WLI

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon. There were 1,684 head offered in the weekly Fed Cattle exchange auction and no takers.

Limited trading interest held Cattle futures to a narrow, though mostly slightly higher trading range.

Except for 32¢ lower in spot Feb, Live Cattle futures closed an average of 17¢ higher.

Other than 27¢ and 2¢ lower at either end of the board, Feeder Cattle futures closed an average of 15¢ higher, except for unchanged in Oct.

Corn futures closed mostly 2¢ to 3¢ higher through Jul ’20 and then mostly 1¢ higher.

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

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

Choice boxed beef cutout value was 8¢ lower Wednesday afternoon at $218.05/cwt. Select was 43¢ higher at $213.00.

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Major U.S. financial indices closed sharply higher Wednesday. Along with strong quarterly earnings from the likes of Boeing and Apple, support included the Fed standing pat on interest rates.

“The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective as the most likely outcomes,” according to a statement from the FOMC. “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”

The Dow Jones Industrial Average closed 434 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 154 points.

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“While the need for increasing exports is clear, it’s frequently met with concern or skepticism among some producers and others in the supply chain,” says Will Sawyer, animal protein economist with CoBank’s Knowledge Exchange Division. He explains “Concerns lie primarily in the fear that themore exports play a role in supply and demand, themore exposure producers and industry participants have to increased market volatility and lower margins.”

Look to other protein sectors and other countries, however, and the reward of growing export markets outweighs the risk.

Greater reliance on export markets has resulted in higher prices for the animal protein sectors in other exporting nations, including Australia, Brazil and Canada, according to C0Bank. Analysis shows that greater profitability has offset price volatility for beef, pork and poultry producers in each of those countries, despite declining domestic consumption in both Australia and Canada.

“Profitable growth has always been at the core of the industry, and has enabled producers and processors to recover from the historic volatility and costs from 2007 through 2012,” Sawyer says. He adds, “The groundwork has already been laid from the supply chain, to industry representation, to let trade drive the industry forward over the next decade. Long-term, he says exports will be the key driver for further expansion across the animal protein sector.”

A video synopsis, and the full report, “Protein Passport: Exporting Your Way to Growth,” are available at cobank.com.

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon.

Higher wholesale beef values and likely less beef production than anticipated so far this year, due to weather helped Cattle futures mostly edge higher.

Live Cattle futures closed an average of 17¢ higher (7¢ to 42¢ higher).

After 82¢ and 10¢ lower in the front two contracts, Feeder Cattle futures closed an average of 15¢ higher.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 3¢ to 4¢ lower. 

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

Choice boxed beef cutout value was 73¢ higher Tuesday afternoon at $218.13/cwt. Select was 96¢ higher at $212.57.

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Major U.S. financial indices closed mixed Tuesday as investors fretted about looming Apple quarterly earnings and the Fed meeting on Wednesday.

The Dow Jones Industrial Average closed 51 points higher. The S&P 500 closed 3 points lower. The NASDAQ was down 57 points.

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Heading into Wednesday’s Fed meeting, few analysts expect another increase in interest rates, given recent market volatility and the apparent drag lingering trade issues are having on global and domestic GDP.

In the recent 2019 outlook report from CoBank’s Knowledge Exchange Division, analysts say, “The FOMC is no longer locked into a tightening cycle aimed at returning to ‘neutral’ conditions. Instead, we expect the Fed to lean dovish as it

attempts to take its foot off the gas and coast safely through 2019. The greatest threat to this approach will be the risk of stagflation–a slowing economy and

a resurgence in inflation. Under such circumstances, the Fed may allow inflation to move higher than 2% if longer run inflation expectations remain anchored and their economic projections indicate that inflation is likely to normalize back to 2% over the intermediate term.”

Recently firm wholesale beef values, near-steady cash prices and continued performance-dampening weather helped Cattle futures gain some ground Monday, led by Feeder Cattle.

Live Cattle futures closed an average of 33¢ higher.

After 10¢ higher in spot Jan, Feeder Cattle futures closed an average of 70¢ higher.

Corn futures closed unchanged to fractionally mixed.

Soybean futures closed 1¢ to 2¢ lower. 

Wholesale beef values were firm 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 39¢ higher Monday afternoon at $217.40/cwt. Select was 42¢ lower at $211.61.

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Major U.S. financial indices closed lower Monday, basically retracing upward steps taken in the previous session. Pressure included the likes of Caterpillar and chipmaker Nvidia attributing part of their weaker forecasts to softer Chinese trade.

The Dow Jones Industrial Average closed 208 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 79 points.

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The federal government is open for business again, at least temporarily, meaning USDA agencies can begin providing market data. The exception during the shutdown was price data that continued to flow from the Agricultural Marketing Service. That information is why some livestock economists attribute little market impact to the missing data up to this point.

But, in his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says, “Among many repercussions of the federal government shutdown, agricultural data has been severely disrupted. Some reports will resume after a delay and some may be completely skipped. Numerous crop, livestock and trade reports were missed in January, which are important for cattle and beef markets.

“Missing from delayed or skipped January reports are the monthly crop production (including the December 1 hay stocks by state) and the annual crop production report that will confirm 2018 production of corn and other feed grains, soybeans and hay. The grain stocks report provides information about crop market conditions for the current marketing year. The winter wheat/canola seedings report will provide information about winter wheat pasture.”

During the shutdown, the World Agricultural Supply and Demand Estimates for January, actual daily slaughter data and the January Cattle on Feed report went missing. The Jan 1 Cattle inventory report was originally scheduled to go out the end of this week; presumably it will be delayed, at the least.

“As well, the January livestock trade data (for November) was not reported and will be important to close out 2018 livestock and meat import and export totals,” Peel says. “Detailed weekly cattle slaughter data has not been reported since early December, along with carcass weights by slaughter class. These are important to finalize 2018 beef production totals and also to assess the current status of cattle markets, including weather impacts.”

Negotiated cash fed cattle sold steady in the beef on Friday at $197/cwt. Live sales were steady to mostly $1 lower at $123 in Kansas and Nebraska and at $123.00 to $125.50 in the western Corn Belt. The Texas Cattle Feeders Association reported its members selling steers at $123, which was $1 less than the previous week.

Softer cash trade and pressure in Lean Hog futures helped pressure Cattle futures on Friday.

Other than 70¢ and 37¢ higher in the front two contracts, Live Cattle futures closed an average of 37¢ lower.

Feeder Cattle futures closed an average of 45¢ lower.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 5¢ to 9¢ higher. 

Wholesale beef values were weak 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 74¢ lower Friday afternoon at $217.01/cwt. Select was 11¢ lower at $212.02.

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Major U.S. financial indices closed higher Friday with the announcement that Congress and President Trump reached a resolution to reopen the government, at least temporarily—until Feb. 15—with hopes all sides can come to agreement on a national budget and border security.

The Dow Jones Industrial Average closed 183 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 91 points.

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USDA’s monthly Cattle on Feed report was due to be published Friday, but went missing due to the partial government shutdown. Even when government reopens for business, the report may go unpublished.

According to various pre-report estimates, December feedlot placements—feedlots with 1,000 head or more capacity—were likely about 2% more year over year.

For instance, David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets, says “December saw an increase in cattle imports from Mexico and larger calf and feeder sales. Placements in December are typically much lower than in November, as much as 500,000 fewer in some years.”

The Livestock Marketing Information Center (LMIC) is more conservative, though, expecting placements to be 0.6% more.

“Feeder cattle imports from Mexico and Canada were about 25,000 head higher year-over-year. Auction receipts showed strong volumes relative to a year ago, both pointing to more placements,” LMIC analysts say in the latest Livestock Monitor. “The headwind to placements has been extremely muddy conditions in feedlots, especially in Kansas and Nebraska.

All of the sources mentioned here expect December marketings to be about on par with the previous year.

“Actual weekly slaughter has not been released since Dec. 8, so this estimate relies on estimated daily slaughter,” LMIC analysts explain. “While the estimated slaughter data is better than no data, there is a large difference in precision. Estimated daily slaughter for steers and heifers are rounded to the nearest 1,000 head, while actual slaughter is down to the number of head. Over the course of an entire month, estimated versus actual can vary.”

For Anderson, and the majority of analysts in the Urner Barry Survey—reported by the Daily Livestock Report—that leaves estimated inventory of cattle on feed Jan. 1 about 2% higher than a year earlier.

“That represents a relatively large number of cattle on feed, as have the last several reports,” Anderson says. “It also continues to represent a narrowing of the growth in on-feed numbers compared to months earlier in the year.”

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Pressure in Lean Hog futures, undeveloped cash trade and light interest held Cattle futures to minimal gains.

Other than 20¢ and 2¢ lower in the front two contracts, Live Cattle futures closed an average of 28¢ higher.

Feeder Cattle futures closed an average of 50¢ higher.

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed mostly unchanged to fractionally mixed. 

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

Choice boxed beef cutout value was 54¢ higher Thursday afternoon at $217.75/cwt. Select was 10¢ higher at $212.14.

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Major U.S. financial indices closed narrowly mixed Thursday, with strong quarterly earnings reports tempered by continued fretting over the ongoing trade dispute between China and the U.S.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 3 points higher. The NASDAQ was up 47 points.

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“Wholesale beef markets are starting 2019 with a continuation of generally strong prices seen last year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his recent market comments. “For the first three weeks of the year, boxed beef cutout prices are up 2.9% for Choice and 3.4% for Select compared to the same period last year.” 

Week to week on Thursday, Choice boxed beef cutout value was $5.25 higher at $217.75/cwt. Select was at $4.50 higher at $212.14.

“In 2018, weekly boxed beef prices averaged 2.2% higher year over year compared to 2017,” Peel explains. “Wholesale beef prices were higher in 2018 despite a projected 2.8% increase in beef production and larger pork and poultry supplies.”

Middle meats provided the most support to cutout values in recent months, according to Peel. He explains, “Current Choice rib primal price is $344.79/cwt., up 9.8% year over year. Last year, rib primal prices averaged 6.2% higher compared to 2017. Choice loin primal price is currently $280.80/cwt., up 4.7% compared to the same week last year. In 2018, Choice loin primal prices averaged 1.5% higher year over year.”