WLI

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Nebraska through Monday afternoon, according to the Agricultural Marketing Service. It was mostly inactive on light trade in the Western Corn Belt.

Last week in the Texas Panhandle, live sales traded from $121 to $122. In Kansas, live sales traded at $121. In Nebraska live sales traded at $125 and dressed at $198. In the Western Corn Belt, live sales were at $125-$126 and dressed at $198.

Steep declines in Lean Hog futures pressured Cattle futures Monday despite last week’s stronger cash trade and surging wholesale beef prices. By the end of the session, though, they were back to about even.

Live Cattle futures closed an average of 27¢ lower (15¢ to 45¢), except for unchanged in spot Aug.

Feeder Cattle futures closed mixed, down an average of 19¢, except for 28¢ higher in Apr.

Choice boxed beef cutout value was $3.54 higher Monday afternoon at $299.80/cwt. Select was $3.72 higher at $280.81/cwt.

Crop progress and an improved weather outlook pressured Corn futures Monday.

Corn futures closed mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 4¢ to 7¢ lower, except for 11¢ higher in Spot Aug.

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Major U.S. financial indices closed mixed Monday. The spread of the Delta variant of Covid, as well as anticipation of year-end stimulus tapering, weighed on the market.

The Dow Jones Industrial Average closed 107 points lower. The S&P 500 closed 4 points lower.The NASDAQ closed 24 points higher. 

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“Triple-digit gains in Choice cutout values last week created optimism, however traders are still questioning where beef prices will land once Labor Day buying is complete,” says Brenda Boetel, Extension livestock economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “Feeders are expected to focus on further advancement of cash values following the moderate $1 to $2/cwt. gains last week. This could create a wider gap between asking prices and bids once each side becomes more active.”

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

Last week were generally $1-$2 higher on a live basis in the Texas Panhandle at $121-$122/cwt.; $1 higher in Kansas at $121; $3 higher in Nebraska at $125; $1-$2 higher in the western Corn Belt at $125-$126. Dressed trade was $2 higher in Nebraska at $198; $3 higher to $3 lower at $198 in the western Corn Belt.

Surging wholesale beef values, position squaring and stronger cash fed cattle prices, albeit with anemic trade, helped buoy Cattle futures Friday.

Live Cattle futures closed an average of 78¢ higher (30¢ to $1.225)

Feeder Cattle futures closed an average of $1.62 higher (80¢ to $2.20)

Corn futures closed 3¢ to 6¢ higher through the front six contracts, except for up fractionally in spot Sept, and then mostly 8¢ to 9¢ higher.

Soybean futures closed 6¢ to 8¢ higher, except for 20¢ higher in Spot Aug.

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After a better-than-expected employment report for July, major U.S. financial indices once again closed at record highs although the NASDAQ was down. The report from the labor department showed 943,000 new jobs last month, which brought the unemployment rate down to 5.4%.

The Dow Jones Industrial Average closed 144 points higher. The S&P 500 closed 7 points higher. The NASDAQ was down 59 points.

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U.S. red meat exports closed the first half of the year at record levels, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Although volume and value eased from the enormous totals posted in April and May, export value was still the highest on record for the month of June and first-half shipments established a record pace for both beef and pork exports.

June beef exports totaled 112,249 metric tons (mt), up 42% from a year ago when exports were still hampered by a COVID-related slowdown in production. Export value was $804.4 million, up 68% from a year ago and the third highest on record after April and May of this year. First-half exports reached 700,087 mt, up 18% from a year ago, valued at $4.64 billion (up 28%). Compared to 2018, the record year for U.S. beef exports, first-half results were up 6% in volume and 15% in value.

“USMEF had expected a continued strong performance in June for both beef and pork exports, despite significant headwinds,” said USMEF President and CEO Dan Halstrom. “2021 has presented many formidable challenges for the U.S. industry, including a very tight labor situation, logistical obstacles that slowed product movement and foodservice restrictions in many key markets. So the fact that first-half exports reached record levels speaks to the loyalty of our international customer base, strong consumer demand for high-quality, nutritious U.S. red meat and the U.S. industry’s ability to adapt to a challenging and rapidly changing business climate. We have also seen a welcome rebound in beef and pork variety meat volumes, which had been down last year.”

Beef export value equated to $351.18 per head of fed slaughter in June, up 60% from last June’s COVID-impacted average. The first-half per-head average was $359.49, up 20% from a year ago. June exports accounted for 13.6% of total beef production and 11.5% of muscle cuts, both dramatically higher than a year ago. In the first half, exports accounted for 14.7% of total beef production and 12.5% for muscle cuts, each up about 1.5 percentage points from a year ago.

Pork exports reached 238,935 mt in June, up 15% from a year ago, while export value climbed 35% to $696.8 million. First-half pork exports topped last year’s record pace by 1% at 1.58 million mt, valued at $4.33 billion (up 7%).

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

So far this week, live sales are: $1-$2 higher in the Texas Panhandle at $121-$122/cwt.; $1 higher in Kansas at $121; $3 higher in Nebraska at $125; $1-$2 higher in the western Corn Belt at $125-$126. Dressed trade is $2 higher in Nebraska at $198; $3 higher to $3 lower at $198 in the western Corn Belt.

Heavy pressure in Lean Hog futures weighed on Live Cattle Thursday, despite higher cash and wholesale prices.

Live Cattle futures closed an average of 96¢ lower with more pressure at the front (52¢ to $1.47 lower).

Higher Corn futures pressured Feeder Cattle futures.

Feeder Cattle futures closed an average of $1.59 lower.

Choice boxed beef cutout value was $3.24 higher Thursday afternoon at $292.58/cwt. Select was $2.62 higher at $273.77/cwt.

Corn futures closed 5¢ to 10¢ higher through the front six contracts and then mostly fractionally higher to 1¢ higher.

Soybean futures mixed, from 4¢ lower to 3¢ higher.

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Major U.S. financial indices closed at record highs, supported by declining weekly initial unemployment insurance claims. Perhaps there was also speculation on Friday’s monthly employment report.

The Dow Jones Industrial Average closed 272 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 115 points.

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USDA’s Agricultural Marketing Service will begin publishing two new reports this month, based on Livestock Mandatory Reporting, aimed at bolstering market transparency.

The National Daily Direct Formula Base Cattle report is supposed to provide more information about foundational prices used in cattle market formulas, grids and contracts. It begins publication Monday (Aug. 9)

According to USDA’s announcement Thursday, “National Daily Direct Formula Base Cattle reports will enable stakeholders to see the correlation between the negotiated trade and reported formula base prices, as well as the aggregated values being paid as premiums and discounts. Daily formula base price reports will be national in scope and released in morning, summary and afternoon versions. The weekly and monthly formula base reports will be both national and regional in scope and include forward contract base purchase information.”

The National Weekly Cattle Net Price Distribution report will show the volume of cattle purchased at each different level of pricing within those formulas, grids, and contracts. It begins publication next Tuesday (Aug. 10).

“The National Weekly Cattle Net Price Distribution report will show at what levels (price and volume) trade occurred across the weekly weighted average price for each purchase type – negotiated, negotiated grid, formula and forward contract,” according to USDA. “Currently, the market speculates whether large or small volumes of cattle trade on both sides of the price spread. And in fact, with premiums and discounts applied to the prices, the spreads shown on reports can be wide. Publishing a price distribution for all cattle net prices will offer more transparency to each of the purchase type categories. This report is a window into what producers are paid for cattle (net) and retains confidentiality by segregating volumes purchased in $2.00 increments +/- the daily weighted average price, depending upon premiums and discounts. AMS has published a similar net price distribution report for direct hogs since January 2010.”

Negotiated cash fed cattle prices leaned higher Wednesday: $1 higher in Kansas at $121/cwt. on a live basis; steady to $1 higher in Nebraska at $125 (compared to Tuesday); steady with the previous day at $125 in the Western Corn Belt. Although too few to trend, live prices in the Texas Panhandle were $2 higher at $122. Dressed trade was $2 higher in Nebraska at $198. All of that was on slow trade with light to moderate demand.

Stronger cash prices and surging wholesale beef values provided support for Cattle futures Wednesday.

Live Cattle futures closed an average of 55¢ higher.

Feeder Cattle futures closed an average of 42¢ higher.

Through mid session today, limit-down moves in Lean Hogs are weighing on Live Cattle, while a bounce in Corn futures is pressuring Feeder Cattle.

Corn futures closed mixed mixed Wednesday, down 4¢ to 5¢ through new-crop contracts and then mostly fractionally higher.

Soybean futures closed 5¢ to 11¢ higher through Jul ’22 and then 4¢ higher.

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Major U.S. financial indices closed mixed on Wednesday as investors speculate about the Federal Reserve tapering stimulus support.

The Dow Jones Industrial Average closed 324 points lower at 34,793. The S&P 500 closed 21 points lower. The NASDAQ was down 19 points. 

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“My farm gains from red meat exports in the price of every acre of crops that we grow,” says Dean Meyer, who produces corn, soybeans, cattle and hogs near Rock Rapids, Iowa. “Red meat exports are vital to my family’s operation.”

Myer was speaking about a recent study conducted by World Perspectives, Inc. and released by the U.S. Meat Export Federation (USMEF), indicating U.S. beef and pork exports added 41¢/bu. to the value of corn and $1.06/bu. to soybeans in 2020.

Corn and soybean producers support the international promotion of U.S. pork, beef and lamb by investing a portion of their checkoff dollars in market development efforts conducted by USMEF. This funding is leveraged with support from pork and beef checkoff programs and USDA.

Meyer also highlights the industry-wide collaboration behind the promotion of value-added U.S. red meat in international markets. “Something else this study points to is how different sectors of U.S. agriculture can work together to benefit the industry as a whole.” With such collaboration, Meyer adds, “there is great potential for U.S. agriculture on the world stage.”

Key findings from the study, based on 2020 export data:

Beef and pork exports used 530.5 million bu. of corn. At an average annual price of $3.52/bu., beef and pork exports accounted for $1.87 billion in market value to the corn industry.

U.S. pork exports used 2.45 million tons of soybean meal, which is the equivalent of 103.2 million bu. of soybeans. At an average annual price of $8.98/bu., pork exports accounted for $927 million in market value to the soybean industry.

Beef and pork exports also used 3.03 million tons of distiller’s dried grains with solubles (DDGS) at an annual average price of $154.59/ton, generating $468 million in market value for ethanol mills’ co-products.

“USMEF’s efforts to promote U.S. red meat in international markets have paid off for producers, whether they raise livestock or grow corn and soybeans – or, like me, they do both,” says Mark Legan, a hog farmer from Coatesville, Ind. “The study adds numbers to the story – a story those of us in this business have been telling for a long time – that global trade is vital to all of us involved in U.S. agriculture.”

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. In the Western Corn Belt, a few live sales traded at $125/cwt. 

Trade was mostly inactive on light demand in the Southern Plains.

Surging wholesale beef prices helped lift Live Cattle.

Choice boxed beef cutout value was $4.84 higher Tuesday afternoon at $285.84/cwt. Select was $4.11 higher at $267.49/cwt.

Live Cattle futures closed an average of 50¢ higher, (25¢ higher at the back to $1.12 at the front), except for 10¢ lower in the back contract.

Feeder Cattle futures were buoyed by lower Corn futures.

Feeder Cattle futures closed an average of 59¢ higher, except for an average of 17¢ lower in the back two contracts.

Grain futures trended lower with the weekly Crop Progress report (see below), profit taking and the lack of follow-through for Wheat.

Corn futures closed 6¢ to 8¢ lower through new-crop six contracts, then mostly unchanged to fractionally lower.

Soybean futures closed 22¢ to 33¢ lower through Aug ’22 and then mostly 15¢ to 16¢ lower.

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Major U.S. financial indices closed higher Tuesday on strong earnings reports. The S&P 500 hit a record level. Investors will be looking for this week’s report on jobs data to gauge the strength of the recovery.

The Dow Jones Industrial Average closed 278 points higher. The S&P 500 36 points higher. The NASDAQ was up 80 points.

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The Purdue University/CME Group Ag Economy Barometer leveled off after two months of sharp declines, down 3 points in July to a reading of 134.

“This month’s sentiment index marks the lowest barometer reading since July of 2020 and actually marks a return to sentiment readings observed from much of 2017 through 2019, when annual average barometer readings ranged from 131 to 133,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Producers’ sentiment regarding their farms’ financial condition was more optimistic when prices for corn, soybeans and wheat were surging last fall, winter and early spring. Still, recent sentiment readings suggest farmers remain cautiously optimistic about financial conditions on their farms.”

The Index of Current Conditions was down 6 points to a reading of 143, primarily as a result of weakened principal crop prices. The Index of Future Expectations was down 2 points to a reading of 130.

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 July 19-23, 2021.

The Farm Capital Investment Index declined for the fourth consecutive month down 4 points to a reading of 50. Weakness in the investment index was primarily attributable to more producers indicating they plan to reduce their farm building and grain bin purchases in the upcoming year. Two-thirds of July’s respondents said their construction plans were lower than a year earlier, compared to 61% in June. Plans for farm machinery purchases were also somewhat weaker, with a shift of more respondents planning to reduce their machinery purchases compared to last year instead of holding them constant.