WLI

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

For the week, live prices were 50¢ to $1 higher in the Southern Plains at $136/cwt., $2 higher at $140 in Nebraska and at $143-$147 in the western Corn Belt. Dressed prices were $2 higher in Nebraska at $227 and $1-$4 higher in the western Corn Belt at $225-$232.

Cattle futures edged higher Friday, supported by stronger cash prices.

Live Cattle futures closed an average of 24¢ higher.

Feeder Cattle futures closed an average of 37¢ higher, except for 12¢ lower in Mar.

Choice Boxed beef cutout value was $1.66 lower Friday afternoon at $264.62/cwt. Select was $1.68 lower at $238.67/cwt.

Corn and Soybean futures were mixed Friday amid weather speculation and biding time for next week’s USDA yield estimates.

Corn futures closed mostly 3¢ to 8¢ higher.

Soybean futures closed mostly 6¢ to 9¢ lower through Aug ‘23 and then mostly 1¢ to 2¢ lower.

Total estimated cattle slaughter last week of 651,000 head was 18,000 fewer than the previous week but 7,000 head more than the same week last year. Total year-to-date estimated cattle slaughter of 10.1 million head was 238,000 head more (+1.2%) than a year earlier. Total estimated year-to-date beef production of 16.6 billion lbs. was 168.9 million lbs. more (+1.0%) than a year earlier.

The five-area direct weighted average steer price in July was $142.16/cwt. on a live basis. That was 62¢ less than the prior month but $20.13 higher year over year. The average steer price in the beef was $228.25 for July, which was $1.51 less than the previous month but 30.63 higher than the previous year.

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Major U.S. financial indices closed mixed Friday as investors weighed the positive jobs report against further potential monetary tightening by the Federal reserve.

Total non-farm payroll employment rose by 528,000 in July, according to the Employment Situation Summary from the U.S. Bureau of Labor Statistics. The number shattered expectations ahead of the report. The nation’s unemployment rate edged down to 3.5%. Both total non-farm employment and the unemployment rate have returned to their February 2020 pre-pandemic levels. Average hourly earnings for all employees on private non-farm payrolls rose by 15¢ to $32.27.

The Dow Jones Industrial Average closed 76 points higher. The S&P 500 closed 6 points lower. The NASDAQ was down 63 points.

CME WTI Crude Oil futures closed 37¢ to 52¢ higher through the through the front six contracts.

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U.S. beef exports topped $1 billion in June for the fifth time this year, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

June beef exports of 130,638 metric tons (mt), were slightly less than the record volume posted in May but were 16% more year-over-year and the fourth largest on record. Export value was $1.05 billion in June, also slightly less than the May record but 31% above last year. For the first half of 2022, beef exports increased 6% from a year ago to 743,904 mt, valued at $6.19 billion (up 33%).

While beef export growth has been largely driven by major Asian markets such as South Korea, China/Hong Kong, Japan and Taiwan, exports are also trending higher to the ASEAN region, the Caribbean, Central America, Europe and the Middle East.

“The first-half performance for U.S. beef exports was nothing short of remarkable, especially considering the growing economic headwinds in many key markets and continued shipping and logistical challenges,” says USMEF President and CEO Dan Halstrom. “The rebound in the global foodservice sector has provided a tremendous lift in 2022, even though it is still far from a full recovery in many Asian and European destinations. We definitely see opportunities for further growth, though inflationary pressure and the stronger U.S. dollar continue to raise concerns about consumer spending power.”

June beef export value averaged $447.45 per head of fed slaughter, up 27% from a year ago. Through June, per-head value averaged $476.98, up 33% from the first half of 2021. Exports accounted for 15.5% of total June beef production and 13.3% for muscle cuts, up significantly from 13.6% and 11.5%, respectively, in June 2021. First-half exports accounted for 15.4% of total production and 13.2% for muscle cuts, up from 14.7% and 12.5%, respectively.

Negotiated cash fed cattle trade was moderate with light to moderate demand in the Southern Plains through Thursday afternoon. Prices were 50¢ to $1 higher at $135.50 to $136/cwt.

Elsewhere, trade was limited on light demand with too few transactions to trend, according to the Agricultural Marketing Service.

So far this week, live prices are $2 higher in Nebraska at $140 and generally steady in the western Corn Belt at $141-$145. Dressed prices are steady to $7 higher in Nebraska at $225-$232.

Choice Boxed beef cutout value was $1.66 lower Thursday afternoon at $266.28/cwt. Select was 95¢ lower at $240.35/cwt.

Firm to stronger cash fed cattle prices helped Live Cattle futures mostly edge higher and Feeder Cattle futures mostly fade higher Corn futures.

Live Cattle futures closed narrowly mixed from an average of 18¢ lower in the front three contracts to an average of 41¢ higher.

Feeder Cattle futures closed an average of 18¢ lower, except for an average of 17¢ higher in the back two contracts.

Corn futures closed mostly 6¢ to 10¢ higher and Soybean futures closed mostly 40¢ to 57¢ higher, apparently buoyed by technical buying and weather speculation.

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Major U.S. financial indices closed narrowly mixed Thursday as investors seemed in hover mode ahead of the jobs report due out Friday.

The Dow Jones Industrial Average closed 85 points lower. The S&P 500 closed 3 points lower. The NASDAQ was up 52 points.

CME WTI Crude Oil futures closed $2.12 to $2.41 lower through the through the front six contracts.

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“The August 2022 contract is currently the lowest price of any (see chart below), and every consecutive contract is higher than the previous. This is a clear signal that traders are expecting feeder cattle prices to increase into 2023,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest Cattle Market Notes Weekly.

Maples points out Feeder Cattle contract prices (solid line, July 29) are approximately $10/cwt. higher across all contracts since June 1 (dotted line).

“The spring 2023 contracts are currently trading near $190 which, if actually observed, would mean feeder cattle prices not seen since 2015,” Maples explains. “Strong market expectations also mean there may be some attractive risk management opportunities for producers depending on your goals … The December Corn futures contract is down more than $1/bu. since mid-June, which also has a positive impact on cattle market expectations.”

Steady to firmer cash prices helped Live Cattle futures close an average $1.17 higher on Wednesday (67¢ higher at the back to $1.82 higher in spot Aug).

Negotiated cash fed cattle trade was slow on moderate demand in Nebraska through Wednesday afternoon with live prices at $140-$142/cwt. but mostly $2 higher at $140. Dressed trade there last week was at $225.

Elsewhere, trade ranged from limited on light demand to mostly inactive on light demand with too few to trend.

On Tuesday, live prices were steady at $135 in the Southern Plains and unevenly steady in the western Corn Belt at $143. Dressed prices there last week were $224-$228.

Choice Boxed beef cutout value was 52¢ lower Wednesday afternoon at $267.94/cwt. Select was 25¢ lower at $241.30/cwt.

Recently lower Corn futures and continued cash strength helped boost Feeder Cattle futures an average of $1.62 higher ($1.22 higher at the front to $2.15 higher at the back).

Corn futures firmed Wednesday and closed mostly fractionally higher to 2¢ higher, following the previous session’s steep decline.

Soybean futures closed 11¢ to 16¢ lower, pressured by lower oil prices.

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Major U.S. financial indices closed higher Wednesday supported by strong corporate earnings reports.

The Dow Jones Industrial Average closed 416 points higher. The S&P 500 closed 63 points higher. The NASDAQ was up 319 points.

CME WTI Crude Oil futures closed $2.72 to $3.76 lower through the through the front six contracts.

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Compared to its last quarterly World Economic Outlook, the International Monetary Fund (IMF) paints a bleaker outlook for the global and domestic economies in its July update.

“A tentative recovery in 2021 has been followed by increasingly gloomy developments in 2022 as risks began to materialize. Global output contracted in the second quarter of this year, owing to downturns in China and Russia, while U.S. consumer spending undershot expectations,” according to the report. “Several shocks have hit a world economy already weakened by the pandemic: higher-than-expected inflation worldwide –– especially in the United States and major European economies –– triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID-19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine.”

IMF’s baseline forecasts global economic growth this year to be 3.2%, compared to 6.1% last year — 0.4% less than the previous estimate. U.S. economic growth is projected at 2.3% this year versus 5.7% in 2021 — 1.4% less than the previous outlook. IMF projects global economic growth next year at 2.9% and 1.0% for the U.S.

“The risks to the outlook are overwhelmingly tilted to the downside,” according to the report. “The war in Ukraine could lead to a sudden stop of European gas imports from Russia; inflation could be harder to bring down than anticipated, either if labor markets are tighter than expected or inflation expectations unanchor; tighter global financial conditions could induce debt distress in emerging market and developing economies; renewed COVID-19 outbreaks and lockdowns as well as a further escalation of the property sector crisis might further suppress Chinese growth; and geopolitical fragmentation could impede global trade and cooperation.”

Cattle futures weakened Tuesday, pressured by lower wholesale beef prices, the weaker cash outlook and worries about House Speaker Nancy Pelosi’s visit to Taiwan potentially straining the already frayed relationship between the U.S. and China.

Feeder Cattle futures closed an average of $1.08 lower (57¢ to $1.65 lower).

Live Cattle futures closed an average of 17¢ lower, except for 2¢ higher in Jun.

Grain and Soybean futures closed lower again Tuesday with weather pressure and steady crop condition ratings week to week and year over year.

Corn futures closed 11¢ to 15¢ lower through Sep ‘23 and then mostly 5¢ to 8¢ lower.

Soybean futures closed mostly 12¢ to 19¢ lower.

Negotiated cash fed cattle trade was slow on light demand in the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few live trades at $143/cwt. but too few to trend. Elsewhere, trade was at a standstill.

Last week, live prices were $135/cwt. in the Southern Plains, $138 in Nebraska and $141-$145 in the western Corn Belt. Dressed prices were $225 in Nebraska and $224-$228 in the western Corn Belt.

Choice Boxed beef cutout value was $2.14 lower Tuesday afternoon at $268.46/cwt. Select was $1.35 lower at $241.55/cwt.

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Major U.S. financial indices settled lower Tuesday with the aforementioned concerns about increased tension between the U.S. and China.

The Dow Jones Industrial Average closed 402 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 20 points.

CME WTI Crude Oil futures closed 53¢ to $1.17 higher through the through the front six contracts.

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Agricultural producer sentiment increased 6 points from June to July to a reading of 103, according to the latest Purdue University/CME Group Ag Economy Barometer. The Index of Current Conditions rose 10 points to 109 and the Index of Future Expectations rose 4 points to 100. All three indices were still 23-24% lower than a year earlier.

“Even though we saw a slight uptick in sentiment this month, there is still a tremendous amount of uncertainty in the agricultural economy,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Key commodity prices, including wheat, corn and soybeans, all weakened during the month and producers remain concerned over rising input prices and input availability.”

Producers’ views on farmland values diverged this month as the Short-Term Farmland Value Index declined 9 points to 127, while the long-term index rose 9 points to 150. The short-term index is down 20% from its peak reading in 2021, while the long-term index is only 6% lower than the peak reached last year. Short-term there was a shift away from expectations that farmland values will go higher, with more producers in July expecting values to remain about the same.

“The short-run and long-term farmland indices don’t always move in tandem, but the magnitude of this month’s divergence between the short and long-term indices is unusual,” Mintert says. “Producers who expect values to rise over the upcoming five years continue to say that non-farm investor demand and inflation are the two primary reasons they expect values to rise.”

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 July 11-15.

A reprieve in Corn futures helped Feeder Cattle climb an average of $1.64 on Monday, further bolstered by last week’s strong cash trade.

Corn futures closed 9¢ to 10¢ lower through new-crop contracts and then mostly 1¢ to 2¢ lower. Pressure was likely due in part to reports that the first load of Ukraine grain exports in too many months left from the port at Odessa.

Live Cattle futures closed an average of 66¢ higher, with another day of higher wholesale beef prices.

Choice Boxed beef cutout value was $1.36 higher Monday afternoon at $270.60/cwt. Select was 65¢ higher at $242.90/cwt.

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 $135/cwt. in the Southern Plains, $138 in Nebraska and $141-$145 in the western Corn Belt. Dressed prices were $225 in Nebraska and $224-$228 in the western Corn Belt.

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Major U.S. financial indices closed narrowly lower Monday, with pressure from energy stocks.

The Dow Jones Industrial Average closed 46 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 21 points.

CME WTI Crude Oil futures closed $3.04 to $4.73 lower through the through the front six contracts.

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Nationally, year-to-date beef cow slaughter was 14.1% more year over year through mid-July, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“Beef cow slaughter would have to drop to a level less than 6% higher year over year for the remainder of the year before the annual beef cow slaughter would not be double-digit higher for the entire year,” Peel says. 

Further, Peel explains heifer slaughter is up 3.9% year over year so far in 2022. 

“The July 1 inventory of heifers in feedlots was up 2.9% over last year and confirms that heifers continue to be diverted into feeder channels rather being retained for breeding,” Peel explains. “The mid-year cattle inventory showed that the beef cow herd was down 2.4% year over year and the inventory of beef replacement heifers was down 3.5% from last year. The beef industry is poised to see the largest single year beef cow herd decrease in more than 35 years.”