WLI

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.

Overall, Cattle futures extended gains Friday as nearby Corn futures continued to soften.

Feeder Cattle futures closed an average of 58¢ higher. They were an average of $6.23 higher week to week on Friday as Corn futures declined an average of 40.3¢ through the front six contracts during the same period.

Live Cattle futures closed mixed on Friday, down 3¢ to 28¢ in the front two contracts, then up an average of 21¢. Week to week, however, they were an average of $1.96 higher.

Negotiated cash fed cattle trade was limited on light demand through Friday afternoon, with too few transactions to trend accord to the agricultural Marketing Service. 

For the week, live prices were $2 lower in the Southern Plains at $135/cwt., $1 lower in Nebraska at $139 and steady to $2 lower in the western Corn Belt at $140. Dressed prices were $1-$2 lower in Nebraska at $222 and steady to $5 lower in the western Corn Belt at $222.

Wholesale beef prices continued to gain last week. Choice boxed beef cutout value was $1.84 higher week to week on Friday at $267.26/cwt. Select was $3.52 higher at $250.02.

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Major U.S. financial indices ended with week on a slide Friday, after the May jobs report showed 390,000 jobs were added. Many analysts expected a lower number and now think the Federal Reserve will continue hiking interest rates aggressively as the labor market remains tight, increasing fears the economy will end up in a recession.

The Dow Jones Industrial Average closed 349 points lower. The S&P 500 closed 68 points lower. The NASDAQ was down 304 points.

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Although total red meat in cold storage at the end of April was the most in two years, stock levels were still 3% less than the five-year average, according to analysts with the Livestock Marketing Information Center (LMIC).

“Total red meat in cold storage has been rising since the start of the year,” say LMIC analysts, in the latest Livestock Monitor. “In April, nearly 1.1 billion lbs. of red meat were in cold storage, up more than 10% from the start of the year and 16% from last year. April marked the highest level in two years when total red meat in cold storage was almost 1.3 billion lbs.”

Higher than normal beef stocks drove increased levels of total red meat in freezers. In April, 531.7 million lbs. of beef were in cold storage, up 18.5% or 82.9 million lbs. from a year ago.

“The typical seasonal pattern for beef in cold storage is for levels to generally decline during the first part of the year before rising the second half of the year,” LMIC analysts say. “This year, beef in cold storage has stayed above 525 million lbs. for the first four months.”

Cattle futures extended the previous day’s rally, apparently helped along by technical support and perhaps emboldened by corn planting progress and recent rains across the country.

Feeder Cattle futures closed an average of $2.70 higher.

Live Cattle futures closed an average of $1.74 higher, from 83¢ in spot June to $2.15 in Dec.

Choice Boxed beef cutout value was 77¢ lower Thursday afternoon at $266.65/cwt. Select was 72¢ higher at $249.63.

Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Thursday afternoon, with too few transactions to trend accord to the agricultural Marketing Service. 

For the week, live prices are $2 lower in the Southern Plains at $135/cwt., $1 lower in Nebraska at $139 and steady to $2 lower in the western Corn Belt at $140. Dressed prices are $1-$2 lower in Nebraska at $222 and steady to $5 lower in the western Corn Belt at $222.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 21¢ to 39¢ higher through Jly ‘23 and then mostly 10¢ to 18¢ higher.

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Major U.S. financial indices saw gains on Thursday after two days of losses. Market reports were mixed for the day, but investors seem to expect Friday’s payroll report to show some softening in the labor market. If they are right, that might have a dampening effect, to a degree, on inflation.

The Dow Jones Industrial Average closed 435 points higher. The S&P 500 closed 76 points higher. The NASDAQ was up 322 points.

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Food inflation and rising costs contributed to a year-over-year 4% decline in consumer visits to U.S. restaurants in April, according to The NPD Group. Restaurant traffic in April was 11% below the pre-pandemic level in April 2019. The 1% increase in consumer spending at restaurants in April versus a year ago was more a reflection of higher prices than increased use of restaurants, according to NPD’s daily tracking of the U.S. foodservice industry. Those analysts note the price of a foodservice meal was 9% higher than April of 2019.

“For many consumers, it’s more affordable to eat at home,” says David Portalatin, NPD food industry advisor. “This is when operators need to demonstrate their value to consumers struggling with inflation and be solutions-oriented to help consumers meet needs across life stages.”

Rising restaurant prices have had the most impact on lower-income households and households with kids, according to NPD. For consumers in households with annual incomes of less than $50,000, restaurant visits declined by 11% in April 2022 compared to the same month a year ago. Traffic from households with kids younger than 6 was down 8%; traffic decreased by 9% for households with kids ages 6 to 12.