WLI

Although increasing Corn futures capped gains, Live Cattle futures closed higher again Tuesday, helped along by resurgent Lean Hogs. Feeder Cattle futures mostly edged higher.

Live Cattle futures closed an average of 47¢ higher.

Except for unchanged in Nov and 5¢ lower in Jan, Feeder Cattle futures closed an average of 5¢ higher.

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

Soybean futures closed 1¢ to 2¢ lower through Aug ’20 and then unchanged to fractionally mixed.

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

Choice boxed beef cutout value was 46¢ higher Tuesday afternoon at $213.78/cwt. Select was 12¢ higher at $189.71.

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Major U.S. financial indices closed higher Tuesday, with announcement that the U.S. and China will resume trade talks in person next week. Better than expected quarterly earnings reports from the likes of Coca-Cola and United Technologies also provided support.

The Dow Jones Industrial Average closed 177 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 47 points.

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Beef burgers are still by far the most popular burger ordered at quick service restaurants (QSRs). There were 6.4 billion beef burgers ordered at QSRs in the year ending May 2019, according to The NPD Group (NPD). Although growth is flat compared to year ago, beef burgers are still the top sandwich ordered at U.S. restaurants, reports NPD’s CREST^®service, which continually tracks how U.S. consumers use restaurants.

With that said, there were 228 million servings of plant-based burgers ordered at QSRs in the year ending May, up 10% from a year ago. NPD analysts say the strong year-over-year growth of plant-based burgers is primarily due to increased availability at major QSR chains.

Beef burger buyers, who purchased beef burgers at QSRs an average of 18 times in the year ending April 2019, did give plant-based burgers a try, purchasing them at QSRs two times in the period. Conversely, 95% of plant-based buyers made a beef burger purchase within the past year, according to NPD’s receipt harvesting serving, Checkout.

Although vegetarians and vegans are contributing to the growth in plant-based, they still represent a small (single digits) percentage of the U.S. population and aren’t the primary contributors.

Instead, the NPD folks say the popularity of plant-based foods is being fueled by consumers’ desire to add protein to their diets, concerns for animal welfare and how meat products are brought to market, sustainability, and what they perceive to be healthier nutrition.

Neutral Cattle on Feed numbers and neutral to softer overall inventory numbers in the semiannual Cattle report helped Cattle futures rally to start the week. Lower grain prices also helped.

Live Cattle futures closed an average of 54¢ higher.

Feeder Cattle futures closed an average of $2.20 higher.

Grain futures fell, presumably on expectations of more favorable growing weather.

Corn futures closed 7¢ to 9¢ lower through Jul ’20 and then mostly fractionally lower to 1¢ lower.

Soybean futures closed mostly 10¢ to 13¢ lower. 

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

Choice boxed beef cutout value was 10¢ lower Monday afternoon at $213.32/cwt. Select was 8¢ higher at $189.59.

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Major U.S. financial indices edged higher Monday, with quarterly earnings reports from the likes of Amazon and Facebook surpassing expectations.

The Dow Jones Industrial Average closed 17 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 57 points.

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“If both domestic and international demand for U.S. beef continues at current levels, there will be little or no pressure on cattle markets,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “If something should happen to weaken beef demand in the U.S. or in global markets, lower beef and cattle prices could result in some liquidation of cattle inventories.”

In the meantime, Peel says the cattle inventory revealed in Friday’s semiannual USDA Cattle report suggest the nation’s beef cowherd is at a plateau. As mentioned in Monday’s Cattle Current, the 34.0 million head of beef cows and the 103 million total cattle and calves July 1 were the same as a year earlier.

“I contrast a plateau with a more typical cyclical peak inventory that historically has implied a liquidation phase to follow,” Peel explains. “The current inventory levels do not suggest a need for, or an inevitable, liquidation in cattle inventories at this time. Stable cow numbers and calf crop suggest that beef production will show little or no growth going into 2020. Current beef production levels and cattle prices are sustainable until something changes to provoke a new direction in cattle inventories.”

In fact, Peel says the U.S. cattle and beef industry may be the most stable he can ever remember. 

“This is pretty remarkable, given the continued turbulence in external market conditions,” Peel says. “Numerous factors that could destabilize cattle markets should be monitored, including: corn prices and feed market conditions; the impacts of African Swine Fever on global protein markets; U.S. macroeconomic conditions; and exchange rates among others. Additionally, progress or lack thereof on current trade politics or new trade issues that could arise will have a large impact, positive or negative, on the overall climate for beef and cattle markets.”

Negotiated cash fed cattle trade ended up mainly steady to $1 lower last week at $111/cwt. in the Southern Plains, $113.00-$113.50 in Nebraska and $114-$116 in the western Corn Belt. Dressed trade was steady at $182-$185.

Cattle futures closed higher Friday, with support from Lean Hogs and perhaps some boost from the potential impact excessive heat will have on production.

Live Cattle futures closed an average of 52¢ higher.

Feeder Cattle futures closed an average of 45¢ higher.

Corn futures closed 5¢ to 6¢ higher through Jul ’20 and then mostly 1¢ higher.

Soybean futures closed 15¢ to 20¢ higher through Sep ’20 and then mostly 13¢ higher.

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

Choice boxed beef cutout value was 8¢ higher Friday afternoon at $213.42/cwt. Select was 90¢ higher at $189.51.

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Major U.S. financial indices closed lower Friday, amid mixed quarterly earnings reports and geopolitical angst stemming from Iran’s seizure of a British oil tanker.

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 60 points.

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There were no surprises in Friday’s monthly USDA Cattle on Feed report (feedlots with 1,000 head or more capacity), with the numbers about dead on with pre-report estimates.

Cattle feeders placed 1.76 million head in June, which was 2.34% (-42,000 head) less than a year earlier. In terms of placement weight, 38.72% weighed less than 699 lbs., 44.48% weighed 700-899 lbs. and 16.80% weighed 900 lbs. or more.

Marketings in June of 1.94 million head were 3.04% (-61,000 head) less than the previous year, keeping in mind there was one less business day this year.

Cattle on feed July 1 of 11.48 million head were 1.75% (+198,000 head) more than last year. This makes the third month in a row that the on-feed number was the largest since the data series began in 1996, according to the Agricultural Marketing Service.

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USDA’s semiannual Cattle report hints at slowing herd expansion and fewer calves year over year.

The nation’s herd of beef cows—34.0 million head—was the same as a year earlier.

All cattle and calves were 103 million head July 1, even with the same time a year ago.

The estimated feeder cattle supply outside feedlots July 1 was 37.1 million head, which is 0.3% more than last year. However, the 4.4 million head of heifers for beef replacement were 200,000 head (-4.5%) less than the previous July.

As well, this year’s estimated calf crop of 36.3 million head was 102,700 (-0.3%) fewer than the same period a year earlier. That’s with an estimated 26.5 million calves born in the first half 2019, which would be 100,000 fewer than the same period last year.

Negotiated cash fed cattle trade continued mainly steady to $1 lower on Thursday, with prices so far this week at $111/cwt. in the Southern Plains, $114-$116 in the western Corn Belt and $113.00-$113.50 in Nebraska. Dressed trade so far this week is at $182-$185.

Cattle futures closed lower Thursday, with limited trade, some technical correction and likely positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 72¢ lower.

Feeder Cattle futures closed an average of $1.20 lower.

Sagging corn export sales helped pressure Corn futures 9¢ to 11¢ lower through Jul ’20 and then mostly 1¢ to 2¢ lower.

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

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

Choice boxed beef cutout value was 77¢ higher Thursday afternoon at $213.34/cwt. Select was 27¢ higher at $188.61.

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Major U.S. financial indices edged higher Thursday, on mixed quarterly earnings and increasing chatter about the Fed cutting interest rates.

The Dow Jones Industrial Average closed 3 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 22 points.

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Carcass weights continued lower year over year for the week ending July 6, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed steer weight was 861 lbs., which was 7 lbs. more than the previous week but 6 lbs. lighter than the same week a year earlier. The average dressed heifer weight was 792 lbs., which was 3 lbs. more than a week earlier but 5 lbs. lighter year over year.

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Heading into Friday’s monthly Cattle on Feed report, a survey of analysts by Urner Barry suggests 2.1% fewer cattle were placed on feed in June than the previous year. That’s the average of estimates that range from 6.8% fewer to 5.7% more, according to the Daily Livestock Report.

The average estimate for marketings is for 3% fewer, keeping in mind one less business day this year.

On average, estimates see the July 1 on-feed inventory being 1.8% more.

Fed cattle markets were mixed on Wednesday.

Country trade in Kansas was $1 lower than last week on a live basis at $111/cwt., on moderate trade and demand, according to the Agricultural Marketing Service.

Likewise, $111 bought the 326 head offered in the weekly Fed Cattle Exchange auction: 243 head for delivery at 1-9 days and 83 head for delivery at 1-17 days.

At fat auctions in the north, though, prices were higher.

Slaughter steers and heifers sold fully $1 higher at Sioux Falls Regional in South Dakota: $115.35/cwt. for Ch 2-3 steers at an average of 1,400 lbs.

At the fat auction in Tama, Iowa Ch 2-4 steers sold $3.50-$4.00 higher at $118.50 and an average weight of 1,338 lbs. Choice heifers sold $3 higher.

Feeder Cattle led Cattle futures lower Wednesday, perhaps with some positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 52¢lower.

After 47¢ lower in spot Aug, Feeder Cattle futures closed an average of $1.12 lower.

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed mostly 4¢ to 5¢ lower.

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

Choice boxed beef cutout value was 36¢ lower Wednesday afternoon at $212.57/cwt. Select was 82¢ lower at $188.34.

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Major U.S. financial indices closed lower Wednesday, on mixed quarterly earnings and ongoing concerns about unresolved trade issues with China.

The Dow Jones Industrial Average closed 115 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 37 points.

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Fed steer prices (5-area direct) declined 15% from the spring peak of $128.96/cwt. to $110.13 for the week ending June 30, according to USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook.

As mentioned recently in Cattle Current, based on recent price data, USDA lowered the expected third-quarter price for fed steers by $3, from the previous month’s forecast to an average of $107. The fourth-quarter price was reduced $4 to $110.

“As the result of lower forecast fed cattle prices and higher feed prices relative to last year in in second-half 2019, feedlots will likely be less willing to bid up prices for feeder cattle,” ERS analysts say. “Based on recent price data, the third-quarter feeder steer price (Oklahoma City) was lowered by $2 to $143/cwt. and the fourth-quarter price forecast was lowered $1 from the prior month to $141.

As a result, this month’s annual price forecast for 2019 was $1 lower at $141. The 2020 annual price forecast was unchanged.”