WLI

Negotiated cash fed cattle trade was very limited on light demand in Kansas and Nebraska through Tuesday afternoon. There were a very limited amount of live purchases in Kansas at $130-$134/cwt. and a very limited number of dressed trades in Nebraska at $210-$216—too few transactions to trend in either region.

After early support, Cattle futures continued lower, helped along by scattered but lower early-week cash prices for fed cattle and the notion that wholesale values are due to break lower.

Live Cattle futures closed an average of 73¢ lower (45¢ to 90¢ lower).

Except for unchanged at the very back of the board, Feeder Cattle futures closed an average of $1.24 lower (80¢ to $1.60 lower).

Choice boxed beef cutout value was $1.33 lower Tuesday afternoon at $251.19/cwt. Select was 32¢ lower at $221.45.

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Major U.S. financial indices closed higher on Tuesday, with a rebound in tech stocks, which saw some liquidation in recent days.

The Dow Jones Industrial Average closed 92 points higher for a new record high. The S&P 500 closed 10 points higher. The NASDAQ closed 44 points higher.

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Lighter carcass weights, tied to aggressive feedlot marketing, continue to dilute the impact of increasing cattle numbers.

“Sharply lower carcass weights so far this year have held year-to-date beef production increases to roughly 4% over year-earlier levels…Beef production is currently projected to increase 3.4% year over year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Beef carcass weights appear to have bottomed seasonally but may remain below year ago levels for much of the remainder of the year…Cattle slaughter for the year to date is still running about 6% higher year over year, but slaughter rates for most classes of cattle have moderated recently and are expected to have smaller year-over-year increases in the second half of 2017.”

Combined with improving beef exports, Peel says per capita retail beef consumption is projected to increase less than 1% this year. Said another way, for the extra cattle numbers, domestic consumers will be faced with less than 1% more beef to consume this year.

Markets got the week off to a dreary start on Monday.

Although limited on light demand early cash fed cattle sales in Nebraska were $3-$5 lower than last week at $132/cwt.

By way of review, given the lateness of fed cattle trade last week, prices were $1 lower to $1 higher on a live basis at mostly $137. Dressed trade was $1-$4 higher at $216-$220.

Cattle futures closed sharply lower on Monday, though up from session lows, with a growing sense in the market that the seasonal top is near or already in for cash fed cattle and wholesale beef values.

Live Cattle futures closed an average of $1.92 lower ($1.32 to $2.90 lower).

Feeder Cattle futures closed an average $2.38 lower ($1.92 to $2.80 lower).

Choice boxed beef cutout value was $1.31 higher Monday afternoon at $252.52/cwt. Select was $1.48 higher at $221.77.

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Major U.S. financial indices closed lower on Monday, with tech stocks leading the way once again. There didn’t seem to be any overriding fundamental reason for the move. Part of it could have been investors playing defense against the Federal Reserve meeting scheduled for today and tomorrow.

The Dow Jones Industrial Average closed 36 points lower. The S&P 500 closed 2 points lower. The NASDAQ closed 32 points lower.

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The U.S. Department of Agriculture reached agreement with Chinese officials on final details of a protocol to allow the U.S. to begin beef exports to China, according to a USDA announcement yesterday.

USDA’s Agricultural Marketing Service posted the requirements for its Export Verification program for U.S. establishments shipping to China, which will enable packers to apply for approval to export to China. The Food Safety and Inspection Service also updated its online Export Library specifying China’s requirements.

Until being banned in 2003, the U.S. was China’s largest supplier of imported beef, providing 70% of their total intake, according to USDA. Chinese beef imports grew from $275 million in 2012 to $2.5 billion last year.

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Friday afternoon. There were a few live sales in both regions at $136/cwt. and a few in the beef at $218, but too few transactions to trend.

Cattle futures closed narrowly mixed in sluggish, light trade.

Except for 37¢ higher in Apr, Live Cattle futures closed an average of 25¢ lower.

Feeder Cattle futures closed an average 53¢ higher (22¢ to 67¢ higher).

Choice boxed beef cutout value was 82¢ higher Friday afternoon at $251.21/cwt. Select was 28¢ higher at $220.29.

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Major U.S. financial indices closed in opposite directions on Friday, with Goldman Sachs contributing to Dow Gains, while slipping prices in leading tech stocks like Apple and Amazon pressured the NASDAQ.

The Dow Jones Industrial Average closed 89 points higher. The S&P 500 closed 2 points lower. The NASDAQ closed 113 points lower.

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“Beef production for 2017 is lowered primarily on lighter carcass weights, which more than offsets higher expected slaughter in the later part of 2017,” say analysts with USDA’s Economic Research Service, in the monthly World Agricultural Supply and Demand Estimates released Friday. “Higher expected placements support a higher 2018 beef forecast…The forecast for total meat production is lowered from last month per 2017 but is raised for 2018”

The projected 5-area fed steer price for the year increased $2 on the low end of the range and $1 on the high end to $122-$126/cwt. Price projections are $132-$135 for the second quarter, $118-$124 in the third quarter and $113-$123 in the fourth quarter.

Cash fed cattle traded about $4.50 higher in the weekly Fed Cattle Exchange Auction on Thursday at an average price of $136.75. Only about 25% of the 1,396-head offering sold—and that was for delivery at 1-17 days. Country trade failed to materialize to a large enough degree for a trend in any of the major cattle feeding regions through the afternoon.

Cattle futures backed away from firm early support to trade narrowly mixed in Live Cattle and lower in Feeder Cattle.

Live Cattle futures closed 17¢ lower to 17¢ higher, except for 45¢ lower in away Jun.

Feeder Cattle futures closed an average 83¢ lower (65¢ to $1.02 lower).

Choice boxed beef cutout value was 32¢ lower Thursday afternoon at $250.39/cwt. Select was 11¢ higher at $220.01.

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Major U.S. financial indices closed slightly higher on Thursday, with investors apparently satisfied there is no lethal testimony coming to the Trump administration via former FBI director James Comey.

The Dow Jones Industrial Average closed 8 points higher. The S&P 500 closed fractionally higher. The NASDAQ closed 24 points higher.

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Despite the May decline in the Restaurant Performance Index, based on the first quarter, consumer spending grew by 1.3% and visits to restaurants and foodservice outlets held steady. That’s according to The NPD Group, a leading global information company, which continually tracks the foodservice industry.

Fortunes depend on the segment of foodservice.

Areas offering the most convenience to customers, like delivery and drive-thru, grew in the first quarter by 2% and 3%, respectively, according to NPD Group’s CREST® foodservice market research, which tracks daily how U.S. consumers use restaurants and foodservice outlets. Visits to what are termed fast-casual restaurants, grew visits by 3%, mainly due to unit expansion.

On the other side of the scale, NPD data says visits to casual dining restaurants fell by 4%, while visits to midscale/family dining restaurants declined by 3%.

Negotiated cash fed cattle trade remained at a standstill in the country yesterday. That’s not surprising, given the previous day’s sudden and steep sell0ff in Cattle futures, along with Wednesday’s weekly Fed Cattle Exchange auction being postponed until today due to technical problems.

Live Cattle futures rebounded some, helped by fundamental support, but front-month Feeder Cattle contracts continued to erode.

Live Cattle futures closed an average of 99¢ higher (57¢ to $1.22 higher).

Feeder Cattle futures closed 22¢ to 72¢ lower in the front three contracts and then an average of $1.14 higher.

Choice boxed beef cutout value was 26¢ higher Wednesday afternoon at $250.71/cwt. Select was 33¢ higher at $219.90.

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Major U.S. financial indices tilted higher on Wednesday, basically ending the day where they began. Sliding oil prices, due to a surprising increase in U.S. Crude Oil and gasoline inventories added pressure.

The Dow Jones Industrial Average closed 37 points higher. The S&P 500 closed 3 points higher. The NASDAQ closed 22 points higher.

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Producer sentiment toward the agricultural economy held steady in May, continuing a trend of overall higher optimism, according to the latest Purdue University and CME Group Ag Economy Barometer.

At 130 points, the May barometer reading is on par with the prior month.

While overall sentiment remained the same, there were some changes in the barometer’s sub-indices. The Index of Current Conditions fell 10 points from April to 117. On the other hand, the Index of Future Expectations increased 4 points in May, marking the second-consecutive month of growth. Both reflect higher levels of producer optimism than at the same time last year.

Producer sentiment hovered around the 130-point mark for five of the last six months and remains significantly stronger than a year ago when it was 97. By the way, the Ag Economy barometer is based on a monthly survey of 400 agricultural producers from across the country.