WLI

Cattle futures settled mainly narrowly mixed on Monday, unable to build on last week’s strong cash markets and the seasonal uptick in wholesale beef values. Though trade was light, some analysts pinned part of the weakness on shifting fund positions, from the long side.

Live Cattle futures closed mostly narrowly mixed (from an average of 73¢ lower in three contracts to an average of 24¢ higher).

Except for 90¢ lower in spot Nov, Feeder Cattle futures closed narrowly mixed (25¢ lower to 15¢ higher).

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

Choice boxed beef cutout value was 29¢ higher Monday afternoon at $213.76/cwt. Select was $2.28 higher at $201.11.

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Major U.S. financial indices closed sharply lower again on Monday, amid a volatile day of trading with pressure from tech stocks and continuing trade worries, relative to China.

The Dow Jones Industrial Average closed 245 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 116 points

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Higher costs—including winter feed, fuel, utilities and interest—along with lower cull cow prices are pressuring cow-calf returns this year, according to the Livestock Marketing Information Center (LMIC).

“On a per cow basis, cash return for 2018 is expected to be slightly negative (about -$10 per cow),” say LMIC analysts, in the latest Livestock Monitor. “Last year had a positive return over cash costs, due to calf prices that strengthened during the second half of the year. Estimated loss per cow in 2018 was smaller than 2016’s. The preliminary 2019 LMIC forecast is for positive returns over cash costs. That situation may further improve in 2020.”

For context, LMIC emphasizes their annual calculations are for market analysis; they don’t reflect any individual operation.

“The estimates only incorporate cash production costs plus pasture rent. A commercial size herd that weans and sells calves in the fall is assumed,” LMIC analysts explain. “…These estimates are best interpreted in a broad context, focusing on the direction of change.”

Negotiated cash fed cattle prices surged higher on Friday. Live prices were mainly $3-$4 higher at mostly $114-$115/cwt., except for $2-$3 higher in the western Corn Belt at $112-$113. Dressed sales were $6 higher at $180.

Higher fed cattle prices, strengthening wholesale beef values and apparent position squaring helped lift Cattle futures.

Live Cattle futures closed an average of 86¢ higher (50¢ to $1.32 higher).

Feeder Cattle futures closed an average of 58¢ higher.

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

Choice boxed beef cutout value was 37¢ higher Friday afternoon at $213.47/cwt. Select was 52¢ higher at $198.83.

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Major U.S. financial indices slid sharply on Friday, with continued investor jitters about rising interest rates and global trade. The decline came in spite of positive economic news that included the economy growing at 3.5% in the third quarter, according to the U.S. Commerce Department.

The Dow Jones Industrial Average closed 296 points lower. The S&P 500 closed 46 points lower. The NASDAQ was down 151 points.

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“Year-to-date cattle slaughter through September was 2.6% above last year and 8.6% above the previous 3-year average. Year-to-date steer and heifer slaughter is 1.2% below and 7.6% above last year respectively,” according to analysts with the Agricultural Marketing Service. “Year-to-date beef cow slaughter is 10.7% above a year ago and 22.8% above the previous 3-year average. With that many beef cows moved to slaughter this year, some analysts are looking at late 2019 futures to see if current $114-$116 prices are realistic.”

Cattle futures, led by Feeder Cattle, mostly softened Thursday, with no change in fundamentals but uncertainty surrounding the level of cash fed cattle trade this week in terms of both volume and price.

Except for 7¢ higher in spot Oct, Live Cattle futures closed an average of 78¢ lower (52¢ to $1.27 lower).

Feeder Cattle futures closed an average of $1.38 lower (65¢ to $2.30 lower).

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 $1.71 higher Thursday afternoon at $213.10/cwt. Select was 49¢ higher at $198.31.

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Major U.S. financial indices surged on Thursday, recovering a fair portion of the previous session’s steep losses. Support was attributed to mainly oversold conditions, as well as positive quarterly earnings from folks like Microsoft and Amazon.

The Dow Jones Industrial Average closed 401 points higher. The S&P 500 closed 49 points higher. The NASDAQ was up 209 points.

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Another chapter in the regulation of fake meat unfolded the past couple of days at a joint public meeting hosted by the United States Department of Agriculture (USDA) and the U.S. Food and Drug Administration (FDA). The meeting—Use of Animal Cell Culture Technology to Develop Products Derived from Livestock and Poultry—included discussions about the safety and marketing of cell-based fake meat, as well as which agency will ultimately have regulatory control.

The North American Meat Institute (NAMI) continued to argue that the USDA Food Safety and Inspection Service (FSIS) has primary jurisdiction for regulation of new cell-based meat products.

FSIS oversight includes the USDA mark of inspection, providing consumer confidence that a product has been deemed wholesome by the agency.

Likewise, Jennifer Houston, president-elect of the National Cattlemen’s Beef Association (NCBA) explained, “Ensuring lab-grown fake meat products are subject to strong, daily inspection by USDA’s trained professionals is essential. The health of consumers is on the line, and USDA is far better suited to ensure the safety of lab-grown products.”

Mark Dopp, NAMI senior vice president of Regulatory and Scientific Affairs, also detailed the importance and benefits of USDA’s label approval process, which protects companies from frivolous lawsuits and gives consumers confidence that products are accurately labeled and not represented to be something they are not.

“USDA can be trusted to enforce truthful, transparent labeling of the products under its jurisdiction,” explained Kevin Kester, NCBA president. “Beef producers welcome competition, but product labels and marketing must be based on sound science, not the misleading claims of anti-animal agriculture activists.”

Although cash fed cattle trade remained undeveloped through Wednesday afternoon on light to moderate demand, there were some early live sales in the western Corn Belt on Tuesday at $112/cwt., which was $2 more than last week.

There were only 1,051 head offered in the weekly Fed Cattle Exchange Auction, and no takers. There were two lots passed out at $105.

Stronger wholesale beef prices, notions of steady-to-higher fed cattle prices, as well as a surge in Lean Hog futures, helped Cattle futures firm Wednesday.

Live Cattle futures closed an average of 71¢ higher (50¢ to $1.20 higher).

Except for 45¢ lower in spot Oct, Feeder Cattle futures closed an average of 48¢ higher.

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

Choice boxed beef cutout value was $1.11 higher Wednesday afternoon at $211.39/cwt. Select was 96¢ higher at $197.82.

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Major U.S. financial indices plunged Wednesday. Pressures appeared to be many and varied, everything from declining tech and bank stocks to concerns about economic growth, tied to worries about trade and rising interest rates.

For instance, sales of new single-family houses in September were 5.5% less than the prior month’s adjusted rate, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Although home sales were 3.5% more year over year, September sales represented the slowest pace since December of 2016, according to the National Association of Home Builders (NAHB).

The Dow Jones Industrial Average closed 608 points lower. The S&P 500 closed 84 points lower. The NASDAQ was down 329 points.

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“Stocker budgets for winter grazing still look quite favorable, unless grazing delays stretch out too long and cut days available for winter grazing down excessively,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

On the one hand, Peel explains precipitation in Oklahoma for the past month is the second most on record (187% of normal); the most all time in the last 90 days. That provides lots of promise.

“Producers may, in fact, be looking to stock a bit heavier than usual with potential for better than average wheat forage production this winter,” Peel says.

On the other hand, the extraordinary moisture is delaying some planting and development.

“For the first time in many years, turnout for wheat grazing is likely to be delayed by excess moisture across many regions of the state,” Peel explains. “Some wheat that was planted early is getting close to being ready to graze but some producers have struggled to get cattle ready for grazing. Wet, sloppy conditions make health challenges worse and producers have backed off of purchases recently. Some cattle sellers have also had difficulty gathering and getting cattle to market.”