WLI

Negotiated cash fed cattle traded at $112/cwt. in the Texas Panhandle on Friday, according to the Texas Cattle Feeders Association. That was $1 more than a week earlier.

Elsewhere, prices were yet to be established through late afternoon, according to reports from the Agricultural Marketing Service. Although too few to trend, there were some early live sales reported in the Western Corn Belt at $115-$116 and a few in the beef at $185. Those prices are at the top of the region’s range the prior week.

Feeder Cattle futures gained on softer corn prices, while Live Cattle treaded water.

Live Cattle futures closed from 5¢ lower to 12¢ higher, amid light trade.

Feeder Cattle futures closed an average of 41¢ higher, across a range of 5¢ higher at the back to 95¢ higher in spot Aug.

Corn futures closed 2¢ to 4¢ lower through Jul ’20 and then 1¢ lower.

Soybean futures closed mostly 1¢ higher through Aug ’20 and then 2¢ to 3¢ higher. 

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

Choice boxed beef cutout value was 40¢ lower Friday afternoon at $212.17/cwt. Select was 84¢ lower at $188.34.

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Major U.S. financial indices closed higher Friday. Lusher quarterly earning reports from companies like Intel and Alphabet provided support. As well, second-quarter U.S. GDP growth was stronger than expected.

Real gross domestic product (GDP) increased at an annual rate of 2.1% in the second quarter of 2019, according to the advance estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.1%.

The Dow Jones Industrial Average closed 51 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 91 points.

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The price Index for beef and veal through June grew slower year over year than food prices in general and overall consumer prices, according to the most recent Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics (BLS).

Compared to the previous year, the beef and veal price index this June was 0.6% higher, while the price index for all meats was up 1.3%. The index for pork prices was 2.0% higher; 0.4% lower for poultry.

More specifically, the food at home index increased 0.9% over the last 12 months, with all six major grocery store food group indexes rising over the span,

ranging from 0.3% (meats, poultry, fish, and eggs) to 2.3% (nonalcoholic beverages).

During the same period, the index for food away from home rose 3.1%, with the index for full service meals rising 3.3%, while the index for limited service meals increased 3.0%.

Over the last 12 months, the all items index increased 1.6%, before seasonal adjustment. Take food and energy away and the index was 2.1% higher year to year.

Negotiated cash fed cattle trade continued to be undeveloped through Thursday afternoon.

Cattle futures basically hovered in place, awaiting some cash direction.

Except for unchanged in Oct and 5¢ higher in Dec, Live Cattle futures closed an average of 13¢ lower.

Feeder Cattle futures closed an average of 21¢ higher in five contracts and an average of 11¢ lower in the other three.

Corn futures closed 1¢ to 5¢ lower through Sep ’20 and then fractionally lower.

Soybean futures closed mostly 4¢ to 8¢ lower. 

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

Choice boxed beef cutout value was $1.03 lower Thursday afternoon at $212.57/cwt. Select was 24¢ lower at $189.18.

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Major U.S. financial indices closed lower Thursday. An assortment of underwhelming quarterly earnings reports was part of it. There was also chatter that investors feared the Fed might be less aggressive in cutting interest rates at next week’s FOMC meeting, based on recent positive economic news.

For instance, the U.S. Census Bureau announced that durable goods orders in June were up 2% compared to the previous month, which was more than traders expected. Also on Thursday, the European Central Bank left its lending rate unchanged, hinting at a more positive economic outlook for the region.

The Dow Jones Industrial Average closed 128 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 82 points.

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Feedlot marketing remains current, based on the most recent USDA slaughter and carcass grading data.

The average dressed steer weight for the week ending July 13 was 865 lbs., which was 4 lbs. more than the previous week but 2 lbs. lighter year over year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 791 lbs. was 1 lb. lighter than the previous week and 8 lbs. less  year over year. Fed cattle slaughter of 531,743 head for the week was 11,828 head more than the same week a year earlier. Total cattle slaughter of 658,432 was 8,134 head more.

As for grading, 77.72% of carcasses graded Choice and Prime the week ending July 12, according to USDA’s National Steer and Heifer Estimated Grading report. That was 0.91% less than previous week. Carcasses grading in the upper two-thirds of Choice were 0.22% less than the previous week at 31.51%.

For broader monthly perspective, total commercial red meat and pork production was record large for the month of June at 4.37 billion lbs., which was 1% more than the previous year, according to USDA’s monthly Livestock Slaughter report. That was with one less business day in the month this year.

However, beef production in June of 2.2 billion lbs. was 3% less than the previous year, with the month’s 2.80 million head of total cattle slaughter 2% less year over year.

Pork production of 2.13 billion lbs. in June was 6% more than the previous year, with hog slaughter of 9.99 million head 4% more than last year.

For January through June, commercial red meat production of 26.8 billion lbs. was 2% more than the same period a year earlier. Accumulated beef production was up slightly from last year, veal was down 1% and pork was up 4%. Lamb and mutton production was down 1%.

There was little to no country trade for negotiated cash fed cattle through Wednesday afternoon, but early signs pointed to steady money or just either side of even.

Slaughter steers sold steady to $1 higher at Sioux Falls Regional in South Dakota. Slaughter heifers sold steady to $2 higher.

At the fat auction in Tama, IA, however, Choice Steers and heifers sold 75¢ to $1 lower: $117.30/cwt. for Ch 2-4 steers at an average of 1,339 lbs.

There were only 378 head offered in the weekly Fed Cattle Exchange auction and no takers.

Cattle futures traded sideways until a bounce in Feeder Cattle.

Except for 15¢ lower in spot Aug and unchanged in Feb, Live Cattle futures closed an average of 10¢ higher.

Feeder Cattle futures closed an average of 34¢ higher.

Corn futures closed mostly fractionally lower.

Soybean futures closed mostly 4¢ to 5¢ higher. 

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

Choice boxed beef cutout value was 18¢ lower Wednesday afternoon at $213.60/cwt. Select was 29¢ lower at $189.42.

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Major U.S. financial indices closed mixed Wednesday, with mixed quarterly earnings reports. For instance, AT&T and UPS beat expectations, while Boeing and Caterpillar disappointed.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed 14 points higher. The NASDAQ was up 70 points.

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This year’s estimated calf crop of 36.3 million head is 102,700 head fewer (-0.3%) than the same period a year earlier, according to last week’s semiannual Cattle report from USDA. That’s with an estimated 26.5 million calves born in the first half of 2019, which would be 100,000 fewer than the same period last year.

“This combined with steer slaughter below a year ago, fewer steers on feed and elevated cow and heifer slaughter indicate that the data is supporting a lot of anecdotal stories over the last couple of years of reproductive problems,” says David Anderson, Extension livestock economist at Texas A&M University, in the most recent issue of In the Cattle Markets. “Reports of reproductive problems have often been attributed to extreme weather events, but also some uncertain factors. This combination of data might also suggest that the calf crop or maybe even the cow herd has been slightly overestimated the last couple of years.”

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.”