Daily Market Highlights

Negotiated cash fed cattle prices took another step higher Thursday.

Live prices were $2 higher in the Southern Plains at $142/cwt., steady to $4 higher in Nebraska at $140 and steady to $5 higher in the western Corn Belt at $140. Dressed trade in Nebraska was $3 higher at $220.

Last week, live prices in Colorado were $140 and dressed prices in the western Corn Belt were $213-$217.

Cattle futures, especially font-month Live Cattle, gained Thursday with the stronger cash prices. They closed an average of 71¢ higher, from $1.65 higher in spot Dec to 7¢ higher in the back contract.

The weekly U.S. Export Sales report added support. For the week ending Nov. 25, net U.S. beef export sales (2021) of 21,600 metric tons were 12% more than the previous week and 5% more than the prior four-week average. Increases were primarily for South Korea, China, Japan, Mexico, and Chile.

Choice boxed beef cutout value was $1.80 higher Thursday afternoon at $272.02/cwt. Select was 28¢ higher at $258.25.

Feeder Cattle gains were capped by stronger Corn futures prices. They closed an average of 36¢ higher, except for 5¢ lower in spot Jan.

Corn futures closed 3¢ to 6¢ higher in the front five contracts and then fractionally higher to 1¢ higher.

Soybean futures closed 11¢ to 16¢ higher in the front five contracts and then mostly 3¢ to 4¢ higher.

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Volatile major U.S. financial indices reversed course and closed sharply higher, putting a sizable dent into the previous day’s losses. There was little news to push them good or bad.

The Dow Jones Industrial Average closed 617 points higher. The S&P 500 closed 64 points higher. The NASDAQ was up 127 points.

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The Federal Trade Commission (FTC) ordered nine large retailers, wholesalers, and consumer good suppliers to provide detailed information that will help the FTC shed light on the causes behind ongoing supply chain disruptions and how these disruptions are causing serious and ongoing hardships for consumers and harming competition in the U.S. economy.

“Supply chain disruptions are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber. I am hopeful the FTC’s new study will shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects,” says FTC Chair Lina M. Khan. “The FTC has a long history of pursuing market studies to deepen our understanding of economic conditions and business conduct, and we should continue to make nimble and timely use of these information-gathering tools and authorities.”

The FTC is issuing the orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose. The orders are being sent to Walmart Inc., Amazon.com, Inc., Kroger Co., C&S Wholesale Grocers, Inc., Associated Wholesale Grocers, Inc., McLane Co, Inc. Procter & Gamble Co., Tyson Foods, Inc., and Kraft Heinz Co. The companies will have 45 days from the date they received the order to respond.

In addition to better understanding the reasons behind the disruptions, the study will examine whether supply chain disruptions are leading to specific bottlenecks, shortages, anticompetitive practices, or contributing to rising consumer prices.

The orders require the companies to detail the primary factors disrupting their ability to obtain, transport and distribute their products; the impact these disruptions are having in terms of delayed and canceled orders, increased costs and prices; the products, suppliers and inputs most affected; and the steps the companies are taking to alleviate disruptions; and how they allocate products among their stores when they are in short supply.

The early-day rebound in equity markets, as well as positive supply fundamentals helped Cattle futures regain some recently lost ground Wednesday.

Feeder Cattle futures closed an average of $1.39 higher (97¢ higher at the front to $1.77 higher at the back of the board).

Live Cattle futures closed an average of 74¢ higher, from 12¢ higher in spot Dec to $1.12 higher.

Corn futures closed 3¢ to 5¢ higher in the front three contracts and then mostly 1¢ to 2¢ higher.

Soybean futures closed 5¢ to 11¢ higher through Jan ’23 and then mostly 1¢ to 3¢ higher.

Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were at $140/cwt. in the Southern Plains, $136-$140 in Nebraska, $140 in Colorado and $135-$140 in the western Corn Belt. Dressed trade was at $217 in Nebraska and at $213-$217 in the western Corn Belt. 

Choice boxed beef cutout value was $1.46 lower Wednesday afternoon at $270.22/cwt. Select was $2.32 lower at $257.97/cwt.

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Major U.S. financial indices started Wednesday’s session paring losses, but announcement of the first confirmed case of the new COVID variant (Omicron) in the U.S. took them sharply lower by the end of the day.

Positive news helping bolster stocks prior to the announcement included more jobs than expected in the ADP National Employment Report. Private sector employment increased by 540,000 from October to November.

The Dow Jones Industrial Average closed 461 points lower. The S&P 500 closed 53 points lower. The NASDAQ was down 283 points.

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Global economic recovery is continuing but its momentum has eased and is becoming increasingly imbalanced according to the latest Economic Outlook from the Organization for Economic Cooperation and Development (OECD).

“The strong rebound we have seen is now easing and supply bottlenecks, rising inflation, and the continuing impact of the pandemic are clouding the horizon,” says OECD Secretary-General Mathias Cormann. “The risks and uncertainties are large, as is being seen with the emergence of the Omicron variant, aggravating the imbalances and threatening the recovery. Keeping the recovery strong and on track will entail addressing a number of imbalances, but above all it will mean managing the health crisis through better international coordination, improving health systems and massively stepping up vaccination programs worldwide.”

OECD projects real global GDP growth at 5.6% this year, 4.5% next year and 3.2% in 2023.

For the U.S., OECD projects real GDP at 5.6% this year, 3.7% next year and 2.4% in 2023.

Among the key points in the OECD Economic Outlook:

Surging demand for goods since economies reopened, and the failure of supply to keep pace, generated bottlenecks in production chains. Labor shortages, pandemic-related closures, rising energy and commodity prices, and a scarcity of some key materials are all holding back growth and adding to cost pressures. Inflation has increased significantly in some regions.

Alongside cost pressures from manufacturing supply bottlenecks and food price increases, imbalances in the energy market are a key factor driving up inflation in all economies. Gas prices have risen sharply, notably in Europe, and risks are high, with storage levels around 28% lower than they would normally be at this time of the year. Rising food and energy costs are inevitably hitting low-income households the hardest.  

Inflationary pressures are proving stronger and more persistent than expected a few months ago. Consumer price inflation in the OECD is now projected to start fading in 2022, before moderating as key bottlenecks ease, capacity expands, more people return to the labor force and demand rebalances. The Outlook underlines the risk that continued supply disruptions, perhaps associated with further waves of COVID-19 infections, may result in longer and higher inflationary pressure.

Another risk, exposed by the emergence of the Omicron variant in recent days, is a worsening health situation due to COVID-19 resulting in further restrictions that would jeopardize the recovery. Ensuring improved access to vaccines for all must be an urgent policy priority, according to the report. A faster, better coordinated, worldwide vaccine roll-out is not only essential for saving lives and preventing the emergence of new variants, but would also help tackle some of the bottlenecks undermining the strength of the recovery by allowing factories, ports and borders to re-open fully.

A potential sharp slowdown in China, if activity in the property market declined abruptly amid concerns about the financial soundness of some of the largest real estate developers, could also disrupt the global recovery. The impact of such a slowdown would spread rapidly to other countries, particularly if it generated uncertainty in global financial markets and added to the current bottlenecks in supply.

Cattle futures, especially Live Cattle lost some steam Tuesday. While technical correction and month-end position squaring were likely behind some of the pressure, most commodities followed the sharp drop in equity markets, which were tied to uncertainty about the Covid variant, Omicron, and its potential economic impact.

Feeder Cattle futures closed an average of 60¢ higher (17¢ to $1.00 higher), except for an average of 46¢ lower in the front two contracts.

Live Cattle futures closed an average of 80¢ lower, from 12¢ lower toward the back to $1.45 lower toward the front of the board.

Corn futures closed 12¢ to 15¢ lower through the front five contracts and then mostly 8¢ to 9¢ lower.

Soybean futures closed 20¢ to 27¢ lower through the front seven contracts and then mostly 10¢ to 18¢ lower.

Negotiated cash fed cattle trade ranged from limited to mostly inactive on light demand through Tuesday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $7 higher in the Southern Plains at $140/cwt., $3-$6 higher in Nebraska at $136-$140, $5-$8 higher in Colorado at $140 and $3-$6 higher in the western Corn Belt at $135-$140. Dressed trade was $7 higher in Nebraska at $217 and $3-$7 higher in the western Corn Belt at $213-$217.

Choice boxed beef cutout value was $5.90 lower Tuesday afternoon at $271.68/cwt. Select was $1.73 lower at $260.29/cwt.

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Major U.S. financial indices closed sharply lower Tuesday, with apparent pressure from COVID variant worries.

“The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation. Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” explained Federal Reserve Chair Jerome Powell, in testimony before the U.S. Senate Committee on Banking, Housing and Urban Affairs.

Moreover, based on various reports, Powell suggested the FOMC might consider accelerated tapering of the federal bond buying program as inflation continues higher.

The Dow Jones Industrial Average closed 652 points lower. The S&P 500 closed 88 points lower. The NASDAQ was down 245 points.

CME WTI Crude Oil futures closed $3.72 to $3.79 lower in the front six contracts.

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“There should be three strong weeks of cattle prices leading up to the cattle market break that will occur during the Christmas and New Year holidays. However, prices are expected to strengthen moving into January,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his most recent market comments. “The number of cattle marketed the next three weeks will depend on a producer’s desire to market cattle before the end of the year or after the start of the new year as it can have tax implications. Regardless of the month producers decide to market calves, prices are expected to slowly increase from December through April. The expectation is to see the strongest prices since the spring of 2016.”

Likewise, Stephen Koontz, agricultural economist at Colorado State University points out underlying cattle market fundamentals continue pointing to increasing price strength.

“Boxed beef cutout valuations continue to drift lower following summer seasonal highs, but packer margins remain incredibly strong by historical standards,” Koontz explains, in the most recent issue of In the Cattle Markets. “Federally inspected steer and heifer slaughter remain at elevated levels and repeatedly press on what I perceive as industry capacity of 525,000 head per week. Saturday slaughter also is at elevated levels. Cattle on feed over 120 days and over 150 days continue the seasonal decline but remain above last year. The leverage remains with the packer in this situation, but the packer has a strong incentive to run as many hours as possible. Beef cow slaughter also remains strong. The beef herd liquidation, at least partially, continues and will impact next year’s supply.”

Plus, Koontz explains reduced beef cold storage inventory amid increased beef supplies suggest ongoing domestic demand strength.

“There are solid underlying supply and demand fundamentals, and it is clear that the bottleneck in the packing sector remains,” Koontz says. “It is reasonable to have long-term optimism but at the same time be willing to periodically and aggressively reduce risk.”

Cattle futures softened Monday amid likely profit taking and month-end positioning. Although some would say they started the week in oversold territory in need of technical correction, the fundamental pathway continues clear.

Feeder Cattle futures closed an average of 91¢ lower, from $1.42 lower at the front to 22¢ lower at the back.

The CME Feeder Cattle Index was $3.34 higher at $161.29/cwt.

Live Cattle futures closed an average of $1.25 lower, from 55¢ lower toward the back to $1.90 lower near the front of the board.

Negotiated cash fed cattle trade was mostly inactive on very light demand through Monday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $7 higher in the Southern Plains at $140/cwt., $3-$6 higher in Nebraska at $136-$140, $5-$8 higher in Colorado at $140 and $3-$6 higher in the western Corn Belt at $135-$140. Dressed trade was $7 higher in Nebraska at $217 and $3-$7 higher in the western Corn Belt at $213-$217.

Recent trade volume and delivery patterns suggest cash prices this week have the potential to gain more.

Choice boxed beef cutout value was $2.43 lower Monday afternoon at $277.58/cwt. Select was 26¢ lower at $262.02/cwt.

Corn futures closed mostly 5¢ to 9¢ lower.

Soybean futures closed 9¢ to 11¢ lower.

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Major U.S. financial indices pared sharp losses from the previous session on Monday  as traders and everyone else tried to sort out the potential impact of the new COVID variant announced last week.

The Dow Jones Industrial Average closed 236 points higher. The S&P 500 closed 60 points higher. The NASDAQ was up 291 points.

West Texas Intermediate Crude Oil futures on the CME rebounded $1.80 to $1.89 through the front six contracts.

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“As 2021 winds to a close, cattle markets seem to finally be able to move out from under the specter of the pandemic impacts that began 18 months ago…The recent breakout of fed cattle markets, after struggling under the weight of beef packer capacity constraints, clears the way for cattle markets to move forward with the optimism that has been building in the industry in recent months,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel adds that plenty of challenges remain, including COVID uncertainty and economic ripple effects, higher input costs and drought. But, he explains, market fundamentals continue to improve.

“The beef cow herd has been declining since 2019 and declined even faster in 2021. It will decline again in 2022 and likely in 2023,” Peel says. “However, strong domestic beef demand bolstered by even stronger demand and potential in international markets suggests that cyclical expansion could resume in the not-to-distant future. Exactly what the future path will be remains to be determined but producers should consider strategic and tactical plans for industry outcomes.”

With that in mind, Peel suggests winter is an appropriate time for producers to consider both animal and forage production and management plans for the coming year. 

“Once calf marketing is complete and herd culling decisions are implemented, a relative down-time is ideal for a bit of review of the past year and planning for next year with a series of questions,” Peel says. “What are the conditions of pastures and rangeland going into the next growing season; should grazing plans or stocking rates be adjusted? Were production and reproductive rates and weaning weights as expected?  What is the current body condition of the cows?  What is the herd health status?  Are upcoming herd nutritional needs evaluated and matched with feed and supplement resources? Planning now can help manage costs and production next year.”

Bottom line, Peel says relative market stability offers producers the opportunity to play offense rather than defense for the first time in a long while, if they’re prepared to do so.

Cattle futures closed narrowly mixed Friday amid holiday-shortened trade.

Live Cattle futures closed an average of 15¢ lower, except for an average of 26¢ higher in the front two contracts.

Feeder Cattle futures closed an average of 10¢ higher, except for unchanged to an average of 5¢ lower in three contracts.

Corn futures closed mostly 4¢ to 5¢ higher.

Soybean futures closed 11¢ to 14¢ lower through the front six contracts and then mostly 4¢ to 7¢ lower.

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Friday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $7 higher in the Southern Plains at $140/cwt., $5-$6 higher in Nebraska at $138-$140, $5-$8 higher in Colorado at $140 and $6 higher in the western Corn Belt at $138-$140. Dressed trade was $7 higher in Nebraska at $217.

Total estimated cattle slaughter last week of 566,000 head was 111,000 head fewer than the previous week. Total year-to-date estimated cattle slaughter of 30.16 million head was 863,000 head more (+2.9%) than a year earlier. Total year-to-date estimated beef production of 24.95 billion lbs. was 601.5 million lbs. more (+2.5%) than a year earlier.

The average dressed steer weight the week ending Nov. 13 was 924 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 5 lbs. heavier than the previous week but 6 lbs. lighter than a year earlier. The average dressed heifer weight of 844 lbs. was 2 lbs. heavier than the previous week but 2 lbs. lighter than the previous year.

Choice boxed beef cutout value was 90¢ higher Friday afternoon at $280.01/cwt. Select was $1.19 lower at $262.28/cwt.

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Major U.S. financial indices closed sharply lower Friday, in response to reports from the World Health Organization about a new COVID variant (Omicron) discovered in South Africa, where COVID infections increased in recent weeks.  

The Dow Jones Industrial Average closed 905 points lower. The S&P 500 closed 106 points lower. The NASDAQ was down 353 points.

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Last year, there were 19.7 million full-time and part-time jobs related to the agricultural and food sectors — 10.3% of total U.S. employment — according to USDA’s Economic Research Service (ERS).

“Direct on-farm employment accounted for about 2.6 million of these jobs, or 1.4% of U.S. employment,” according to ERS analysts. “Employment in agriculture-related and food-related industries supported another 17.1 million jobs. Of these, food service, eating and drinking places accounted for the largest share at 10.5 million jobs. Food and beverage stores supported 3.3 million jobs.”

For recent perspective, 772,000 workers were hired directly by operators of the nation’s farms and ranches the week of Oct. 10-16, 2021, according to the most recent Farm Labor report from the National Agricultural Statistics Service (NASS). That was 2% more than the reference week in October 2020.

Farm and ranch operators paid their hired workers an average gross wage of $16.59 per hour during the October 2021 reference week. That was 5% more than the previous year. Field workers received an average of $16.08 per hour, up 5%. Livestock workers earned $15.45 per hour, up 6%. The field and livestock worker combined gross wage rate of $15.92 per hour was 5% more than the 2020 reference week.

Negotiated cash fed cattle prices are soaring. So far this week, live prices in the Southern Plains are $7 higher at $140/cwt., $4-$6 higher in Nebraska at $138-$139 and $4 higher in the western Corn Belt at $136-$138. Trade through Wednesday afternoon was moderate with good demand in the Southern Plains and Nebraska, according to the Agricultural Marketing Service.

Live prices in Colorado last week were at $132-$135. Dressed prices last week were at $210.

Cash bullishness added fuel to the rally in Cattle futures.

Feeder Cattle futures closed an average of $1.60 higher ($1.07 higher at the back to $2.55 higher in spot Jan).

Live Cattle futures closed an average of $1.09 higher, (37¢ higher toward the back to $2.50 higher in spot Dec).

Choice boxed beef cutout value was 47¢ higher Wednesday afternoon at $279.11/cwt. Select was 80¢ higher at $263.47/cwt.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed 6¢ to 7¢ lower through the front five contracts and then mostly 2¢ to 3¢ higher.

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Major U.S. financial indices closed narrowly mixed Wednesday.

Initial unemployment insurance claims for the week ending Nov. 20 were 199,000, according to the U.S. Department of Labor. That was 71,000 fewer than the previous week and the fewest since Nov. 15 in 1969.

The Dow Jones Industrial Average closed 9 points lower. The S&P 500 closed 10 points higher. The NASDAQ was up 70 points.

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Historically large exports of U.S. beef to China continue to help buoy this year’s record pace of exports overall.

“Through the first three quarters of the year, the U.S. has shipped 394.5 million pounds to China, a more than 9-fold increase from the same period last year,” according to analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Since March of this year, China has ranked as the number three destination for U.S. beef exports each month. In September, China accounted for 18.1% of total exports for the month behind South Korea (22.4%) and Japan (24.0%).”

Based on weekly exports and net sales data, LMIC analysts say beef exports to China are expected to remain elevated through the end of the year.

“The last two weeks, USDA FAS reported new sales of 8,230 and 13,751 metric tons (or 18.1 and 30.3 million lbs.) to China,” say LMIC analysts. “Net sales are new export sales which were purchased for delivery to the destination. Two consecutive weeks of large new sales of beef to China is an indication that they are likely sourcing beef supplies for the Chinese New Year (February 1, 2022) and 2022 Winter Olympics (February 4-20, 2022).”

Negotiated cash fed cattle trade ranged from slow on light demand in the Southern Plains to limited on light demand in other regions through Tuesday afternoon, according to the Agricultural Marketing Service. Although there were too few transactions to trend, early live sales were $3 higher in the Southern Plains at $136/cwt.

Prices last week were at $133 in the Southern Plains, $133-$134 in Nebraska, $132-$135 in Colorado and $132-$134 in the western Corn Belt. Dressed trade was at $210.

Cattle futures continued to gain ground Tuesday with recent cash strength and the likelihood of another step forward this week.

Feeder Cattle futures closed an average of $1.46 higher.

Live Cattle futures closed an average of 68¢ higher, from 37¢ to $1.22 higher.

Choice boxed beef cutout value was 61¢ lower Tuesday afternoon at $278.64/cwt. Select was $1.06 lower at $262.67/cwt.

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Major U.S. financial indices closed mixed again Tuesday as bond yields continued to hamper tech stocks.  

The Dow Jones Industrial Average closed 194 points higher. The S&P 500 closed 7 points higher. The NASDAQ was down 79 points.

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U.S. beef and veal exports are projected at $9.1 billion next year, which would be $428 million more than this year, according to the latest quarterly Outlook for U.S. Agricultural Trade from USDA’s Economic Research Service (ERS) and Foreign Agricultural Service (FAS). The increase is based mostly on expected higher unit values.

Livestock, poultry, and dairy exports are forecast to increase by $1.9 billion to $38.7 billion, with gains across all major commodities except pork.

Total U.S. agricultural exports for 2022 are projected at $175.5 billion, down $2.0 billion from the August forecast, driven by forecast reductions in oilseed and oilseed product exports. If realized, however, the total would be record large.

“The global economic recovery continues to make progress, but with continued disruptions posed by both price pressures and supply issues. Continued supply-chain backlogs and coronavirus (COVID-19) variants have slowed the economic recovery,” say ERS-FAS analysts. “Despite these continued challenges, global employment statistics continue to gain strength, pointing to momentum in the economic recovery through the end of the calendar year. World real gross domestic product (GDP) is projected to increase by 5.9% in 2021, and subsequently increase by 4.9% in 2022.”

ERS-FAS projects U.S. real GDP at 6.0% this year and 5.2% next year.

Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.

Live prices last week were $1 higher in the Southern Plains at $133/cwt., $1-$2 higher in Nebraska at $133-$134, steady to $2 higher in the western Corn Belt at $132-$134 and steady to $3 higher in Colorado at $132-$135. Dressed trade was $3 higher at $210.

Cattle futures gained some traction Monday with support from last week’s stronger cash prices and the neutral Cattle on Feed report.

Feeder Cattle futures closed an average of 62¢ higher, except for unchanged in the back contract, amid light trade.

Live Cattle futures closed an average of 68¢ higher, from 32¢ higher at the back to $1.27 higher toward the front. 

Choice boxed beef cutout value was 84¢ higher Monday afternoon at $279.25/cwt. Select was 10¢ lower at $263.73/cwt.

Corn futures closed mostly 4¢ to 7¢ higher, riding wheat’s coattails.

Soybean futures closed 7¢ to 11¢ higher through the front six contracts, and then mostly 4¢ to 5¢ higher.

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Major U.S. financial indices closed mixed Monday as bond yield rates and the Dollar index increased.  

The Dow Jones Industrial Average closed 17 points higher. The S&P 500 closed 15 points lower. The NASDAQ was down 202 points.

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“Market-ready supplies of fed cattle have tightened and packers are actively chasing cattle for the first time in many months,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. He notes the upper end of last week’s negotiated cash fed cattle price range was $9-$10 higher than the last week of October.

At the same time, Peel explains Oklahoma auction prices for feeder steers (800-850 lbs., Medium and Large #1) increased nearly 6% since September and are about 21% higher than when the year began.

“This increase in feeder prices reflects generally tighter feeder cattle supplies and fed market optimism as reflected in Live Cattle futures prices in 2022,” Peel explains. “This is despite sharply higher feedlot cost of gain — up 33% from January to September in Kansas feedlot surveys.”

Stocker steer and calf prices are up sharply from early October lows. Oklahoma auction prices for Medium and Large #1 steers weighing 450-500 lbs. rose 13% over the last seen weeks and are nearly 8% more than the beginning of the year, according to Peel.

“In general, cattle prices are higher now compared to last year and are expected to continue improving in 2022. Live Cattle and Feeder Cattle futures have priced in considerable optimism for 2022,” Peel says. “However, plenty of challenges remain for cattle producers with continued drought, higher input prices, supply chain disruptions and considerable short-term macroeconomic uncertainty. It will still be a bumpy ride, but producers can focus more on managing costs with cattle prices generally moving higher.”

Refreshing might be the most apt way to describe last week’s negotiated cash fed cattle trade. For the first time in what seems like forever, packers chased cattle to fill their pipelines. Cattle feeders passed early-week bids and carved mainly another $1-$3 from the market.

Live prices last week were $1 higher in the Southern Plains at $132/cwt., $1-$2 higher in Nebraska at $133-$134 and $1-$4 higher in the western Corn Belt at $133-$134. Dressed trade was $3 higher at $210. Live prices in Colorado the previous week were at $132. There were a few sales reported at $135 in Nebraska through Friday afternoon, but too few to trend.

The five-area direct average fed steer price through Thursday was $1.66 higher than the previous week at $133.01/cwt. The average steer price in the beef was $2.99 higher at $209.59.

Estimated total cattle slaughter the week ending Nov. 20 of 677,000 head was 22,000 head more than the previous week. Year-to-date estimated total cattle slaughter of 29.59 million head is 857,000 head more (+2.98%) than a year earlier. Estimated year-to-date beef production of 24.47 billion lbs. is 605.8 million lbs. (+2.54%) than a year earlier.

Cattle futures closed narrowly mixed Friday, but rode the coattails of stronger cash prices to weekly gains.

Feeder Cattle futures closed an average of 21¢ lower, except for unchanged to 12¢ higher in three contracts. They were an average of $2.83 higher week to week.

Live Cattle futures closed an average of 27¢ higher, except for 5¢ lower in Jun and unchanged at the back of the board. Week to week, they were an average of $1.15 higher.

Choice boxed beef cutout value was $2.25 higher Friday afternoon at $278.41/cwt. Select was 67¢ higher at $263.85/cwt. Week to week, though, Choice was $5.89 lower and. Select was $5.70 lower.

Corn futures closed mostly 1¢ to 2¢ lower, except for 1¢ higher in four contracts mid-board.

Soybean futures closed 1¢ to 4¢ higher, except for fractionally lower to 2¢ lower in the front five contracts.

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Except for the tech-heavy NASDAQ, major U.S. financial indices closed lower Friday, pressured by the new COVID lockdown in Austria.

The Dow Jones Industrial Average closed 268 points lower. The S&P 500 closed 6 points lower. The NASDAQ was up 63 points.

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Logic suggests markets should view the latest monthly Cattle on Feed report — feedlots with 1,000 head or more capacity — as neutral, coming in line with pre-report expectations.

Cattle feeders placed 2.25 million head in October, which was 53,000 head more (+2.4%) than a year earlier.

In terms of placement weights, 48% went on feed weighing 699 lbs. or less, 40% weighing 700-899 lbs. and 12% weighing 900 lbs. or more.

Marketings in October of 1.79 million head were 85,000 head fewer (-4.5%) than the same time last year.

Cattle on feed Nov. 1 of 11.95 million head were on par with a year earlier.

Analysts with the Livestock Marketing Information Center (LMIC) point out the inventory of cattle on feed more than 120 days tightened by 175,000 head month to month. That’s the least in 10 months, they say, but still nearly 100,000 head more year over year.

“Continued placements of heifers is likely still happening to boost cattle placements and to maintain these levels of inventory,” say LMIC analysts in the latest Livestock Monitor. “The Jan. 1 cattle inventory is just around the corner and it’s looking more and more like the beef herd will be down more than 2%.”

Last week, USDA’s Economic Research Service (ERS) raised the expected fourth-quarter feeder steer price (750-800 lbs., basis Oklahoma City) by $3 to $154/cwt., compared to the previous monthly projection.

That’s based on current price strength and improved prospects of winter pasturing stocker cattle, which will likely increase competition, according to ERS analysts, in the latest Livestock, Dairy and Poultry Outlook. They point out October feeder steer prices at Oklahoma City averaged about $16 more year over year at $153.52/cwt. 

The forecast average feeder steer price for next year was unchanged at $155.50, compared to the projected average price of $145.55 this year.

ERS projects the average feeder steer price at $153 in the first quarter, $151 in the second quarter and $156 in the third quarter.

Negotiated cash fed cattle prices perked up another $1-$3 on Thursday with light to moderate trade and demand, according to the Agricultural Marketing Service.

Live prices were $1 higher in the Southern Plains at $132/cwt., $1-$2 higher in Nebraska at $133-$134 and $1-$3 higher in the western Corn Belt at $133. Dressed trade was $3 higher at $210. Live prices in Colorado last week were at $132.

Stronger cash prices helped push Cattle futures higher.

Feeder Cattle futures closed an average of $1.90 higher, except for 15¢ lower in nearly spent Nov.

Live Cattle futures closed an average of 70¢ higher.

Lower grain futures prices added support.

Corn futures closed narrowly mixed, from 2¢ lower to 1¢ higher.

Soybean futures closed mostly 11¢ to 15¢ lower.

Wholesale beef prices continued to drift lower. Choice boxed beef cutout value was $3.66 lower Thursday afternoon at $278.47/cwt. Select was $2.53 lower at $264.06/cwt.

Net U.S. beef export sales of 25,500 metric tons (2021) for the week ending Nov. 11 were 23% more than the previous week and 58% more than the prior four-week average, according to the U.S. Export Sales report. Increases were primarily for China, Taiwan, Japan, South Korea, and Mexico.

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Major U.S. financial indices closed narrowly mixed Thursday.

Weekly initial unemployment claims decreased by 1,000 to 268,000 for the week ending Nov. 13, according to the U.S. Department of Labor. That was in line with trader expectations.

The Dow Jones Industrial Average closed 60 points lower. The S&P 500 closed 15 points higher. The NASDAQ was up 72 points.

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Rabobank analysts expect operational beef packing capacity and cattle numbers to regain some relative balance by the second quarter of next year.

“Although packers will still have healthy margins compared to pre-pandemic levels, the price spread between beef and cattle will begin a multi-year narrowing trend in 2022,” say Rabobank analysts, in the recent Rabobank Global Animal Protein Outlook 2022. “Even as domestic beef demand (willingness to pay) falls slightly from its pandemic highs, continued export growth, declining beef production and general economic inflation will provide price support.”

Along those same lines, Don Close, Rabobank senior animal protein analyst notes North American feed costs are expected to remain at high levels. “Producers will need to be vigilant in finding opportunities to lock in profitable margins,” he says.

Animal protein supply chains face across-the-board cost inflation with the most significant increases coming in four key areas – animal feed, labor, energy and freight, according to the report.

“This next year has the potential to accelerate structural change as a result of escalating costs,” says Christine McCracken, senior animal protein analyst for Rabobank. “Success will most likely go the players that adapt to the changing business environment; embracing consumer preferences for sustainability and preparing for a surge in demand as economies continue to reopen and adjust following COVID-19-induced lockdowns.”