WLI

Grain markets were the story once again on Tuesday, melting down beneath the weight of bearish outside markets, the climbing U.S. dollar, a more optimistic weather outlook and apparently little impact from the latest monthly World Agricultural Supply and Demand Estimates (WASDE-see below).

Corn futures closed 36¢ to 48¢ lower through Jly ‘23 and then mostly 15¢ to 19¢ lower.

Soybean futures closed 48¢ to 63¢ lower through Sep ’23, then mostly 38¢ to 43¢ lower.

Sharply lower Corn futures and strong cash demand boosted Feeder Cattle an average of $3.48 higher, (from $2.98 higher to $4.70 higher).

That and firm wholesale Choice beef value helped Live Cattle edge an average of 41¢ higher, except for unchanged and down 25¢ in two contracts.

Last week, live prices were $137/cwt. in the Southern Plains, $144-$149 in Nebraska and $147-$150 in the western Corn Belt. Dressed prices were $232.

Choice Boxed beef cutout value was 37¢ higher through Tuesday afternoon at $268.51/cwt. Select was 83¢ lower at $242.17/cwt.

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Major U.S. financial indices closed lower Tuesday, pressured by falling Crude Oil futures and investor uneasiness over Wednesday’s consumer inflation report.

The Dow Jones Industrial Average closed 193 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 108 points.

West Texas Intermediate Crude Oil futures on the CME closed $6.45 to $8.25 lower through the front six contracts.

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USDA’s Economic Research Service increased the forecast average fed steer price for this year $1.20 higher than the previous month at $141.30/cwt., in the monthly World Agricultural Supply and Demand Estimates (WASDE). That was based on prices reported in the second quarter and expected packer demand strength in the third quarter. Prices are forecast to be $139 in the third quarter and $145 in the fourth quarter.

The annual expected average fed steer price for next year was unchanged at $153.

Among other WASDE highlights:

Corn

The 2022-23 U.S. corn outlook was for larger supplies and 70 million bu. more ending stocks. Corn production was forecast 45 million bu. higher based on increased planted and harvested area from the June 30 Acreage report. Yield was unchanged at 177.0 bu./acre. The season-average farm price received by producers was lowered 10¢ to $6.65.

Soybeans

Soybean production was projected 135 million bu. lower at 4.5 billion bu. on lower harvested area — 2.6 million acres less than expected the previous month, based on the June Acreage report. Ending stocks for 2022-23 were projected 50 million bu. less at 230 million. The U.S. season-average soybean price was forecast 30¢ lower at $14.40/bu. The soybean meal price was projected $10 lower at $390/short ton. The soybean oil price was forecast 1¢ lower at of 69¢/lb.

Wheat

Supplies of 2022-23 U.S. wheat were raised 44 million bu. to 1,781 million based on increased harvested area and higher yields. The projected season-average farm price for wheat was lowered 25¢/bu. to $10.50 on declines in futures and cash prices.

Strong cash demand for calves and feeder cattle, with snugger supplies looming, helped boost

Feeder Cattle futures an average of $2.09 higher Monday ($1.60 higher toward the back to $3.15 higher in spot Aug).

Live Cattle futures closed an average of $1.26 higher (82¢ higher toward the back to $2.20 higher in spot Aug), helped along by firm wholesale beef values.

Choice Boxed beef cutout value 25¢ higher through Monday afternoon at $268.14/cwt. Select was $1.15 higher at $243.00.

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

Last week, live prices were steady to $1 lower in the Southern Plains at $137/cwt., $1-$2 lower in Nebraska at $144-$149 and steady in the western Corn Belt at $147-$150. Dressed prices were $2 lower at $232.

The average five-area direct fed steer price last week was $144.35/cwt. on a live basis, which was $1.81 less than the previous week. The average price in the beef was $1.74 less at $232.22.

Corn futures closed 1¢ to 5¢ higher through new-crop contracts on Monday and then mostly 6¢ to 8¢ lower.

Soybean futures closed mostly 7¢ to 8¢ higher.

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Major U.S. financial indices closed lower as investors appeared to be skittish at the start of earnings season.

The Dow Jones Industrial Average closed 164 points lower. The S&P 500 closed 44 points lower. The NASDAQ was down 262 points.

West Texas Intermediate Crude Oil futures on the CME closed narrowly mixed through the front six contracts

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Auction receipts will likely continue down the seasonal path this year — dipping in July and then growing through the end of the year — but with fewer numbers, says Josh Maples, Extension livestock economist at Mississippi State University. In the latest Cattle Market Notes Weekly, he points out year-to-date stocker and feeder cattle auction receipts are about 3% less than the same time last year, according to

“While the drop in auction receipts for 2022 is one indicator of tighter supplies, the mix of steers and heifers is also of interest,” Maples explains. “The percentage of heifers (in the auction mix) has ticked higher in recent years, which is another signal that herd expansion is not occurring. The average weekly heifer percentage is 44% so far in 2022. For reference, this average was 39% during the first six months of 2015 when the U.S. herd was in a rapid expansion phase and more heifers were being retained for breeding.”

The next USDA Cattle report July 22 should provide more clarity to the number of calves born this year.

Grain and Soybean futures rallied higher Friday, apparently mostly due to a wetter, drier forecast. 

Corn futures closed mostly 25¢ to 31¢ higher through Jly ‘23 and then mostly 10¢ to 22¢ higher.

Soybean futures closed mostly 24¢ to 39¢ higher through Aug ’24 and then mostly 10¢ to 21¢ higher.

Stronger grain futures pressured Feeder Cattle futures an average of $1.28 lower, (from 75¢ lower to $1.58 lower).

Live Cattle futures closed mixed, from an average of 53¢ lower through the front four contracts to an average of 21¢ higher, except for unchanged in the back contract. The anemic weekly export sales report could have provided some pressure. Net U.S. beef export sales the week ending the week of June 30 were 3% less than the previous week and 23% less than the prior four-week average, according to USDA.

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

For the week, live prices were steady to $1 lower in the Southern Plains at $137/cwt., $1-$2 lower in Nebraska at $144-$149 and steady in the western Corn Belt at $147-$150. Dressed prices in Nebraska were $2 lower at $232.

Choice Boxed beef cutout value 18¢ lower through Friday afternoon at $267.89/cwt. Select was 73¢ lower at $241.85

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Major U.S. financial indices closed narrowly mixed on Friday. The June jobs report was stronger expected, but it remains to be seen if the recent rally can overcome bearish news and technical resistance. 

The Dow Jones Industrial Average closed 46 points lower. The S&P 500 closed 3 points lower. The NASDAQ was up 14 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.06 to $2.39 higher through the front six contracts.

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U.S. beef exports set new volume and value records in May, topping $1 billion for the fourth time this year, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

May beef exports reached 135,006 metric tons (mt), up 1% from the previous high posted in May 2021. Export value climbed 20% to $1.09 billion, breaking the March 2022 record. For January through May, beef exports increased 4% from a year ago to 613,266 mt, valued at $5.14 billion (up 34%). Exports to leading markets South Korea, Japan and China/Hong Kong already topped $1 billion each through May, while shipments also trended significantly higher to Taiwan, the Caribbean, the ASEAN region, the Middle East and Central America.

“For U.S. beef exports to maintain a $1 billion-per-month pace is tremendous under any circumstances, but it is especially remarkable given the strong U.S. dollar, continued shipping and logistical challenges and the economic uncertainty our industry and international customers face today,” said USMEF President and CEO Dan Halstrom. “Across a wide range of markets, the momentum for retail beef sales achieved during the pandemic continues, and it’s now complemented by a strong rebound in the foodservice sector. May volume was actually down slightly to both Japan and South Korea, and yet exports still set a new record. That’s a great indication of soaring, broad-based demand for U.S. beef.”

May beef export value averaged $505.02 per head of fed slaughter, up 17% from a year ago, breaking the previous record ($503.68) set in January 2022. Through May, per-head value averaged $483.49, up 34% from the first five months of 2021.

Negotiated cash fed cattle trade was moderate on moderate demand through Thursday afternoon in the Southern Plains and Nebraska. Live prices were steady to $1 lower in the Texas Panhandle at $137/cwt., mostly $1 lower in Kansas at $137 and $1-$2 lower in Nebraska at $144-$149, where dressed prices were $2 lower at $232.

Trade was limited on light to moderate demand in the western Corn Belt. Live prices the previous day were $150 — the top of last week’s range — and dressed prices were steady at $234.

Choice Boxed beef cutout value was 2¢ higher Thursday afternoon at $268.07/cwt. Select was 35¢ lower at $242.58.

Stronger grain futures pressured Feeder Cattle Thursday, while firmer beef values helped Live Cattle stay the course.

Feeder Cattle futures closed an average of 82¢ lower (42¢ to $1.05 lower).

Live Cattle futures closed an average of 18¢ higher, except for 10¢ lower in near Oct.

Grain and Soybean futures rallied back Thursday on oversold conditions and supportive outside markets.

Corn futures closed mostly 9¢ to 11¢ higher through Jly ‘23 and then mostly 2¢ to 5¢ higher.

Soybean futures closed mostly 38¢ to 43¢ higher through Jly ‘23 and then mostly 12¢ to 20¢ higher.

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Major U.S. financial indices rallied higher Thursday, buoyed by a bounce-back in crude oil prices and perhaps optimism about the nation’s monthly employment report due out Friday.   

The Dow Jones Industrial Average closed 346 points higher. The S&P 500 closed 57 points higher. The NASDAQ was up 259 points.

West Texas Intermediate Crude Oil futures on the CME closed $3.56 to $4.27 higher through the front six contracts.

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The Purdue University/CME Group Ag Economy Barometer continued to decline in June, down 2 points to a reading of 97. The Index of Future Expectations fell 5 points to a reading of 96, marking the lowest level since October 2016. However, producers were slightly more optimistic regarding current conditions — the Index of Current Conditions improved 5 points to 99.

“Rising input costs and uncertainty about the future continue to weigh on farmer sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Many producers remain concerned about the ongoing escalation in production costs as well as commodity price volatility, which could lead to a production cost/income squeeze in 2023.”

The Farm Financial Performance Index, which is primarily reflective of income expectations for the current year, improved 2 points to a reading of 83 in June, yet remains at one of the index’s lowest readings over the past two years. When asked about expectations for their farm’s financial condition in June 2023 compared to June 2022, 51% of survey respondents said they expect their farms to be worse off financially. That was the most negative response to the benchmark question since data collection began in 2015.

Primary producer concerns continue to be input prices (43%), followed by input availability (21%), government policies (18%), and lower output prices (17%). Looking ahead to 2023, a majority of farmers expect to see another round of large input cost increases with 63% of producers expecting higher costs in 2023, on top of the large increases experienced in 2022.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between June 13-17.

Cattle futures gained Wednesday, helped along by a bounce higher in wholesale beef values.

Choice Boxed beef cutout value was $3.39 higher Wednesday afternoon at $268.05/cwt. Select was $3.06 higher at $242.93.

Feeder Cattle futures closed an average of $1.17 higher (60¢ higher in spot Aug to $1.32 higher at the back).

Live Cattle futures closed an average of 96¢ higher ($1.57 higher in spot Aug to 12¢ higher at the back).

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

Last week, live prices were $137-138/cwt. in the Southern Plains, $145 in Colorado, $145-$151 in Nebraska and $147-$150 in the western Corn Belt. Dressed prices were $234.

Grain and Soybean futures firmed Wednesday as traders re-trenched after recent steep losses.

Corn futures closed 5¢ to 7¢ higher through new-crop contracts and then 2¢ to 5¢ higher.

Soybean futures closed 4¢ to 7¢ higher through Jan ‘23 and then mostly fractionally higher to 1¢ higher.

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Major U.S. financial indices eased higher Wednesday as some investors were apparently cheered by comments in the latest Federal Reserve minutes reaffirming commitment to containing inflation.  

The Dow Jones Industrial Average closed 69 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 39 points.

West Texas Intermediate Crude Oil futures on the CME closed 97¢ to $1.59 lower through the front six contracts.

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Willingness to pay (WTP) decreased for five evaluated retail products in June compared to the previous month, according to the latest Meat Demand Monitor from Kansas State University, funded in part by the beef checkoff. WTP declined 23¢ for ribeye steak to $17.42/lb. and 26¢ for ground beef to $8.78/lb. WTP also declined 25¢ for pork chop to $7.09/lb., 7¢ for chicken breast to $8.29/lb., 45¢ for shrimp to $9.16/lb. and 17¢ for beans and rice to $2.93/lb.

“Meanwhile, WTP decreased for seven evaluated Food Service meals,” according to the report. “Combined this broadly confirms weakening consumer demand consistent with increased general discussion around consumers being more conservative in their spending.”

Even so, in ad hoc questioning, when questioned about their response to higher retail meat prices, 31% of respondents (the most common response) said they were not making any changes in purchasing.

“Among those indicating changes, the most prevalent noted adjustment remains reducing the volume of items purchased while being steadfast in product type (brand, cut, and package size),” according to the report.

The Meat Demand Monitor tracks U.S. consumer preferences, views, and demand for meat with separate analysis for retail and food service channels. It is a monthly online survey with a sample of over 2,000 respondents reflecting the national population.