WLI

Negotiated cash fed cattle trade was mostly inactive with light demand in all trading regions through Tuesday afternoon, according to the Agricultural Marketing Service. There were not enough sales for a market trend.

Live prices last week were at $124/cwt. in the Texas Panhandle, at $122-$124 in Kansas, at $122 in Nebraska and at $122-$123 in the western Corn Belt. Dressed prices were $196 in Nebraska and $192-$196 in the western Corn Belt. 

Cattle futures received follow-through support Tuesday amid continued oversold conditions and outside support.

Feeder Cattle futures closed an average of $1.37 higher (60¢ higher in Aug ’22 up to $1.85 in nearby Nov.

Live Cattle futures closed an average of 66¢ higher (20¢ at the front of the board to 95¢ at the back) except for nearby Dec, down 20¢.

Choice boxed beef cutout value was $1.47 lower Tuesday afternoon at $287.71/cwt. Select was $2.62 higher at $267.78/cwt.

Corn futures closed 2¢ to 4¢ lower.

Soybean futures closed 7¢ to 15¢ higher.

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Major U.S. financial indices closed higher on Tuesday amid continued volatility in the markets. Part of that uncertainty stems from mixed news about the economy and its recovery. On the positive side, a report from the Institute for Supply Management Tuesday showed service provides expanded in September more quickly than anticipated. Despite continued problems with inventories and labor, 17 of 18 service industries grew last month, with retail, entertainment and management/support experiencing the biggest growth.

The Dow Jones Industrial Average closed 312 points higher. The S&P 500 closed 45 points higher. The NASDAQ closed 178 points higher.

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The Purdue University/CME Group Ag Economy Barometer declined in September, down 14 points to a reading of 124. That’s the weakest agricultural producer sentiment reading since July 2020 when the index stood at 118. The Index of Current Conditions declined 12 points to a reading of 140 and the Index of Future Expectations fell 16 points to a reading of 116.

In September, fewer respondents said they expected their ranch or farm financial performance to match last year’s, while the percentages of producers expecting both worse and better financial performance rose.

“Although the combined responses left the Farm Financial Performance Index unchanged from a month earlier, the increasing divergence in expectations among respondents from August to September could reflect differences in how individual farms managed risk in a period of rapidly fluctuating commodity prices,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Producer concerns about rising input costs rose sharply this month with over one-third of respondents saying they expect input prices to rise by more than 12% in the coming year, which is six times the average farm input inflation rate of the last decade. Inflation expectations were higher this month across the board with the percentage of respondents expecting input inflation to rise above 12% doubling since July with an increase to 34%, up from 21% last month.

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 Sept. 27-29, 2021.

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

Live prices last week were at $124/cwt. in the Texas Panhandle at $122-$124 in Kansas, at $122 in Nebraska and at mostly $122 in the western Corn Belt. Dressed prices were $196 in Nebraska and $192-$197 in the western Corn Belt.

Estimated total cattle slaughter last week of 637,000 head was 4,000 head fewer than the previous week and 27,000 head fewer than the same time last year.

Cattle futures plowed higher Monday, buoyed in part by extremely oversold conditions.

Live Cattle futures closed an average of $1.64 higher (75¢ higher at the back to $2.85 higher toward the front).

Feeder Cattle futures closed an average of $1.30 higher Monday (32¢ higher toward the back to $2.25 higher in spot Oct) except for $2.00 lower in Sep.

Choice boxed beef cutout value was $3.18 lower Monday afternoon at $289.18/cwt. Select was 32¢ higher at $265.16.

Corn futures closed fractionally lower to 2¢ higher across most of the board.

Soybean futures closed 6¢ to 10¢ lower through Jly ’22 and then mostly fractionally lower to 3¢ lower.

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Major U.S. financial indices closed mostly sharply lower Monday, led by tech stocks as investors seemed to grow squeamish about the impact of rising bond yield rates on high-value shares.

The Dow Jones Industrial Average closed 323 points lower. The S&P 500 closed 56 points lower. The NASDAQ was down 311 points.

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Forty-seven percent of the winter wheat crop was in the ground as of Oct. 3, according to USDA’s latest Crop Progress report. That was 3% less than the same time last year but 1% more than the 5-year average. Emergence was at 19% compared to 22% last year and 20% for average.

Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides a regional perspective in his weekly market comments, based on the previous week’s data. 

“Although the numbers are about average, general indications are that wheat pasture prospects are limited at this time,” Peel says. “Some producers have “dusted in” wheat into dry soil, which will germinate quickly with the recent rains. Pockets of heavy rain may have crusted over fields with un-germinated or very small wheat and may require replanting.” That’s similar to the prognosis I heard from producers in western Kansas last week.

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the Western Corn Belt through Friday afternoon, according to the Agricultural Marketing Service. There were a few live sales at $122/cwt., however not enough in either region for a full market trend. Trading was at a standstill in the Southern Plains. 

Live prices last week were steady in the Texas Panhandle at $124/cwt., steady to $1 lower in Kansas at $123-$124, $2 lower in Nebraska at $122 and steady to $1 lower in the western Corn Belt at $122-$123. Dressed prices were $2 lower in Nebraska at $196 and steady to $1 lower in the western Corn Belt at $192-$196.

Cattle futures ended the week mixed as traders continued to position for the new month. Conditions remain as oversold as buyer interest is limited.

Feeder Cattle futures closed mixed from an average of 66¢ lower in four contracts (7¢ to $1.95 lower) to an average of 57¢ higher (20¢ to $1.95 higher).

Live Cattle futures closed mixed, an average of 38¢ lower through the front four contracts to an average of 21¢ higher in the back four contracts.

Choice boxed beef cutout value was $2.62 lower at $292.36/cwt. Select was $4.48 lower at $264.84/cwt.

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed 6¢ to 9¢ lower in the front four contracts, 3¢ to 5¢ lower through Jan ’23 and then mostly 1¢ lower to fractionally higher.

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Major U.S. financial indices gained some lost ground on Friday, closing higher after a run of down days. Part of the market optimism came from Merck’s announcement of promising trial data for a pill that could be a game changer for treatment of Covid-19. Friday the Labor Department reported improvement in the jobs market – payrolls increased by about 500,000 in September, almost twice that of August. The unemployment rate is forecast at 5.1% compared to 5.2% a month earlier.

The Dow Jones Industrial Average closed 483 points higher. The S&P 500 closed 50 points higher. The NASDAQ was up 118 points. 

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Glynn Tonsor, agricultural economist at Kansas State University (K-State) shared price forecasts from the Livestock Marketing Information Center (LMIC) during last week’s K-State Beef Stocker Field Day.

In his Beef Cattle Outlook, according to Tonsor, LMIC sees steer calves (basis 500-600 lbs., the Southern Plains) averaging $175-$178/cwt. next year with average prices at $167-$170 in the first quarter, $172-$176 in the second, $179-$189 in the third and $177-$187 in the fourth quarter. The annual average price in 2023 is projected at $193-$203.

For feeder steers (basis 700-800 lbs., Southern Plains) LMIC projects next year’s annual average price at $156-$160, with average prices at $153-$156 in the first quarter, $154-$159 in the second, $157-$167 in the third and $155-$165 in the fourth quarter. The annual average price in 2023 is projected at $170-$180.

LMIC projects the 2022 average fed steer price (five-area direct) at $128-$130 with average prices at $127-$130 in the first quarter, $132-$136 in the second, $122-$130 in the third and $126-$134 in the fourth quarter. The annual average price in 2023 is projected at $134-$144.

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

So far this week, Live prices are steady in the Texas Panhandle at $124/cwt., steady to $1 lower in Kansas at $123-$124, $2 lower in Nebraska at $122 and steady to $1 lower in the western Corn Belt at $122-$123. Dressed prices are $2 lower in Nebraska at $196 and steady to $1 lower in the western Corn Belt at $192-$196.

Position squaring for the end of the week, month and quarter, along with softer cash prices and sharply lower outside markets helped push Cattle futures lower Thursday.

Feeder Cattle futures closed an average of $2.35 lower, except for 35¢ lower in expiring Sep.

Live Cattle futures closed an average of $1.60 lower.

Choice boxed beef cutout value was $2.35 lower Thursday afternoon at $294.98/cwt. Select was $2.46 lower at $269.32/cwt.

Corn futures closed lower and Soybean futures closed sharply lower Thursday. Pressure included higher projected stocks than anticipated (see below) and the recently stronger dollar weighing on exports. As with cattle, week-end and month-end and positioning likely also contributed.

Corn futures closed mostly 2’2¢ to 2’6¢ lower.

Soybean futures closed 21¢ to 28¢ lower through Aug ’22 and then 15¢ lower to 3¢ higher.

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Major U.S. financial indices closed sharply lower Thursday to close out a volatile month of trade, with investor frets including slowing economic growth, stimulus tapering, rising inflation and interest rates along with the Congressional war over the budget.

The Dow Jones Industrial Average closed 546 points lower. The S&P 500 closed 51 points lower. The NASDAQ was down 63 points.

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USDA’s quarterly Grain Stocks report offered some market surprises.

Although, estimated old-crop corn stocks Sept. 1 were 36% less year over year at 1.24 billon bu., they were more than the trade expected. Of the total stocks, 395 million bu. were stored on farms, down 47% from a year earlier. Off-farm stocks, of 842 million bu. were 28% less than a year ago.

Likewise, old-crop soybean stocks of 256 million bu. were 51% less than a year earlier, but more than trade expectations. Soybean stocks stored on farms totaled 68.1 million bu., down 52% from a year ago. Off-farm stocks, of 188 million bu. were 51% less year over year. 

All wheat stored in all positions was bullish at 1.78 billion bu. which was 18% less year over year and less than expected. On-farm stocks were estimated at 419 million bu., down 41% from last September. Off-farm stocks of 1.36 billion bu. were 6% less year over year.

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

Live sales traded steady in the Texas Panhandle at $124/cwt. and steady to $2 lower in Nebraska at $122-$124/cwt. Dressed trade in Nebraska was $2 lower at $196.

Although too few to trend, there were some live sales in Kansas at $123-$124 and some in the western Corn Belt at $121.00-$123.50.

Those softer prices and declining wholesale beef values pressured Live Cattle futures Wednesday, which closed an average of 26¢ lower, except for 10¢ higher in away Oct and unchanged in away Dec.

Choice boxed beef cutout value was $4.23 lower Wednesday afternoon at $297.33/cwt. Select was $2.57 lower at $271.78/cwt.

Weakness on the live side and a day of stronger Corn futures added pressure to Feeder Cattle, which closed an average of $1.08 lower.

Corn futures closed mostly 4¢ to 6¢ higher.

Soybean futures closed mostly 4¢ to 6¢ higher through Aug ‘22 and then mainly 2¢ to 4¢ higher.

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Major U.S. financial indices closed mixed Wednesday with the third straight day of losses in NASDAQ, while the dollar rose to its highest level since November 2020.

The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 7 points higher. The NASDAQ closed 34 points lower.

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Although the global economy is growing more than expected a year ago — buoyed by extraordinary support from governments and central banks — recovery remains uneven, according to the latest Interim Economic Outlook from the Organization for Economic Cooperation and Development (OECD).

“Large differences in vaccination rates between countries are adding to the unevenness of the recovery,” according to the report. “Renewed outbreaks of the virus are forcing some countries to restrict activities, resulting in bottlenecks and adding to supply shortages.” 

Similarly, inflationary price pressure is variable. OECD notes inflation is rising rapidly in the U.S. and some emerging economies, but remains relatively low in many other advanced economies, particularly in the euro area.

“A rapid increase in demand as economies reopen pushed up prices in key commodities such as oil and metals as well as food, which has a stronger effect on inflation in emerging markets,” according to OECD. “The disruption to supply chains caused by the pandemic has added to cost pressures. At the same time, shipping costs have increased sharply.”

OECD projects inflation in the G20 countries to peak toward the end of this year and then slow throughout 2022.

OECD forecasts strong global growth of 5.7% this year and 4.5% in 2022.

“Even in the countries where output or employment have recovered to their pre-pandemic levels, the recovery is incomplete, with jobs and incomes still short of the levels expected before the pandemic,” according to the Interim Economic Outlook.