WLI

Cattle futures faded early pressure to close mainly narrowly mixed on Tuesday, supported by the continued surge in beef cutout values and the outlook for steady to higher cash fed cattle prices this week.

Except for 62¢ lower in spot Dec and 52¢ higher at the back of the board, Live Cattle futures closed marginally mixed (10¢ lower to 25¢ higher).

Other than $1.22 lower in spot Nov and 10¢ higher at the back of the board, Feeder Cattle futures closed an average of 11¢ lower.

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

Choice boxed beef cutout value was $1.24 higher Tuesday afternoon at $236.05/cwt. Select was 56¢ lower at $209.82.

Corn futures closed mostly 1¢ lower.

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

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Major U.S. financial indices closed narrowly mixed Tuesday, amid continued strong quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 3 points lower. The NASDAQ was up 1 point.

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Agricultural producer sentiment rose in October, according to the Purdue University/CME Group Ag Economy Barometer. It increased 15 points from September to a reading of 136. Sub-indices also increased, with an increase of 15 points in both the Index of Current Conditions (155) and the Index of Future Expectations (146).

The barometer is based on a mid-month survey of 400 U.S. crop and livestock producers.

“Almost across the board, farmers were more optimistic about the agricultural economy in October,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “While the level of optimism among farmers is higher than earlier this year, the survey uncovered additional uncertainty related to trade agreements that are still being negotiated.”

For instance, 96% of producers indicated the U.S.-Mexico-Canada Trade Agreement—waiting for approval by Congress—was either important or very important. However, only 55% expect it to be approved by Congress soon. At the same time, 97% of producers felt the recently announced trade deal with Japan was also important or very important to U.S. agriculture.

As for the ongoing trade war between the U.S. and China, 51% of respondents believed an imminent resolution was unlikely. But, that was 8% fewer than in September and 20% less than when the same question was posed in August. At the same time, 75% in the October survey said they expect the final outcome will ultimately prove beneficial to U.S. agriculture. October was the fourth consecutive month that more than 70% expected a beneficial outcome to the trade dispute.

When all was said and done last week, negotiated cash fed cattle sales ended up $2 higher on a live basis in the Southern Plains at $112/cwt., mostly $5 higher in Nebraska at mostly $115 and $3-$4 higher in the western Corn Belt at $113-$114. Dressed sales were mostly $5 higher at mostly $180.

Cattle futures edged mostly higher to start the week, maintaining gains from Friday’s rally, borne by higher cash fed cattle prices and increasing wholesale beef values.

Live Cattle futures closed an average of 39¢ higher.

Other than 5¢ lower and unchanged in the front two contracts, Feeder Cattle futures closed an average of 63¢ higher (17¢ to $1.07 higher).

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

Choice boxed beef cutout value was $1.61 higher Monday afternoon at $234.81/cwt. Select was $2.87 higher at $210.38.

Corn futures closed 3¢ to 6¢ lower in the front four contracts and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 2¢ higher through Jan. ’21 and then mostly fractionally lower.

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Major U.S. financial indices closed higher Monday, with follow-through buying from Friday’s rally, sparked by a strong monthly employment report and continued strong quarterly corporate earnings.

The Dow Jones Industrial Average closed 114 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 46 points.

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Cyclical price support could be nearer than previously supposed, based on recent estimates from the Livestock Marketing Information Center (LMIC).

First, LMIC projects the Jan. 1 cattle inventory will be slightly less year over year.

“Regional cow slaughter suggests beef cows are being slaughtered at a much higher rate in most of the regions except the Southern Plains,” say LMIC analysts, in the latest Livestock Monitor. “Total beef cow slaughter through 42 weeks of the year is up 2.9%. Heifer slaughter continues to post large gains compared to a year ago. Weekly heifer slaughter year to date is up 7.3%.”

Further, LMIC analysts explain heifer slaughter is on pace for about 500,000 head more than was in the Jan. 1 ‘other heifer’ category.

“That would indicate more heifers that were considered for replacement were pulled from the herd,” they say. “The latest Cattle on Feed report showed 39% of the on-feed mix were heifers. This suggests that the number of heifers held for replacement for beef-type animals will also likely be below a year ago. LMIC is penciling in beef heifer replacements down more than 2%.”

As for dairy, LMIC analysts say the cow inventory edged lower since last year, with the latest milk production report indicating 30,000 fewer cows than when the year began.

Finally, LMIC analysts point out steer slaughter for the first 42 weeks of this year is more than 2% less than the same period last year.

“Reconciling the steer slaughter deficit against 2018’s large 1.8% increase in the calf-crop year from the previous year has been difficult,” they say. “The calf crop and the number reported for steers 500 lbs. and heavier both appear to be too high in last year’s report (Cattle).”

Negotiated cash fed cattle trade remained undeveloped in the North through Friday afternoon, based on USDA reports. Although there were too few transactions to trend, a few live sales in the western Corn Belt were at $112-$114/cwt. and a few dressed sales in Nebraska were at $180. Compared to the previous week, that was $2-$4 higher on a live basis and $5 higher in the beef.

Furthermore, USDA’s Direct Slaughter Cattle Reporting Dashboard tallied 12,560 head of steers and heifers Friday (live and dressed), with the average steer price at $113.70 on a live basis and $177.04 in the beef.

For the week, live sales in the Southern Plains were $2 higher at $112/cwt.

Stronger cash prices and the recent surge in wholesale beef values helped Cattle futures rally on Friday.

Not counting 40¢ lower in newly minted away April, Live Cattle futures closed an average of $1.55 higher ($1.07 higher to $2.30 higher in spot Dec).

Feeder Cattle futures closed an average of $1.94 higher ($1.32 to $2.72 higher).

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

Choice boxed beef cutout value was $1.02 higher Friday afternoon at $233.20/cwt. Select was also $1.02 higher at $207.51.

Corn futures closed mostly fractionally lower.

Soybean futures closed 3¢ to 7¢ higher through Aug. ’20 and then mostly 1¢ lower.

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Major U.S. financial indices closed higher Friday, buoyed by a strong monthly employment report.

Total non-farm payroll employment increased by 128,000 in October, according to the U.S. Bureau of Labor Statistics. That was significantly more than expectations. The unemployment rate was little changed at 3.6%. The average hourly earnings of all employees on non-farm payrolls increased 6¢ to $28.12. Average hourly earnings are 3.0% higher over the last 12 months.

Crude oil rallied with West Texas Intermediate (CME) up $1.80 to $2.02 higher through the front 12 contracts.

The Dow Jones Industrial Average closed 301 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 94 points.

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Choice boxed beef cutout value was $233.20/cwt. Friday, the highest since August—about a week after the Tyson fire. That was $14.65 more (+6.7%) than a year earlier. At $207.52 on Friday, Select was $3.27 more (+1.6%) more. The Choice-Select spread was 79.6% higher (+$11.39) at $25.69.

“Most of the strength in cutout prices right now is coming from the rib and brisket primal, with slight support from the chuck and round,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The chuck and round will bear more of the burden of supporting the cutout value moving through the winter months.”

Griffith also notes 90%-lean beef prices remain strong, despite seasonal fourth-quarter pressure.

“Current prices are about 16% above where they were this time one year ago, but they are slightly lower than the five-year average price for the beginning of November,” Griffith says.

Except for some scattered sales in Kansas on Thursday—steady with the previous day’s higher market in the Southern Plains at $112/cwt.—negotiated cash fed cattle trade remained undeveloped, based on USDA reports.

Cattle futures pulled back from the strong rally the previous day, pressured by outside markets on new doubts about a U.S.-China trade deal.

Live Cattle futures closed an average of 63¢ lower (15¢ lower at the back to $1.70 lower in expiring Oct).

Feeder Cattle futures closed an average of 19¢ lower.

Wholesale beef values were sharply higher on Choice and steady on Select, with moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.13 higher Thursday afternoon at $232.18/cwt. Select was 18¢ lower at $206.49.

Corn futures closed mostly fractionally lower.

Soybean futures closed mostly 2¢ higher.

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Major U.S. financial indices closed lower Thursday. Pressure included chatter about a more dismal outlook for U.S.-China trade talks, but nothing definitive, as always. Likely, there was also some month-end profit taking and book squaring.

The Dow Jones Industrial Average closed 140 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 11 points.

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For the first time in a long while, carcass weights trended higher year over year, for the week ending Oct. 19.  

The average dressed steer weight was 900 lbs., according to the most recent Actual Slaughter Under Federal Inspection report. That was 1 lb. lighter than the previous week but 6 lbs. heavier than the same time a year earlier. The average dressed heifer weight of 831 lbs. was 3 lbs. heavier than the previous week and 5 lbs. heavier than the previous year.

Negotiated cash fed cattle trade developed in the Southern Plains Wednesday at $112/cwt. on a live basis. That was $2 more than the bulk of last week’s trade in the region.

Likewise, there were four lots of heifers (433 head) offered in the weekly Fed Cattle Exchange Auction, for delivery at 1-9 days. Two Kansas lots sold for a weighted average price of $112. The other two lots were passed at $112.25 and $112.75.

Also, there were 237 head of Ch 2-4 steers at the fat auction in Tama, IA—average weight of 1,445 lbs. They sold for a weighted average price of $113.05

Cattle futures rallied strong on Wednesday, supported by stronger cash fed cattle prices and the sharp seasonal uptick in wholesale beef values.

Except for 2¢ higher in expiring October, Live Cattle futures closed an average of $1.24 higher, with increasing open interest and the heaviest trade in a month. Dec closed at the highest level since April at $118.30.

Other than 60¢ higher in nearly spent October, Feeder Cattle futures closed an average of $2.69 higher, with active trade and expanding open interest.

Wholesale beef values were weak on Choice and sharply higher on Select, with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 50¢ lower Wednesday afternoon at $230.05/cwt. Select was $3.10 higher at $206.67.

Corn futures closed 2¢ to 4¢ higher in the front three contracts, and then mostly fractionally higher.

Soybean futures closed mostly 2¢ lower.

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Major U.S. financial indices closed higher Wednesday. Support included stronger domestic economic performance last month, as well as a positive barometer for job growth.

Real gross domestic product (GDP) increased at an annual rate of 1.9% in the third quarter of this year, according to the advance estimate released by the Bureau of Economic Analysis.

On the jobs front, non-farm jobs in the private sector increased by 125,000 from September to October, according to the closely-watched ADP National Employment report.

Also, as expected, the Federal Open Markets Committee (FOMC), cut the target range for the federal funds rate by 25 points for the third time this year.

The Dow Jones Industrial Average closed 115 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 27 points.

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Whether current interest in plant-based proteins is a fad or a long-term trend depends on the particular consumer and their reasons for choosing plant-based foods.

That’s the conclusion of a new study by the NPD Group (NPD), which finds that Millennials (born 1981-1996) are the top consumers of plant-based meat alternatives. According to The Future of Plant-based Snapshot, this generational group has adopted plant-based meat alternatives as a way to indulge sensibly while addressing their long-term health goals and animal welfare concerns.

Likewise, the study indicates Gen Xers (born 1965-1980) are also a core consumer group of plant-based meat alternatives. Many in this group are parents of Gen Zs (born 1997 to present), and they raised their Gen Z children on plant-based beverages and foods. Boomers are decelerating their consumption of plant-based meat alternatives but are the top consumers of plant-based dairy alternatives.

Since the core consumer groups for plant-based dairy and meat alternatives are younger, NPD forecasts that plant-based foods, to varying degrees, do have staying power. NPD’s study also finds that plant-based food consumption is not about rejecting traditional protein sources, as about 90% of plant-based users are neither vegetarian nor vegan.

“First and foremost taste is king when considering entering the plant-based foods category,” says Darren Seifer, NPD food and beverage industry analyst. “Attributes such as health and convenience go far to drive consumption, but if the flavor profile falls below consumers’ expectations, then the product will likely have a short run…”