WLI

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon, as Cattle futures continued to mostly grind higher.

Live Cattle futures closed an average of 17¢ higher, except for an average of 10¢ lower at either end of the board.

Except 7¢ lower for expiring Spot Sep, Feeder Cattle futures closed an average of 33¢ higher.

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

Choice boxed beef cutout value was $1.12 lower Thursday afternoon at $213.51/cwt. Select was 56¢ higher at $190.39.

Corn futures closed mostly fractionally lower.

Soybean futures closed fractionally mixed to 1¢ higher. 

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Major U.S. financial indices closed lower on Thursday, riding a similar seesaw from earlier in the week with the ebb and flow of trade talk with China.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed 7 points lower. The NASDAQ was down 46 points.

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Beef supplies in Cold Storage continue less year over year.

Total pounds of beef in freezers, as of Aug. 31, were 4% more than the previous month but 6% less than the same time last year, according to the most recent USDA Cold Storage report.

Frozen pork supplies were down 1% from the previous month, but were up 4% from last year.

Total red meat supplies in freezers were up 1% from the previous month but down 1% from last year.

Total frozen poultry supplies were 4% more than the previous month but 5% less than a year ago.

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon.

There were 1,533 offered, but no sales, in the weekly Fed Cattle Exchange auction.

Although expectations remain for steady to higher prices this week, slaughter cattle sold $2-$5 lower at Sioux Falls Regional in South Dakota. Choice 2-3 steers (395 head) brought an average of $100.07/cwt. That’s on the lower end of country trade in the region last week.

Cattle futures continued to exhibit firmness on Wednesday, maintaining and extending recent gains.

Live Cattle futures closed an average of 52¢ higher (15¢ to $1.07 higher).

Feeder Cattle futures closed an average of 89¢ higher (32¢ to $1.05 higher).

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

Choice boxed beef cutout value was 76¢ lower Wednesday afternoon at $214.63/cwt. Select was 17¢ higher at $189.83.

Corn futures closed mostly fractionally higher.

Soybean futures closed 3¢ to 5¢ lower through Jul ’20 and then 1¢ to 2¢ lower.

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Major U.S. financial indices closed higher on Wednesday, mostly retracing lost ground from the previous session. Some attributed support to a comment by President Trump suggesting optimism over a trade deal with China.

The Dow Jones Industrial Average closed 162 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 87 points.

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U.S. beef and red meat exports got a shot in the arm yesterday with completion of the previously announced U.S.-Japan Trade Agreement (USJTA).

“This agreement between the United States and Japan is a better deal for the entire U.S. economy, but is a particularly big win for our farmers and ranchers,” says U.S. Secretary of agriculture, Sonny Perdue. “When I visited Japan in May for the G20, I made it clear that the U.S. is Japan’s best customer and we felt that relationship was not reciprocal. This agreement helps level the playing field.”

When implemented, Secretary Perdue says the agreement will enable American producers to compete more effectively with countries that currently have preferential tariffs in the Japanese market.

“With Japan being the largest value destination for U.S. pork and beef exports (combined export value in 2018 was $3.7 billion), there is no market more critical to the profitability and prosperity of the U.S. red meat industry,” explains Dan Halstrom, president and CEO of the U.S. Meat Export Federation. “It is therefore imperative that we achieve a level playing field for U.S. pork and beef in Japan, so that the U.S. industry can further expand its customer base in this increasingly competitive market. Today’s announcement is not only excellent news for U.S. farmers and ranchers, but also for Japanese consumers who will have greater access to U.S. pork and beef products.”

Under the USJTA, Japan committed to provide substantial market access to American food and agricultural products by eliminating tariffs, enacting meaningful tariff reductions, or allowing a specific quantity of imports at a low duty (generally zero), according to Secretary Perdue. Tariff treatment for the products covered in the agreement will match the preferential tariffs Japan provides to countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. 

After early follow-through support Tuesday, Cattle futures traders seemed content to hold their positions and wait for direction from the cash market.

Live Cattle futures closed narrowly mixed but mostly higher (35¢ lower to 30¢ higher).

Other than 35¢ lower at the front and 5¢ lower at the back, Feeder Cattle futures closed an average of 57¢ higher.

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

Choice boxed beef cutout value was $1.06 lower Tuesday afternoon at $215.39/cwt. Select was $1.18 lower at $189.66.

Corn futures closed mostly unchanged to fractionally mixed.

Soybean futures closed mostly 1¢ lower to 1¢ higher.

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Major U.S. financial indices closed lower on Tuesday amid chatter about the Democrats calling for an impeachment inquiry into President Trump, as well as weaker consumer confidence.

The Conference Board Consumer Confidence Index® decreased to 125.1 (1985=100) in September from 134.2 in August.

“Consumers were less positive in their assessment of current conditions and their expectations regarding the short-term outlook also weakened,” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The escalation in trade and tariff tensions in late August appears to have rattled consumers. However, this pattern of uncertainty and volatility has persisted for much of the year and it appears confidence is plateauing. While confidence could continue hovering around current levels for months to come, at some point this continued uncertainty will begin to diminish consumers’ confidence in the expansion.” 

The Dow Jones Industrial Average closed 142 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 118 points.

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If current high levels of beef cow and heifer slaughter continue, then analysts with the Livestock Marketing Information Center (LMIC) say the beef cow inventory at the beginning of next year could be lower than the previous year.

For January through August, LMIC pegs federally inspected heifer slaughter 7.0% higher than the same period a year earlier, with beef cow slaughter up 1.9%.

“The last week of August, heifer slaughter surged to over 200,000 head, the highest weekly figure since June 2011,” say LMIC analysts, in the most recent Livestock Monitor. “The last several weeks of actual heifer slaughter has been above a year ago by over 5% and jumped in the final week of August to 11%…The climb in heifer slaughter offers a few signposts. The first is that these are likely heifers that didn’t get bred. July’s cattle on feed report indicated that animals 900 lbs. and heavier jumped 11.5% higher than a year ago. The U.S. does not break down each weight group by heifers and steers, but the large volume in the slaughter mix, coupled with higher heavier placement weights, could imply that some of those heavier cattle were female replacements that remain open.”

Cattle futures rallied Monday, helped along by stronger cash fed cattle prices last week, as well as Friday’s bullish Cattle on Feed report.

Live Cattle futures closed an average of $1.54 higher ($1.05 to $2.62 higher).

Feeder Cattle futures closed an average of $2.03 higher ($1.77 to $2.70 higher).

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

Choice boxed beef cutout value was 52¢ lower Monday afternoon at $216.45 cwt. Select was 88¢ lower at $190.84.

Corn futures closed 1¢ to 2¢ higher.

Soybean futures closed 5¢ to 9¢ higher through Sep ’20 and then mostly 1¢ to 2¢ higher. 

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Major U.S. financial indices closed narrowly mixed and little changed on Monday. Pressure included weak manufacturing data out of Europe, adding to concerns about the global economy.

The Dow Jones Industrial Average closed 14 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 5 points.

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Although the cyclical peak in feedlot inventories likely remains in the future, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University notes the year-over-year decline of 1.3% decline in September was the first monthly decrease since December of 2016.

“The short-term disruption of the plant fire in August and early September likely delayed some feedlot placements, but a larger 2018 calf crop and generally good forage conditions in 2019 likely means that significant numbers of yearlings are still to be marketed in the fourth quarter,” Peel explains in his weekly market comments. “The estimated 2019 calf crop is equal to 2018 levels, meaning that plenty of new-crop calves will be marketed this fall, with feeder supplies ample through 2020. It will likely be a few more months before we will see sustained year-over-year decreases in feedlot inventories.”

Peel also points out August feedlot placements estimated in the monthly Cattle on Feed report were down for the fourth consecutive month.

“Total placements the last six months, capturing the bulk of current cattle on feed, are down 0.8% percent year over year,” Peel says. “Monthly marketings for the past six months are up 1.0% year over year. Feedlots have continued to market cattle timely and maintain currentness.”

Negotiated cash fed cattle prices continued to look stronger through Friday afternoon, based on USDA reports. Although too few to trend, there were a few live trades reported at $102/cwt. in Kansas and Nebraska, which was $1-$2 higher than the previous week. Overall, live trade in in the Southern Plains was $1 higher at $101 and steady to $2 higher in the western Corn Belt at $100-$104. Dressed trade was $2-$7 higher in Nebraska at mostly $162; steady to $5 higher in the western Corn Belt at $160-$165.

Cattle futures closed a touch softer in sluggish trade on Friday with apparent positioning ahead of the monthly Cattle on Feed report (see below) and ahead of the weekend.

Live Cattle futures closed an average of 37¢ lower.

Except for an average of 32¢ higher in the front two contracts, Feeder Cattle futures closed an average of 44¢ lower.

Wholesale beef values were lower 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 $1.20 lower Friday afternoon at $216.97 cwt. Select was 44¢ lower at $191.72.

Corn futures closed mainly 2¢ to 3¢ lower.

Soybean futures closed mostly 6¢ to 9¢ lower.

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Major U.S. financial indices closed lower on Friday. Apparently, the primary pressure was circulation of a report that Chinese officials cut short or cancelled their planned visit to a U.S. farm, which investors viewed in a bearish light.

The Dow Jones Industrial Average closed 159 points lower. The S&P 500 closed 14 points lower. The NASDAQ was down 65 points.

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As many suspected, there were fewer cattle placed on feed in August, year over year and fewer total cattle on feed Sept. 1. If anything, though, Friday’s monthly Cattle on Feed report was more bullish than anticipated.

Placements in August for feedlots with 1,000 head or more capacity was 1.88 million head, which was 186,000 head fewer, or 8.99% less than the previous year. Most analyst estimates ahead of the report were for a decline of 6-8%.

In terms of placement weight, 36.35% went on feed weighing 699 lbs. or less, 45.85% weighing 799-899 lbs. and 17.78% weighing 900 lbs. or more.

Marketings in August of 1.95 million head were 1.51% less, compared to the 1.7% to 1.9% reduction analysts expected.

Cattle on feed Sept. 1 of 10.98 million head were 143,000 head fewer, or 1.29% less than a year earlier. Ahead of the report analysts anticipated a decline of about 0.50% to 1.0%.