WLI

Cattle futures closed mostly lower Tuesday, buoyed by support late in the day, but amid limited trade and interest overall.

Except for 12¢ and 10¢ higher, in near Feb and Apr, respectively, Live Cattle futures closed an average of 30¢ lower.

Feeder Cattle futures closed an average of 63¢ lower.

Wholesale beef values were steady 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 19¢ lower Tuesday afternoon at $204.61/cwt. Select was 66¢ higher at $192.55.

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Major U.S. financial indices surged higher Tuesday, lifted by strong quarterly earnings across a broad base of companies, including Morgan Stanley, Netflix and United Health.

The Dow Jones Industrial Average closed 547 points higher. The S&P 500 closed 59 points higher. The NASDAQ was up 214 points.

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Although most expectations are for September feedlot placements to be about even with last year, in this Friday’s monthly Cattle on Feed report, a majority of analysts expect the on-feed number Oct. 1 to be about 6% more.

For instance, analysts at Allendale, Inc. expect placements to be 0.2% more than last year (2.154 million head). If so, they say that would be the largest placement for the month in seven years and mark the fifth consecutive month of higher year-over-year placements.

“High placements have been seen despite profitability concerns,” say Allendale analysts. “Kansas State estimates a $110 loss per head on finished cattle in September. First-half 2019 marketings are slated for $122-$125 breakevens. August placements determine a part of the March through early August beef supply.”

The folks at Allendale expect marketings in September to be 0.7% less than last year at 1.771 million head. They look for the number of cattle on feed Oct. 1 to be 5.9% more than a year earlier at 11.446 million head, which would be record high for the month since the data series that began in 1996.

Sharply higher wholesale Choice beef cutout values helped boost Live Cattle futures Monday. That provided support to Feeder Cattle, after follow-through pressure tied in part to higher gain prices.

Live Cattle futures closed an average of 95¢ higher (55¢ higher to $1.80 higher in near Dec).

Feeder Cattle futures closed an average of 70¢ higher.

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

Choice boxed beef cutout value was $2.09 higher Monday afternoon at $204.80/cwt. Select was 39¢ lower at $191.89.

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Despite positive quarterly earnings reports, investors started the week with renewed pessimism; pushing U.S. financial indices lower Monday.

The Dow Jones Industrial Average closed 89 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 66 points.

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Retail prices for beef and pork drifted lower in September, reversing a trend from the summer months, according to the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. Retail chicken prices moved lower, too, but within a narrow range established early last year.

“The biggest retail price decline from August to September was for Choice Beef, falling 15¢ per pound,” say LMIC analysts. “Even with the drop in price, compared to 12 months earlier, prices were still 2% higher. That compares with retail pork prices that were 5% lower than a year earlier and chicken prices that were lower by a fraction of a percent.” They note the prices are based on Bureau of Labor Statistics survey data that is compiled by USDA’s Economic Research Service (ERS).

Negotiated cash fed cattle trade for the week was mainly steady to weak with live sales at $111/cwt. in the Northern and Southern Plains; mostly $2 lower in the western Corn Belt at $108. Dressed sales were $1 lower at $174.

Firming grain prices helped pressure Feeder Cattle futures sharply lower Friday. In turn, Live Cattle closed lower to a much lesser degree.

Live Cattle futures closed an average of 55¢ lower.

Feeder Cattle futures closed an average of $1.63 lower ($1.27 to $2.12 lower).

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

Choice boxed beef cutout value was 20¢ higher Friday afternoon at $202.71/cwt. Select was 21¢ lower at $192.28.

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Gains in Asian and European shares overnight helped plug the recent sell-off as major U.S. financial indices closed higher Friday.

The Dow Jones Industrial Average closed 287 points higher. The S&P 500 closed 38 points higher. The NASDAQ was up 167 points.

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Strong growth in both the U.S. and global economies will support increased demand in domestic and export markets through the end of the year. However, according to the latest Quarterly Rural Economic Review (QRER) from CoBank’s Knowledge Exchange Division (KED), U.S. competitiveness is currently constrained by trade uncertainties and the elevated value of the U.S. dollar, further placing pressure on the agricultural economy as output in most industries rises.

“Agricultural markets are being squeezed as prices remain weak,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division. “While recently negotiated trade deals show some upside for agriculture, global demand for output from the U.S. agriculture sector is being outpaced by current U.S. production.”

CoBank’s latest QRER indicates that any significant farm price improvements over last year’s prices will be limited, particularly with record U.S. yields for many of the major crop commodities adding to available supply levels. Meanwhile, the animal protein and dairy sectors continue to benefit from strong domestic demand and the promise of better access to Mexico and Canada, but will need more export market growth to absorb their current pace of output and expansion.

Negotiated cash fed cattle trade was steady in the Southern Plains Thursday at $111/cwt. It was steady to weak in the North at $108 in the western Corn Belt, $110.50-$111.50 in Nebraska and $111 in Colorado. Dressed trade was steady to $1 lower at $174.

Other than some support at the front of the board, Cattle futures continued to trend lower Thursday.

Except for 55¢ and 30¢ higher in the front two contracts, Live Cattle futures closed an average of 15¢ lower.

Except for 82¢ higher and 57¢ higher in the front two contracts, Feeder Cattle futures closed an average of 60¢ lower.

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

Choice boxed beef cutout value was 40¢ higher Thursday afternoon at $202.51/cwt. Select was 72¢ higher at $192.49.

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Worries about rising interest rates continued to fuel the plunge in major U.S. financial indices Thursday.

The Dow Jones Industrial Average closed 545 points lower. That’s a decline of 1,376 points in the last two sessions. The S&P 500 closed 57 points lower (151 points lower in the last two days). The NASDAQ was down 92 points (407 points lower in the last two sessions).

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“The forecast for 2018 total red meat and poultry production is lowered from last month,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). “Beef production is reduced from the previous month, largely due to lower expected fourth-quarter fed cattle slaughter. Carcass weights are forecast lower on a higher expected proportion of cows in the slaughter mix.”

Beef projection for this year was projected 150 million lbs. less than the previous month at 26.94 billion lbs. Next year’s beef production is estimated to be 970 million lbs. more than this year at 27.91 billion lbs.

The fourth-quarter fed steer price (5-area direct) is estimated at $110-$114/cwt. Next year: $117-$125 in the first quarter; $118-$128 in the second; $109-$119 in the third.

“For 2019, the total red meat and poultry production forecast is raised from the previous month as higher expected beef production more than offsets lowered forecasts for pork and broiler production,” say ERS analysts. “Beef production is raised from last month as larger placements in late 2018 and early 2019 are marketed during 2019. However, carcass weights are lowered for the early part of the year.”

Red meat and poultry production this year was estimated 477 million lbs. less at 102.61 billion lbs. Red meat and poultry production next year was estimated to be 3.2 billion lbs. more than this year at 105.85 billion lbs.