WLI

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.

Negotiated cash fed cattle trade was limited on very light demand in Nebraska and at a standstill in all other major feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Cattle futures edged higher Monday with stronger wholesale beef prices and optimism for pushing cash prices higher this week.

Live Cattle futures closed an average of 31¢ higher.

Feeder Cattle futures closed an average of 53¢ higher, from 7¢ higher in spot Aug to $1.05 higher at the back.

Choice boxed beef cutout value was $2.54 higher Money afternoon at $281.00/cwt. Select was $4.19 higher at $263.38/cwt.

CME Feeder Cattle Index $1.54 higher at $155.58

Rallying wheat futures led grains higher Monday.

Corn futures closed mostly 10¢ to 14¢ higher.

Soybean futures closed mostly 4¢ to 6¢ higher through Aug ‘22, and then mostly 11¢ to 17¢ higher.

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Major U.S. financial indices closed mixed on Monday as manufacturing growth slowed and worries about economic growth, combined with supply issues and the Delta Covid-19 variant’s continued spread all weighed on stocks.

The Dow Jones Industrial Average closed 97 points lower. The S&P 500 closed 8 points lower. The NASDAQ was up 8 points.

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“Cattle carcass weights will rise seasonally the remainder of the year but are expected to remain lower year over year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.  “Lower steer and heifer carcass weights likely reflect several influences, including feedlots becoming more current in marketings, higher feed prices and perhaps a return to longer-term carcass weight trends. Beef production for the remainder of 2021 is predicted to be 4-5% lower year over year as a result of lower slaughter totals and lighter carcass weights.”

For the first 28 weeks this year, Peel says average weekly yearling slaughter averaged 501,392 head, fractionally higher than the same period last year. 

“However, he adds, Monday-Friday slaughter thus far in 2021 has averaged 2.7% lower than 2019 and is covered by a 31.0% increase in Saturday slaughter of steers and heifers,” Peel says. “The 2021 average Saturday yearling slaughter total is 50,430 head compared to 38,492 head in 2019. Saturday slaughter accounts for 10.4% of total yearling slaughter in 2021 compared to 7.6% of slaughter for the same period in 2019.”

Negotiated cash fed cattle prices last week were $1 higher in the Southern Plains at $122/cwt. and unevenly steady in Nebraska at $122. Dressed trade in Nebraska was $1 higher at $196. Dressed prices in the western Corn Belt were $196, compared to $195-$202 the previous week; no established trend for live trade.

Through Thursday, the average five-area direct fed steer price was $121.05/cwt., 40¢ more than the previous week. The average steer price in the beef was $197.49, which was 70¢ more.

Cattle futures softened further Friday amid week-end and month-end position squaring.

Live Cattle futures closed an average of  60¢ lower.

Feeder Cattle futures closed an average of  32¢ lower (5¢ to $1.02 lower).

Choice boxed beef cutout value was $3.24 higher Friday afternoon at $278.46/cwt. Select was $2.37 higher at $259.19/cwt.

Estimated total cattle slaughter last week of 649,000 head was 1,000 more than the previous week and 13,000 more than the same week last year. Estimated year-to-date total cattle slaughter of 19.24 million head is 826,000 more (+4.5%) than the same period last year.

Corn futures closed 10¢ 11¢ lower through new-crop contracts and then mostly 5¢ to 7¢ lower.

Soybean futures closed mostly 14¢ to 29¢ lower.

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Major U.S. financial indices closed the week lower on Friday as concern among investors seems to be corporate earnings, while strong in the second quarter, may have peaked – especially with megacap tech companies like Amazon.

The Dow Jones Industrial Average closed 149 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 106 points. l

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The Livestock Marketing Information Center (LMIC) revised beef production lower this year based on the reduced beef cow numbers in the recent semiannual Cattle report.

“LMIC is now projecting prices could be almost 7% higher than a year ago for fed cattle, which would support strong gains in the feeder cattle complex,” say the organization’s analysts, in the latest Livestock Monitor.

These are among specific points LMIC made regarding the Cattle report:

“The beef cow decline was expected, given year-to-date slaughter is up 9% or 152,000 head. Heifer slaughter, too, was in line with a decline, up 9% over last year.”

“One of the more surprising numbers was the calf crop, which was reported as even with a year ago, even though total cows (beef + dairy) was down by 500,000 head.” 

“…the dairy cow herd has shown stronger growth in 2021 reaching 9.5 million head, a 1.6% increase over 2020. Dairy replacements indicated that trend may continue as dairy farmers held back 2.5% more heifers than a year ago.”