WLI

Negotiated cash fed cattle prices lost some ground Wednesday. Live prices in the Texas Panhandle were $4 lower at $136/cwt., on slow trade and light demand, according to the Agricultural Marketing Service. Although too few to trend, there some early dressed sales in Nebraska $2 lower at $218.

Cattle futures sagged lower, pressured by softer cash prices and reports of reduced production at some plants due to weather.

Live Cattle futures closed an average of $1.05 lower (60¢ to $1.78 lower).

Feeder Cattle futures closed an average of $1.41 lower (83¢ to $1.93 lower).

Choice boxed beef cutout value was 46¢ lower Wednesday afternoon at $260.26/cwt. Select was  $1.35 lower at $247.45.

Corn futures closed 4¢ to 5¢ lower through Jly ’22, then down 1¢ to 2¢.

Soybean futures closed fractionally higher to 3¢ higher through Jly ’22, and then mostly 2¢ to 4¢ lower.

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Major U.S. financial indices closed higher Wednesday with a late-session surge.

The increase came amid news confirming the Fed will maintain its current lending rate but accelerate tapering of its bond buying program in light of higher inflation that appears to be more than transitory.

The Dow Jones Industrial Average closed 383 points higher. The S&P 500 closed 75 points higher. The NASDAQ was up 327 points.

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USDA’s Economic Research Service (ERS) increased the price outlook for next year in the latest Livestock, Dairy and Poultry Outlook.

ERS forecast next year’s annual average feeder steer price (basis 750-800 lbs. Oklahoma City) $3.50 higher than the previous month’s estimate at $159.00/cwt. The 2021 estimated annual average increased $1.25 to $146.80. So, next year’s annual average price is projected to be $12.20 more than in 2021.

The 2021 fourth-quarter forecast was revised $5 higher to $159 based on current price strength and improved prospects for winter grazing.

As for fed cattle, the average five-area direct fed steer price in November was $133.39/cwt., which was $9.06 higher than the previous month; $24.54 higher year over year.

ERS projected the average fourth-quarter fed steer price $5 higher at $133, based on continued demand strength and tighter supplies. The 2022 annual forecast also increased $5.00 to $135.00.

The forecast for 2021 beef production was raised on higher expected slaughter of fed cattle and slightly heavier carcass weights. December’s beef production forecast was 10 million lbs. more than the previous month at 27.895 billion lbs. Beef production for next year is forecast to be 27 billion lbs.

As the week wears on, cash fed cattle price prospects appear steady to softer, given reduced packer production the next two holiday weeks, along with declining wholesale beef prices.

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. There were a few live trades in Kansas at $138/cwt., but too few to trend.

Live prices last week were at $138-$140/cwt. in the Southern Plains and Colorado; $138-$140 in Nebraska and the western Corn Belt. Dressed prices were $220 in Nebraska and $218-$220 in the western Corn Belt.

At the same time, wholesale beef prices continue to decline with Choice boxed beef cutout value $2.50 lower Tuesday afternoon at $260.72/cwt. Select was  $4.84 lower at $248.80.

All of that was enough for Live Cattle futures to drift an average of 32¢ lower.

Feeder Cattle futures closed an average of 41¢ lower Tuesday, also pressured by Corn futures closing 2¢ to 5¢ higher, while Soybean futures closed 11¢ to 13¢ higher through Sep ’23 and then mostly 9¢ higher — both rebounding from the previous day’s losses.

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Major U.S. financial indices closed lower Tuesday, pressured in part by a higher Producer Price Index (PPI) than anticipated. The final demand PPI was 0.8% higher month to month in November. It was 9.6% higher during the previous 12 months ending in November — the steepest increase since 12-month data were first calculated in November 2010, according to the U.S. Bureau of Labor Statistics (BLS).

“The Producer Price Index is a family of indexes that measures the average change over time in the selling prices received by domestic producers of goods and services,” according to BLS. “PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI), which measure price change from the purchaser’s perspective.”

The Dow Jones Industrial Average closed 106 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 175 points.

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The latest monthly Meat Demand Monitor (MDM) points toward continued domestic beef demand strength. 

“Responses in November again suggest consumer expectations of price increases (beef and pork). These consumer expectations and realized prices continue to align with broader discussions around food (and non-food) inflation,” according to the MDM report. “It should be carefully noted these higher expected prices reflect both supply-side factors (e.g. higher production costs) and demand strength…It should further be noted the majority (83%) indicate having either the same, or

more than normal amounts of meat on hand, indicating both ongoing demand strength and supply availability.”

The MDM — funded in part by the National Beef Checkoff and the National Pork Checkoff — tracks U.S. consumer preferences, views, and demand for meat with separate analysis for retail and food service channels. More than 2,000 respondents are surveyed, reflecting the national population.

Beef market share at the grocery store was 32% in November, according to the MDM. It was 21% for pork. For restaurants, market share was 41% for beef and 15% for pork.

“Taste, Freshness, Safety, and Price remain most important when purchasing protein. Price decreased most in importance from last month following its increase in October,” according to the report.

The MDM also asks consumers various ad hoc questions each month. In November, 75% of respondents self-declared as regular consumers of products derived from animal products — the highest percentage since the data series began in 2020. As for other categories, 11% of respondents indicated they are Flexitarian/Semi-Vegetarian; 9% indicated they are either Vegan Vegetarian or Vegetarian.

The MDM is coordinated and published by Kansas State University.

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Live prices last week live prices were at $138-$140/cwt. in the Southern Plains and Colorado; $138-$140 in Nebraska and the western Corn Belt. Dressed prices were $220 in Nebraska and $218-$220 in the western Corn Belt.

Choice boxed beef cutout value was $1.32 lower Monday afternoon at $263.22/cwt., but Select was $1.40 higher at $253.64

Long-term optimism helped boost Live Cattle futures an average of 46¢ higher on Monday.

Feeder Cattle futures closed an average of 84¢ higher (20¢ higher at the back to $1.37 higher). They received a boost from softer Corn futures, which were down on a drop in Soybean futures based on  bullish South American production weather.

Corn futures closed 4¢ to 8¢ lower.

Soybean futures closed 18¢ to 23¢ lower through Nov ’22 and then mostly 12¢ to 15¢ lower.

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Major U.S. financial indices continued there almost daily seesaw action Monday, to the down side this time. Apparently investors started the week more anxious about everything from inflation to the potential impact of the new COVID variant.

The Dow Jones Industrial Average closed 320 points lower. The S&P 500 closed 45 points lower. The NASDAQ was down 217 points.

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“Decreased net cattle imports are adding to declining cattle inventories in the U.S. and generally tighter cattle numbers at the end of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Numerous factors, both short term and long term, are affecting the development of live cattle trade in North America.”

According to Peel, factors affecting current live cattle trade include structural development in cattle feeding and packing in Canada and Mexico, drought conditions, feed supplies and prices and exchange rates.

“For the first 10 months of the year, total U.S. cattle imports from Mexico are down 23.4% year over year, following a decrease of 32.4% in October compared to last year,” Peel says. “Cattle imports from Canada are down 9.0% for the year-to-date compared to last year but were up 9.2% percent year over year in the month of October. Total cattle imports are down 18.7% year over through October with the one-month total down 18.5%.”

On the other end of the trade, Peel says U.S. cattle exports increased significantly to Canada and Mexico over the last four years. He explains cattle exports to Canada were 70.7% higher year to date through October. Exports to Mexico, though still relatively small in actual numbers are up 215.2%.

“In total, cattle exports so far in 2021 are up 81.2% year over year, equal to 31.3% of imports, and contributing to a 35.0% decrease in net cattle imports for the first 10 months of the year,” Peel says.

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

Live prices last week were $2 lower in the Southern Plains at $140/cwt. and steady to $2 lower at $138-$140 in Nebraska and the western Corn Belt. Dressed prices were steady at $220.

Cattle futures drifted a touch higher Friday.

Feeder Cattle futures closed and average of 62¢ higher (22¢ to $1.05 higher).

Live Cattle futures closed an average of 28¢ higher.

Choice boxed beef cutout value was 1¢ lower Friday afternoon at $264.54/cwt. Select was 56¢ higher at $252.24

Cattle futures drifted a touch higher Friday.

Feeder Cattle futures closed and average of 62¢ higher (22¢ to $1.05 higher).

Live Cattle futures closed an average of 28¢ higher.

Corn futures closed fractionally lower to 1¢ lower.

Soybean futures closed 1¢ to 3¢ higher through Nov ‘22 and then fractionally higher. 

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Major U.S. financial indices closed higher Friday despite the steamy inflation illustrated in the latest Consumer Price Index. Through November, the all-items index was up 6.8% over the last 12 month — the most since 1982 — according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 216 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 113 points.

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The steady to softer prices this week are likely due to the lower boxed beef prices and a shift in the cuts being purchased.

“Fed cattle prices are not likely to push higher prior to the end of the year as there will be two consecutive weeks of reduced slaughter and beef production, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, the market is expected to find support in January with more support arriving with the spring and summer grilling season. April Live Cattle futures is pricing finished cattle near $142, but there may be more upside potential than what the futures market is expecting if domestic and international demand remain strong.”

Griffith explains last week’s softer cash prices likely stem from from lower wholesale beef prices, losing some ground to shifting buyer demand.

“As the Choice Select spread has narrowed considerably the past several weeks, it would appear beef buyers are attempting to secure some of their winter beef needs to stock shelves for January and February,” Griffith says. “There may still be one more run on high-quality beef for the holiday season, but the bulk of most product moved will be for post-holiday consumption. As the shift occurs, the Choice-Select spread will continue narrowing. At this time, the narrowing will primarily occur in the form of Choice prices declining more quickly than Select prices declining.”

So far this week, fed cattle prices are steady to $2 lower.

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service.

Prices in the Southern Plains were at $140/cwt., which was steady with the prior day but $2 lower than last week.

Although too few to trend, there were a few live sales in the western Corn Belt at $138-$140 and a few in the beef at $220. Prices there last week were $140 and $220, respectively.

Trade in Nebraska was slow on moderate demand. Dressed prices were steady with last week at $220. Although too few to trend, there were some live trades at $138-$140, compared to $140 last week.

Trade in Colorado was mostly inactive on very light demand. Live prices last week were $142.

Choice boxed beef cutout value was 44¢ higher Thursday afternoon at $264.55/cwt. Select was $1.41 lower at $251.68.

Cattle futures softened amid the subdued cash trade.

Live Cattle futures closed an average of 62¢ lower.

Feeder Cattle futures closed an average of 55¢ lower, except for 67¢ higher in spot Jan.

Corn futures closed 3¢ to 4¢ higher through near Jly and then mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 3¢ to 4¢ higher.

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Major U.S. financial indices softened Thursday amid some likely retrenching and despite positive employment news.

Weekly initial unemployment insurance claims for the week ending Dec. 4 were 184,000, which was 43,000 less than the previous week and the least since Sept. 6, 1969.

The Dow Jones Industrial Average closed fractionally lower. The S&P 500 closed 33 points lower. The NASDAQ was down 269 points.

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USDA’s Economic Research Service (ERS) raised the fed cattle price forecasts for this year and next year based on current price strength and expectations of continued demand strength.

In the latest World Agricultural Supply and Demand Estimates, ERS forecast this year’s annual average five-area direct fed steer price $1.25 higher than last month at $122.56/cwt. Next year’s average price was projected $5 higher than the previous month at $135. Prices were forecast at $138 in the first quarter, $134 in the second quarter and $132 in the third quarter.

Corn

The 2021-22 U.S. corn supply use and outlook was unchanged, as was the projected season-average price of $5.45/bu.

Soybeans

U.S. soybean supply use and outlook was unchanged, but soybean oil production was raised on a higher extraction rate.

The 2021-22 U.S. season-average soybean and soybean oil price forecasts were unchanged at $12.10/bu. and 65¢/lb., respectively. Soybean meal price was projected $5 higher $330/short ton.

Wheat

The outlook for 2021-22 U.S. wheat was for slightly lower supplies, unchanged domestic use, reduced exports and higher ending stocks.

The projected season-average farm price was raised 15¢/bu. to $7.05 on current NASS prices and expected cash and futures prices for the remainder of 2021-22. That would be the highest season-average farm price since 2012-13.