WLI

Cattle feeders and beef packers appeared to remain mostly at a stalemate through late Friday afternoon, based on USDA reports.

“Negotiated cash trade followed a similar trend compared to recent weeks with early dressed purchases in the North ranging from $183 to $185/cwt. Dressed purchases late in the week traded mostly at $180,” said analysts with the Agricultural Marketing Service on Friday. “In the Western Corn Belt, early live purchases traded at $114-$115. Early live purchases in Nebraska were at $113.” They add that trade was slow to develop in the Southern Plains with producers passing on bids of $109.

Stronger corn prices early in the session and sluggish trade weighed on Feeder Cattle futures, while Live Cattle paddled in place. 

Other than 10¢ higher and unchanged in the front two contracts, Live Cattle futures closed an average of 19¢ lower.

Feeder Cattle futures closed an average of $1.16 lower.

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

Choice boxed beef cutout value was 51¢ lower Friday afternoon at $216.37/cwt. Select was $1.44 higher at $193.81.

“Grain traders spent most of the day repositioning themselves ahead of the highly anticipated Monday report,” say analysts with USDA’s Agricultural marketing Service (AMS). “There is a wide range of estimates for corn: 83.5 to 89.8 million acres planted, down from 91.7 million acres first reported for corn in June. Soybean estimates range from 78.0 to 83.5 million acres planted. The June report had soybean acres at 80 million. The WASDE report plus the re-survey of June acres report is set to be released at 11 a.m. CDT Monday.” 

Corn futures closed fractionally mixed.

Soybean futures closed 7¢ to 8¢ higher, up 19¢ to 24¢ in the last two sessions.

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Major U.S. financial indices closed lower Friday, but well off session lows, ending a wildly volatile week of trading, due mainly to the trade jabs between the U.S. and China.

The Dow Jones Industrial Average closed 90 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 80 points.

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“Restaurants, food service providers, and grocery stores are making final preparations for beef purchases to meet Labor Day weekend beef demand,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Labor Day weekend marks the unofficial end of summer and the end of the summer grilling season. This holiday provides the beef industry one last opportunity to push high-valued cuts out the door and on to consumers’ plates.”

Consumers can choose from lots of quality, too. Although the percentage of Choice-grading carcasses sagged below year-earlier levels in recent weeks, Griffith points out the level remains high, compared to recent years, dropping below 70% only two weeks this year.

In fact, for May through July, the percentage of fed cattle grading Choice ranged from 69.6% to 71.6%, according to USDA’s weekly National Steer and Heifer Estimated Grading Percent reports. For Choice and Prime combined, the range was 77.1% to 78.8%. During the same period, 30.1% to 31.9% of carcasses graded in the upper two-thirds of Choice.

“The market continues to demand higher quality beef and cattle producers continue to find ways to improve quality grade in cattle,” Griffith says. “The consumer trend to higher quality beef is likely to continue.”

Cash fed cattle trade remained undeveloped through Thursday afternoon.

Cattle futures drifted higher amid sluggish trade, higher outside markets and help from Lean Hogs at the end of the session.

Live Cattle futures closed an average of 45¢ higher, except for 15¢ lower in the back two contracts. 

Feeder Cattle futures closed an average of 48¢ higher.

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

Choice boxed beef cutout value was 39¢ higher Thursday afternoon at $216.88/cwt. Select was 34¢ lower at $192.37.

Grain futures were higher, especially soybeans, buoyed by dry weather forecast in the Corn Belt and likely positioning ahead of Monday’s government reports that will provide updates to planted acres.

Corn futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed 12¢ to 16¢ higher.

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Major U.S. financial indices closed sharply higher Thursday, led by tech stocks and supported by stronger than expected Chinese exports.

The Dow Jones Industrial Average closed 371 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 176 points.

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An extra dollar invested in Cattlemen’s Beef Promotion and Research Board (CBB) activities returned $11.91 to beef industry profit for 2014-2018, according to independent research conducted by Harry M. Kaiser, a Gellert Family Professor of Applied Economics and Management at Cornell University.

Specifically, the $11.91 is what’s termed the marginal beef-cost ratio (BCR).

Key objectives of the study—An Economic Analysis of the Cattlemen’s Beef Promotion and Research Board Demand-Enhancing Programs—were to:

Measure the impact of CBB demand-enhancing activities on beef demand in the U.S. and in foreign markets.

Compare benefits to costs of CBB activities for producers’ and importers’ investments in the national checkoff program.

Among the conclusions:

Had there not been any domestic CBB demand enhancing activities over the latest 5-year period, (2014-18) total domestic beef demand would have been 14.3% lower than it actually was. CBB’s promotion and research activities increased total domestic beef demand by 12.8 billion lbs. in total, during that time, or 2.6 billion lbs. per year.

Had there not been any CBB export promotion, U.S beef exports would have been 5.5% lower than it was in 2014-18. The study considered eight international markets: Mexico, Japan, South Korea, Taiwan, Hong Kong, China, European Union, and Russia and surrounding regions.

Cash fed cattle trade was yet to develop to any degree through Wednesday afternoon. Fat auctions in the western Corn Belt provided divergent signals.

At Sioux Falls Regional in South Dakota, slaughter steers and heifers sold $5-$7/cwt. lower than the previous week. For instance, Choice 2-3 steers (857 head) weighing an average of 1,420 lbs. brought $111.94. That’s $3-$4 lower than last week’s country trade in the region.

On the other hand, with a significantly narrower offering, Choice steers and heifers brought $118.00 to $120.75 at Tama, IA.

Although closing well off of session highs, Cattle futures firmed Wednesday, helped along by the latest rebound in Lean Hogs.

Live Cattle futures closed an average of 41¢ higher. 

Feeder Cattle futures closed an average of 22¢ higher, except for 42¢ lower in spot Aug and 7¢ lower in Sep.

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

Choice boxed beef cutout value was 71¢ higher Wednesday afternoon at $216.49/cwt. Select was 6¢ higher at $192.71.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed fractionally higher to 1¢ higher.

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Major U.S. financial indices closed little changed Wednesday after a volatile session in which the Dow was down almost 600 points. Continued angst over the trade impasse with China seemed to be the most prevalent driver.

West Texas Intermediate crude oil futures on the CME closed $2.49 to $2.58 lower through the front six contracts. Week to week, those contracts closed an average of $7.59 lower.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 2 points higher. The NASDAQ was up 29 points.

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U.S. pasture value averaged $1,400/acre this year, according to the latest Land Values Summary released this week by USDA’s National Agricultural Statistics Service (NASS). That’s up $30 (+2.2%)  from last year.

Regionally, pasture value was highest in the Southeast with a combined average of $4,180 per acre for Alabama, Florida, Georgia and South Carolina. It was lowest in the Mountain States at an average of $683/acre, followed by a combined average of $1,090/acre for the Northern Plains states of Kansas, Nebraska, North Dakota and South Dakota.

Pasture value increased each year since 2014, when the average value was $1,290/acre, according to Agricultural Land Values Final Estimates 2014-2018 from NASS.

By way of reference, U.S. cropland value this year averaged $4,100/acre, which was $50/acre more (+1.2%) than last year. Between 2014 and this year, average cropland value ranged from $4,030/acre in 2017 to $4,100 this year and in 2015.

Cash fed cattle trade remained undeveloped through Tuesday afternoon.

Cattle futures sagged lower toward the end of the session, following the reprieve from negative trade news and wild gyrations the previous day.

Live Cattle futures closed an average of 93¢ lower. 

Other than 5¢ and 22¢ higher in Sep and Oct, Feeder Cattle futures closed an average of 63¢ lower.

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

Choice boxed beef cutout value was $1.08 higher Tuesday afternoon at $215.78/cwt. Select was 98¢ higher at $192.65.

Corn futures closed 1¢ to 6¢ lower.

Soybean futures closed mostly 2¢ to 3¢ lower.

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Major U.S. financial indices rebounded from the previous day’s massive selloff.

Apparently, primary support came from reports that China intends to maintain its currency at higher levels than appeared Monday, when that nation allowed its currency to slide to decade-low values, in retaliation for the recently announced additional tariffs on Chinese imports.

The Dow Jones Industrial Average closed 311 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 107 points.

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Improved expectations for current economic conditions helped drive producer sentiment sharply higher in July, according to the Purdue University/CME Group Ag Economy Barometer.

The overall Barometer reading of 153 in July was 27 points higher than the previous month and 52 points higher than in May. Results are based on a survey of 400 agricultural producers across the U.S (surveyed July 15-19).

Improving crop conditions after an extraordinarily wet planting season, combined with a late spring/early summer crop price rally, boosted farmer sentiment.

“The Corn Belt is continuing to see better crop conditions and that has farmers, at least momentarily, breathing a sigh of relief,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “However, the agricultural economy is still in flux. The impact of prevented planting on 2019 corn and soybean acreage and prices along with the outcome of trade talks with China remain unknown.” 

The Index of Current Conditions, a sub-index of the ag barometer, increased 44 points in July to a reading of 141, marking the largest one-month improvement since data collection began in October of 2015. The barometer’s other sub-index, the Index of Future Expectations, increased 18 points from June, to a reading of 159 in July.

Mintert notes that improvement in producer sentiment occurred despite the fact that many producers were in the midst of filing prevented planting crop insurance claims and wondering about the size of the USDA’s 2019 Market Facilitation Payments (MFP).

Given the late planting season, USDA re-surveyed corn and soybean growers in July to better estimate actual planted acreage of both crops. In the meantime, the Ag Economy Survey asked corn and soybean participants whether they were taking a prevented planting payment on any of the corn or soybean acreage they intended to plant this year.

Of those planting corn, 25% said they were filing a prevented planting claim on some of their intended acreage: 61% said their prevented planting totaled 15% or more of their intended acreage; 42% said that they did not plant 25% or more of their intended acreage

For those with soybeans, 24% said they were filing a prevented planting claim on some of their intended acreage: 39% said their prevented planting totaled 15-25% of their intended acreage; 2% said they were unable to plant 25% or more of their intended acreage.