WLI

Through late Friday afternoon, negotiated cash fed cattle prices for the week were mostly $2-$3 less on a live basis at $125-$126/cwt. in the Southern Plains, mostly $126 in Nebraska and mostly $128 in the western Corn Belt. Dressed trade was also $2-$3 lower at $206 in Nebraska and at $205 in the western Corn Belt.

Cattle futures softened Friday with pressure from Lean Hog futures, lower cash prices and positioning for the end of the month and quarter.

Except for 62¢ higher in the back contract, Live Cattle futures closed an average of 57¢ lower.

Except for 85¢ and $1.70 higher in the back two contracts, Feeder Cattle futures closed an average of 47¢ lower.

Corn futures closed 8¢ to 17¢ lower through Jul ’20, and then 3¢ to 5¢ lower. Planting intentions and grain stocks (see below) applied heavy pressure to the front contracts.    

Soybean futures closed 3¢ to 5¢ lower.

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

Choice boxed beef cutout value was $1.40 lower Friday afternoon at $226.04/cwt. Select was 63¢ lower at $218.89.

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Major U.S. financial indices closed higher Friday, with support including optimism regarding trade talks between the U.S. and China.

The Dow Jones Industrial Average closed 211 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 60 points.

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Corn stocks Mar. 1 were 3% less year over year at 8.60 billion bu., according to USDA’s Grain Stocks report issued Friday. That was significantly more than the trade expected. Likewise, the 92.8 million acres farmers intend to plant, in the Prospective Plantings report, is 4% more than last year (+3.66 million acres) and more than expected.

Keep in mind, the Prospective Plantings report is based on surveys conducted before or mostly before the bomb cyclone and subsequent flooding. No doubt, intentions and possibilities changed since then. Still, Corn futures dropped hard Friday in response to the reports.

Soybeans stored in all positions on Mar. 1 totaled 2.72 billion bu., up 29% from the previous year, reflecting the relative dearth of exports so far this year.

Soybean planted area for this year is estimated at 84.6 million acres, down 5% from last year.

All wheat stored in all positions on Mar. 1 totaled 1.59 billion bu., which was 6% more than a year earlier.

All wheat planted area for 2019 is estimated at 45.8 million acres, down 4% from last year and the least since records began in 1919. The 2019 winter wheat planted area of 31.5 million acres is 3% less than last year but 1% more than the previous estimate.

Despite lower cash fed cattle prices the previous day and heavy pressure in Lean Hog futures, Live Cattle futures traded mostly sideways Thursday. Feeder Cattle inched higher, amid continued light trade.

Live Cattle futures closed narrowly mixed (20¢ lower to 35¢ higher).

Except for 15¢ lower and unchanged at either end of the board, Feeder Cattle futures closed an average of 43¢ higher.

Corn futures closed mostly fractionally higher through Mar ’21, and then 3¢ to 5¢ higher    

After 1¢ to 2¢ higher in the front four contracts, Soybean futures closed mostly fractionally lower to 1¢ lower.

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

Choice boxed beef cutout value was $1.55 lower Thursday afternoon at $227.44/cwt. Select was $1.01 lower at $219.52.

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Major U.S. financial indices bounced higher Thursday, with many crediting various reports of progress in trade talks between the U.S. and China.

The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 25 points.

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U.S. beef exports remained robust in January, but the lack of progress in trade talks with various countries—the growing tariff disadvantage with competitors—started to show.

U.S. beef exports declined by 1% in January to 4,766 metric tons (mt), compared to the previous year, but beef export value increased 3% to $642.3 million. That’s according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Export value per head of fed slaughter pulled back from last year’s record pace, averaging $284.86, down 3% from a year ago.

Japan and South Korea set the pace for U.S. beef exports.

Japan imported 8% more U.S. beef year-over-year (25,925 mt), valued at $167 million, which was 12% more than the same time a year earlier.

January was the first full month U.S. beef competitors received tariff relief in Japan under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the import duty rate dropping from 38.5% to 27.5% on Dec. 30, 2018. This gap will widen further on April 1, when the rate for CPTPP countries drops to 26.6%.

“It’s great to see Japan’s demand for U.S. beef increase in January despite these tariff rate changes for our major competitors,” says Dan Halstrom, USMEF president and CEO. “But this disadvantage will become more and more pronounced over time, so negotiations toward a U.S.-Japan trade agreement cannot come soon enough. The playing field needs to be leveled as quickly as possible so that the U.S. industry can continue to capitalize on booming meat demand in Japan.”

South Korea imported 4% more U.S. beef in January (17,900 mt), on the heels of its record imports last year. Export value was 10% more at $134.3 million.

Although there were too few transactions for a full trend in any region, negotiated cash fed cattle trade got underway Wednesday with a decidedly bearish tone.

Live sales were $2-$3 lower in the Southern Plains at $125-$126/cwt.; $126-$127 in Nebraska. Live trade was $3 less in Colorado at $126; $1-$2 lower in the western Corn Belt at $128-$129. Dressed sales were $2-$3 lower at $206 in Nebraska and $205 in the western Corn Belt.

Early capitulation by some cattle feeders, and at those prices, surprised plenty of traders.

Live Cattle futures closed an average 87¢ lower through the front five contracts and then an average of 22¢ lower.

The notion is growing for some that last week was the seasonal top for fed cattle. If so, next comes a downward trek for prices through the summer months, with the pitch and speed depending on lots of factors; everything from marketing currentness associated with long-fed cattle and increasing cattle numbers, to beef demand, to feed prices impacted by protracted flooding to packer capacity utilization.

Feeder Cattle futures closed an average of 29¢ lower, except for an average of 8¢ higher for Aug-Oct. Trade was light.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed 10¢ to 13¢ lower through May ’20 and then 7¢ to 9¢ lower. Presumably, pressure is building with thoughts that weather will force more acres from corn to beans.

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

Choice boxed beef cutout value was 52¢ lower Wednesday afternoon at $228.99/cwt. Select was $1.54 higher at $220.53.

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Major U.S. financial indices closed lower, Wednesday, giving back gains from the previous session. Once again, pressure included a decline in the 10-year Treasury yield and lingering worries about slowing global economic growth.

The Dow Jones Industrial Average closed 32 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 48 points.

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Although devastating to individual producers and localities, cattle losses associated with the bomb cyclone are unlikely to impact overall short-term cattle markets, according to Don Close, senior protein analyst for Rabobank AgriFinance and Jim Robb, senior agricultural economist at the Livestock Marketing Information Center.

They were featured presenters at BEEF magazine’s Market Outlook webinar on Wednesday, which included perspective on markets for the remainder of this year and for 2020.

Longer term, they explained impacts could show up in this year’s calf crop, due both to direct loss and potential troubles settling cows this summer.

In the meantime, Robb noted that impact on crops, similar to 1993, could increase feed prices and pressures calf prices later in the year.

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Live Cattle futures closed an average 48¢ lower (12¢ to 77¢ lower).

Except for 57¢ and 2¢ higher in the front two contracts, Feeder Cattle futures closed an average of 89¢ lower.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed 3¢ to 5¢ lower.

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

Choice boxed beef cutout value was 51¢ higher Tuesday afternoon at $229.51/cwt. Select was 26¢ higher at $218.99.

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Major U.S. financial indices closed higher, Tuesday. Early on, the rising 10-year Treasury yield offered support.

The Dow Jones Industrial Average closed 140 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 53 points.

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Plenty of folks are eager to see the Prospective Plantings report from USDA on Friday, but it will likely spawn more questions than answers, as surveys for the report occurred before the bomb cyclone and subsequent flooding, which is projected to continue for the next couple of months.

“Taking a brief look at intended national plantings, versus actual acreage seeded in the past two primary flood years—2011 and 1993—1993 was significantly worse with spring flooding, plus devastating growing season flooding,” say analysts with the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor. “However, note that the balance of this year Midwest crops could be different than those years due to relative crop prices, etc. In 2011, the corn area planted was about 240,000 acres below the prospective indication (down 0.3%), while soybean acreage was down 1.6 million acres (dropped 2.0%). In 1993, the difference (actual plantings minus prospective survey) was a corn drop of about 3.25 million acres (-4.3%), and a soybean increase of 785,000 acres (up 1.3%).”

Markets will focus on three areas in order to assess corn and soybean prices, according to LMIC.

First is plantings. Next is the portion of planted acres harvested for grain; LMC analysts note Midwest flooding could increase planting area abandoned as the growing season unfolds. Finally, is the yield per acre.