WLI

Negotiated cash fed cattle trade was mostly inactive on very light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

Live prices last week ranged from steady to $2 lower in the Southern Plains at $118-$120/cwt. to $1-$5 lower in the Northern Plains at $121; steady to $4 lower in the western Corn Belt at $120-$122. Dressed trade was $2-$4 lower at $192.

Cattle futures closed higher Friday, supported by oversold conditions and a reprieve from another day of higher corn prices.

Live Cattle futures closed an average of 67¢ higher (12¢ to 92¢ higher), except for 47¢ and 12¢ lower in the front two contracts.

Feeder Cattle futures closed an average of $1.42 higher (65¢ to $1.67 higher).

Choice boxed beef cutout value was $1.46 higher at $283.77/cwt. Select was $1.56 lower at $272.13

Corn futures closed 1¢ to 4¢ lower, except for 5¢ and 1¢ higher in the front two contracts.

Soybean futures closed 1¢ to 6¢ higher through Nov ‘22, and then fractionally lower to 2¢ lower.

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Major U.S. financial indices closed higher Friday, amid mainly positive economic news, and as investors took a more measured view of reports that President Biden will seek an increase in capital gains taxes.

The Dow Jones Industrial Average closed 227 points higher. The S&P 500 closed 45 points higher.

The NASDAQ up 198 points.

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Logic suggests markets will view the monthly Cattle on Feed report as neutral to hopefully friendly, with placements significantly less than the average of analysts expectations.

Feedlots with 1,000 head or more capacity placed 2.0 million head in March, which was 440,00 head more (+28.26%) than the previous year’s paltry placements, due to the pandemic. Placements were 5.5% less than expectations.

In terms of placement weights: 36.5% went on feed weighing 699 lbs. or less; 51.6% weighed 700-899 lbs.; 11.75% weighed 900 lbs. or more.

Marketings in March of 2.04 million head were 1.49% more year over year, which was in line with expectations. The total was the second most for the month since the data series began in 1996, according to USDA’s National Agricultural Statistics Service.

There were 11.9 million head on feed Apr. 1, which was 600,000 head more (+5.31%) than last year; the second most for the month since the data series began. That was 0.8% less than analysts expected. The number of heifers and heifer calves on feed were 7% more than the previous year.

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

Live trade in Nebraska was at $121/cwt., which was $1-$5 lower than last week. Dressed trade was $4 lower at $192.

In the western Corn Belt, at $121-$122, which was steady to $2 lower than last week. Dressed trade was $2-$4 lower at $192.

Trade was limited on light demand in in Colorado. Live prices were $1-$2 lower at $121.

Trade was mostly inactive on light demand in the Southern Plains. For the week, prices are steady in the Texas Panhandle at $120 and steady to $2 lower in Kansas at $118-$120.

Cattle futures—especially Feeder Cattle—crumbled beneath the weight of surging Corn futures.

Corn futures closed 20¢ to limit up 25¢ in the front three contracts, 15¢ to 16¢ higher through the next four and then mostly 5¢ to 7¢ higher.

Soybean futures closed 28¢ to 36¢ higher in the front six contracts, and then mostly 22¢ to 27¢ higher.

Live Cattle futures closed an average of $1.12 lower (85¢ lower at the back to $1.45 in spot Apr).

Feeder Cattle futures closed an average of $2.70 lower ($1.45 higher at the back to $3.55 lower).

Live Cattle futures closed an average of $1.12 lower (85¢ lower at the back to $1.45 in spot Apr).

Net U.S. beef export sales of 24,600 metric tons (mt) for 2021 were 57% more than the previous week and 38% more than the prior four-week average, according to USDA’s weekly U.S. Export Sales report for the week ending Apr. 15. Increases were primarily for South Korea, Japan, China, Mexico and Taiwan.

Choice boxed beef cutout value was $1.85 higher Thursday afternoon at $282.31/cwt. Select was $1.81 higher at $273.69

The average dressed steer weight the week ending Apr. 10 was 900 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 6 lbs. heavier than the prior week and 4 lbs. heavier than the same week last year. The average dressed heifer weight of 829 lbs. was 3 lbs. lighter than the prior week but 3 lbs. heavier than the prior year.

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Major U.S. financial indices closed lower Thursday, supposedly linked to reports that President Biden is set to try increasing capital gains taxes. That followed early-session support tied to positive quarterly corporate earnings and economic data.

Initial weekly unemployment insurance claims were 547,000 for the week ending Apr. 17, which was less than traders expected.

The Dow Jones Industrial Average closed 321 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 131 points.

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U.S. consumers are ready, willing and able to return to restaurant dining as more people get vaccinated for COVID-19 and mandated restrictions lessen.

Although still 25% less than two years earlier, major chain transactions at full service restaurants in March were 210% higher than the previous year, according to the NPD Group’s (NPD) CREST^®Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 75 quick service, fast casual, midscale, and casual dining chains representing 53% of the commercial restaurant traffic in U.S.

Transactions at quick service restaurant (QSR) chains were 29% higher year over year in March, but 5% less than two years earlier.

Overall, customer transactions at major restaurant chains in March were 32% higher than the previous year but 6% less than in March 2019.

“There is now optimism on the part of the American consumer, which helps to unleash pent up demand for dining out,” says  David Portalatin, NPD food industry advisor. “Although transactions are still down compared to pre-pandemic times, there is improvement and a signal that we’re headed in the right direction on the road to recovery.”

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

Live prices were mainly steady in the Texas Panhandle at $120/cwt. and steady to $1 lower in Kansas at $119-$120. Although too few to trend, there were some trades in Nebraska and the western Corn Belt at $123.

In Nebraska last week, prices were $122-$126 on a live basis and at $196 in the beef.

In the western Corn Belt last week, prices were $122-$124 on a live basis and at $194-$196 in the beef.

Live prices in Colorado last week were at $122-$123.

Cattle feeders offered 3,470 head (29 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 1,517 head (7 lots) sold. Six lots from the Southern Plains brought $120/cwt., which was steady to $1 lower than negotiated trade in the region last week. One lot of 457 steers from Nebraska brought $124, which was at the mid point of last week’s negotiated price range.

Cattle futures gave back what they gained in the previous session, and then some, pressured by yet another surge in grain futures prices and disappointing early cash prices. Perhaps there was also some positioning ahead of Friday’s monthly Cattle on Feed report.

As mentioned in Cattle Current Tuesday, the report will likely show March placements significantly higher than last year. Part of that has to do with anemic placements the previous year as the pandemic took hold. However, disrupted placements in February, due to the widespread winter storm and power outages will probably add to the tally.

Live Cattle futures closed an average of 92¢ lower (20¢ lower at the back to $1.95 lower toward the front).

Feeder Cattle futures closed an average of $2.29 lower ($1.97 to $3.17 lower), except for 15¢ lower in spot Apr.

Choice boxed beef cutout value was $2.20 higher Wednesday afternoon at $280.46/cwt. Select was $1.41 higher at $271.88.

Corn futures closed 14¢ to 19¢ higher in the front two contracts, 6¢ to 9¢ higher through the next five and then mostly 1¢ to 2¢ higher.

Soybean futures closed 14¢ to 25¢ higher in the front four contracts, and then mostly 8¢ to 10¢ higher.

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Major U.S. financial indices closed higher Wednesday, supported by positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 316 points higher. The S&P 500 closed 38 points higher. The NASDAQ was up 163 points. 

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“We have an opportunity to take the lessons we’ve learned from the COVID-19 pandemic and apply those to transforming our nation’s food system from the inside out, including our supply chains,” says U.S. Agriculture Secretary Tom Vilsack.

On Wednesday, Secretary Vilsack announced USDA is seeking public comments on a department-wide effort to improve and reimagine the supply chains for the production, processing and distribution of agricultural commodities and food products. The action is in response to Executive Order 14017, America’s Supply Chains, signed by President Biden Feb. 24, 2021. The request for comments is published in the Federal Register and the comment period will close on May 21, 2021.

“USDA plans to tackle this supply chain assessment holistically, looking across a full range of risks and opportunities,” says Secretary Vilsack. “From elevating the importance of local and regional food systems, to addressing the needs of socially disadvantaged and small to mid-size producers, to supporting sustainable practices to advance resilience and competitiveness, this top to bottom assessment will position USDA to make long-term, transformative changes for economic, national, and nutritional security.”

Goals of this transformation include a fairer, more competitive, and transparent system where a greater share of the food dollar goes to those growing, harvesting, and preparing the nation’s food.

“Growing consolidation in food and agriculture, the general health of our population, a growing climate crisis, and the need to ensure racial justice and equity are important factors to take into consideration as USDA looks at strengthening food and agricultural supply chains,” according to the USDA announcement.

Further, USDA is interested in comments about how to target pandemic-related stimulus relief programs and spending authorized by Congress in the Consolidated Appropriations Act (CAA) and American Rescue Plan Act (ARPA) toward long term, systemic change that results in food supply chain resiliency.

The deadline for comments is May 21, 2021. More information about how to submit comments in is available in the Notice.

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

Last week, live prices were at $120/cwt. in the Texas Panhandle, $120-$121 in Kansas, $122-$126 in Nebraska, $122-$123 in Colorado and at $122-$124 in the western Corn Belt. Dressed prices were at $196 in Nebraska and at $194-$196 in the western Corn Belt.

Cattle futures finally found some traction Tuesday, even in the face of surging Corn futures. Besides being oversold, the need for fed cattle prices to rise with long-term higher feed costs could have something to do with the transition.

Live Cattle futures closed an average of $1.04 higher (22¢ to $1.60 higher).

Feeder Cattle futures closed an average of $1.30 higher (30¢ to $1.75 higher), except for 15¢ lower in spot Apr.

Choice boxed beef cutout value was $2.09 higher Tuesday afternoon at $278.26/cwt. Select was $1.34 higher at $270.47.

Grain futures surged higher again Tuesday, helped along by a building weather premium based on dryness in Brazil and in the U.S. Northern Plains.

Although this week’s cold snap likely will stall planting in some parts of the U.S., corn planting was on par with the five-year average of 8%, as of Apr. 18, according to the most recent USDA Crop Progress report. Soybean planting was 1% ahead of average at 3%.

Corn futures closed 8¢ to 14¢ higher through Jly ‘22, and then mostly 5¢ higher.

Soybean futures closed 19¢ to 22¢ higher through the front three contracts, 15¢ higher through the next five and then mostly 10¢ to 13¢ higher. 

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Major U.S. financial indices extended losses Tuesday. Reports from the World Health Organization (WHO) that COVID-19 cases increased the last eight weeks seemed the primary pressure.

“The COVID-19 pandemic shows no signs of easing, with global case and death incidence at a concerning rate since mid-February 2021,” according to the latest WHO update. “A third of the global cumulative COVID-19 cases and deaths have been reported in the last three months alone…”

The Dow Jones Industrial Average closed 256 points lower. The S&P 500 closed 28 points lower. The NASDAQ was down 128 points.

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“Despite the recent declines in futures prices, there remains cautious optimism in cattle markets this year,” says Josh Maples, Extension livestock economist at Mississippi State University. “The expectation of tightening supplies and a strong beef demand profile provide some optimism for stronger markets this year. However, there are still many factors to watch closely.”

For instance, in the latest issue of In the Cattle Markets, Maples says drought and pasture conditions are of primary concern as worsening conditions are forcing herd liquidation decisions for many producers in the Northern Plains.

Related, Maples points to elevated feed prices with little prospect of reprieve if planted acres come in near those suggested by USDA’s Prospective Plantings report. He notes Corn futures are above $5 until the Sep ’22 contract.

Shorter term, Maples says the next monthly Cattle on Feed report—due out Friday—will show significantly more March feedlot placements year over year, since the comparison is to extraordinarily sparse placements in 2020 when pandemic effects were taking hold.

“While placements are nearly certain to be higher than a year ago, just how much higher is the big question,” Maples says. “Very large placement totals in March 2021 could lead to larger than expected totals of market-ready live cattle this summer. The recent declines in summer-month Live Cattle futures may be reacting to this possibility.”

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

Last week, live prices were at $120/cwt. in the Texas Panhandle, $120-$121 in Kansas, $122-$126 in Nebraska, $122-$123 in Colorado and at $122-$124 in the western Corn Belt. Dressed prices were at $196 in Nebraska and at $194-$196 in the western Corn Belt.

Cattle futures closed lower again Monday, especially Feeder Cattle as Corn futures continued to climb higher.

Live Cattle futures closed an average of 45¢ lower.

Feeder Cattle futures closed an average $1.51 lower.

Choice boxed beef cutout value was 12¢ higher Monday afternoon at $276.17/cwt. Select was 3¢ higher at $269.13.

Corn futures closed 6¢ to 8¢ higher through Sep ‘22, and then mostly 3¢ to 4¢ higher.

Soybean futures closed 10¢ to 16¢ higher through the front five contracts, 6¢ to 9¢ higher through the next four contracts and then mostly 1¢ to 3¢ higher. 

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Major U.S. financial indices closed lower Monday, led by big tech stocks.

The Dow Jones Industrial Average closed 123 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 137 points.

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Drought is already forcing cowherd liquidation in Texas and the Dakotas, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. That follows a 14.5% decline in Colorado beef cow numbers—year over year Jan. 1.

“Drought conditions since last fall are the worst since 2013,” Peel says, in his weekly market comments.

The measuring stick is the weekly U.S. Drought Monitor (USDM), which classifies the percentage of the nation that is Abnormally Dry (D0) or experiencing one of four degrees of drought, ranging from Moderate Drought (D1) to Exceptional Drought (D4).

For the week beginning Apr. 13, 62.55% of the Continental United States was classified from Abnormally Dry to Exceptional Drought, compared to 25.58% at the same time last year.

More specifically, Peel shares details about the USDM Drought Severity and Coverage Index (DSCI), which combines the drought categories into a single number.

“The DSCI can range from 0 (zero abnormally dry or drought conditions) to 500 (100% D4, Exceptional Drought),” Peel explains. “The current DSCI for the continental U.S. is 169, compared to 45 one year ago. Since the Drought Monitor began in 2000, the U.S. DSCI has only reached a level of 200 for a total of 22 weeks (all in 2012 and early January 2013), with a maximum of value of 215. Coming summer weather raises the odds of further increases in drought. ” 

“In any specific location, the drought situation right now will set the stage for the next year,” Peel says. “In many parts of the country, the next two months may determine much of the forage production for the next 12 months. Regions such as the Southwest and the southern Rocky Mountains have been in drought for many months and face limited forage prospects this year unless moisture arrives very soon.”

As examples, Peel notes the DSCI in New Mexico is currently 433 and is 301 in Colorado. North Dakota currently has a DSCI of 367, a record level of drought in the state, Peel says. The DSCI is 227 in South Dakota and 236 in Texas.

“These regions may produce little or no forage this year, making drastic management actions likely. Herd liquidation is already occurring and may accelerate quickly in these regions,” Peel says. “Producers in all drought areas need to inventory current forage and hay reserves and carefully evaluate forage production potential at this time. This will provide the basis for a drought action plan that can help guide what and when decisions must be made going forward.”

One source for management considerations can be found in the “Managing Cattle and Forages in a Dry Weather Pattern” section at the OSU beef Extension Ranchers Thursday Lunchtime Webinar series.