WLI

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.”

Last week’s higher fed cattle prices and firmer wholesale beef values appeared to finally offer some spark to Cattle futures on Tuesday, especially Feeder Cattle.

Live Cattle futures closed an average of 77¢ higher.

Feeder Cattle futures closed an average of $1.68 higher ($1.15 higher to $2.27 higher in spot Jan).

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

Choice boxed beef cutout value was 96¢ lower Tuesday afternoon at $214.46/cwt. Select was 45¢ higher at $201.39.

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Wild market swings continued on Wall Street Tuesday, apparently driven by continued kneejerk reactions to the headlines. By the end, major U.S. financial indices settled narrowly mixed.

The Dow Jones Industrial Average closed 53 points lower. The S&P 500 closed fractionally lower. The NASDAQ was up 11 points.

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“The 2018 forecast for total red meat and poultry production is raised from last month as higher beef and poultry production forecasts more than offset lower pork production,” according to analysts with USDA’s Economic Research Service, in the monthly World Agricultural Supply and Demand Estimates (WASDE). “The increase in beef production reflects a faster pace of steer and heifer slaughter. However, this is slightly offset by lower carcass weights.”

Fed steer prices (5-area Direct) are projected at $119-$125/cwt. in the first quarter next year, $118-$128 in the second quarter and $109-$119 in the third.

Other WASDE highlights:

Corn

Lower corn used for ethanol, reduced imports and larger ending stocks.

The season-average corn price received by producers was unchanged at a midpoint of $3.60/bu., but the range was narrowed 5¢ cents on each end to $3.25 to $3.95/bu.

Wheat

Unchanged supplies, lower exports, and higher ending stocks.

The projected season-average farm price is up 5¢/bu. at the midpoint with the range narrowed to $5.05 to $5.25.

Soybeans

Supply and use projections for 2018-19 were unchanged. Soybean ending stocks were projected at a record 955 million bu.

The U.S. season-average soybean price for 2018-19 was forecast at $7.85 to $9.35/bu., unchanged at the midpoint. Soybean meal price was unchanged at $290 to $330 per short ton. Soybean oil price was unchanged at 28.0¢ to 32.0¢/lb.

Negotiated cash fed cattle trade last week ended up $1-$3 higher at $119/cwt. ($116 in the western Corn Belt). Dressed trade was steady to $4 higher at $187.

Feeder Cattle futures gained some ground Monday, amid limited trade, while Live Cattle closed narrowly mixed, despite stronger cash prices and wholesale beef values.

Live Cattle futures closed 32¢ lower to 32¢ higher.

Feeder Cattle futures closed an average of 67¢ higher. 

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 $1.13 higher Monday afternoon at $215.42/cwt. Select was 44¢ higher at $200.94.

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Extreme volatility continued on Wall Street Monday with steep losses early and then recovery later on, led by tech stocks.

The Dow Jones Industrial Average closed 34 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 51 points.

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“The latest meat trade data shows that meat exports are continuing to help offset record meat production in 2018,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in December market comments.  “Each of the major meats—beef, pork and poultry—are projected to reach record levels in 2018 and will combine to push total U.S meat production to a record level of 102.3 billion lbs., up 2.6% year over year. However, 2018 per capita meat consumption in the U.S. is projected at 218.7 lbs., up 1.0% year over year. The smaller increase in meat consumption compared to production is largely due to the net movement of meat offshore through meat exports. Thus far in 2018 (January-October), total meat exports of 13.3 billion lbs. consist of broiler (44.0%); pork (36.3%); and beef (19.7%).

Moreover, Peel explains U.S. meat exports are forecast to increase next year, while total meat imports are forecast to decrease. 

“Continued improvements in the net trade balance will be critical to partially offset total 2019 meat production forecast at 103.7 billion lbs., up 1.4% year over year and another record level,” Peel says. “Domestic per capita total meat consumption is forecast to hold steady in 2019.”

However, Peel also pointed out earlier this fall, “There is general agreement that trade disruptions will likely reduce U.S. and global macroeconomic growth in 2019. While the beef industry has avoided most of the direct tariff impacts thus far, indirect tariff impacts will continue to grow unless the trade situation is resolved very soon. Consumers will see growing tariff impacts that may impact consumer spending and beef demand…Tariff-driven price increases could push consumers to cheap and abundant pork and poultry at the expense of beef demand.”