WLI

While volatility continued in outside markets Tuesday, Cattle futures managed to retrace some of the previous session’s losses …There’s a wide gap in expectations for placements in the looming Cattle on Feed report… coming up on your Cattle Current Market Update with Wes Ishmael.

As expected, negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Cattle futures firmed, amid continued light trade, apparently spurred along by short covering, more than anything.

Live Cattle futures closed an average of 62¢ higher.

Feeder Cattle futures closed an average of 91¢ higher.

Corn futures closed most 1¢ higher.

Soybean futures closed mostly 2¢ to 3¢ higher.

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

Choice boxed beef cutout value was 1¢ higher Tuesday afternoon at $212.68/cwt. Select was 97¢ higher at $204.73.

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Major U.S. financial indices eked out gains Tuesday, amid another stormy day of trading. Pressure continued to stem, in part, from worries about slowing global economic growth, tied to unresolved trade issues.

Domestically, the angst was compounded by an expected rise in interest rates Wednesday, another slide in crude oil prices

Spot CME crude oil (WTI) closed at $46.24, the lowest in more than a year. Contracts for the next 12 months were down $3.36 to $3.64.

Pressure also included an anemic outlook from the National Association of Home Builders (NAHB).

Builder confidence in the market for newly built single-family homes fell four points to 56 in December on the NAHB/Wells Fargo Housing Market Index (HMI) with persistent concerns about housing affordability. Although this is the lowest HMI reading since May 2015, builder sentiment remains in positive territory.

“We are hearing from builders that consumer demand exists, but that customers are hesitating to make a purchase because of rising home costs,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, LA “However, recent declines in mortgage interest rates should help move the market forward in early 2019.”

The Dow Jones Industrial Average closed 82 points higher. The S&P 500 closed fractionally higher. The NASDAQ was up 30 points.

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When the monthly Cattle on Feed report comes out Thursday, it will show either a few more November cattle placements or lots fewer, depending on which analysts and surveys you follow.

For instance, Allendale, Inc. sees November placements 0.9% more than last year. According to the Daily Livestock Report, though, the average estimate of the Urner Barry survey is for a decrease of 6.3%. That represents an estimated difference of 153,000 head.

As for estimated marketings in November, both sources project a year-over-year increase of about 1%.

For Allendale, that leaves an estimated 3.2% more cattle on feed Dec. 1, versus 1.7% more for the average of estimates in the Urner Barry survey.

Cattle futures softened to start the week, especially Feeder Cattle. Pressure likely included the anticipated packer slowdown during the next two holiday-shortened weeks, as well as technical correction.

Live Cattle futures closed an average of 77¢ lower.

Feeder Cattle futures closed an average of $1.70 lower ($1.20 to $2.45 lower).

Corn futures closed fractionally lower through Dec ’10 and then mixed.

Soybean futures closed 2¢ to 4¢ higher.

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

Choice boxed beef cutout value was $1.71 higher Monday afternoon at $212.67/cwt. Select was 62¢ higher at $203.76.

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Major U.S. financial indices closed sharply lower again Monday, down about the same amount they were in the previous session. Concerns continued about slowing global economic growth and unresolved trade issues, in tandem with expectations the Fed will raise interest rates again Wednesday.

The Dow Jones Industrial Average closed 507 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 156 points.

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“Packer demand has increased seasonally, and strong margins this year have likely encouraged packers to be strong buyers of cattle,” say analysts with USDA’s Economic Research Service (ERS), in the December Livestock, Dairy and Poultry Outlook. “For the week ending December 8, the weekly slaughter estimate was 667,000 head. This would be the highest weekly slaughter total since the week ending May 19. This demand is also reflected in prices offered for fed steers in the 5-area marketing region. In November, monthly prices finally broke out of the 5-month narrow price window of $109.90 to 112.20/cwt. to reach over $115. Further, for the week ending December 9, fed steer prices climbed to $118.11, though still below year-earlier levels. From last month, the forecast for fourth-quarter 2018 price for fed steers in the 5-area marketing region was raised to $113-$116/cwt. However, the annual forecast for 2019 fed steer prices was left unchanged $114-$122/cwt.

The aggressive slaughter pace pushed estimated beef production for this year 25 million lbs. higher to 26.9 billion lbs. ERS analysts note lighter carcass weights and less projected cow slaughter in the fourth quarter partially offset increased steer and heifer slaughter. Likewise, beef production for 2019 was reduced slightly based on the expectation of lighter carcass weights. Estimated beef production for next year was reduced by 25 million lbs. to 27.8 billion lbs.

Negotiated cash fed cattle prices in the Southern Plains on Friday were mainly steady with the previous week at $119/cwt. on a live basis. Early dressed sales in Nebraska were $1 higher at $188. Though too few to trend, early live sales in the western Corn Belt were $1 higher at $117, while early dressed sales of $187 were at the upper end of the prior week’s trading range in the region.

Cattle futures meandered to a marginally softer close.

Other than 12¢ higher in spot Dec, Live Cattle futures closed an average of 29¢ lower.

Feeder Cattle futures closed an average of 22¢ lower.

Corn futures closed mostly unchanged to fractionally mixed.

Soybean futures closed 4¢ to 6¢ lower.

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

Choice boxed beef cutout value was $1.51 lower Friday afternoon at $210.96/cwt. Select was $2.14 higher at $203.14.

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Major U.S. financial indices closed sharply lower Friday, pressured by weak European and Chinese economic data pointing toward slowing global economic growth.

The Dow Jones Industrial Average closed 496 points lower. The S&P 500 closed 50 points lower. The NASDAQ was down 159 points.

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Despite some notions to the contrary, the nation’s beef cow herd likely continued to expand a mite this year, according to the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor. Specifically, LMIC analysts expect to see 0.2-0.4% growth as of January 1.

Yes, growth is anticipated despite federally inspected heifer slaughter through October running 7.3% more than the previous year; 10.7% more for federally inspected beef cow slaughter.

“The number of beef cows that calved has grown over the last four years, adding 2.6 million head since 2014,” says LMIC analysts. “This incredible growth pattern led to larger calf crops, and the economics has supported retaining a large number of heifers in recent years to continue adding to that beef cow number.”

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. Although too few to trend, there were some early live sales in the western Corn Belt at $117/cwt., which was $1 higher than last week. Early dressed sales at $187, were at the top of last week’s range for the region.

Live Cattle futures edged mostly higher, while recent pressure on grain prices added lift to Feeder Cattle.

Other than an average of 7¢ lower in near Feb, and Apr, Live Cattle futures closed an average of 27¢ higher.

Feeder Cattle futures closed an average of 60¢ higher.

Corn futures closed mostly fractionally mixed.

Soybean futures closed 10¢ to 13¢ lower through 2019.

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

Choice boxed beef cutout value was 22¢ higher Thursday afternoon at $212.47/cwt. Select was 57¢ lower at $201.00.

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Major U.S. financial indices settled mixed Thursday. Support included perceptions that U.S. and China trade talks are progressing, including various reports suggesting China purchased a significant volume of U.S. soybeans.

The Dow Jones Industrial Average closed 70 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 27 points.

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“There are two overriding themes in livestock markets: generally low feed costs and record meat production,” says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets. “On the beef side, booming exports and strong domestic beef demand have cushioned the blow of increasing beef production. Record pork production in 2018 and again in 2019 will pressure pork prices lower. The chicken industry has continued to increase production, but prices have fallen to extremely low levels, which is likely to lead to some production restraint in the coming year. On the turkey side, falling demand has led to unprofitable prices for producers.”

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon.

There were only 156 head (two lots) offered in the weekly Fed Cattle Exchange auction. One lot (97 heifers) sold for delivery at 1-9 days for an average of $119/cwt.

Cattle futures continued to build on recent gains Wednesday, buoyed by last week’s large fed cattle harvest, as a barometer of domestic demand strength, in tandem with stronger cash prices.

Live Cattle futures closed an average of 39¢ higher.

Feeder Cattle futures closed an average of 34¢ higher.

Corn futures closed mostly unchanged to fractionally mixed.

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

Choice boxed beef cutout value was $2.21 lower Wednesday afternoon at $212.25/cwt. Select was 18¢ higher at $201.57.

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Although closing off of session highs, major U.S. financial indices settled higher Wednesday, reportedly fueled by increasing optimism regarding U.S.-China trade talks.

The Dow Jones Industrial Average closed 157 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 66 points.

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Congress passed the new Farm Bill, overwhelmingly in both the Senate and House of Representatives. All that’s left is President Trump’s, signature, which seems likely, based on his remarks ahead of the congressional vote.

“America’s cattlemen and women want common sense and certainty from Congress this holiday season and throughout the year; today, they received that through the passage of the Farm Bill,” said Kevin Kester, president of the National Cattlemen’s Beef Association. “Certainty that a Foot-and-Mouth Disease vaccine bank will be authorized and funded. Certainty that important conservation programs will be reauthorized and funded. And certainty that trade promotion and access to foreign markets will remain a priority in the years to come.”

“The passage of the 2019 Farm Bill is good news because it provides a strong safety net for farmers and ranchers, who need the dependability and certainty this legislation affords,” says U.S. Agriculture Secretary, Sonny Perdue. “This Farm Bill will help producers make decisions about the future, while also investing in important agricultural research and supporting trade programs to bolster exports. While I feel there were missed opportunities in forest management and in improving work requirements for certain SNAP recipients, this bill does include several helpful provisions and we will continue to build upon these through our authorities. I commend Congress for bringing the Farm Bill across the finish line and am encouraging President Trump to sign it.”

“Feeding an increasing global population is not simply an agriculture challenge, it is a national security challenge,” said Senator Pat Roberts (Rep, KS) after the Senate passed the conference report. “This means we need to grow more and raise more with fewer resources. That will take investments in research, new technology, lines of credit, and proper risk management. It takes the government providing tools, and then getting out of the producer’s way.”