WLI

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

Last week, live prices were at $117/cwt. in the Southern Plains, $118 in Nebraska and $118-$120 in the western Corn Belt. Dressed prices were at $190 in Nebraska and at $188-$190 in the western Corn Belt.

The five-area direct average steer price was $118.08/cwt. last week on a live basis. That was $2.49 more than the prior week. The average five-area direct steer price in the beef was $189.36, which was $4.89 more.

Cattle futures closed sharply higher Monday, supported by stronger cash prices, increasing wholesale beef values and higher outside markets.

Live Cattle futures closed an average of $1.32 higher.

Feeder Cattle futures closed an average of $2.07 higher, from $1.35 to $2.57 higher.

Choice boxed beef cutout value was $5.82 higher Monday afternoon at $258.67/cwt. Select was $2.89 higher at $249.86.

Corn futures closed mostly 4¢ to 9¢ higher, except for 6¢ lower in the front two contracts.

Soybean futures closed mostly 5¢ to 9¢ higher.

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Major U.S. financial indices closed sharply higher Monday, buoyed by Friday’s positive national employment outlook.

Total nonfarm payroll employment rose by 916,000, month to month, in March, according to the U.S. Bureau of Labor Statistics. That was significantly more than the trade expected. The unemployment rate edged down to 6.0%.

In March, average hourly earnings for all employees on private nonfarm payrolls fell by 4¢ to $29.96.

The Dow Jones Industrial Average closed 373 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 225 points.

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Significantly higher feed costs than last year will encourage feedlots to place cattle at heavier weights, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. In turn, stocker and backgrounders have more incentive to add more weight to cattle.

In his weekly market comments, Peel points out current weekly average cash corn prices are reported at $5.85/bu. in Dodge City, at $5.99/bu. in Garden City and at $6.01/bu. in the Texas Triangle. He explains those prices are 79-82% more than the lows in August.

“Feedlots will also look for opportunities to adjust feedlot rations using cheaper substitute ingredients, if possible,” Peel says. “Wheat may offer some potential in feedlot rations in the coming weeks and months. Winter wheat prices in the Southern Plains have increased in the last eight months but relatively less than corn.”

Peel uses Dodge City prices as an example. The current cash wheat price (hard red winter) is 41% more than in August at $5.37/bu., but it’s cheaper than corn at $5.85/bu.

“In general, a wheat price of 107% of corn price is equivalent on a price per pound basis (60 lbs. of wheat/bu. versus 56 lbs./bu. for corn),” Peel says. “In some circumstances, wheat may have additional feed value compared to corn due to a higher protein content. However, cattle rations typically do not need the additional protein, so wheat value is based primarily on energy content. Feedlots do not change rations quickly or for short periods of time but will adjust if market conditions suggest that an extended period of alternative feeds is likely.” 

Negotiated cash fed cattle trade and demand were moderate in Nebraska and the western Corn Belt through Friday afternoon. Elsewhere, trade was mostly inactive on light demand, according to the Agricultural Marketing Service (AMS).

By the end of the week, live prices were $2 higher in the Southern Plains at $117/cwt., $2 higher in Nebraska at mostly $118 (some up to $121) and $3-$4 higher in the western Corn Belt at $119-$120. Dressed trade was $5 higher at $190.

Futures markets were closed Friday, in observance of Good Friday. Feeder Cattle futures closed narrowly mixed, week to week on Thursday. Live Cattle futures closed $1.04 higher, buoyed by escalating wholesale beef values, stronger cash prices and continued strength in Lean Hogs.

Choice was boxed beef cutout value $2.88 higher Friday afternoon at $252.85/cwt. Select was $2.27 higher at $246.97.

Estimated total cattle slaughter the week ending April 3 was 609,000 head, which was 40,000 head fewer than the previous week, according to USDA. Year-to-date estimated total cattle slaughter of 8.36 million head is 295,000 head fewer (-3.4%) than the same period last year. Estimated year-to-date beef production of 7.00 billion lbs. is 152.7 million lbs. less (-2.1%) than last year.

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Equity markets were closed Friday.

The Dow Jones Industrial Average was 533 points higher, week to week on Thursday. The NADASQ closed 502 points higher. The S&P 500 was up 110 points.

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Wholesale beef values continue to climb higher and faster than many expected.

Choice boxed beef cutout value was $15.19 higher week to week on Friday at $252.85/cwt. Select was $19.20 higher at $246.97. That’s $22.86 higher for Choice over the last two weeks; $27.02 higher for Select.

“The two drivers of higher beef prices are likely restaurants increasing dining capacity and consumers continuing to use discretionary spending on their eating experience, since many do not feel comfortable traveling yet. How these factors change as an increasing number of Americans get a coronavirus vaccine will be determined in coming months.” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Consumer willingness to pay (WTP) for ribeye steak and ground beef at retail increased month to month in March, according to the Meat Demand Monitor (MDM), which tracks U.S. consumer preferences, views, and demand for meat with separate analysis for retail and food service channels.

Specifically, WTP for ribeye (retail) increased by $1.42 to $17.21 in March. WTP for ground beef (retail) increased by 76¢ to $8.05. For perspective, WTP also increased for pork chops, bacon and chicken breast. It declined for plant-based patties.

The MDM is a monthly online survey with a sample of over 2,000 respondents reflecting the national population. Agricultural economists Glynn Tonsor at Kansas State University and Jayson Lusk at Purdue University maintain the MDM, which is funded in part by the national beef checkoff and the national pork checkoff.

“The combined beef and pork projected market shares for March are 31% and 21%, respectively, at the grocery store; 38% and 14% at the restaurant,” according to the latest MDM report. “Taste, Freshness, Safety, and Price remain most important when purchasing protein.”

Negotiated cash fed cattle prices were $2 higher in Kansas Thursday at $117/cwt., with moderate trade and demand, according to the Agricultural Marketing Service (AMS). For the week, some early live sales traded at $118 in Nebraska and the Texas Panhandle, but too few to trend.

Live prices last week were at $115 in the Texas Panhandle, $116 in Nebraska and $115-$117 in the western Corn Belt. Dressed trade was at $185.

Cattle futures were mixed Thursday amid likely profit taking and repositioning.

Live Cattle futures closed an average of 50¢ lower, except for 35¢ higher in the back contract.

Feeder Cattle futures closed an average of 66¢ higher, except for unchanged and 17¢ lower in the front two contracts. 

Wholesale beef prices continue to climb. Choice boxed beef cutout value was $2.85 higher Thursday afternoon at $249.97/cwt. Select was $6.57 higher at $244.70.

The average dressed steer weight for the week ending Mar. 21 was 901 lbs. according to USDA’s Actual Slaughter Under Federal Inspection repot. That was 3 lbs. lighter than the previous week but 3 lbs. heavier than the same week last year. The average dressed heifer weight of 836 lbs. was 4 lbs. heavier than the previous week but even with the prior year.

Corn futures closed 4¢ to 7¢ higher in the front five new-crop contracts and then fractionally mixed. The two remaining old-crop contracts close 2¢ to 4¢ lower.

Soybean futures closed mixed but mostly 19¢ to 34¢ lower, following the previous session’s limit-up move.

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Major U.S. financial indices closed sharply higher Thursday, buoyed by lower Treasury yield rates and President Biden’s proposed $2 trillion infrastructure plan.

The Dow Jones Industrial Average closed 171 points higher. The S&P 500 closed 46 points higher. The NASDAQ was up 233 points.

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COVID-19 case rates among meat and poultry workers continue to be significantly less than the general population, thanks to safety measures implemented by packers and processors since the pandemic began.

For perspective, the most recent data from the North American Meat Institute (the Meat Institute) indicate the current COVID-19 case rate among meat and poultry workers is 2.67 cases per day per 100,000 workers. That’s more than 85% lower than rates in the general population (18.25 cases per day per 100,000 people) and more than 98% lower than the May 2020 peak in the sector of 98.39 cases per day per 100,000 workers.

“Frontline meat and poultry workers were among the first impacted by the pandemic, but comprehensive protections implemented in the sector since spring 2020 work,” says Julie Anna Potts, president and CEO of the Meat Institute.

For example, the University of Nebraska Medical Center found that the combination of universal masking and physical barriers reduced cases significantly in 62% of meat facilities studied. An analysis published in the Lancet in June 2020 found that distancing of 3 ft. and use of facemasks each reduce transmission by about 80%, and use of eye protection reduces transmission by about 65%.

“The critical next step is to ensure immediate access to vaccines as this dedicated and diverse workforce continues feeding Americans and keeping our farm economy working,” Potts says.

Negotiated cash fed cattle trade was limited on light demand in Nebraska through Wednesday afternoon. Although too few to trend, there were some early live sales at $118/cwt., which was $2 higher than last week. Trade was mostly inactive on light demand in the Southern Plains, according to the Agricultural Marketing Service (AMS). Elsewhere, it was at a standstill.

Buyers of Nebraska cattle in Central Stockyards’ weekly Fed Cattle Exchange auction also paid $118 for 1,725 head. Overall, cattle feeders offered 4,593 head; 2,038 head sold—all via live weight—for a weighted average price of $117.77.

Live Cattle futures gained on the outlook for higher cash prices, as well as ongoing strength in wholesale beef values.

Live Cattle futures closed an average of 82¢ higher, except for unchanged in spot Apr.

Feeder Cattle futures wilted beneath the weight of resurgent grain futures prices, tied to USDA’s Prospective Plantings report (see below).

Feeder Cattle futures closed an average of $2.41 lower. 

Choice boxed beef cutout value was $2.29 higher Wednesday afternoon at $247.12/cwt. Select was $2.21 higher at $238.13.

Grain futures spiked higher Wednesday—especially Corn and Soybeans—based on USDA’s Prospective Plantings report. Producers intend to plant more acres to both crops this year than last, but far fewer than expectations ahead of the report.

Corn futures closed mostly 18¢ higher to limit up 25¢.

Soybean futures closed 44¢ higher to limit up 70¢.

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Major U.S. financial indices closed mixed Wednesday, with the broadest gains in big tech stocks.

The Dow Jones Industrial Average closed 85 points lower. The S&P 500 closed 14 points higher. The NASDAQ was up 201 points.

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Producers surveyed across the United States intend to plant an estimated 91.1 million acres of corn in 2021, according to USDA’s Prospective Plantings report from the National Agricultural Statistics Service (NASS). That’s 325,000 more acres than last year, but about 2 million acres shy of expectations ahead of the report.

Planted acreage intentions for corn are up or unchanged in 24 of the 48 estimating states. The largest increases are expected in the Dakotas, where producers intend to plant a combined 8.90 million acres, an increase of 2.00 million acres from 2020. Producers across most of the Corn Belt intend to plant fewer acres than last year. If realized, the planted area of corn in Idaho and Oregon will be the largest on record.

Corn stocks in all positions on March 1 of 7.70 billion bu. were 3% less than a year earlier, according to USDA’s Grain Stocks report.

Soybean growers intend to plant 87.6 million acres in 2021, up 5% from last year, but about 2.5 million acres shy of pre-report expectations by private analysts. If realized, this will be the third highest planted acreage on record. Compared with last year, planted acreage is expected to be up or unchanged in 23 of the 29 states estimated.

Soybeans stored in all positions on March 1 of 1.56 billion bu. were 31% less year over year.

All wheat planted area for 2021 is estimated at 46.4 million acres, up 5% from 2020. This represents the fourth lowest all wheat planted area since records began in 1919.

All wheat stored in all positions on March 1 of 1.31 billion bu. were 7% less than a year earlier.