WLI

Short covering and lower Corn futures helped Feeder Cattle futures mostly rebound from the previous day’s pressure.

Feeder Cattle futures closed an average of $1.00 higher.

Live Cattle futures closed mixed, from an average of 17¢ lower in four contracts to an average of 39¢ higher.

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

Fed cattle prices last week were generally steady on a live basis at $123-$124/cwt. Dressed trade was $2 lower at $198 in Nebraska and $194-$198 in the western Corn Belt.

Choice boxed beef cutout value was $1.14 lower Tuesday afternoon at $301.56/cwt. Select was 3¢ lower at $274.35.

Corn futures closed 5¢ to 7¢ lower through new-crop contracts and then 2¢ lower to 1¢ higher.

Soybean futures closed mostly 9¢ to 10¢ lower.

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Spiking treasury yield rates and the Congressional budget stalemate weighed on equity markets Tuesday.

The Dow Jones Industrial Average closed 569 points lower. The S&P 500 closed 90 points lower. The NASDAQ was down 423 points.

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Despite bad weather and the delta variant spread, consumer online and physical restaurant visits in August continued to recover from last year’s steep declines, according to the NPD Group (NPD). U.S. restaurant traffic increased by 5% over the 10% decline in August 2020 and was 5% less than the pre-pandemic level in August 2019. Larger average check sizes drove a 13% increase in dollars compared to a year ago and a 3% gain in dollars over the same month two years ago, according to NPD’s daily tracking of the U.S. restaurant industry. 

“Overall, the state of the U.S. restaurant industry today reflects the steady state of the home-centric lifestyle that has us eating more meals at home,” says David Portalatin, NPD food industry advisor. “This behavior pre-dates the pandemic and will continue into the foreseeable future. To meet the needs of today’s restaurant consumers, restaurant operators need to think about getting meals and snacks into the home.”

Quick service restaurant visits, representing most U.S. restaurant traffic, were down 3% in August compared to August 2019, up 2% versus the same time last year. Visits to full service restaurants declined by 9% this August compared to the same month two years ago, and increased by 20% versus a 25% decrease in August 2020. 

While restaurant visits improved overall, dine-in or on-premises traffic continues to struggle compared to pre-pandemic levels. Dine-in visits were down 34% in August compared to August 2019. Off-premises orders, which gained significant ground during the pandemic, represented 73%, of all restaurant visits this August. Of off-premises services, delivery continues its meteoric growth, with orders increasing by 128% in August compared to the same month two years ago, and now represents 10% of off-premises visits. Carry-out visits, which hold a 49% share of off-premises traffic, increased by 6% compared to pre-pandemic levels. Drive-thru visits rose by 11% in August compared to August 2019 and represented 41% of off-premises visits in the month. Although digital ordering has grown by triple-digits since the pandemic began, non-digital orders represented 85% in of all restaurant orders in August.

Cattle futures closed lower Monday, pressured by Friday’s Cattle on Feed report with unexpectedly higher placements. 

Live Cattle futures closed an average of 40¢ lower.

Feeder Cattle futures closed an average of $1.68 lower (38¢ to $3.00 lower). They received extra pressure from Corn futures, which closed an average of 12¢ higher in the front six contracts, apparently based on early yields.

Soybean futures closed up across the board, mostly 2¢ to 6¢ higher.

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

Live price last week were generally steady at $123-$124/cwt. Dressed trade was $2 lower at $198 in Nebraska and $194-$198 in the western Corn Belt.

 Choice boxed beef cutout value was 62¢ lower Monday afternoon at $302.70/cwt. Select was 15¢ lower at $274.38.

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Major U.S. financial indices closed mixed on Monday, after the Federal Reserve chair said last week tapering of stimulus efforts could start as soon as November. Brent crude closed at the highest mark since 2018. Two regional Fed presidents stepped down unexpectedly on Monday amid scrutiny over their 2020 stock trading.

The Dow Jones Industrial Average closed 71 points higher. The S&P 500 12 closed points lower. The NASDAQ closed 78 points lower. 

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“Going forward, the expectation is that fed cattle supplies will continue to tighten and drop below the slaughter capacity cap that has separated the fed market from beef markets,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “Beef production is expected to drop in the fourth quarter and fed markets should participate more fully in the market strength. Barring any new disruptions or “Black Swans,” cattle and beef markets should get lined up in a more typical fashion and move forward with tighter supplies and continued strong demand.”

In his weekly market comments, providing insight to Friday’s Cattle on Feed report, Peel notes cattle feeders appear to making headway with front-end supplies, albeit slowly.

“The 12-month moving average of feedlot placements peaked recently in April, with declines since, except for a slight move higher with the large August placements,” Peel explains. “Generally, declining placements imply smaller feedlot numbers, eventually. The large heavy placements in August will front-end load future production somewhat. The 12-month moving average of marketings peaked recently in June and is moving lower in July and August suggesting that the peak feedlot production is past.” He adds that the 12-month moving average feedlot inventory also peaked recently in June and is also moving lower.

As for August placements, Peel explains, the unexpected increase came almost exclusively in weights heavier than 700 lbs. For instances he points to the 15.4% year-over-year increase in cattle placed weighing more than 900 lbs.

Negotiated cash fed cattle trade ranged from a standstill to mostly inactive on light demand through Friday afternoon, according to the Agricultural Marketing Service. There were too few transactions to trend in any region.

Live price last week were generally steady at $123-$124/cwt. Dressed trade was $2 lower at $198 in Nebraska and $194-$198 in the western Corn Belt.

Cattle futures closed mixed on Friday, amid fairly light action as traders positioned ahead of the monthly Cattle on Feed report and the end of the week.

Feeder Cattle futures closed an average of 50¢ higher, except for 27¢ lower in spot Sep.

Live Cattle futures closed an average of 34¢ lower.

Estimated total cattle slaughter last week was 641,000 head, according to USDA’s Agricultural Marketing Service (AMS). That was 16,000 head fewer than the previous week. Year-to-date estimate total cattle slaughter of 20.11 million head was 627,000 head more (+3.2%) than the same period last year. Estimated year to date beef production of 20.1 billion lbs. was 627 million lbs. more (+3.2%) than the same time last year.

The average dressed steer weight the week ending Sept 11 was 909 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 3 lbs. heavier than the previous week but 11 lbs. lighter than the same week last year. The average dressed heifer weight of 831 lbs. was 9 lbs. heavier than the previous week but 5 lbs. lighter than the previous year.

Choice boxed beef cutout value was $2.28 lower Friday afternoon at $303.32/cwt. Select was 46¢ lower at $274.53.

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Major U.S. financial indices closed narrowly mixed Friday, ending a volatile week of trade.

The Dow Jones Industrial Average closed 33 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 4 points.

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Markets may deem Friday’s monthly Cattle on Feed report a bit bearish with August placements about 3% more than estimates ahead of the report.

There were 2.10 million head placed in feedlots with 1,000 head or more capacity, which was 2.3% more than a year earlier. Pre-report estimates, on average, saw a decline of 0.7%. In terms of weight, 34% went on feed weighing 699 lbs. or less, 48% weighing 800-999 lbs. and 18% weighing 900 lbs. or more.

Cattle marketed in August of 1.88 million head were 0.37% less than a year earlier, about even with pre-report expectations.

Cattle on feed Sept. 1 of 11.23 million head were 160,000 head fewer (-1.40%), which was 0.5% more than expected. That’s the second highest inventory for the date since the data series began in 1996, according to the Agricultural Marketing Service.

Negotiated cash fed cattle trade ranged from a standstill to limited trade on light demand through Thursday afternoon, according to the Agricultural Marketing Service. There were too few transactions to trend in any region.

So far this week, live price are generally steady with last week at $123-$124/cwt. Dressed trade is $2 lower at $198 in Nebraska and $194-$198 in the western Corn Belt.

Resurgent equity markets helped Cattle futures mainly increase Thursday.

Live Cattle futures closed an average of 47¢ higher, except for 5¢ lower in spot Oct.

Recently higher Corn futures capped Feeder Cattle, which closed from an average of 33¢ lower in three contracts to an average of 37¢ higher.

Corn futures closed mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 1¢ to 3¢ higher.

Choice boxed beef cutout value was $2.23 lower Thursday afternoon at $305.60/cwt. Select was 51¢ lower at $274.99.

Net U.S. beef export sales (2021) for the week ending Sept. 16 totaled 15,800 metric tons, according to the weekly U.S. Export Sales report. That was 3% more than the previous week and 17% more than the prior four-week average. Increases were primarily for Japan, South Korea, China, Taiwan, and Canada. 

Consensus favors Friday’s monthly Cattle on Feed report coming in about even with the previous year; slightly few placements and total cattle on feed.

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Major U.S. financial indices continued to rally Thursday with follow-through support from the Fed’s dovish tone a day earlier.

The Dow Jones Industrial Average closed 506 points higher. The S&P 500 closed 53 points higher. The NASDAQ was up 155 points.

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Federally Inspected (FI) total cattle slaughter in August of 2.83 million head was 83,300 head more (+3.02%) year over year, according to the monthly Livestock Slaughter report from USDA. The average live weight was down 11 lbs. from the previous year, at 1,354 lbs. For January through August, total FI cattle slaughter of 22.08 million head was 964,100 head more (+4.6%) than the same time last year.

Total commercial beef production in August of 2.36 billion lbs. was 24.4 million lbs. more (+1.04%) than the previous year. Beef production for January through August of 18.53 billion lbs. is 782.6 million lbs. more (+4.41%) year over year.

Total commercial red meat production in August of 4.59 billion lbs. was 104.3 million lbs. less (-2.20%) year over year, due to lower year-over-year production of veal, pork, lamb and mutton. For January through August, total red meat production of 36.88 billion lbs. was 541.4 million lbs. more (+1.49%) than the same period last year.

Negotiated cash fed cattle trade was slow with moderate demand in Kansas and Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices were steady in Kansas at $123-$124/cwt., but $1 lower in Nebraska at $124. Dressed trade in Nebraska was $2 lower at $198.

Trade was limited on light demand in other regions. A light test brought steady money of $124 in the Texas Panhandle. Live sales in the western Corn Belt last week were $123-$124; dressed sales were $196-$200.

Higher outside markets and potential positioning ahead of Friday’s Cattle on Feed report helped lift Cattle futures Wednesday.

Feeder Cattle futures closed an average of $1.09 higher (87¢ to $1.27 higher) except for 5¢ lower in spot Sep.

Live Cattle futures closed an average of $1.02 higher (65¢ to $1.30 higher).

Choice boxed beef cutout value was $3.54 lower Wednesday afternoon at $307.83/cwt. Select was $2.51 lower at $275.50.

Corn futures closed 7¢ to 8¢ higher through new-crop contracts and then mostly 1¢ to 3¢ higher.

Soybean futures closed 6¢ to 9¢ higher through the front six contracts and then mostly 1¢ to 4¢ higher.

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Major U.S. financial indices rallied back Wednesday.

The Federal Reserve seemed to soothe some investor worries with its statement Wednesday, acknowledging progress in domestic economic recovery — and the likelihood of tapering its bond buying program soon — while holding interest rates steady and reiterating it will do so until maximum employment is achieved and inflation rises to 2% and moderately exceeds that level for some time.

“With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen,” according to the statement. “The sectors most adversely affected by the pandemic have improved in recent months, but the rise in COVID-19 cases has slowed their recovery. Inflation is elevated, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.”

The Dow Jones Industrial Average closed 338 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 150 points.

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USDA’s latest monthly Cold Storage report continues to reflect strong red meat demand.

Total pounds of beef in freezers Aug. 31 were 4% more than the previous month but 8% less year over year.

Frozen pork supplies were up 4% from the previous month but down 1% percent from the same time last year.

Total red meat supplies in freezers were 4% more than the previous month but 6% less than a year earlier. 

Total frozen poultry supplies were down 3% from the previous month and down 20% from a year ago.