WLI

Negotiated cash fed cattle prices were $2 higher in Kansas through Friday afternoon at $137/cwt. That was on slow to moderate trade and moderate demand, according to the Agricultural Marketing Service. There were also a few trades in the Texas Panhandle at $137, but too few to trend; established trade for the week was $1 higher at $136.

Elsewhere, trade ranged from mostly inactive on light demand to a standstill. For the week, live prices were $3 higher in Nebraska at $142-$143 and $2 higher in the western Corn Belt at $142-$143. Dressed prices were $3-$4 higher at $225-$226.

Choice Boxed beef cutout value was 22¢ higher Friday afternoon at $271.32/cwt. Select was 72¢ lower at $248.89.

Estimated total cattle slaughter last week of 674,000 head was 71,000 more than the previous holiday-shortened week and 4,000 head more than the same week last year. Estimated year-to-date total cattle slaughter of 14.9 million head is 149,000 head more than last year. Estimated year-to-date beef production of 12.4 billion lbs. is 129 million lbs. more than last year.

Cattle futures softened Friday, pressured by sharply lower outside markets and likely week-end profit taking.

Feeder Cattle futures closed an average of $1.07 lower (75¢ to $1.55 lower).

The CME Feeder Cattle Index closed $7.58 higher week to week on Thursday at $161.87/cwt.

Live Cattle futures closed an average of 64¢ lower, from 50¢ lower at the back to $1.00 lower toward the front.

Corn futures closed mostly 3¢ to 6¢ higher.

Soybean futures closed mostly 14¢ to 20¢ lower.

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Major U.S. financial indices plunged Friday on higher inflation than expected. The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.0% in May on a seasonally adjusted basis after rising 0.3% in April, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 8.6% before seasonal adjustment

A closely watched gauge of consumer confidence added pressure. Consumer sentiment declined 14% month to month in June and was 41% lower year over year, according to the University of Michigan Consumer Sentiment Index.

The Dow Jones Industrial Average closed 880 points lower. The S&P 500 closed 116 points lower. The NASDAQ was down 414 points.

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USDA’s Economic Research Service (ERS) left the projected fed steer price for this year unchanged, despite higher forecast beef production, in the latest monthly World Agricultural Supply and Demand Estimates (WASDE).

ERS forecast the five-area direct average fed steer price for this year at $140.10/cwt.  Prices are forecast at $140 in the second quarter, $136 in the third quarter and $145 in the fourth quarter. Next year’s average price was projected at $153.

Projected beef production this year increased 65 million lbs. to 27.9 billion lbs., on increased fed cattle and cow slaughter. The total would be just 41 million lbs. less than last year. Beef production next year was projected to be 1.96 billion lbs. (-7.0%) less than this year at 25.9 billion lbs.

Total U.S. red meat and poultry production for 2022 was forecast 136 million lbs. more than the previous month at 106.5 billion lbs., on increased beef and pork production. Next year’s total U.S. red meat and poultry production was projected at 105.3 billion lbs. which would be 1.12 billion lbs. less (-1.0%) than this year.

Corn

ERS left projected corn acreage and yield unchanged, but increased beginning and ending stocks on reduced exports. The season-average farm price for corn received by producers was unchanged at $6.75/bu.

Soybeans

Beginning and ending soybean stocks were projected lower on increased exports. The season-average soybean price was projected 30¢ higher at $14.70/bu.

Wheat

Projected ending wheat stocks were increased by 8 million bu. on slightly higher yield but still would be less than 2021-22. The projected 2022-23 season-average farm price was unchanged at $10.75/bu., compared to $7.70 for 2021-22.

Cattle futures closed narrowly mixed Thursday, retaining most of the previous strong gains, supported by stronger cash fed cattle prices and aggressive slaughter.

Feeder Cattle futures closed 12¢ and 38¢ higher in the front two contracts and then an average of 45¢ lower.

Live Cattle futures closed mixed, from 33¢ lower 28¢ higher.

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

So far this week, live prices are $1 higher in the Texas Panhandle at $136/cwt., $3 higher in Nebraska at $142-$143 and $2 higher in the western Corn Belt at $142-$143. Dressed prices are $3-$4 higher at $225-$226.

Choice Boxed beef cutout value was 64¢ lower through Thursday afternoon at $271.10/cwt. Select was 20¢ higher at $249.61

Corn futures closed narrowly mixed, mostly 1¢ lower to up 3¢ higher.

Soybean futures closed 11¢ to 29¢ higher through Jan ‘23. And then mainly 1¢ to 3¢ higher.

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Major U.S. financial indices closed sharply lower Thursday with selling pressure late in the session. Some of it could have stemmed from positioning ahead of Friday’s Consumer Price Index. Also, initial unemployment insurance claims rose by 27,000 last week — more than the trade expected.

The Dow Jones Industrial Average closed 683 points lower. The S&P 500 closed 98 points lower. The NASDAQ was down 332 points.

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Among the highlights of the recently released Global Beef Quarterly from Rabobank analysts:

“The first signs of softening consumer confidence are apparent in most markets, with wholesale prices for beef coming under pressure even though production costs are higher…We expect ongoing adjustments of consumption and margins in all markets as we head into Q3 2022.”

“Lockdowns in China and biosecurity risks in Indonesia pose notable implications for trade. Lockdowns of major Chinese cities are further constraining beef demand and restricting foodservice sales. As a result, Chinese beef imports dropped in Q1, and we expect them to be down in Q2. Continuation of the lockdowns will impact China’s beef imports for 2022. In Indonesia, official reports of lumpy skin disease (early March) and foot-and-mouth disease (late April) have placed authorities in trading nations – particularly Australia and New Zealand – on high alert.”

“With increased focus on carbon over the last two years, we have seen numerous companies, industries, and governments make commitments around the reduction of greenhouse gases. Most major meat processing companies around the world have a statement on the environment and a commitment to reduce emissions – and in many cases, to reach net-zero emissions – by a specified timeframe. We see the same for major food retail and foodservice companies. Until now, most commitments have not necessarily changed what consumers see. But that is all starting to change as the first movers release climate-neutral products onto shelves.”

Negotiated cash fed cattle prices continued to gain Wednesday with live prices $1 higher in the Texas Panhandle at $136/cwt., $1-$2 higher in Nebraska at $142-$143 and steady in Colorado at $141. Dressed prices in Nebraska are mostly $3-$4 higher at $225-$226, but a few up to $228. That was on moderate trade and demand, according to the Agricultural Marketing Service.

Trade was limited on moderate demand in the western Corn Belt. So far this week, live prices are steady to $2 higher at $141-$142. Dressed prices in the region last week were $222.

Stronger cash prices helped Cattle futures step higher.

Live Cattle futures closed an average of $2.10 higher, while Feeder Cattle futures closed an average of $2.29 higher.

Choice Boxed beef cutout value was 32¢ higher through Wednesday afternoon at $271.74/cwt. Select was 15¢ lower at $249.41.

Corn futures closed mostly 3¢ to 7¢ higher through new-crop contracts and then 1¢ to 6¢ lower.

Soybean futures closed mostly 9¢ to 18¢ higher.

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Major U.S. financial indices finished lower Wednesday after U.S. crude oil topped $120/barrel – a three-month high. Friday’s consumer price index for May will provide the latest read on inflation.

The Dow Jones Industrial Average closed 269 points lower. The S&P 500 closed 45 points lower. The NASDAQ was down 89 points.

West Texas Intermediate Crude Oil futures on the CME were up an average of $2.55 through the front six contracts.

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U.S. beef exports continued their extraordinary pace in April, topping $1 billion for the third time this year, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 124,408 metric tons (mt) in April, up 3% from a year ago and the fifth largest on record. Export value soared 33% to $1.05 billion. Value was second only to the record $1.07 billion in March.

April beef export value equated to $489.59 per head of fed slaughter, up 33% from a year ago and the second highest on record.

Beef exports to Taiwan and the Philippines were record-large in April. Exports increased to Japan, China/Hong Kong, Indonesia, the Middle East and the Caribbean.

“Global demand for U.S. beef continues to overcome enormous obstacles, from inflationary pressure to logistical challenges to the recent lockdowns in some of China’s major metropolitan areas,” says USMEF President and CEO Dan Halstrom. “Most encouraging is that even as beef exports climb to unprecedented levels in our largest Asian markets, demand is strengthening in other regions as well, fueled by a strong rebound in the foodservice sector.”

Halstrom cautioned that April results did not capture the full impact of recent COVID-19 lockdowns in China, some of which continued through May and into early June. The pressure inflation imposes on consumers’ discretionary income and the rising strength of the U.S. dollar versus some key trading partner currencies are also growing headwinds for U.S. red meat exports.

For January through April, beef exports increased 5% from a year ago to 478,260 mt, valued at $4.05 billion (up 38%).

The January-April average was $478.03 per head, up 39%.

Recently stronger wholesale beef prices helped Cattle futures firm Tuesday, despite another day of higher Corn futures.

Live Cattle futures closed an average of 71¢ higher (3¢ higher at the back to $1.22 higher toward the front).

Feeder Cattle futures closed an average of 17¢ higher except for unchanged in Jan.

Corn futures closed mostly 12¢ to 14¢ higher through new-crop contracts and then 16¢ to 20¢ higher.

Soybean futures closed mostly 9¢ to 29¢ higher.

Negotiated cash fed cattle trade was limited on light demand in the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. A few live sales traded at $141/cwt. Trading was at a standstill in the Southern Plains and Nebraska.

Last week, live prices were $135 in the Southern Plains, $139-$140 in Nebraska and $140-$141 in the western Corn Belt. Dressed prices were $222.

Choice Boxed beef cutout value was $1.84 higher Tuesday afternoon at $271.42/cwt. Select was $1.53 lower at $249.56

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Major U.S. financial indices rallied on Tuesday even though retail giant Target announced markdowns due to surplus inventories, which is typically bearish news.

The Dow Jones Industrial Average closed 264 points higher. The S&P 500 closed 39 points higher. The NASDAQ was up 114 points.

West Texas Intermediate Crude Oil futures on the CME were 91¢ to $1.66 higher through the front six contracts with spot Jly closing at $119.41.

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The Purdue University/CME Group Ag Economy Barometer declined 22 points month over month in May to 99, the lowest level since April 2020.

The Index of Current Conditions dipped 26 points to a reading of 94 and the Index of Future Expectations fell 21 points to a reading of 101.

Despite strong commodity prices, this month’s weakness in producers’ sentiment appears to be driven by the rapid rise in production costs and uncertainty about where input prices are headed,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “That combination is leaving producers very concerned about their farms’ financial performance.”

Higher input costs remain a top concern for producers with 44% of those surveyed choosing it as the biggest concern facing their farming operation in the coming year. Additionally, 57% of producers said they expect a 30% or more rise in prices paid for farm inputs in 2022 compared to prices paid last year.

The percentage of producers who expect their farm’s financial performance to worsen in 2022 compared to last year rose from 29% in April to 38% in May.

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 May 16-20.

Corn futures surged 11¢ to 15¢ higher through Jly ‘23 on Monday, tied to increased uncertainty stemming from Russia’s weekend destruction of a major grain export terminal in the southern part of Ukraine.

That helped pressure Feeder Cattle futures an average of $1.32 lower (85¢ lower at the back to $1.90 lower in spot Aug).

Live Cattle futures closed an average of 57¢ lower, except for 22¢ higher in the back contract. 

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service. Last week, live prices were $2 lower in the Southern Plains at $135/cwt. and steady to $1 lower at $139-$140 in Nebraska and $140-$141 in the western Corn Belt. Dressed prices were $1-$2 lower in Nebraska at $222 and steady to $5 lower in the western Corn Belt at $222.

The five-area weighted average direct fed steer price last week was $1 lower on a live basis at $138.07/cwt. The average steer price in the beef was $2.10 lower at $221.89.

Choice Boxed beef cutout value was $2.32 higher through Monday afternoon at $269.58/cwt. Select was $1.07 higher at $251.09.

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Major U.S. financial indices closed little changed but to the upside Monday.

The Dow Jones Industrial Average closed 16 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 48 points.

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Calf prices declined more than seasonally expected this spring, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. He explains high grain prices and poor forage prospects helped push the price for a 500 lb. steer in Oklahoma City about 12% lower from the first of April to the end of May, compared to the typical decline of 4-5%.

Feeder-weight cattle (800 lbs., Oklahoma City) prices were less impacted, about 4% lower from early April to late May, compared to a usual seasonal decline of 1-2%.

“Increasing feedlot ration costs continue to push down on feeder cattle prices,” Peel says. “However, Feeder Cattle futures have rallied off the mid-May lows as Corn futures have moderated. If it persists, this may help stabilize cash feeder cattle prices into the summer.”

Similarly, Peel says fed cattle prices decreased along seasonal expectations during the past month.

“Fed prices typically decrease into the summer as fed slaughter reaches a seasonal peak between May and August. Fed prices typically reach a summer low around Labor Day, before increasing in the fourth quarter,” Peel explains.