Daily Market Highlights

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

For the week, live prices were steady at $114/cwt. in the Southern Plains, steady to $1 higher at $114 in Colorado, steady in Nebraska at $113-$114 and steady to $1 lower in the western Corn Belt at $112-$113. Dressed trade was steady in Nebraska at $180 and steady to $2 lower in the western Corn Belt at $178-$180.

Lower grain futures helped lift Cattle futures on Friday. Perhaps some traders also are returning to the Live Cattle Market, positioning ahead of what appears to be a solid trend higher after first-quarter supplies are whittled and as the U.S. economy expands.

Live Cattle futures closed an average of 83¢ higher.

Feeder Cattle futures closed an average of $1.52 higher.

Choice boxed beef cutout value was 80¢ lower Friday afternoon at $225.87/cwt. Select was 20¢ higher at $220.27.

Total estimated cattle slaughter for the week ending Mar. 13 was 647,000 head, which was 18,000 head fewer than the prior week. Year-to-date estimated total cattle slaughter of 6.47 million head is 209,000 head fewer (-3.12%). Estimated beef production so far this year is 5.46 billion lbs., which is 74.8 million lbs. less (-1.35%) than the same time last year.

Corn futures closed mostly 4¢ lower.

Soybean futures closed 1¢ to 5¢ higher, after mostly fractionally mixed through Jan ’22. 

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Major U.S. financial indices closed mixed but mostly higher Friday. Primary pressure was rising bond yield rates on big tech stocks.

The Dow Jones Industrial Average closed 293 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 78 points.

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Gradual deployment of effective COVID-19 vaccines is boosting prospects for sustained global economic recovery, according to the Organization for Economic Cooperation and Development (OECD).

OECD increased its expectations for global GDP this year by more than 1%—compared to December projections—to 5.6%, in that organization’s Interim Economic Outlook.

World output is expected to reach pre-pandemic levels by the middle of this year but the pace and duration of the recovery will depend on the race between vaccines and emerging variants of the virus, according to OECD analysts.

“Widespread vaccination of the adult population is the best economic policy available today to get our economies and employment growing again,” says OECD Chief Economist Laurence Boone. “…If we don’t get enough people vaccinated quickly enough to allow restrictions to be lifted, the recovery will be slower and we will undermine the benefits of fiscal stimulus.”

In the OECD’s central scenario, U.S. GDP is projected to be 6.5% this year, which is more than 3% higher than the December projection, partly reflecting the large-scale fiscal stimulus with a sustained pace of vaccination.

Vaccine deployment remains uneven globally, OECD analysts say, noting the pandemic is widening gaps in economic performance between countries and between sectors, increasing social inequalities, particularly affecting vulnerable groups, and risking long-term damage to job prospects and living standards for many people.

Among other highlights from the OECD report summary:

Cost pressures have begun to emerge in commodity markets due to the resurgence of demand and temporary supply disruptions, but underlying inflation remains mild, held back by spare capacity around the world.

The current very accommodative monetary policy stance should be maintained, and allow temporary overshooting of headline inflation provided underlying price pressures remain well contained, with macro-prudential policies deployed where necessary to ensure financial stability.

Continued income support for households and companies is warranted until vaccination allows a significant easing of restraints on face-to-face activities, but should be refocused to support people and help companies with grants and equity rather than debt.

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Thursday afternoon, with too few transactions to trend. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.

For the week, live prices are steady at $114/cwt. in the Southern Plains, steady to $1 higher at $114 in Colorado, steady in Nebraska at $113-$114 and steady to $1 lower in the western Corn Belt at $112-$113. Dressed trade is steady in Nebraska at $180 and steady to $2 lower in the western Corn Belt at $178-$180.

Net U.S. beef export sales for the week ending Mar. 4 were 20,900 metric tons, according to USDA’s weekly U.S. Export Sales report. That was 8% less than the previous week but 17% more than the previous four-week average. Increases were primarily for South Korea, Japan, Mexico, China and Taiwan.

Cattle futures closed mixed Thursday. Live Cattle closed mostly higher, supported by a strong rally in front-month Lean Hog futures. Feeder Cattle futures edged mostly lower with higher Corn futures and the sluggish recovery in cash prices.

Live Cattle futures closed an average of 48¢ higher, except for 5¢ to 30¢ lower in three contracts.

Feeder Cattle futures closed an average of 43¢ lower, except for unchanged to 7¢ higher in three contracts.

Choice boxed beef cutout value was 62¢ lower at $226.67/cwt. Thursday afternoon. Select was 25¢ higher at $220.07.

The average dressed steer weight the week ending Feb. 27 was 899 lbs., which was 10 lbs. lighter than the previous week and 2 lbs. heavier year over year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 834 lbs. was 7 lbs. lighter than the previous week and 1 lb. heavier year over year.

Corn futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed mostly 5¢ to 9¢ higher though May ‘22, and then mostly 11¢ to 16¢ higher.

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Major U.S. financial indices closed higher Thursday, supported by President Biden singing the COVID-19 relief bill and a more positive labor outlook than the trade expected.

Initial unemployment insurance claims for the week ending Mar. 6 were 712,000, according to the U.S. Department of Labor. That was 42,000 fewer than the previous week.

The Dow Jones Industrial Average closed 188 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 329 points.

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“U.S. corn market prices continue to rise, largely driven by strong export demand and tight global supplies,” say analysts with USDA’s Economic Research Service (ERS), in the latest USDA Feed Outlook. “The average cash-spot corn-market prices for Central Illinois and the Gulf for February 2021 were $5.56/bu. and $6.24/bu., respectively. By comparison, the same prices in February 2020 were $3.75 and $4.29.”

Through the first five months of the 2020-21 marketing year, U.S. corn exports totaled 857 million bu., significantly higher than the same time a year earlier. For the year, corn exports are projected at 2,600 million bu., according to ERS.

“The Foreign Agricultural Service’s (FAS) Export Sales Report system shows record amounts of total commitments and outstanding sales for U.S. corn—mostly driven by large purchases for China’s market,” ERS analysts explain. “In order to meet these outstanding sales, the U. S. export program would have to operate at a very high pace, consistently, for the remainder of the marketing year. Inspections data indicate a high export level for February—potentially a February export record—with strong demand to China, Mexico, and Japan. While the strong pace may be logistically feasible, the United States is also likely to face increased competition from Southern Hemisphere corn exporters in the second half of the marketing year.”

Ethanol is another key wild card for corn prices going forward.

With demand for ethanol this year—and the derived demand for corn—primarily driven by trends in gasoline consumption, ERS analysts say how and when U.S. consumers return to the roads will be the most important factor relative to that aspect of the corn market.

“Overall, gasoline prices through the end of 2020 remained lower than pre-COVID-19 levels, indicating that demand was still relatively weak. The RBOB spot price averaged $1.43/gal. in December 2020, which was up 204% from the April 2020 average of $0.47/gal., but was still lower than $1.66/gal. in December 2019,” say ERS analysts. “Through early 2021, however, prices have been steadily climbing back to pre-COVID-19 market levels, indicating that supply is continuing to adjust to current levels of demand, as well as higher crude oil prices. The USDA’s 2020-21 corn used for ethanol forecast is currently 4,950 million bu., which assumes higher corn use for ethanol from March to August relative to 2019-20.

Negotiated cash fed cattle trade continued steady with last week in the Southern Plains on Wednesday at $114/cwt., with limited trade and light demand in the Texas Panhandle; limited trade on light to moderate demand in Kansas.

Live trade in Nebraska was light on light to moderate demand at $113 to $114, which was steady with last week, but steady to $1 lower than the previous day. Dressed trade on Tuesday was mainly steady at $180.

In Colorado, live trade was steady with the prior day and week at $114, with slow trade and light demand.

Trade was limited on light demand in the western Corn Belt with too few transactions to trend. Live prices there last week were at $112 to $114; dressed trade at $180.

Cattle feeders offered 1,296 head (9 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. All were from the Southern Plains, except for one lot in Nebraska. The reserve price was $114/cwt. on all but one lot. None sold. The highest bids were at $113.75.

Cattle futures softened Wednesday, challenged by steady rather than higher cash prices and dwindling wholesale beef values.

Live Cattle futures closed an average of 49¢ lower, except for 30¢ higher in the back contract.

Feeder Cattle futures closed an average of 27¢ lower, except for unchanged in Nov.

Choice boxed beef cutout value was $1.74 lower Wednesday afternoon at $227.29/cwt. Select was $3.98 lower at $219.82.

Grain futures closed lower on Wednesday, amid likely profit taking and with the static to slightly bearish World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 10¢ to 14¢ lower through the front three contracts, and then mostly 2¢ to 4¢ lower. 

Soybean futures closed 22¢ to 30¢ lower through Jan ‘22, and then mostly 10¢ to 15¢ lower.

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Except for a slight decline in the tech-heavy NASDAQ, major U.S. financial indices closed higher Wednesday, buoyed by a decline in Treasury yield rates and House passage of the Covid-19 relief bill.

The Dow Jones Industrial Average closed 464 points higher. The S&P 500 closed 23 points higher. The NASDAQ was down 4 points.

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Severe winter weather last month stalled the slow progress restaurants were making in recovering business from the pandemic.

Year-over-year major restaurant chain customer transactions declined by 13% in February, compared to a 9% decline in January, according to the NPD Group (NPD) CREST^®Performance Alerts which provides a rapid weekly view of chain-specific transactions and share trends for 75 quick service, fast casual, midscale, and casual dining chains representing 53% of the commercial restaurant traffic in U.S.

Customer transactions at major restaurant chains in Texas for the month of February declined by 46% compared to year ago, as record low cold temperatures, snow and ice disrupted travel and rocked the state’s power grid.

Overall, customer transactions at major full-service restaurant chains, which have been challenged throughout the pandemic by mandated dine-in restrictions and shutdowns, decreased by 33% in February versus a year earlier. Major quick service restaurant chains, which represent the bulk of the restaurant industry transactions, were 12% less than the same time last year.

“Aside from any unforeseen events or severe weather in major parts of the country, we should see customer transaction declines improving in the months to come,” says David Portalatin, NPD food industry advisor. “The next several months will help us plot the course for the U.S. restaurant industry’s recovery.”

Negotiated cash fed cattle trade was slow on light demand in the Northern Plains through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few early live sales at $114/cwt., which was steady to $1 higher.

Last week, live prices were at $114 in the Southern Plains, $113-$114/cwt. in the Northern Plains and at $112-$114 in the western Corn Belt. Dressed trade was at $180.

Cattle futures closed mostly higher Tuesday, buoyed in part by softer Corn futures and increasing chatter that the bottom may finally be in or at least near for cattle prices.

Live Cattle futures closed an average of 33¢ higher, except for an average of 16¢ lower in the back two contracts.

Feeder Cattle futures closed an average of $2.03 higher through the front three contracts, and then from 30¢ lower to 60¢ higher.

Choice boxed beef cutout value was $2.05 lower Tuesday afternoon at $229.03/cwt. Select was 67¢ higher at $223.80.

Corn futures closed mostly 1¢ to 3¢ higher, except for 1¢ to 3¢ lower in the front three contracts.

Soybean futures closed mostly 4¢ to 7¢ higher.

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Major U.S. financial indices closed higher Tuesday, led by recently beleaguered big tech stocks, as Treasury yield rates declined.

The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 464 points.

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USDA’s Economic Research Service (ERS) increased estimated beef production for this year by 40 million lbs. to 27.58 billion lbs., in the latest World Agricultural Supply and Demand Estimates (WASDE).

“First-half beef production is raised from last month as lower expected fed cattle slaughter in the first quarter is more than offset by higher first-half non-fed cattle slaughter,” according to ERS analysts. “Second-half production is adjusted to reflect a more rapid pace of first-quarter feedlot placements.”

Fed steer price forecasts were unchanged at $113/cwt. in the first and second quarters, $114 in the third quarter and $119 in the fourth quarter for an annual average of $115.

Total red meat and poultry production was reduced 127 million lbs. to 107.47 billion lbs., with expected reductions in pork, broiler and turkey production.

Among other WASDE highlights:

Corn

The 2020-21 U.S. corn supply and use outlook was unchanged from the previous month. However, international corn production was forecast higher with increases for India, South Africa, and Bangladesh. Global corn ending stocks, at 287.7 million tons, were up 1.1 million from the previous month.

The projected season-average farm price was unchanged at $4.30/bu. 

Soybeans

U.S. soybean supply and use projections for 2020-21 were mostly unchanged. Global 2020-21 oilseed supply and demand forecasts include higher production, exports, and ending stocks.

The U.S. season-average soybean price was projected at $11.15/bu., unchanged from the prior month. Although current cash prices are significantly higher, ERS analysts explain prices received through January averaged just over $10/bu., reflecting forward pricing at lower prices. Soybean meal prices were also unchanged at $400/ton. Soybean oil price was forecast at 41.0¢/lb., up 1¢ from the prior month.

Wheat

The supply and demand outlook for 2020-21 U.S. wheat was mostly unchanged. The 2020-21 global wheat outlook is for larger supplies, increased consumption, higher exports, and reduced stocks. Supplies were raised 3.5 million tons to 1,077.1 million.

The season-average farm price for wheat was unchanged at $5.00/bu. 

Negotiated cash fed cattle trade was at a standstill through Monday afternoon, except for mostly inactive on very light demand in the western Corn Belt, according to the Agricultural Marketing Service.

Prices last week ended up steady on a live basis in the Southern Plains at $114/cwt., steady to $1 lower in the Northern Plains at $113-$114 and steady to $2 lower in the western Corn Belt at $112-$114. Dressed trade was $2 lower at $180.

The five-area average direct steer price last week was 43¢ lower on a live basis at $113.64/cwt. and $1.84 lower in the beef at $179.79.

Cattle futures closed higher Monday, supported by increasing optimism about further reopening the domestic economy and more positive fundamentals on the horizon.

Live Cattle futures closed an average of 59¢ higher.

Feeder Cattle futures closed an average of 61¢ higher, except for 7¢ lower in May.

Choice boxed beef cutout value was 25¢ lower Monday afternoon at $231.08/cwt. Select was $2.28 higher at $223.13.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed mostly 3¢ to 8¢ higher.

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Major U.S. financial indices closed mixed Monday. Key support included the Senate passing the $1.9 trillion pandemic relief legislation over the weekend, with expectations the House of Representatives will follow suit. Pressure included the outlook for higher inflation and interest rates.

The Dow Jones Industrial Average closed 306 points higher. The S&P 500 closed 20 points lower.The NASDAQ was down 310 points.

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“Although the global foodservice sector still has a long recovery ahead, international demand for U.S. red meat remains impressive and resilient, but a range of logistical challenges must be overcome in order to fully satisfy this demand,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF).

For instance, Halstrom explains transportation challenges are currently a dominant concern, especially congestion and container shortages at West Coast ports where shorthanded crews are handling record-large cargo volumes.

“Labor is also at a premium in processing plants, which affects the industry’s ability to fully capitalize on demand for certain labor-intensive cuts and variety meat items,” Halstrom says.

Such challenges helped pressure U.S. beef and pork exports to start the year.

U.S. Beef exports were 2% less year over year in January at 105,047 metric tons (mt), according to data released by USDA and compiled by USMEF. Value was 3% less at $653 million. Lower beef variety meat shipments drove the decline as muscle cut exports were steady with a year earlier.

January beef exports to South Korea were strong and continued to gain momentum in China.

U.S pork exports in January of 248,656 mt, were 9% less than a year earlier. Export value was 13% less at $642.8 million.

Although exports still face the aforementioned transportation and labor challenges, as well as COVID-related obstacles, Halstrom says, “As key destinations for U.S. red meat roll out COVID vaccination programs, the outlook for 2021 is optimistic, with retail meat demand remaining strong and the expectation that foodservice will rebound in more and more regions.”

Negotiated cash fed cattle trade was limited on light to moderate demand in Colorado and the western Corn Belt through Friday afternoon. Elsewhere, trade ranged from a standstill to mostly inactive on very light demand, according to the Agricultural Marketing Service.

For the week, established trade was steady on a live basis at $114/cwt. in the Southern Plains and Northern Plains. Dressed trade in Nebraska was $2 lower at $180. The previous week, live sales in the western Corn Belt were at $114, with dressed trade at $182.

Total estimated cattle slaughter the week ending March 6 was 665,000 head, which was 1,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 5.83 million head is 213,000 head fewer (-3.52%) than the same period last year. Estimated beef production so far this year is 4.93 billion lbs., which is 73.8 million lbs. less (-1.48%) year over year.

Cattle futures closed higher Friday, supported by higher outside markets and despite the increase in grain futures. Perhaps support also included expectations that cash fed cattle prices next week will likely edge higher, given the dearth of cash purchases by packers the past two weeks.

Live Cattle futures closed an average of 59¢ higher.

Feeder Cattle futures closed an average of $1.48 higher (5¢ to $2.50 higher), except for 50¢ lower in spot Mar.

Choice boxed beef cutout value was $2.55 lower Friday afternoon at $231.33/cwt. Select was 83¢ lower at $220.85.

Grain futures closed higher Friday, likely supported by positioning ahead of the next World Agricultural Supply and Demand Estimates due out Tuesday.

Corn futures closed 11¢ to 15¢ higher in the front three contracts, and then mostly 3¢ to 5¢ higher.

Soybean futures closed mostly 10¢ to 19¢ higher.

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Major U.S. financial indices closed higher at the end of a volatile trading session Friday. Primary support seemed to stem from easing Treasury yield rates and significantly more new jobs than the trade expected.

Total non-farm payroll employment rose by 379,000 in February, according to the U.S. Bureau of Labor Statistics. The nation’s unemployment rate was little changed at 6.2%. Average hourly earnings for all employees on private non-farm payrolls increased by 7¢ to $30.01.

West Texas Intermediate Crude Oil Futures on the CME were an average of $4.63 higher week to week on Friday.

The Dow Jones Industrial Average closed 572 points higher on Friday. The S&P 500 closed 73 points higher. The NASDAQ was up 196 points. 

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Total beef cows in Canada and the U.S. totaled 34.69 million head  Jan. 1, which was 194,300 head fewer (-0.56%) than the previous year, according to the United States and Canadian Cattle and Sheep report. Beef cows in the U.S. were 31.16 million head, which were 181,100 fewer (-0.58%). Beef cows in Canada of 3.53 million head were 13,200 head fewer (-0.37%).

The inventory of all cattle and calves in the U.S. and Canada Jan. 1 was 104.74 million head, which was  313,800 head fewer year over year (-0.30%). Inventory in the U.S. of 93.59 million head were 198,800 head fewer (-0.21%). Canadian inventory of all cattle and calves was 11.15 million head, down 115,000 head (-1.02%); the least since 1989, according to the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor.

Between a smaller calf crop (-0.8%) north of the border and 4.1% more heifers retained for replacement, LMIC analysts say there will likely be a smaller number of cattle available in Canada for feedlots in 2021.

Negotiated cash fed cattle trade was at a standstill in Colorado and the Texas Panhandle through Thursday afternoon. Elsewhere, trade was limited on light demand with too few transactions to trend.

For the week so far, trade is steady with last week on a live basis in the Southern Plains and Northern Plains at $114/cwt. Dressed trade in Nebraska is $2 lower at $180. Live sales in the western Corn Belt last week were at $114, with dressed trade at $182.

Cattle futures closed lower Thursday, pressured by the slog for higher cash prices and faltering outside markets. That was despite net U.S. export beef sales for the week ending Feb. 25 up noticeably from the previous week and up 15% from the prior four-week average at 22,600 metric tons (mt), according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service.

Live Cattle futures closed an average of 41¢ lower, from 2¢ lower at the back to 85¢ lower in spot Apr.

Feeder Cattle futures closed an average of $1.34 lower, from 75¢ lower at the back to $2.32 lower toward the front.

Choice boxed beef cutout value was 85¢ higher Thursday afternoon at $233.88/cwt. Select was $2.56 lower at $221.68.

The average dressed slaughter weight of 909 lbs. the week ending Feb. 20 was 10 lbs. less than the previous week, helped along by the recent winter storm. That was still 9 lbs. heavier year over year, according to the USDA Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 841 lbs. was 9 lbs. lighter than the previous week, but 10 lbs. heavier year over year. Fed cattle slaughter of 439,124 head was 49,097 head fewer (-10.05%) than the same week a year earlier.

Corn futures encountered some pressure in the front months, perhaps tied in part to the previously mentioned weekly U.S. Export Sales report.

Weekly net U.S. corn export sales of 115,900 mt for 2020-21 were a market-year low, down 74% from the previous week and down 96% from the previous four-week average. U.S. net soybean export sales of 334,000 mt were up noticeably from the previous week but 33% less than the previous four-week average.

Corn futures closed mostly 1¢ to 2¢ higher, except for 1¢ to 4¢ lower in the front three contracts.

Soybean futures closed 6¢ to 15¢ higher, except for 3¢ to 4¢ higher in the front five contracts.

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Major U.S. financial indices closed sharply lower Thursday, with traders apparently rattled by Federal Reserve Chair Jerome Powell’s dovish remarks concerning recent inflation, which helped lift Treasury yield rates and depress bond prices.

On the other hand, crude oil futures continued to surge higher, tied to the OPEC announcement that it would maintain reduced production levels. West Texas Intermediate on the CME closed $2.13 to $2.55 higher through the front six contracts.

The Dow Jones Industrial Average closed 345 points lower. The S&P 500 closed 51 points lower. The NASDAQ was down 274 points.

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Recent data continues to paint a bleak picture for U.S. restaurant recovery, the nation’s second largest private sector employer.

“While many other industries have moved into a recovery phase, the restaurant industry ended last year in a double-dip recession and with 2.5 million fewer jobs. Between March 2020 and January 2021, restaurant and foodservice sales were down $255 billion from expected levels,” according to a letter to Congress from Sean Kennedy, Executive Vice President of the National Restaurant Association (NRA). The letter supported passage of the American Rescue Plan.

Kennedy shared highlights from a February NRA survey of 3,000 restaurant operators.

Among the survey findings:

The restaurant industry lost nearly 450,000 jobs between November of last year and January 2021, representing about 10% of the total jobs recovered during the first six months after the spring shutdowns. Eighty percent of operators say their current staffing level is lower than what it would normally be in the absence of COVID-19.

Consumer spending in restaurants remained well below pre-pandemic levels in January. Overall, 77% of restaurant operators say their total dollar sales volume in January was lower than in January 2020.

32% of restaurant operators think it will be 7 to 12 months before business conditions return to normal for their restaurant, while 29% think it will be more than a year. An additional 10% of operators say business conditions will never return to normal for their restaurant.

14% of restaurant operators say they will ‘probably’ or ‘definitely’ be closed within three months if there are no additional relief packages from the federal government.

Negotiated cash fed cattle trade and demand were light to moderate in the Southern Plains through Wednesday afternoon at $114/cwt., according to the Agricultural Marketing Service; steady with the previous week. Trade was light on moderate demand in Nebraska with dressed prices $2 lower at $180. Elsewhere, trade was limited on light demand, with too few transactions to trend.

Cattle feeders offered 1,592 head (10 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. All were from Texas, except for one lot from Nebraska. Of those offered, 757 head sold (four lots), with 167 heifers bringing an average price of $114.08/cwt. and 590 steers bringing an average of $114.00. All sales were by live weight.

Similarly, Choice steers and heifers sold steady to $1 lower at the fat auction in Tama, IA. There were 150 Choice 2-4 steers weighing an average of 1,473 lbs., bringing an average of $114.19/cwt., which was steady with the prior week’s negotiated trade.

Cattle futures closed mainly higher Wednesday, supported by lower Corn futures and oversold conditions.

Live Cattle futures closed an average of 59¢ higher, except for an average of 5¢ lower in the front two contracts.

Feeder Cattle futures closed an average of $1.28 higher, from 47¢ higher in spot Mar to $1.97 higher toward the back.

Choice boxed beef cutout value was $1.65 lower Wednesday afternoon at $233.03/cwt. Select was $1.93 lower at $224.24.

Corn futures closed 2¢ to 10¢ lower through May ‘22 and then mostly fractionally mixed.

Soybean futures closed 3¢ to 7¢ lower through Mar ‘22, and then mostly fractionally higher to 1¢ lower.

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Major U.S. financial indices closed lower Wednesday. Positive news included private sector employment increasing by 117,000 jobs from January to February according to the February ADP^® National Employment Report^TM. 

Pressure included a higher Treasury yield rate, though not spiking as it did last week.

The Dow Jones Industrial Average closed 121 points lower. The S&P 500 closed 50 points lower. The NASDAQ was down 361 points.

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Agricultural producers surveyed for the monthly Purdue University/CME Group Ag Economy Barometer believe plant-based meat alternatives will make inroads in the total protein marketplace during the next five years.

According to the February Ag Economy Barometer report, 55% of respondents said they expect alternative protein sources to capture up to 10% of the combined market for animal and plant-based protein, while approximately 15% said they expect plant-based alternatives to capture 10% or more of the total protein market.

Respondents also believe alternative proteins gaining too much market share would impact farm income negatively.

When asked what impact they would expect to see on farm income if plant-based alternatives to animal protein capture a relatively large market share (25%) of the total protein market, a majority  said they think the impact on farm income would be negative. Approximately four out of 10 producers would expect to see farm income decline by 10% or more.

“That a majority of farmers perceive negative effects of alt-meats on the agricultural economy is consistent with: 1) the fact that some respondents are likely livestock producers, and 2) a recognition that the amount of corn and soy needed to produce alt-meats is lower than the amount needed to produce an equivalent amount of beef, pork, or chicken,” says Jayson Lusk, Purdue University agricultural economist, in his March 2 blog. 

When asked if they would be interested in pursuing a contract offered to grow a crop used in the production of plant-based meat, 62% of survey respondents said no, 16% said maybe and 23% said yes.

“That strikes me as high and may include a bit of cheap talk,” Lusk explains. “It may also be that the question was worded too vaguely. What are the conditions of the contract? What are the price premiums? Farmers would want to know answers to these questions (and more) before switching to a new crop.”

February’s Ag Economy Barometer reading of 165 was little changed compared to January when the index stood at 167.

The Current Conditions Index of 200 in February was near the all-time high. The Future Expectations Index, though, declined by 3 points to 148, marking the third decline in four months.

“Ongoing strength in ag commodity prices and farm income continue to support producers’ perspective on current conditions while concerns about possible policy changes affecting agriculture and eroding confidence in future growth in ag trade continue to weigh on producers’ future expectations,” according to the report.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses.

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service. Live prices last week were at $114/cwt. and dressed trade was at $182.

Cattle futures closed mixed Tuesday, with continued pressure from Corn futures and uncertainty about the week’s cash direction.

Live Cattle futures closed an average of 33¢ higher, except for 25¢ lower in the back contract.

Feeder Cattle futures closed mixed, from an average of 42¢ lower to an average of 18¢ higher.

Choice boxed beef cutout value was $4.35 lower Tuesday afternoon at $234.68/cwt. Select was $1.47 lower at $226.17.

Corn futures closed mostly 4¢ to 7¢ higher; 13¢ higher in spot Mar.

Soybean futures closed 10¢ to 11¢ higher through Jan ‘22, and then mostly 3¢ higher.

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Major U.S. financial indices closed lower Tuesday, with likely profit taking from the previous day’s sharp rebound.

The Dow Jones Industrial Average closed 143 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 230 points.

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Bipartisan U.S. Senators—Deb Fischer (R-Neb.) and Ron Wyden (D-Ore.)— introduced a bill on Tuesday aimed at increasing transparency and price discovery in cash fed cattle markets.

The Cattle Market Transparency Act of 2021, according to the Senators, will:

Establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades to enable price discovery in cattle marketing regions. It will require the Secretary of Agriculture, in consultation with the Chief Economist, to establish regionally sufficient levels of negotiated cash and negotiated grid trade, seek public comment on those levels, then implement.

Require USDA to create and maintain a publicly available library of marketing contracts between packers and producers in a manner that ensures confidentiality.

Prohibit the USDA from using confidentiality as a justification for not reporting and make clear that USDA must report all Livestock Mandatory Reporting (LMR) information, and they must do so in a manner that ensures confidentiality.

Senator Fischer, a member of the Senate Agriculture Committee first introduced the bill last September.

“I am pleased to reintroduce this bill with bipartisan support,” says Senator Fischer. “It will help facilitate price discovery and provide cattle producers with the information they need to make informed marketing decisions. I am committed to working across the aisle to advance the bill forward this Congress.”

The need for increased market transparency and cash price discovery is recognized widely. Choosing a voluntary or mandatory approach is where opinions diverge just as widely.

“Cattle producers continue to face serious obstacles when it comes to increasing profitability and gaining leverage in the marketplace,” explains Ethan Lane, Vice President of Government Affairs for the National Cattlemen’s Beef Association (NCBA). “Leveling the playing field and putting more of the beef dollar in producer pockets remains the top priority of this association. NCBA shares Senator Fischer’s objectives, as do its affiliates and indeed the entire industry. The best way to achieve those objectives, however, continues to be hotly debated by the very cattle producers this legislation would directly impact. We have worked and will continue to work alongside our affiliates, Congress, and USDA toward regionally robust negotiated trade, the establishment of a cattle contract library, and commonsense in USDA’s rules of confidentiality by taking direction from our membership through the grassroots policy process.”

NCBA is two months into the implementation phase of a voluntary approach, which established a series of triggers to evaluate negotiated trade volumes in each region and benchmarks for improvement.

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service. Live prices last week were at $114/cwt. and dressed trade was at $182.

The weekly five-area direct average fed steer price last week was $114.07/cwt., which was even with the previous week but 78¢ less than the previous year. The average five-area dressed steer price was $181.63, which was $1.06 more than the previous week but $3.15 less than the previous year.

Cattle futures extended losses Monday, with pressure including last week’s steady cash prices, the outlook for steady money this week and expectations for declining wholesale beef values.

Live Cattle futures closed an average of 47¢ lower, except for unchanged to an average of 8¢ higher in three contracts.

Feeder Cattle futures closed an average of 70¢ lower (10¢ lower toward the back to $1.47 lower in spot Mar), except for 50¢ higher in the back contract.

Boxed beef cutout value: Choice boxed beef cutout value was $1.50 lower Monday afternoon at $239.03/cwt. Select was $2.09 lower at $227.64.

Grain Futures softened Monday, pressured by the stronger U.S. Dollar and recently weaker export sales.

Corn futures closed 8¢ to 9¢ lower through the front three contracts, 1¢ to 5¢ lower through the next five and then 1¢ higher.

Soybean futures closed 9¢ to 13¢ lower through Aug’21, and then mostly 1¢ to 4¢ higher

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Major U.S. financial indices roared back Monday, helped along by a lower Treasury yield rate and U.S. approval of a third COVID-19 vaccine—this one a single-shot version from Johnson & Johnson.

The Dow Jones Industrial Average closed 603 points higher. The S&P 500 closed 90 points higher. The NASDAQ was up 396 points.

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Although the La Niña weather pattern leveled off recently, it will return with warm and dry conditions over most of the United States into the summer, according to Dr. Art Douglas, professor emeritus at Creighton University.

“The Pacific jet stream is positioned far north from normal preventing moisture from reaching the continent,” Douglas explained at last week’s CattleFax Outlook, held during the virtual 2021 Cattle Industry Convention Winter Reboot. “The only significant moisture will be in the Ohio Valley and along the Canadian border from northeast North Dakota into Minnesota.”

Douglas forecasts the Southwest U.S. will be warmer than normal, and the western half of the country will be relatively dry. Dry conditions in the Rockies will eventually extend into the central Corn Belt, he said, causing concerns for corn and soybean growers.

With crops and feed costs in mind, Mike Murphy, CattleFax vice president of research and risk management services, estimated that there will be 181 million planted acres of corn and soybeans in 2021, the most ever combined acres for those two commodities.

“That number is likely to be even higher, and in some regards it needs to be larger to balance the demand and build back supply,” said Murphy. He explained corn should be able to balance supply and demand, but soybean supplies will be snugger globally, with a smaller crop expected from South America.

On the demand side of the ledger, Murphy explained China is looking for higher quality feed ingredients, such as corn and soybeans, as that nation rebuilds its pork industry in the wake of African Swine Fever. That includes the estimated 700 million bu. of corn China purchased from the U.S. this year.

“As soybean prices drive higher, soybeans will have a greater influence on the value of corn, bringing corn prices with it,” said Murphy.

Spot soybean prices are expected to be $13.50-$16.50/bu. for the remainder of 2021, according to Murphy.