Daily Market Highlights

Negotiated cash fed cattle trade ended the holiday-shortened week steady to $2 lower on a live basis in the Southern Plains at $93-$95/cwt.; steady to $1 higher in Nebraska at $95-$96 and unevenly steady in the western Corn Belt at $96-$97. Dressed trade was $1 lower in Nebraska at $154-$155 and steady to $4 lower in the western Corn Belt at $152-$155.

Cattle futures extended gains, though, for no apparent reason.

Live Cattle futures closed an average of $1.08 higher (32¢ higher to $2.10 higher in spot Aug).

Feeder Cattle futures closed an average of $1.78 higher ($1.47 to $2.55 higher).

Choice boxed beef cutout value was 6¢ higher Thursday afternoon at $205.44/cwt. Select was 33¢ higher at $198.76.

The average dressed steer weight for the week ending June 20 was 890 lbs., which was 6 lbs. lighter than the previous week, but 36 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 823 lbs. was 1 lb. lighter than the previous week, but 33 lbs. heavier than the same week a year earlier.

Grain futures softened Thursday, following strong gains earlier in the week. Pressure likely included week-end positioning and profit taking, as well as the bearish weekly Export Sales report (week ending June 25) from USDA’s Foreign Agricultural Service.

Net export corn sales of 361,100 metric tons (mt) for 2019-2020 were down 22% from the previous week and 32% from the prior four-week average.

Net soybean export sales of 241,700 mt for 2019-2020 were a marketing-year low, down 60% from the previous week and 63% from the prior four-week average.

Corn futures closed mostly 3¢ to 7¢ lower.

Soybean futures closed fractionally lower to 2¢ lower.

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Major U.S. financial indices climbed higher Thursday on the back of a national employment report that shattered expectations to the upside.

Total nonfarm payroll employment rose by 4.8 million in June, according to the Employment Situation Summary from the U.S. Bureau of Labor Statistics. The unemployment rate declined to 11.1%.

“These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it,” according to the report. “In June, employment in leisure and hospitality rose sharply. Notable job gains also occurred in retail trade, education and health services, other

services, manufacturing, and professional and business services.”

Average hourly earnings for all employees on private nonfarm payrolls in June fell by 35¢ to $29.37.

The Dow Jones Industrial Average closed 92 points higher. The S&P 500 closed 14 points higher. The NASDAQ closed 53 points higher.

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“To further aid in a gentle transition back toward economic normality, federal economic policy will have to shift from sending families money to maintain social distancing to helping businesses maintain employment,” says Jeffrey Dorfman, professor of agricultural and applied economics at the University of Georgia. That’s part of a recent publication from the Council for Agricultural Science and Technology (CAST): Macroeconomic Impacts and Policies in the Face of COVID-19.

Although the government extended forgivable loans to small businesses through the Paycheck Protection Program, Dorfman explains the current unemployment bonus of $600 per week could make it harder for some businesses to reopen.

“Workers are currently making more from unemployment than from working, particularly in the retail, hospitality, and personal services sectors that are home to so many small businesses,” Dorfman says. “With the unemployment bonus, not working can pay the equivalent of about $50,000 per year. Few small businesses can compete with that when roughly half of all workers made less than that just a few months ago.”

Worker challenges aside Dorfman says, economic recovery requires customers feeling safe about returning to restaurants, local shops, movie theaters and all of the rest.

“Until a vaccine and/or effective treatments are widely available, the best confidence restorer will be clearly posted and followed safety protocols that minimize the risk of frequenting public businesses and maximize the amount of economic activity that can safely take place,” Dorfman says. “But a full recovery requires either a vaccine or treatment that convinces people contracting the virus is more a nuisance than a mortal risk.”

Negotiated cash fed cattle prices Wednesday were steady to $2 lower in the Southern Plains at $95/cwt. on a live basis; steady to $1 higher in Nebraska at $95-$96. Dressed trade for the week is $1 lower in Nebraska at $154-$155; steady to $4 lower in the western Corn Belt at $152-$155.

Cattle feeders offered 1,814 head in the weekly Fed Cattle Exchange Auction. There were 144 head—one lot of Kansas steers—selling for a weighted average price of $95/cwt., for delivery at 1-9 days. Two other lots were passed out at $93.

Cattle futures wobbled to start the day but picked up steam as the day progressed. Depending on your leanings, Live Cattle seem to be looking past the current backlog of fed cattle, or largely priced it in a ways back.

Live Cattle futures closed an average of $1.31 higher.

Feeder Cattle futures closed an average of 80¢ higher (22¢ higher in spot Aug to $1.42 higher).

Choice boxed beef cutout value was $1.59 lower Wednesday afternoon at $205.38/cwt. Select was $1.47 lower at $198.43.

Grain futures extended gains Wednesday, buoyed by USDA’s recent reports.

Corn futures closed 8¢ to 10¢ higher through Jul ’21 and then 3¢ to 4¢ higher.

Soybean futures closed 16¢ to 19¢ higher.

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Major U.S. financial indices closed mixed on Wednesday, with nervousness about the economy’s start-and-stop reopening countered by positive employment news.

Private sector employment increased by 2.37 million in June, according to the ADP National Employment Report^®.

“As the economy slowly continues to recover, we are seeing a significant

rebound in industries that once experienced the greatest job losses. In fact, 70% of the jobs added this month were in the leisure and hospitality, trade and construction industries,” says Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

The Dow Jones Industrial Average closed 77 points lower. The S&P 500 closed 15 points higher. The NASDAQ closed 95 points higher.

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“Slaughter cow prices have been one of the few bright spots for cattle producers over the past few months. Slaughter cow prices in the Southern Plains averaged $57.84/cwt. over the past six weeks of available data, which is 19.5% above the same period in 2019. Generally, cull cow markets are most directly related with ground beef demand,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest issue of In the Cattle Markets.

Total cow slaughter so far this year is about par with 2019, with beef cow slaughter up about 2% and dairy cow slaughter down about 2%, according to Maples. He notes the 6.7% increase in beef cow slaughter during the first two weeks of June is likely due in part to delayed marketing by some producers.

“Lower calf prices could drive increased beef cow culling later in the year,” Maples says. “Dairy slaughter is near the seasonal low point and milk prices have rebounded, which may prevent significant dairy cow culling. While the supply picture is becoming a little clearer, ground beef demand will continue to be key for support of beef cow cull prices.”

There was no Afternoon Slaughter Cattle Review from USDA at press time. However, the Direct Slaughter Cattle Reporting Dashboard from AMS had live cattle on Tuesday bringing an average of just over $97/cwt.; close to $153 in the beef.

Cattle futures started the day in positive territory before USDA’s grain-friendly Acreage and Grain Stocks reports pounded Feeder Cattle futures.

Other than $3.35 lower in expiring spot Jun and 20¢ higher in the back contract, Live Cattle futures closed an average of 20¢ lower.

Feeder Cattle futures closed an average of $1.00 lower (65¢ lower in spot Aug to $1.20 lower).

Choice boxed beef cutout value was $1.39 lower Tuesday afternoon at $206.97/cwt. Select was 81¢ lower at $199.90.

Corn and soybean futures bounced higher Tuesday, buoyed by the aforementioned USDA reports.

Corn futures closed 12¢ to 15¢ higher through Jul ’21 and then 4¢ to 7¢ higher.

Soybean futures closed 16¢ to 20¢ higher through Mar ’21 and then mostly fractionally higher to 12¢ higher.

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Major U.S. financial indices closed higher again Tuesday, led by tech stocks and despite continuing concerns about increasing coronavirus cases.

In remarks to the U.S. House Committee on Financial Services, Federal Reserve Chair, Jerome Powell put it this way: “Output and employment remain far below their pre-pandemic levels. The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus. A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.”

The Dow Jones Industrial Average closed 217 points higher. The S&P 500 closed 47 points higher. The NASDAQ closed 184 points higher.

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USDA projects acres of all hay harvested this year at 52.38 million acres, which would be 44,000 fewer acres (-0.08%) than last year, according to the Acreage report from the National Agricultural Statistics Service (NASS).

The decline comes in forecast acres of alfalfa and alfalfa mixtures at 16.35 million acres, which would be 381,000 fewer acres (-2.33%) than last year. All other hay acres of 36.03 million acres would be 347,000 acres more (+0.97%) than the previous year.

Corn acreage is projected at 92.01 million acres, which would be 2.31 million acres more (+2.57%) than last year. However, the projection is about 5 million acres less than the initial outlook in USDA’s Prospective Plantings report that came out at the end of March. Acreage harvested for grain is forecast at 84.02 million acres, which would be 2.70 million acres more (+3.32%) than last year.

Corn stocks in all positions June 1 totaled 5.22 billion bu., according to USDA’s Grain Stocks report. That’s 21.43 million bu. more (+0.41%) than the same time last year.

Of total corn stocks, 3.03 billion bu. are stored on farms, up 3% from a year earlier. Off-farm stocks, at 2.20 billion bu., are down 2% percent from a year ago.

Soybean acres are estimated to be 7.73 million acres more (+3.32%) than last year at 83.83 million acres. That’s about 325,000 acres more than the Prospective Plantings projection. Harvested soybean acres are forecast at 83.02 million acres, which would be 8.07 million acres more (+10.77%) than the previous year.

Soybean stocks in all positions June 1 of 1.39 billion bu. were 397.09 million bu. less (-22.7%) than the same time a year earlier.

On-farm soybean stocks totaled 633 million bu., down 13% from a year ago. Off-farm stocks, at 753 million bu., were 28% less than a year ago.

Acreage for all wheat this year is estimated at 44.25 million acres, which would be 908,000 fewer acres (-2.01%) than last year and the least since records began in 1919. Harvested wheat acres are projected at 36.68 million acres, which would be 484,000 fewer acres (-1.30%) than the prior year.

Wheat stocks stored in all positions June 1 of 1.04 billion bu. were 35.92 million bu. less (-3.32%) than the prior year.

On-farm all wheat stocks were estimated at 232 million bu., up 12% from a year earlier. Off-farm stocks of 812 million bu., are 7% less.

Packers up north got a head start on the holiday-shortened week Monday, paying steady to $3 less for negotiated cash fed cattle at $153/cwt. on a dressed basis in the western Corn Belt.

The five-area average direct fed steer price last week was $96.21/cwt. on a live basis, which was $4.57 less than the prior week. The average steer price in the beef was $154.78, which was $5.92 less. Prices the same week last year were $110.13 and $179.02, respectively.

Even so, Cattle futures ended Monday higher, helped along by outside markets and despite the bounce in Corn futures. Higher wholesale beef values also helped.

Live Cattle futures closed an average of 64¢ higher.

Except for 20¢ lower in the back contract, Feeder Cattle futures closed an average of 50¢ higher. 

Choice boxed beef cutout value was $1.19 higher Monday afternoon at $208.36/cwt. Select was $1.86 higher at $200.71.

Grain futures traded higher, perhaps buoyed by positioning ahead of Tuesday’s Grain Stocks and Acreage reports due from USDA.

Corn futures closed 7¢ to 9¢ higher through Sep ’21 and then 4¢ to 6¢ higher.

Soybean futures closed mostly 1¢ higher through Jan ’21 and then mostly 5¢ to 6¢ higher.

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Major U.S. financial indices on Monday bounced back from steep losses in the previous session.

Positive news on the day included a record rebound in pending home sales, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, rose 44.3% to 99.6 in May, the stoutest month-over-month gain since NAR started the series in January 2001. However, contract signings were 5.1% less year over year.

“The outlook has significantly improved, as new home sales are expected to be higher this year than last, and annual existing-home sales are now projected to be down by less than 10%, even after missing the spring buying season due to the pandemic lockdown,” says Lawrence Yun, NAR’s chief economist.

The Dow Jones Industrial Average closed 580 points higher. The S&P 500 closed 44 points higher. The NASDAQ closed 116 points higher.

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“After the disappointing shortages and high beef prices during Memorial Day, the improved beef situation for this grilling holiday is a great relief,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.  “Grocery stores should be well stocked in time for July 4 and retail prices are adjusting down rapidly. For individual stores, it may depend on their particular supply arrangements.” 

In his weekly market comments, Peel explains actual slaughter for the week ending June 13 exceeded year-ago levels for the first time since the first week of April.

Of course, supplies of competing meats are growing, too.

Although decreased broiler chick placements in April and May will likely lead to a modest third-quarter decrease in production, Peel says total production for beef, pork and broilers is projected to increase to a new annual record this year.

As for pork, Peel explains, the most recent Quarterly Hogs and Pigs (June) report pegged the total hog inventory at 79.6 million head, up 5.2% year over year and 3.0% more than in March.

According to Peel, beef production this year is projected at 27.41 billion lbs., 0.6% more than last year. Pork production for the year is estimated to be 3.4% more the last year at 28.47 billion lbs. and broiler production is projected 1.7% more at 44.16 billion lbs. Total red meat and poultry production is projected to be 1.9% more than last year at 106.74 billion lbs.

Negotiated cash fed cattle prices ended the week solidly lower, according to reports from the Agricultural Marketing Service. Regionally, live prices were $5-$7 lower in the Texas Panhandle at $93-$95/cwt., $5 less in Kansas at $95, $3-$7 lower in Nebraska at $95 and $1-$4 less in the western Corn Belt at $98. Dressed trade was $3-$7 less at $155-$156 in Nebraska and at $153-$156 in the western Corn Belt.

The five-area average direct fed steer price through Thursday was $96.24/cwt. on a live basis, which was $4.58 lower than the previous week and $14.34 less than the same period a year earlier. The average dressed steer price was $154.78, which was $5.96 less than the prior week and $24.58 less than a year earlier.

Cattle futures softened to end the week, amid the lower cash fed cattle prices, possible month-end and quarter-end positioning, as well as the picture painted by the monthly Livestock Slaughter report (see below).

Except for 52¢ higher in waning spot Jun, Live Cattle futures closed an average of 62¢ lower (5¢ to 97¢ lower).

Feeder Cattle futures closed an average of $1.08 lower (65¢ lower to $1.75 lower).

Choice boxed beef cutout value was $1.09 lower Friday afternoon at $207.17/cwt. Select was $1.08 lower at $198.85.

USDA estimated total cattle slaughter for the week at 680,000 head, which would be 3.7% more than the previous week and 1.5% more than the same week last year. Total beef production under federal inspection was estimated at 562.3 million lbs., which would be 3.9% more than the previous week and 5.3% more than the same week last year.

Corn futures closed fractionally lower to 1¢ lower.

Soybean futures closed mostly 7¢ to 9¢ lower.

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Major U.S. financial indices closed sharply lower Friday on renewed fears that recent spikes in COVID-19 will further slow nascent economic rebuilding.

The Dow Jones Industrial Average closed 730 points lower. The S&P 500 closed 74 points lower. The NASDAQ closed 259 points lower.

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The latest Livestock Slaughter report from USDA’s National Agricultural Statistics Service (NASS) provides insight to recent packing disruptions, including a reflection of how increased carcass weights are impacting total beef production. Keep in mind, there were two fewer business days in May this year compared to 2019.

Federally inspected beef production in May of 1.83 billion lbs. was 473.3 million lbs. less than the previous year (-20.6%), but 45.6 million lbs. more than the previous month (+2.6%).

Beef production for January through May of 10.50 billion lbs. was 364.7 million lbs. less than the same period a year earlier (-3.4%).

There were 1.70 million fed steers and heifers harvested in January-May, which was just 45,800 head more (+2.8%) than the previous month and 626,100 head fewer (-26.9%) less than May of last year.

For January through May, the 9.8 million steers and heifers slaughtered was 785,600 head fewer (-7.4%) than the same period a year earlier.

The 3.7 million fed heifers harvested in January through May were 199,100 more (+5.0%) than the same time a year earlier.

The 1.3 million beef cows harvested in January through May were 20,100 head more (+1.6%) than the same time a year earlier.

Federally inspected total red meat production of 3.71 billion lbs. in May was 820.3 million lbs. less than the previous May (-18.1%), and 108.2 million lbs. less than in April (-2.8%).

Total red meat production for January through May of 21.81 billion lbs. was 419.7 million lbs. less than the same period a year earlier (-1.9%).

Negotiated cash fed cattle trade continued at lower money for the week with live sales in the Texas Panhandle on Thursday down $5-$7 at $93-$97/cwt.

Cattle futures closed mainly higher, with support likely including lower corn prices and positive export news.

Weekly net U.S. beef export sales as of June 18 were 24,400 metric tons (mt), which were 21% more than the previous week and 52% more than the prior four-week average, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service. Increases were primarily for South Korea, Japan, Taiwan, Mexico, and Hong Kong.

Other than unchanged to an average of 15¢ lower in three contracts, Live Cattle futures closed an average of 32¢ higher.

Feeder Cattle futures closed an average of 49¢ higher.

Choice boxed beef cutout value was $1.43 lower Thursday afternoon at $208.26/cwt. Select was $1.76 lower at $199.93.

The average dressed steer weight for the week ending June 13 was 896 lbs., which was 4 lbs. heavier than the previous week and 47 lbs. heavier than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 824 lbs., which was the same as a week earlier, but 37 lbs. heavier than the prior year.

Corn futures closed 4¢ to 7¢ lower through May ’21 and then mostly 3¢ lower.

Soybean futures closed mostly 1¢ to 3¢ lower through Sep ’21 and then 4¢ to 7¢ lower.

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Major U.S. financial indices closed higher Thursday after a volatile session. Primary support seemed to be the rollback of some regulations for big banks, despite the somber outlook from the International Monetary Fund (IMF).

“Consumption growth, in particular, has been downgraded for most economies, reflecting the larger-than-anticipated disruption to domestic activity,” according to that organization’s most recent quarterly World Economic Outlook. “The projections of weaker private consumption reflect a combination of a large adverse aggregate demand shock from social distancing and lockdowns, as well as a rise in precautionary savings. Moreover, investment is expected to be subdued as firms defer capital expenditures amid high uncertainty. Policy support partially offsets the deterioration in private domestic demand.”

The IMF projects global economic growth this year to be -4.9%, which is 1.9% more negative than its April outlook.

Outlook for economic growth in advanced economies is -8.0%, also 1.9% more negative than April projections. IMF also projects growth for the U.S. this year at -8.0%. Next year, GDP in advanced economies is projected at +4.8%.

The Dow Jones Industrial Average closed 299 points higher. The S&P 500 closed 33 points higher. The NASDAQ closed 107 points higher.

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“The calculated number of cattle on feed longer than 120 days is 5.1 million compared to 4.2 million a year ago,” says David Anderson, Extension Livestock Economist at Texas A&M University, referring to last week’s monthly Cattle on Feed report. “Most of that increase in over 120 days on feed are cattle that have been on feed even longer as evidenced by the number of cattle on feed over 150 days. But, cattle on feed between 90 and 120 days totaled about 1.65 million versus 1.79 million last year. So, there remains more adjustments to come to work through the impacts of corona virus in the cattle markets.”

However, in the most recent issue of In the Cattle Markets, Anderson explains the recent report hints at more normalcy returning to the industry.

For instance, he points out marketings in May were 27.5% less than the prior year, but there were two less business days.

“As May progressed, packing constraints loosened and daily slaughter moved closer to year-ago speeds. June 2020 has 22 slaughter days compared to only 20 in June 2019, so the next report’s marketings will likely show the dual impact of improving slaughter speeds and 10% more workdays in the month,” Anderson says.

Likewise, May feedlot placements (feedlots with 1,000 head or more capacity) were 1.3% less year over year, after being more than 20% less the previous two months.

“May is typically a larger month for placements due to cattle coming off wheat pasture and other small winter grains,” Anderson explains. “Feeder cattle sales did start to pick up as May went on, as cattle previously held back had to move. Some drought conditions likely moved some feeders, and some opportunities to favorably place occurred.”

Except for in the Texas Panhandle, trendable negotiated cash fed cattle trade continued on Wednesday, according to the Agricultural Marketing Service. Live sales were mostly $5 lower in Kansas at mostly $97/cwt. They were $3-$4 lower in Nebraska at $95-$98 and $1-$4 lower in the western Corn Belt at $98. Dressed trade for the week is $3-$6 lower at mostly $156.

Cattle feeders offered 1,221 head in the weekly Fed Cattle Exchange Auction. Of those, 276 head—four lots from Kansas and Nebraska—sold for a weighted average price of $96.43/cwt. for delivery at 1-17 days.

Choice steers and heifers sold $2.75-$3.00 lower at the fat auction in Tama, IA, where 184 Choice 2-4 steers weighed an average of 1,376 lbs. and brought an average price of $100.95.

At Sioux Falls Regional in South Dakota, slaughter steers and heifers sold $4-$6 lower. There were 372 Choice 2-3 steers weighing an average of 1,429 lbs. and bringing an average of $95.86.

Cattle futures tottered on Wednesday as outside markets eroded, but retained the lion’s share of gains made in the previous session.

Live Cattle futures closed an average of 31¢ lower.

Feeder Cattle futures closed narrowly mixed, from an average of 29¢ lower through the front three contracts to an average of 33¢ higher.

Choice boxed beef cutout value was $2.12 lower Wednesday afternoon at $209.69/cwt. Select was $1.88 lower at $201.69.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed mostly 3¢ to 4¢ lower. 

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Major U.S. financial indices dove South on Wednesday, with investors apparently spooked by spiking coronavirus cases in some states and what that could mean to reopening the economy.

The Dow Jones Industrial Average closed 710 points lower. The S&P 500 closed 80 points lower. The NASDAQ closed 222 points lower.

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Total pounds of beef in freezers May 31 were down 13% from the previous month but up 2% from last year, according to the most recent USDA Cold Storage report.

Frozen pork supplies were 24% less than the previous month and down 26% from a year earlier. Stocks of pork bellies were down 27% from last month and down 8% from last year.

Total red meat supplies in freezers were 18% less than the previous month and 13% less than a year earlier.

Total frozen poultry supplies were down 5% from the previous month and down 4% from a year ago.

Negotiated cash fed cattle trade continued lower Tuesday, with dressed trade in Nebraska mostly $3-$7 lower than last week at $155/cwt.

Even so, Cattle futures found some spark, helped along by outside markets.

Except for 87¢ lower in spot Jun and 17¢ lower at the back, Live Cattle futures closed an average of 90¢ higher (37¢ to $2.07 higher).

Feeder Cattle futures closed an average of $1.39 higher.

Choice boxed beef cutout value was $2.25 lower Tuesday afternoon at $211.81/cwt. Select was 73¢ lower at $203.57.

Corn futures closed mostly 3¢ to 4¢ lower

Soybean futures closed mostly 1¢ to 4¢ lower through Sep ’21 and then mostly fractionally higher.

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Major U.S. financial indices closed higher Tuesday, led by by tech stocks once again, and despite the growing number of COVID-19 cases.

The Dow Jones Industrial Average closed 131 points higher. The S&P 500 closed 13 points higher. The NASDAQ closed 74 points higher.

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So far, major restaurant chain transactions continue to improve, despite the recent spikes in COVID-19 cases, according to the NPD Group (NPD).

For the week ending June 14, total major restaurant chain transactions were 12% less than the same week a year earlier, which represented a 1% improvement compared to the previous week.

More specifically, quick service chain transactions were 11% less year over year and 2% more positive than the previous week. Full service chain transactions were 26% less than a year earlier but improved 12% week to week.

“The only major variable in play with a case surge at the moment would be erosion in consumer willingness to dine out,” says David Portalatin, NPD food industry advisor. “There are three main variables that will influence continued restaurant recovery: reopening of on-premise dining and expanding allowed capacity; the willingness of consumers to dine out and feel safe and confident in doing so; and the economic wellbeing of the consumer. Thus far, the evidence in restaurant transactional improvement confirms that dining rooms are opening, and there is consumer demand to fill opened restaurants.”

Although too few to trend, there were a few early live sales in the Texas Panhandle on Monday at $95/cwt. There were a few dressed trades in Nebraska at $152-$155.

Cattle futures closed narrowly lower Monday.

Live Cattle futures closed an average of 22¢ lower.

Feeder Cattle futures closed an average of 55¢ lower, (7¢ lower at the back to 80¢ lower at the front).

Choice boxed beef cutout value was 34¢ higher Monday afternoon at $214.06/cwt. Select was 39¢ higher at $204.30.

Corn futures closed 3¢ to 4¢ lower in the front four contracts and then mostly 1¢ lower.

Soybean futures closed fractionally lower to 1¢ lower. 

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Major U.S. financial indices closed higher on Monday, buoyed by tech stocks.

The Dow Jones Industrial Average closed 153 points higher. The S&P 500 closed 20 points higher. The NASDAQ closed 110 points higher.

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“Wholesale boxed beef prices have dropped nearly back to pre-COVID-19 levels and may go lower into mid-summer as abundant third-quarter beef production could highlight potential recessionary demand weakness,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel explains cattle slaughter continues to recover from disruptions wrought by the pandemic, with estimated slaughter the week ending June 20 being 98.2% of year-earlier levels.

At the same time, the backlog of fed cattle continues to add days on feed and pounds per carcass.

Year to date, Peel notes steer and heifer carcass weights averaged 27.4 lbs. heavier year over year. Carcasses were an average of 20.4 lbs. heavier in the first quarter; 36.7 lbs. heavier for April 1 to June 6.

Beef production was 8.0% more year over year in the first quarter, while second-quarter production is estimated to be 14.0% less year over year, according to Peel. That makes for 3.8% less beef production for the year through June 19.

“The combination of recovered slaughter and higher carcass weights resulted in weekly beef production in mid-June estimated to be above year-earlier levels for the first time in 10 weeks,” Peel says. “Weekly beef production is likely to exceed year-earlier levels for the third quarter and perhaps for the balance of the year.”

More specifically, he explains third-quarter beef production is forecast to be nearly 6% higher than the same time last year. Annual beef production this year is forecast to be slightly more than last year at a record 27.3 billion lbs.

“With beef supplies increasing in the second half of the year, beef demand will be critical,” Peel says. “Retail grocery will transition from limited beef supplies in recent weeks to ample supplies at the same time that food service demand is slowly building.” 

Negotiated cash fed cattle prices were lower to sharply lower last week, with significantly heavier carcasses than a year ago and the continued backlog of market-ready cattle.

Based on reports from the Agricultural Marketing Service, the last established market in the Texas Panhandle was at $98/cwt., which was $6-$10 less than the previous week. Until then, prices were about $5 less at around $100, according to the Texas Cattle Feeders Association. Live prices were $4-$6 lower in Kansas at mostly $100-$102, steady to $10 lower in Nebraska at $98-$102 and $3-$4 lower in the western Corn Belt at $99-$102. Dressed trade was steady to $12 lower at $158-$160.

Through Thursday, the five-area direct weighted average price for steers on a live basis was $100.82/cwt., which was  $4.02 less than the previous week. The average dressed steer price was $160.74, which was $5.91 less. Prices at the same time last year were at $110.43 and $180.56, respectively. Keep in mind that carcass weights are contra-seasonal and significantly heavier than last year.

Cattle futures closed mostly narrowly mixed Friday.

Live Cattle futures closed an average of 63¢ lower through the front five contracts (10¢ lower to $1.37 lower in spot Jun) and then an average of 16¢ higher.

Feeder Cattle futures closed narrowly mixed, from an average of 24¢ lower to an average of 24¢ higher.

Choice boxed beef cutout value was 16¢ higher Friday afternoon at $213.72/cwt. Select was 17¢ lower at $203.91.

The average dressed steer weight for the week ending June 6 was 892 lbs., which was 1 lb. heavier than the prior week and 46 lbs. heavier than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 824 lbs. was 2 lbs. lighter than the previous week, but 42 lbs. heavier than the prior year.

Corn futures closed 1¢ to 2¢ higher. 

Soybean futures closed mostly 3¢ to 4¢ higher. 

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Major U.S. financial indices closed mainly lower on Friday, following a volatile session. Key pressure appeared to stem from the spike in COVID cases in some states, leading to worries about the path of economic reopening.

The Dow Jones Industrial Average closed 208 points lower. The S&P 500 closed 17 points lower. The NASDAQ closed 3 points higher.

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If anything, Friday’s monthly Cattle on Feed report from USDA will likely be viewed as at least a touch bearish, with more cattle placed, fewer cattle marketed and slightly more cattle on feed June 1 than the trade expected. That’s for feedlots with 1,000 head or more capacity.

Placements in May of 2.04 million head were 26,000 head fewer (-1.26%) than the previous year. Average analyst estimates ahead of the report expected placements to be 2.3% less.

In terms of placement weights: 33.38% went on feed weighing 699 lbs. or less; 49.93% weighed 700-899 lbs.; 16.69% weighed 900 lbs. or more.

Marketings in May of 1.5 million head were 570,000 head fewer (-27.54%) than a year earlier. That’s the least marketings for the month since the data series began in 1996. Ahead of the report, on average, analysts expected marketings to be down 26.4%.

There were 11.67 million head on feed June 1, which was 57,000 head fewer (-0.49%) than a year earlier. That’s the second highest June inventory since the data series began in 1996. Average analyst expectations were for a decline of 1%.