Daily Market Highlights

Cattle Current Daily—April 12, 2021

Negotiated cash fed cattle trade ranged from a standstill to limited on light demand through Friday afternoon, according to the Agricultural Marketing Service. Although too few to trend there were some trades in the western Corn Belt at $125/cwt. on a live basis and at $196 in the beef.

In established trade for the week, live prices were $3 higher in the Southern Plains at $120, $5-$7 higher in Nebraska at $125, $5 higher in the western Corn Belt at $123-$125 and $4-$7 higher in Colorado (compared to two weeks earlier) at $120-$123. Dressed prices were $5-$7 higher at $195.

Week to week on Thursday, the five-area direct average steer prices was $4.42 higher at $121.87. The average dressed steer price was $195.21, which was $6.53 higher.

Cattle futures closed lower Friday, amid active trade and likely profit taking from the strong week-to-week gains.

Live Cattle futures closed an average of $1.10 lower (22¢ to $2.45 lower), except for 62¢ higher in the back contract.

Feeder Cattle futures closed an average of $1.55 lower (80¢ lower toward the back to $2.37 lower in spot Apr), except for 45¢ higher in the back contract.

Choice boxed beef cutout value was $1.67 higher Friday afternoon at $272.17/cwt. Select was 24¢ higher at $264.07.

Estimated total cattle slaughter the week ending Apr. 10 was 641,000 head, according to USDA, which was 32,000 head more than the previous week. Year-to-date estimated total cattle slaughter of 9.0 million head is 184,000 head fewer (-2.0%) than the same time last year. Estimated year-to-date beef production of 7.54 billion lbs. is 54.2 million lbs. less (-0.7%) than a year earlier.

Grain futures were mixed Friday, reacting to USDA’s monthly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed mostly 1¢ to 3¢ higher, except for 2¢ lower in spot May.

Soybean futures closed 9¢ to 12¢ lower through the front six contracts, and then mostly 2¢ to 7¢ lower.

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Major U.S. financial indices closed higher Friday. Support included optimism about the pace of domestic COVID-19 vaccinations and further reopening of the economy.

The Dow Jones Industrial Average closed 297 points higher. The S&P 500 closed 31 points higher. The NASDAQ was up 70 points.

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Logistical challenges continued to hamper U.S. beef exports in February, but they should increase as the year progresses, according to the U.S. Meat Export Federation (USMEF).

Beef exports in February were 8% less in volume year over year at 103,493 metric tons (mt), according to data released by USDA and compiled by USMEF. Beef export value was 2% less at $669.5 million. The decline was due mainly to variety meat exports.

For the year, through February, U.S. beef exports are 5% less in volume and 2% less in value at $1.32 billion.

U.S. pork export volume in February was 12% less than a year earlier. Value was 13% less at $629.4 million.

“While February exports were in line with expectations, the results don’t fully reflect global demand for U.S. red meat,” says Dan Halstrom, USMEF president and CEO. “Logistical challenges, including congestion at some U.S. ports, are still a significant headwind. Tight labor supplies at the plant level continue to impact export volumes for certain products, including some variety meat items and labor-intensive muscle cuts.”

Halstrom notes that the flow of exports through U.S. ports is showing some gradual improvement as COVID-impacted crews move closer to full strength, but remains a serious concern for the U.S. agricultural sector.

Cattle Current Daily—April 12, 2021 2021-04-10T16:17:21-05:00

Cattle Current Daily—April 9, 2021

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

For the week so far, live prices are $3 higher in the Southern Plains at $120/cwt., $5 higher in Nebraska at $123, $3-$5 higher in the western Corn Belt at $121-$125 and $4-$7 higher in Colorado (compared to two weeks earlier) at $120-$123. Dressed trade is $5-$7 higher at $195.

Feeder Cattle futures closed mostly slightly lower Thursday, pressured by the surge in Corn futures prices.

Feeder Cattle futures closed an average of 52¢ lower (37¢ to $1.07 lower), except for an average of 42¢ higher in the back two contracts.

Live Cattle futures mostly extended gains, with continued support from cash prices and wholesale beef values, as well as expanding open interest. 

Live Cattle futures closed an average of 56¢ higher (35¢ to $1.00 higher), except for an average of 17¢ lower in two nearby contracts.

Choice boxed beef cutout value was $4.19 higher Thursday afternoon at $270.50/cwt. Select was $8.64 higher at $263.83.

The average dressed steer weight the week ending March 27 was 899 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 2 lbs. lighter than the previous week, but 8 lbs. heavier than the same week last year. The average dressed heifer weight of 830 lbs. was 6 lbs. lighter week to week but 5 lbs. heavier than a year earlier.

Front-month grain futures closed sharply higher Thursday amid likely positioning ahead of USDA’s World Agricultural Supply and Demand Estimates due out Wednesday.

Corn futures closed 10¢ to 19¢ higher in the front three contracts, 8¢ to 9¢ higher in the next four and then mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 1¢ to 2¢ higher, except for 6¢ higher in the front two contracts.

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Major U.S. financial indices closed higher Thursday, led by tech stocks.

The Dow Jones Industrial Average closed 57 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 140 points.

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“For the economy and rural industries, there will be no going back to pre-COVID conditions. A transformed policy environment and awakened commodity markets are making way for a whole new operating environment, according to the new Quarterly report from CoBank’s Knowledge Exchange (CBKE).

“The policy focus in Washington is shifting from crisis management to building for the future,” says Dan Kowalski, CBKE vice president. “And the outcome of the president’s infrastructure plan will have substantial implications for rural water, power and broadband providers. Hundreds of billions of dollars in funding would reshape these industries and intensify the current focus on climate resilience and social equity.”

In terms of economic growth, CBKE analysts explain consensus forecasts point to 7% U.S. GDP growth this year, the fastest rate of expansion since 1984. They note the U.S. economy continues to outperform expectations as stimulus funds fuel robust consumer spending.

On the other side of the ledger, those analysts expect inflation to increase.

“Any inflation that results from resurgent demand will be in addition to the base-effect inflation that we are certain to have in coming months,” according to the CBKE report. “Inflation is typically measured in year-over-year terms, and base effects occur when inflation readings are skewed because of price anomalies in the prior year. In 2020, prices for many goods and services dove in the middle months of the year as demand suddenly dropped. Those 2020 price declines will widen year-over-year inflation over the next couple of quarters, and new upward price pressure should push headline inflation above 3%. We expect this burst of inflation to be short-lived as the economy recalibrates, but we could experience inflation over 2% well into 2022.”

Cattle Current Daily—April 9, 2021 2021-04-08T19:22:53-05:00

Cattle Current Daily—April 8, 2021

Negotiated cash fed cattle trade and demand were moderate in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were $3 higher than last week at $120/cwt.

In Nebraska, trade was light on light to moderate demand. Although too few to trend, there were some live sales at $120-$123. Prices there last week were at $118 on a live basis and at $190 in the beef.

Also too few to trend, early live prices in Colorado were at $120-$123. The last established market was two weeks ago at $116.

Last week, in the western Corn Belt, prices were at $118-$120 on a live basis and at $188-$190 dressed.

Cattle feeders offered 4,422 head in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 3,277 head sold, all from Texas and Nebraska and all on a live weight basis. Steer prices ranged from $122.00 to $122.75/cwt. in Nebraska and from $120.00 to $120.75 in Texas. Heifer prices ranged from $122.00 to $122.75 in Nebraska and from $120.50 to $121.00 in Texas.

Cattle futures extended gains Wednesday, supported by higher cash fed cattle prices and the continued increase in wholesale beef values. 

Live Cattle futures closed an average of 49¢ higher.

Feeder Cattle futures closed an average of $1.11 higher (90¢ to $1.60 higher).

Choice boxed beef cutout value was $3.54 higher Wednesday afternoon at $266.31/cwt. Select was $3.89 higher at $255.19.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 3¢ to 10¢ lower through the front four contracts, and then mostly fractionally mixed.

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Major U.S. financial indices closed little changed Wednesday.

The Dow Jones Industrial Average closed 16 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 9 points.

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Agricultural producers are growing more optimistic, according to the latest Purdue University/CME Group Ag Economy Barometer. It rose 12 points month to month in March to 177, the highest level since October 2020.

“Even with a rebound in crop production in 2021, it looks like carryover supplies of corn and soybeans will remain tight, providing producers confidence that crop prices will remain strong this year,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “A rebound in the U.S. economy this summer, combined with expectations for a smaller pork supply, is also providing some optimism in the livestock sector.”

The Index of Future Expectations increased 16 points in March to 164 after declining four consecutive months. The Index of Current Conditions rose 2 points to 202, tying the record high.

Producers’ perspective about their operations’ financial position continues to improve, as well. The Farm Financial Performance Index was 125 in March, up from the record low of 55 in April of last year. In turn, that optimism appears to be fueling short-term optimism for land values.

The Short-Term Farmland Value Expectations Index rose for the fourth consecutive month, up 3 points to 148. The Long-Term Farmland Value Index, matched its previous high, up 4 points to 157.

Producer optimism about U.S.-China trade continued to decline. In March, 31% of survey respondents expected the trade dispute to be resolved in a way that’s beneficial to U.S. agriculture. That’s down 50 points from early last year.

Cattle Current Daily—April 8, 2021 2021-04-07T18:45:17-05:00

Cattle Current Daily—April 7, 2021

Negotiated cash fed cattle trade was at a standstill in Nebraska and the Texas Panhandle through Tuesday afternoon. Elsewhere, trade ranged from limited to mostly inactive on light demand, according to the Agricultural Marketing Service (AMS).

Last week, live prices were at $117/cwt. in the Southern Plains, $118 in Nebraska and $118-$120 in the western Corn Belt. Dressed prices were at $190 in Nebraska and at $188-$190 in the western Corn Belt.

Cattle futures closed mainly higher Tuesday, buoyed by the bullish rise in wholesale beef values. 

Live Cattle futures closed an average of 30¢ higher (5¢ to $1.35 higher), except for 15¢ lower in the back contract

Feeder Cattle futures closed an average of 99¢ higher (2¢ to $1.55 higher), except for unchanged in May.

Choice boxed beef cutout value was $4.10 higher Tuesday afternoon at $262.77/cwt. Select was $1.44 higher at $251.30.

Corn futures closed mostly 4¢ to 5¢ lower, except for 1¢ higher at either end of the board.

Soybean futures closed 1¢ to 6¢ higher.

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Major U.S. financial indices edged lower Tuesday, amid some likely profit taking and rally fatigue.

The Dow Jones Industrial Average closed 96 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 7 points. 

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Economic light continues to shine brighter at the end of the pandemic tunnel.

“Thanks to the ingenuity of the scientific community, hundreds and millions of people are being vaccinated, and this is expected to power recoveries in many countries later this year,” explained Gita Gopinath, Chief Economist and Director of the Research Department at the International Monetary Fund (IMF). “We are now projecting a stronger recovery for the global economy compared with our January forecast.”

Specifically, IMF projects global GDP this year at 6.0% and 4.4% in 2022. That’s from the organization’s latest World Economic Outlook.

“The upgrades in global growth for 2021 and 2022 are mainly due to upgrades for advanced economies, particularly to a sizable upgrade for the United States that is expected to grow at 6.4% this year. This makes the United States the only large economy projected to surpass the level of GDP it was forecast to have in 2022 in the absence of this pandemic,” said Gopinath.

Cattle Current Daily—April 7, 2021 2021-04-06T20:19:09-05:00

Cattle Current Daily—April 6, 2021

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service (AMS).

Last week, live prices were at $117/cwt. in the Southern Plains, $118 in Nebraska and $118-$120 in the western Corn Belt. Dressed prices were at $190 in Nebraska and at $188-$190 in the western Corn Belt.

The five-area direct average steer price was $118.08/cwt. last week on a live basis. That was $2.49 more than the prior week. The average five-area direct steer price in the beef was $189.36, which was $4.89 more.

Cattle futures closed sharply higher Monday, supported by stronger cash prices, increasing wholesale beef values and higher outside markets.

Live Cattle futures closed an average of $1.32 higher.

Feeder Cattle futures closed an average of $2.07 higher, from $1.35 to $2.57 higher.

Choice boxed beef cutout value was $5.82 higher Monday afternoon at $258.67/cwt. Select was $2.89 higher at $249.86.

Corn futures closed mostly 4¢ to 9¢ higher, except for 6¢ lower in the front two contracts.

Soybean futures closed mostly 5¢ to 9¢ higher.

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Major U.S. financial indices closed sharply higher Monday, buoyed by Friday’s positive national employment outlook.

Total nonfarm payroll employment rose by 916,000, month to month, in March, according to the U.S. Bureau of Labor Statistics. That was significantly more than the trade expected. The unemployment rate edged down to 6.0%.

In March, average hourly earnings for all employees on private nonfarm payrolls fell by 4¢ to $29.96.

The Dow Jones Industrial Average closed 373 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 225 points.

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Significantly higher feed costs than last year will encourage feedlots to place cattle at heavier weights, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. In turn, stocker and backgrounders have more incentive to add more weight to cattle.

In his weekly market comments, Peel points out current weekly average cash corn prices are reported at $5.85/bu. in Dodge City, at $5.99/bu. in Garden City and at $6.01/bu. in the Texas Triangle. He explains those prices are 79-82% more than the lows in August.

“Feedlots will also look for opportunities to adjust feedlot rations using cheaper substitute ingredients, if possible,” Peel says. “Wheat may offer some potential in feedlot rations in the coming weeks and months. Winter wheat prices in the Southern Plains have increased in the last eight months but relatively less than corn.”

Peel uses Dodge City prices as an example. The current cash wheat price (hard red winter) is 41% more than in August at $5.37/bu., but it’s cheaper than corn at $5.85/bu.

“In general, a wheat price of 107% of corn price is equivalent on a price per pound basis (60 lbs. of wheat/bu. versus 56 lbs./bu. for corn),” Peel says. “In some circumstances, wheat may have additional feed value compared to corn due to a higher protein content. However, cattle rations typically do not need the additional protein, so wheat value is based primarily on energy content. Feedlots do not change rations quickly or for short periods of time but will adjust if market conditions suggest that an extended period of alternative feeds is likely.” 

Cattle Current Daily—April 6, 2021 2021-04-05T18:35:32-05:00

Cattle Current Daily—April 5, 2021

Negotiated cash fed cattle trade and demand were moderate in Nebraska and the western Corn Belt through Friday afternoon. Elsewhere, trade was mostly inactive on light demand, according to the Agricultural Marketing Service (AMS).

By the end of the week, live prices were $2 higher in the Southern Plains at $117/cwt., $2 higher in Nebraska at mostly $118 (some up to $121) and $3-$4 higher in the western Corn Belt at $119-$120. Dressed trade was $5 higher at $190.

Futures markets were closed Friday, in observance of Good Friday. Feeder Cattle futures closed narrowly mixed, week to week on Thursday. Live Cattle futures closed $1.04 higher, buoyed by escalating wholesale beef values, stronger cash prices and continued strength in Lean Hogs.

Choice was boxed beef cutout value $2.88 higher Friday afternoon at $252.85/cwt. Select was $2.27 higher at $246.97.

Estimated total cattle slaughter the week ending April 3 was 609,000 head, which was 40,000 head fewer than the previous week, according to USDA. Year-to-date estimated total cattle slaughter of 8.36 million head is 295,000 head fewer (-3.4%) than the same period last year. Estimated year-to-date beef production of 7.00 billion lbs. is 152.7 million lbs. less (-2.1%) than last year.

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Equity markets were closed Friday.

The Dow Jones Industrial Average was 533 points higher, week to week on Thursday. The NADASQ closed 502 points higher. The S&P 500 was up 110 points.

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Wholesale beef values continue to climb higher and faster than many expected.

Choice boxed beef cutout value was $15.19 higher week to week on Friday at $252.85/cwt. Select was $19.20 higher at $246.97. That’s $22.86 higher for Choice over the last two weeks; $27.02 higher for Select.

“The two drivers of higher beef prices are likely restaurants increasing dining capacity and consumers continuing to use discretionary spending on their eating experience, since many do not feel comfortable traveling yet. How these factors change as an increasing number of Americans get a coronavirus vaccine will be determined in coming months.” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Consumer willingness to pay (WTP) for ribeye steak and ground beef at retail increased month to month in March, according to the Meat Demand Monitor (MDM), which tracks U.S. consumer preferences, views, and demand for meat with separate analysis for retail and food service channels.

Specifically, WTP for ribeye (retail) increased by $1.42 to $17.21 in March. WTP for ground beef (retail) increased by 76¢ to $8.05. For perspective, WTP also increased for pork chops, bacon and chicken breast. It declined for plant-based patties.

The MDM is a monthly online survey with a sample of over 2,000 respondents reflecting the national population. Agricultural economists Glynn Tonsor at Kansas State University and Jayson Lusk at Purdue University maintain the MDM, which is funded in part by the national beef checkoff and the national pork checkoff.

“The combined beef and pork projected market shares for March are 31% and 21%, respectively, at the grocery store; 38% and 14% at the restaurant,” according to the latest MDM report. “Taste, Freshness, Safety, and Price remain most important when purchasing protein.”

Cattle Current Daily—April 5, 2021 2021-04-03T16:32:32-05:00

Cattle Current Daily—April 2, 2021

Negotiated cash fed cattle prices were $2 higher in Kansas Thursday at $117/cwt., with moderate trade and demand, according to the Agricultural Marketing Service (AMS). For the week, some early live sales traded at $118 in Nebraska and the Texas Panhandle, but too few to trend.

Live prices last week were at $115 in the Texas Panhandle, $116 in Nebraska and $115-$117 in the western Corn Belt. Dressed trade was at $185.

Cattle futures were mixed Thursday amid likely profit taking and repositioning.

Live Cattle futures closed an average of 50¢ lower, except for 35¢ higher in the back contract.

Feeder Cattle futures closed an average of 66¢ higher, except for unchanged and 17¢ lower in the front two contracts. 

Wholesale beef prices continue to climb. Choice boxed beef cutout value was $2.85 higher Thursday afternoon at $249.97/cwt. Select was $6.57 higher at $244.70.

The average dressed steer weight for the week ending Mar. 21 was 901 lbs. according to USDA’s Actual Slaughter Under Federal Inspection repot. That was 3 lbs. lighter than the previous week but 3 lbs. heavier than the same week last year. The average dressed heifer weight of 836 lbs. was 4 lbs. heavier than the previous week but even with the prior year.

Corn futures closed 4¢ to 7¢ higher in the front five new-crop contracts and then fractionally mixed. The two remaining old-crop contracts close 2¢ to 4¢ lower.

Soybean futures closed mixed but mostly 19¢ to 34¢ lower, following the previous session’s limit-up move.

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Major U.S. financial indices closed sharply higher Thursday, buoyed by lower Treasury yield rates and President Biden’s proposed $2 trillion infrastructure plan.

The Dow Jones Industrial Average closed 171 points higher. The S&P 500 closed 46 points higher. The NASDAQ was up 233 points.

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COVID-19 case rates among meat and poultry workers continue to be significantly less than the general population, thanks to safety measures implemented by packers and processors since the pandemic began.

For perspective, the most recent data from the North American Meat Institute (the Meat Institute) indicate the current COVID-19 case rate among meat and poultry workers is 2.67 cases per day per 100,000 workers. That’s more than 85% lower than rates in the general population (18.25 cases per day per 100,000 people) and more than 98% lower than the May 2020 peak in the sector of 98.39 cases per day per 100,000 workers.

“Frontline meat and poultry workers were among the first impacted by the pandemic, but comprehensive protections implemented in the sector since spring 2020 work,” says Julie Anna Potts, president and CEO of the Meat Institute.

For example, the University of Nebraska Medical Center found that the combination of universal masking and physical barriers reduced cases significantly in 62% of meat facilities studied. An analysis published in the Lancet in June 2020 found that distancing of 3 ft. and use of facemasks each reduce transmission by about 80%, and use of eye protection reduces transmission by about 65%.

“The critical next step is to ensure immediate access to vaccines as this dedicated and diverse workforce continues feeding Americans and keeping our farm economy working,” Potts says.

Cattle Current Daily—April 2, 2021 2021-04-01T19:25:26-05:00

Cattle Current Daily—April 1, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska through Wednesday afternoon. Although too few to trend, there were some early live sales at $118/cwt., which was $2 higher than last week. Trade was mostly inactive on light demand in the Southern Plains, according to the Agricultural Marketing Service (AMS). Elsewhere, it was at a standstill.

Buyers of Nebraska cattle in Central Stockyards’ weekly Fed Cattle Exchange auction also paid $118 for 1,725 head. Overall, cattle feeders offered 4,593 head; 2,038 head sold—all via live weight—for a weighted average price of $117.77.

Live Cattle futures gained on the outlook for higher cash prices, as well as ongoing strength in wholesale beef values.

Live Cattle futures closed an average of 82¢ higher, except for unchanged in spot Apr.

Feeder Cattle futures wilted beneath the weight of resurgent grain futures prices, tied to USDA’s Prospective Plantings report (see below).

Feeder Cattle futures closed an average of $2.41 lower. 

Choice boxed beef cutout value was $2.29 higher Wednesday afternoon at $247.12/cwt. Select was $2.21 higher at $238.13.

Grain futures spiked higher Wednesday—especially Corn and Soybeans—based on USDA’s Prospective Plantings report. Producers intend to plant more acres to both crops this year than last, but far fewer than expectations ahead of the report.

Corn futures closed mostly 18¢ higher to limit up 25¢.

Soybean futures closed 44¢ higher to limit up 70¢.

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Major U.S. financial indices closed mixed Wednesday, with the broadest gains in big tech stocks.

The Dow Jones Industrial Average closed 85 points lower. The S&P 500 closed 14 points higher. The NASDAQ was up 201 points.

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Producers surveyed across the United States intend to plant an estimated 91.1 million acres of corn in 2021, according to USDA’s Prospective Plantings report from the National Agricultural Statistics Service (NASS). That’s 325,000 more acres than last year, but about 2 million acres shy of expectations ahead of the report.

Planted acreage intentions for corn are up or unchanged in 24 of the 48 estimating states. The largest increases are expected in the Dakotas, where producers intend to plant a combined 8.90 million acres, an increase of 2.00 million acres from 2020. Producers across most of the Corn Belt intend to plant fewer acres than last year. If realized, the planted area of corn in Idaho and Oregon will be the largest on record.

Corn stocks in all positions on March 1 of 7.70 billion bu. were 3% less than a year earlier, according to USDA’s Grain Stocks report.

Soybean growers intend to plant 87.6 million acres in 2021, up 5% from last year, but about 2.5 million acres shy of pre-report expectations by private analysts. If realized, this will be the third highest planted acreage on record. Compared with last year, planted acreage is expected to be up or unchanged in 23 of the 29 states estimated.

Soybeans stored in all positions on March 1 of 1.56 billion bu. were 31% less year over year.

All wheat planted area for 2021 is estimated at 46.4 million acres, up 5% from 2020. This represents the fourth lowest all wheat planted area since records began in 1919.

All wheat stored in all positions on March 1 of 1.31 billion bu. were 7% less than a year earlier.

Cattle Current Daily—April 1, 2021 2021-04-01T12:44:18-05:00

Cattle Current Daily—March 31, 2021

Negotiated cash fed cattle trade was limited on light demand in the Texas Panhandle through Tuesday afternoon. Although too few to trend, there were some early live sales at $116/cwt. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service (AMS).

Last week, live prices were at $115/cwt. in the Sothern Plains, mostly $116 in the Northern Plains and at $115-$117 in the western Corn Belt. Dressed trade was at mostly $185.

Feeder Cattle futures edged higher Tuesday, helped along by softer Corn futures. Live Cattle were mixed, taking a breather ahead of cash direction.

Live Cattle futures closed narrowly mixed, from 42¢ lower to 15¢ higher.

Feeder Cattle futures closed an average of 48¢ higher, except for 25¢ lower and unchanged in the front two contracts. 

Choice boxed beef cutout value was $5.30 higher Tuesday afternoon at $244.83/cwt. Select was $3.42 higher at $235.90.

Corn futures, and especially Soybean futures, closed lower Tuesday with likely profit taking and positioning ahead of USDA’s Prospective Plantings report due out Wednesday.

Corn futures closed mostly 4¢ to 8¢ lower.

Soybean futures closed 22¢ to 27¢ lower through the front four contracts, and then mostly 11¢ to 18¢ lower.

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Major U.S. financial indices closed lower Tuesday, pressured by rising Treasury yield rates and worries about increasing interest rates.

The Dow Jones Industrial Average closed 104 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 14 points.

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 “Americans feel better than ever about choosing meat as part of healthy, balanced diets. With COVID-19 deepening demand for convenient, affordable food that tastes good and matches Americans’ values, meat fits the bill,” says Julie Anna Potts, president and CEO of the North American Meat Institute (the Meat Institute).

Potts is referring to the recently released annual Power of Meat report conducted by 210 Analytics on behalf of FMI and the Meat Institute’s Foundation for Meat and Poultry Research and Education.

The national analysis shows that three out of every four Americans agree meat belongs in healthy, balanced diets, up by nearly 20% since 2020; 94% say they buy meat because it provides high-quality protein.

Nearly all American households (98.4%) purchased meat in 2020 (IRI data) and 43% of Americans now buy more meat than before the pandemic, primarily because they are preparing more meals at home.

The proportion of meals prepared at home peaked at 89% in April 2020 and remained at 84% in December (IRI), considerably above pre-pandemic levels and particularly impacting Millennials who were previously most likely to eat out.

“Shoppers are cooking more at home due to the COVID-19 pandemic, and their confidence in cooking and preparing meat has increased,” says Rick Stein, FMI vice president of fresh foods. “Further analysis also shows convenient meal solutions are key and that food retailers have opportunities to provide more choices, along with more information and education on consumer priorities like nutrition and meal preparation, building up what we call consumers’ Meat IQ.”

The number of meat shoppers who purchased groceries online grew 40% in 2020, and 59% of online purchasers expect to continue purchasing about the same amount online in this year, suggesting food shopping habits may have changed permanently.

Cattle Current Daily—March 31, 2021 2021-03-30T22:36:33-05:00

Cattle Current Daily—March 30, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Northern Plains through Monday afternoon. Elsewhere, it was mostly inactive on very light demand with too few transactions to trend, according to the Agricultural Marketing Service (AMS).

Last week, live prices were $1 higher in the Southern Plains at $115/cwt., $2 higher in the Northern Plains at mostly $116 and $1-$2 higher in the western Corn Belt at $115-$117. Dressed trade was $3-$5 higher at $185.

The five-area direct average steer price last week was $115.38/cwt. on a live basis, which was $1.14 higher than the previous week. The five-area direct average steer price in the beef was $184.66,which was $2.98 higher.

Cattle futures bounced higher Monday, amid active trade, extending last week’s gains, with ongoing support from higher wholesale beef values, last week’s  stronger cash prices and softer Corn futures.

Live Cattle futures closed an average of 61¢ higher, except for unchanged and 5¢ lower in the back two contracts.

Feeder Cattle futures closed an average of $1.28 higher, from 15¢ higher toward the back to $2.32 higher toward the front. 

The CME Feeder Cattle Index was $2.10 higher at $138.85.

Choice boxed beef cutout value was $1.87 higher Monday afternoon at $239.53/cwt. Select was $4.73 higher at $232.50.

Corn futures closed 2¢ to 5¢ lower.

Soybean futures closed 1¢ to 2¢ lower, except for 5¢ to 7¢ lower in the front three contracts.

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Major U.S. financial indices closed narrowly mixed to lower Monday, following strong pressure early in the session from bank stocks. According to various reports, the pressure stemmed from the forced liquidation of more than $20 billion by a hedge fund that got caught upside down in bad bets and margin calls; ripple effects ensued.

The Dow Jones Industrial Average closed 98 points higher. The S&P 500 closed 3 points lower. The NASDAQ was down 79 points.

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“As April arrives, the current drought situation looms larger and potential impacts on cattle markets are increasing with each passing week,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The latest Drought Monitor shows that 43.55% of the continental U.S. is in some degree of drought (D1-D4), including 18.06% in Extreme and Exceptional drought (D3-D4). Additionally, another 20.66% of the country is abnormally dry (D0), which means that only 35.79% of the U.S. is free of drought conditions. At the beginning of March one year ago, over 76% of the U.S. was drought free.”

The current drought, which began to advance a year ago, has progressed more rapidly than any drought in more than 20 years, Peel says. He adds an aggregate annual index of drought conditions is currently at the highest level (worst drought) since 2014. 

So far, Peel notes the most significant drought impacts appear to be in Colorado, where the beef cow inventory declined by 112,000 head (-14.5%) year over year Jan. 1 and replacement heifers declined by 16.1%.

“Drought conditions plagued much of the desert southwest in 2020 but cow herd liquidation in Nevada, New Mexico and Utah totaled just 34,000 head. As bad as they were, these cowherd losses were not enough to cause significant general cattle market impacts. Significantly higher hay prices were noted in 2020 in the western drought region,” Peel says. “If a drought is severe enough, over a big enough region, and lasts long enough, broader market values may be affected resulting in lower prices for cattle and higher prices for feeds and other inputs. This can result in additional challenges for drought impacted producers, as well as impacts on producers outside the drought region.” 

Moreover, odds favor La Niña conditions into the summer, according to Art Douglas, professor emeritus at Creighton University and long-time CattleFax meteorologist. He forecasts the Southwest U.S. will be warmer than normal, and the western half of the country will be relatively dry. Dry conditions in the Rockies will eventually extend into the central Corn Belt, he says, causing concerns for corn and soybean growers.

“Arguably the most concerning areas now are North and South Dakota and Texas. Persistence or expansion of drought in these areas (which have large beef cattle numbers), in conjunction with ongoing drought in Rocky Mountain and desert southwest regions could result in levels of herd liquidation/movement that broadly impact cattle markets,” Peel says. “If the drought preempts spring forage growth in these regions, market impacts could develop rapidly in the next three to five months. Conditions in the coming weeks may have significant cattle market impacts on producers in drought regions, producers in regions where drought is or could develop, as well as producers outside of drought areas.”

Cattle Current Daily—March 30, 2021 2021-03-29T19:02:54-05:00

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