WLI

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Thursday afternoon, with too few transactions to trend. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.

For the week, live prices are steady at $114/cwt. in the Southern Plains, steady to $1 higher at $114 in Colorado, steady in Nebraska at $113-$114 and steady to $1 lower in the western Corn Belt at $112-$113. Dressed trade is steady in Nebraska at $180 and steady to $2 lower in the western Corn Belt at $178-$180.

Net U.S. beef export sales for the week ending Mar. 4 were 20,900 metric tons, according to USDA’s weekly U.S. Export Sales report. That was 8% less than the previous week but 17% more than the previous four-week average. Increases were primarily for South Korea, Japan, Mexico, China and Taiwan.

Cattle futures closed mixed Thursday. Live Cattle closed mostly higher, supported by a strong rally in front-month Lean Hog futures. Feeder Cattle futures edged mostly lower with higher Corn futures and the sluggish recovery in cash prices.

Live Cattle futures closed an average of 48¢ higher, except for 5¢ to 30¢ lower in three contracts.

Feeder Cattle futures closed an average of 43¢ lower, except for unchanged to 7¢ higher in three contracts.

Choice boxed beef cutout value was 62¢ lower at $226.67/cwt. Thursday afternoon. Select was 25¢ higher at $220.07.

The average dressed steer weight the week ending Feb. 27 was 899 lbs., which was 10 lbs. lighter than the previous week and 2 lbs. heavier year over year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 834 lbs. was 7 lbs. lighter than the previous week and 1 lb. heavier year over year.

Corn futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed mostly 5¢ to 9¢ higher though May ‘22, and then mostly 11¢ to 16¢ higher.

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Major U.S. financial indices closed higher Thursday, supported by President Biden singing the COVID-19 relief bill and a more positive labor outlook than the trade expected.

Initial unemployment insurance claims for the week ending Mar. 6 were 712,000, according to the U.S. Department of Labor. That was 42,000 fewer than the previous week.

The Dow Jones Industrial Average closed 188 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 329 points.

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“U.S. corn market prices continue to rise, largely driven by strong export demand and tight global supplies,” say analysts with USDA’s Economic Research Service (ERS), in the latest USDA Feed Outlook. “The average cash-spot corn-market prices for Central Illinois and the Gulf for February 2021 were $5.56/bu. and $6.24/bu., respectively. By comparison, the same prices in February 2020 were $3.75 and $4.29.”

Through the first five months of the 2020-21 marketing year, U.S. corn exports totaled 857 million bu., significantly higher than the same time a year earlier. For the year, corn exports are projected at 2,600 million bu., according to ERS.

“The Foreign Agricultural Service’s (FAS) Export Sales Report system shows record amounts of total commitments and outstanding sales for U.S. corn—mostly driven by large purchases for China’s market,” ERS analysts explain. “In order to meet these outstanding sales, the U. S. export program would have to operate at a very high pace, consistently, for the remainder of the marketing year. Inspections data indicate a high export level for February—potentially a February export record—with strong demand to China, Mexico, and Japan. While the strong pace may be logistically feasible, the United States is also likely to face increased competition from Southern Hemisphere corn exporters in the second half of the marketing year.”

Ethanol is another key wild card for corn prices going forward.

With demand for ethanol this year—and the derived demand for corn—primarily driven by trends in gasoline consumption, ERS analysts say how and when U.S. consumers return to the roads will be the most important factor relative to that aspect of the corn market.

“Overall, gasoline prices through the end of 2020 remained lower than pre-COVID-19 levels, indicating that demand was still relatively weak. The RBOB spot price averaged $1.43/gal. in December 2020, which was up 204% from the April 2020 average of $0.47/gal., but was still lower than $1.66/gal. in December 2019,” say ERS analysts. “Through early 2021, however, prices have been steadily climbing back to pre-COVID-19 market levels, indicating that supply is continuing to adjust to current levels of demand, as well as higher crude oil prices. The USDA’s 2020-21 corn used for ethanol forecast is currently 4,950 million bu., which assumes higher corn use for ethanol from March to August relative to 2019-20.

Negotiated cash fed cattle trade continued steady with last week in the Southern Plains on Wednesday at $114/cwt., with limited trade and light demand in the Texas Panhandle; limited trade on light to moderate demand in Kansas.

Live trade in Nebraska was light on light to moderate demand at $113 to $114, which was steady with last week, but steady to $1 lower than the previous day. Dressed trade on Tuesday was mainly steady at $180.

In Colorado, live trade was steady with the prior day and week at $114, with slow trade and light demand.

Trade was limited on light demand in the western Corn Belt with too few transactions to trend. Live prices there last week were at $112 to $114; dressed trade at $180.

Cattle feeders offered 1,296 head (9 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. All were from the Southern Plains, except for one lot in Nebraska. The reserve price was $114/cwt. on all but one lot. None sold. The highest bids were at $113.75.

Cattle futures softened Wednesday, challenged by steady rather than higher cash prices and dwindling wholesale beef values.

Live Cattle futures closed an average of 49¢ lower, except for 30¢ higher in the back contract.

Feeder Cattle futures closed an average of 27¢ lower, except for unchanged in Nov.

Choice boxed beef cutout value was $1.74 lower Wednesday afternoon at $227.29/cwt. Select was $3.98 lower at $219.82.

Grain futures closed lower on Wednesday, amid likely profit taking and with the static to slightly bearish World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 10¢ to 14¢ lower through the front three contracts, and then mostly 2¢ to 4¢ lower. 

Soybean futures closed 22¢ to 30¢ lower through Jan ‘22, and then mostly 10¢ to 15¢ lower.

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Except for a slight decline in the tech-heavy NASDAQ, major U.S. financial indices closed higher Wednesday, buoyed by a decline in Treasury yield rates and House passage of the Covid-19 relief bill.

The Dow Jones Industrial Average closed 464 points higher. The S&P 500 closed 23 points higher. The NASDAQ was down 4 points.

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Severe winter weather last month stalled the slow progress restaurants were making in recovering business from the pandemic.

Year-over-year major restaurant chain customer transactions declined by 13% in February, compared to a 9% decline in January, according to the NPD Group (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.

Customer transactions at major restaurant chains in Texas for the month of February declined by 46% compared to year ago, as record low cold temperatures, snow and ice disrupted travel and rocked the state’s power grid.

Overall, customer transactions at major full-service restaurant chains, which have been challenged throughout the pandemic by mandated dine-in restrictions and shutdowns, decreased by 33% in February versus a year earlier. Major quick service restaurant chains, which represent the bulk of the restaurant industry transactions, were 12% less than the same time last year.

“Aside from any unforeseen events or severe weather in major parts of the country, we should see customer transaction declines improving in the months to come,” says David Portalatin, NPD food industry advisor. “The next several months will help us plot the course for the U.S. restaurant industry’s recovery.”

Negotiated cash fed cattle trade was slow on light demand in the Northern Plains through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few early live sales at $114/cwt., which was steady to $1 higher.

Last week, live prices were at $114 in the Southern Plains, $113-$114/cwt. in the Northern Plains and at $112-$114 in the western Corn Belt. Dressed trade was at $180.

Cattle futures closed mostly higher Tuesday, buoyed in part by softer Corn futures and increasing chatter that the bottom may finally be in or at least near for cattle prices.

Live Cattle futures closed an average of 33¢ higher, except for an average of 16¢ lower in the back two contracts.

Feeder Cattle futures closed an average of $2.03 higher through the front three contracts, and then from 30¢ lower to 60¢ higher.

Choice boxed beef cutout value was $2.05 lower Tuesday afternoon at $229.03/cwt. Select was 67¢ higher at $223.80.

Corn futures closed mostly 1¢ to 3¢ higher, except for 1¢ to 3¢ lower in the front three contracts.

Soybean futures closed mostly 4¢ to 7¢ higher.

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Major U.S. financial indices closed higher Tuesday, led by recently beleaguered big tech stocks, as Treasury yield rates declined.

The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 464 points.

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USDA’s Economic Research Service (ERS) increased estimated beef production for this year by 40 million lbs. to 27.58 billion lbs., in the latest World Agricultural Supply and Demand Estimates (WASDE).

“First-half beef production is raised from last month as lower expected fed cattle slaughter in the first quarter is more than offset by higher first-half non-fed cattle slaughter,” according to ERS analysts. “Second-half production is adjusted to reflect a more rapid pace of first-quarter feedlot placements.”

Fed steer price forecasts were unchanged at $113/cwt. in the first and second quarters, $114 in the third quarter and $119 in the fourth quarter for an annual average of $115.

Total red meat and poultry production was reduced 127 million lbs. to 107.47 billion lbs., with expected reductions in pork, broiler and turkey production.

Among other WASDE highlights:

Corn

The 2020-21 U.S. corn supply and use outlook was unchanged from the previous month. However, international corn production was forecast higher with increases for India, South Africa, and Bangladesh. Global corn ending stocks, at 287.7 million tons, were up 1.1 million from the previous month.

The projected season-average farm price was unchanged at $4.30/bu. 

Soybeans

U.S. soybean supply and use projections for 2020-21 were mostly unchanged. Global 2020-21 oilseed supply and demand forecasts include higher production, exports, and ending stocks.

The U.S. season-average soybean price was projected at $11.15/bu., unchanged from the prior month. Although current cash prices are significantly higher, ERS analysts explain prices received through January averaged just over $10/bu., reflecting forward pricing at lower prices. Soybean meal prices were also unchanged at $400/ton. Soybean oil price was forecast at 41.0¢/lb., up 1¢ from the prior month.

Wheat

The supply and demand outlook for 2020-21 U.S. wheat was mostly unchanged. The 2020-21 global wheat outlook is for larger supplies, increased consumption, higher exports, and reduced stocks. Supplies were raised 3.5 million tons to 1,077.1 million.

The season-average farm price for wheat was unchanged at $5.00/bu. 

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

Prices last week ended up steady on a live basis in the Southern Plains at $114/cwt., steady to $1 lower in the Northern Plains at $113-$114 and steady to $2 lower in the western Corn Belt at $112-$114. Dressed trade was $2 lower at $180.

The five-area average direct steer price last week was 43¢ lower on a live basis at $113.64/cwt. and $1.84 lower in the beef at $179.79.

Cattle futures closed higher Monday, supported by increasing optimism about further reopening the domestic economy and more positive fundamentals on the horizon.

Live Cattle futures closed an average of 59¢ higher.

Feeder Cattle futures closed an average of 61¢ higher, except for 7¢ lower in May.

Choice boxed beef cutout value was 25¢ lower Monday afternoon at $231.08/cwt. Select was $2.28 higher at $223.13.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed mostly 3¢ to 8¢ higher.

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Major U.S. financial indices closed mixed Monday. Key support included the Senate passing the $1.9 trillion pandemic relief legislation over the weekend, with expectations the House of Representatives will follow suit. Pressure included the outlook for higher inflation and interest rates.

The Dow Jones Industrial Average closed 306 points higher. The S&P 500 closed 20 points lower.The NASDAQ was down 310 points.

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“Although the global foodservice sector still has a long recovery ahead, international demand for U.S. red meat remains impressive and resilient, but a range of logistical challenges must be overcome in order to fully satisfy this demand,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF).

For instance, Halstrom explains transportation challenges are currently a dominant concern, especially congestion and container shortages at West Coast ports where shorthanded crews are handling record-large cargo volumes.

“Labor is also at a premium in processing plants, which affects the industry’s ability to fully capitalize on demand for certain labor-intensive cuts and variety meat items,” Halstrom says.

Such challenges helped pressure U.S. beef and pork exports to start the year.

U.S. Beef exports were 2% less year over year in January at 105,047 metric tons (mt), according to data released by USDA and compiled by USMEF. Value was 3% less at $653 million. Lower beef variety meat shipments drove the decline as muscle cut exports were steady with a year earlier.

January beef exports to South Korea were strong and continued to gain momentum in China.

U.S pork exports in January of 248,656 mt, were 9% less than a year earlier. Export value was 13% less at $642.8 million.

Although exports still face the aforementioned transportation and labor challenges, as well as COVID-related obstacles, Halstrom says, “As key destinations for U.S. red meat roll out COVID vaccination programs, the outlook for 2021 is optimistic, with retail meat demand remaining strong and the expectation that foodservice will rebound in more and more regions.”

Negotiated cash fed cattle trade was limited on light to moderate demand in Colorado and the western Corn Belt through Friday afternoon. Elsewhere, trade ranged from a standstill to mostly inactive on very light demand, according to the Agricultural Marketing Service.

For the week, established trade was steady on a live basis at $114/cwt. in the Southern Plains and Northern Plains. Dressed trade in Nebraska was $2 lower at $180. The previous week, live sales in the western Corn Belt were at $114, with dressed trade at $182.

Total estimated cattle slaughter the week ending March 6 was 665,000 head, which was 1,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 5.83 million head is 213,000 head fewer (-3.52%) than the same period last year. Estimated beef production so far this year is 4.93 billion lbs., which is 73.8 million lbs. less (-1.48%) year over year.

Cattle futures closed higher Friday, supported by higher outside markets and despite the increase in grain futures. Perhaps support also included expectations that cash fed cattle prices next week will likely edge higher, given the dearth of cash purchases by packers the past two weeks.

Live Cattle futures closed an average of 59¢ higher.

Feeder Cattle futures closed an average of $1.48 higher (5¢ to $2.50 higher), except for 50¢ lower in spot Mar.

Choice boxed beef cutout value was $2.55 lower Friday afternoon at $231.33/cwt. Select was 83¢ lower at $220.85.

Grain futures closed higher Friday, likely supported by positioning ahead of the next World Agricultural Supply and Demand Estimates due out Tuesday.

Corn futures closed 11¢ to 15¢ higher in the front three contracts, and then mostly 3¢ to 5¢ higher.

Soybean futures closed mostly 10¢ to 19¢ higher.

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Major U.S. financial indices closed higher at the end of a volatile trading session Friday. Primary support seemed to stem from easing Treasury yield rates and significantly more new jobs than the trade expected.

Total non-farm payroll employment rose by 379,000 in February, according to the U.S. Bureau of Labor Statistics. The nation’s unemployment rate was little changed at 6.2%. Average hourly earnings for all employees on private non-farm payrolls increased by 7¢ to $30.01.

West Texas Intermediate Crude Oil Futures on the CME were an average of $4.63 higher week to week on Friday.

The Dow Jones Industrial Average closed 572 points higher on Friday. The S&P 500 closed 73 points higher. The NASDAQ was up 196 points. 

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Total beef cows in Canada and the U.S. totaled 34.69 million head  Jan. 1, which was 194,300 head fewer (-0.56%) than the previous year, according to the United States and Canadian Cattle and Sheep report. Beef cows in the U.S. were 31.16 million head, which were 181,100 fewer (-0.58%). Beef cows in Canada of 3.53 million head were 13,200 head fewer (-0.37%).

The inventory of all cattle and calves in the U.S. and Canada Jan. 1 was 104.74 million head, which was  313,800 head fewer year over year (-0.30%). Inventory in the U.S. of 93.59 million head were 198,800 head fewer (-0.21%). Canadian inventory of all cattle and calves was 11.15 million head, down 115,000 head (-1.02%); the least since 1989, according to the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor.

Between a smaller calf crop (-0.8%) north of the border and 4.1% more heifers retained for replacement, LMIC analysts say there will likely be a smaller number of cattle available in Canada for feedlots in 2021.