WLI

Feeder Cattle futures rebounded from some of the steep, recent losses Wednesday, helped along by static to lower Corn futures prices and sharply higher outside markets. Feeder Cattle futures closed an average of $2.44 higher ($2.02 to $3.20 higher.

Live Cattle futures closed an average of 71¢ higher, except for an average of 45¢ lower in the front three contracts. 

Corn futures closed mostly 8¢ to 16¢ lower.

Soybean futures closed 20¢ to 30¢ lower.

Negotiated cash fed cattle trade started the week $2 lower in the Southern Plains at $140/cwt. Trade was slow on light to moderate demand, according to the Agricultural Marketing Service.

Trade was limited on light demand in Nebraska with a few live trades at $140, but too few to trend. Live prices last week were $142-$144 and dressed prices were $227.

Trade was also limited on light demand in the western Corn Belt. Prices last week were $144 on a live basis and $227 in the beef.

Choice boxed beef cutout value was 96¢ lower Wednesday afternoon at $255.72/cwt. Select was 18¢ lower at $251.34.

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Major U.S. financial indices closed sharply higher Wednesday, basically erasing losses from the previous session.

Positive news included the labor front. Private-sector non-farm employment increased by 475,000 jobs from January to February according to the February ADP^®National Employment Report^TM.

“Hiring remains robust but capped by reduced labor supply post-pandemic. Last month large companies showed they are well-poised to compete with higher wages and benefit offerings, and posted the strongest reading since the early days of the pandemic recovery,” says Nela Richardson, ADP chief economist, “Small companies lost ground as they continue to struggle to keep pace with the wages and benefits needed to attract a limited pool of qualified workers.”

The Down Jones Industrial Average closed 596 points higher. The S&P 500 closed 80 points higher. The NASDAQ was up 219 points.

Gains came despite another surge in crude oil prices. West Texas Intermediate Crude Oil futures (CME) closed $4.28 to $7.19 higher through the front six contracts.

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Farmland prices are rising sharply as a result of high yields and strong commodity prices, as well as other factors, according to R.D. Schrader, president of Schrader Real Estate and Auction Company.

“A lot of things are falling into place to create one of the most positive land markets in recent years,” Schrader says. “The high yields and strong commodity prices are a powerful combination we haven’t seen in several years. In addition, many investors see the U.S. farmland market as a safe haven.”

Speaking at the company’s State of the Farmer’s Economy Update, Schrader explained prices for high quality farmland have risen by up to 24% in some parts of the Midwest.

“We’re seeing factors we’ve never seen before, including the use of Midwest farmland for wind and solar leases, pipelines, carbon wells and others,” explains Steve Slonaker, a farm manager, appraiser and auction manager. “Since we have little or no history on which to base our assessments, this makes the picture more complicated for everyone buying, selling or leasing farmland.”

Grain and soybean futures continued to dominate market narrative Tuesday, blasting another leg higher, fueled by the Russian attack on Ukraine and the fallout from everything from export disruptions to financial turmoil.

Corn futures closed 30¢ to 42¢ higher in the front three contracts and the mostly 13¢ to 15¢ higher. Spot Mar was 80¢ higher over the last two sessions, closing Tuesday at a staggering $7.39’6

Soybean futures closed 41¢ to 61¢ higher in the front six contracts and then mostly 38¢ to 39¢ higher. The front two contracts are up more than $1.00 over the past two sessions.

Kansas City HRW futures closed 50¢ to 57¢ higher in the front five contracts; more than $1 higher in the front contracts over the last two sessions.

Those runaway feed futures prices hammered Cattle futures, especially Feeder Cattle once again. Feeder Cattle closed an average of $1.63 lower (65¢ to $2.55 lower) for an average of $4.14 lower over the last two sessions.

Live Cattle futures closed mixed, from an average of 54¢ lower in the front three contracts to an average of 19¢ higher.

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

Last week, live prices were $142/cwt. on a live basis in the Southern Plains, $142-$144 in Nebraska and $144 in the western Corn Belt. Dressed prices were $227 in Nebraska and $226-$227 in the western Corn Belt.

Choice boxed beef cutout value was 83¢ lower Tuesday afternoon at $256.68/cwt. Select was $1.89 lower at $251.52.

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Major U.S. financial indices closed fled lower Tuesday with intensified concern surrounding the fallout from Russia’s military invasion in Eastern Europe.

The Down Jones Industrial Average closed 597 points lower. The S&P 500 closed 67 points lower. The NASDAQ was down 218 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.09 to $7.69 higher through the front six contracts.

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Agricultural producer sentiment increased month to month in February, according to the Purdue University/CME Group Ag Economy Barometer.

Specifically, the overall Ag Economy Barometer rose 6 points to 125. The Index of Current Conditions declined 1 point to 132. The Index of Future Expectations increased 10 points to 122.

Although the readings are static to positive, the Barometer’s Farm Financial Performance Index continues to underscore producer concerns about rising input costs. That index was unchanged in February, but declined 27% from late 2021 to 2022, indicating producers expect financial performance in 2022 to be worse than in 2021.

“These survey responses suggest that concerns about the spike in production costs and supply chain issues continue to mostly outweigh the impact of the commodity price rally that’s been underway this winter,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Higher input costs have consistently been the number one concern identified by farmers over the past six months, according to results from the Ag Economy Barometer survey. In February, 47% of respondents cited input costs as their primary concern.

Tight machinery inventories continue to be a problem. In February, more than 40% of producers said low farm machinery inventories were holding back their investment plans. While plans for farm building and grain bin construction were more optimistic month to month, 56% said their plans for new construction were below the previous year.

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 February 14-18, 2022, days prior to Russia’s invasion of Ukraine.

Grain and soybean futures ricocheted sharply higher Monday, driven once again by uncertainty stemming from the military assault in Eastern Europe.

Corn futures closed 24¢ to 38¢ higher through Jly ‘23 and then mostly 16¢ to 19¢ higher.

Soybean futures 29¢ to 54¢ higher through Sep ‘22 and the mostly 19¢ to 20¢ higher.

The spike weighed on Cattle futures, especially Feeder Cattle.

Feeder Cattle futures closed average of $2.51 lower.

Live Cattle futures closed an average 32¢ lower, except for $1.22 higher in spot Feb.

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

Last week live prices were generally steady in the Southern Plains at mostly $142/cwt., steady to $2 higher in Nebraska at $142-$144, and steady to $2 higher in the western Corn Belt at $144. Dressed prices were $1 higher in Nebraska at $227 and steady to $1 higher in the western Corn Belt at $226-$227.      

Choice boxed beef cutout value was 76¢ lower week to week on Monday afternoon at $257.51/cwt. Select was $2.00 lower at $253.41.

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Major U.S. financial indices closed mixed Monday after another volatile session tied to uncertainty about the Russian attack on Ukraine and the economic sanctions taken by the U.S. and other countries against Russia.

The Down Jones Industrial Average closed 166 points lower. The S&P 500 closed 10 points lower. The NASDAQ was up 56 points.

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“Replacement prices across regions will be a key indicator this summer to help determine where carrying capacity exists and if we should start to see regions of the U.S. expanding the beef herd,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

Albeit slowly, the folks at LMIC say their data — a range of replacement auction data covering 16 areas — indicates, where possible, producers are adding breeding stock, prompted by the level of feeder cattle prices.

For instance, Medium and Large 1 bred cows, averaged across all trimesters and all ages, are running about $100 per head higher year over year at auctions in Nebraska and Missouri. Beef cow herds (Jan. 1) declined in those states last year but are near Iowa and Minnesota where the state herds expanded.

“Medium and Large 1-2 are only about $45 per head higher. West Plains, MO bred heifers (1-9 months) Medium and Large 1-2 are up 21% and medium and large 2s are up 13% from January of last year,” say LMIC analysts. “Across most of the bred cow categories, prices are seeing double digit percentage increases, with the exception of bred cows over 8 years old. Open stock cow prices are higher as well. Under 2-years-old Medium and Large 1-2 are up 19% from last year, 2-8 year olds are up 9%. Medium and Large 2 open stock cows (2-8 years) are up 11%. In Joplin, MO bred cows Medium and Large 1-2 are up 16% across all ages and trimesters. Open stock cows are up 35% across all types.”

Similarly, the Jan. 1 Cattle report indicated pockets of beef cow herd expansion in the Pacific Northwest. Looking at some of the nearest auctions in Montana, LMIC analysts say, “…bred heifers appear to be about 15% higher, bred cows (Medium and Large 1) are mixed with later trimesters commanding only a slightly higher price than last year. Stock cows are averaging about $2/cwt. higher across all age groups.”

The volatile market whipsaw unleashed by Russia’s attack on Ukraine continued in futures and equities Friday.

Grain and soybean futures closed sharply lower, shoved around by massive open interest, a more positive South American weather outlook and USDA projecting more corn and wheat acres to be planted than expected. In its Grains and Oil Seeds Outlook presented at the annual Agricultural Outlook Forum, USDA forecast 92.0 million acres of corn and 88.0 million acres of soybeans.

Soybean futures closed 34¢ to 71¢ lower through Jan ‘23 and the mostly 19¢ to 29¢ lower.

Corn futures closed 24¢ to 35¢ lower through Jly ‘23 and then mostly 20¢ lower.

Softer Corn futures benefitted Feeder Cattle futures, which closed an average of 96¢ higher (65¢ to $1.15 higher) Friday. However, they closed an average of $3.74 lower week to week on Friday ($2.22 to $6.10 lower). 

Based on weekly auctions monitored by Cattle Current, calves and feeders sold widely mixed last week but with distinctly lower undertones related to pressure from grain prices as well as weather disruptions in some areas.

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

For the week, live prices were generally steady in the Southern Plains at mostly $142, $2 higher in Nebraska at $144 and steady to $3 higher in the western Corn Belt at $144-$145. Dressed prices were $1 higher in Nebraska at $227 and steady to $1 higher in the western Corn Belt at $226-$227.

The five-area direct weighted average steer price was $1.15 higher on a live basis at $143.40/cwt. and 92¢ higher in the beef at $227.02.

Total estimated cattle slaughter of 647,000 head was 13,000 head fewer than the previous week. Total estimated year-to-date cattle slaughter of 5.14 million head was just 19,000 head fewer than a year earlier.

Live Cattle futures closed an average 33¢ lower Friday (15¢ lower toward the back to $1.25 lower in spot Feb), except for 55¢ higher in the back contract. Week to week on Friday, they were an average of $2.64 lower ($1.30 to $3.97 lower).

Wholesale beef price continue their seasonal decline.

Choice boxed beef cutout value was $7.58 lower week to week on Friday at $258.27/cwt. Select was $7.22 lower at $255.41.

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Major U.S. financial indices closed higher Friday with follow-through support from the momentum that reversed the steep decline during the previous day’s session. Part of that seemed to extend from oversold conditions. 

The Down Jones Industrial Average closed 834 points higher. The S&P 500 closed 95 points higher. The NASDAQ was up 221 points.

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Logic suggests markets should view Friday’s monthly Cattle on Feed report as neutral with numbers close to pre-report expectations.

Placements in January (feedlots with 1,000 head or more capacity) were 1.999 million, which was 25,000 less (-1.2%) than the previous year.

In terms of placement weights, 43.3% went on feed weighing 699 lbs. or less, 48.0% weighing 700-899 lbs. and 8.8% weighing 900 lbs. or more.

Marketings in January of 1.773 million were 56,000 head less (-3.1%) than a year earlier.

Cattle on feed Feb. 1 of 12.199 million were 93,000 head more (+0.8%) year over year. That’s the most for the data since the date series began in 1996.

The February report also provides perspective on how many cattle were on feed Jan. 1 in feedlots with less than 1,000 head capacity, and how many cattle those feedlots marketed last year.

Cattle and calves on feed in feedlots with 1,000 head or more capacity Jan. 1 represented 81.9% of all cattle and calves on feed in the United States. It was 81.6% a year earlier.

Marketings of fed cattle for feedlots with capacity of 1,000 head or more during 2021 represented 87.2% of total cattle marketed from all feedlots in the United States, compared to 87.0% in 2020.

Cattle futures fell hard Thursday as outside markets initially plummeted in response to Russia’s invasion of Ukraine, although they did close off of session lows.

Feeder Cattle futures closed an average of $2.91 lower, from $1.90 to $4.47 lower.

Live Cattle futures closed an average of $2.05 lower, from $1.12 to $2.52 lower.

So far this week, though, negotiated cash fed cattle prices are firm to higher with live prices steady in the Southern Plains at $142/cwt., $2 higher in Nebraska at $144 and steady to $3 higher in the western Corn Belt at $144-$145. Dressed prices are $1 higher in Nebraska at $227 and steady to $1 higher in the western Corn Belt at $226-$227.

Trade was slow on light demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service.

Choice Boxed beef cutout value was 76¢ lower Thursday afternoon at $260.88/cwt. Select was $4.68 lower at $258.96.

Grain and soybean futures were widely volatile as traders came to grips with the war in eastern Europe, as well as U.S. baseline projections released as part of the annual Agricultural Outlook Forum (see below).

Corn futures closed 4¢ to 9¢ higher in the front three contracts and then 6¢ to 15¢ lower.

Soybean futures closed mostly 23¢ to 36¢ lower.

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Although major U.S. financial indices managed to close higher Thursday, they plumbed sharply lower during the session amid fears and uncertainty stemming from Russia’s military aggression in neighboring Ukraine.

The Down Jones Industrial Average closed 92 points higher. The S&P 500 closed 63 points higher. The NASDAQ was up 463 points.

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USDA expects more moderate feed prices later this year and slightly less total red meat and poultry production.

“In the first part of the year, steer and heifer slaughter will likely remain near last year’s levels, as current feedlot inventories are marketed. As the year progresses, however, marketings will decline as feedlot numbers diminish,” according to analysts with USDA’s World Agricultural Outlook Board (WAOB). “Additionally, cow slaughter is expected to decline due to lower inventories and expectations that any response to improving returns or forage will likely be manifest in producers retaining cows later in the year. Heavier cattle weights, which is a function of expected demand for higher-grading fed cattle as well as a decreasing proportion of cows in the slaughter mix during 2022, will only partly offset lower slaughter numbers.”

That’s from the Livestock and Poultry Outlook presented during this year’s Agricultural Outlook Forum.

Commercial beef production for this year is forecast to be 2% less than last year at 27.38 billion lbs. Total red meat and poultry production is projected to decrease fractionally to 106.6 billion lbs. Although fractional, WAOB analysts note the decline would be the first decline since 2014.

“Feed prices during 2022 are likely to be slightly lower than 2021. Corn prices in the first part of 2022 are expected to be above a year ago reflecting a forecast 2021-22 crop year average of $5.45/bu. However, prices later in the year are expected to be below 2021, reflecting a decline in the season-average price to $5.00/bu. for 2022-23,” say WAOB analysts. “Soybean meal prices in the first part of 2022 will reflect a 2021-22 crop year average of $410 per ton and prices in the fourth quarter are expected to reflect a market year forecast of $375 for 2022-23.”