WLI

Negotiated cash fed cattle trade ranged from limited on light demand to slow on moderate demand through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, various reports suggested prices were a touch higher than earlier in the week, supported by the bounce in futures.

So far this week, live prices are $1 lower in the Texas Panhandle at $135/cwt. and $1-$3 lower in Kansas and Nebraska at $135. Dressed trade in Nebraska is steady to $1 lower at $217-$218. Last week, live prices were at $138 in the western Corn Belt and dressed trade was at $217-$218.

Cattle futures extended recent gains Wednesday amid lighter pre-holiday trade.

Feeder Cattle futures closed an average of 58¢ higher (10¢ to 95¢ higher).

Live Cattle futures closed an average of 66¢ higher.

Choice boxed beef cutout value was 47¢ higher Wednesday afternoon at $261.86/cwt. Select was 91¢ higher at $250.83/cwt.

Corn futures closed 3¢ to 4¢ higher through Sep ‘22, and then mostly 1¢ higher.

Soybean futures closed 15¢ to 22¢ higher through Sep ‘22 and then mostly 7¢ to 8¢ higher.

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Major U.S. financial indices extended gains Wednesday. Support included the Food and Drug Administration’s emergency use authorization of the COVID treatment pill from Pfizer.

The Dow Jones Industrial Average closed 261 points higher. The S&P 500 closed 47 points higher. The NASDAQ was up 180 points.

CME West Texas Intermediate Crude Oil futures closed $1.05 to $1.64 higher in the front six contracts. That makes for a gain of about $3.50-$4.00 in those contracts over the last two trading sessions.

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Beef in freezers continues lower year over year, according to the latest USDA Cold Storage report. Beef in cold storage Nov. 30 was 4% more than the previous month but 4% less year over year.

Pork in cold storage was 8% less than the previous month and 3% less than the same time last year.

Total red meat supplies in freezers were 2% less than the previous month and 4% less than the prior year.

Total frozen poultry supplies were 17% less month to month and 18% less year over year.

Cattle futures bounced back Tuesday from recently oversold conditions, with more optimistic outside markets, despite softer cash prices and the shorter harvest schedule through the remainder of the year.

Feeder Cattle futures closed an average of $1.75 higher.

Live Cattle futures closed an average of 99¢ higher (85¢ to $1.17 higher).

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on light demand through Tuesday afternoon, according to the Agricultural Marketing Service. Although there were too few transactions for a trend, some live sales traded at $135/cwt. in the Texas Panhandle and Nebraska.

Last week, live prices were $2-$4 lower in Kansas and Nebraska at $136-$138/cwt. They were $4 lower in the Texas Panhandle at $136 and steady to $2 lower in the western Corn Belt at $138. Dressed prices were $2 lower in Nebraska at $218 and steady to $3 lower in the western Corn Belt at $217-$218.

Choice boxed beef cutout value was 99¢ lower Tuesday afternoon at $261.39/cwt. Select was 75¢ lower at $249.92/cwt.

Corn futures closed 4¢ to 8¢ higher through Jly ‘23, and then mostly 1¢ to 2¢ higher.

Soybean futures closed 10¢ to 19¢ higher through Sep ‘22 and then fractionally lower to 5¢ higher.

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Major U.S. financial indices recovered a chunk of last week’s losses Tuesday, buoyed by positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 560 points higher. The S&P 500 closed 81 points higher. The NASDAQ was up 360 points.

CME West Texas Intermediate Crude Oil futures closed $2.27 to $2.51 higher in the front six contracts.

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Heading into Thursday’s monthly Cattle on Feed report, analysts expect to see the Dec. 1 feedlot inventory a touch less than a year earlier.

“Placements are expected to be up around 4.5% from last year. Other than last year, that would be the smallest November placements since 2016,” says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets. “Fewer feeder cattle were imported from Mexico during the month while slightly more were imported from Canada. Placements in the expected range would follow the normal pattern of declining sharply from October’s placements.”

On the other end, November feedlot marketings are projected to be about 4.5% more year over year, due in part to one more slaughter day, according to Anderson.

“The combination of marketings and placements leaves the number of cattle on feed slightly below last year,” Anderson says. “On-feed inventories typically increase from November to December and the December inventory is often the highest for the year. December 2021 should be an exception to that with on-feed inventories in February being larger.”

Negotiated cash fed cattle trade was limited on light demand in Nebraska through Monday afternoon. Although too few transactions to trend, there were some live trades in the region at $135/cwt. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.

Last week, live prices were $2-$4 lower in Kansas and Nebraska at $136-$138/cwt. They were $4 lower in the Texas Panhandle at $136 ad steady to $2 lower in the western Corn Belt at $138. Dressed prices were $2 lower in Nebraska at $218 and steady to $3 lower in the western Corn Belt at $217-$218.

Cattle futures trended lower Monday with softer cash prices, holiday-limited harvest schedules on the books and no support from outside markets.

Live Cattle futures closed an average of 34¢ lower, except for 10¢ higher in away Feb.

Feeder Cattle futures closed an average of 75¢ lower (2¢ lower at the back to $1.20 lower toward the front), except for 5¢ higher in Oct.

Choice boxed beef cutout value was 63¢ lower Monday afternoon at $262.38/cwt. Select was $2.39 higher at $250.67.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 2¢ to 6¢ higher.

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Major U.S. financial indices extended losses Monday, closing sharply lower amid growing uncertainty related to surging Covid-omicron infections.

The Dow Jones Industrial Average closed 433 points lower. The S&P 500 closed 52 points lower. The NASDAQ was down 188 points.

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“Rapidly expanding drought conditions are threatening winter wheat grazing in the Southern Plains. Dwindling forage supplies may already be causing some wheat pasture removals and could be contributing to the strong December feeder cattle auction volumes,” says Derrell Peel, Extension livestock making specialist at Oklahoma State University, in his weekly market comments.

According to the Dec. 16 U.S. Drought Monitor, 74% of the nation was abnormally dry or in some degree of drought compared to 67% a year earlier. Moreover, 55% was experiencing some degree of drought (D1-D4) compared to 49% last year.

“Without additional moisture very soon, more wheat pastures will have to be de-stocked. Current forecasts show little chances for precipitation in the region into January,” Peel says. “La Niña conditions are expected to persist through the winter, shifting the drought focus back to the Southwest and Southern Plains and potentially improving drought conditions in California and the Pacific Northwest.” 

In the meantime, Peel notes the recent, heady price run.

“Optimism building in feeder cattle markets in the second half of the year has been enhanced and consolidated with the fed cattle market breaking out and moving sharply higher in the last two months of the year,” Peel explains. “Fed cattle prices have increased roughly 12% since late October and are about 29% higher compared to one year ago in December.”

Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $2 lower in Kansas at $138/cwt. and $4 lower in the Texas Panhandle at $136. Dressed prices were $2 lower in Nebraska at $218.

Estimated total cattle slaughter last week was 657,000 head, which was 11,000 head fewer than the prior week. Year-to-date estimated total cattle slaughter of 32.17 million head was 886,000 head more (+2.8%) than the same period last year. Estimated year-to-date before production of 26.64 billion lbs. is 628 million lbs. more (+2.4%) than last year.

Cattle futures limped lower Friday, pressured by softer cash prices and pre-holiday positioning. Increasing carcass weights amid declining wholesale beef prices added weight.

The average dressed steer weight the week ending Dec. 4 was 928 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 2 lbs. heavier than the previous week, 6 lbs. heavier than two weeks earlier and the same week a year earlier. The average dressed heifer weight was 4 lbs. heavier than the previous week at 851 lbs. and 1 lb. heavier than the same week last year.

Feeder Cattle futures closed an average of $1.78 lower (95¢ lower at the back to $2.62 lower toward the front).

Live Cattle futures closed an average of 61¢ lower.

Choice boxed beef cutout value was 4¢ higher Friday afternoon at $263.01/cwt. Select was 14¢ higher at $248.28.

Corn futures closed 1¢ to 2¢ higher in the front three contracts and then mostly fractionally lower.

Soybean futures closed 6¢ to 10¢ higher in the front five contracts and then mostly unchanged to fractionally lower.

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Major U.S. financial indices closed lower again Friday with pressure from escalating Covid infections and the outlook for tighter monetary policy.

The Dow Jones Industrial Average closed 532 points lower. The S&P 500 closed 48 points lower. The NASDAQ was down 10 points.

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The U.S. economy is poised to slow next year relative to 2021, but economic growth will continue at a pace that is well above average, according to analysts with CoBank’s Knowledge Exchange (CKE). They explain consumers have powered the economic recovery since mid-2020 and that will continue in the coming year. Consumer spending is expected to rise another 4% to 5% in 2022 and GDP is expected to grow by roughly 4.5%, according to CKE’s comprehensive year-ahead outlook report from.

The CoBank 2022 outlook report examines several key factors that will shape agriculture and market sectors that serve rural communities throughout the U.S.

“The COVID-19 omicron variant is shaping up to be the wild card of early 2022 and it could delay the rebalancing of the U.S. economy,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange. “If omicron disrupts the services industry, the majority of consumer spending will again revert to goods, compounding supply chain and inflation problems. However, at this early stage, we expect omicron to have only a modest impact on the economy.”

Among report highlights:

If the global economy is to perform well in 2022, it will do so despite three significant headwinds: a persistent pandemic, monetary tightening in the U.S. and slowing growth in China.

The pandemic has significantly altered how our economy functions, with the greatest impact coming from what we consume. Through October, in 2021 Americans spent 18% more on goods and about 1% less on services than they did in 2019. Compounded by a labor shortage, it is easy to see why supply chains have become one of the biggest economic challenges of the pandemic—demand has significantly exceeded the capacity of our existing system. Fortunately, we have likely experienced the worst of the bottlenecks, which should diminish in the coming year.

The Fed will want to extend the economic recovery as long as possible before raising interest rates. But it will also be cognizant that the longer inflation remains elevated the higher the likelihood that it leads to a perpetuating cycle of higher prices and higher wages.

The U.S. farm economy will continue to struggle with the ongoing supply chain dysfunction and cost inflation issues that emerged in the summer of 2021. Historically strong prices will be more than offset by increases in cost structure for nearly all crop production including row crops, fruits and vegetables, and hay. CoBank economists do not anticipate any significant pullback in farm-level costs until Q3, at the earliest.

The Bureau of Labor and Statistics’ Consumer Price Index for all meats, poultry, fish, and eggs hit an all-time high in October, up 12% year over year. As restaurant and grocery prices adjust, consumer-level meat inflation is likely to continue well into the new year. While higher retail prices could limit consumption growth, tighter cattle supplies, ongoing broiler breeder issues and sow herd reductions should support favorable processor margins through at least the first half of 2022. Although beef exports have been robust during the second half of 2021, the collective U.S. protein opportunity to China may have already peaked.

Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are $2 lower in Kansas at $138/cwt. and $4 lower in the Texas Panhandle at $136. Dressed prices are $2 lower in Nebraska at $218.

Last week, live prices were at $140 in Colorado and $138-$140 in Nebraska and the western Corn Belt. Dressed prices in the western Corn Belt were $218-$220.

Cattle futures were narrowly mixed Thursday with lackluster trade.

Live Cattle futures closed an average of 28¢ higher, except for 5¢ lower in Jun.

Feeder Cattle futures closed mixed, from an average of 35¢ lower in five contracts to and average of 31¢ higher.

Choice boxed beef cutout value was $2.71 higher Thursday afternoon at $262.97/cwt. Select was 69¢ higher at $248.14.

Corn futures closed mostly 3¢ to 6¢ higher, boosted by positive weekly U.S. export sales.

Soybean futures closed 10¢ to 14¢ higher through the front four contracts and then mostly 5¢ higher.

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Major U.S. financial indices closed lower Thursday with hard pressure on tech stocks.

The Dow Jones Industrial Average closed 29 points lower. The S&P 500 closed 41 points lower. The NASDAQ was down 385 points.

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Domestic beef demand is the strongest it has been in three decades. Beef gained about 8% market share over the last two decades and U.S. beef exports through November 2021 were on a record pace in terms of volume and value.

Kevin Good, CattleFax analyst and vice president of industry relations, says this is all a result of listening to the consumer.

Good was speaking to members of the American Hereford Association (AHA), guests and allied industry partners during an educational forum at the organization’s recent Annual Membership Meeting and Conference.

“Think about grade, think about consistency. They are the driving points,” Good said. He explained, “Today, we have a much better product than we had in the past and our customers are rewarding us with more dollars.”

For perspective, 72.7% of all beef cattle graded Choice in 2020 and 10.2% graded Prime, according to USDA’s Estimated National Grading Summary. Just 10 years earlier, 60.1% were Choice and 3.4% were Prime. Through October this year, 72.6% were Choice and 10.1% were Prime.

Whether regarded as the proverbial chicken or egg, Good pointed out carcass quality increased as the industry applied premiums and discounts in order to get what consumers wanted.

“There will be a time when we produce 20-30% prime in the national herd, and it’s not that far away,” Good predicted. “As we think about what our customer is demanding, let’s remember that last year, with COVID, we couldn’t sell Prime through restaurants, it went through retail. Every major retail chain in the U.S. now has a premium product offering. Consumers want it, so we’re going to have to provide it.”

Good also shared price expectations for 2022, as cow numbers and fed cattle supplies decline and more leverage returns to producers. Currently, CattleFax projects calves to average $205/cwt., compared to $170 in 2021; yearlings to average $168, compared to $140 in 2021; fed steers to average $140, compared to $121 in 2021.