WLI

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon, but futures prices and a few trades in the western Corn Belt hint at steady to softer prices.

Although too few to trend, there were a few live sales in the western Corn Belt at $126-$128/cwt., and a few in the beef at $204-$205.

Live Cattle futures closed an average of $1.14 lower (47¢ lower in the back contract to $2.35 lower in spot Apr). Trade volume was the heaviest since the first part of January.

Feeder Cattle futures closed an average of $1.19 lower.

Bears, no doubt, will likely make the case that the decline in Cattle futures signals the seasonal top is in the books.

Corn futures closed 3¢ to 5¢ higher.

Soybean futures closed 6¢ to 7¢ higher.

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

Choice boxed beef cutout value was 86¢ higher Tuesday afternoon at $228.22/cwt. Select was 72¢ higher at $220.35.

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Major U.S. financial indices closed mixed Tuesday.

Primary pressure came from Boeing stocks, beaten lower following the Ethiopian Airlines crash involving one of that company’s popular models; the EU and Indonesia grounded the plane from use by their airlines.

Support included continued inflation sloth, revealed by the monthly Consumer Price Index (CPI). It increased by 0.2% in February, after no change the prior month, according to the Bureau of Labor Statistics. Before seasonal adjustment the CPI for the last year increased 1.5%. Leave out food and energy expenditures and the February CPI increased by 0.1%.

The Dow Jones Industrial Average closed 96 points lower. The S&P 500 closed 8 points higher. The NASDAQ was up 32 points.

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Total pounds of beef in freezers Jan. 31 totaled 502.15 million lbs., according to the latest USDA Cold Storage report. That was 8.32 million lbs. (+1.66%) than a year earlier. Month to month, frozen beef supplies increased 14.44 million lbs. (+2.91%).

Frozen pork supplies were up 11% from the previous month, but down 3% from last year.

Total red meat supplies in freezers of 1.12 billion lbs. were 9.4 million lbs. fewer (-0.80%) than a year earlier.

Total frozen poultry supplies were up 4% from the previous month, but down 2% from a year earlier.

Short covering and profit taking seemed to be the order of the day in Cattle futures to start the week as follow-through buying to the previous session’s gains failed to materialize.

Live Cattle futures closed an average of 46¢ lower, except for unchanged to 17¢ higher in the back three contracts.

Feeder Cattle futures closed an average of $1.49 lower through the front three contracts and then an average of 28¢ lower.

Grain futures turned lower Monday, presumably on continued response to last weeks World Agricultural Supply and Demand Estimates indicating increased ending stocks for wheat and corn.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed 3¢ to 6¢ lower, with chatter that delayed planting conditions this year could force more acres into soybeans.

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

Choice boxed beef cutout value was $1.23 higher Monday afternoon at $227.36/cwt. Select was 85¢ higher at $219.63.

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Major U.S. financial indices closed higher Monday, boosted by tech stocks, including Apple.

The Dow Jones Industrial Average closed 200 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 149 points.

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National Beef Packing Company, LLC (National Beef), announced on Monday that it has approved a transaction that will result in 100% ownership interest in Iowa Premium, LLC, (IP) at Tama, IA.

IP began operations in November 2016. It employs more than 800 people and processes approximately 1,100 head of Black Angus fed cattle per day.

“I am excited to expand our beef operations with a processing facility in Iowa and we look forward to strengthening IP’s relationships with the family farmers who produce the highest quality Black Angus cattle in the U.S.,” says Tim Klein, National Beef president and CEO. “Iowa Premium fits perfectly with our value-based marketing strategy as we continue to provide our customers with the very best beef products and programs.”

The transaction is subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in the second quarter of 2019.

There were a few negotiated cash fed cattle trades in Nebraska and the western Corn Belt on Friday at $127-$128/cwt. on a live basis, and a few in the beef at $205; too few to trend.

For the week, trade was generally steady at $128 in the Southern Plains and Nebraska. Dressed trade was also steady at $205.

A rally in Lean Hogs and expectations for fewer feedlot placements helped underpin Cattle futures on Friday.

Live Cattle futures closed an average of 52¢ higher (15¢ higher in the back contract to 75¢ higher).

Feeder Cattle futures closed an average of $1.03 higher (72¢ to $1.70 higher).

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed 5¢ to 7¢ lower through Jan. ’20 and then mostly 3¢ to 4¢ 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 9¢ higher Friday afternoon at $226.13/cwt. Select was 24¢ higher at $218.78.

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Major U.S. financial indices closed lower Friday, but well off of session lows. Pressure came early with the monthly jobs report, indicating significantly few new jobs last month than expected. That and the bleaker outlook from the European Central Bank a day earlier bolstered angst about an economic slowdown.

Total non-farm employment grew by only 20,000 in February, according to the Bureau of Labor Statistics.

Average hourly earnings for all employees on private nonfarm payrolls rose by 11¢ in February to $27.66. Hourly earnings increased by 3.4% over the past year.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 13 points.

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Feedlot placements continued lower month to month in January, according to Friday’s Cattle on Feed report. Placements of 1.96 million head were 5.27% less (-109,000 head) than a year earlier. Keep in mind the report reflects feedlots with 1,000 head or more capacity. Most analysts expected the decline to be a touch steeper, but the report likely will be gauged as neutral.

As for placement weights: 41.61% went on feed weighing up to 699 lbs.; 49.72% weighed 700-899 lbs.; 8.67% weighed 900 lbs.  

Marketings in January of 1.91 million head were 2.80% more (+52,000 head) than the previous January.

Cattle on feed Feb. 1 were 11.68 million head, which was 0.41% more (+48,000 head) than a year earlier.

Weekly negotiated cash fed cattle got underway Thursday with moderate trade and demand in the Southern Plains. Prices were steady with the previous week at $128/cwt. Though too few transactions to trend, there was also light to moderate trade in Nebraska at $128, which was steady with the bulk of the previous week’s sales in the region.

Steady cash prices helped lift Live Cattle futures.

Live Cattle futures closed an average of 53¢ higher (5¢ higher in spot Apr to 92¢ higher).

Short covering, apparently, and perhaps positioning ahead of Friday’s Cattle on Feed report helped Feeder Cattle futures gain back a fair portion of what was lost in the previous two sessions.

Feeder Cattle futures closed an average of $1.52 higher (45¢ in the back contract to $2.35 higher).

Corn futures closed mostly 3¢ to 6¢ lower.

Soybean futures closed mixed from 3¢ lower to 1¢ higher.

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

Choice boxed beef cutout value was $1.11 higher Thursday afternoon at $226.04/cwt. Select was 17¢ higher at $218.54.

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Major U.S. financial indices sunk lower Thursday, as investors fretted over a bleaker economic outlook for European Union (EU) countries.

In a prepared press statement yesterday, Mario Draghi, president of the European Central Bank (ECB) explained real GDP for the Euro area increased by only 0.2% in the fourth quarter last year, following growth of 0.1% in the third quarter.

“Real GDP growth remained unexpectedly sluggish in the fourth quarter of 2018, and recent indicators point to substantially weaker than previously expected activity also in the first half of 2019,” according to ECB staff macroeconomic projections for the euro area released yesterday. “While some temporary factors are likely to have contributed to the slowdown in activity in late 2018, the broad-based worsening of economic sentiment indicators across countries and sectors in recent months suggests that more persistent adverse factors have also been at play and that the underlying cyclical momentum is somewhat weaker than previously assessed.”

The ECB projects GDP growth at 1.1% this year, down from 1.7% in their previous forecast.

The Dow Jones Industrial Average closed 200 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 84 points.

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U.S. beef exports blasted through previous records for value last year, according to year-end 2018 statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Exports also achieved a new high for volume.

Beef export value last year was $8.33 billion, which was $1.06 billion more—15% more—than the previous record set a year earlier. The volume of 1.35 million metric tons (mt) was 7% more than the previous year and 5% more than the previous record set in 2011.

Beef export value per head of fed slaughter last year was also record high at $323.14, which was 13% more than the previous year and 8% more than the previous record set in 2014.

South Korea accounted for half of the $1 billion surge in beef exports. Japan, Taiwan and the ASEAN region also fueled demand growth.

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, but a variety of indicators suggested at least steady prices this week.

At Sioux Falls Regional in South Dakota, Ch 2-4 steers brought $125.50 to $129.75/cwt. on Wednesday. The deepest test of Ch 2-4 steers at Tama, IA brought an average price of $130.81.

Through Tuesday, the 5-area direct live steer price was $128.50 on a smattering of trades, about even with the previous week.

There were only 300 head offered in the weekly Fed Cattle Exchange auction, and no takers.

Live Cattle futures puttered in place Wednesday, drifting a touch lower, while Feeder Cattle continued to soften amid light trade.

Other than 7¢ higher in spot Apr, Live Cattle futures closed an average of 26¢ lower.

Feeder Cattle futures closed an average of 79¢ lower (22¢ to $1.02 lower).That’s an average of about $1.50 lower in the last two sessions.

Corn futures closed 2¢ to 3¢ lower through Jul ’20 and then mostly fractionally lower.

Soybean futures closed 10¢ to 11¢ lower through Aug ’20 and then 7¢ to 9¢ lower.

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

Choice boxed beef cutout value was 89¢ higher Wednesday afternoon at $224.93/cwt. Select was 58¢ higher at $218.37.

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Major U.S. financial indices closed lower Wednesday, without much fundamental direction, but apparent rally fatigue as investors wait for a resolution to U.S.-China trade talks.

The Dow Jones Industrial Average closed 133 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 70 points.

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Despite lighter year-to-year carcass weights, beef production continued to climb in January, according to the most recent USDA Livestock Slaughter report.

Total beef production in January of 2.31 billion lbs. was 30.8 million lbs. more than the previous year (+1.35%).

Fed steer and heifer slaughter under federal inspection of 2.19 million head was 61,200 head more (+2.87%) than the previous year.

Total cattle slaughter of 2.79 million head was 72,100 head (+2.66%) than a year earlier.

Average steer dressed weight in January was 886 lbs., which was 7 lbs. lighter than a year earlier. Average dressed heifer weight was 12 lbs. lighter at 824 lbs.

Total red meat production in January of 4.70 billion lbs. was 114.1 million lbs. more (+2.49%) than the same month a year earlier.