WLI

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.

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Wednesday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.

Last week, live prices were $142/cwt. in the Southern Plains and Colorado; $140 in Nebraska and the western Corn Belt. Dressed prices were $220.

The lack of cash direction and lower wholesale beef prices helped pressure Live Cattle futures. They closed an average of 45¢ lower.

Choice boxed beef cutout value was $3.92 lower Wednesday afternoon at $264.11/cwt. Select was $2.59 lower at $253.09.

Feeder Cattle futures stepped lower amid lackluster trade and the absence of cash direction. They closed an average of $1.45 lower.

Corn futures closed mostly fractionally mixed as traders readied for Thursday’s monthly World Agricultural Supply and Demand Estimates.

Soybean futures closed 9¢ to 12¢ higher.

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Major U.S. financial indices mainly edged higher Wednesday, as investors appeared to be waiting for more direction from the weekly jobless claims report Thursday and the next read on inflation Friday, in the monthly Consumer Price Index report.

The Dow Jones Industrial Average closed 35 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 100 points.

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U.S. beef export value soared in October, up 48% year over year to $956.9 million, the second highest monthly level on record, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Beef export volume was 7.5% more at 115,709 metric tons (mt).

Through the first 10 months of the year, beef export volume totaled 1.19 million mt, up 17% from a year ago. Export value increased 38% to $8.53 billion, surpassing the full-year record of $8.33 billion established in 2018.

Beef export value per head of fed slaughter equated to $439.46 in October, up 55% from a year ago. The January-October average was $394.14, up 34%.

U.S. pork exports were 7% less year over year in October at 226,206 mt  while export value slipped 3.5% to $618.8 million. For January through October, pork exports were slightly higher than the same period last year for volume. Pork export value was 8% higher at $6.84 billion.

“USMEF has always prioritized market diversification, and this is more critical than ever now that the red meat industry faces unprecedented transportation challenges and rising input costs,” says Dan Halstrom, USMEF president and CEO. “Exports (U.S. red meat) will likely reach about $18 billion in 2021, which is a remarkable achievement. While global demand is tremendous and we are cautiously optimistic about further growth in 2022, supply chain pressures are not easy to overcome and are a growing concern for exporters and their international customers.”

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

Last week, live prices were $142/cwt. in the Southern Plains and Colorado; $140 in Nebraska and the western Corn Belt. Dressed prices were $220.

Cattle futures drifted amid lackluster trading interest Tuesday.

Live Cattle futures closed an average of 19¢ lower, except for 5¢ higher in spot Dec.

Feeder Cattle futures closed an average of 56¢ lower (22¢ lower in spot Jan to $1.17 lower in the back contract).

Choice boxed beef cutout value was $4.50 lower Tuesday afternoon at $268.03/cwt. Select was $2.17 lower at $255.68.

Corn futures closed mostly 2¢ higher.

Soybean futures closed 7¢ to 11¢ lower through the front five contracts and then mostly 2¢ to 3¢ higher.

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Major U.S. financial indices extended gains decisively Tuesday, led by tech stocks.

The Dow Jones Industrial Average closed 492 points higher. The S&P 500 closed 95 points higher. The NASDAQ was up 461 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.40 to $2.56 higher through the front six contracts; about $5.00 higher in the past two sessions.

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Agricultural producer sentiment is declining as production costs increase, according to the latest Purdue University/CME Group Ag Economy Barometer.

Month to month, the Ag Economy Barometer slipped 5 points to 116 in November with pessimism increasing for both current and future conditions. The Index of Current Conditions declined 7 points in November to a reading of 128 and the Index of Future Expectations fell 4 points to 110. All three measures were the lowest for this year.

“Farmers are facing sharp rises in production costs coinciding with fluctuating crop and livestock prices, the prospect of changing environmental and tax policy, uncertainty over COVID-19, as well as a host of other issues, all of which are negatively impacting farmer sentiment” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

In November, 43% of survey respondents said they expect farm input prices to rise by more than 16% in the upcoming year. This compares with the actual average rate of farm input price inflation over the past decade of less than 2%.

Somewhat surprisingly, given the concerns about rising input costs, 52% of corn/soybean producers expect cash rental rates to rise in 2022, compared to 43% in October. This marks the highest percentage of producers reporting that they expect rental rates in 2022 to rise since the May 2021 survey.