WLI

Negotiated cash fed cattle trade remained undeveloped through late Friday afternoon, based on USDA reports, which cited a few trades in Nebraska and the western Corn Belt at $124-$125/cwt. on a live basis. The Agricultural Marketing Service reported dressed sales $2 higher in Nebraska at $200. Chatter increased that trade was headed higher by the end of the day.

Expectations of steady to higher cash and firm fundamentals helped lift Cattle futures Friday. Those fundamentals include winter-depressed cattle weights.

Dressed steers weights for the week ending Jan. 5 were 6 lbs. lighter year over year at 896 lbs., according to the Actual Slaughter Under Federal Inspection report from USDA. Dressed heifer weights were 8 lbs. lighter at 892 lbs. A week earlier, year over year, dressed steer weights were 9 lbs. lighter and dressed heifer weights were 13 lbs. lighter.

As well, the slug of USDA reports released Friday—offering the year’s first grain supply and usage estimates—proved to be market neutral.

Live Cattle futures closed 61¢ higher (10¢ to $1.10 higher).

Feeder Cattle futures closed an average of 74¢ higher (50¢ to $1.02 higher).  

Corn futures closed mostly fractionally lower to 2¢ lower.

Soybean futures closed mostly 1¢ higher. 

Wholesale beef values were weak to lower on light demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.36 lower Friday afternoon at $215.35/cwt. Select was 36¢ lower at $211.17. 

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Major U.S. financial indices closed narrowly mixed Friday, recovering from strong pressure early in the session, tied to lingering worries about the lack of resolution to trade issues between the U.S. and China.

The Dow Jones Industrial Average closed 63 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 9 points.

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“Beef production (2018) is reduced on lower cattle slaughter and lighter carcass weights through late December,” say ERS analysts, in the latest World Agricultural Supply and Demand Estimates (WASDE). “The 2019 beef production forecast is reduced on lower projected slaughter as smaller anticipated placements in late 2018 and early 2019 are expected to result in lower fed cattle marketings and slaughter in the first half of the year.”

The annual average fed steer price (5-area Direct) for last year was estimated at $117.12/cwt., which was 21¢ higher than the December projection.

Fed steer prices for this year are estimated at $122-$126 in the first quarter, $119-$127 in the second, $109-$119 in the third and at $108-$118 in the fourth.

Total beef production for last year was revised down 75 million lbs. from the December estimate to 26.86 billion lbs. Likewise, estimated beef production for this year was revised down by 175 million lbs. to 27.61 billion lbs.

“Total red meat and poultry production for 2018 was lowered from December as beef and broiler production more than offsets slightly higher pork production,” say ERS analysts. “For 2019, the total red meat and poultry production forecast is lowered from December on lower expected beef, pork, and broiler production.”

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. 

Cattle futures mostly tread water, pressured early by sharply lower Lean Hog futures, but recovering as trade picked up.

Live Cattle futures closed narrowly mixed (17¢ lower to 11¢ higher). 

Except for unchanged in the back contract, Feeder Cattle futures closed an average of 26¢ higher. 

Corn and soybean futures came under pressure Thursday, perhaps in part to negative rhetoric regarding a trade resolution with China, as well as defensive positioning ahead of USDA reports Friday that will provide the first glimpse at grain stocks and usage estimates in more than a month.

Corn futures closed 2¢ to 3¢ lower through Sep ’20 and then fractionally lower to 1¢ lower.

Soybean futures closed 3¢ to 8¢ lower. 

Wholesale beef values were lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 86¢ lower Thursday afternoon at $216.71/cwt. Select was 84¢ lower at $211.53. 

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Major U.S. financial indices closed lower Thursday, pressured mostly by renewed concerns about global economic growth. Worries were spurred by reports that the U.S. and China are still wide apart in trade negotiations. Pressure also came from the European Commission (EU) lowering its projections for economic growth to 1.5% for this year.

“Our forecast is revised downwards, in particular for the largest euro area economies,” says Valdis Dombrovskis, in charge of Financial Stability, Financial Services and Capital Markets Union. “This reflects external factors, such as trade tensions and the slowdown in emerging markets, notably in China. Concerns about the sovereign-bank loop and debt sustainability are resurfacing in some euro area countries. The possibility of a disruptive Brexit creates additional uncertainty…”

The Dow Jones Industrial Average closed 220 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 86 points.

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U.S. beef exports continued on a record pace in November according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Note that these are the latest statistics, about a month late, due to the government shutdown.

Beef exports totaled 112,842 metric tons (mt) in November, up 1% from a year earlier, while value climbed 6% to $709.2 million. For January through November of last year, exports reached 1.24 million mt, up 8% year-over-year and 6% above the record pace of 2011. At $7.63 billion, beef export value was up 16% and broke the full-year record set in 2017 ($7.27 billion).

Beef export value per head of fed slaughter is also on a record pace, averaging $322.97 in November, which was 5% more than a year earlier. Value per head of fed slaughter through the first 11 months of 2018 was $320.72, which was 14% more than the same period a year earlier.

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon, but early sings pointed to at least steady trade.

For instance, although too few to trend, there was some live trade in Nebraska at $124/cwt., steady with last week. 

Likewise, two lots of steers from Kansas brought a weighted average price of $124.11 in the weekly Fed Cattle Exchange auction. That was steady with the region’s country price a week earlier. There were only 294 head offered, but 161 head sold. Another lot was passed out at $124.

Cattle futures edged lower Wednesday with the lack of cash direction and light trade, especially light in Feeder Cattle.

Other than unchanged to an average of 3¢ higher in the back three contracts, Live Cattle futures closed an average of 19¢ lower.

Feeder Cattle futures closed an average of 48¢ lower.  

Corn futures closed mostly unchanged to fractionally lower.

Soybean futures closed mostly 2¢ to 4¢ higher. 

Wholesale beef values were firm on Choice and weak on Select with light to moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 55¢ higher Wednesday afternoon at $217.57/cwt. Select was 73¢ lower at $212.37. 

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Major U.S. financial indices leaked lower Wednesday, pressured by mixed quarterly earnings results and little betting direction from the State of the Union address. 

The Dow Jones Industrial Average closed 21 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 26 points.

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“Plant-based proteins are no longer just a meat replacement, it’s now its own category,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “It’s possible that protein overall is evolving into a category, whether animal meat, beans, nuts, soy, wild game or other proteins, in forms ranging from beverage to center-of-plate.”  

Case shipments of plant-based protein from broadline foodservice distributors to foodservice operators increased 20% year to year in November, according to The NPD Group.

Burgers represent the largest plant-based foodservice category and have year-over-year double-digit growth in pounds shipped to foodservice operators, and plant-based burgers are showing up the most on many restaurant menus.  Although plant-based burgers are popular across demographics, an analysis done with NPD’s receipt mining service, Checkout, shows that smaller, more affluent ($100,000 and up) households are the top buyers of plant-based burgers.   

About a quarter of the U.S. population, many of whom aren’t vegan or vegetarian, say that they eat and drink plant-based beverages and foods as well as animal protein on a regular basis, according to NPD.

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon.

Live Cattle futures edged higher with the firm fundamental outlook—at least static demand levels and weather-dampened beef production—for the near term. Feeder Cattle softened, likely due most to positioning after the previous session’s strong gain.

Live Cattle futures closed an average of 30¢ higher (5¢ higher to 97¢ higher in spot Feb).

Other than an average of 12¢ higher in Sep and Oct, Feeder Cattle futures closed an average of 32¢ lower. 

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed 1¢ to 2¢ higher. 

Wholesale beef values were weak on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 63¢ lower Tuesday afternoon at $217.02/cwt. Select was 31¢ lower at $213.10. 

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Major U.S. financial indices closed higher again Tuesday, buoyed by positive quarterly earnings reports. Also, there may have been some betting on the President’s State of The Union address scheduled for Tuesday night.

The Dow Jones Industrial Average closed 172 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 54 points.

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Agricultural producers were more optimistic about the agricultural economy in January, but they remain concerned about farmland values, according to results from the January Purdue University/CME Group Ag Economy Barometer. 

The barometer rebounded 16 points from December, to 143 in January. It’s based on 400 survey responses from agricultural producers across the country.

“This survey provided us with the first opportunity to measure farmers’ sentiment following the announcement of USDA’s second round of Market Facilitation Program (MFP) payments and the passage of the 2018 Farm Bill,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “It appears that these two announcements provided a significant boost to producer sentiment regarding both current and future economic conditions.”

In January, both of the barometer’s two sub-indices increased month to month. The Index of Current Conditions rose 3 points to 132. The Index of Future Expectations increased 13 points to 148. Pessimism about farmland values increased, though. According to the January survey, the percentage expecting higher farmland values over the next 12 months declined 4 points to 13%. Those expecting higher values in the next five years declined 2 points to 48%.