Daily Market Highlights

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Western Corn Belt through Monday afternoon, according to the Agricultural Marketing Service. In Nebraska, trading was mostly inactive with very light demand. Last week, live prices were at $120. Dressed prices in Nebraska and the Western Corn Belt were at $190-$191.

Cattle futures tread water to the downside Monday with pressure from new-crop grain prices and the appearance of an imminent top for wholesale beef values.

Feeder Cattle futures closed an average of 18¢ lower, except for 28¢ and 55¢ higher at either end of the board.

Live Cattle futures closed an average of 33¢ lower through the front four contracts and then an average of 68¢ higher (37¢ higher to $1.60 higher in the back contract).

Choice boxed beef cutout value was 38¢ lower Monday afternoon at $338.60/cwt. Select was $2.56 lower at $309.17.

Except for nearby contracts, grain futures continued to extend gains Monday.

Corn futures closed 10¢ to 14¢ higher in new-crop contracts, and then mostly 4¢ to 7¢ higher. Spot Jly was down 3¢.

Soybean futures closed mostly 7¢ to 14¢ higher, except for 4¢ to 23¢ lower in the front three contracts.

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Major U.S. financial indices fell on Monday, due mostly to concern over inflation risks and speculation about the Fed’s looming decision on interest rates. However, the NASDAQ gained on biotech stocks.

The Dow Jones Industrial Average closed 126 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 67 points.

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“Calmer times may be coming but we are not quite there yet,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “It will take a few more weeks to work through current fed cattle supplies and get the packing industry below capacity constraints. That will allow fed cattle markets to once again fully reflect market conditions.”

Peel points out domestic and international beef markets are very strong as economies continue to open.

“Feed prices are expected to remain elevated and feeder cattle markets will continue to adjust to both feed market and fed cattle market conditions,” Peel says. “Drought impacts remain uncertain and the short-term and long-term impacts on cattle markets are unknown. If enough herd liquidation is forced by the drought, short-term cattle slaughter and beef production will be higher than expected and beef production prospects beyond 2021 will be reduced.”

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on light demand.

Regionally, negotiated prices last week were mostly steady to $1 either side of steady. Live prices were at $120/cwt. and dressed prices were at $189-$191.

Estimated total cattle slaughter for the week ending June 5 was 538,000 head, according to USDA. That was 91,000 head fewer than the previous week and 90,000 head fewer than the same week a year earlier. Estimated beef production for the week was 443.0 million lbs., which was 75 million lbs. less than the previous week.

Surging Corn futures prices hammered Feeder Cattle futures on Friday. It’s likely week-end profit taking also played a role.

Feeder Cattle futures closed an average of $2.09 lower ($1.32 lower at the back to $3.02 lower in spot Aug).

Although mainly lower Friday, Live Cattle futures continued to consolidate, supported by wholesale beef values and slaughter data suggesting a return to post-pandemic normal following disruptions at JBS earlier in the week.

Live Cattle futures closed an average of 47¢ lower, except for 5¢ and $1 higher at either end of the board and unchanged in away Aug.

Net U.S. beef export sales of 12,600 metric tons for 2021 were 55% less than the previous week and 38% less than the prior four-week average, according to USDA’s Export Sales report for the week ending May 27. Increases were primarily for Japan, South Korea, Taiwan, Mexico and Chile.

Choice boxed beef cutout value was $1.57 lower Friday afternoon at $338.98/cwt. Select was $1.43 lower at $311.73.

Grain markets were sharply higher on Friday as extreme heat gripped the Western Corn Belt and Northern Plains.

Corn futures closed up through Jul ’22 an average of 24¢ higher.

Soybean futures closed up an average of 33¢ through Jan ’22.

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Major U.S. financial indices rallied on Friday despite a somewhat disappointing jobs report and downward pressure on the dollar. The S&P 500 almost hit an all-time high as investor anxiety seemed to lessen about the Federal Reserve changing rates and tapering support. NASDAQ posted its best day in three weeks.

The Dow Jones Industrial Average closed 179 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 200 points.

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Drought continues to elevate beef cow slaughter.

“The start of pasture and range conditions (this year) was the worst since the 2012 and 2013 growing seasons. These early weeks are showing a large portion of the U.S. was already requiring supplemental feed to maintain herds,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “For the west, this is a second year of continued hardship and will result in a second year of beef cow culling. As of this week (June 4) about 25% of the beef cowherd was in areas where pasture and range conditions were assessed as poor and very poor. This is an improvement from a few weeks ago, when 40% of the cowherd was assessed to be in those conditions. Still, pasture and range is not improving evenly.”

More specifically, utilizing regional USDA cow slaughter reports, LMIC analysts point out beef cow slaughter is 29% higher year over year in Region 5 (IL, IN, MI, MN, OH, WI), 12% higher in Region 6 (AR, LA, NM, OK, TX) and 18% higher in Region 9 (AZ, CA, HI, NV).

“Total U.S. beef cow slaughter in federally inspected plants is up 10.1% year to date,” explain LMIC analysts. “In the last couple of weeks, beef cow slaughter accelerated, hitting above 70,000 head per week. The percent change is being amplified by below average slaughter levels of last year during April and May…In addition to the West, drought has been creeping into the Southeast, and the Northern Plains continue to struggle with limited moisture.”

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light to moderate demand.

So far this week, live sales are steady to $4 higher in the Texas Panhandle at $120/cwt., steady in Kansas at $119 to $120 and steady at $120 in Nebraska and the western Corn Belt. Dressed trade is steady with the upper end of last week’s range at $190-$191.

Cattle futures, especially Feeder Cattle faded early pressure to close mainly higher Thursday with continued support from higher wholesale beef values.

Feeder Cattle futures closed an average of $1.54 higher (62¢ higher in spot Aug to $2.92 higher at the back).

Live Cattle futures closed an average of 60¢ higher (12¢ to $1.02 higher), except for an average of 44¢ lower in the front three contracts.

Choice boxed beef cutout value was 39¢ higher Thursday afternoon at $340.55/cwt. Select was $1.28 higher at $313.16.

Grain markets were mainly lower on Thursday with weather forecasts continuing to cast a shadow.

Corn futures closed 6¢ to 13¢ lower through Jly ’22 and then mostly unchanged to fractionally higher.

Soybean futures closed 9¢ to 13¢ lower through Jan ‘22 and then mostly 5¢ higher, except for fractionally lower to 4¢ lower in a few middle contracts.

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Major U.S. financial indices fell on Thursday with uncertainties about the strength of the economy and anticipation over when the Federal Reserve may slow or stop support. Friday’s jobs report is expected to give a strong indication of where the economy stands.

The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 142 points.

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Agricultural producer sentiment declined significantly last month, according to the Purdue University/CME Group Ag Economy Barometer. Month to month, the index dropped 20 points to 158, the lowest level since September last year.

“The potential for changing tax rules and rising input costs appeared to be on producers minds this month and were the primary drivers for the Ag Barometer’s decline,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

More specifically, producers’ expectations for good versus bad times in U.S. agriculture shifted dramatically. In May, just 27% of respondents said they expect good times in U.S. agriculture during the next five years, the lowest reading in the survey’s history and down 12 points from a month earlier. One driver appears to be the dichotomy between expectations for the crops versus livestock sectors. More than half (54%) of respondents said they expect widespread good times for the crops sector in the next five years, but just one-fourth (26%) of producers said they expect the same for the livestock sector.

“The difference in expectations for these two principal sectors of the agricultural economy could help explain why producers appear to be very bullish about farmland values and cash rental rates while at the same time expressing less optimism about both current conditions and future expectations for the agricultural economy overall,” Mintert says.

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains. A few live sales in the Texas Panhandle traded from $119 to $120/cwt. through Wednesday afternoon, according to the Agricultural Marketing Service. In Kansas, a few live purchases traded at $120. In Nebraska and the Western Corn Belt, negotiated cash trading was slow with moderate demand. There were a few dressed trades in Nebraska at $190 to $191. In the western Corn Belt, there were a few live sales at $120 and few in the beef at $190-$191.

Feeder Cattle futures rallied higher with news JBS was resuming operations following the cyber-attack on its IT systems.

Feeder Cattle futures closed an average of $2.08 higher, from $3.18 to $2.40 higher in the front three months and $1.90 to $1.40 higher across the rest of the board.

Live Cattle futures closed an average of $1.61 higher, with the most gain ion the front two contracts. Only Apr ’22 and Jun ’22 gained less than $1 at 75¢ and 88¢ respectively.

Choice boxed beef cutout value was was $5.60 higher Wednesday afternoon at $340.16/cwt. Select was $5.43 higher at $311.88.

Grain markets were mixed on Wednesday with weather weighing on the corn market.

Corn futures closed down across the board an average of 6¢ lower through Jly ‘22.

Soybean futures closed up up an average of 16¢ through Mar ’22.

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Major U.S. financial indices closed narrowly higher on Wednesday, remaining near all-time highs.

The Dow Jones Industrial Average closed 25 points higher at 34,600. The S&P 500 closed 6 points higher at 4,208. The NASDAQ closed 20 points higher at 13,756.

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“Cattle producers are frustrated, and with good reason. In sale barns and state meetings across the country, we’re hearing the same story of sky-high input costs and intense market volatility. Across the industry, there’s a consensus that market dynamics which consistently squash producer profitability are not sustainable for live cattle or beef producers,” says NCBA President Jerry Bohn, president of the National Cattlemen’s Beef Association (NCBA). “As members of Congress create policy that directly impacts business conditions for our producers, it is critical that they consider the grassroots input and firsthand experiences of folks on the ground. Our letter provides that perspective and reinforces how urgently we need something to shift here to strengthen the security of the beef supply chain. NCBA has strong working relationships with members on both sides of the aisle, we have grassroots policy to back the actions we outlined today, and we hope the conversation in Washington around these critical policy areas will progress quickly.”

The letter Bohn refers to is one NCBA sent—with the support of 37 affiliate state cattle organizations— urging the leadership of the U.S. Senate and House Agriculture Committees to address critical areas of concern in the cattle and beef industry.

Specifically, NCBA pushed Sen. Debbie Stabenow (D-MI), Sen. John Boozman (R-AR), Rep. David Scott (D-GA-13), and Rep. Glenn “GT” Thompson (R-PA-15) to consider swift Congressional action to:

• Expand beef processing capacity
• Broaden labor policies to strengthen the beef processing workforce
• Increase transparency in cattle markets by reauthorizing Livestock Mandatory Reporting (LMR)
• Support industry efforts to reform “Product of the USA” generic labeling
• Ensure proper oversight of cattle market players by concluding the ongoing U.S. Department of Justice investigation into the meatpacking sector

Cattle futures dropped hard Tuesday, in response to the uncertainties spawned by disruptions to JBS processing facilities, caused by the Sunday cyber-attack on that company’s global IT infrastructure. They clawed back some of the losses by the end of the session, though.

According to a JBS news release: “On Sunday, May 30, JBS USA determined that it was the target of an organized cyber-security attack, affecting some of the servers supporting its North American and Australian IT systems. The company took immediate action, suspending all affected systems, notifying authorities and activating the company’s global network of IT professionals and third-party experts to resolve the situation. The company’s backup servers were not affected, and it is actively working with an Incident Response firm to restore its systems as soon as possible.

“The company is not aware of any evidence at this time that any customer, supplier or employee data has been compromised or misused as a result of the situation. Resolution of the incident will take time, which may delay certain transactions with customers and suppliers.”

Widespread reports suggested JBS packing facilities closed. At press time there was no word on when normal production would resume. However, there were unconfirmed reports Tuesday evening that operations would resume Wednesday.

There was no negotiated trade report from the Agricultural Marketing Service as of press time Tuesday evening.

Negotiated cash fed cattle prices last week were at $116-$120/cwt. in the Texas Panhandle, at $119-$120 in Kansas and at $120 in Nebraska and the western Corn Belt. Dressed prices were at $191 in Nebraska and at $189-$191 in the western Corn Belt.

Feeder Cattle futures closed mixed on Tuesday, with JBS uncertainty weighing on the front months.

Feeder Cattle futures closed an average of $1.28 lower through the front half of the board, (45¢ lower to $2.20 lower in spot Aug) and then an average of 36¢ higher.

Live Cattle futures closed an average of $1.70 lower in the front three contracts (77¢ to $2.32 lower) and then an average of 89¢ higher, except for unchanged in the back contract.

Choice boxed beef cutout value was $3.59 higher Tuesday afternoon at $334.56/cwt. Select was $5.55 higher at $306.45.

Grain markets were up on Tuesday on news of a hot, dry forecast for the next two weeks in northern U.S. growing areas as well as southern Canada. Brazil’s drought also worsened.

Corn futures closed 28¢ to 32¢ higher through Jly ’22 and then mostly 10¢ to 15¢ higher.

Soybean futures closed mostly 16¢ to 24¢ higher.

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Major U.S. financial closed narrowly mixed Tuesday as investors wait for economic data coming out this week to indicate how well the economy is rebounding and to get a feel for inflation.

The Dow Jones Industrial Average closed 46 points higher. The S&P 500 2 points lower. The NASDAQ closed 12 points lower.

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“With the economy opening up and growing rapidly, meat markets of all types are enjoying strong demand,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “In numerous cases, wholesale prices for specific meat products are at record levels, exceeding the levels provoked by the pandemic disruptions one year ago; and unlike last year, lack of supply is not the issue. Year-to-date production of beef, pork and broilers is higher, not only compared to last year but also compared to 2019 levels.”

Wholesale beef tenderloin set a new record at more than $17/lb., Peel says, in his weekly market comments. Ribeye prices also set a new record at more than $13/lb.

“Tenderloin is almost exclusively a restaurant item, while ribeye is popular in restaurants, at retail grocery and for export,” Peel explains. “Strip loins are very popular at retail grocery and prices have also increased sharply this year but failed to exceed the pandemic levels from last year. Brisket prices have increased dramatically since January, averaging over $7/lb. in May; another indication that BBQ is back.”

Prices for chuck and round products—driven by retail grocery for use as value cuts and ground beef—are higher, too, but less steeply than middle meats, Peel says.

Negotiated cash fed cattle trade was mostly inactive on very light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

Live prices last week were steady to $3 lower in the Texas Panhandle at $116-$120/cwt., steady to $1 lower in Kansas at $119-$120 and steady at $120 in Nebraska and the western Corn Belt. Dressed prices were steady to $1 higher in Nebraska at $191; steady in the western Corn Belt $189-$191.

Live Cattle futures closed mixed Friday, an average of 46¢ lower through the front four contracts, and then unchanged to an average of 7¢ higher. Part of the pressure likely stemmed from the lack of budge in cash prices, while the rally in wholesale beef values appears long in the tooth.

Choice boxed beef cutout value was 99¢ higher Friday at $330.97/cwt. Select was $3.20 lower at $300.90.

Feeder Cattle futures closed an average of $1.28 lower. Even though Corn futures were mostly 3¢ to 9¢ lower, the steep climb in the previous session continued to apply pressure. Feeder Cattle were down an average of about $3 in the last two sessions.

Total estimated cattle slaughter the week ending May 29 was 629,000 head, according to USDA. That was 40,000 head fewer than the previous week. Total estimated beef production for the week was 518.0 million lbs., which was 32.7 million lbs. less than the prior week.

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Major U.S. financial indices edged higher Friday on generally positive economic news.

Personal consumption expenditures (PCE), excluding food and energy, increased $80.3 billion (0.5%), according to the U.S. Bureau of Economic Analysis. The core PCE price index, excluding food and energy—a key inflation gauge the Federal Reserve monitors—was 3.1% more than a year earlier, according to the U.S. Commerce Department. The pace of inflation was slightly more than analyst expectations but reportedly less than many traders feared.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 12 points.

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Between new packing plants and plans for expanding current facilities, the North American Meat Institute (the Meat Institute) estimates there’s an additional 4,150 head per day (+4%) packing capacity in various stages of completion. However, even with added capacity, Sarah Little, vice president of communications for the Meat Institute explains, “Labor is, and is likely to remain, a significant factor that affects utilization of production; and is also a factor that will challenge new small and medium sized facilities entering the market.”

As mentioned previously in Cattle Current, there are no easy solutions to the ongoing predicament of lower derivative demand for fed cattle from packers, relative to elevated derivative demand from wholesalers and overall strong consumer beef demand. Economic fundamentals explain the current reality, no matter how frustrating.

Plenty of emotion is understandably involved, but sharing myths as fact hinders legitimate discussion and the search for long-term market solutions. With that in mind, the Meat Institute shared facts to counter several popular cattle market myths. Among them:

Myth: Fed cattle marketing options such as forward contracting and formula-based sales, allow meatpackers to exert more control, limit competition and depress sales in the live cash market.

Fact: Forward contracts and formula-based sales provide an effective way for producers to hedge their risk and lock in prices. They also often pay premiums for quality. This allows packers and producers and feeders to predict needs in advance…In its 2018 report to Congress, USDA’s Agricultural Marketing Service reported, “Stakeholders were in general agreement that formula-based purchases provide greater benefits, in terms of operational efficiency, for both packers and feedlots.”

Fact: From 2002 to 2019, according to USDA data compiled by economist and industry expert Nevil Speer, PhD, while the number of cattle sold on a cash market basis declined 55%, beef grading in the top two quality grades (Choice and Prime) increased 39%. During the same period of time, consumer per capita beef expenditures increased 56%.

Myth: Packers can control prices and defy expectations of market fundamentals.

Fact: The cattle market works as economists would have predicted, given the current conditions: when supplies of cattle increase, prices decrease, and vice versa.

Fact: There appears to be insufficient long-term profitability to attract many investors to the beef packing sector. According to Rabobank analysts, “Several considerable hurdles must be addressed by both incumbents and new entrants…First, the upfront cost of a new plant is extremely expensive…$100 million to $120 million USD for every 1,000 head of daily capacity.

“… the capital depth and longevity required to build and maintain a new plant through its first cattle cycle precludes most would-be investors from considering such a project…That’s not a recipe for thin capital or weak hearts.”

Negotiated cash fed cattle trade was at a standstill in Colorado through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was mostly inactive on very light demand.

So far this week, live prices are $116-$120/cwt. in the Texas Panhandle, $119-$120 in Kansas and at $120 in Nebraska and the western Corn Belt. Dressed prices are at $191 in Nebraska and $189-$191 in the western Corn Belt.

Feeder Cattle futures closed an average of $1.69 lower Thursday, from 20¢ lower in spot May to $2.35 lower. Corn futures applied the pressure, up 33¢ to 40¢ higher through Jly ’22 and then mostly 13¢ to 24¢ higher. Dryness in the forecast and strong exports helped fuel the bounce. Soybean futures tagged along, closing 26¢ to 34¢ higher.

Live Cattle futures edged an average of 20¢ higher, except for 10¢ lower in spot Jun. Support included positive export news.

Net U.S. beef export sales of 27,900 metric tons (mt) for 2021 were 19% more than the previous week and 45% more than the prior four-week average, according to USDA’s U.S. Export Sales report for the week ending May 20. Increases were primarily for China, Japan, South Korea, Indonesia, and Taiwan.

Choice boxed beef cutout value was 49¢ higher Thursday afternoon at $329.98/cwt. Select was 5¢ higher at $304.10

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Major U.S. financial indices closed flat to higher Thursday, supported by fewer initial weekly unemployment insurance claims than analysts expected. Initial claims were 406,000 for the week ending May 22, according to the U.S. Department of Labor. That was 38,000 fewer than the previous week and the least since March of last year.

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 1 point.

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La Niña conditions ended earlier this month and NOAA forecasters estimate about a 67% chance that neutral conditions will continue through the summer.

As it is, dryness and drought continues across much of the United States, according to the U.S. Drought Monitor. Specifically, 61.4% of the nation is classified from abnormally dry to exceptional drought, compared to 34.4% a year earlier; 21.3% is experiencing extreme or exceptional drought versus 1.2% last year.

Negotiated cash fed cattle trade was slow on light demand through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices in the Texas Panhandle Prices were steady to $3 lower than last week at $116-$120/cwt., steady to $1 higher in Kansas at $119-$120 and steady in Nebraska at $120. Dressed trade was steady to $1 higher in Nebraska at $191.

Although there were too few transactions to trend in the western Corn Belt, early live trades were steady at $120, while dressed sales were steady to $3 higher at $191.

Cattle futures edged lower Wednesday. Pressure included softer cash prices in the south and a deceleration in wholesale beef values.

Feeder Cattle futures closed an average of 49¢ lower (5¢ to $1.47 lower), except for an average of 24¢ higher in two contracts. 

Live Cattle futures closed an average of 34¢ lower.

Corn futures edged mostly 2¢ to 5¢ higher Wednesday, following the previous day’s steep break.

Front-month Soybeans continued to soften with the lack of follow-through export sales. Soybean futures closed fractionally lower to 8¢ lower through Jly ‘22 and then mostly 7¢ higher.

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Major U.S. financial indices closed mainly flat Wednesday.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 7 points higher. The NASDAQ was up 80 points.

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USDA projects U.S. beef exports this year to be record large for both volume and value at $7.6 billion, according to the latest quarterly Outlook for U.S. Agricultural Trade. That’s $200 million more than forecast three months earlier, based on both increased volume and unit values.

For that matter, USDA forecasts record-high levels of exports for other red meats and poultry, as well as for U.S. agricultural products overall. Total value of U.S. farm exports for fiscal year 2021 is projected to be $164 billion, which would be $28 billion more (+21%) than the previous year and the highest total on record. The annual export record of $152.3 billion was set in 2014.

“U.S. agricultural trade has proven extraordinarily resilient in the face of a global pandemic and economic contraction,” says Agriculture Secretary Tom Vilsack. “Today’s estimate shows that our agricultural trading partners are responding to a return to certainty and reliability from the United States.” 

Key drivers of the surge in projected U.S. agricultural exports include a record outlook for China, record export volumes and values for a number of key products, sharply higher commodity prices, and reduced foreign competition.

China is poised to be back on top as the United States’ number one customer, with U.S. exports to that nation forecast at $35 billion, eclipsing the previous record of $29.6 billion set in 2014.

“The comparatively early post-pandemic re-emergence of the manufacturing sector in China facilitated the boost in global demand for goods, helping China’s GDP to grow by 2.3% in 2020,” say analysts with USDA’s Economic Research Service (ERS). GDP in China this year is projected to be 8.2%.

As the global economy emerges from the pandemic, ERS analysts note the significant price increase for commodities, such as lumber and copper, used in manufacturing and construction.

“The current level of backwardation or inversion of commodity future contracts, where the nearby delivery contract is priced above more distant delivery dates, suggests the price boom is in part due to near-term supply constraints,” say ERS analysts. “The U.S. dollar is expected to depreciate by 2.4% in 2021, which is likely to continue to support higher commodity demand and prices into next year.”

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains, Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales at $119 to mostly $120/cwt., except for $118 in the western Corn Belt. Early dressed sales in Nebraska were at $191.

Feeder Cattle futures closed higher Tuesday, boosted by another sharp break in Corn futures prices.

Feeder Cattle futures closed an average of $2.07 higher, from 35¢ higher in spot May to $2.55 higher. 

Live Cattle futures mainly edged higher, supported by wholesale beef values and resurgent front-month

Live Cattle futures closed an average of 30¢ higher, except for unchanged to an average of 9¢ lower in three contracts.

Choice boxed beef cutout value was $2.09 higher Tuesday afternoon at $329.92/cwt. Select was 87¢ higher at $304.26

Corn futures wilted Tuesday, pressured by planting progress and crop development, forecast rain and chatter about more corn acres.

Corn futures closed 23¢ to 37¢ lower though Jly ‘22 and then mostly 8¢ lower

Soybean futures closed 10¢ to 15¢ lower through May ‘22 and then mostly 6¢ lower.

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Major U.S. financial indices softened Tuesday after early gains.

The Dow Jones Industrial Average closed 81 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 4 points. 

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Total pounds of beef in freezers April 30 were 6% less than the previous month and 5% less than a year earlier, according to USDA’s monthly Cold Storage report. 

Frozen pork supplies were up 1% from the previous month but down 26% from last year. Stocks of pork bellies were down 3% from last month and down 58% from last year.

Total red meat supplies in freezers were 3% less than the previous month and 17% less than the same time last year.

Total frozen poultry supplies were down slightly from the previous month and down 20% from a year ago.

Negotiated cash fed cattle trade was mostly inactive with very light demand in Nebraska and the western Corn belt through Monday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was at a standstill.

Live prices last week were at $119-$120/cwt. in the Texas Panhandle, at $119 in Kansas and at $120 in other regions. Dressed trade was at $190-$191 in Nebraska, $191 in Colorado and at $188-$191 in the western Corn Belt.

Feeder Cattle futures shrugged off Friday’s Cattle on Feed report and mostly extended gains Monday, helped along by further softness in Corn futures and recently stronger cash prices.

Feeder Cattle futures closed an average of 57¢ higher, except for 95¢ lower in spot May and unchanged in Mar.

Live Cattle futures weakened. Besides the lack of early-week cash direction, traders are likely trying to decide whether beef prices decline significantly after the Memorial Day push or slowly recede from current levels with further reopening of restaurants and food service.

Live Cattle futures closed an average of 55¢ lower, from 15¢ lower toward the back to 92¢ lower in spot Jun.

Choice boxed beef cutout value was $2.66 higher Monday afternoon at $327.83/cwt. Select was $1.08 higher at $303.39

Corn futures closed mostly 5¢ to 6¢ lower. 

Soybean futures closed mostly 3¢ to 4¢ higher, after 1¢ to 3¢ lower in the front three contracts.

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Major U.S. financial indices closed higher Monday, apparently buoyed most by stocks that gain more with the reopening economy.

The Dow Jones Industrial Average closed 186 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 190 points.

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“Current futures prices imply fourth-quarter margins will be very good for feedlots,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “LMIC projected break-evens currently list October at about $115/cwt., nearly $10 under the current October Live Cattle Contract. More distant deferred Live Cattle contracts are even higher, which should bode well for cattle feeding returns into the first half of 2022.”

So far this year, LMIC estimates cattle feeding returns at -$60 to +$40 per head, due in part to escalating feed costs on the negative side of the ledger, but supported by declining feeder cattle prices from August of last year through January this year.

“Break-evens have been declining since January because of the rapid decline in feeder prices six months prior,” say LMIC analysts. “However June will be the last month of declining feeder costs, and those breakeven prices are expected to rise at least through September. May feeder cattle costs are expected to drop significantly, offering an opportunity for cattle feeders to make money in the fourth quarter.”