WLI

Negotiated cash fed cattle trade was at a standstill in Colorado through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was mostly inactive on very light demand.

So far this week, live prices are $116-$120/cwt. in the Texas Panhandle, $119-$120 in Kansas and at $120 in Nebraska and the western Corn Belt. Dressed prices are at $191 in Nebraska and $189-$191 in the western Corn Belt.

Feeder Cattle futures closed an average of $1.69 lower Thursday, from 20¢ lower in spot May to $2.35 lower. Corn futures applied the pressure, up 33¢ to 40¢ higher through Jly ’22 and then mostly 13¢ to 24¢ higher. Dryness in the forecast and strong exports helped fuel the bounce. Soybean futures tagged along, closing 26¢ to 34¢ higher.

Live Cattle futures edged an average of 20¢ higher, except for 10¢ lower in spot Jun. Support included positive export news.

Net U.S. beef export sales of 27,900 metric tons (mt) for 2021 were 19% more than the previous week and 45% more than the prior four-week average, according to USDA’s U.S. Export Sales report for the week ending May 20. Increases were primarily for China, Japan, South Korea, Indonesia, and Taiwan.

Choice boxed beef cutout value was 49¢ higher Thursday afternoon at $329.98/cwt. Select was 5¢ higher at $304.10

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Major U.S. financial indices closed flat to higher Thursday, supported by fewer initial weekly unemployment insurance claims than analysts expected. Initial claims were 406,000 for the week ending May 22, according to the U.S. Department of Labor. That was 38,000 fewer than the previous week and the least since March of last year.

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 1 point.

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La Niña conditions ended earlier this month and NOAA forecasters estimate about a 67% chance that neutral conditions will continue through the summer.

As it is, dryness and drought continues across much of the United States, according to the U.S. Drought Monitor. Specifically, 61.4% of the nation is classified from abnormally dry to exceptional drought, compared to 34.4% a year earlier; 21.3% is experiencing extreme or exceptional drought versus 1.2% last year.

Negotiated cash fed cattle trade was slow on light demand through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices in the Texas Panhandle Prices were steady to $3 lower than last week at $116-$120/cwt., steady to $1 higher in Kansas at $119-$120 and steady in Nebraska at $120. Dressed trade was steady to $1 higher in Nebraska at $191.

Although there were too few transactions to trend in the western Corn Belt, early live trades were steady at $120, while dressed sales were steady to $3 higher at $191.

Cattle futures edged lower Wednesday. Pressure included softer cash prices in the south and a deceleration in wholesale beef values.

Feeder Cattle futures closed an average of 49¢ lower (5¢ to $1.47 lower), except for an average of 24¢ higher in two contracts. 

Live Cattle futures closed an average of 34¢ lower.

Corn futures edged mostly 2¢ to 5¢ higher Wednesday, following the previous day’s steep break.

Front-month Soybeans continued to soften with the lack of follow-through export sales. Soybean futures closed fractionally lower to 8¢ lower through Jly ‘22 and then mostly 7¢ higher.

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Major U.S. financial indices closed mainly flat Wednesday.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 7 points higher. The NASDAQ was up 80 points.

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USDA projects U.S. beef exports this year to be record large for both volume and value at $7.6 billion, according to the latest quarterly Outlook for U.S. Agricultural Trade. That’s $200 million more than forecast three months earlier, based on both increased volume and unit values.

For that matter, USDA forecasts record-high levels of exports for other red meats and poultry, as well as for U.S. agricultural products overall. Total value of U.S. farm exports for fiscal year 2021 is projected to be $164 billion, which would be $28 billion more (+21%) than the previous year and the highest total on record. The annual export record of $152.3 billion was set in 2014.

“U.S. agricultural trade has proven extraordinarily resilient in the face of a global pandemic and economic contraction,” says Agriculture Secretary Tom Vilsack. “Today’s estimate shows that our agricultural trading partners are responding to a return to certainty and reliability from the United States.” 

Key drivers of the surge in projected U.S. agricultural exports include a record outlook for China, record export volumes and values for a number of key products, sharply higher commodity prices, and reduced foreign competition.

China is poised to be back on top as the United States’ number one customer, with U.S. exports to that nation forecast at $35 billion, eclipsing the previous record of $29.6 billion set in 2014.

“The comparatively early post-pandemic re-emergence of the manufacturing sector in China facilitated the boost in global demand for goods, helping China’s GDP to grow by 2.3% in 2020,” say analysts with USDA’s Economic Research Service (ERS). GDP in China this year is projected to be 8.2%.

As the global economy emerges from the pandemic, ERS analysts note the significant price increase for commodities, such as lumber and copper, used in manufacturing and construction.

“The current level of backwardation or inversion of commodity future contracts, where the nearby delivery contract is priced above more distant delivery dates, suggests the price boom is in part due to near-term supply constraints,” say ERS analysts. “The U.S. dollar is expected to depreciate by 2.4% in 2021, which is likely to continue to support higher commodity demand and prices into next year.”

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains, Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales at $119 to mostly $120/cwt., except for $118 in the western Corn Belt. Early dressed sales in Nebraska were at $191.

Feeder Cattle futures closed higher Tuesday, boosted by another sharp break in Corn futures prices.

Feeder Cattle futures closed an average of $2.07 higher, from 35¢ higher in spot May to $2.55 higher. 

Live Cattle futures mainly edged higher, supported by wholesale beef values and resurgent front-month

Live Cattle futures closed an average of 30¢ higher, except for unchanged to an average of 9¢ lower in three contracts.

Choice boxed beef cutout value was $2.09 higher Tuesday afternoon at $329.92/cwt. Select was 87¢ higher at $304.26

Corn futures wilted Tuesday, pressured by planting progress and crop development, forecast rain and chatter about more corn acres.

Corn futures closed 23¢ to 37¢ lower though Jly ‘22 and then mostly 8¢ lower

Soybean futures closed 10¢ to 15¢ lower through May ‘22 and then mostly 6¢ lower.

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Major U.S. financial indices softened Tuesday after early gains.

The Dow Jones Industrial Average closed 81 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 4 points. 

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Total pounds of beef in freezers April 30 were 6% less than the previous month and 5% less than a year earlier, according to USDA’s monthly Cold Storage report. 

Frozen pork supplies were up 1% from the previous month but down 26% from last year. Stocks of pork bellies were down 3% from last month and down 58% from last year.

Total red meat supplies in freezers were 3% less than the previous month and 17% less than the same time last year.

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

Negotiated cash fed cattle trade was mostly inactive with very light demand in Nebraska and the western Corn belt through Monday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was at a standstill.

Live prices last week were at $119-$120/cwt. in the Texas Panhandle, at $119 in Kansas and at $120 in other regions. Dressed trade was at $190-$191 in Nebraska, $191 in Colorado and at $188-$191 in the western Corn Belt.

Feeder Cattle futures shrugged off Friday’s Cattle on Feed report and mostly extended gains Monday, helped along by further softness in Corn futures and recently stronger cash prices.

Feeder Cattle futures closed an average of 57¢ higher, except for 95¢ lower in spot May and unchanged in Mar.

Live Cattle futures weakened. Besides the lack of early-week cash direction, traders are likely trying to decide whether beef prices decline significantly after the Memorial Day push or slowly recede from current levels with further reopening of restaurants and food service.

Live Cattle futures closed an average of 55¢ lower, from 15¢ lower toward the back to 92¢ lower in spot Jun.

Choice boxed beef cutout value was $2.66 higher Monday afternoon at $327.83/cwt. Select was $1.08 higher at $303.39

Corn futures closed mostly 5¢ to 6¢ lower. 

Soybean futures closed mostly 3¢ to 4¢ higher, after 1¢ to 3¢ lower in the front three contracts.

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Major U.S. financial indices closed higher Monday, apparently buoyed most by stocks that gain more with the reopening economy.

The Dow Jones Industrial Average closed 186 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 190 points.

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“Current futures prices imply fourth-quarter margins will be very good for feedlots,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “LMIC projected break-evens currently list October at about $115/cwt., nearly $10 under the current October Live Cattle Contract. More distant deferred Live Cattle contracts are even higher, which should bode well for cattle feeding returns into the first half of 2022.”

So far this year, LMIC estimates cattle feeding returns at -$60 to +$40 per head, due in part to escalating feed costs on the negative side of the ledger, but supported by declining feeder cattle prices from August of last year through January this year.

“Break-evens have been declining since January because of the rapid decline in feeder prices six months prior,” say LMIC analysts. “However June will be the last month of declining feeder costs, and those breakeven prices are expected to rise at least through September. May feeder cattle costs are expected to drop significantly, offering an opportunity for cattle feeders to make money in the fourth quarter.”

Negotiated cash fed cattle trade was mostly inactive with very light demand in Nebraska and the western Corn belt through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was at a standstill.

For the week, live prices were steady to 50¢ higher in the Texas Panhandle at $119-$120/cwt., $1 lower in Kansas at $119, steady in Nebraska at $120 and mostly steady in the western Corn Belt at $120. Dressed prices were steady to $1 lower at $190-$191 in Nebraska and at $188-$191 in the western Corn Belt.

Cattle futures closed mainly higher Friday, with a late surge after two-sided trading. Support included softer, more stable Corn futures, along with continued demand strength.

Feeder Cattle futures closed an average of $1.69 higher. 

Live Cattle futures closed an average of 66¢ higher, (27¢ to $1.07 higher), except for and average of 30¢ lower in the back to contracts.

How the market reacts to the monthly Cattle on Feed report (see below) is anybody’s guess.

Boxed beef cutout value (p.m.): Choice boxed beef cutout value was 99¢ higher Friday afternoon at $325.17/cwt. Select was 70¢ higher at $302.31.

Estimated total cattle slaughter of 669,000 head last week was 29,000 head more than the previous week. Estimated year-to-date total cattle slaughter of 12.9 million head is 757,000 head more (+6.2%) than last year’s pandemic-ravaged pace. Estimated beef production last week was 550.7 million lbs., which was 23.1 million lbs. more than the previous week.

Corn futures closed mostly 3¢ to 5¢ lower. 

Soybean futures closed 7¢ to 14¢ lower. 

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Major U.S. financial indices closed mixed Friday, with most of the pressure on big tech stocks. The Dow Jones Industrial Average closed 123 points higher. The S&P 500 3 points lower. The NASDAQ down 64 points.

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Reaction to the monthly Cattle on Feed report for feedlots with 1,000 head or more capacity could range from neutral to widely diverse.

April placements of 1.82 million head were 389,000 head more (27.16%) more than the previous year, which was about 6.3% more than the average of analyst expectations ahead of the report. However, comparing to last year’s pandemic blip seems a fool’s errand. Compared to 2019, April placements were 21,000 head fewer (-1.14%).

In terms of placement weight, 35% went on feed weighing 699 lbs. or less, 49% weighing 700-899 lbs. and 16% weighing 900 lbs. or more.

Marketings in April of 1.94 million head were 479,000 head more (32.83% more) than a year earlier, about even with the average of analyst expectation. The number was 10,000 head more (0.5%) than the same month in 2019.

Cattle on Feed May 1 of 11.73 million head were 525,000 head more (4.69%) more than last year and the second most for the date since the data series began in 1996. That was about 1% more than what analysts expected, on average. Compared to two years earlier, there were 93,000 head fewer (-0.79%) cattle on feed.