to meat industry clients.

“Recent data from Mintel shows that 81% of American consumers eat beef,” says Bridget Wasser, associate director of customer insights at Midan. “We know that consumers are seeking out several attributes when shopping for beef, so we set out to determine which claims are most impactful.”

According to Midan’s newest proprietary research, 68% of consumers purchase beef with production claims at least some of the time.

The survey, which was fielded in April 2022, presented a nationally representative sample of U.S. beef consumers with 28 different product attributes. Claims tested ranged from quality claims including USDA Prime or Choice grade, production claims like grass-fed or carbon neutral, and sourcing claims such as locally raised or product of the U.S.

Claims that carry the most weight with consumers vary generationally. For instance, most shoppers search first for beef carrying a USDA Choice grade. When it comes to the second attribute they look for: Baby Boomers — Raised in the USA; Gen X — USDA Prime; Millennials — Raised with no added hormones or growth promotants.

As for Gen Z — they ranked No added hormones or growth promotants as their leading attribute, followed by High in protein. USDA Choice ranked fourth on the list for them.

Feeder Cattle futures gave back the previous session’s gains and then some Tuesday, pressured by higher Corn futures.

Feeder Cattle futures closed an average of $1.80 lower Tuesday (35¢ lower at the back to $2.27 lower toward the front), giving back the previous session’s gains and then some. Much of the pressure came from Corn futures bouncing 12¢ to 13¢ higher through Jly ‘23 and then mostly 8¢ to 9¢ higher, supported by bleaker condition ratings than expected. Soybean futures closed 15¢ to 17¢ higher through Jly ‘23. and then mostly 7¢ to 9¢ higher.

Live Cattle futures closed an average of 12¢ lower, except for 27¢ higher in three contracts with firmness from growing optimism for higher cash fed cattle prices this week.

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

Live prices last week were $142/cwt. in the Southern Plains, $143 in Nebraska and $143-$145 in the western Corn Belt. Dressed prices were $226-$227 in Nebraska and $226 in the western Corn Belt.

Choice Boxed beef cutout value was 81¢ lower Tuesday afternoon at $251.64/cwt. Select was $1.34 higher at $227.23/cwt.

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Major U.S. financial indices closed lower Tuesday with traders fretting over the Fed’s interest rate decision Wednesday.

The Dow Jones Industrial Average closed 313 points lower. The S&P 500 closed 43 points lower. The NASDAQ was down 109 points.

CME WTI Crude Oil futures closed $1.28 to $1.42 lower through the front six contracts.