Daily Market Highlights

Cattle futures bounced around last week, but never outran the shadow of the unexpectedly large March feedlot placements suggested by the latest Cattle on Feed report that came out the previous Friday.

Sagging wholesale beef values and worries that elevated retail beef prices are beginning to chip at demand added pressure to Live Cattle futures, which closed an average of $2.90 lower week to week on Friday. They closed an average of 84¢ lower on Friday, except for $3.40 higher in expiring Apr.

Choice boxed beef cutout value was $7.13 lower week to week on Friday at $260.78/cwt. Select was $6.80 lower at $247.97.

However, negotiated cash fed cattle prices were steady to higher amid snugger supplies before the anticipated summer bulge.

Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to limited with light demand, with too few transactions too trend, according to the Agricultural Marketing Service.

Live prices last week were steady in the Southern Plains at $140/cwt.; steady to $1 higher in the Northern Plains at $144-$146 and in the Western Corn Belt at $145-$147. Dressed prices were $2 higher at $232.

Through Thursday, the weighted average direct fed steer price was 31¢ higher on a live basis at $143.31/cwt. The average steer price in the beef was 42¢ higher at $232.32.

Estimated total cattle slaughter last week of 656,000 head was 9,000 head fewer than the previous week but 3,000 head more than the same week last year. Year-to-date total estimated cattle slaughter of 11.01 million head is 51,000 head more than the same time last year. Total estimated year-to-date beef production through last week was 9.20 billion lbs., which was 706,000 lbs. more (+0.77 %) than a year earlier.

Feeder cattle futures closed an average of $1.87 lower on Friday and an average of $7.73 lower week to week, as Corn futures gained an average of 25.6¢ in the front six contracts during the same time.

******************************

Major U.S. financial indices tumbled Friday, led by tech stocks and growing uncertainty about domestic and global economic growth, challenged by high inflation and COVID hotspots.

The Dow Jones Industrial Average closed 939 points lower. The S&P 500 closed 155 points lower. The NASDAQ was down 536 points.

******************************

“The main conclusion is that there is no relationship between price discovery and the volume of negotiated cash trade. There is no clear overall problem that price discovery is somehow deficient in regional fed cattle markets. Mandating cash trade does not address a price discovery problem that is observed today or since the beginning of Livestock Mandatory Reporting.”

That was one of the insights Stephen Koontz, agricultural economist at Colorado State University provided in testimony during last week’s Senate hearing to review the Cattle Price Discovery and Transparency Act of 2022, and the Meat and Poultry Special Investigator Act of 2022.

Koontz’s insights are based on a bevy of research during his career exploring cash price discovery in cattle markets.

“It is also important to recognize what price discovery is not – price discovery is not higher prices,” Koontz explained. “Price discovery is the market moving quickly and clearly to the appropriate price level. At times this is a lower fed cattle price and other times a higher price. It is a common misconception that better price discovery implies better prices for the individual contemplating the issue. And there is no scientific evidence that improved price discovery has value not already revealed in price nor will improve prices to producers.”

On the other hand, mandating minimum levels of regional cash fed cattle trade, thereby reducing the use of alternative marketing arrangements, would come at a heavy cost, likely borne mostly by cow-calf producers.

“Mandating minimum cash trade is substantially costly. Costs are at least hundreds of millions of dollars and more likely billions of dollars. These costs will be leveled on cow‐calf producers nationwide and consumers of beef both domestically and internationally,” Koontz explained. “Primary research which discovered these costs is almost 20 years old – but the economic concepts are foundational and the costs today are likely substantially higher. There is no research which can attribute higher cattle prices to mandated cash trade. Likewise, my preliminary work has revealed to me that price discovery is not improved with mandated cash trade. The price discovery we currently have in regional fed cattle markets is not deficient. And the cost‐benefit of mandated cash trade is clear.”

Feeder Cattle futures firmed Thursday, closing an average of 87¢ higher, except for 27¢ lower in expiring Apr. They were helped along by the mainly narrowly mixed close in Corn futures. 

The overall continued decline in wholesale beef prices and weaker weekly exports helped pressure Live Cattle Live futures an average of 47¢ lower, except for unchanged in almost-spent spot Apr.

Choice Boxed beef cutout value was 69¢ higher Thursday afternoon at $262.60/cwt. Select was $1.26 lower at $251.06.

Negotiated cash fed cattle trade ranged from a standstill to mostly inactive, with too few transactions too trend, according to the Agricultural Marketing Service.

So far this week, live prices are steady in the Southern Plains at $140/cwt.; steady to $1 higher in the Northern Plains at $144-$146 and in the Western Corn Belt at $145-$147. Dressed prices are $2 higher at $232.

******************************

Major U.S. financial indices surged Thursday, fueled by tech stocks and positive quarterly corporate earnings reports. That was despite news from the Bureau of Economic Analysis (BEA) that real gross domestic product (GDP) decreased at an annual rate of 1.4% in the first quarter of this year, according to the advance estimate. In the fourth quarter, real GDP increased 6.9%.

According to BEA, the decline reflected decreases in private inventory investment, exports, federal government spending, and state and local government spending, while imports, which are a subtraction in the calculation of GDP, increased.

The Dow Jones Industrial Average closed 614 points higher. The S&P 500 closed 103 points higher. The NASDAQ was up 382 points.

******************************

The Creighton University Rural Mainstreet Index (RMI) declined to 62.0 in April from 65.4 a month earlier but remained above growth-neutral for the 17th consecutive month. The RMI results from a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

“The region recorded a 34% gain in farm commodity prices over the past 12 months, but low short-term interest rates and healthy farm income have underpinned the Rural Mainstreet Economy,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heifer College of Business.

Among highlights from the latest survey:

The region’s farmland price index for April climbed 2 points to 80.0, marking the 19th straight month the index was above growth neutral. For the past several months, the RMI survey registered the strongest, most consistent growth in farmland prices since the survey was launched in 2006.

Russia’s invasion of Ukraine, along with accompanying global trade tensions and surging inflation, pushed the business confidence index to its lowest level since the beginning of the pandemic in Spring 2020. The index, which reflects bank CEO expectations for the economy six months out, plummeted to 39.1 from 54.0 in March.

This month bankers were asked to forecast the impact of President Biden’s emergency waiver on the summer production of E-15 ethanol. Fewer than 4 of 10 bankers (39.1%) expect President Biden’s emergency waiver on the summer production of E-15 ethanol to have a positive impact. More than half (56.5%) expect the waiver to have little or no impact.

Another day of higher Corn futures weighed heavily on Feeder Cattle futures, Wednesday, which closed an average of $3.35 lower ($2.57 to $4.20 lower), except for unchanged in expiring Apr

After 12¢ and 10¢ higher in the front two contracts, Corn futures closed mostly fractionally higher to 6¢ higher, pushed along by Soybean futures, which closed 20¢ to 22¢ higher through Jan ‘23.  

Technical pressure and looming large supplies pressured Live Cattle futures an average of $1.03 lower, replacing early-week bullishness tied to stronger weekly cash prices.

Negotiated cash fed cattle trade on Wednesday ranged from a standstill to light on slow to moderate demand, with too few transactions too trend, according to the Agricultural Marketing Service.

So far this week, live prices are steady in the Southern Plains at $140/cwt.; steady to $1 higher in the Northern Plains at $144-$146 and in the Western Corn Belt at $145-$147. Dressed prices are $2 higher at $232.

Choice Boxed beef cutout value was $2.26 lower Wednesday afternoon at $261.91/cwt. Select was $3.91 lower at $252.32.

******************************

Major U.S. financial indices closed little changed Wednesday, as investors appeared to take a breath and wait for further direction from corporate earnings reports.

The Dow Jones Industrial Average closed 61 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 1 point.

******************************

Both the U.S. Senate and House of Representatives held hearings this week regarding the Cattle Price Discovery and Transparency Act of 2022, which would mandate regional minimum levels of negotiated cash fed cattle trade. A team of America’s foremost livestock economists assessed the proposed bill ahead of the hearings. Here are some of the highlights from their report:

• “There is no research evidence of any significant or persistent fed cattle price discovery problem at this time. This legislation is attempting to solve a problem that does not exist. As such, this legislation offers zero benefits for fed cattle markets and imposes many millions of dollars of additional cost, added risk, and lost value. The exact cost will depend on details of implementation, but the cost is minimally hundreds of millions of dollars resulting in lower feeder cattle prices and higher consumer beef prices.”
• “The incentives to reduce risks and transactions costs for producers and packers associated with quality and timing of sales and deliveries to plants will still exist with implementation of this bill. As such, forcing “minimum thresholds” will increase these risks and transactions costs for both producers and packing plants utilizing AMAs at a level beyond whatever the prescribed minimums, that cannot be objectively justified, turn out to be if this bill is implemented.”
• “There is no academic literature that indicates any analysis pointing toward benefits that can be quantified with these minimum thresholds. Benefits of reduced AMA use (alternatively, higher negotiated cash trade) are generally speculative. As noted, evidence that higher negotiated trade will positively impact prices, reduce marketing margins, or improve price discovery is lacking. However, many market participants clearly see negotiated cash trade as a good in and of itself. To the extent the industry desires greater cash market engagement, lower cost means of achieving this outcome are available.”

Steady to stronger negotiated cash fed cattle prices helped Live Cattle futures closed an average of 65¢ higher.

Negotiated cash fed cattle trade was moderate through Tuesday afternoon  in Nebraska and the Southern Plains, according to the Agricultural marketing Service.

So far this week, live prices are steady in the Southern Plains at $140/cwt. and steady to $1 higher in Nebraska at $145-$146. Dressed prices are unevenly steady at $232 in Nebraska.

Feeder Cattle futures closed an average of $1.18 lower, pressured by Corn futures, which were up mostly 3¢ to 9¢, supported by slow planting progress. Soybean futures closed mostly 1¢ to 11¢ higher.

Choice Boxed beef cutout value was $2.43 lower Tuesday afternoon at $264.17/cwt. Select was 29¢ lower at $256.23.

******************************

Major U.S. financial indices fell Tuesday on mixed corporate earnings, news of Russia cutting energy supplies to Poland and Bulgaria, continued Covid lockdowns in China and uncertainty over the Fed’s ability to rein in inflation without the economy weakening.

The Dow Jones Industrial Average closed 809 points lower. The S&P 500 closed 121 points lower. The NASDAQ was down 514 points.

******************************

“Every producer wants fair market value for the animals we raise and produce and many of us achieve that true value through value-based alternative marketing arrangements. Accordingly, I do not support a government mandate, of any kind,” said Shawn Tiffany, Kansas Livestock Association president-elect. That was during Tuesday’s Senate Committee on Agriculture, Nutrition, and Forestry hearing to discuss transparency and oversight within cattle marketing, specifically the Cattle Price Discovery and Transparency Act.

The Cattle Price Discovery and Transparency Act would mandate regional minimums for cash fed cattle trade. Tiffany testified in opposition to a government mandate as it could result in fewer marketing opportunities and less incentive for producers to invest in genetics and innovative production techniques that lead to higher-quality beef.

“Regardless of how well intentioned the concept of helping producers obtain fair market value for their animals, the end result will be fewer marketing options for U.S. producers,” Tiffany explained.

Friday’s bearish Cattle on Feed report took Cattle futures down a peg on Monday.

Feeder Cattle futures closed an average of $1.78 lower ($1.25 to $2.57 lower), and Live Cattle futures closed an average of $1.83 lower (72¢ lower toward the back to $3.35 lower in spot Apr).

Negotiated cash fed cattle trade opened the week at steady money of $140/cwt. in the Texas Panhandle on moderate trade and light demand. Elsewhere, trade was mostly inactive on light demand with too few transactions to trend, according to the Agricultural Marketing Service.

Last week, live prices were $1 higher in the Southern Plains at $140/cwt., $4 higher in Nebraska at $144-$146, $3-$4. higher in Colorado at $144-$145  and $3 higher in the western Corn Belt at $145-$146. Dressed prices were $4 higher at $230.

The weighted average five-area direct steer price last week was $2.00 higher on a live basis at $143.02/cwt. The average dressed steer price was $6.40 higher at $232.29.

Corn futures closed mostly 7¢ to 14¢ higher, but Soybean futures closed 10¢ to 12¢ lower through Jan ‘23 and then mostly 3¢ to 9¢ lower.

 Wholesale beef prices were mixed with Choice Boxed beef cutout value $1.31 lower Monday afternoon at $266.60/cwt. , while Select was $1.75 higher at $256.52.

******************************

Major U.S. financial indices clawed back some of the previous session’s steep losses on Monday, amid another volatile day of trade and supported by positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 238 points higher. The S&P 500 closed 24 points higher. The NASDAQ was up 165 points.

West Texas Intermediate Crude Oil futures closed $2.68 to $3.53 lower through the front six contracts, apparently pressured by slowing economic growth that could be compounded by the recent COVID outbreak in China.

******************************

“The unexpectedly large March feedlot placement total may indicate unusual movement of feeder cattle out of the country. It is possible that some heifers originally designated as replacements on Jan. 1 are already being diverted to feedlots,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

As noted in the last issue of Cattle Current, according to the latest monthly Cattle on Feed report (feedlots with 1,000 head or more capacity), March feedlot placements were slightly less (-8,000 head) than a year earlier at 1.99 million head. However, pre-report expectations expected a decrease of about 8%, based on auction totals and other data.

Peel notes the largest increase in placements occurred in Nebraska (+6.8%), while placements were even with the previous year in Kansas and Colorado. Placement were lower year over year in Texas (-6.5%) and Iowa (-10.7%).

“As May approaches and widespread drought conditions persist, cattle industry impacts are expected to accelerate in the coming weeks,” Peel says. “However, there are indications that drought is already impacting cattle markets significantly.”

Heading into the new week, the primary focus is likely reaction to Friday’s monthly Cattle on Feed report for feedlots with 1,000 head or more capacity.

On the surface, it confirms the severity and duration of the current drought, with March placements about 8% more than expected, following surging placements the previous month. Beneath the surface, though, there likely will be some head scratching about how they square with USDA numbers at the beginning of the year suggesting the feeder supply outside of feedlots was 676,000 head fewer (-2.6%) than last year.

March placements of 1.99 million head were 8,000 less year over year — fractionally less — which was about 8% more than expectations ahead of the report.

In terms of placement weights, 35% went on feed weighing 699 lbs. or less, 53% weighing 700-899 lbs. and 12% weighing 900 lbs. or more.

Marketings in March of 2.0 million head were 41,000 head fewer (-2.0%) than the previous year, about even with pre-report expectations.

Cattle on feed April 1 of 12.11 million head were 208,000 head more (+1.7%) than the previous year. That’s the most for the date since the data series began in 1996 and slightly more than expectations ahead of the report.

******************************

Cattle futures softened to end an otherwise positive week.

Perhaps there was some profit taking, but pressure in Live Cattle mirrored the logical response to numbers revealed in the monthly Cattle on Feed report. Presumably, however, the report was not released until after trading hours.

Feeder Cattle futures closed mixed, from an average of 53¢ lower to an average of 36¢ higher, while Live Cattle futures closed an average of 97¢ lower (20¢ lower at the back to $1.65 lower in spot Apr).

Week to week, though — from the previous Thursday through Friday — Feeder Cattle futures an average of $2.15 higher, except for 25¢ lower in waning spot Apr, and Live Cattle futures closed an average of $1.41 higher.

For much of the week, Cattle futures received support from a reprieve in the relentless surge of Corn futures prices and mostly from stronger cash fed cattle prices.

Negotiated cash fed cattle prices last week were $1 higher on a live basis in the Southern Plains at $140/cwt., $4 higher in Nebraska at $144-$146 and $3 higher in the western Corn Belt at $145-$146. Dressed prices were $4 higher at $230.

Through Thursday, the weighted average five-area direct steer price was $1.98 higher on a live basis at $143.00/cwt. The average dressed steer price was $6.03 higher at $231.90.

******************************

Major U.S. financial indices plunged Friday on disappointing quarterly corporate earnings reports and follow-through pressure from the previous day tied to inflation and hawkish comments from the Fed suggesting a stronger response via interest rate hikes.

The Dow Jones Industrial Average closed 981 points lower. The S&P 500 closed 121 points lower. The NASDAQ was down 335 points.

A hard break in Corn futures and likely positioning ahead of Friday’s monthly Cattle on Feed report gave Feeder Cattle futures more room to run, up an average of $2.32.

Corn futures closed mostly 9¢ to 16¢ lower on leaner weekly export sales and ethanol production, as well as likely profit taking.

Soybean futures closed 1¢ to 5¢ higher, helped along by vegetable oil prices.

Feeder Cattle support also came from stronger cash fed cattle prices this week that helped Live Cattle futures close an average of $1.05 higher.

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

So far this week, negotiated cash fed cattle prices are $1 higher on a live basis in the Southern Plains at $140/cwt., $4 higher in Nebraska at $144-$146 and $3 higher in the western Corn Belt at $145-$146. Dressed prices are $4 higher at $230.

Choice Boxed beef cutout value was $1.35 higher Thursday afternoon at $270.17/cwt. Select was 85¢ lower at $255.68.

Carcass weights continue higher year over year. For the week ending April 9, the average dressed steer weight was 12 lbs. heavier at 912 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 11 lbs. heavier at 840 lbs. The same week, 78,681 beef cows were slaughtered, which was 20.8% more year over year.

Net U.S. beef export sales of 15,000 metric tons (mt) were 13% less than the previous week and 27% less than the prior four-week average, according to the U.S. Weekly Export Sales for the week ending April 14. Increases were primarily for Japan, South Korea, China, Canada, and Taiwan.

******************************

Major U.S. financial indices closed sharply lower Thursday, pressured by inflation concerns and rising Treasury yield rates. Earlier in the session, indices were sharply higher on positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 368 points lower. The S&P 500 closed 65 points lower. The NASDAQ was down 278 points.

******************************

Recent widespread winter storms eased drought conditions a bit last week. According to the latest U.S. Drought Monitor, 65.82% of the nation is classified from abnormally dry (D0) to exceptional drought (D4), compared to 67.44% a week earlier and 64.68% a year earlier when drought was already prevalent in some regions.

However, areas affected by Extreme (D3) or exceptional drought expanded from 19.37% the previous week to 20.24%; it was 21.14% at the same time last year.

In the High Plains, except for North Dakota and areas of bordering states, “…windy, dry weather raised dust, resulting in fast-spreading wildfires, and led to a broad increase in the coverage of abnormal dryness (D0) and moderate to extreme drought (D1 to D3),” according to the U.S. Drought Summary (USDS).

USDS analysts say a classic La Niña regime developed in the West during recent weeks, bringing moisture to northern California and the Pacific Northwest, eastward to the northern Rockies.

“At the same time, dry, often windy weather has affected the nation’s southwestern quadrant. As a result, deterioration has been observed in parts of the Southwest, particularly in New Mexico,” analysts say.

Another day of stronger cash trade added lift to Cattle futures an average of $1.60 higher.

So far this week, negotiated cash fed cattle prices are $1 higher on a live basis in the Southern Plains at $140/cwt., $4 higher in Nebraska at $144-$146 and $3 higher in the western Corn Belt at $145-$146. Dressed prices are $4 higher at $230.

Through Wednesday afternoon, trade was slow on light demand in Nebraska at $146 and in the western Corn Belt at $145, but too few to trend, according to the Agricultural Marketing Service.

Choice Boxed beef cutout value was $1.11 lower Wednesday afternoon at $268.82/cwt. Select was $2.68 lower at $256.53.

Mainly firm Corn futures continued to add support to Feeder Cattle, which closed an average of $1.47 higher.

Corn futures closed mostly fractionally higher to 1¢ higher, except for 11¢ and 10¢ higher in the front two contracts.

Soybean futures closed 12¢ to 30¢ higher in the front four contracts and then mostly 7¢ to 9¢ higher.

******************************

Major U.S. financial indices closed mixed Wednesday with pressure in tech stocks but mostly positive quarterly corporate earnings reports in other sectors.

The Dow Jones Industrial Average closed 249 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 166 points.

******************************

Global economic recovery from the pandemic declined considerably due to Russia’s invasion of Ukraine, according to the latest semiannual World Economic Outlook from the International Monetary Fund (IMF).

IMF projects global economic growth to slow from an estimated 6.1% last year to 3.6% this year, which is 0.8% less than the organization’s expectations in January.

“The economic effects of the war are spreading far and wide—like seismic waves that emanate from the epicenter of an earthquake—mainly through commodity markets, trade, and financial linkages,” according to the report. “Because Russia is a major supplier of oil, gas, and metals, and, together with Ukraine, of wheat and corn, the current and anticipated decline in the supply of these commodities has already driven their prices up sharply.”

Compared to its January projection, IMF increased expected inflation in advanced economies this year 1.8% to 5.7%. Inflation expectations for emerging and developing economies grew 2.8% to 8.7%.

“The war in Ukraine will amplify economic forces already shaping the global recovery from the pandemic,” say IMF analysts. “The war has further increased commodity prices and intensified supply disruptions, adding to inflation. Even before Russia invaded Ukraine, broad price pressures had led central banks to tighten monetary policy and indicate increasingly hawkish future stances. As a result, interest rates had risen sharply and asset price volatility had increased since the start of 2022—hitting household and corporate balance sheets, consumption, and investment. The prospect of higher borrowing costs has also increased the cost of extended fiscal support. These changes are occurring faster than previously expected even as many parts of the global economy—particularly countries with low vaccination rates—must contend with continued strain on health care systems because of the pandemic.”

Negotiated cash fed cattle trade jumped out to an early and positive start Tuesday with prices $1 higher in the Southern Plains at $140/cwt. on moderate trade and demand, according to the Agricultural Marketing Service.

Elsewhere, trade ranged from a standstill to mostly inactive on very light demand with too few transactions to trend.

Last week, live prices were at $140-$142 in the Northern Plains and at $142-$143 in the western Corn Belt. Dressed prices were $225-$227 in Nebraska and $226 in the western Corn Belt.

Choice Boxed beef cutout value was $1.15 lower Tuesday afternoon at $269.93/cwt. Select was 25¢ lower at $259.21.

Stronger cash fed cattle prices helped Live Cattle futures close an average of 49¢ higher, except for 15¢ lower in the back two contracts.

Softer front-month Corn futures helped give Feeder Cattle a reprieve, closing an average of 69¢ higher, except for 2¢ land 5¢ lower in two contracts.

Corn futures closed 1¢ to 9¢ lower through new-crop contracts and then 1¢ to 5¢ higher.

Soybean futures closed mixed; fractionally lower to 1¢ higher through Nov ’22 and then mostly 7¢ to 9¢ higher.

******************************

Major U.S. financial indices rallied Tuesday on mainly positive quarterly corporate earnings reports, a day of lower energy prices and positive news on the housing front.

Privately‐owned housing units authorized by building permits in March were 1.87 million, which was 0.4% more than the previous month and 6.7% more than the previous year, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

Privately‐owned housing starts in March were 1.79 million, which was 0.3% more than the previous month and 3.9% more than the previous year.

The Dow Jones Industrial Average closed 499 points higher. The S&P 500 closed 70 points higher. The NASDAQ was up 287 points.

West Texas Intermediate Crude Oil futures on the CME closed $4.58 to $5.65 lower through the front six contracts.

******************************

“Beef heifer retention was lower coming into 2022, which suggests continued contraction in beef cow numbers. It is still early in the year, but beef cow slaughter through the end of March points to another year of heavy culling,” says Kenny Burdine, Extension livestock economist at the University of Kentucky. “The combination of dry weather and strong cull cow prices are likely to keep cows moving and encourage producers to pull the trigger a little sooner on those cows as they approach the end of their productive lives. This is definitely something to watch as we move through the current year, and it is hard to imagine that we won’t be discussing another decrease in beef cow numbers at the start of 2023.”

Burdine provides a perspective in the latest Cattle Market Notes Weekly. Year to date, through the end of March, he explains beef cow slaughter is 17% more than last year. Even if you adjust for paltry slaughter numbers during last year’s February ice storm, he notes beef cow slaughter is still more than 14% higher year over year.

Cattle futures closed lower Monday as Corn futures continued to rally 12¢ to 23¢ higher through old-crop and new-crop contracts, perhaps also buoyed by the slow planting pace.

According to the latest USDA Crop progress report, 4% of the corn is in the ground compared to 7% last year and the five-year average of 6%.

Feeder Cattle futures closed an average of $2.36 lower, while Live Cattle futures closed an average of 69¢ lower, except for 2¢ higher in the back contract.

For much of last week, Cattle futures got a boost from stronger negotiated cash fed cattle prices that were $1-$4 higher on a live basis, depending on the region at $139-$143/cwt. Dressed prices were $3-$5 higher at $225-$227.

On Monday, negotiated cash fed cattle trade ranged from inactive on light demand to a standstill, according to the Agricultural Marketing Service.

The five-area direct weighted average steer price last week was $141.02/cwt., which was $2.20 more than the previous week. The average steer price in the beef was $3.46 higher at $225.89.

Choice Boxed beef cutout value was $1.54 lower Monday afternoon at $271.08/cwt. Select was 56¢ higher at $259.46.

******************************

Major U.S. financial indices edged lower in a volatile session Monday, as investors considered inflation, surging commodity markets and quarterly corporate earnings reports due out this week.

The Dow Jones Industrial Average closed 39 points lower, The S&P 500 closed fractionally lower. The NASDAQ was down 18 points.

******************************

Reduced production and high prices will likely mean fewer U.S. beef exports this year, although exports are expected to remain at historically high levels.

Last year, U.S. beef exports comprised 12.3% of domestic production at 3.45 billion lbs. This year, USDA’s Economic Research Service (ERS) projects exports at 3.3 billion lbs., which would be 11.9% of production.

Globally, beef production is expected to grow this year and global beef trade is projected to continue at record levels, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

Specifically, in his weekly market comments, Peel says beef production this year is expected to grow in Brazil, China, India, Australia and Mexico. Projections anticipate reduced production in the U.S., Canada, the European Union (E.U.) and Argentina.

“Brazil is projected to be the largest beef exporting country again in 2022 with exports forecast to increase 12.1% year over year,” Peel says. “Brazil has been the largest beef exporting country for the last five years consecutively and the largest in 14 of the last 20 years after first becoming the largest exporting country in 2004. Brazil is projected to account for 22% of global beef exports this year.”

By way on contrast, Peel explains the U.S. is expected to be the second-largest global beef exporter this year. India is third largest and Australia will likely rank fourth. These four countries would represent about 60% of global beef exports this year, according to Peel.

On the other side of the scale, Peel says the U.S. is projected to be the second largest beef importer in the world behind China/Hong Kong. Much of the beef imported to the U.S. is lean trim used in ground beef blends.

“Although global beef trade is summarized in terms of total quantities, it is important to recognize that beef consists of many different products and most beef exports and imports are specific products moving between specific destinations for specific uses,” Peel says. “Trade in beef products helps balance both the overall quantity of beef and the preferred mix of beef products in various markets. Beef trade adds value for both exporters and importers and increases the total value of the global beef industry.”