WLI

Negotiated cash fed cattle trade was $1 higher at $120/cwt. in Kansas through Thursday afternoon. Although too few to trend, live sales were generally $1-$2 higher at $120-$121 in Nebraska and at $121 in the western Corn Belt. Early dressed sales were $2-$4 higher at $192.

Cattle futures were mixed on Thursday but closed mostly slightly higher, supported by stronger cash prices and sluggish trade.

Live Cattle futures closed mixed, from an average of 34¢ lower across the front four contracts to an average of 27¢ higher. 

Other than 7¢ lower in Mar, Feeder Cattle futures closed an average of 40¢ higher (7¢ to 85¢ higher).

Wholesale beef values were weak on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 58¢ lower Thursday afternoon at $208.99/cwt. Select was also 58¢ lower at $200.99.

Corn futures closed fractionally mixed through Jul ’21 and then unchanged to 4¢ higher.

Soybean futures closed 3¢ to 4¢ lower through Aug ’20 and then mostly 1¢ lower.

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Major U.S. financial indices closed higher Thursday, as investors seemed to ignore mixed economic news and the House vote to impeach president Trump.

The Dow Jones Industrial Average closed 137 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 59 points.

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The U.S. House of Representatives approved implementing legislation for the U.S.-Mexico-Canada Agreement (USMCA), by a vote of 385-41.

“Ratification of USMCA is an important step in solidifying trade relations with Mexico and Canada, which are critical destinations for U.S. pork, beef and lamb,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation. “This agreement will bolster the United States’ position as a reliable supplier to two leading markets that currently account for about one-third of all U.S. red meat exports.”

“Today was a crucial win for all U.S. beef producers and a reassurance that U.S. beef will continue to have duty-free access to Canada and Mexico,” says Jennifer Houston, president of the National Cattlemen’s Beef Association (NCBA).

Now, it’s up to the Senate to pass the legislation and President Trump to approve.

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Red meat and pork production were record high in November at 4.74 billion lbs., which was 1% more than the previous year, according to USDA’s monthly Livestock Slaughter report. For January through November, it was 3% more at 50.3 billion lbs.

Beef production in November of 2.30 billion lbs. was 1% less than the previous year. Cattle slaughter of 2.77 million head was also 1% less. Through November, beef production was 129.3 million lbs. more (+0.50%) than the same period last year at 24.89 billion lbs.

More recently, average steer carcass weights for the week ending Dec. 7 were 5 lbs. lighter than the previous week at 906 lbs., according to USDA’s most recent weekly Actual Slaughter Under Federal Inspection report. That was 10 lbs. heavier than the prior year. The average heifer carcass weight of 840 lbs. was even with the prior week and 5 lbs. heavier than the prior year. Total cattle slaughter for the week of 682,077 head was the most in more than two years. Fed cattle slaughter of 536,210 head was the most since June. Total beef production for the week was 564.8 million lbs., the most in more than two years.

Pork production totaled 2.43 billion lbs. in November, up 3% from the previous year. Hog slaughter of 11.3 million head was 3% higher year over year. For January through November, pork production was 5% more than the same period last year.

Prospects for negotiated cash fed cattle prices got a shot in the arm from the weekly Fed Cattle Exchange auction Wednesday. One lot of Texas steers—268 head—sold out of a total offering of 878 head, for a weighted average price of $120/cwt., which was $1 higher than last week’s country trade in the region.

Similarly, Choice steers and heifers sold $1.00-$1.50 higher at the fat auction in Tama, IA. There were 305 Ch 2-4 steers weighing an average of 1,453 lbs. and bringing an average price of $120.54, which was at the upper end of the previous week’s country price.

Cattle futures wavered, amid the lack of cash direction and sluggish overall trade.

Other than 2¢ higher in spot Dec, Live Cattle futures closed an average of 25¢ lower. 

Other than 7¢ higher toward the back, Feeder Cattle futures closed an average of 52¢ lower.

Wholesale beef values were lower to sharply lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $3.24 lower Wednesday afternoon at $209.57/cwt. Select was $1.90 lower at $201.57.

Corn futures closed 1¢ to 3¢ lower.

Other than fractionally lower in the front four contracts, Soybean futures closed 1¢ to 4¢ higher.

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Major U.S. financial indices closed narrowly mixed Wednesday, amid mixed news and continuing optimism surrounding the presumed phase-one U.S.-China trade deal.

The Dow Jones Industrial Average closed 27 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 4 points.

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Although narrowing recently, analysts with the Livestock Marketing Information Center (LMIC) point out the Choice-Select spread was $19-$27/cwt. from June through November, well above the previous year and the five-year average. They explain the spread typically begins to narrow following peak summer beef demand around Independence Day.

According to LMIC, in the latest Livestock Monitor, 70.9% of carcasses graded Choice through November, which was 1% less than the prior year. Prime-grading carcasses were higher, though, at 8.5%.

“Interestingly, total cattle slaughter through the first week of December is 1.4% above last year at 31.1 million head. Slaughter data does not indicate that there is a lack of cattle available, but there is a lack of Choice grade cattle,” say LMIC analysts. “A factor contributing to the lower available supplies of Choice product are cattle graded for branded programs. Branded programs typically include higher quality-grade cattle, which may contain cattle that grade Choice and/or Prime.”

More specifically, quality-based brands commonly target carcasses that grade in the upper two thirds of Choice. So far this year, USDA certified 31.5% of fed cattle for that category, according to LMIC. That’s 7.4% more than last year.

“Branded boxed beef prices have been commanding an average of $5.30/cwt. above the Choice boxed beef price, indicating that there may be more Choice product going into channels for branded products,” say LMIC analysts. “The relatively higher price for branded boxed beef products over Choice products, and more cattle qualifying for branded programs, may be contributing to lower availability in the Choice category.”

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Feeder Cattle futures mostly edged higher and Live Cattle mostly wandered lower.

Live Cattle futures closed an average of 38¢ lower (5¢ to 95¢ lower) to an average of 7¢ higher.

Feeder Cattle futures closed an average of 14¢ higher, except for 10¢ and 27¢ lower on either end of the board.

Wholesale beef values were sharply lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $4.27 lower Tuesday afternoon at $212.81/cwt. Select was $2.04 lower at $203.47.

Corn futures closed mostly 1¢ higher through Jly ‘21; and then fractionally lower to 1¢ lower.

Soybean futures closed mostly 3¢ to 4¢ higher through Jan. ’21 and then mostly 1¢ higher.

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Major U.S. financial indices crept higher Tuesday. Support included more new housing starts than expected.

Total housing starts increased 3.2% in November to a seasonally adjusted annual rate of 1.37 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department.

The November reading of 1.37 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months, according to the National Association of Home Builders (NAHB). Within this overall number, single-family starts increased 2.4% to a 938,000 seasonally adjusted annual rate off downwardly revised estimates for recent months.

“Market conditions for single-family starts are positive, given a lack of resale inventory, low interest rates and a solid job market,” says Greg Ugalde, NAHB chairman and a home builder and developer from Torrington, Conn. “Builder confidence points to additional gains as we look forward.”

The Dow Jones Industrial Average closed 31 points higher. The S&P 500 closed 1 point higher. The NASDAQ was up 9 points.

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“Despite wholesale prices declining from abnormally high levels in mid November, packers continue to pay higher prices to bid cattle out of the feedlots,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “Greater fed cattle slaughter may in part reflect the packers’ inclination to capture stronger than typical margins as wholesale boxed beef prices averaged well above 2018 during November and into early December. Feedlots also have a higher proportion of cattle on feed over 150 days, and the narrowing of the Choice-Select spread may also be providing incentives to bring additional cattle to market.”

USDA recently increased its projected fourth-quarter fed steer price by $2 to $114/cwt. Forecast prices for the first two quarters of next year were raised to $122 and $118, respectively.

In turn, ERS also increased projected prices for feeder cattle (basis Oklahoma City).

Based on recent price data, the fourth-quarter 2019 feeder steer price was raised by $3 to $147/cwt. The 2020 annual price forecast for feeder steers was raised by $2 to $144.

Quarterly feeder steers prices for 2020 are projected at: $140 in the first quarter, $142 in the second quarter and $147 in the third quarter.

As for cull cows, ERS analysts point out the average price for the week ending Dec. 6 was $53.76/cwt., which was 16% higher than a year earlier. “This, coupled with tight forage supplies for some producers, is likely encouraging a higher culling rate.” Beef cow slaughter continues well above last year’s pace.

Negotiated cash fed cattle trade ended up steady to $1 higher in the Southern Plains last week at $119/cwt. on a live basis; steady to $2.50 higher in the Northern Plains at $119.00-$120.50. Dressed trade was steady to $2 higher at $188-$190.

Week to week the 5-area average direct live steer price was just 25¢ higher at $119.17, but with average live weights 34 lbs. heavier at 1,506 lbs. In the beef, the average steer price was 10¢ less at $188.00 with average dressed weights 45 lbs. heavier at 992 lbs.

Cattle futures wandered narrowly lower Monday, maintaining most of the previous session’s strong gains, and in the face of higher Corn futures.

Live Cattle futures closed an average of 18¢ lower, except for 5¢ higher in the back contract.

Feeder Cattle futures closed an average of 43¢ lower, except for 5¢ higher in the back contract

Wholesale beef values were higher on light to moderate demand and offerings, according to the Agricultural Marketing Service. Gains over the last two days suggest the seasonal bottom might be established.

Choice boxed beef cutout value was 79¢ higher Monday afternoon at $217.08/cwt. Select was $1.27 higher at $205.51.

Corn futures closed mostly 5¢ to 6¢ higher through Jly ‘21; and then mostly 2¢ to 3¢ higher.

Soybean futures closed 10¢ to 14¢ higher through Jan. ’21 and then mostly 3¢ higher.

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Major U.S. financial indices closed higher on Monday, with follow-through optimism from the U.S.-China phase-one trade deal announced last week.

The Dow Jones Industrial Average closed 100 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 79 points.

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Hide prices continue to dilute byproduct value, which ranged from $8.24/cwt. to $9.30 so far this year.

“Hide values are down 32% from a year ago from January to November,” say analysts with the Livestock Marketing Information Center (LMIC). “On a per hundredweight basis, January through November of 2019 (hides) averaged $47.85/cwt. compared to $70.37 in 2018. This year’s values will be the lowest annual average for hides since the start of this data set in 1992.”

Based on data from USDA’s Foreign Agricultural Service (FAS) for January through October, they say cattle hides that were sold as parts are 74% less than last year and those sold whole are down 5%.

Meat and bone meal is 14% less than the same period last year, although some offal prices are higher, such as for tripe and tongues, which are up 34% and 25%, respectively.

In the latest Livestock Monitor, LMIC analysts say most offal products are consumed overseas. For example, they explain South Africa is the largest destination for U.S. bovine kidneys. Purchases by that nation are up 26% year-over-year and kidney prices are 13% higher.

Similarly, Egypt buys more than half of the beef livers exported by the U.S,; those prices are up 3%.