WLI

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.

Negotiated cash fed cattle trade was limited on light demand in the Texas Panhandle through Tuesday afternoon. Although too few to trend, there were some early live sales at $116/cwt. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service (AMS).

Last week, live prices were at $115/cwt. in the Sothern Plains, mostly $116 in the Northern Plains and at $115-$117 in the western Corn Belt. Dressed trade was at mostly $185.

Feeder Cattle futures edged higher Tuesday, helped along by softer Corn futures. Live Cattle were mixed, taking a breather ahead of cash direction.

Live Cattle futures closed narrowly mixed, from 42¢ lower to 15¢ higher.

Feeder Cattle futures closed an average of 48¢ higher, except for 25¢ lower and unchanged in the front two contracts. 

Choice boxed beef cutout value was $5.30 higher Tuesday afternoon at $244.83/cwt. Select was $3.42 higher at $235.90.

Corn futures, and especially Soybean futures, closed lower Tuesday with likely profit taking and positioning ahead of USDA’s Prospective Plantings report due out Wednesday.

Corn futures closed mostly 4¢ to 8¢ lower.

Soybean futures closed 22¢ to 27¢ lower through the front four contracts, and then mostly 11¢ to 18¢ lower.

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Major U.S. financial indices closed lower Tuesday, pressured by rising Treasury yield rates and worries about increasing interest rates.

The Dow Jones Industrial Average closed 104 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 14 points.

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 “Americans feel better than ever about choosing meat as part of healthy, balanced diets. With COVID-19 deepening demand for convenient, affordable food that tastes good and matches Americans’ values, meat fits the bill,” says Julie Anna Potts, president and CEO of the North American Meat Institute (the Meat Institute).

Potts is referring to the recently released annual Power of Meat report conducted by 210 Analytics on behalf of FMI and the Meat Institute’s Foundation for Meat and Poultry Research and Education.

The national analysis shows that three out of every four Americans agree meat belongs in healthy, balanced diets, up by nearly 20% since 2020; 94% say they buy meat because it provides high-quality protein.

Nearly all American households (98.4%) purchased meat in 2020 (IRI data) and 43% of Americans now buy more meat than before the pandemic, primarily because they are preparing more meals at home.

The proportion of meals prepared at home peaked at 89% in April 2020 and remained at 84% in December (IRI), considerably above pre-pandemic levels and particularly impacting Millennials who were previously most likely to eat out.

“Shoppers are cooking more at home due to the COVID-19 pandemic, and their confidence in cooking and preparing meat has increased,” says Rick Stein, FMI vice president of fresh foods. “Further analysis also shows convenient meal solutions are key and that food retailers have opportunities to provide more choices, along with more information and education on consumer priorities like nutrition and meal preparation, building up what we call consumers’ Meat IQ.”

The number of meat shoppers who purchased groceries online grew 40% in 2020, and 59% of online purchasers expect to continue purchasing about the same amount online in this year, suggesting food shopping habits may have changed permanently.

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Northern Plains through Monday afternoon. Elsewhere, it was mostly inactive on very light demand with too few transactions to trend, according to the Agricultural Marketing Service (AMS).

Last week, live prices were $1 higher in the Southern Plains at $115/cwt., $2 higher in the Northern Plains at mostly $116 and $1-$2 higher in the western Corn Belt at $115-$117. Dressed trade was $3-$5 higher at $185.

The five-area direct average steer price last week was $115.38/cwt. on a live basis, which was $1.14 higher than the previous week. The five-area direct average steer price in the beef was $184.66,which was $2.98 higher.

Cattle futures bounced higher Monday, amid active trade, extending last week’s gains, with ongoing support from higher wholesale beef values, last week’s  stronger cash prices and softer Corn futures.

Live Cattle futures closed an average of 61¢ higher, except for unchanged and 5¢ lower in the back two contracts.

Feeder Cattle futures closed an average of $1.28 higher, from 15¢ higher toward the back to $2.32 higher toward the front. 

The CME Feeder Cattle Index was $2.10 higher at $138.85.

Choice boxed beef cutout value was $1.87 higher Monday afternoon at $239.53/cwt. Select was $4.73 higher at $232.50.

Corn futures closed 2¢ to 5¢ lower.

Soybean futures closed 1¢ to 2¢ lower, except for 5¢ to 7¢ lower in the front three contracts.

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Major U.S. financial indices closed narrowly mixed to lower Monday, following strong pressure early in the session from bank stocks. According to various reports, the pressure stemmed from the forced liquidation of more than $20 billion by a hedge fund that got caught upside down in bad bets and margin calls; ripple effects ensued.

The Dow Jones Industrial Average closed 98 points higher. The S&P 500 closed 3 points lower. The NASDAQ was down 79 points.

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“As April arrives, the current drought situation looms larger and potential impacts on cattle markets are increasing with each passing week,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The latest Drought Monitor shows that 43.55% of the continental U.S. is in some degree of drought (D1-D4), including 18.06% in Extreme and Exceptional drought (D3-D4). Additionally, another 20.66% of the country is abnormally dry (D0), which means that only 35.79% of the U.S. is free of drought conditions. At the beginning of March one year ago, over 76% of the U.S. was drought free.”

The current drought, which began to advance a year ago, has progressed more rapidly than any drought in more than 20 years, Peel says. He adds an aggregate annual index of drought conditions is currently at the highest level (worst drought) since 2014. 

So far, Peel notes the most significant drought impacts appear to be in Colorado, where the beef cow inventory declined by 112,000 head (-14.5%) year over year Jan. 1 and replacement heifers declined by 16.1%.

“Drought conditions plagued much of the desert southwest in 2020 but cow herd liquidation in Nevada, New Mexico and Utah totaled just 34,000 head. As bad as they were, these cowherd losses were not enough to cause significant general cattle market impacts. Significantly higher hay prices were noted in 2020 in the western drought region,” Peel says. “If a drought is severe enough, over a big enough region, and lasts long enough, broader market values may be affected resulting in lower prices for cattle and higher prices for feeds and other inputs. This can result in additional challenges for drought impacted producers, as well as impacts on producers outside the drought region.” 

Moreover, odds favor La Niña conditions into the summer, according to Art Douglas, professor emeritus at Creighton University and long-time CattleFax meteorologist. He forecasts the Southwest U.S. will be warmer than normal, and the western half of the country will be relatively dry. Dry conditions in the Rockies will eventually extend into the central Corn Belt, he says, causing concerns for corn and soybean growers.

“Arguably the most concerning areas now are North and South Dakota and Texas. Persistence or expansion of drought in these areas (which have large beef cattle numbers), in conjunction with ongoing drought in Rocky Mountain and desert southwest regions could result in levels of herd liquidation/movement that broadly impact cattle markets,” Peel says. “If the drought preempts spring forage growth in these regions, market impacts could develop rapidly in the next three to five months. Conditions in the coming weeks may have significant cattle market impacts on producers in drought regions, producers in regions where drought is or could develop, as well as producers outside of drought areas.”