Daily Market Highlights

Negotiated cash fed cattle trade continued sluggish on Friday. Live trade last week was steady in Nebraska and the Southern Plains at $114/cwt.; steady to $1 lower at $114 in the western Corn Belt. Dressed trade was steady to $2 higher at $182.

Sluggish cattle trade, near-term heavy fed cattle supplies and month-end position squaring all helped pressure Cattle futures Friday.

Live Cattle futures closed an average of $1.50 lower, from 95¢ lower toward the back to $3.90 lower in expiring Feb.

Feeder Cattle futures closed an average of $2.27 lower.

Choice boxed beef cutout value was 14¢ higher Friday afternoon at $240.53/cwt. Select was 94¢ higher at $229.73.

Estimated total cattle slaughter last week of 666,000 head was 114,000 head more than the previous week and 38,000 more than the prior year. Year-to-date estimated cattle slaughter of 5.17 million head is 227,000 head fewer than the same time last year. Beef production of 4.37 billion lbs. is 87.9 million lbs. less (-1.97%) year over year.

Corn futures closed mostly 3¢ to 4¢ lower.

Soybean futures closed mostly 7¢ to 9¢ lower.

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Major U.S. financial indices closed mixed Friday, from the sharply lower Dow to higher tech stocks. Primary pressure continued to be investor fears about rapidly rising inflation and interest rates.

The Dow Jones Industrial Average closed 469 points lower. The S&P 500 closed 18 points lower. The NASDAQ was up 72 points.

CME WTI Crude Oil futures closed $1.93 to $2.03 lower through the front six contracts.

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“Beef in cold storage followed a fairly typical seasonal pattern in 2020 despite the coronavirus pandemic,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, beef in cold storage accelerated more than normal the last quarter of 2020. This resulted in beef in cold storage at the end of January 2021 totaling 519 million lbs., which is the largest quantity of beef in cold storage at the end of January since 2017. This is not an unmanageable quantity of beef, but it could indicate that beef is slowly backing up in the supply chain.” He adds that recently higher wholesale beef values may suggest supplies will be easily cleared.

Total pounds of beef in freezers Jan. 31 were down 3% from the previous month, but up 6% from last year, according to the latest USDA Cold Storage report.

Negotiated cash fed cattle trade was limited on light demand in Nebraska through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live trades at $114/cwt., and a few in the beef at $182, but too few to trend.

There were also a few dressed trades in the western Corn Belt at $182, but too few to trend.

Last week, live sales were at $114 in the Southern Plains and Nebraska; $114-$115 in the western Corn Belt. Dressed trade was at $180-$182.

Cattle feeders offered 790 head (6 lots) in Central Stockyards’ special Fed Cattle Exchange auction Thursday, all from the Southern Plains. None sold. Reserve prices were $115-$116 and bids were $114.25 to $114.50.

Cattle futures closed mixed Thursday. Weaker Corn futures, tied to lower export sales and profit taking, helped Feeder Cattle.

Feeder Cattle futures closed an average of 35¢ higher.

Sharply lower outside markets, the continued lack of cash direction and weaker export sales helped to mostly pressure Live Cattle.

Net U.S. beef export sales of 8,500 metric tons for 2021 were 63% less than the previous week and 66% less than the prior four-week average, according to the U.S. Export Sales report for the week ending Feb. 18. Increases were primarily for South Korea, Japan, Mexico, Canada, and Taiwan.

Live Cattle futures closed an average of 33¢ lower, except for an average of 17¢ higher in three contracts.

Choice boxed beef cutout value was 36¢ lower Thursday afternoon at $240.39/cwt. Select was $1.00 lower at $228.79.

The average dressed steer weight the week ending Feb. 13 was 919 lbs., the same as a week earlier, but 14 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 850 lbs. was 2 lbs. heavier than the prior week and 17 lbs. heavier than the previous year. Fed cattle slaughter of 468,241 head was 40,812 head less than the previous week; 20,542 head less than the prior year.

Corn futures closed 3¢ to 7¢ lower through Sep ‘21, and then mostly 1¢ to 2¢ lower.

Soybean futures closed 5¢ to 18¢ lower through Jan ‘22, and then mostly fractionally higher to 1¢ higher.

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Major U.S. financial indices closed sharply lower Thursday with investors apparently rattled by a surge in Treasury bond yield rates. That came in the face of a more positive unemployment report than the trade expected.

Weekly initial unemployment insurance claims were 730,000 the week ending Feb. 20, down 111,000 from the previous week, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 559 points lower. The S&P 500 closed 96 points lower. The NASDAQ was down 478 points. 

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Beef byproduct values continue to gain after sinking to a pandemic low of $6.57/cwt. the latter part of last April. Prices mostly gradually increased since then to $9.78 by Feb. 24; about 7% more than a year earlier.

“Beef and beef byproducts are typically produced in nearly fixed proportions; however, when packers experienced line disruption in 2020, many plants changed fabrication methods to keep more whole muscles/primals intact and keep less offal to maximize line speed,” explains Brenda Boetel, livestock economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “The decrease in beef and offal provided less opportunities for exports and byproduct values decreased…When these edible offal products are not exported, they will often go into rendering or into pet food and ultimately decrease the overall value of the finished steer.”

Total offal value plus hides accounted for 20.7% of U.S. beef export value in 2020, down from 22% in 2019, according to Boetel.

For perspective, basis a steer at 1,400 lbs., byproduct value increased $44.94 per head to $136.92 at the end of February, compared to the pandemic low.

“With the continued recovery from COVID disruptions, byproduct production has mostly returned to pre-COVID levels. Given the relatively fixed pounds of byproducts per 1,400 lb. steer, the byproduct drop value contributions have been increasing due primarily to changes in demand,” Boetel says.

Negotiated cash fed cattle tradewas limited on light demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service. There were a few live trades in the Southern Plains steady with last week at $114/cwt., but too few to trend.

Cattle feeders offered 1,145 head (9 lots) in Central Stockyards’ (CS) Fed Cattle Exchange auction Wednesday, all from the Southern Plains. Of those, 409 head sold (250 heifers and 159 steers) for a weighted average price of $114.25/cwt. CS will host a special sale Thursday.

On the other hand, slaughter steers sold steady to $3 lower, with instances of $4 lower at Sioux Falls Regional in South Dakota. There were 534 head of Choice 3-4 steers weighing an average of 1,654 lbs., bringing an average of $112.06, which was $2-$3 lower than cash trade in the region last week.

Cattle futures closed higher Wednesday, helped along by sharply higher outside markets, broad commodity support and recent strength in Lean Hog futures.

 Live Cattle futures closed an average of 91¢ higher.

Feeder Cattle futures closed an average of $1.23 higher, from 67¢ higher at the back to $2.15 higher toward the front.

Choice boxed beef cutout value was 46¢ higher Wednesday afternoon at $240.75/cwt. Select was 74¢lower at $229.79. 

Corn futures closed mostly 3¢ to 7¢ higher.

Soybean futures closed 14¢ to 18¢ higher through Jan ‘22, and then mostly 5¢ to 10¢ higher.

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Major U.S. financial indices closed higher Wednesday, amid another volatile session. Support seemed to center around optimism for the economy picking up steam. Remarks from Federal Reserve Vice Chair, Richard Clarida also helped quell inflation worries, with remarks to the U.S. Chamber of Commerce, mirroring the dovish tone of Chair Jerome Powell a day earlier.

The Down Jones Industrial Average closed 424 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 132 points.

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Cattle markets continue to underperform, beneath the weight of record high beef production since the middle of June. But, Randy Blach, CattleFax CEO, expects cattle prices to increase from now through 2024, especially after the first half of this year. Profitability will increase significantly for cow-calf producers and margin operators, he says.

CattleFax shared its Market Outlook Wednesday, as part of the National Cattlemen’s Beef Association Winter Reboot.

Part of the price optimism has to do with declining cattle numbers, after working through current front-end supplies.

CattleFax projects modest herd liquidation of 200,000 beef cows this year and 350,000 head next year, due in part to the likelihood of expanding La Niña drought this spring and summer.

Leverage will also swing back in producers’ favor as packing plant capacity utilization declines, according to Kevin Good, CattleFax vice president of industry relations and analysis.

At the same time, CattleFax expects consumer beef demand to continue strong.

Blach explained domestic consumer beef demand last year was the strongest in more than 30 years, based on the U.S. Consumer Beef Demand Index. That was helped by consumer incomes being replaced almost entirely by government stimulus.

Internationally, CattleFax expects U.S. beef exports to increase at least 5% this year.

In terms of cattle prices, these are the CattleFax projections for this year.

                                                Annual Av.                Range

Fed steer                               $119/cwt.                  $108 to $128

800 lbs. steer                       $145/cwt.                  $135 to $160

550 lbs. steer                       $170/cwt.                  $160 to $180

Utility cows                          $64/cwt.                     $52 to $74

Bred cows                            $1,600/hd                 $1,200 to $1,900

There are headwinds, of course.

Even before considering the drought, Mike Murphy, CattleFax vice president of research and risk management services, said both supply and demand mean feed costs will likely remain elevated into the next crop marketing year.

As well, the folks at CattleFax expect inflation and interest rates to begin rising.

Negotiated cash fed cattle trade was at a standstill in Kansas through Tuesday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand, with too few transactions to trend.

Cattle futures softened Tuesday, with spot Live Cattle soon to expire, the lack of cash direction and bearish outside markets early in the session.

Live Cattle futures closed an average of 85¢ lower, from 10¢ to $1.85 lower.

Feeder Cattle futures closed an average of $1.01 lower, from 67¢ to $1.35 lower.

Choice boxed beef cutout value was 31¢ higher Tuesday afternoon at $240.29/cwt. Select was 55¢ higher at $230.53.

Corn futures closed 1¢ to 2¢ higher through Jly ‘21, and then mostly fractionally mixed.

Soybean futures closed 10¢ to 22¢ higher through Sep ‘22, and then mostly 8¢ higher.

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Major U.S. financial indices closed mixed Tuesday, following steep early losses. Part of the turnaround stemmed from comments made by Federal Reserve Chair, Jerome Powell, which seemed to quell some inflation fears, at least for the day.

“Following large declines in the spring, consumer prices partially rebounded over the rest of last year. However, for some of the sectors that have been most adversely affected by the pandemic, prices remain particularly soft. Overall, on a 12-month basis, inflation remains below our 2% longer-run objective,” explained Powell, in his Semiannual Monetary Policy Report to the Congress. “As noted in our January policy statement, we expect that it will be appropriate to maintain the current accommodative target range of the federal funds rate until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.”

The Dow Jones Industrial Average closed 15 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 67 points.

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“It’s likely that you’ve heard individuals like Bill Gates claim that U.S. livestock’s contribution to climate change is immense. However, these claims are flat out wrong,” says Jerry Bohn, president of the National Cattlemen’s Beef Association, in an op-ed released yesterday. “Some activists and others like Gates often cite old claims made in the United Nation’s debunked report titled Livestock’s Long Shadow. They also use global numbers to back their claims about U.S. cattle production to back their marketing claims and sell their products.

“It’s critical that Americans understand that global GHG emissions are skewed higher because they include emissions from nations whose cattle and beef management systems are far less efficient than those in the United States. Global numbers also include countries like India, which have large bovine populations but where harvest is very low or non-existent because of cultural or religious practices. In global terms, U.S. beef cattle production counts for just 0.5% of global GHG emissions, so even if every American stopped eating beef in favor of fake meat substitutes, there would be virtually no discernible impact on our changing climate.”

In the op-ed—Beef Is, and Always Will Be Sustainable—Bohn emphasizes continued progress of the U.S. beef production system, which is already among the most productive and efficient in the world.

“Between 1975 and 2017, beef cattle emissions declined 30%. At the same time, the U.S. now produces even more beef from fewer animals and a smaller land base. Today, the U.S. produces 18% of the world’s beef with just 6% of the world’s cattle numbers,” Bohn explains. “This is possible through commitments to animal welfare, better animal nutrition and advancements in genetics. Those statistics are often overlooked or ignored by individuals like Bill Gates, the writers at OZY and others who are working to advance an agenda that drives people away from eating meat using scare tactics and unsound science to advance their cause and line their pockets with grocery money from well-meaning, concerned consumers who have been sold something they don’t want and never needed in the first place.”

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 sales last week were at $114/cwt. in the Southern Plains and Nebraska; at $114-$115 in the western Corn Belt. Dressed trade was at $180-$181 in Nebraska and at $180-$182 in the western Corn Belt.

Last week’s five-area direct average steer price was 39¢ higher on a live basis at $113.99/cwt. The average five-area dressed steer price was 47¢ higher at $180.57.

Despite rising Corn futures prices and higher feedlot placements than expected (Friday’s Cattle on Feed report), Feeder Cattle futures shook off early pressure to mostly extend gains. Live Cattle futures closed narrowly mixed, though, amid plentiful fed cattle supplies and short-term uncertainty.

Live Cattle futures closed narrowly mixed, from an average of 28¢ lower across the front half of the board to an average of 16¢ higher.

Feeder Cattle futures closed an average of 27¢ higher, except for an average of 32¢ lower in the back two contracts.

Choice boxed beef cutout value was 75¢ higher Monday afternoon at $239.98/cwt. Select was $2.08 higher at $229.98.

Grain Futures rebounded with last week’s USDA forecast during the Agricultural Outlook Forum.

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed mostly 5¢ to 15¢ higher.

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Major U.S. financial indices closed mixed Monday. Primary pressure stemmed from a selloff in big tech stocks, as well as continued nervousness over rising Treasury yield rates—potential implications for higher interest rates and economic recovery. 

The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed 30 points lower. The NASDAQ was down 341 points.

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“The feedlot situation in early 2021 is a carryover from the disruptions and unusual dynamics last year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “For the entire year in 2020, feedlot placements were down 4.0%. In the last half of the year feedlot placements were almost unchanged year over year, up 0.3%.  However, this average belies dramatic dynamics as feedlot placements in the third quarter were up 8.5% year over year, while placements in the fourth quarter were down 7.0% from the prior year.”

Peel points out total estimated feeder supplies outside of feedlots Jan. 1 were 25.66 million head, down 0.2% year over year. Even when adjusted for decreased veal slaughter and increased feeder cattle imports, he says the 1.3% year-over-year decrease in the 2020 calf crop would have suggested a bigger decrease in the feeder supply to start the year.

“It appears that some feeder cattle were carried over into 2021 and likely is reflected in the relatively large January placements,” Peel says. “Feeder supplies are somewhat front-loaded early in 2021 but should tighten up in the second half of the year.”

As reported in Cattle Current Monday, feedlot placements in January were 2.017 million head, according to the latest Cattle on Feed (COF) report. That was about 3% more year over year and about 3% more than pre-report expectations.

Peel shares one other note about the COF.

“January marketings were 1.822 million head, down 5.6% from one year ago and about as expected. However, January 2021 had two less slaughter days than the year before meaning that daily average marketings this year were 3.8% higher than last year,” Peel explains.

Negotiated cash fed cattle trade last week ended up steady in the Southern Plains at $114/cwt., according to the Agricultural Marketing Service. Live trades were steady to $1 higher in Nebraska at $114; dressed trade steady to $1 higher at $180-$181. In the western Corn Belt, prices were steady to $2 higher on a live basis at $114-$115 and steady to $2 higher in the beef at $180-$182.

Through Thursday, the five-area direct average steer price was $114.11/cwt. on a live basis, which was 33¢ more than the previous week but $5.66 lower than the same week last year. The average five-area dressed steer price was 64¢ higher week to week at $180.71, which was $9.39 less year over year.

Cattle futures closed higher Friday with steady cash prices, lower Corn futures, the week’s strong wholesale beef values and expectations for packers to pick up production following storm disruptions.

Live Cattle futures closed an average of 71¢ higher.

Feeder Cattle futures closed an average of 90¢ higher.

Choice boxed beef cutout value was 38¢ higher Friday afternoon at $239.23/cwt. Select was 43¢ higher at $227.90.

Estimated cattle slaughter for the week of 552,000 head was 56,000 head fewer than the previous week and 74,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 4.50 million head is 263,000 head fewer (-5.52%) than last year. Estimated year-to-date beef production of 3.81 billion lbs. is 124.8 million lbs. less (-3.17%) than the same time last year.

Corn futures closed 6¢ to 7¢ lower through the front three contracts, mostly fractionally higher to 1¢ higher through Jly ’23 and then mostly 3¢ lower.

Soybean futures closed mostly 3¢ to 9¢ higher.

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Major U.S. financial indices closed narrowly mixed Friday. Likely profit taking and inflation jitters counterbalanced positive economic news.

Existing-home sales of 6.69 million rose 0.6% in January, marking two consecutive months of growth, according to the National Association of Realtors® (NAR). Sales were 23.7% more year over year.

“Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market,” says Lawrence Yun, NAR’s chief economist. “Sales easily could have been even 20% higher if there had been more inventory and more choices.”

The Dow Jones Industrial Average closed fractionally higher. The S&P 500 closed 7 points lower. The NASDAQ was up 9 points. 

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Feedlots with 1,000 head or more capacity placed 2.017 million head in January, according to Friday’s monthly Cattle on Feed report. That was about 3% more year over year and about 3% more than pre-report expectations. The report accounts for feedlots with 1,000 head or more capacity.

In terms of weight, 42.14% went on feed weighing 699 lbs. or less; 49.18% weighed 700-899 lbs.; 8.68% weighed 900 lbs. or more.

“With higher placements in January, rising feed costs are likely to become more of a focus and concern,” say analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor. “The weekly Omaha corn price for January averaged $5.04/bu., which is a 15.2% ($0.67 per bushel) rise over December 2020 and 32.0% ($1.23 per bushel) higher than last year. High feed costs may incentivize cow-calf operators to add more weight to calves before placing into feedlots. This may be a challenge as much of the western U.S. remains in drought, potentially limiting available pasture and feed supplies. The harsh winter weather in mid-February likely depleted hay stocks in some areas.”

Marketings in January of 1.822 million head were 5.6% less year over year and slightly fewer than expected.

Total cattle on feed Feb. 1 of 12.106 million head were 1.5% more than a year earlier and about 0.5% more than expectations. That’s the second most for the month since the data series began in 1996.

Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service. Live sales were steady with the prior week at $114/cwt. in the Southern Plains. There were a few live sales at $114 in Nebraska and a few in the western Corn Belt at $115, but too few to trend.

Prices last week were $113-$114 in Nebraska on a live basis and at $112-$115 in the western Corn Belt. Dressed trade was at $180.

Cattle feeders offered 1,518 head of Southern Plains steers and heifers in Central Stockyards’ special Fed Cattle Exchange auction on Thursday. Of those, 737 head sold (5 lots), via live weight and Bid-the-Grid for $114/cwt. The exception was 41 head bringing $113.75.

Cattle futures closed mixed but mostly lower Thursday, pressured again by supply chain disruptions and uncertainty about post-storm impacts. Positioning ahead of Friday’s monthly Cattle on Feed report also could have been in play.

Live Cattle futures closed an average of 70¢ lower (17¢ to $1.22 lower), except for an average of 32¢ higher in the back three contracts.

Feeder Cattle futures closed an average of 48¢ lower, except from unchanged to an average of 8¢ higher in three contracts.

Choice boxed beef cutout value was $1.34 higher Thursday afternoon at $238.85/cwt. Select was $1.83 higher at $227.47.

The average dressed steer weight the week ending Feb. 6 was 919 lbs., which was 1 lb. lighter than the previous week but 16 lbs. heavier than the same time a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 848 lbs. was 5 lbs. lighter week to week but 14 lbs. heavier year over year. Total fed cattle slaughter for the week of 509,053 head was 16,884 head more than the same week last year.

Corn futures closed mixed, mostly from 1¢ lower to 1¢ higher.

Soybean futures closed 6¢ to 8¢ lower through the front four contracts, then 2¢ lower to mostly 2¢ to 4¢ higher.

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Major U.S. financial indices closed lower Thursday, pressured in part by discouraging jobs data.

Initial weekly unemployment insurance claims for the week ending Feb. 13 increased by 13,000 to 861,000, according to the U.S. Department of Labor. That was more than the trade expected.

The Dow Jones Industrial Average closed 119 points lower. The S&P 500 closed 17 point lower. The NASDAQ was down 100 points.

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U.S. beef and veal exports for fiscal year (FY) 2021 are projected to be $7.4 billion, according to the latest quarterly Outlook for U.S. Trade report from USDA’s Economic Research Service (ERS) and Foreign Agricultural Service (FAS). The forecast is $300 million more than the November estimate, mostly on increased unit values. The total would be $756 million more than FY 2020.

Total FY 2021 U.S. livestock, dairy, and poultry exports are forecast $300 million more than the November projection at $32.6 billion.

Total FY 2021 U.S. agricultural exports are forecast $5 billion more than the November projection at $157.0 billion, driven by higher oilseed and grain export forecasts.

“The global COVID-19 pandemic remains the defining variable impacting economic growth for countries around the globe,” say ERS-FAS analysts. “The success of both economic relief programs and vaccination deployments is expected to shape the growth rates and extent of recovery in FY 2021. Several new variants of the virus pose concerns for prolonged economic setbacks, but widespread distribution of vaccines has the potential to provide a buffer against further economic disruption. Global gross domestic product (GDP) is projected to grow 5.5% in FY 2021. Containing the pandemic, restoring consumer confidence, and boosting consumption levels are essential to advancing growth.”

For perspective, those analysts note global GDP last year declined by about 3.5%.

“The impact of wide-ranging adaptations in monetary policy and shifts in international trade flows due to the pandemic have had notable impacts on foreign exchange rates over the last 14 months,” says ERS-FAS analysts. “The initial outbreak of COVID-19 caused a flight of currency toward the U.S. dollar, leading to its dramatic appreciation in early 2020. As the outbreak steadied, and interest rates on U.S. Treasuries remained low relative to government debt from other currency safe havens, particularly the European Union’s Euro, the dollar has depreciated steadily since April…The recent currency trend of a weakening U.S. dollar relative to the Japanese yen, Euro, and Chinese renminbi yuan is expected to continue into 2021 but moderate as the year progresses.”

U.S. agricultural imports in FY 2021 are forecast at $137.5 billion, up $500 million from the November forecast, led by increases in livestock, dairy, and poultry imports.

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service. There was some trade in the Texas Panhandle on Tuesday at $114/cwt., which was steady with last week.

Impacts from the severe weather, including reports of reduced slaughter at some packing plants in the Southern Plains, due to rolling power outages, might help explain what appears to be a tough road to maintaining steady fed cattle prices this week. Reduced production also helps account for the atypical rise in wholesale beef values.

Cattle feeders offered 1,444 head (9 lots) in Central Stockyards’ (CS) weekly Fed Cattle Exchange auction, all from Kansas and Texas. None sold. The reserve price for most was $114.50/cwt. CS will host another sale Thursday.

Choice steers and heifers sold 75¢ to $1.00/cwt. higher amid a light offering at the fat auction in Tama, IA. The deepest test was 198 head of Choice 2-4 heifers weighing an average of 1,362 lbs., bringing an average of $114.92. That was at the upper end of last week’s country trade in the region.

At Sioux Falls Regional, though, slaughter steers sold steady, while heifers traded $2-$3 lower. There were 171 Choice 2-3 steers weighing an average of 1,457 lbs. and bringing an average of $113.37.

Cattle futures closed lower Wednesday, pressured by supply chain disruptions, as well as uncertainty about post-storm impacts.

Live Cattle futures closed an average of 58¢ lower, from 2¢ lower toward the back to $1.65 lower toward the front.

Feeder Cattle futures closed an average of $1.26 lower, from 85¢ lower to $2.35 lower in spot Mar.

Choice boxed beef cutout value was $2.74 higher Wednesday afternoon at $237.51/cwt. Select was $3.61 higher at $225.64.

Corn futures closed mostly 1¢ to 3¢ higher through Sep ‘22, and then mostly unchanged to fractionally higher.

Soybean futures closed mostly 1¢ to 3¢ lower, except for 3¢ higher in near Nov and Jan.

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Major U.S. financial indices closed narrowly mixed amid volatile trade Wednesday, despite domestic retail sales last month shattering expectations to the upside.

U.S. retail and food services sales in January were 5.3% more than the previous month at $586.2 billion, according to the U.S. Census Bureau.

Apparently, the sharp increase fueled investor concerns about inflation, as did the monthly Producer Price Index (PPI) from the U.S. Bureau of Labor Statistics. It increased 1.3% in January, the steepest rise since the index began in 2009.

The Dow Jones Industrial Average closed 90 points higher. The S&P 500 was down 1 point to 3,931. The NASDAQ was down 82 points.

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Creighton University’s Rural Mainstreet Index (RMI) increased to 52.0 in January, from 51.6 in December. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the index increased to its second highest level since January 2020. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Recent sharp improvements in agriculture commodity prices, federal farm support payments, and the Federal Reserve’s record-low short-term interest rates have underpinned the Rural Mainstreet Economy in a solid and positive growth range. However, the rural economy remains well below pre-pandemic levels,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The confidence index, which reflects bank CEO expectations for the economy six months out, declined slightly to a still healthy 60.0 from December’s 62.9.

“Federal farm support payments, improving grain prices, and advancing exports have supported confidence, offsetting negatives from pandemic ravaged retail and leisure and hospitality companies in rural areas,” Goss explains.

For a fourth straight month, the farmland price index advanced above growth neutral. The January level of 56.3 was the highest level since July 2013, and up from 55.0 in December. This is first time since 2013 that Creighton’s survey has recorded four straight months of above growth-neutral farmland prices.

Similarly, the farm equipment-sales index the past two months rose above growth neutral for the first time in 86 months. It was 50.2 in December and then rose to 54.5 in January, the highest level since April 2013.

According to Goss, bankers reported that their primary economic concerns for this year are excessive inflation and higher long-term interest rates.

“I feel the economy is moving in a positive direction that can be rattled by a combination of higher taxes, higher inflation, and a return of stricter regulation,” explained Jim Levick, president of Nebraska State Bank in Oshkosh, NE.

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

Trade last week was steady in the Southern Plains at $114/cwt. on a live basis, $1-$2 higher in Nebraska at $113-$114 and steady to $1 higher in the western Corn Belt at $112-$115. Dressed trade was steady to $2 higher at $180.

Futures markets closed mixed but mainly higher Tuesday, with Feeder Cattle fading pressure from surging grain futures and Live Cattle helped by higher wholesale beef values and recently increasing open interest.

Live Cattle futures closed mixed, from an average of 41¢ lower in four contracts (5¢ lower at the back to $1.05 lower in spot Feb) to an average of 31¢ higher.  

Feeder Cattle futures closed an average of 78¢ higher, except for an average of 10¢ lower in the front three contracts.

Choice boxed beef cutout value was $2.33 higher Tuesday afternoon at $234.77/cwt. Select was 62¢ higher at $222.03.

Grain futures surged, led by wheat and concerns about winter kill from the severe weather.

Corn futures closed 11¢ to 13¢ higher through Sep ‘21, 7¢ to 9¢ higher through the next four contracts and then mostly 3¢ to 4¢ higher. 

Soybean futures closed 11¢ to 17¢ higher. 

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Major U.S. financial indices closed narrowly mixed Tuesday. Pressure included investors fretting over escalating Treasury yield rates pointing toward higher interest rates and the potential impact on the speed of economic recovery.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 2 points lower. The NASDAQ closed 47 points lower.

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“Heavier anticipated carcass weights and greater fed cattle marketings are expected to lift 2021 beef production to record levels at 27.540 billion lbs.,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook (LDPO).

Based on January’s Actual Slaughter Under Federal Inspection report, ERS analysts say average carcass weights were more than 18 lbs. heavier than the same time a year earlier at 844.1 lbs. They add that the same data suggests cattle slaughter is 3.7% more than last year.

“Although the number of cattle outside feedlots Jan. 1 was less than a year ago, a larger proportion of cattle on small grains pastures, and dry conditions in parts of the Plains States, raised prospects for higher anticipated placements in first-half 2021. As a result, marketings in second-half 2021 were increased, which also contributed to a raised production forecast,” say ERS analysts.

Those projections helped lead to the lower month-to-month forecast for an average five-area direct fed steer price of $115/cwt.

ERS also lowered expectations for feeder steer prices.

“Feeder steer prices for January 2021 averaged $133.94/cwt. for steers weighing 750-800 lbs. sold at Oklahoma City National Stockyards, about 7% below the average for January 2020. With prices for the first two weeks of February almost $7 below the same month last year, the first-quarter 2021 forecast was lowered $2 to $132/cwt.,” say ERS analysts. “Revisions to the 2020 calf crop tightened anticipated feeder cattle supplies in second-half 2021. However, higher expected feed costs offset expectations for stronger prices the rest of the year; as a result, the second-half 2021 feeder steer price forecasts are unchanged from last month.”

ERS forecasts the feeder steer price at $134/cwt. in the second quarter, $139 in the third and $140 in the fourth quarter for an annual average of $136.25. That would be only 80¢ more than the 2020 average.

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

Trade last week was steady in the Southern Plains at $114/cwt. on a live basis, $1-$2 higher in Nebraska at $113-$114 and steady to $1 higher in the western Corn Belt at $112-$115. Dressed trade was steady to $2 higher at $180.

The five-area direct average steer price last week was about even with the prior week at $113.83/cwt. on a live basis and at $180.10 in the beef. Confirmed trade volume was 19,328 head fewer at 62,079.

Futures markets were closed Monday in observance of President’s Day. Week to week on Friday, Live Cattle futures closed an average of 79¢ higher (45¢ to $1.40 higher). Feeder Cattle futures closed an average of $1.29 higher, from 17¢ higher at the back to $2.57 higher at the front.

Choice boxed beef cutout value was 7¢ higher Monday afternoon at $232.44/cwt. Select was 48¢ higher at $221.41.

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Equity markets were closed Monday in observance of President’s Day. Week to week on Friday, the DJIA closed 310 points higher, the NADASQ closed 239 points higher and the S&P 500 was up 48 points.

Crude Oil futures (WTI-CME) closed an average of $2.57 higher last week, through the front six contracts. The severe weather will likely boost energy markets this week.

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Frigid, prolonged temperatures in the Southern Plains, along with ice and snow are being described as once in a generation or downright history making.

“An unprecedented and expansive area of hazardous winter weather continues into President’s Day as disruptive snow and ice accumulations transpire across the South Central U.S.,” according to the National Weather Service on Monday. “This impressive onslaught of wicked wintry weather across much of the Lower 48 is due to the combination of strong Arctic high pressure supplying sub-freezing temperatures and an active storm track escorting waves of precipitation from coast to coast.”

Sub-zero temperatures and wind chills were expected to last several more days, as the storm system tracked from the Southern Plains toward the northeast. It was preceded by last week’s Arctic blast across the Northern and Central Plains.

“Wheat pasture cattle and other stockers are no doubt experiencing reduced gains or even weight loss in these conditions. Many cattle grazing dual-purpose wheat will need to be removed and marketed in the next two to three weeks, very likely a bit lighter in weight than expected,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel notes feeder cattle prices in the state were 3-10% lower last week as decreased demand overwhelmed the significant decline in auction volume. Some markets in the region closed last week and will this week.

“Feedlot cattle are no doubt impacted as well and the market effects will be apparent over time,” Peel says. “Reduced performance will show up as lower carcass weights in the coming weeks. The residual impacts of this historic weather event will likely effect cattle markets for several weeks.”