Daily Market Highlights

Futures and equity markets were closed Friday, in observance of Good Friday. Through Thursday, from the previous Friday, Cattle futures were able to claw back some losses, supported by stronger cash sales and the continued seasonal increase in Choice wholesale beef value.

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

Live prices last week were $1 higher in the Southern Plains at $139/cwt., $2 higher in Nebraska at $140-$142, $3 higher in the western Corn Belt at $143 and $2-$4 higher in Colorado at $140-$142. Dressed prices were $4 higher at $226.

“It is not surprising that finished cattle prices increased this week as the April market tends to be strong and the highlight of the spring,” says Andrew P. Griffith, agricultural economist at the University of Tennessee (UT). “However, pessimism has started to set in due to the failure of the market to break out of its narrow trading range. As was said last week, it will still be difficult for finished cattle prices to exceed the high price experienced in February, but there is more of a chance now than last week. The hope is that prices push higher and even challenge the $145 price mark, which would be $2 higher than the $143 price in February.”

Estimated total cattle slaughter last week of 634,000 head was 37,000 head fewer than the previous week and 7,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 9.69 million head was 50,000 more than last year. Year-to-date estimated beef production of 8.1 billion lbs. was 61.8 million lbs. more than in 2021.

Choice boxed beef cutout value was $2.15 higher week to week on Friday at $272.62/cwt. Select was $1.43 lower at $258.90.

Live Cattle futures closed an average of $1.97 higher from the previous Friday through Thursday ($1.42 higher at the back to $2.85 higher at the front).

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Calf and feeder cattle prices sold mixed but with mainly more week-over-week strength through the gut of the country, based on weekly auctions monitored by Cattle Current.

As mentioned in Cattle Current last week, optimism remains for higher prices in the latter half of this year.

USDA’s Economic Research Service (ERS) increased the anticipated annual feeder steer price this year to $163/cwt., in the latest monthly Livestock, Dairy and Poultry Outlook.

“With higher placements in the first quarter, it is likely that calves that might have remained on pastures later in the year were pulled forward. As a result, from last month, tighter anticipated feeder cattle supplies in second-half 2022 will likely support elevated prices,” say ERS analysts.

The projected third-quarter average feeder steer price (basis 750-800 lbs. Oklahoma City) was raised $4 to $165; the fourth-quarter price was bumped $6 higher to $172.

In the meantime, though, an assortment of challenges continues to cap price potential, including higher feedlot placements last month, apparently induced by drought, and continued heavy beef production on the back of heavier fed cattle carcass weights and increased non-fed volume.

From the previous Friday through Thursday last week, Feeder Cattle futures closed an average of 97¢ higher (32¢ to $2.40 higher), gaining back about a third of the previous week’s losses. 

That was despite Corn futures closing an average of 17.9¢ higher through the front six contracts during the same period, about 50¢ higher over the last two weeks.

“Russia’s invasion of Ukraine, drought in the Southern Plains and Western U.S., high fertilizer prices, strong export demand, and the recent USDA Prospective Plantings report have all provided fuel to the rally,” explains Aaron Smith UT crop marketing specialist, in his weekly market comments. “The December contract has closed up 16 of the last 20 trading days. Prices are rapidly approaching the August 2012 high of $8.43 ¾. Prices will not go up forever, but right now there appears to be little that can slow the ascent in the short term.”

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CF Industries Holdings, Inc. (CF Industries) — a leading global manufacturer of hydrogen and nitrogen products — provided perspective to customers last week regarding ongoing supply chain disruptions that are adding an extra layer of heft to input prices.

CF Industries informed customers it serves by Union Pacific (UP) rail lines that railroad-mandated shipping reductions would result in nitrogen fertilizer shipment delays during the spring application season and that it would be unable to accept new rail sales involving Union Pacific for the foreseeable future.

UP shipping restrictions stem from efforts by that railroad to ease congestion, according to a letter to customers from Kenny Rocker, UP executive Vice President, marketing and sales.

“Over the last few weeks, our network has experienced some setbacks – including numerous service interruptions, crew shortages in select areas and delays to our network – as we have seen our operating inventory continue to climb over the past 60 days. This additional inventory has led to more congestion in yards, an imbalance of our resources, and further slowdown of our operational performance,” Rocker explains.

Among steps taken to ease congestion, Rocker cites the addition of 50 locomotives since January with 100 more to come, heavy recruitment and current training of 450 employees and asking come customers, like CF Industries, to voluntarily reduce their rail car inventories.

“If we do not see reductions to the operating inventory through their voluntary efforts, then we will begin metering traffic after April 18,” according to Rocker.

According to CF Industries, UP told it to reduce shipments by nearly 20% and that noncompliance will result in the embargo of its facilities by the railroad.

“The timing of this action by Union Pacific could not come at a worse time for farmers,” says Tony Will, CF Industries president and chief executive officer. “Not only will fertilizer be delayed by these shipping restrictions, but additional fertilizer needed to complete spring applications may be unable to reach farmers at all. By placing this arbitrary restriction on just a handful of shippers, Union Pacific is jeopardizing farmers’ harvests and increasing the cost of food for consumers.”

CF Industries believes it will still be able to fulfill delivery of product already contracted for rail shipment to Union Pacific destinations, albeit with likely delays. The company intends to engage directly with the federal government to ask that fertilizer shipments be prioritized so that spring planting is not adversely impacted.

CF Industries ships to customers via Union Pacific rail lines primarily from its Donaldsonville Complex in Louisiana and its Port Neal Complex in Iowa. The rail lines serve key agricultural areas such as Iowa, Illinois, Kansas, Nebraska, Texas and California. Products that will be affected include nitrogen fertilizers such as urea and urea ammonium nitrate as well as diesel exhaust fluid, an emissions control product required for diesel trucks. CF Industries is the largest producer of urea, urea ammonium nitrate and diesel exhaust fluid in North America. Its Donaldsonville Complex is the largest single production facility for the products in North America.

Cattle futures edged lower Thursday, amid light trade and likely positioning ahead of the holiday weekend — the CME is closed Friday in observance of Good Friday.

Live Cattle futures closed an average of 18¢ lower, except for 5¢ higher in the spot month and unchanged in Dec.

Feeder Cattle futures closed an average of 26¢ lower.

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

Soybean futures closed mixed, mostly 4¢ lower to 1¢ higher, except for 6¢ higher and fractionally higher in the front two contracts.

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

So far this week, live prices are $1 higher in the Southern Plains at $139/cwt., $2 higher in Nebraska at $140-$142, $3 higher in the western Corn Belt at $143 (a few up too $145) and $2-$4 higher in Colorado at $140-$142.

Dressed prices are $4 higher at $226; a few up to $231.

Choice Boxed beef cutout value was 50¢ lower Thursday afternoon at $271.86/cwt. Select was 34¢ lower at $259.71.

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Major U.S. financial indices closed lower Thursday, led by tech stocks, amid rising Treasury yield rates and fretting over steep inflation.

The Dow Jones Industrial Average closed 113 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 292 points

West Texas Intermediate Crude Oil futures (CME) closed $1.65 to $2.70 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) increased the anticipated annual feeder steer price this year to $163/cwt., in the latest monthly Livestock, Dairy and Poultry Outlook.

“With higher placements in the first quarter, it is likely that calves that might have remained on pastures later in the year were pulled forward. As a result, from last month, tighter anticipated feeder cattle supplies in second-half 2022 will likely support elevated prices,” say ERS analysts.

The projected third-quarter average feeder steer price (basis 750-800 lbs. Oklahoma City) was raised $4 to $165; the fourth-quarter price was bumped $6 higher to $172.

Based on elevated beef cow slaughter, it appears calf numbers will be less than previously thought going forward. Through the first quarter of this year, weekly, federally inspected (FI) beef cow slaughter averaged 18% higher year over year, while dairy cow slaughter declined 3%.

“Typically, cow slaughter would display this volume in the fourth quarter. However, higher feed costs, drought conditions plaguing much of the nation, and historically high prices for cull cows have cow-calf producers making further cuts to their herds,” say ERS analysts. “The macroeconomic situation has also changed from last year with higher fuel prices, feed costs, and operating costs that may be affecting producer decisions as well.”

Total FI non-fed cattle slaughter in the first quarter was the most since the mid-1980s.

ERS analysts point out 69% of the country was experiencing some level of drought the week of March 29, compared with about 63% the same week last year. That’s the widest drought coverage since about 67% in April 2013.

Spun another way, ERS analysts say 61% of the nation’s cattle inventory is in areas experiencing drought, compared to 35% at the same time last year.

“Based on the economic and environmental factors noted, expectations for cow and bull slaughter were raised in each quarter of 2022,” say ERS analysts. “Despite the highest cow slaughter volume typically occurring at the end of the year, the volume in fourth-quarter 2022 will likely not surpass the first quarter. The 2022 price forecast for live cutter cows was raised to $79/cwt. This is 22% above the 2021 average of $64.91 and the highest price since 2015.”

Negotiated cash fed cattle prices continued to gain ground Wednesday on slow trade and moderate demand, according to the Agricultural Marketing Service.

So far this week, live prices are $1 higher in the Southern Plains at $139/cwt., $2 higher in Nebraska at $140-$142, $3 higher in the western Corn Belt at $143 (a few up to $145) and $2-$4 higher in Colorado at $140-$142.

Dressed prices are $4 higher at $226; a few up to $231.

Choice Boxed beef cutout value was $1.11 lower Wednesday afternoon at $272.36/cwt. Select was $1.34 lower at $259.37.

Cash market strength helped Cattle futures once again.

Live Cattle futures closed an average of 53¢ higher (35¢ to $1.00 higher).

Feeder Cattle futures closed an average of 57¢ higher (30¢ to $1.02 higher).

That was despite Corn futures closing mostly 4¢ to 7¢ higher.

Soybean futures closed 4¢ to 5¢ higher in the front three contracts and then 1¢ to 2¢ lower.

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Major U.S. financial indices closed higher Wednesday, apparently buoyed by initial quarterly corporate earnings that beat expectations. That was despite the Consumer Price Index the previous day indicating the steepest inflation in four decades. It was also despite Wednesday’s monthly Producer Price Index registering the highest historical 12-month increase of 11.2%.

The Dow Jones Industrial Average closed 344 points higher. The S&P 500 closed 49 points higher. The NASDAQ was up 272 points

West Texas Intermediate Crude Oil futures (CME) closed $2.75 to $3.65 higher through the front six contracts.

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Consumers grew more comfortable preparing more meals at home through the pandemic and now health and wellness are becoming more significant drivers of their eating choices, according to America’s Health Pulse: Closing the Gap Between Wants and Needs, a new report from the NPD Group (NPD). Specifically, consumers are focusing more on customized diets, nutrient intake, and functional foods.

Wellness now directly impacts 21% of all eating occasions, amounting to billions of occasions annually, according to the report. With most meals sourced from home — a behavior established long before the pandemic — NPD expects wellness as a consumption driver to remain elevated into the foreseeable future.

Although consumers seek wellness overall, NPD analysts say they are homing in on specific areas. For example, the COVID-19 pandemic brought a new focus on the food-as-medicine movement. Concern over the highly contagious and potentially deadly virus led many to consider their food choices to help build immunity. The importance of strong immunity remains a top wellness focus from a holistic standpoint rather than specifically fighting the virus. Additionally, the aging boomer population is looking to food as medicine to find remedies to either cure or manage health conditions.  

Consumers customize their health and wellness eating goals with a variety of tools. These tools include social media and following social media influencers, personalized eating and fitness plans from healthcare providers or trainers, apps and technology-enabled exercise equipment, and forecasting health using genetic markers. 

“The pattern of consumer attention to health and wellness shows increasing awareness and adaptation across the board,” says Darren Seifer, NPD food and beverage industry analyst. “This means consumers no longer think of health and wellness as an add-on, but as an integrated part of how they live their lives; that, in turn, opens opportunity for brands to become a permanent solution.”

Negotiated cash fed cattle prices gained $1 in Kansas at $139/cwt. on active trade and good demand through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend there were also some early trades $2 higher in Nebraska and the western Corn Belt at $142.

Choice Boxed beef cutout value was $1.36 higher Tuesday afternoon at $273.47/cwt. Select was 42¢ higher at $260.71.

Stronger cash trade helped boost Cattle futures.

Live Cattle futures closed an average of 75¢ higher (62¢ to $1.50 higher), also supported by increasing open interest the past couple of days.

Feeder Cattle futures closed an average of 55¢ higher (22¢ to $1.10 higher) except for 15¢ lower and unchanged in the back two contracts.

That was despite another day of higher Corn futures.

As if they needed more help, Corn futures climbed 11¢ to 14¢ higher through Jly ‘23, boosted by President Biden’s announcement that the higher-blend 15% ethanol gas (E15) could be sold through the summer in an effort to curb rising fuel costs. Previously, E15 sales were prohibited during the summer months.

Soybean futures closed 14¢ to 22¢ higher.

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Major U.S. financial indices softened further Tuesday with the highest inflation since 1981, according to the latest Consumer Price Index (CPI) for all urban consumers from the U.S. Bureau of Labor Statistics. It increased 1.2% in March after rising 0.8% in February, up 8.5% over the last 12 months.

The Dow Jones Industrial Average closed 87 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 40 points

West Texas Intermediate Crude Oil futures (CME) closed $4.71 to $6.31 higher through the front six contracts.

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“With declining beef production and increased prices, 2022 will likely see a contraction of about 4% year over year in exports,” says Brenda Boetel, livestock economist at the University of Wisconsin-River Falls. “Although exports will be lower, they are still historically high and continue to be a supportive factor for cattle prices. The bigger trade concern currently for cattle is the indirect effects from decreased trade opportunities for poultry due to highly pathogenic avian influenza (HPAI) and the decreased export potential for pork due to lower imports from China.”

In the latest issue of In the Cattle Markets from the Livestock Marketing Information Center (LMIC), Boetel explains current HPAI impacts so far are less than the outbreak in 2014-15 when about 12% of the layer hens were lost and more than 50 countries imposed import restrictions on U.S. poultry leading to a 14% decline in broiler exports and a 4% decline in domestic broiler prices. She notes export restrictions today are different than in 2015, confined to regions of infection rather than the entire nation.

“If HPAI continues to expand, though the impact on trade will grow and hence the potential to impact beef prices will continue to increase,” Boetel explains. “Beef is the highest priced animal protein in the U.S., and given the expected decline in production due to lower numbers and continued strong trade, we will likely see continued increases in retail beef prices. Additional supplies of poultry or pork on U.S. grocery shelves will put downward pressure on those prices and will eventually transfer to cattle prices.”

Live Cattle futures closed an average of 66¢ higher Monday, receiving support from the major, performance-depressing winter storm moving toward the Northern Plains, and thoughts by some that cash cattle can crawl higher this week.

In the meantime, negotiated cash fed cattle trade ranged from limited on light demand to a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Live prices last week were at $138/cwt. in the Southern Plains and Colorado, at $138-$140/cwt. in Nebraska and at $140 in the western Corn Belt at $140. Dressed prices were $222.

Choice Boxed beef cutout value was $1.64 higher Monday afternoon at $272.11/cwt. Select was 4¢ lower at $260.29.

Strength in the Live pit helps drag Feeder Cattle futures an average of 34¢ higher, except for 25¢ lower in Aug.

Corn futures closed mostly 2¢ to 4¢ higher Monday, except for 4¢ and 2¢ lower in the front two contracts.

Incidentally, 32% of the winter wheat crop was rated as Good (29%) or Excellent (3%) in USDA’s Crop Progress report for the week ending April 10. That was 21% less than the same time last year. 36% was rated Poor (18%) or Very Poor (18%) compared to 17% the previous year.

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Major U.S. financial indices sank Monday as traders positioned ahead of Tuesday’s monthly Consumer Price Index and the beginning of corporate earnings season.

The Dow Jones Industrial Average closed 75 points lower. The S&P 500 75 closed points lower. The NASDAQ was down 299 points

West Texas Intermediate Crude Oil futures (CME) closed $2.80 to $3.97 lower through the front six contracts.

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Beef demand, especially demand for ground beef continues to boost cutter cow values.

For perspective, analysts with the Livestock Marketing Information Center (LMIC) say national cutter cow values were $75/cwt. to start the second quarter — the highest since late 2015 — and up from $52 at the beginning of the year.

“The five-year average of 2016-2020 averaged a cutter cow price of $55/cwt. nationally across all weights,” LMIC analysts explain, in the latest Livestock Monitor. “Other cow quality grade values have improved, as well. For instance, they note values for premium white cows, those fed a concentrated diet before heading to slaughter, are 25% higher than last year. Breaker (75% lean) cow prices are 29% higher year over year and prices for boner cows (85% lean) are up 14%.

Cow cutout values mirror the trajectory of cull cow prices.

“Last week, the boxed cow cutout was $230/cwt., 31% ahead of the five-year average and 21% higher than last year,” says LMIC analysts. “Strong demand for beef has helped support these numbers, as well as consumers buying more ground beef, seasonally. The cutout offers a snapshot of all the quality grades. 

“More specifically, trimmings from lean cows are fed into the ground 90% lean beef markets, which have seen higher prices since the summer of 2021. Lean 90% ground beef averaged $363/cwt., compared to the five-year average of $222. These prices are expected to remain elevated through summer because of time of year and the relative value of other beef products in the meat case.”

Corn and soybean futures climbed again Friday with confirmation of ending stock expectations in the World Agricultural Supply and Demand Estimates (see below).

Corn futures closed mostly 5¢ to 11¢ higher.

Soybean futures closed 35¢ to 43¢ higher in the front three contracts and then 18¢ to 29¢ higher.

Cattle futures traded in a narrow range, capped by grain market strength and signs of weakening beef prices.

Feeder Cattle futures closed narrowly mixed Friday, from an average of 34¢ lower to an average of 9¢ higher. Week to week on Friday, they closed an average of $2.97 lower ($1.25 to $6.75 lower), with most of the pressure in nearby contracts.

Live Cattle futures closed narrowly mixed, from an average of 16¢ lower to an average of 24¢ higher. Week to week on Friday, they closed an average of 83¢ lower, except for an average of 50 higher in three contracts.

Negotiated cash fed cattle trade ranged from inactive on light demand to a standstill in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

Live prices last week were steady to $1 lower in the Southern Plains at $137-$138/cwt., steady in Nebraska at $138-$140 and generally $1-$3 lower in the western Corn Belt at $140. Dressed prices were steady at $222.

Estimated total cattle slaughter last week of 676,000 head was 37,000 head more than the previous week and 3,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 9.1 million head is 61,000 more than the same time last year. Estimated total year-to-date beef production of 7.6 billion lbs. is 72.9 million lbs. more than the same time last year.

Choice Boxed beef cutout value was 93¢ lower Friday afternoon at $270.47/cwt. Select was 89¢ lower at $260.33.

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Major U.S. financial indices closed mixed Friday with weekly losses as investors wrestled with higher inflation and interest rates.

The Dow Jones Industrial Average closed 137 points higher. The S&P 500 closed 11 points lower. The NASDAQ was down 186 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.98 to $2.23 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) left the expected five-area direct fed steer price this year unchanged from the previous month at $139.50/cwt., in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). That would be $17.10 more than in 2021. Prices are projected to be $139.25 in the first quarter, $139 in the second, $136 in the third and $143 in the fourth.

That’s with beef production estimated to be 140 million lbs. more than the previous month at 27.7 billion lbs., with higher expected first-quarter placements supporting increased fed cattle slaughter and with more expected non-fed cattle slaughter. The total would be 367 million lbs. less (-1.3%) than last year.

Projected total red meat and poultry production of 106.2 billion lbs. would be 624 million lbs. less (-0.58%) than last year.

Corn

ERS increased the expected 2021-22 season-average farm price for corn by 15¢ to $5.80/bu., based on observed prices to date. Ending stocks were unchanged at 1.44 billion bu. With an anticipated increase in corn used for ethanol production offsetting a reduction in feed and residual use.

Soybeans

ERS left the 2021-22 season-average farm price for soybeans unchanged at $13.25/bu. and the soybean meal price unchanged at $420/short ton, but increased the soybean oil price 2¢ to 70.0¢/lb. A lower soybean meal export forecast is offset by slightly higher domestic disappearance. Soybean ending stocks are projected at 260 million bushels, down 25 million from last month.

Wheat

ERS increased the season-average farm price for wheat 10¢ to $7.60/bu. Based on NASS prices reported to date and expectations for cash and futures prices for the remainder of 2021-22. That would be the highest price since 2012-13. That’s with projected stable supplies, lower domestic use, reduced exports and higher ending stocks.

Oversold conditions helped Cattle futures claw back a little more of recent losses.

Feeder Cattle futures closed an average of $1.57 higher, except for an average of 59¢ lower in the front two contracts.

That was with Corn futures gaining on likely positioning ahead of tomorrow’s month World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 3¢ to 9¢ higher.

Soybean futures closed mostly 22¢ to 26¢ higher.

Live Cattle futures closed an average of 62¢ higher, except for 12¢ lower in nearby Jun.

Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

So far this week, live prices are steady to $1 lower in the Southern Plains at $137-$138/cwt., steady in Nebraska at $138-$140. Prices are $140 in the western Corn Belt, compared to the previous week’s $139-$143. There were also some live sales reported in Colorado for the first time in a long while at $138. Dressed prices so far this week are steady at $222.

Choice Boxed beef cutout value was 36¢ higher Thursday afternoon at $271.40/cwt. Select was 17¢ higher at $261.22.

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Major U.S. financial indices edged higher Thursday as investors wrestled with figuring out longer-term impacts of higher inflation and interest rates.

The Dow Jones Industrial Average closed 87 points higher. The S&P 500 closed 19 points higher. The NASDAQ was up 8 points.

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U.S. beef exports continued at a steamy pace in February, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 108,501 metric tons (mt) in February, up 5% from a year ago. Value of exports climbed 35% to $904.4 million, led by growth in key Asian and Latin American markets. Through the first two months of the year, exports increased 9% to 227,567 mt, while value soared 46% to $1.93 billion.

“Broad-based growth has become a recurring theme for U.S. beef exports, as international demand has never been higher and global supplies remain tight,” says USMEF President and CEO Dan Halstrom. “We anticipated a lift from COVID-related foodservice restrictions being eased in many destinations. This materialized late last year and in early 2022, although conditions still vary by country. While lockdowns in China and Hong Kong are certainly a setback for foodservice demand, those are the main exceptions as most countries have shifted to more of a living-with-COVID approach.”

February beef export value equated to $445.95 per head of fed slaughter, up 29% from a year ago. The January-February average was $474.87 per head, up 45%.

Pork exports trended lower year-over-year, as larger shipments to Mexico and Japan did not offset the continued decline in demand from China/Hong Kong.

February pork exports were 198,539 mt, down 17% from a year ago, while export value fell 14% to $541.3 million. Through February, exports were also down 17% in volume (407,347 mt) and 14% in value ($1.1 billion).

Going forward, Halstrom notes the sharp increase in European hog prices last month could lead to more opportunity for U.S. pork exports.

“Rarely have we seen so many outside forces creating headwinds for U.S. meat exports and such uncertainty in the global marketplace,” Halstrom says. “Yet consumer demand for high-quality beef, pork and lamb has proven resilient, and USMEF sees opportunities for further growth in both established and emerging markets.”

Slightly lower nearby Corn futures prices helped Feeder Cattle futures recover some lost ground Wednesday, closing an average of 86¢ higher, except for 55¢ lower in the back contract.

Corn futures closed unchanged to 3¢ lower through July ’23 and then fractionally higher to 2¢ higher.

Soybean futures closed mostly 6¢ to 12¢ lower.

Live Cattle futures closed an average of 57¢ higher (17¢ to $1.05 higher), supported by recently blooming wholesale beef prices.

However, Choice Boxed beef cutout value was 49¢ lower Wednesday afternoon at $271.04/cwt. Select was $1.85 lower at $261.05.

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

So far this week, prices are generally steady on a live basis at $138/cwt. in the Southern Plains and Colorado, $138-$140 in Nebraska and $140 in the western Corn Belt. Dressed prices are steady at $222.

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Major U.S. financial indices closed lower Wednesday, apparently due at least in part to the Fed’s recent hawkish comments regarding inflation and interest rates.

The Dow Jones Industrial Average closed 144 points lower. The S&P 500 closed 43 points lower. The NASDAQ was down 315 points.

CME Crude Oil futures on the CME were $3.90 to $5.73 lower through the front six contracts.

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“Cattle feeders who use distiller’s grains, primarily in the wet form, are closely watching ethanol production numbers, given the potential for ethanol plant slowdowns,” says Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln. “Over the past two years, distiller’s grain prices (as a percentage of corn price on a dry matter basis) have been very volatile due to both more movement in the corn market and ethanol idling.”

In the latest issue of In the Cattle Markets, Dennis explains current weekly ethanol production is near pre-COVID levels, even with higher corn prices.

“Since oil and ethanol are highly correlated, one would expect ethanol plants to continue to be profitable even at higher corn prices. However, Iowa State University Ethanol Profitability Tracker indicates the relative price increase in ethanol ($/gal.) have not been sufficiently high compared to the cost of corn ($/bu.). Net returns are calculated to be -$0.28/gal. of ethanol, its lowest level since last winter in the last run-up in grain prices,” according to Dennis.

Dennis points out distillers’ grains generally are fed up to a 40% inclusion but the level and type of distiller’s grain used can vary, given local availability. Obviously, he explains increasing prices for corn and distillers grains increase feedlot cost of gain.

Prior to USDA’s cattle-bearish Prospective Plantings report, Dennis notes CME Live Cattle futures were trending higher. “Since the release, Live Cattle prices have eroded between $2-4/cwt. with larger declines occurring in more nearby months. This is further narrowing profit margins,” he says.

Soybean and corn futures gained Tuesday with stronger demand and bearish weather conditions in South America. Corn futures closed 3¢ to 9¢ higher. Soybean futures were up 7¢ to 28¢.

That weighed on Cattle futures once again, with Feeder Cattle an average of $2.26 lower and Live Cattle down an average of $1.21. So far today, they’re gaining some of that back.

Negotiated cash fed cattle prices continued mainly steady Tuesday with live prices at $138-$140/cwt. in Nebraska and dressed prices at $222, on moderate trade and demand, according to the Agricultural Marketing Service.

So far this week, live prices are steady in the Southern Plains at $138 and $140 in the western Corn Belt.

Choice Boxed beef cutout value was $3.49 higher Tuesday afternoon at $271.53/cwt. Select was $1.20 higher at $262.90.

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Major U.S. financial indices lost ground Tuesday. Federal Reserve Governor Lael Brainard spoke at a conference where she indicated the central bank is ready to implement additional tightening to tackle inflation. Brainard noted the effects of inflation are worse for working families, who spend proportionally much more of their income on basic necessities – up to 77% for lower income families.

The Dow Jones Industrial Average closed 281 points lower. The S&P 500 closed 58 points lower. The NASDAQ was down 328 points.

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Agricultural producer sentiment slipped last month, according to the Purdue University/CME Group Ag Economy Barometer. It was down 12 points from the previous month and 26% less year over year at 113. That was the lowest since March 2020.

The Index of current conditions was 19 points lower at 113; 44% less than a year earlier. The Index of Future Expectations was 9 points lower at 113, which was 31% less than the same time last year.

“Concern about the war’s impact on input prices and input availability on their farming operations was paramount in the minds of producers responding to the March survey and was a major factor in this month’s decline in sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The March survey provided the first opportunity to ask producers how they expect the war in Ukraine to affect U.S. agriculture. Producers overwhelmingly said they expect input prices to be most affected (63% of respondents), followed by crop prices (33% of respondents), and livestock prices (3% of respondents). Responding to a related question, 19% of respondents chose “availability of inputs” as their primary concern this year, which was equal to the percentage of producers who chose “lower crop and/or livestock prices” as their biggest concern.

Relative to input prices, 57% expect them to increase by 20% or more and 36% think input prices will rise by 30% or more. Just more than 25% say they’ve had difficulty purchasing crop inputs for the 2022 crop season. Producers report that supply chain problems persist across a wide range of inputs with herbicides, fertilizer, and farm machinery parts posing the most problems.

Agricultural Producers continue to say that they expect their operation’s financial performance to decline in 2022 compared to 2021. The March Farm Financial Performance Index, which asks producers whether they expect their farm’s financial performance in 2022 to be better than, worse than or about the same as in 2021, was up slightly (4 points) at a reading of 87, but remains 30% lower than a year earlier.

“When producers think about how their farm will fare financially in 2022, it’s clear they do not expect commodity price strength to offset the dramatic rise in farm production costs they are experiencing,” Mintert says.

Feeder Cattle futures were pressured sharply lower by rising feed costs once again Monday.

Feeder Cattle futures closed an average of $2.29 lower ($1.50 lower toward the back to $3.65 lower toward the front).

Corn futures closed mostly 7¢ to 15¢ higher

Soybean futures closed mostly 22¢ to 31¢ higher.

Live Cattle futures, closed an average of 55¢ lower, except for 17¢ higher in away Apr.

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

Live prices were at $138/cwt. In the Southern Plains, $138-$140 in Nebraska and $139-$143 in the western Corn Belt at $139-$143. Dressed prices were $222.

The five-area direct average steer price was 37¢ higher at $139.32/cwt. The average steer price in the beef was 15¢ higher at $222.61.

Choice boxed beef cutout value was 90¢ higher Monday afternoon at $268.04/cwt. Select was 82¢ lower at $261.70.

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

The Dow Jones Industrial Average closed 103 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 271 points.

West Texas Intermediate Crude Oil futures on the CME closed an average of $3.78 higher.

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Declining beef and pork production may offset increased broiler production and lead to a decrease in total meat production in 2022, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his week market comments. He explains the current forecast from the Livestock Marketing Information Center (LMIC) pegs Beef production this year at 27.39 billion lbs., which would be 2.2% less than last year.

LMIC forecasts total red meat and poultry production at 106.25 billion lbs., which would be slightly less than last year.

If realized, Peel says it would be the first decrease in total meat production since 2014, following seven consecutive years of increasing production. 

“High feed prices will impact all livestock industries and may moderate meat production going forward,” Peel explains. “Feed costs increased significantly in 2021 and will push even higher in the coming months. Beef will be additionally impacted by drought conditions and reduced production of pasture and hay. Drought may impact the timing of beef production with drought liquidation potentially increasing beef production temporarily but leading to a larger decline in beef supplies later.”