WLI

Negotiated cash fed cattle trade for the week was mainly $3 higher through Friday afternoon at $103/cwt. on a live basis and at $163 in the beef.

Through Thursday, the five-area direct weighted average steer price was $101.28 on a live basis, which was $2.79 higher than the previous week. The average dressed steer price was $163.19, which was $3.17 higher than the prior week. Compared to the same time last year, though, those prices were $12.83 less and $19.38 less, respectively.

Cattle futures edged lower on Friday, entrenched in the long-worn sideways channel, and with some likely profit taking.

Except for 17¢ higher in spot Aug, Live Cattle futures closed an average of 51¢ lower (7¢ to 87¢ lower).

Except for 22¢ and 7¢ higher in two away contracts, Feeder Cattle futures closed an average of 37¢ lower.

Choice boxed beef cutout value was 81¢ higher Friday afternoon at $205.47/cwt. Select was 74¢ higher at $192.75.

Corn futures closed mostly 2¢ lower. 

Soybean futures closed mostly 9¢ to 10¢ lower.

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Major U.S. financial indices closed mainly sideways on Friday as investors weighed the impasse over additional federal coronavirus aid against stouter employment numbers than expected.

Total non-farm employment increased 1.8 million month-to-month in July and the national unemployment rate declined 0.9% to 10.2%, according to the U.S. Bureau of Labor Statistics.

Average hourly earnings for all employees on private non-farm payrolls rose by 7¢ to $29.39.

The Dow Jones Industrial Average closed 46 points higher. The S&P 500 closed 2 points higher. The NASDAQ closed 97 points lower.

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Recently expired COVID-19 unemployment benefits could hamstring the struggling recovery in the U.S. restaurant sector, according to the NPD Group (NPD).

“Up until July 31, somewhere between 25 and 30 million Americans were receiving Federal Pandemic Unemployment Compensation as part of the federal government’s CARES Act, which has provided $600 a week of enhanced unemployment benefits,” explains David Portalatin, NPD food industry advisor. “These unemployment benefits translated to between $15-$18 billion per week being put into consumers’ bank accounts, and for context, total restaurant industry sales right now are a bit less than $8 billion per week.”

For the week ending July 26, U.S. major restaurant chain customer transactions were down 11%, compared to a year earlier, but 1% more positive than the previous week, according to NPD’s CREST^®Performance Alerts.

Customer transactions at major quick service restaurant chains were even with the prior week and down 11% year over year. Full service restaurants chain transactions were 24% less than the same week last year, but improved 3% week to week.

The NPD folks note that full service restaurants were still recovering from the Great Recession, which ended more than 10 years ago, when the COVID pandemic prompted shelter-at-home orders and mandated dine-in closures. Along the way, consumers began leaning more toward quick service restaurants, too.

“Long before COVID, consumers were already favoring quick service restaurants and off-premises dining, and this trend has accelerated during the pandemic and will most likely be a behavior that will stick,” Portalatin says. “For full service restaurants it will mean more flexible operations, delivering on the on-premises experience and optimizing off-premises services. I see this as a sea change for the U.S. restaurant industry.”

Negotiated cash fed cattle trade had yet to fully develop through Thursday afternoon, according to the Agricultural Marketing Service, but early prices are mostly $3 higher, with established trade in the Southern Plains at mostly $100/cwt. Although too few to trend, there were some early trades in Nebraska ($163 dressed) and in the western Corn Belt at $103 on a live basis and at $163 in the beef.

Cattle futures were mixed but mostly softer. The latest U.S. Export sales report offered no support. Net beef export sales for the week ending July 30 were down 55% from the previous week and down 35% percent from the prior four-week average, according to USDA’s Foreign Agricultural Service. June exports were down hard (see below).

Except for 32¢ and 42¢ higher on either end of the board, Live Cattle futures closed an average of 45¢ lower.

Except for 15¢ lower in Sep, Feeder Cattle futures closed an average of 87¢ lower (52¢ to $1.32 lower).

Choice boxed beef cutout value was $1.09 higher Thursday afternoon at $204.66/cwt. Select was $1.19 higher at $192.01.

The average dressed steer weight for the week ending July 25 was 903 lbs., which was 4 lbs. heavier than the previous week and 34 lbs. heavier than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 829 lbs. was the same as the previous week but 29 lbs. heavier than the previous year.

Total cattle slaughter for the week of 639,971 head was 11,692 head fewer than the same week last year, but beef production of 533.7 million lbs. was 7.8 million lbs. more.

Corn futures closed unchanged to fractionally mixed. 

Soybean futures closed mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed higher Thursday, led by tech stocks and supported by fewer weekly initial jobless claims than anticipated.

Initial claims for the week of Aug. 1 were 249,000 fewer than the prior week at 1.19 million, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 185 points higher. The S&P 500 closed 21 points higher. The NASDAQ closed 109 points higher.

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Supply disruptions, restrictions on foodservice and weakening economies in major import markets helped confound U.S. beef exports in June, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

June beef exports were close to the May lows, down 33% from a year ago to 79,013 metric tons (mt), with value falling 32% to $492.3 million. Exports were below year-ago levels to most markets but trended higher to Canada, China and South Africa. For January through June, beef exports fell 9% below last year’s pace in volume (591,609 mt) and were 10% lower in value ($3.63 billion).

Beef export value per head of fed slaughter averaged $219.53 in June, down 32% year over year. The first-half average was $300.43 per head, down 4%.

“We expected that the interruptions in red meat production would continue to weigh on June exports, but anticipated more of a rebound from the low May totals, particularly for beef,” says USMEF President and CEO Dan Halstrom. “But, it takes time for the entire chain to adjust to supply shocks, and thus it was another difficult month for exports. However, weekly U.S. export data suggest an upward trend in demand in most markets, and with production recovering, the U.S. has regained its supply advantage. So, we expect beef and pork exports to regain momentum in the second half of the year.”

June pork exports totaled 207,181 mt, which were 3% less than a year ago, while export value fell 9% to $516.3 million. Exports continued to trend higher than a year ago to China/Hong Kong, but were the lowest since October.

There was no negotiated cash fed cattle trade summary available from USDA at press time Wednesday, but indications continued to point to higher prices for the week.

For instance, Choice steers and heifers sold $3.50 to $3.75 higher at the fat auction in Tama, Iowa. There were 127 head of Choice 2-4 steers weighing an average of 1,382 lbs. and bringing an average of $104.32/cwt.

Cattle feeders offered 1,474 head in the weekly Fed Cattle Exchange Auction—all from the Southern Plains. Of those, 1,400 head sold: 960 head for delivery of 1-9 days at an average weighted price of $99.95/cwt.; 440 head for delivery at 1-17 days for a weighted average price of $100.

Except for 2¢ and 5¢ lower in two contracts, Live Cattle futures closed an average of 34¢ higher.

Except for 15¢ lower in Sep, Feeder Cattle futures closed an average of 59¢ higher.

Choice boxed beef cutout value was 58¢ lower Wednesday morning at $203.66/cwt. Select was 56¢ higher at $191.01.

Corn futures closed 1¢ to 3¢ higher. 

Soybean futures closed 1¢ to 3¢ lower through Mar ’21 and then mostly 1¢ higher.

The five-area direct weighted monthly average fed steer price in July was $96.57/cwt. on a live basis, which was $7.25 less than in June and $15.63 less than the previous July. The average dressed steer price of $157.69 was $8 less than the previous month and $20.54 less than the prior year.

The average monthly fed heifer price of $96.22 was $9.24 less than in June and $15.88 less than in July of last year. The average heifer price in the beef was $157.32, which was $8.70 less month to month and $20.91 less year over year.

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Major U.S. financial indices closed higher Wednesday, amid mixed economic news. Support included more promise for another COVID-19 vaccine candidate and ongoing Congressional wrestling for more pandemic aid. Pressure included a more pessimistic labor outlook.

Private sector employment increased by 167,000 jobs from June to July according to the closely watched ADP National Employment Report®.  That was significantly less than traders expected.

The Dow Jones Industrial Average closed 373 points higher. The S&P 500 closed 21 points higher. The NASDAQ closed 57 points higher.

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Heading into Labor Day–the last grilling holiday of the summer–David Anderson, Extension livestock economist at Texas A&M University says the recent surge in orders suggests retailers are making a push to feature beef.

“Big beef featuring will be welcome,” Anderson says, in the latest issue of In the Cattle Markets. “Slowly working off the backlog (fed cattle) and moving more beef into retail is slowly pulling cattle prices higher. The weekly Choice beef cutout hit its low for the year, so far, at $201.24/cwt. for the week ending July 18. Since then, it has clawed back to $202.34. But, as with fed cattle, large beef supplies are keeping the pressure on the wholesale market.”

Although the aforementioned backlog continues, Anderson notes fed cattle slaughter is almost equal to year-ago levels. Specifically, he says fed cattle slaughter for June and July, combined, was 99.9% of a year earlier. He adds that along with increased cow slaughter and heavier carcass weights beef production for the last eight weeks was more than the same time period last year.

“In coming weeks, watch for progress on the fed cattle slaughter front, more featuring for Labor Day and increasing beef exports as prices decline. All of these should act to boost fed cattle prices going into late summer,” Anderson says.

Cattle futures closed mostly narrowly lower on Tuesday, awaiting cash direction. Early indications are cash fed cattle have some room to grow this week.

Live Cattle futures closed an average of 35¢ lower.

Except for an average of 14¢ higher in two mid-board contracts, Feeder Cattle futures closed an average of 22¢ lower.

Choice boxed beef cutout value was 42¢ lower Tuesday afternoon at $204.24/cwt. Select was 5¢ higher at $190.45.

Positive crop conditions and weather weighed on grain futures, Tuesday.

Corn futures closed 6¢ to 9¢ lower through Jly ’21 and then mostly 1¢ lower.

Soybean futures closed 11¢ to 14¢ lower through Mar ’21 and then 4¢ to 9¢ lower

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Major U.S. financial indices closed higher Tuesday, with increasing hopes of Congress agreeing to additional coronavirus relief.

The Dow Jones Industrial Average closed 164 points higher. The S&P 500 closed 11 points higher. The NASDAQ closed 38 points higher.

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Month-to-month farmer sentiment was virtually unchanged in July, according to the Purdue University/CME Group Ag Economy Barometer. The index increased 1 point to a reading of 118, which was 30% lower than in February before the pandemic began.

Producers’ perspective on current versus future conditions shifted, though. The Index of Current Conditions rose 12 points from June to a reading of 111, and the Index of Future Expectations fell 5 points to a reading of 121.

“Although overall farmer sentiment in July did not change much compared to June, sentiment was still much weaker than in February before the impact of coronavirus hit,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “In July, farmers indicated they were a bit less concerned about the current economic situation on their farms than earlier this spring, but they are less optimistic about the future, perhaps as a result of the recent resurgence in COVID-19 cases. Still, two-thirds of producers responding to this month’s survey said they believe Congress should provide additional economic assistance to farmers in 2020 to help offset the pandemic’s impact on agriculture.”

Among survey highlights:

**56% of producers said they plan to reduce their farm machinery purchases compared with a year ago; while 38% said they plan to keep machinery purchases about the same.

**16% of respondents expect farmland values to rise over the next 12 months compared with 10% in June. Looking ahead, however, 48% said they expect values to rise over the next five years compared with 55% in the previous survey.

**More than half of survey respondents said they were less likely to attend in-person educational events in 2020, as a result of COVID-19 concerns. When asked what their top information source would be in lieu of attending in-person events, 36% chose farm magazines, 19% chose online webinars, 17% chose farm radio and 17% chose websites.

The Ag Economy Barometer, based on responses from 400 U.S. agricultural producers, was conducted July 20-24.