WLI

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

In the Western Corn Belt last week, live sales traded from $120-$124/cwt. and dressed sales from $195-$202.

Live trade in the Southern Plains last week was at $119.

In Nebraska last week, live sales were at $120-$123 and dressed at $195.

Cattle futures gained traction Monday, buoyed by last Friday’s friendly USDA reports (see below).

Feeder Cattle futures closed an average of $1.44 higher. 

Live Cattle futures closed an average of 97¢ higher.

Choice boxed beef cutout value was $1.30 higher Monday afternoon at $267.93/cwt. Select was 98¢ higher at $250.92/cwt.

Grain futures edged higher Monday on a hotter, drier near-term weather outlook.

Corn futures closed up 2¢ to 3¢ through new-crop contracts, then mostly 6¢ to 7¢ higher.

Soybean futures closed up mostly 8¢ to 9¢, except for mostly 6¢ higher in the front four contracts.

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Major financial indices posted modest gains on Monday, as investors appeared content to wait for Wednesday’s Federal Reserve update on the economy and interest rates.

The Dow Jones Industrial Average closed 83 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 4 points.

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“While it is not clear that drought has contributed significantly to cattle liquidation thus far, the potential is high for additional herd liquidation in the remainder of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel was referring to Friday’s semiannual USDA Cattle report, which pegged the July 1 beef cow inventory at 31.4 million, which was 650,000 head fewer (-2.03%) than the same time a year earlier.

Beef heifers retained for replacement of 4.3 million head were 100,000 head fewer (-2.27%) than the previous year.

“Tighter cattle supplies, combined with continued strong beef demand leads to expectations for modestly higher prices for the remainder of 2021 and beyond,” Peel says. “Fourth-quarter prices for calves, feeders and fed cattle are currently projected to average 8-12% higher year over year. However, profitability will be tempered by higher input costs, including sharply higher prices for feed grains and supplements.”

Likewise, Peel explains the feedlot situation continues to improve relative to slaughter capacity constraints.

“It appears that the feedlot industry has finally moved past the cyclical bulge of cattle numbers and should be operating with declining numbers going forward for the foreseeable future,” Peel says, citing the latest Cattle on Feed report.

As mentioned in Monday’s Cattle Current, June feedlot placements (feedlots with 1,000 head or more capacity) of 1.67 million head were 7.1% less (128,000 head fewer) than last year. June marketings of 2.02 million head were 2.7% more (53,000 head more) than a year earlier. Total cattle on feed July 1 of 11.29 million head was 1.3% less (148,000 head fewer) than the previous year.

“The overall message of these two reports is that declining cattle numbers are improving cattle market conditions both for the remainder of the year and into 2022 and beyond,” Peel says. 

Negotiated cash fed cattle prices ended up lower last week: $1 lower in the Southern Plains on a live basis at $119/cwt.; steady to $3 lower in Nebraska at $122-$123; $1 lower in the western Corn Belt at $124. Dressed trade was $1-$7 lower in Nebraska at $195; $1-$2 lower in the western Corn Belt at $195.

Through Thursday, the five-area average direct fed steer price was $120.65/cwt. on a live basis, which was $2.15 less than the previous week. The average steer price in the beef was $196.79, which was 96¢ less.

Cattle futures, especially Feeder Cattle gained Friday, buoyed by lower Corn futures and expectations of a friendly Cattle on Feed report (see below).

Feeder Cattle futures closed an average of $1.76 higher across the board. 

Live Cattle futures closed an average of 46¢ higher through Aug ’22; then down 30¢-45¢ in the back contracts.

Choice boxed beef cutout value was 49¢ higher Friday afternoon at $266.63/cwt. Select was 17¢ higher at $249.94/cwt.

Estimated total cattle slaughter last week was 652,000 head, which was 1,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 18.60 million head is 820,000 head more (+4.61%) than the same period last year.

Positive weather expectations and lower weekly exports pressured Grain futures Friday.

Corn futures closed down 10¢ to 18¢ through the front six contracts, then down 1¢ to 9¢ through Dec ’23.

Soybean futures closed down 10¢ to 15¢ in the through Jan ’22, then down 3¢ to 6¢.

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Major financial indices closed at record highs on Friday with more corporate profits beating Wall Street estimates. The Dow Jones closed above 35,000 for the first time.

The Dow Jones Industrial Average closed 238 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 53 points.

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Both the latest Cattle on Feed and Cattle inventory reports should be price-supportive.

Cattle feeders (feedlots with 1,000 head or more capacity) placed 1.67 million head in June, which was 7.1% less (128,000 head fewer) than last year and 1.3% less than average expectations heading into the report.

In terms of weights, 36.2% went on feed weighing 699 lbs. or less, 46.8% weighing 700-899 lbs. and 17.1% weighing 900 lbs. or more.

Marketings in June were 2.02 million head, which was 2.7% more (53,000 head more) than the previous year and in line with expectations.

Total cattle on feed July 1 of 11.29 million head were 1.3% less (148,000 head fewer) than the previous year, also in line with pre-report expectations.

Beef Cows 2% Less

USDA’s semiannual Cattle report published Friday offers the first insight to the potential degree of herd contraction for the year.

There were 31.4 million beef cows July 1, which was 650,000 head fewer (-2.03%) than the same time a year earlier.

Beef heifers retained for replacement were 4.3 million head, which was 100,000 head fewer (-2.27%) than the previous year.

The calculated number of calves outside feedlots July 1 of 36.1 million head was 600,000 head fewer (-1.63%) than the same time last year.

Total cattle and calves, including dairy, was 100.9 million head, which was 1.3 million head fewer (-1.27%) than the previous year.

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

For the week, live sales in Nebraska are steady to $2 lower at $122-$123/cwt. Dressed trade is $1-$7 lower at $195.

Live sales in the western Corn Belt are $5 lower at $120. Dressed trade is $1 lower to $5 higher at $195-$202.

Live sales in the Southern Plains this week are mainly steady at $120.

Feeder Cattle closed higher Thursday, supported by lower Corn futures.

Feeder Cattle futures closed an average of $1.40 higher across the board. 

Live Cattle benefitted from higher wholesale beef prices the last couple of days, although it seems way too early to call a seasonal bottom.

Live Cattle futures closed an average of 68¢ higher across the board.

Strong weekly export sales also provided support.

U.S. net beef export sales for 2021 totaled 25,100 metric tons the week ending July 15, according to USDA’s weekly U.S. Export Sales report. That was noticeably more than the previous week and 63% more than the prior four-week average. Increases primarily were for South Korea, Japan, China, Canada, and Mexico.

Choice boxed beef cutout value was 90¢ higher Thursday afternoon at $266.14/cwt. Select was $1.00 higher at $249.77/cwt. Steer byproduct value was $14.07/cwt., the first time it reached that mark since April of 2015. It started this calendar year right at $9.00. 

The average dressed steer weight the week ending July 10 was 885 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week but 17 lbs. lighter than the same week last year. The average dressed heifer weight of 812 lbs. was 1 lb. lighter than the previous week but 17 lbs. lighter than the previous year.

Grain futures softened, with reported pressure from the aforementioned export report.

Corn futures closed 6¢ to 7¢ lower through Jul ’22; then 2¢ lower to fractionally higher.

Soybean futures closed mostly 18¢ to 28¢ lower.

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Major financial indices closed higher Thursday, led by tech stocks. Positive earnings are damping investor anxiety over inflation and the resurgence of COVID-19 cases. Economic data was mixed, though. Sales of previously owned homes increased for the first time in five months, but jobless claims also rose.

Initial weekly unemployment insurance claims the week ending July 17 were 419,000, which was 51,000 more than the previous week and significantly more than analysts were expecting.

The Dow Jones Industrial Average closed 25 points higher. The S&P 500 closed 9 points higher. The NASDAW was up 53 points.

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Total pounds of beef in freezers June 30 were 4% less than the previous month and 7% less than last year, according to USDA’s monthly Cold Storage report.

Frozen pork supplies were 4% less than the prior month and 4% less year over year. 

Total red meat supplies in freezers were down 4% from the previous month and down 8% from last year.

Total frozen poultry supplies were 2% more than the previous month, but 15% less than a year earlier.

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Total federally inspected cattle slaughter in June was 2.90 million head, according to USDA’s monthly Livestock Slaughter report. That was 76,500 more (+2.71%) year over year. Total cattle slaughter from January through June of this year was 16.45 million head, which was 945,600 head more (+6.10%) than the same period last year.

Commercial beef production in June of 2.4o billion lbs. was 23.6 million lbs. more (+1.0%) than last year. Commercial beef production for January through June was 13.85 billion lbs., which was 862.4 million lbs. more (+6.64%) than last year.

Total commercial red meat production for January through June was 27.91 billion lbs., which was 1.1 billion lbs. more (+4.0%) than the same period last year.

Negotiated cash fed cattle trade and demand were moderate in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Compared to last week, live sales traded $1 lower at $119/cwt.

Although too few transactions to trend, there was limited trade and light demand in Nebraska, where a few live sales traded at $122-$123, compared to $123-$125 last week.

Cattle futures, especially Feeder Cattle, gained Wednesday. It was tough to pinpoint any particular reason. Perhaps some of the support came from early positioning ahead of the Cattle on Feed and semiannual Cattle reports due out Friday.

Feeder Cattle futures closed an average of $1.12 higher. 

Live Cattle futures closed an average of 48¢ higher.

Choice boxed beef cutout value was 36¢ higher Wednesday afternoon at $265.24/cwt. Select was 19¢ higher at $248.77/cwt.

Corn futures closed mostly fractionally higher to 2¢ higher.

Soybean futures closed mixed, down 1¢ to 4¢ in the front two contracts, then mostly 2¢ to 6¢ higher through Sep ’22 and then mostly fractionally higher to 7¢ lower.

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Major financial indices closed higher driven by positive corporate earnings reports.

The Dow Jones Industrial Average closed 286 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 133 points.

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Domestic beef demand continued higher year over year in May, according to the recently updated monthly Domestic Meat Demand Indices provided by Glynn Tonsor, agricultural economist at Kansas State University.

Specifically, the Choice Retail Beef Demand Index was 1.96% more than the previous year and the All-fresh Retail Beef Demand Index was 4.43% more.

Keep in mind, that’s amid continued strength in retail prices.

“The June all fresh beef price was $7.11/lb., down 1.2% from last year but the third highest level only behind record prices of June ($7.56) and May ($7.59) set last year during the pandemic,” say analysts with the Livestock Marketing Information Center (LMIC). “The Choice sirloin steak, beef for stew, and all uncooked beef steaks each set all-time high prices in June. Choice sirloin steak was $10.78/lb. rising 3.4% over last year, which was the prior record price at $10.42. Beef for stew and all uncooked beef steaks were $6.80 and $9.75/lb., respectively, beating the prior record prices set exactly one year ago.”

On the other end of the scale, ground beef prices decline 8.0% year over year in June to $4.36/lb., according to LMIC. Chuck roast and round roast both fell 7.4% and 5.1%, to $6.64 and $6.21/lb., respectively.

“Many of the retail beef price data for June last year were record prices, which led to some of the reported prices posting year-over-year declines,” LMIC analysts explain, in the latest Livestock Monitor.

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

Cattle futures closed lower amid light trade Tuesday, led by Feeder Cattle, which was pressured by Corn futures once again.

Feeder Cattle futures closed an average of $1.25 lower through the front five contracts, then down 18¢ to 30¢ at the back. 

Live Cattle futures closed an average of 47¢ lower, except for 73¢ higher in the back contract.

Choice boxed beef cutout value was $1.61 lower Tuesday afternoon at $264.88/cwt. Select was 91¢ lower at $248.58/cwt. Also of note, steer byproduct value spiked 80¢ to $13.93/cwt.

Grain futures bounced higher Tuesday with hotter, drier weather forecast in the Corn Belt and wheat challenges in the West.

Corn futures closed 12¢ to 16¢ higher through Jly ‘22, and then mostly 2¢ to 6¢ higher.

Soybean futures closed 10¢ to 15¢ higher through Sep ‘22, and then 8¢ to 9¢ higher.

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Major U.S. financial indices recovered a majority portion of what was lost in the previous day’s steep selloff as investors seemed content to bet on the dip.

The Dow Jones Industrial Average closed 550 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 224 points.

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“Across day-parts, the motivations for visiting restaurants are evolving, necessitating a refocus on how restaurant operators target consumers,” says David Portalatin, food industry advisor for the NPD Group (NPD). “Quality, value, and innovation will always be relevant to the consumer, but we also need to recognize that in many ways the world has fundamentally changed.”

Depending on new consumer rhythms of home, school, and work-life, recovery of each day-part — morning meal, lunch, dinner, and P.M. Snack — will be key to the restaurant industry’s recovery.

For instance, online or physical visits for the morning meal (breakfast and morning snack periods) were 5% less in May than the same time last year and 11% less than two years earlier. Since morning meal visits are habitual, recovery for this day-part will depend on consumers returning to workplaces and schools, according to NPD.

Lunch traffic was 4% less year over year in May and 10% less than two years ago, so recovery relies on more employees returning to workplaces, as well as more midday activities such as shopping.

Visits during the dinner day-part were 5% less than a year earlier and 12% less than two years ago. According to NPD, restaurant’s ability, particularly full service restaurants, to operate at total capacity will aid in recovery of this day-part, as will consumer comfort with dining in, and more business and recreational travel.

On the other hand, P.M. Snack visits in May were 8% more than last year and 3% more than two years ago as more flexible work schedules blur day-parts. Operators need to innovate their food and beverage offerings to grow traffic in this day-part, say the NPD folks.

Overall, total restaurant visits were 23% percent more year over year in May but were 6% less than two years earlier.