WLI

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon, based on USDA reports. Recent fundamentals and this week’s winter storms suggest prices should be no worse than steady.

Cattle futures mostly edged higher, amid light trade and waiting for cash direction.

Live Cattle futures closed an average of 52¢ higher, with open interest continuing to build.

After 35¢ and 12¢ lower at the front of the board, Feeder Cattle futures closed an average of 35¢ higher.

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

Choice boxed beef cutout value was $1.40 lower Tuesday afternoon at $231.84/cwt. Select was 38¢ higher at $212.29.

Corn futures closed mostly 2¢ lower.

Soybean futures closed 7¢ to 8¢ lower through Aug ’21 and then mostly 3¢ lower.

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Major U.S. financial indices extended gains Tuesday, helped along by positive sales and earnings from major retailers.

The Dow Jones Industrial Average closed 55 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 15 points.

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U.S. consumers may appear to be creatures of habit in their eating patterns but the foods they eat today have a modern twist influenced by a host of factors such as ethnicity, age/generational group, and health/social consciousness, according to the NPD Group (NPD). That organization has tracked American eating patterns for the last 34 years.

Here are some highlights from NPD Group’s latest annual edition of Eating Patterns in America:

• There were more than 460 billion in-home and away-from-home eating and drinking occasions in the U.S. last year.
• 16% of consumers regularly use plant-based alternatives such as almond milk, tofu, and veggie burgers; 89% of these consumers do not consider themselves vegan or vegetarian.
• 14% of in-home eating occasions included at least one item that required no preparation, compared to only 11% of occasions in 2013.
• Visits to quick-service restaurants increased by 630 million visits since 2014, while total visits to restaurants declined by more than 700 million visits.
• 19% of grocery shoppers now order their edible groceries online; from 2017 to 2020 the average annual growth rate for digital restaurant orders is forecast at 22%.
• One in five adults try to manage a health condition with their food and beverage choices.

“This past year we’ve seen emerging new eating trends that will impact both the food and beverage and restaurant industries in the years to come,” says David Portalatin, NPD Food Industry advisor and author of Eating Patterns in America. “Food manufacturers and restaurant operators will need to understand how these trends will impact their businesses in order to stay ahead of the curve.”

Logic suggested markets should view Friday’s Cattle on Feed as at least neutral, with placements 2% less than expected. However, the fact that placements were 10% higher year over year also suggested there might be an opportunity for bears to press their case with follow-through selling. Instead, Cattle futures climbed higher to start the week, gaining back a lion’s share of Friday’s retreat.

Live Cattle futures closed an average of $1.27 higher.

Feeder Cattle futures closed an average of $2.72 higher.

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

Choice boxed beef cutout value was 67¢ higher Monday afternoon at $233.24/cwt. Select was 59¢ higher at $211.91.

Corn futures closed mostly 2¢ to 3¢ higher through Mar ’21 and then 1¢ higher.

Soybean futures closed 2¢ to 4¢ lower through Sep ’20 and then mostly 1¢ higher.

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Major U.S. financial indices closed higher Monday, with growing optimism about the U.S. and China reaching agreement on the first phase of a trade deal.

The Dow Jones Industrial Average closed 190 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 112 points.

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“Annual average feedlot inventories (12-month moving average) peaked in August but there is a chance that strong placements in the next few months could push to a higher average total,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “In other words, feedlot inventories are close but may not yet be quite at a cyclical peak.”

Reviewing Friday’s monthly Cattle on Feed report, Peel points out heavy feeders dominated placements.

“Placements of feeder cattle over 800 lbs. were up 29.5% year over year, with placements 700-800 lbs. up 14.9% compared to one year ago,” Peel says.  “Meanwhile, placement of feeders under 600 lbs. were down 6.3% year over year.  In the three months from August-October, placements of feeders over 700 lbs. were up 4.6% year over year, while placements of cattle less than 700 lbs. were down 2.8%. This means that feedlots will be somewhat front-loaded for the next few months.”

As noted in Monday’s Cattle Current, 46.02% of October placements weighed 699 lbs. or less; 40.05% weighed 700-899 lbs.; 13.93% weighed more than 900 lbs.

“It would appear that anecdotal stories of cattle doing very well this summer were accurate, given placement weights,” says David Anderson, Extension livestock economist at Texas A&M University. “It’s interesting to note that 25,000 more head were placed weighing over 1,000 pounds than a year ago. For the year, placements are about half a percent ahead of last year.”

In the latest issue of In the Cattle Markets, Anderson explains most heavyweight placements in the fall usually come in September, while heavyweight placements in the spring usually come in March and May as cattle come off wheat pasture and other winter grazing programs.

The widely expected significant increase in October feedlot placements was confirmed in Friday’s monthly Cattle on Feed report. Although less than most expected (see below), positioning ahead of the report provided the opportunity some had been seeking for a market correction.

Live Cattle futures closed an average of $1.52 lower

Feeder Cattle futures closed an average of $3.03 lower.

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

Choice boxed beef cutout value was $2.29 lower Friday afternoon at $232.57/cwt. Select was $2.54 lower at $211.32.

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed 1¢ to 4¢ lower.

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Major U.S. financial indices closed higher Friday. Once again, many ascribed movement to U.S.-China trade talks; positive this time.

The Dow Jones Industrial Average closed 109 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 13 points.

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Feedlot placements in October were significantly higher than the previous year, as many expected, but a little less than pre-report estimates, according to Friday’s monthly Cattle on Feed report for feedlots with 1,000 head or more capacity.

There were 2.48 million head placed, which was 10.19% more (+299,000 head) than last year. Ahead of the report, amid a wide range, analyst consensus was for an increase of 12%.

In terms of placement weight, 46.02% weighed 699 lbs. or less; 40.05% weighed 700-899 lbs.; 13.93% weighed more than 900 lbs.

“If you remember back to last year, drought throughout the Plains brought many more calves to market through the summer months than in recent times,” say analysts with USDA’s Agricultural Marketing Service (AMS). “This year, with the excellent grazing conditions and uncertainty fueled by the fire at a packing plant in Kansas, producers were content to graze calves longer. At some point, though, these cattle had to show up at auction or be marketed directly to feedlots.” 

Marketings in October of 1.88 million head were 0.64% less (-12,000 head), which was in line with expectations.

As of Nov. 1, there were 11.83 million head on feed, which was 1.19% more (+139,000 head) than the previous year.

Beef in Cold Storage Declines

Total pounds of beef in freezers Oct. 31 were 1% less than the previous month and 10% less than a year earlier, according to the monthly Cold Storage report issued Friday.

Frozen pork supplies were record large for the month, up 3% from the previous month and up 8% 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 7% less than the previous month and 3% less than a year earlier.

For the week so far, negotiated cash fed cattle trade is mainly $1 higher on a live basis at $116/cwt. in the Southern Plains and at $115-$117 up north. Dressed trade is $2 higher at $184.

Cattle futures closed lower Thursday, though, especially Feeder Cattle, as wholesale beef values show signs of seasonal weakening, and ahead of Friday’s Cattle on Feed report.

Other than 2¢ higher in spot Dec, Live Cattle futures closed an average of 49¢ lower

Feeder Cattle futures closed an average of $1.18 lower.

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

Choice boxed beef cutout value was $3.35 lower Thursday afternoon at $234.86/cwt. Select was 91¢ lower at $213.86.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed 1¢ to 4¢ lower.

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Major U.S. financial indices continued to drift lower Thursday, with continued uncertainty surrounding the enigmatic back and forth chatter concerning the U.S.- China trade deal.

The Dow Jones Industrial Average closed 54 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 20 points.

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Beef cow slaughter appears to be picking up speed, based on USDA’s monthly Livestock Slaughter report issued Thursday.

Non-dairy cow slaughter—the ‘other cow’ category in USDA’s report—for October of 307,900 head was 28,800 head more (+10.32%) than last year. For January through October, non-dairy cow slaughter of 2.61 million head is 82,000 head more (+3.24%) than the same period last year.

Similarly, fed heifer slaughter of 8.16 million head for the first 10 months of the year is 572,400 head more (+7.54%) than the same period in 2018.

For perspective, total fed steer and heifer slaughter in October of 2.28 million head was 9,900 head fewer (-0.43%) than the previous year. For January through October, however, fed steer and heifer slaughter of 21.85 million head is 253,100 head more (+1.17%) than the same period last year.

Federally inspected cattle slaughter for the month of October was 2.93 million head, which was 17,600 head more (+0.61%) than the previous year.

Dressed steer weights in October averaged 902 lbs., which was 4 lbs. heavier than the previous year. For January through October, though, dressed steer weights are 4 lbs. lighter at 872 lbs.

Dressed heifer weights in October averaged 830 lbs., which was even with the previous year. For January through October, however, dressed heifer weights are 5 lbs. lighter at 808 lbs.

Total beef production in October was 2.44 billion lbs., which was 7.5 million lbs. more (+0.31%) than the previous year. For January through October, total beef production of 22.59 billion lbs. was 147.5 million lbs. more (+0.66%) than last year.