WLI

Negotiated cash fed cattle traded ended up mostly $1 higher on a live basis last week at $124/cwt. in Nebraska and the Southern Plains; $1-$2 higher in the western Corn Belt at $122-$124. Dressed trade was $2-$3 higher at $197.

Early support in grain futures helped pressure Feeder Cattle, while stronger cash prices and the weather helped cap losses in Live Cattle.

Except for an average of 37¢ higher in the front two contracts, Live Cattle futures closed an average of 22¢ lower. 

Except for $1.27 lower in spot Jan, Feeder Cattle futures closed an average of 59¢ lower.

Corn futures closed mostly fractionally higher.

Soybean futures closed mostly 5¢ to 6¢ lower (8¢ lower in spot Jan).

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

Choice boxed beef cutout value was 44¢ lower Monday afternoon at $212.02/cwt. Select was 81¢ lower at $205.46.

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Major U.S. financial indices closed lower Monday, led by tech stocks. Depending on the analysts you listen to, pressure included lingering uncertainty about trade issues and the government shutdown, as well as queasiness about the next round of corporate earnings.

The Dow Jones Industrial Average closed 86 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 65 points.

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In lieu of USDA market reports derailed by the partial government shutdown, markets will make assumptions about the missing data, says Brenda Boetel, Extension agricultural economist at the University of Wisconsin-River Falls.

“The longer the lack of information prevails, the greater the market correction may be when the reports resume, especially if the reports say something different than the market assumed,” Boetel explains, in the latest issue of In the Cattle Markets. “The cattle markets care about last week’s missing reports, because they gave the final information on the size of the 2018 corn harvest, the speed in which corn is being used, and the first hint of information regarding how many acres of each crop will be planted in 2019. The market is trading on old information, a less than desirable situation.”

Specifically, she’s referring to the monthly World Agricultural Supply and Demand Estimates (WASDE) that were supposed to be issued last week, along with Quarterly Grain Stocks, Winter Wheat and Canola Seedings and weekly export sales.

“The WASDE report likely would have shown a decrease in 2018 corn yield,” Boetel says. “Additionally, poor harvest conditions affected acreage as well as yield. The USDA would likely have lowered 2018 corn production from 14.626 billion bu. to around 14.545 billion bu. The February report will begin to adjust the demand side of the equation and examine more closely whether usage estimates for ethanol or exports needs to be adjusted.”

Cattle feeders and packers continued their standoff through late Friday afternoon, with negotiated cash fed cattle trade undeveloped, according to USDA reports. However, according to AMS, there was a smattering of dressed sales in the Northern Plains at $197/cwt., which was $2 more than the previous week. 

Adverse pen conditions and another winter storm over the weekend point to continued erosion in feedlot performance and more price leverage for cattle feeders.

Cattle futures closed near steady Friday, maintaining week-to-week gains as traders waited cash direction.

Except for 17¢ lower in June, Live Cattle futures closed an average of 15¢ higher. 

Except for 7¢ and 12¢ higher in April and May, Feeder Cattle futures closed an average of 33¢ lower.

Corn futures closed mostly 2¢ higher.

Soybean futures closed 3¢ to 4¢ higher.

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

Choice boxed beef cutout value was $1.50 lower Friday afternoon at $212.46/cwt. Select was $1.50 lower at $206.27.

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Major U.S. financial indices edged slightly lower Friday amid persistent concerns about the partial government shutdown and the lack of trade resolution with China.

The Dow Jones Industrial Average closed 5 points lower. The S&P 500 closed fractionally lower. The NASDAQ was down 14 points.

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Impacts from muddy feedlot pens and winter weather continue to cut both ways in the market.

“Heavy rain and snow has most of the trade area in very muddy conditions and these conditions are discouraging calf buyers from buying at this time,” according to the Agricultural Marketing Service (AMS) reporter on hand for Monday’s auction at Oklahoma National Stockyards.

Between demand pressure and heavy post-holiday volume, steers and heifers sold from $4/cwt. lower to $1 higher last week, according to the Agricultural Marketing service (AMS).

Heading into the weekend, a wide swath of the nation was gearing up for Winter Storm Gia

“Feedyards that were already wet will see more moisture fall from the sky, dashing any hopes that they will dry out anytime soon. Said AMS analysts on Friday. “Muddy feedyards in Kansas, Nebraska and Iowa want to get cattle moved out of the poor pen conditions, as cattle performance has been seriously impeded due to above average moisture recently.”  

Lost pounds to weather are supporting Cattle futures and the uptick in cash fed cattle prices. On the other hand, costs are increasing.

Feeder Cattle futures closed an average of $1.60 higher week to week on Friday. Live Cattle futures closed an average of $1.70 higher.

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. Current indications continue to suggest steady to higher prices when it does occur.  Wet, muddy condition in major cattle feeding areas continue to hinder cattle performance and add support to the market.

Cattle futures traded mainly sideways.

Except for 25¢ lower in the back contract, Live Cattle futures closed an average of 11¢ higher. 

Feeder Cattle futures closed 10¢ lower to 20¢ higher.

Grains closed lower on the day, presumably on a less bearish outlook than traders expected to see for soybeans in South America. Chatter also picked up a notch regarding the growing dearth of publicly available market data, due to the ongoing partial government shutdown.

Corn futures closed 4¢ to 5¢ lower through Jul ’20 and then mostly 2¢ lower.

Soybean futures closed 11¢ to 17¢ lower.

Wholesale beef values were steady 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 12¢ higher Thursday afternoon at $213.96/cwt. Select was $1.30 higher at $207.77.

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Major U.S. financial indices edged higher again on Thursday, with follow-through support regarding the potential pause for interest rate increases, along with lingering hopes of a trade resolution with China. Pressure on retail stocks helped cap gains.

The Dow Jones Industrial Average closed 122 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 28 points.

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Despite the fact that there are fewer farms and ranches today, and a growing generational gap between the general population and agriculture, the children of Baby Boomers are more likely than their parents to know much about agriculture. That’s according to the latest Feed4Thought survey from Cargill.

Specifically, Cargill found that twice as many Generation Y respondents (ages 18–34) in the U.S. and China reported knowing a livestock or seafood farmer, compared to those over 55 years old. Trends were similar in Mexico and France. While 81% of 18-to-34-year-old Chinese participants said they have visited a livestock or seafood farm during their lifetime, only 50% of their older compatriots had. Young respondents in every country surveyed were more likely to have visited a farm than those over 55.

Generation Y (born between the early 1980s and about 2000) is also acting on what they learn about farming practices, according to the survey. Almost three times as many Gen Y participants (52%) said they had changed their eating habits for sustainability reasons in the past year versus older U.S. respondents (19%). Mexico, France and China showed a similar age correlation, with 80% of young Chinese reporting changes. Having kids at home made participants in all four sample countries more likely to make values-based changes.

“We know people increasingly care about animal welfare, the healthfulness of foods and sustainability,” says Marina Crocker, head of Cargill Animal Nutrition market insights. “By pairing Cargill’s understanding of what our customers need with state-of-the-art analytics about what people want, we can anticipate and serve emerging consumer expectations in the solutions we provide our customers.”

More than 80% of survey respondents said the way an animal is raised is important, and almost half of them were willing to pay more as a result. Chinese survey participants (59%) were the most open to paying a premium based on factors such as animal feed and housing; Americans (31%) the least.

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. There were only 571 head offered in the weekly Fed Cattle Exchange auction, with none sold.

Cattle futures softened some, likely on profit taking and awaiting the week’s cash direction.

Live Cattle futures closed an average of 26¢ lower through the front six contracts and then an average of 27¢ higher.

Except for 10¢ higher in the back contract, Feeder Cattle futures closed an average of 58¢ lower.

Corn futures closed mostly unchanged to 1¢ higher.

Soybean futures closed 5¢ higher across the board. 

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

Choice boxed beef cutout value was 14¢ lower Wednesday afternoon at $213.84/cwt. Select was 79¢ lower at $206.47.

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Major U.S. financial indices closed higher for the fourth session in a row, buoyed by confirmation the FOMC plans to be patient with future interest rate increases.

According to the FOMC minutes, “… many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming. A number of participants noted that, before making further changes to the stance of policy, it was important for the Committee to assess factors such as how the risks that had become more pronounced in recent months might unfold and to what extent they would affect economic activity, and the effects of past actions to remove policy accommodation, which were likely still working their way through the economy.”

Crude oil prices continued to climb as well, with West Texas Intermediate Crude on the CME closing $2.36 to $2.58 higher for the next 12 months.

The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 60 points.

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Lots went right and little went wrong for cattle markets last year or the year before, according to Stephen Koontz, agricultural economist at Colorado State University. He notes strong wholesale margins, efficient movement of increased production through the supply chain and exceptional U.S. beef export levels, particularly to Japan and Korea.

“But forecasts for 2019 suggest a further 1.8% increase in beef production, a further 2.4% increase in pork production, a 1.3% increase in broiler production, and 0.5% increase in milk production,” Koontz explains, in the most recent issue of In the Cattle Markets.  “There will be plenty of protein and fats. While the stock market has been volatile, the underlying indicators of the macro economy have largely remained strong. That is not the case for the rest of the world. There are clear weaknesses in the world economy. There is plenty of protein. And, there appears to be plenty of downside price risk.”

Negotiated fed cattle trade was undeveloped through Tuesday afternoon, but Cattle futures suggest steady to higher prices for the week. They closed sharply higher, especially Feeder Cattle, buoyed by increasing open interest and trade activity.

Live Cattle futures closed an average of 84¢ higher (40¢ higher to $2.10 higher in spot Feb), with the most active trade since September.

Feeder Cattle futures closed an average of $1.30 higher, with the most active trade since October.

Corn futures closed mostly 1¢ lower.

Soybean futures closed 3¢ to 6¢ lower through Jan ’20 and then mostly 1¢ lower.

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

Choice boxed beef cutout value was 30¢ lower Tuesday afternoon at $213.98/cwt. Select was 95¢ lower at $207.26.

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Major U.S. financial indices close higher for the third consecutive day as investors seemed to grow more optimistic that ongoing trade talks with China may bear fruit. Resurgent tech stocks added support, as did the recent rebound in oil prices. Crude Oil futures (CME-WTI) are about $3 higher since last Wednesday.

The Dow Jones Industrial Average closed 256 points higher. The S&P 500 closed 24 points higher. The NASDAQ was up 73 points.

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Agricultural producer sentiment declined in December as farmers’ perception of both current and future economic conditions weakened, according to results from the Purdue University-CME Group Ag Economy Barometer. The December barometer reading of 127 was 7 points lower than November. The barometer is based on 400 survey responses from agricultural producers across the country.

Both of the barometer’s two sub-indices declined in December. The Index of Current Conditions fell 6 points to 109, which was 30 points less than a year earlier. The Index of Future Expectations fell 8 points in December to 135, but was 15 points higher than a year earlier.

“Over the course of the last year, producers’ impression of current economic conditions on their farms has declined markedly,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “But at the same time, their expectations for future economic conditions have held steady. As a result of this mixed view, farmers appear to be cautious about making large investments in their farming operations.”

Mintert points to December’s Large Farm Investment Index as an example. That index measures whether producers feel this is a good time to make large farm investments. It dropped 5 points month to month at 51 and was 29 points lower than a year earlier.

Similarly, 42% said now was a good time to bring a new generation of family into the business, versus about 50% during the past two years. Looking ahead five years, 65% expect conditions to be more favorable for bringing in a new generation.