WLI

Negotiated cash fed cattle trade remained undeveloped through late Thursday afternoon. There was some light trade on light to moderate demand in the western Corn Belt. Though too few transactions to trend, early live sales were $1 higher than last week’s low price in the region at $107.00-$108.50/cwt. Early dressed sales were steady to $2 higher at $170.

Limited trade and pressure on wholesale beef values helped hold Cattle futures in check Thursday, narrowly mixed and range-bound.

Other than 15¢ and 2¢ lower in the front two contracts, Live Cattle futures closed unchanged to 20¢ higher.

Other than unchanged and 5¢ higher in the front two contracts, Feeder Cattle futures closed 15¢ to 32¢ lower.

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

Choice boxed beef cutout value was $1.65 lower Thursday afternoon at $208.75/cwt. Select was $3.08 lower at $197.83.

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Major U.S. financial indices closed mixed again Thursday, mirroring the previous session. Tech stocks applied pressure, as did another day of lower crude oil prices.

The Dow Jones Industrial Average closed 20 points higher. The S&P 500 closed 10 points lower. The NASDAQ was down 72 points.

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U.S. beef exports posted another near-record month in July, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

U.S. beef exports in July climbed 12% in volume compared to the previous year at 116,575 metric tons (mt). Value for July was 16% more than the previous year at $722 million, just slightly below the May 2018 record of $722.1 million. For January through July, beef exports established a record pace in both volume (10% more year over year at 779,450 mt) and value, which was 20% more than the same period year ago at $4.76 billion.

Beef export value in July averaged $326.18 per head of fed slaughter, up 9% from a year ago. Through July this year, per-head export value was up 16% to $318.31.

“The worldwide momentum for U.S. beef has rarely been as strong as it is today,” says Dan Halstrom, USMEF president and CEO.  “To a large degree our mainstay Asian markets are driving this growth, but emerging markets in Asia and in the Western Hemisphere are also displaying a tremendous appetite for U.S. beef and contributing significantly to the surge in export value. From high-end restaurants to convenience stores, U.S. beef is gaining new fans across the globe on a daily basis.”

Beef exports in July accounted for 14% of total beef production. For January through July, exports accounted for 13.5% of total beef production, up from 12.8% last year.

By way of comparison, July U.S. pork exports were 1.5% more than the previous year for volume but 5% less for value at $465.3 million. Retaliatory duties imposed by Mexico and China are behind the decline.

Odds are improving for at least steady cash fed cattle prices this week.

For instance, Choice 2-4 steers sold $1 higher at Sioux Falls Regional in South Dakota at $106-$108/cwt.

There were 512 head offered in the weekly Fed Cattle Exchange auction and no takers. One lot of Kansas heifers was passed out at $106.

In the country, trade was very limited on light to moderate demand in Nebraska and the western Corn Belt through Wednesday afternoon. There were a few early dressed sales at $170/cwt.—too few to trend—which was steady with last week.

Despite light trade and early pressure, notions of firm to higher cash bids for fed cattle helped Feeder Cattle futures close mostly higher; mostly narrowly mixed for Live Cattle.

Other than an average of 74¢ lower in the front two contracts, Live Cattle futures closed narrowly mixed, 15¢ lower to 7¢ higher.

Other than unchanged and 35¢ lower at the front of the board, Feeder Cattle futures closed an average of 50¢ higher (7¢ to 92¢ higher).

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 42¢ lower Wednesday afternoon at $210.40/cwt. Select was $1.30 lower at $200.91.

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Major U.S. financial indices closed mixed Wednesday, with pressure from tech stocks. Support included reports that the U.S. and Canada renewed trade talks.

The Dow Jones Industrial Average closed 22 points higher. The S&P 500 closed 8 points lower. The NASDAQ was down 96 points.

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Overall, pasture and range conditions improved slightly last week, according to the latest weekly Crop Progress report (week ending Sept. 2). Among states with 35% or more of pasture and range rated as Poor or Very Poor, week-to-week conditions improved in Arizona, Colorado, Missouri, New Mexico and Texas.

Nationally, 42% of pasture and range is in Good (36%) or Excellent (6%) condition, 2% more than a week earlier, but 5% less than a year earlier. 28% is rated as Poor (18%) or Very Poor (10%), which is 2% less than a week earlier and 7% more than last year.

States with 35% or more pasture and range rated as Poor or Very Poor include: Arizona (64%), California (45%), Colorado (48%), Missouri (54%), Nevada (35%), New Mexico (46%), Oregon (73%), Rhode Island (70%), Texas (53%), Utah (57%) and Washington (57%). 

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With conditions generally favorable for early to mid September winter wheat planting in his state, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, offers some thoughts about stocker opportunities, in his weekly market comments

“Profitability of winter stockers (purchased in October) will depend on numerous budget factors including purchase price, length of grazing period, rate of stocker gain, wheat pasture cost and, of course, selling price in late February or early March,” Peel explains.

On the buy side of the equation, Peel says seasonal and futures price projections suggest an October low price range in Oklahoma of $163-$168/cwt. for a steer calf (Med. and Large 1) weighing 475 lbs.

“Exceptionally good wheat pasture demand could hold prices at the upper end of the range or higher, while any delays in wheat pasture development could allow prices to drop to the low end of the range or below,” according to Peel.

As for marketing, Peel points to the March Feeder Cattle futures contract of $145-$146.

“This implies an Oklahoma price for 750 lbs. steers in early March of $146-$148/cwt. given an expected basis of roughly $1.50/cwt.,” Peel says. “Budget assumptions can vary widely, but this appears to be a price that more than covers breakeven cost of production for winter grazing. Producers should develop and evaluate budgets which reflect their particular situation. It may be that current futures prices offer an opportunity to protect a decent margin for winter grazing programs.”

Negotiated cash fed cattle traded ended up generally $2.00 to $2.50 lower on a live basis last week at mostly $107 (range of $106.00 to $108.50). Dressed trade was $3-$4 lower at $170.

Despite softer cash prices, Cattle futures gained strength Monday, surprising more than a few folks. Support likely included firming wholesale beef values and opening the books on a new month.

Live Cattle futures closed an average of $1.20 higher.

Feeder Cattle futures closed an average of $2.09 higher ($1.62 to $2.70 higher).

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

Choice boxed beef cutout value was $1.13 higher Monday afternoon at $210.82/cwt. Select was 94¢ higher at $202.21.

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Major U.S. financial indices closed marginally lower Monday, pressured by trade worries once again, concerning Canada and China.

The Dow Jones Industrial Average closed 12 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 18 points.

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Agricultural producer sentiment increased by 12 points in August to 129, according to the latest Purdue University/CME Group Ag Economy Barometer. That was still significantly lower than sentiment in May and June.

The advance was due mostly to a 22-point rise in the Index of Current Conditions, versus an increase of 6 points in the Index of Future Expectations. The barometer is based on a monthly survey of 400 agricultural producers from across the country.

“Farmer sentiment improved over the past month, but producers are uncertain about the (tariff) aid package’s ability to offset income losses on their farm,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Before the August survey, USDA announced intentions to provide aid to farmers impacted by importers’ tariffs. When asked specifically about the relief plan’s expected impact, farmers were split on whether they believed the plan addressed concerns about tariffs’ impact on their farm’s income.

In August, producers were again asked how likely they thought it was that a trade war would reduce their farm’s net income. While 71% (virtually unchanged from July) felt their farm income would be negatively impacted, respondents who expect to see an income reduction of 20% or more fell from 35% in July to 26% in August.

Negotiated cash fed cattle trade remained undeveloped through Friday afternoon, with too few transactions to trend on limited trade and light demand up north—a standstill in Colorado and the Texas Panhandle. There were a few early live sales reported in the western Corn Belt Thursday at $106.00-$108.50/cwt.; a few early dressed sales at $170.

Cattle futures softened Friday, pressured by lower wholesale beef values and thoughts that negotiated cash fed cattle prices could lose ground.

However, Monday’s strong surge—due in part to the announced trade pact between the U.S. and Mexico—was enough to boost Cattle futures slightly higher week to week.

Other than $3 lower in expiring spot Aug, Live Cattle futures closed an average of 34¢ lower.

Feeder Cattle futures closed an average of $1.23 lower.

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

Choice boxed beef cutout value was $2.04 lower Friday afternoon at $209.69/cwt. Select was 94¢ lower at $201.27.

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Major U.S. financial indices closed narrowly mixed Friday, following strong pressure early from reports that the U.S. and Canada had yet to reach a trade deal. Tech stocks, including Apple and Amazon, provided support.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed fractionally higher. The NASDAQ was up 21 points.

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Wholesale beef values appeared to begin their seasonal slide last week with Choice boxed beef cutout value $3.63 lower week to week on Friday at $209.69/cwt. and Select $2.55 lower at $201.27.

“Demand for beef can and likely will remain strong, but wholesale beef prices will still succumb to downward pressure,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Lower wholesale prices should not be interpreted negatively as this is a seasonal trend and prices are expected to be relatively strong for the time of year and the quantity of beef products available.”