Daily Market Highlights

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

Live prices were generally $1-$3 lower last week at $108-$111/cwt. Dressed prices were $1-$4 lower at $172-$174.

For the week:

Texas Panhandle: $110-$111/cwt.  1-2 lower

Kansas: $109-$111  1-3 lower

Nebraska: $109-$110 on a live basis; $172 dressed. Steady to 1 lower and $4 lower

Colorado: $109 1-2 lower

Western Corn Belt: $108-$109 on a live basis; $173-$174 dressed.

Through Thursday, the average five-area direct fed steer price was $109.52/cwt. on a live basis, which was $1.96 less than the previous week and $14.48 less than the same week a year earlier. The average steer price in the beef was $173.06, which was $2.96 less than the previous week and $26.01 less than a year earlier.

Choice boxed beef cutout value was 45¢ lower Friday afternoon at $212.92/cwt. Select was $2.01 higher at $203.08. 

Total estimated cattle slaughter for the week of 651,000 head was the same as a week earlier and 18,000 head more than the same week a year earlier. Estimated beef production for the week of 544.8 million lbs. was 22.3 million lbs. more than the previous year.

The average dressed steer weight the week of Jan. 2 of 920 lbs. was 7 lbs. heavier than the previous week and 8 lbs. heavier than the same week a year earlier, according to the USDA Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 851 lbs. was 12 lbs. heavier than the previous week and 19 lbs. heavier than the prior year.

Cattle futures closed higher Friday. Bottom feeding might be one of the drivers, as was stronger wholesale beef values, rising open interest and a pause to increasing Corn futures.

Live Cattle futures closed an average of 93¢ higher, from 45¢ to $1.32 higher.

Feeder Cattle futures closed an average of $2.02 higher.

Corn futures closed 2¢ to 3¢ lower through the front three contracts, and then mostly 1¢ to 3¢ higher.

Soybean futures closed 12¢ to 13¢ lower through the front three contracts, and then mostly 1¢ to 5¢ higher.

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Major U.S. financial indices closed lower Friday. Pressure included a more negative outlook of consumer retail sales than the trade expected. Also, increasing global movement restrictions, due to escalating COVID-19 cases, weighed on the energy sector.

Advance estimates of U.S. retail and food services sales for December were 0.7% less than the previous month, but 2.9% more than the previous year, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 177 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 114 points.

CME WTI Crude Oil futures closed $1.05 to $1.21 lower through the front six contracts.

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“Much uncertainty continues but assuming no major new global health or economic disruptions, U.S. beef trade is expected to be supportive in 2021,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments (Jan. 11).

As reported in Cattle Current, U.S. beef exports stormed back in November, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

November beef exports totaled 115,337 metric tons (mt), up 6% from a year earlier and the most since July 2019. Export value climbed 8% year-over-year to $707.5 million.

“Demand for U.S. beef in the global retail sector has been outstanding and we expect this to continue in 2021,” says USMEF President and CEO Dan Halstrom. “Unfortunately, foodservice continues to face COVID-related challenges. We expect a broader foodservice recovery this year, especially from mid-2021, but will likely still see interruptions in some markets.”

Through November, beef exports were 6% lower year-over-year in volume (1.13 million mt) and down 7% in value ($6.9 billion). January-November muscle cut exports were 3% below 2019 in volume (883,012 mt) and 6% lower in value ($6.11 billion).

“Beef exports are forecast to be modestly higher year over year, returning roughly to 2019 levels. Beef imports are currently forecast to decrease from the 2020 spike to pre-COVID levels or perhaps a bit lower,” Peel says. “Numerous factors will affect U.S. and global beef trade in 2021 including exchange rates, continuing demand for beef in China, the rebuilding of the Australian beef industry, continuing trade tensions between China and Australia/New Zealand and Mexico’s economic situation.”

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

For the week so far:

Texas Panhandle: $110-$111/cwt.

Kansas: $109-$110

Nebraska: $109-$110 on a live basis; $172 dressed.

Colorado: $109

Western Corn Belt: $108-$109 on a live basis; $173-$174 dressed.

Cattle futures were mixed Thursday, with Feeder Cattle losing ground beneath the weight of another surge higher in grain prices, while more positive supply fundamentals in the second quarter helped bolster deferred Live Cattle.

Live Cattle futures closed an average of 68¢ higher, except for an average of 19¢ lower in the front three.

Feeder Cattle futures closed an average of 64¢ lower except for 15¢ higher in the back contract.

Choice boxed beef cutout value was $2.37 higher Thursday afternoon at $213.37/cwt. Select was $2.01 higher at $201.07.

Strong exports continue to support corn and soybean prices, according to the latest USDA U.S. Export Sales report for the week ending Jan. 7.

Net U.S. corn export sales of 1.44 million metric tons (mt) for 2020-21 were 92% more than the previous week and 34% more than the prior four-week average.

Net U.S. soybean export sales of 908,000 mt for 2020-21 were up noticeably from the previous week and up 93% from the prior four-week average.

Corn futures closed 9¢ to 10¢ higher through the front three contracts, and then 1¢ to 5¢ higher.

Soybean futures closed 20¢ to 25¢ higher through Jan ‘22, and then mostly 10¢ to 16¢ higher.

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Major U.S. financial indices closed a touch lower Thursday, ahead of incoming President Biden’s announcement about plans for another round of federal stimulus.

Initial unemployment insurance claims for the week ending Jan. 9 were 965,000, according to the U.S. Department of Labor. That was 181,000 more than the previous week.

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 14 points lower. The NASDAQ was down 16 points.

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“Improving the traceability and sustainability of our supply chain is one of Wendy’s® key priorities. When it comes to beef, the first step is reaching further back into our supply chain to create visibility into the animals we source for our food, and to verify how they were raised and treated,” says Liliana Esposito, Chief Communications Officer for The Wendy’s  Company.

Wendy’s is accomplishing that in partnership with the Progressive Beef program, which increases transparency and provides third-party verification that the cattle were raised in accordance with strict animal welfare and sustainability standards. The Progressive Beef program is built around three core pillars including animal welfare, food safety and sustainability; and transparency and traceability are critical to achieving progress in these areas.

Wendy’s announced Thursday that 40% of its U.S. fresh, never frozen beef supply was sourced from Progressive Beef™-certified feedlots at the end of last year, which was 15% more than the previous year. The company’s goal is to source  more than 50% of its supply from cattle raised under the Progressive Beef program in 2021.

“Over time, we believe this transparency and record- keeping will enable us to measure and improve our impact on a variety of sustainability metrics, including medical treatment and antibiotic use, and water and land use,” Esposito says.

“Wendy’s is a longtime leader in the restaurant industry, and we were delighted to have them as our first restaurant chain partner,” says John Butler, Chief Executive Officer of Progressive Beef, LLC. “Today’s consumers want to know where their food comes from and that the cattle were ethically and sustainably raised. We are proud to offer Wendy’s a solution to meet the company’s goal of a more transparent and traceable fresh beef supply chain; a program that we believe to be the industry gold standard and way of the future.”

Negotiated cash fed cattle prices for the week, through Wednesday afternoon, were $1-$3 less than the previous week on a live basis and $2-$3 lower in the beef, according to data from the Agricultural Marketing Service.

Live prices were $1 lower than the previous day and $2 less than the previous week in the Texas Panhandle at $110/cwt. Prices in Kansas were $1-$3 lower at $109-$111. Live prices in Nebraska the previous day were at $109-$111, which was steady to $1 lower than the previous week; dressed trade was $2-$3 lower at $173-$174. Live prices were $3 lower in Colorado at $109. Live prices in the western Corn Belt on Tuesday were at $108-$109, which was $1-$2 lower than the previous week; dressed trade was $3 lower at $174-$177.

Feeder Cattle futures mostly edged higher Wednesday, with Feeder Cattle recovering some of the previous session’s steep losses. Higher wholesale beef values also helped Live Cattle to firm after the front months.

Live Cattle futures closed mainly narrowly mixed but mostly higher, from an average of 22¢ lower in the front two contracts to an average of 35¢ higher.

Feeder Cattle futures closed an average of 61¢ higher.

Choice boxed beef cutout value was $1.86 higher Wednesday afternoon at $211.00/cwt. Select was 97¢ higher at $199.06.

Corn futures closed 7¢ to 8¢ higher through the front three contracts, and then mostly 3¢ to 4¢ lower.

Soybean futures closed 6¢ to 12¢ lower through Sep ‘21, and then mostly 1¢ to 4¢ higher.

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Major U.S. financial indices closed narrowly mixed Wednesday amid news including the rise in COVID-19 cases and the political fiasco in the nation’s capitol. 

The Dow Jones Industrial Average closed 8 points lower. The S&P 500 closed 8 points higher. The NASDAQ was up 56 points.

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Last year, the U.S. restaurant industry experienced its steepest decline since the Great Depression , according to the NPD Group (NPD). But, restaurant transactions continued to show improvement in December.

Customer transaction declines at major restaurant chains in December were down 10% compared to the same period a year ago. That was a 27-point improvement from April, the height of the shelter-at-home and restaurant dine-in closure mandates, when transactions declined by 37% from a year earlier, according to NPD’s CREST^®Performance Alerts.

Full service restaurant chains, which primarily rely on dine-in customers and had few if any off-premises services when the dine-in restrictions went into effect, bore the brunt of the transaction declines throughout the pandemic. In April, the segment’s customer transactions declined by 70% year over year; transactions improved to 30% less year over year in December.

Many full service restaurant chains quickly pivoted to offer more off-premises services by turning parking lots into drive-thru stations, offering curbside pick-up, and enhancing delivery options. For full service restaurants now, it’s about government restrictions. In more restrictive states, full service restaurant chain transactions are down 60% to 70%. In less restrictive states, there isn’t as much of a gap between quick service and full service restaurants.

Major quick service restaurant chains, which represent the bulk of restaurant industry transactions, learned to expand their already high capacity for off-premises volumes. The chains’ carry-out, drive-thru, and delivery orders soared throughout the pandemic as consumers looked for relief from preparing most of their meals at home. At their ebb in April, quick service customer transaction declines were 35% less year over year. They quickly improved as shelter-at-home orders were lifted. In December, quick service restaurant chain customer transaction declines were down  8% versus the same month a year earlier.

“The struggles of the restaurant industry are well documented and we acknowledge that some operators have not survived the pandemic,” says David Portalatin, NPD food industry advisor. “But history has shown that consumers will always value the convenience, quality, and experience of restaurant meals, and the operators that deliver against these expectations have proven it’s a winning formula in good or bad times. Our industry is resilient and consumer demand for restaurants remains strong.”

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

Feeder Cattle futures closed sharply lower Tuesday, pressured by more friendly World Agricultural Supply and Demand Estimates for corn and soybeans (see below). Firmer wholesale beef values and hopes for a recovering domestic economy later in the year helped Live Cattle close mainly higher. The recent and continued increase in open interest helped, as did strength in Lean Hog futures.

Live Cattle futures closed an average of 89¢ higher, except for 55¢ lower in the front three contracts.

Feeder Cattle futures closed an average of $1.98 lower from 90¢ lower at the back to $2.92 lower toward the front.

Choice boxed beef cutout value was $1.45 higher Tuesday afternoon at $209.14/cwt. Select was $2.35 higher at $198.09.

Grain futures surged higher Tuesday, fueled by the friendly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed 23¢ to 25¢ higher through the front four contracts, 12¢ to 16¢ higher through the next four and then mostly 5¢ higher.

Soybean futures closed 41¢ to 47¢ higher through the front four contracts, 19¢ to 33¢ higher through the next four and then mostly 10¢ to 16¢ lower.

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Major U.S. financial indices edged higher Tuesday, with trader expectations for additional economic stimulus apparently trumping escalating COVID-19 cases.

The Dow Jones Industrial Average closed 60 points higher. The S&P 500 closed 1 point higher. The NASDAQ was up 36 points.

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USDA lowered its forecast for total red meat and poultry production for 2021, compared to the previous month’s estimate, according to the latest World Agricultural Supply and Demand Estimates (WASDE). That’s based on expectations of lower beef, broiler, and turkey production more than offsetting higher pork production.

However, total estimated red meat and poultry production for 2021 is forecast 634 million lbs. more than in 2020 (+0.60%) at 107.10 billion lbs.

Beef production for 2021 is forecast at 27.19 billion lbs., which would be 32 million lbs. more (+0.11%) than in 2020, with higher non-fed cattle slaughter more than offsetting lighter expected cattle carcass weights.

WASDE estimated the average five-area direct fed steer price for last year at $108.51/cwt. Fed steer prices for 2021 are projected to be $113 in the first and second quarters, $115 in the third quarter and $120 in the fourth quarter for an annual average of $115.50, which was 50¢ more than the previous month’s forecast.

Among other WASDE highlights:

Corn: Outlook for the 2020-21 U.S. corn crop is for lower production, reduced corn used for ethanol, smaller feed and residual use and exports, and decreased ending stocks. Corn production is estimated at 14.182 billion bu., down 324 million on a lower yield and slight reduction in harvested area. With supply falling more than use, corn stocks were lowered 150 million bu. to 1.552 billion. The season-average corn price received by producers was raised 20¢ to $4.20/bu.

Soybeans: Soybean production was estimated at 4.135 billion bu., down 35 million bu., led by reductions for Minnesota, Iowa, and Kansas. Harvested area was estimated at 82.3 million acres, up slightly from the previous report. Yield was estimated at 50.2 bu./acre, down 0.5 bu. With higher imports and slightly higher beginning stocks, soybean supplies were down 14 million bu. from last month. The soybean crush forecast was raised 5 million bu. to 2.2 billion, reflecting improved prospects for soybean meal exports with a lower export forecast for Argentina. The soybean export forecast was raised 30 million to a record 2.23 billion bu. With lower supplies and increased use, ending stocks were projected at 140 million bu., down 35 million from the previous forecast.

The U.S. season-average soybean price for 2020-21 was projected 60¢ higher at $11.15/bu. The soybean meal price was projected $20 higher at $390/short ton. The soybean oil price was forecast 2.5¢ higher at 38.5¢/lb. 

Wheat: Outlook for 2020-21 U.S. wheat is for slightly smaller supplies, unchanged domestic use, higher exports, and lower ending stocks. Supplies were reduced on lower imports, which were decreased 5 million bu. to 120 million on a slower than expected pace. Exports were raised 10 million bu. to 985 million as higher white wheat exports were partially offset by lower Hard Red Winter (HRW) exports. Projected 2020-21 ending stocks were reduced 15 million bu. to 862 million, down 16% from last year. The season-average farm price for wheat was unchanged at $4.70/bu.   

Winter wheat: Planted area for harvest in 2021 was estimated at 32.0 million acres, up 5% from 2020 and up 2% from 2019, according to the Winter Wheat and Canola Seedings report. This represents the fourth lowest United States acreage on record. Seeding of the 2021 acreage was underway in early-September and was ahead of the five-year average pace. Throughout the season, planting and emergence progress remained ahead of the five-year average pace. Seeding was mostly complete by Nov. 15.

Hay Stocks: Stocks on farms Dec. 1 were 84.02 million tons, according to the latest USDA Crop Production report. That was 468,000 tons less (-0.55%) than the previous year.

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

Live prices last week were at $112/cwt. in the Southern Plains and Colorado, $110-$111 in Nebraska and $110 in the western Corn Belt. Dressed trade was at $176 in Nebraska and at $174-$177 in the western Corn Belt.

The average five-area direct fed steer price last week was $111.27/cwt. on a live basis, which was 24¢ less than the previous week. The average steer price in the beef was $175.79, which was 12¢ more than the previous week.

Cattle futures closed mostly lower Monday, with most of the declines in Live Cattle. Pressure included the inability to spark cash prices higher last week, as well as uneasiness ahead of the monthly World Agricultural Supply and Demand Estimates scheduled to be published Tuesday (see below). There was also likely pressure in the nearby contracts from the monthly Goldman roll, as that firm rolls forward underlying futures contracts in its excess return index portfolio, contracts set to expire in the next month.

Live Cattle futures closed an average of 49¢ lower, except for 7¢ higher in three contracts.

Feeder Cattle futures closed an average of 15¢ lower except for an average of 12¢ higher in the front two contracts.

Choice boxed beef cutout value was 89¢ higher Monday afternoon at $207.69/cwt. Select was 95¢ lower at $195.74.

Corn futures closed 3¢ to 4¢ lower through the front three contracts and then mostly 1¢ to 2¢ higher.

Soybean futures closed 1¢ to 2¢ lower through Aug ‘21 and then mostly 12¢ to 14¢ lower.

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Major U.S. financial indices closed lower Monday, with little momentum one direction or the other.

The Dow Jones Industrial Average closed 89 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 165 points. t

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“The corn futures rally is following soybeans higher, and cash has struggled to keep pace, widening the basis for this time of year. Although exports have been strong, the fundamentals are not currently holding ending stocks tight enough to justify $5 corn,” say analysts with the Livestock Marketing Information Center (LMIC). “Still, there seems little to move the futures lower ahead of U.S. plantings and harvest in South America.”

In the latest Livestock Monitor, LMIC analysts explain the last time nearby Corn futures prices were closing in on $5/bu. was in May of 2014.

“Corn prices at the farm, as reported by USDA-NASS during the 2013-14 crop year ending on Aug. 31, 2014 averaged $4.46/bu. Nearby corn futures finished August 2014 at $3.59, a $1.50 decline in about three months. A record large corn crop of 14.2 billion bu. was about to be harvested, followed by 1.9 billion bu. of the crop being marketed in export markets and 6.6 billion bu. being used domestically for food, industrial and seed purposes. These figures compare to the current situation where production is pegged at 14.5 billion bu. by USDA-NASS,” say LMIC analysts. 

Soybean futures are providing plenty of fuel, with nearby contracts surging by about $1/bu. in the last 10 days to the highest level since June of 2014, according to LMIC.

“The impetus for surging prices (soybeans) has come from adverse crop development conditions in Argentina, the third largest soybean producing country and the leading exporter of soybean meal in the world,” LMIC analysts explain. “Reduced availability of soybeans and soybean products from Argentina is forcing the world to focus on U.S. soybean supplies. Projected exports of U.S. soybeans is expected to be a record at 2.2 billion bu. and soybean meal exports should be close to the record set last year at 14 million tons. As a result, inventories of soybeans at the end of this crop year (Aug. 31, 2021) will be close to 200-220 million bu., down from 909 million bu. two years earlier. 

“Tightening supplies support a rising price trend in order to bid more plantings of the crop in the U.S. this spring versus corn and cotton. The average price for soybeans this crop year is currently expected to be $11.50 but the risks to this forecast are all to the high side, depending on weather and the global economy in coming months. The potential for record high soybean prices in the $15-$20 area exists based on possible market conditions.”

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

For the week, despite hopes for gains, prices through Friday afternoon were generally unevenly steady.

Southern Plains: steady at $112/cwt.

Nebraska: steady to $1 lower on a live basis at $110-$111; steady to $1 higher in the beef at $176.

Colorado: Steady to $1 higher on a live basis at $112.

Western Corn Belt: steady to $2 lower on a live basis at $110; steady to $1 higher in the beef at $175-$177.

Through Thursday, the average five-area direct fed steer price was 1¢ higher on a live basis at $111.49/cwt. The average steer price in the beef was 47¢ higher at $176.02.

Cattle futures closed lower Friday. Pressure included demand uncertainty and continued grain market strength.

Live Cattle futures closed an average of 17¢ lower, except for 5¢ higher in Oct.

Feeder Cattle futures closed an average of 52¢ lower.

Choice boxed beef cutout value was 99¢ higher Friday afternoon at $206.80/cwt. Select was 10¢ higher at $196.69.

Corn futures closed 1¢ to 2¢ higher through the front four contracts and then mostly 1¢ lower.

Soybean futures closed 11¢ to 19¢ higher through Sep ‘21 and then mostly 4¢ to 8¢ higher.

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Major U.S. financial indices edged higher Friday, despite a disappointing national employment report.

Total nonfarm payroll employment declined by 140,000 month to month in December, according to the U.S. Bureau of Labor Statistics. The trade expected a slight gain. Average hourly earnings for all employees on private nonfarm payrolls increased 23¢ to $29.81.

The Dow Jones Industrial Average closed 56 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 134 points.

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Although U.S. beef exports for January through November remained lower year over year, they stormed back in November, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

November beef exports totaled 115,337 metric tons (mt), up 6% from a year earlier and the most since July 2019. Export value climbed 8% year-over-year to $707.5 million. November beef muscle cut exports were the third largest on record at 91,338 mt (up 13%, trailing only July and August 2019), valued at $630.4 million (up 11%).

“Demand for U.S. beef in the global retail sector has been outstanding and we expect this to continue in 2021,” says USMEF President and CEO Dan Halstrom. “Unfortunately, foodservice continues to face COVID-related challenges. We expect a broader foodservice recovery this year, especially from mid-2021, but will likely still see interruptions in some markets.”

Among highlights for the month, November exports to China and Guatemala set new monthly records, while shipments to Mexico were the largest since 2016.

Through November, beef exports were 6% lower year-over-year in volume (1.13 million mt) and down 7% in value ($6.9 billion). January-November muscle cut exports were 3% below 2019 in volume (883,012 mt) and 6% lower in value ($6.11 billion).

As for pork, November export volume was steady year over year at 258,801 mt, with value down 2% to $697.5 million. Although China/Hong Kong remained the largest destination for U.S. pork in November, momentum continued to build in other markets including Japan, Mexico and Central America.

January-November pork exports set new annual records for both volume (2.72 million mt, up 14% from the previous year’s pace) and value ($7.03 billion, up 13%). Pork muscle cut exports also shattered previous annual records, increasing 18% year-over-year to 2.29 million mt, valued at $6.08 billion (up 15%).

Negotiated cash fed cattle trade was limited on light demand in Kansas, the Northern Plains and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few dressed trades in Nebraska at $177/cwt., which was $1-$2 higher than last week, when live prices were $112 in the Southern Plains and $110-$112 up north.

Firmer Cattle futures and higher outside markets are helping foster optimism for higher cash prices.

The five-area weighted average steer price in December was $109.05/cwt., on a live basis (FOB), which was 20¢ higher than the previous month but $10.95 less than the previous year, according to USDA. The average steer price in the beef (delivered) was $170.94, which was 60¢ higher than the previous month but $20.24 less than the prior year.

Cattle futures closed mostly higher Thursday. Support included the likely need for packers to get cattle bought, in order to maintain the brisk processing pace. Feeder Cattle also benefitted from a pause in escalating Corn futures.

Live Cattle futures closed an average of 26¢ higher, except for 2¢ lower and 25¢ lower on either end of the board.

Feeder Cattle futures closed an average of $1.11 higher.

Choice boxed beef cutout value was 54¢ higher Thursday afternoon at $205.81/cwt. Select was 51¢ higher at $196.59.

The average dressed steer weight the week ending Dec. 25 was 913 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 8 lbs. less than the previous week but 8 lbs. heavier than the same week a year earlier. The average dressed heifer weight of 839 lbs. was 8 lbs. less than the previous week but 2 lbs. heavier than the prior year.

Corn futures closed unchanged to 1¢ lower.

Soybean futures closed 3¢ to 6¢ lower through Sep ‘21 and then mostly 1¢ to 2¢ higher.

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Major U.S. financial indices surged higher Thursday, buoyed in part by clarity surrounding the presidential election and fewer initial unemployment insurance claims than the trade expected.

For the week ending Jan. 2, initial unemployment insurance claims of 787,000 were 3,000 few than the previous week, according to the U.S, Department of Labor. The four-week moving average was 818,750, which was 18,750 fewer than the previous week’s revised average.

The Dow Jones Industrial Average closed 211 points higher. The S&P 500 closed 55 points higher. The NASDAQ up 326 points.

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Digital recipes play a pivotal role in the path to purchase for grocery and consumer packaged goods (CPG), a pathway the Beef Checkoff is using to accelerate ecommerce growth of beef products.

First, some context.

Last summer, Chicory, the leading contextual commerce provider for CPG and grocery brands, released results from the first annual digital recipe usage survey, quantifying the role of digital recipes in the path to purchase. It demonstrated that recipes represent the number one reason a shopper purchases a new product, proving that recipes are a top strategy for getting new and lapsed shoppers to consider trying a brand that they haven’t recently considered.

“This survey confirmed that digital recipes play a pivotal role in the path to purchase for grocery and CPG products,” said Yuni Sameshima, Chicory’s CEO and co-Founder. “This validates the idea that recipes drive consumer behavior. Consumers use recipes to plan ahead for shopping trips, reference recipes in store and re-reference recipes after the shop as they cook. So, a contextual commerce strategy for grocery and CPG brands should integrate commerce-enabled ads within recipes to directly connect recipe and food inspiration to retailers’ sites for purchase.”

More specifically, according to the Chicory survey:

• 81% of respondents confirmed that they use digital recipes.
• Recipes are 19% more likely to inspire a shopper to try a new product than a recommendation of a family member or friend; 61% more likely than the item being featured or on sale at the retailer, and 78% more likely than an influencer recommendation.
• 82% of Americans responded that they reference digital recipes on their mobile devices while they are physically in the store.
• Baby boomers (18%) were least likely to use recipes. Millennials/Gen Z (48%) and Gen X (34%) were most likely to use recipes.

With all of that in mind, Chicory and the National Cattlemen’s Beef Association (NCBA) announced this week a partnership to raise the profile of beef to American consumers and accelerate ecommerce growth of beef products at Kroger and Kroger banners, Walmart Grocery and Albertson/Safeway banners.

NCBA is a contractor to the Beef Checkoff program and manager of the brand: Beef. It’s What’s for Dinner (BIWD). The Beef Checkoff is leveraging Chicory’s Digital Shopping Aisle experience for two media campaigns, as well as shoppable recipes on BeefItsWhatsforDinner.com.

“At a time when more people are shopping online than ever before, this partnership has allowed us to jump into the world of ecommerce and encourage consumers to enjoy delicious beef for dinner,” says Bridget Wasser, NCBA Senior Executive Director of Product Quality. “Beyond the media campaigns, the shoppable recipes take the work out of dinner from beefy meal ideas, to shopping and grocery delivery with the click of the mouse.”

Chicory’s first-to-market Digital Shopping Aisle solution enables commodity-focused groups to equitably represent beef manufacturers, while executing an effective shopper marketing and contextual commerce campaign. BIWD is utilizing Chicory Premium in recipe ad units to ‘own’ ingredients via in-line units and ‘pairings’ ads to feature products within related content in order to promote beef products in contextually relevant recipes on over 1,500 recipe sites, including Taste of Home, Creme de la Crumb and Fork in the Kitchen.

Consumers see ads that are shoppable at either Kroger and Kroger banners, Walmart Grocery or Albertson/Safeway banners based on retailer geography. Consumers who click on the Walmart Grocery or Albertson/Safeway banners shoppable ads are driven to Chicory’s unique Digital Shopping Aisle, showcasing the available beef products needed for the recipe, such as ground beef, steak and roasts, at a retailer. The Digital Shopping Aisle randomizes the available products that the consumer sees, ensuring a truly equitable experience for each brand and product. Here, shoppers may choose their preferred brand and add the product to their digital shopping cart for a seamless checkout experience. Consumers who click on the Kroger or Kroger banners shoppable ads are driven to customized Kroger landing pages with the various available cuts of beef to make their choice.

The partnership also provides a seamless way for BeefItsWhatsForDinner.com to lead users from inspiration to purchase through Recipe Activation, a commerce-enabled recipe checkout experience. Using Chicory’s shoppable recipe technology, users can purchase instantly all ingredients needed for any of the recipes on BeefItsWhatsForDinner.com.

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

Cattle feeders offered 1,142 head (mostly from the Southern Plains) in Central Stockyards weekly Fed Cattle Exchange auction on Wednesday. One lot of Southern Plains heifers (42 head) sold for a weighted average price of $112/cwt., via Bid-The-Grid™, which was steady with last week’s country trade in the region.

Likewise, fed steers and heifers traded mostly steady at Sioux Falls Regional’s fat auction. There were 301 head of Choice 3-4 steers weighing an average of 1,559 lbs., bringing an average price of $110.76. Country trade in the region last week was at $110-$112.

Cattle futures closed mixed Wednesday, with Live Cattle firming, while Feeder Cattle were pressured by higher grain prices.

Live Cattle futures closed an average of 40¢ higher, except for 5¢ lower and 60¢ lower on either end of the board.

Feeder Cattle futures closed an average of 68¢ lower.

Choice boxed beef cutout value was 63¢ lower Wednesday afternoon at $205.27/cwt. Select was 41¢ lower at $196.08.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 11¢ to 14¢ higher.

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Except for tech stocks, major U.S. financial indices closed higher Wednesday with investors apparently expecting more economic stimulus and government spending under a Biden administration.

As for known reality, private sector employment decreased by 123,000 jobs from November to December according to the December ADP National Employment Report^®. The trade was expecting a month-to-month gain.

The Dow Jones Industrial Average closed 437 points higher. The S&P 500 closed 21 points higher. The NASDAQ was down 78 points.

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Typical beef export seasonality, further potential pandemic disruptions and plentiful fed cattle supplies could test domestic consumer beef demand in the first quarter.

In the latest issue of In the Cattle Markets, Elliott Dennis, livestock economist at the University of Nebraska-Lincoln explains, historically, first-quarter beef export quantities are seasonally lower and more inconsistent than in other quarters; they’re highest and most consistent in the second quarter.

“Local, domestic, and international changes in slaughter rates, supplies of substitute meat products, and consumer beef preferences all influence the domestic wholesale beef price and eventually each country’s desire to import U.S. beef,” Dennis explains.

Production and demand disruptions wrought by the pandemic weighed on U.S. beef exports for much of last year but appeared to be regaining momentum in the fourth quarter.

Through October, U.S. beef exports were 7% less in volume (1.02 million metric tons), compared to the same period a year earlier, according to data released by USDA and compiled by the U.S. Meat Export Federation. Value of January-October beef exports was 8% less than the prior year at $6.2 billion.

“The domestic market likely needs to be the driver of working through wholesale meat supplies in the first quarter,” Dennis says. “Drawing from 2020, the market’s ability to do so could be hindered by meatpacking plant shutdowns (recent example in Guelph, Canada) and government restrictions on social gatherings (increased restrictions in New York State). A positive is that the U.S.-Japan, U.S.-Korea, U.S.-China, and USMCA trade deals are still in place for the time being. Whether we enter round 2 of the U.S.-China trade deal and whether China imports already-committed U.S. beef is more uncertain, given the anticipated change in the presidency.”

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

Prices on a live basis last week were at $112/cwt. in the Southern Plains, at $111-$112 in Colorado and at $110-$112 in Nebraska and the western Corn Belt. Dressed prices were at $175-$176.

Cattle futures rebounded Tuesday, with Live Cattle gaining back most of what was lost in the previous session, while Feeder Cattle regained about half, on an average basis. That was despite another surge in grain futures prices.

Live Cattle futures closed an average of $1.62 higher, except for $1.40 lower in the back contract.

Feeder Cattle futures closed an average of $1.35 higher, from 75¢ to $2.02 higher.

Choice boxed beef cutout value was $3.97 lower Tuesday afternoon at $205.90/cwt. Select was 4¢ lower at $196.49.

Corn futures closed 8¢ higher through the front three contracts and then mostly 3¢ higher.

Soybean futures closed 26¢ to 33¢ higher through the front six contracts and then mostly 18¢-21¢ higher.

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Major U.S. financial indices closed higher Tuesday amid positive economic news.

Support included the latest Manufacturing ISM^®Report On Business^®from the Institute for Supply Management (ISM) indicating the Purchasing Managers Index (PMI^®) increased 3.2% month to month in December to 60.7%.

“This figure indicates expansion in the overall economy for the eighth month in a row after contracting in March, April, and May, which ended a period of 131 consecutive months of growth,” says ISM Chair Timothy R. Fiore. He adds, “Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories, but absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are causing strains that are limiting manufacturing growth potential.”

As well, West Texas Intermediate Crude Oil futures (CME) surged on the day with a surprise announcement that Saudi Arabia is cutting production by 1 million barrels per day in February and March.

The Dow Jones Industrial Average closed 167 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 120 points.

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Agricultural producer sentiment rose with income prospects in December, according to the latest Purdue University/CME Group Ag Economy Barometer.

The barometer increased 7 points from November to a reading of 174. Both of the barometer’s sub-indices, the Index of Current Conditions and the Index of Future Expectations, were also higher month to month. The Index of Current Conditions climbed 15 points to 202 and the Index of Future Expectations increased by 5 points to a reading of 161.

“The rise in the Ag Economy Barometer was primarily driven by farmers’ perception that the current situation on their farms really improved. The sharp rise in the Index of Current Conditions is correlated with the farm income boost provided by the ongoing rally in crop prices. That appears to be the driving force behind producers’ optimism,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

In December, the percentage of ranchers and farmers expecting farmland values to rise over the next year increased 9 points from November to a reading of 35. The percentage expecting farmland values to rise over the next five years increased 11 points from November to a life-of-survey high 65%.

Likewise, more producers said they expect farmland cash rental rates to rise in 2021 when compared to survey results from late summer. In December, 18% of respondents said they expect cash rental rates to rise in 2021, double the percentage who felt that way in August and September. Moreover, it’s clear that any downward pressure on cash rental rates evident earlier in the year has nearly disappeared, as just 5% of farmers said they expect to see cash rental rates decline in 2021 compared to 17% who felt that way in August.

Agricultural producers were less optimistic when asked about the on-going trade dispute between the U.S. and China. In the first quarter of 2020, an average of 76% of respondents thought the trade dispute’s ultimate resolution would favor U.S. agriculture. By spring, that average declined to 62%, and by December it dropped to an all-time survey low of 47%. When asked whether they expect U.S. agricultural exports to increase over the next five years, only 51% of respondents in December said they expect to see export growth.

To learn more about what factors might be motivating the shift in producers’ sentiment before and after the November election, the surveys for November-December included a series of questions focused on producers’ future expectations for environmental regulations, taxes and other key aspects of the agricultural economy.

In December, more than 80% of ranchers and farmers said they expect environmental regulations to become more restrictive, compared to 41% who felt that way in October. More than 70% of producers expect to see higher income and estate taxes compared to 35% and 40%, respectively, in October and November.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from Dec. 7-11, 2020.

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Nebraska through Monday afternoon. Elsewhere, it was mostly inactive on very light demand.

Prices on a live basis last week were at $112/cwt. in the Southern Plains, at $111-$112 in Colorado and at $110-$112 in Nebraska and the western Corn Belt. Dressed prices were at $175-$176.

The five-area average direct fed steer price last week was $2.32 higher than the previous week on a live basis at $111.51/cwt. The average steer price in the beef was $3.87 higher at $175.67.

Cattle futures fell hard Monday, beneath the weight of sharply lower outside markets and the unrelenting rise in feed costs.

Live Cattle futures closed an average of $1.83 lower.

Feeder Cattle futures closed an average of $2.72 lower, from $1.15 lower toward the back to $4.20 lower toward the front.

Choice Boxed beef cutout value was 8¢ lower Monday afternoon at $209.87/cwt. Select was 88¢ higher at $196.53.

Corn futures closed mostly fractionally lower.

Soybean futures closed mostly 4¢ to 6¢ higher.

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Equities sold off at a brisk pace Monday, with most of the fuel appearing to be investor fears that a win by Democrats in Tuesday’s Georgia runoff election—giving that party control of both houses—could lead to an adverse business environment: higher taxes, more regulations, etc. Major U.S. financial indices closed off of session lows, though.

The Dow Jones Industrial Average closed 382 points lower. The S&P 500 closed 55 points lower. The NASDAQ was down 189 points.

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“Strong beef demand and tightening cattle supplies provide cautious optimism for cattle markets in 2021,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Higher feed prices and continuing drought conditions are threats to individual producers and perhaps to overall market conditions in the coming year. Consumer demand will be supported by additional federal stimulus for a time but continuing macroeconomic challenges will persist through the year. The continuing pandemic and the time needed for vaccine implementation suggest that much of the promise of 2021 may be pushed into the second half of the year. In the meantime, uncertainty and volatility are likely to remain elevated and risk management continues to be a key management and marketing consideration.”

Peel points out cash corn prices in December, on average, were about 22% higher year over year, while sorghum prices up more than 50%, wheat prices were about 30% higher and soybean prices were up 35%.

“Cattle production will be affected by higher feed prices, not so much in terms of how much production will occur, but more in terms of how production will change,” Peel says. “For example, higher ration costs will change feedlot demand for the type and size of feeder cattle preferred in feedlots.”

On the plus side, Peel explains current hay supplies appear to be adequate with late- 2020 hay prices slightly less year over year for both alfalfa and other hay. Prices are projected lower for this year.

However, he also explains 41% of the U.S. was experiencing some degree of drought at the end of last year, mostly in the western half of the country. That was 31% more than a year earlier.

“The current level of drought is concerning and, should it persist into the coming growing season, may have significant impacts rather quickly in 2021,” Peel says.