WLI

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.

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. In Nebraska, trading was mostly inactive with very light demand and not enough purchases to trend.

Last week in the Texas Panhandle, live sales traded at $124/cwt. In Kansas, live sales traded from $123-$124. In Nebraska, live sales traded at $124 and dressed mostly at 200. In the Western Corn Belt, live sales traded from $123-$124 and dressed at $196-$200.

Cattle futures mostly firmed Tuesday, despite continued pressure in Lean Hogs, tied to queasiness over China’s economic growth. After the bell, USDA announced confirmation of African Swine Fever in Haiti, which shares an island with the Dominican Republic, where it was recently confirmed.

Feeder Cattle futures closed an average of 48¢ higher, except for an average of 7¢ lower in the front two contracts.

Live Cattle futures closed an average of 38¢ higher, except for an average of 22¢ lower in the front three contracts.

Choice boxed beef cutout value was $4.29 lower Tuesday afternoon at $311.37/cwt. Select was $2.74 lower at $278.01.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed mostly 9¢ to 11¢ higher.

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Major U.S. financial indices retained most of the previous session’s steep losses on Tuesday as investors awaited the Fed’s quarterly economic outlook and interest rate notions.

The Dow Jones Industrial Average closed 51 points lower. The S&P 500 closed 4 points lower. The NASDAQ was up 33 points.

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The venerable cattle cycle is alive and well. Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides insight to the systematic ebb and flow of the U.S. beef cattle inventory.

“Cattle cycles continue to be a regular feature of the industry for several reasons,” Peel explains, in his latest weekly market comments. “It takes rather exaggerated price signals to encourage the cow-calf sector to change course and the lengthy biology of cattle production makes changing course a slow process. Perhaps most important is the interaction between production and reproduction in the cattle industry. Since cattle have offspring one at a time, the process of expanding production when inventories are too low means that tight supplies are made even tighter to retain heifers for increased production and likewise too much supply is made even larger in the short run as more cows are culled and fewer heifers are retained for production.”

Peel points out the most recent cyclical expansion from 2014 to 2019 was the first significant one since 1990 to 1996. 

“A muted cycle from 2004 to 2007 resulted in very little expansion before more liquidation to 2014.  Cattle inventories declined 15 of 18 years from 1996 to 2014,” Peel explains. “The most recent cattle cycle began with an inventory low of 88.24 million head in 2014 with cattle numbers increasing to 94.8 million head in 2019. Modest cyclical liquidation in 2019 and 2020 brought cattle inventories down to 93.6 million head in January 2021. Herd liquidation is being exaggerated by drought in 2021. It is not clear exactly how much and how fast the industry will liquidate going forward but cattle cycles continue to be an important fundamental feature affecting cattle markets in the U.S.”

Plenty of Monday’s market attention was focused beyond cattle to equities and other commodities as Wall Street investors sold heavily, apparently mostly due to concerns tied to China’s property market. Fears are a potential global domino effect in financial markets on top of ongoing worries about the pandemic and economic growth. The Dow Jones Industrial Average was down 614 points, the S&P 500 closed 75 points lower and the NASDAQ was down 330 points.

Despite the heavy outside pressure, Cattle futures held their own.

Feeder Cattle futures closed an average of 29¢ higher, except for unchanged in Mar and 5¢ lower in May.

Live Cattle futures closed an average of 16¢ lower except for 55¢ higher in near Dec.

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

Soybean futures closed mostly 15¢ to 21¢ lower.

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

Last week, prices were steady to unevenly steady in the Southern Plains and Nebraska with live prices at $124/cwt. in the Texas Panhandle, $123-$124 in Kansas and $124 in Nebraska. Live prices in the western Corn Belt were $1-$3 lower at $123-$124. Dressed traded was unevenly steady at $200 in Nebraska but unevenly steady to $4 lower in the western Corn Belt at $196-$200.

Choice boxed beef cutout value was $1.19 higher Monday afternoon at $315.66/cwt. Select was $1 higher at $280.75.

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Reduced U.S. beef imports from Australia are helping lift domestic ground beef prices, according to USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook.

“While the United States is a major global supplier of beef, it also imports beef and processing-grade beef (used for ground beef) to meet a growing consumer demand,” ERS analysts explain. “Historically, Australia is the predominant supplier of processing-grade beef to the United States, with smaller amounts coming from Brazil, Canada, and New Zealand, among other countries.”

As Australia restocks pastures from a multi-year drought, that nation has less beef to export.

For perspective, the price for 90% lean beef from Australia was $240/cwt. in February of this year, according to ERS. The price was $274 in July.

Although it will take Australia a good while to restock, ERS expects that nation’s cattle inventory to ultimately realign close to former supply levels.

“Meanwhile, as the economy reopens, the demand for beef and ground beef is expected to support beef prices,” say ERS analysts.