WLI

Another round of heavy fund selling — tied to recessionary fears — held sway in commodity markets Tuesday.

Corn futures closed mostly 24¢ to 29¢ lower. Soybean futures closed 70¢ to 79¢ lower through Aug ‘23 and then mostly 55¢ to 60¢ lower. Both were also pressured by favorable weather.

Cattle futures were caught in the commodity backwash with Feeder Cattle futures closing an average of $1.49 lower and Live Cattle futures closing an average of $1.65 lower.

Negotiated cash fed cattle trade was at a standstill in all major feeding regions through Tuesday 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.

Choice Boxed beef cutout value was 84¢ higher Tuesday afternoon at $264.66/cwt. Select was 60¢ lower at $239.87.

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Major U.S. financial indices closed mixed Tuesday. Support included more durable goods orders and factory orders than expected in May. Also, the U.S. and China held discussions about easing the tariffs on Chinese goods imposed by President Trump. Reducing the tariffs could lower prices on consumer goods. However, the threat of a recession continues. Bloomberg Economics forecasts the odds of a recession in the U.S. at 38% over the next year.

The Dow Jones Industrial Average closed 129 points lower. The S&P 500 closed 6 points higher. The NASDAQ was up 194 points.

West Texas Intermediate Crude Oil futures on the CME closed $8.74 to $8.93 lower through the front six contracts.

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“The general direction of cattle and beef market forecasts for this year has not changed but annual forecasts have been modified by the way the first half of the year has played out, with implications for a significantly different second half of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.  

For instance, Peel explains beef production through the first two quarters was higher year over year but is still expected to be less than last year across the full calendar. Likewise, he points out total cattle slaughter in 2022 is expected to be about 1% less than 2021 but was 1.4% higher through the first six months.

“The increase is due to more female slaughter with total cow and heifer slaughter up 4.5% in the first half of the year,” Peel says. “Thus far, increased female slaughter more than offsets the 1.6% year-over-year decrease in steer and bull slaughter. Total cow slaughter is up 6.1% so far this year with dairy cow slaughter down 3.1% year over year, partially offsetting the 14.6% year-over-year increase in beef cow slaughter. For the remainder of the year, total beef cow slaughter is likely to remain higher year over year by double-digits and total cow slaughter is likely to increase by 5-6% year over year. This means that reduced cattle slaughter will be realized by less steer and heifer slaughter.”

This reality implies reduced feedlot marketing rates, Peel explains.

“Feedlots, as of June 1 had record inventories of cattle on feed, which seems to be at odds with the idea of reduced marketings in the coming months. However, feedlots have been placing larger numbers of lightweight cattle, which leads to more days on feed and slower turnover rates … slower marketing rates,” Peel explains. “Feedlots will work through current inventories in the second half of the year. May placements were down by the largest year-over-year monthly decrease since last September. Smaller placements in the coming months will lead to lower feedlot inventories by the end of the year unless drought forces even larger numbers of cattle into feedlots.”

Weaker grain futures and strong country trade helped Feeder Cattle futures take another step higher Friday.

Feeder Cattle futures closed an average of $1.57 higher, while Live Cattle futures closed an average of $1.14 higher (55¢ to $2.62 higher).

Grain and Soybean futures were down again on extended fund liquidation and plummeting open interest.

Corn futures closed mostly 7¢ to 12¢ lower. Soybean futures closed 47¢ to 62¢ lower through Aug. ‘23 and then mostly 25¢ to 37¢ lower.

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

For the week (last established) live prices were $1 lower in the Texas Panhandle at $137/cwt., steady to $1 higher in Kansas at $138, steady in Colorado at $145, steady to $3 higher in Nebraska at $145-$151 and unevenly steady ($2 lower to $3 higher) in the western Corn Belt at $148. Dressed prices were steady in Nebraska at $234 and steady to $6 lower in the western Corn Belt at $234.

The average five-area direct fed steer price was $1.60 higher on a live basis at $146.10/cwt. The average steer price in the beef was 97¢ lower at $233.94.

Choice Boxed beef cutout value was 18¢ lower Friday afternoon at $263.82/cwt. Select was 10¢ lower at $240.47.

Estimated total cattle slaughter last week of 636,000 head was 30,000 head fewer than the previous week but 8,000 more than the same week last year, according to USDA. Estimated year-to-date total cattle slaughter of 16.9 million head was 168,000 head more than the same time last year. Estimated year-to-date beef production of 13.96 billion lbs. was 127.6 million lbs. more (+0.9%) than last year.

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Major U.S. financial indices rallied late in Friday’s session to close higher, despite the lowest Manufacturing Purchasing Managers Index since June of 2020, according to the Institute of Supply Management.

The Dow Jones Industrial Average closed 321 points higher. The S&P 500 closed 39 points higher. The NASDAQ was up 99 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.60 to $2.67 higher through the front six contracts.

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Opponents to the nation’s beef checkoff came up short in their latest multi-year challenge.

The Supreme Court of the United States last week denied R-CALF’s lawsuit against 13 state beef councils and the Beef Checkoff. This ruling effectively ends yet another R-CALF attack on the Beef Checkoff and prevents the activist attorneys at Public Justice, from further diverting Checkoff and beef industry resources.

“For too long we have allowed R-CALF and their attorneys to divide our industry and draw attention away from the important job of beef promotion and research. The Supreme Court’s rejection of R-CALF’s petition confirms the Beef Checkoff, and its overseers, are adhering to the letter and spirit of the laws that protect and guide producer investments in the program,” says NCBA CEO Colin Woodall.

NCBA intervened in the lawsuit in its early days to help defend state beef councils from R-CALF and their activist attorneys, who falsely attacked state beef councils and the cattlemen and women who volunteer their time to support the industry as Checkoff leaders. Multiple court decisions rejected these allegations and reaffirmed the work and direction of the Beef Checkoff and those who guide it.

“R-CALF has repeatedly attacked the Beef Checkoff, engaging lawyers who are closely aligned with extremist animal rights groups like PETA and others, in an attempt to further their efforts,” Woodall says. “It’s time that our industry stands up to R-CALF and insists that they end these attacks on the Beef Checkoff and the volunteer cattle producers who direct it.”

As an editorial aside, folks can always find details of a program they disagree with, but when you look at how much the beef checkoff accomplishes each year and over time, its mind boggling that anyone would want to derail the program. Never mind the promotion, naysayers should look at the long list of necessary product research, which has helped create new products and beef demand, and describe an alternative that would have done more.

Grain markets were the story on Thursday as Corn and Soybean futures tumbled, likely having more to do with quarter-end fund liquidation than the latest USDA Grain Stocks and Acreage reports (see below), which were likely regarded as neutral overall.

On Thursday, Corn futures closed 24¢ to 35¢ lower through new-crop contracts and then mostly 11¢ to 20¢ lower.

Soybean futures closed mostly 19¢ to 29¢ lower.

Feeder Cattle futures climbed an average of $2.17 higher Thursday, from $1.50 higher at the back to $2.87 higher in spot August.

Expiring spot June Live Cattle futures closed $1.20 higher at $138 and then an average of 32¢ higher, except for unchanged to an average of 21¢ lower in three contracts.

Cattle futures are higher again so far today.

Negotiated cash fed cattle trade in the Texas Panhandle Thursday was $1 lower than the previous day at $137/cwt.; steady to $1 lower for the week.

Elsewhere, trade ranged from limited on light demand to a standstill with too few transactions to trend.

For the week, live prices are steady to $1 higher in Kansas at $138, steady in Colorado at $145, steady to $3 higher in Nebraska at $145-$151 and steady to $2 higher in the western Corn Belt at $147-$150. Dressed prices are steady in Nebraska at $234 and steady to $6 lower in the western Corn Belt at $234.

Choice Boxed beef cutout value was 88¢ lower through Thursday afternoon at $264.00/cwt. Select was 24¢ lower at $240.57.

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Major U.S. financial indices closed lower Thursday on continued investor concern about recession and positioning at the end of the quarter.

The Dow Jones Industrial Average closed 254 points lower. The S&P 500 closed 33 points lower. The NASDAQ was down 149 points.

The indexes were lower through noon today with pressure including the lowest Manufacturing Purchasing Managers Index since June of 2020, according to the Institute of Supply Management.

West Texas Intermediate Crude Oil futures on the CME closed $3.63 to $4.02 lower through the front six contracts.

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Corn planted area for all purposes in 2022 was estimated at 89.9 million acres, in USDA’s Acreage report. That would be 3.44 million acres less (-4%) than last year. However, it was more than the estimate in the Prospective Plantings report and more than the trade expected.

Compared with last year, planted acreage is expected to be down or unchanged in 35 of the 48 estimating States.

Corn stocks in all positions on June 1, totaled 4.35 billion bu., up 6% year over year, according to USDA’s Grain Stocks report. Of the total stocks, 2.12 billion bu. were stored on farms, which was 22% more than a year earlier. Off-farm stocks, at 2.23 billion bu., were 6% less.

Soybean planted area for 2022 was estimated at 88.3 million acres, which would be 1% more than last year. Still, Soybean acreage was significantly less than the Prospective Plantings report and below trade expectations.

Compared with last year, planted acreage is up or unchanged in 24 of the 29 estimating States.

Soybeans stored in all positions on June 1 totaled 971 million bu., up 26% from a year earlier. On-farm stocks totaled 331 million bu., up 51% from a year ago. Off-farm stocks of 640 million bu. were 17% more than a year ago.

All wheat planted area for 2022 was estimated at 47.1 million acres, up 1% from 2021. If realized, this represents the fifth lowest all wheat planted area since records began in 1919.

Old crop all wheat stored in all positions on June 1 totaled 660 million bu., down 22% from a year ago. On-farm stocks were estimated at 93.0 million bu., down 34% from last year. Off-farm stocks of 567 million bu. were 19% less than a year ago.

Acreage for all hay was estimated at 51.5 million acres, which would be 771,000 acres more (+1.5%) than last year.

Negotiated cash fed cattle trade was light to moderate on moderate demand in Nebraska and the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices were steady in the Texas Panhandle at $138/cwt, steady to $1 higher in Kansas at $138 and steady to $3 higher in Nebraska at $145-$151. Dressed prices in Nebraska were steady at $234.

Elsewhere, trade was limited on moderate demand with too few transactions to trend. Last week live prices were $145 in Colorado and $145-$150 in the western Corn Belt, where dressed prices were $234-$240.

Choice Boxed beef cutout value was $2.26 lower through Wednesday afternoon at $264.88/cwt. Select was $2.50 lower at $240.81.

Cattle futures extended losses Wednesday, with a lack of cash direction early in the session. 

Feeder Cattle futures closed an average of 66¢ lower (7¢ lower toward the back to $1.17 lower toward the front).

Live Cattle futures an average of 53¢ lower, except for 50¢ higher in expiring spot Jun.

Corn and Soybean futures closed mixed ahead of Thursday’s much-anticipated USDA Grain Stocks and Acreage reports. 

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

Soybean futures closed 10¢ to 15¢ higher through Aug ‘23. And then 8¢ to 9¢ higher.

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Major U.S. financial indices were little changed Wednesday as investor pessimism continued regarding inflation, uncertainty and volatility.

The Dow Jones Industrial Average closed 82 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 3 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.86 to $1.98 lower through the front six contracts.

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“…feedlot inventories are declining seasonally and typically bottom-out in the late summer. That trend is expected this year, too, but it remains to be seen just how quickly the inventory numbers decline through the summer or increase during the fall,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest issue of Cattle Market Notes Weekly. “The number of calves born in the U.S. has declined annually since 2018, and 2022 is expected to be smaller again.”

Reflecting on another month of record-large feedlot inventories June 1, Maples explains more heifers and cattle placed at lighter weights, among other factors, makes it difficult to pinpoint when feedlot inventories will begin to decline.

“Lighter cattle typically stay in feedlot inventory longer, and an increase in heifers in the feedlot mix means higher feedlot totals now but fewer replacements to produce calves later,” Maples says. “Both of these factors are likely contributing to higher feedlot totals today, but do not suggest sustained high inventories in the future.”

Cattle futures closed lower Tuesday, basically giving back what was gained the previous session as Corn futures gained and cash fed cattle prices for the week remained unestablished.

Feeder Cattle futures closed an average of $1.42 lower (77¢ lower at the back to $2.30 lower in spot Aug).

Live Cattle futures an average of 44¢ lower, except for 5¢ higher in waning spot Jun.

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

Last week, live prices were $137-$138/cwt. in the Southern Plains, $145-$148 in the Northern Plains and $145-$150 in the western Corn Belt. Dressed prices were $234-$240.

Choice Boxed beef cutout value was $1.54 lower Tuesday afternoon at $267.14/cwt. Select was $1.93 lower at $243.31.

Corn and Soybean futures closed higher on lower week-to-week crop ratings.

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

Soybean futures closed mostly 25¢ to 29¢ higher.

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Major U.S. financial indices closed sharply lower Tuesday amid another volatile day of wide swings up and then down. Perhaps some profit taking and early positioning ahead of the quarter’s end played a role.

The Dow Jones Industrial Average closed 491 points lower. The S&P 500 closed 78 points lower. The NASDAQ was down 343 points.

West Texas Intermediate Crude Oil futures on the CME closed another $2.19 to $2.75 higher through the front six contracts.

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Amid inflation and rising costs, consumers are eating more dinners at home as a way to cut expenses, according to the NPD Group (NPD).

Although dinners at home peaked during the pandemic, out of necessity — and have normalized — they are expected to remain above pre-pandemic levels through 2024, according to NPD’s Future of Dinner report.

As consumers resume their busy lifestyles, however, the report suggests they will look for more convenience — little or no prep and fast dinner fixes, like frozen meals and ready-to-eat snacks, especially during the work week, will grow through 2024, according to the report. NPD analysts say consumers will also increasingly turn to retail on-the-go meals like ready-to-eat entrees from the grocery store to help with meal prep.

Also, according to the report:

• Retail ready-to-eat foods are forecast to grow by double-digits through 2024.
• Restaurant meals eaten at home are also forecast to grow.
• Blended meals — pairing foods prepared and purchased away from home with dishes prepared at home — will continue through the near future.
• Foods that require more effort and time will face headwinds through 2024.

“More dinner meals at home are here to stay. The shifting population life stages and economic situation will create greater reliance on dinner at home,” says Darren Seifer, NPD food and beverage industry analyst. “Consumers across all ages will look for breaks from routine, like making the same dishes out of habit. Food manufacturers and retailers can help consumers with dinner prep fatigue with convenient new foods and dishes that fit various cooking skill sets and needs. Value will also be top-of-mind with consumers during this time of high inflation.”