Daily Market Highlights

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

Cattle futures closed mostly lower in light trade Tuesday, despite higher boxed beef prices and thoughts that last week’s shallower packer buy may elevate cash prices this week. Higher grain futures and election uncertainty likely provided some of the pressure.

Live Cattle futures closed an average of 26¢ lower, except for an average of 27¢ higher in the back three contracts.

Feeder Cattle futures closed an average of 57¢ lower.

Choice boxed beef cutout value was 79¢ higher Tuesday afternoon at $209.44/cwt. Select was $2.83 higher at $195.45.

Corn futures closed 3¢ to 4¢ higher through Sep ‘21 and then mostly 1¢ higher.

Soybean futures closed 8¢ to 12¢ higher through Sep ‘21 and then 4¢ to 6¢ higher.

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Major U.S. financial indices closed higher Tuesday, apparently buoyed by thoughts that economic stimulus talks will gain traction after the election, no matter who wins. 

The Dow Jones Industrial Average closed 554 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 202 points.

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The Purdue University/CME Group Ag Economy Barometer rose 27 points in October to 183, the highest level in the history of the barometer. The Current Conditions Index rose 36 points to a reading of 178 and the Future Expectations Index rose 23 points to a reading of 186.

The Ag Economy Barometer is based on survey responses from 400 U.S. agricultural producers and was conducted Oct. 19-23.

“The combination of good yields, a rally in crop prices and Coronavirus Food Assistance Program payments (CFAP 2) set the stage for an all-time high in the barometer and farmer sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Since bottoming out this summer, the ag economy has rebounded sharply, and the dramatic improvement in sentiment reflects the turnaround in the farm income picture.”

Mintert refers to a late summer/early fall rally in commodity prices combined with government program payments arising from the second round of the Coronavirus Food Assistance Program, which provided a boost to many producers’ farm income. Corn and soybean prices continued to rally, even though U.S. corn yields are expected to set a record high and USDA projects soybean yields to be the fourth highest on record.

Comparing their farm’s current financial condition to a year earlier, 25% of survey respondents said their operation was better off. That was the most positive response from producers to the question in the history of the barometer survey.

The Farm Capital Investment Index also hit an all-time high in October, up 9 points from September to a reading of 82. The percentage of producers expecting to increase their purchases of machinery in the upcoming year rose to 14% from 11% a month earlier, up from 4% in May. The percentage of respondents who plan to reduce their purchases in the next year was 33%, down from 40% in September.

Meanwhile, 4% more producers (27%) than in September expect land values to increase over the next 12 months. Similarly, 38% said they expect cash rental rates to increase in 2021, compared to 8% a month earlier.

Producer optimism about trade with China also increased, with 59% of respondents expecting China to fulfill the food and agricultural import requirements outlined in the Phase One trade agreement with the U.S.; 12% more than a month earlier.

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

Last week, live prices were at $106/cwt. in the Southern Plains, $103-$105 in Nebraska and $101-$103 in the western Corn Belt. Dressed prices, in a light test, were at $158-$163 in Nebraska and at $158-$165 in the western Corn Belt.

Cattle futures managed to close mostly higher Monday after early pressure and skittishness surrounding Tuesday’s election. 

Live Cattle futures closed an average of 26¢ higher.

Feeder Cattle futures closed narrowly mixed from an average of 25¢ lower in the front two contracts to an average of 70¢ higher.

Choice boxed beef cutout value was 55¢ higher Monday afternoon at $208.65/cwt. Select was $1.38 higher at $192.62.

Corn futures closed 1¢ lower in the front four contracts and then mostly fractionally higher

Soybean futures closed 1¢ to 5¢ lower through the front five contracts and then 1¢ to 3¢ higher.

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Major U.S. financial indices closed higher Monday, buoyed by positive economic news and despite election uneasiness.

Economic activity in the manufacturing sector grew in October, with the overall economy notching a sixth consecutive month of growth, according to the latest Manufacturing ISM® Report On Business®. The October Purchasing Managers Index was 3.9 points higher to 59.3%, the highest since September 2018.

The Dow Jones Industrial Average closed 423 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 46 points.

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“Improved stocker prospects, combined with a sharp recovery in the Feeder Cattle futures markets last week, may mean that the seasonal low in calf and stocker prices is past,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “March Feeder futures, the reference for winter grazing programs, increased by roughly $8/cwt. last week, making stocker budgets look more attractive again.”

Besides the rally in futures prices, Peel points out last week’s winter storms and widespread moisture across the Southern Plains, could increase the odds for wheat pasture. Hopes for grazing wheat continued to dwindle amid expanding drought ahead of the storms.

“The wheat crop is generally poised to respond quickly to the timely precipitation. Stocker demand may pick back up somewhat in the coming weeks with improvement in the wheat crop. Seasonally large runs of feeder cattle are expected in the coming weeks and numerous value-added preconditioned calf sales are scheduled in the next five weeks (Oklahoma),” Peel says.

As well, logic suggests last week’s storms depressed feedlot performance in the region, which should also support the market.

Negotiated cash fed cattle prices looked more promising through Friday afternoon, but remained mainly steady to lower than the previous week, according to the Agricultural Marketing Service.

There were a few live trades in Nebraska at $106/cwt., but too few to trend. On Thursday, the market was established at $103, which was $2 less than the previous week. Dressed trade the prior week was at $162-$166.

In the western Corn Belt, live sales for the week were at $101-$103, which was steady to $4 lower than the previous week. Dressed prices the pervious week were at $162-$165.

Live trade in the Southern Plains was steady week to week at $106.

The average five-area direct steer price through Thursday was $104.16/cwt. on a live basis, which was 14¢ more than the previous week, but $7.75 less than the same week last year. The average dressed steer price of $159.70 was $4.27 less than the prior week and $17.89 less than the previous year.

Choice boxed beef cutout value was 78¢ higher Friday afternoon at $208.10/cwt. Select was 1¢ higher at $191.24.

Total estimated cattle slaughter for the week of 638,000 head was 5,000 head fewer than the previous week and 21,000 head fewer (-3.2%) than the same time last year. Year-to-date estimated total cattle slaughter of 26.7 million head is 1.1 million head fewer (-3.8%) than a year earlier. Beef production of 537.3 million lbs. for the week was 4.1 million lbs. less than the previous week and 4.7 million lbs. less than a year earlier. Year-to-date estimated beef production of 22.2 billion pounds is 256.7 million lbs. less (-1.1%) than a year earlier.

Cattle futures continued higher Friday, especially Feeder Cattle with support from seasonal expectations for higher cash fed cattle prices and wholesale beef values. 

Live Cattle futures closed an average of 32¢ higher, from 2¢ higher to 70¢ higher, except for 30¢ lower in expiring spot Oct.

Feeder Cattle futures closed an average of $2.08 higher, from $1.67 higher to $2.77 higher.

Corn futures closed unchanged to 3¢ higher.

Soybean futures closed 5¢ to 8¢ higher.

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Major U.S. financial indices closed lower Friday, ending a volatile and bearish week. Pressure on the day included record high domestic coronavirus cases for the week, renewed pandemic restrictions in Europe and positioning ahead of next week’s elections.

The Dow Jones Industrial Average closed 157 points lower. The S&P 500 closed 40 points lower. The NASDAQ was down 274 points.

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Even before the pandemic, the 49 rural U.S. counties dependent on meatpacking faced a comparatively high prevalence of poverty, according to USDA’s Economic Research Service (ERS).

“Just over 500,000 people work in the meatpacking industry in the United States. Many plants are in cities such as Sioux Falls, SD, where meatpacking is just one of many major employers. However, several other plants are in much smaller municipalities such as Dakota City, NE, and Worthington, MN, where meatpacking is the primary employer in the county,” according to ERS analysts, in The Meatpacking Industry in Rural America During the COVID-19 Pandemic. “There are 56 counties in the United States—49 in rural (non-metro) counties and seven in urban (metro) counties—where meatpacking is estimated to account for more than 20% of all county employment. While these counties make up 2.5% of all rural counties and 0.6% of urban counties, they represent 19.0% and 2.9%, respectively, of all meatpacking employment in the United States.”

By ERS definition, high-poverty counties have poverty rates of 20% or higher, using the 2014–18 five-year estimates of the American Community Survey. By that measure, 34.7% of meatpacking-dependent counties were defined as high-poverty counties, compared with 26.2% in all other rural counties.

Then came COVID-19.

Starting in the middle of April, the two-week moving average of new coronavirus cases in meatpacking-dependent counties were significantly higher than in other rural counties, according to ERS.

“Meatpacking-dependent counties are currently maintaining around 1.25 times the two-week moving average number of new daily cases per 100,000 compared to other rural counties for a third straight month,” explain ERS analysts.

Negotiated cash fed cattle trade got off to a sluggish start for the week on Thursday with a few live trades in the Southern Plains steady with last week at $106/cwt. There were a few live trades in Nebraska at $103. However, there were too few transactions to trend in any region, according to the Agricultural Marketing Service.

The average dressed steer weight for the week ending Oct. 17 was 929 lbs., which was 1 lb. heavier than the prior week and 29 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 4 lbs. heavier than the prior week and 19 lbs. heavier than the previous year.

Cattle futures continued higher Thursday, with the outlook for seasonally higher cash prices, as well as technical support.

Live Cattle futures closed an average of $1.64 higher, from 42¢ higher in almost spent spot Oct. to $3.30 higher.

Feeder Cattle futures closed an average of $1.32 higher, from 27¢ higher at the back to $1.82 higher toward the front.

Choice boxed beef cutout value was $1.53 higher Thursday afternoon at $207.32/cwt. Select was $1.65 higher at $191.23.

Net U.S. beef export sales for 2020 totaled 18,900 metric tons for the week ending Oct. 22, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service. That was 13% less than the previous week and 6% less than the prior four-week average. Increases were primarily for China, Japan, South Korea, Mexico and Taiwan.

Nearby Corn and Soybean futures contracts softened a bit more, while the remainder of the board firmed after the previous session’s steep selloff.

Corn futures closed 1¢ to 3¢ lower through Jly ’21 and then mostly fractionally higher to 1¢ higher.

Soybean futures closed 1¢ to 5¢ lower through Mar ’21 and then mainly fractionally mixed.

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Major U.S. financial indices rebounded Thursday from the previous session’s selloff, buoyed by positive economic news.

Real gross domestic product (GDP) increased at an annual rate of 33.1% in the third quarter, according to the U.S. Bureau of Economic Analysis. It decreased 31.4% in the second quarter.

As well, weekly initial unemployment insurance claims of 751,000 were 40,000 fewer than the prior week, according to the U.S. Department of Labor. That was more positive than the trade expected.

The Dow Jones Industrial Average closed 139 points higher. The S&P 500 closed 39 points higher. The NASDAQ was up 180 points. 

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Each year, for more than three decades, the NPD Group publishes the Eating Patterns in America report—top-line trends based on a year’s worth of data from its daily tracking. As you’d expect, the pandemic shoved this year’s numbers and trends around.

“With mandated shelter-at-home and restaurant dine-in restrictions across most of the country during the pandemic, we have had few options other than to prepare most of our meals at home,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “Working from home, schooling at home, and preparing more meals means more of our meal times are a departure from the norm, with most consumers describing their meals as atypical.”

Examples of how America’s eating patterns changed as a result of the pandemic include:

For several years, 80% of meals have been sourced from home and 20% from restaurants and other foodservice outlets. During the pandemic, the gap widened to as much as 87% of meals sourced from home.

The use of online and digital orders for groceries and restaurant foods leapt years ahead in their growth trend trajectory. By May 2020, 40% of shoppers ordered edible groceries online compared to 28% a year earlier. Consumers more than tripled their share of restaurant meals ordered digitally during the April-May-June 2020 quarter. Digital restaurant carryout made up the larger share of restaurant digital orders.

Visits to full service restaurants, which are primarily on-premises operations, declined nearly 80% during the height of the mandated dine-in closures. Quick service restaurants, already set up for drive-thru, carryout, and delivery, realized double-digit declines as well but not as steep as full service restaurants.

“What a year it will be moving forward as we evolve our perspective and the effects of a global pandemic that has caused such tumultuous change,” Portalatin says. “It is my profound hope that next year when we’re compiling the 36th annual Eating Patterns in America, we’re telling the story of recovery.”

Negotiated cash fed cattle trade was mostly inactive on light demand in all cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service. There were too few transactions to trend in any region.

Live prices last week were at $106/cwt. in the Southern Plains, $105 in Nebraska and $103-$105 in the western Corn Belt. Dressed prices were $162-$166 in Nebraska and $163-$165 in the western Corn Belt.

Cattle feeders offered 2,012 head in the weekly Fed Cattle Exchange. Of those, 1,257 head sold: 766 head at an average of $106.04/cwt. for delivery at 1-9 days; 630 head for an average of $105.80 for delivery at 1-17 days.

Choice steers and heifers sold $2.50-$2.75 lower at the fat auction in Tama, IA. There were 219 Choice 2-4 steers weighing an average of 1,488 lbs. bringing an average price of $102.97.

At Sioux Falls Regional in South Dakota, slaughter steers and heifers sold steady to $1 higher. There were 171 Choice 2-3 steers weighing an average of 1,464 lbs. bringing an average of $103.62.

Cattle futures, especially Feeder Cattle, continued to gain Wednesday, helped along by lower grain futures.

Live Cattle futures closed an average of 47¢ higher, from 10¢ higher to $1.00 higher in spot Oct.

Feeder Cattle futures closed an average of $1.06 higher, from 45¢ higher toward the back to $1.65 higher toward the front.

Choice boxed beef cutout value was 91¢ lower Wednesday afternoon at $205.79/cwt. Select was 91¢ higher at $189.58.

Grain futures closed sharply lower Wednesday, likely pressured by anemic outside markets, profit taking, positioning ahead of next week’s election and improved growing conditions and Russia and South America.

Corn futures closed 10¢ to 14¢ lower through Sep ’21 and then mostly 5¢ to 7¢ lower.

Soybean futures closed 15¢ to 25¢ lower through Aug ’21 and then mostly 10¢ to 13¢ lower.

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Major U.S. financial indices crumbled Wednesday as daily domestic coronavirus cases continued to set records and as Germany and France renewed strict pandemic restrictions amid increasing cases in those countries.

The Dow Jones Industrial Average closed 943 points lower. The S&P 500 closed 119 points lower. The NASDAQ was down 426 points.

WTI Crude Oil futures on the CME closed $1.90 to $2.18 lower through the front six contracts.

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Even as the pandemic threatens to further hamstring the economy, recent economic data suggests improvement before the latest upswing in cases was sluggish.

“Throughout the pandemic we have looked at the advanced estimates of monthly retail sales for clues as to the depth of the recession as well as the recovery.  September data was released last week and showed that improvements are slow,” according to analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “The retail sector continues to be one of the hardest hit sectors of the economy. Clothing and accessory stores are down 32.6% in the first nine months of 2020 compared to a year ago. Department stores are still off 17.8%, and electric and appliance stores are still down 15.8%. Gas stations are off 16.4% and food service and bars are down 20.1%.”

More specifically, with food in mind, the LMIC folks explain sales at food service and drinking establishments were 14% less year over year, while grocery store sales were 10% higher. Although total retail and food service sales were 10% higher in September year over year, they are 0.8% less for the year to date.

“With the holiday season upon us, there is considerable question as to what this year’s spending will look like, and how much another round of stimulus could affect it,” say LMIC analysts. “December is the highest total retail sales month in every single year back to 1992, with the only exception being 2008. The fourth quarter of the year is routinely more than 25% of where total annual retail sales are spent. Last year the fourth quarter represented 26.6% of the annual figure, up from 26.4% the prior year. The 7% year-over-year increase in September looks promising and is easily the highest September on record.” 

Negotiated cash fed cattle trade was mostly inactive on very light demand in Nebraska and the Texas Panhandle through Tuesday afternoon. Elsewhere, it was at a standstill, according to the Agricultural Marketing Service. There were too few transactions to trend in any region.

Cattle futures rallied Tuesday, likely helped along by the performance-depressing winter storm, as well as apparent fund positioning.

Live Cattle futures closed an average of $1.01 higher, from 65¢ higher toward the front of the board to $1.30 higher toward the back.

Feeder Cattle futures closed an average of $1.41 higher, from 60¢ higher in spot Oct to $1.72 higher.

Choice was $1.13 lower at $206.70. Select was 18¢ higher at $188.67.

Corn futures closed 1¢ to 2¢ lower across the front half of the board and then fractionally higher to 1¢ higher.

Soybean futures closed 4¢ to 8¢ lower through Jan ’22 and then fractionally lower to 3¢ lower.

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Except for the tech sector, Major U.S. financial indices closed lower again Tuesday as COVID cases continued to spike higher.

The Dow Jones Industrial Average 222 points lower. The S&P 500 closed 10 points lower. The NASDAQ was up 72 points.

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“Drought conditions will likely play an important part of placements this year,” says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets.

Reflecting on the recent Cattle on Feed report, Anderson explains “Difficult wheat pasture establishment and development may force more to feedlots. Drought in the West and Texas may force some more placements. More feeder cattle continue to come from Mexico adding to available supplies for placement.”

As it is, in his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says total feedlot placements during the third quarter (July-September) were 8.5% more year over year. More specifically, during that same period, he explains year-over-year feedlot placements were 17.0% higher in Kansas, 14.5% more in Nebraska, 13.4% higher in Oklahoma, up 9.3% in Colorado, 2% higher in Texas and 1.9% higher in Iowa.

“The Kansas Focus on Feedlots data shows that feedlot average daily gains have been above year-ago levels all year with improved feed conversions, as well,” Peel says. “Improved gains and feed efficiency have pulled feedlot cost of gain below year-ago levels. Excellent feedlot performance has contributed to heavy cattle weights thus far this year.” He expects steer carcass weights to average more than 900 lbs. this year for the first time in history.

On a related note, analysts with the Livestock Marketing Information Center (LMIC) point out that heifers as a percentage of cattle on feed climbed last year but remained steady so far this year.

“Evidence of the slaughter plant disruptions were evident in quarter-three figures, where heifers on feed climbed to 38.5%, up from 37.3% in the prior quarter. Heifers, because of smaller carcass weights, were likely held longer to allow for very heavy steers to have slaughter priority,” say LMIC analysts, in the latest Livestock Monitor. “The heifer count as of Oct. 1 moved a full percent lower, even as cattle numbers on feed increased significantly. The fourth quarter proportion is 37.6% of steers and heifers on feed.”

The LMIC folks also point out beef cow slaughter since July 1 is higher year over year in the Pacific Northwest, West Coast and Southern Plains.

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

In regional negotiated cash trade last week, live prices were at $106/cwt. in the Southern Plains; $105 in Nebraska and at $103-$105 in the western Corn Belt. Dressed prices were at $162-$166 in Nebraska and at $163-$165 in the western Corn Belt.

The five-area direct average steer price last week was $2.45 less than the previous week on a live basis at $105.07/cwt., with the average weight 14 lbs. lighter at 1,467 lbs. The average steer price in the beef was $163.95, which was $4.40 less week to week. The average carcass weight was 7 lbs. lighter at 977 lbs.

Cattle futures rebounded Monday, despite sharply lower outside markets and the bearish nature of Friday’s Cattle on Feed report. Potential rationale includes oversold conditions, adequate positioning ahead of the report and thoughts that a near-term bottom is in the books.

Live Cattle futures closed an average of 69¢ higher, from an average of 22¢ to $1.12 higher, except for an average of 20¢ lower in two nearby contracts.

Feeder Cattle futures closed an average of 76¢ higher, from 17¢ higher in spot Oct to $1.22 higher.

Choice boxed beef cutout value was 34¢ higher Monday afternoon at $207.83/cwt. Select was $1.91 lower at $188.49.

Corn futures closed 1¢ to 2¢ lower.

Soybean futures closed 1¢ to 4¢ higher through Mar ’21 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed sharply lower on Monday, with spiking coronavirus cases and a more bearish tone to economic stimulus talks.

The Dow Jones Industrial Average closed 650 points lower. The S&P 500 closed 64 points lower. The NASDAQ was down 189 points.

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So far, China purchased more than $23 billion worth of agricultural products, approximately 71% of its target under the Phase One Agreement, according to a recent progress report from the U.S. Trade Representative (USTR) and USDA.

“Since the Agreement entered into force eight months ago, we have seen remarkable improvements in our agricultural trade relationship with China, which will benefit our farmers and ranchers for years to come,” says U.S. Trade Representative Robert Lighthizer.

Highlights of the report include:

Beef: U.S. beef and beef product exports to China through August 2020 were more than triple the total for 2017.

Pork: U.S. pork exports to China hit an all-time record in the first five months of 2020.

Corn: Outstanding sales of U.S. corn to China are at an all-time high of 8.7 million tons.

Soybeans: U.S. soybeans sales for marketing year 2021 are off to the strongest start in history, with outstanding sales to China double 2017 levels.

Sorghum: U.S. exports of sorghum to China from January to August 2020 totaled $617 million, up from $561 million for the same period in 2017.

Additionally, USDA expects 2020 sales to China to hit record or near-record levels for numerous other U.S. agricultural products including pet food, alfalfa hay, pecans, peanuts, and prepared foods.

“This agreement finally levels the playing field for U.S. agriculture and is a bonanza for America’s farmers, ranchers, and producers,” says U.S. Secretary of Agriculture Sonny Perdue. “Being able to participate in this market in a more fair and equitable way has generated more sales that are supporting higher prices and strengthening the rural economy.”

Negotiated cash fed cattle demand and trade through Friday afternoon ranged from a standstill to inactive and light, according to the Agricultural Marketing Service.

For the week live prices were $2 lower in the Southern Plains at $106/cwt.; $3-$4 lower in Nebraska at $104-$105 and $2 lower in the western Corn Belt at $103-$105. Dressed prices were $4-$7 lower in Nebraska at $162-$165 and $3-$4 lower in the western Corn Belt at $163-$165.

Through Thursday, the five-area direct weighted average steer price was $105.11/cwt. on a live basis, which was $2.50 less than the same period last week and $4.74 less than a year earlier. The average dressed steer price of $163.97 was $4.43 less than the previous week and $10.91 less than last year.

Cattle futures continued mostly lower on Friday beneath the weight of the week’s gloom and higher grain prices. Friday’s Cattle on Feed report will likely offer no support on Monday (see below).

Live Cattle futures closed narrowly mixed, from an average of 37¢ lower to an average of 7¢ higher.

Feeder Cattle futures closed an average of 49¢ lower, except for 7¢ higher in the back contract.

Choice boxed beef cutout value was $1.37 lower Friday afternoon at $207.49/cwt. Select was 32¢ higher at $191.40.

Estimated cattle slaughter of 643,000 head for the week was 11,000 few than the previous week but 3,000 head more than the previous year. Year-to-date total cattle slaughter of 26.11 million head is 1.04 million head fewer (-3.82%) than last year. Estimated year-to-date beef production of 21.67 billion lbs. is 257.6 million lbs. less (-1.18%) than the same period last year.

Corn futures closed 1¢ to 3¢ higher through Jly ’21 and then 1¢ to 2¢ lower.

Soybean futures closed 3¢ to 10¢ higher through Aug ’21 and then mostly fractionally mixed.

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Major U.S. financial indices closed narrowly mixed on Friday, amid surging coronavirus cases and wonderments about economic stimulus.

The Dow Jones Industrial Average closed 28 points lower. The S&P 500 closed 11 points higher. The NASDAQ was up 42 points. 

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Unless the trade already counted on the bearishness of the monthly Cattle on Feed report issued Friday, there will likely be more pressure on futures and cash prices to start the week. Keep in mind the report accounts for feedlots with 1,000 head or more capacity.

Placements of 2.23 million head in September were 124,000 head more (+5.9%) than the same time last year. That was about 3% more than expectations ahead of the report. In terms of weights 36% went on feed weighing 699 lbs. or less, 46% weighing 700-899 lbs. and 18% weighing 900 lbs. or more.

Marketings of 1.85 million head in September were 108,000 head more (+6.2%) year over year, a touch more positive than expectations.

Cattle on feed Oct. 1 of 11.72 million head were 429,000 head more (+3.8%) than the previous year. That’s the most for the date since the data series began in 1996 and a little more than what the trade anticipated.

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The 461.99 million lbs. of beef in cold storage Sept. 30, was 3% more than the previous month but 6.99 million lbs. less (-1.5%) than the same time last year, according to USDA’s latest Cold Storage report.

Frozen pork supplies were up slightly from the previous month but down 22% from last year.

Total red meat supplies in freezers were up 1% from the previous month but down 13% from last year.

Total frozen poultry supplies were down 2% from the previous month and down 3% from a year ago.

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

For the week so far live prices are $2 lower in the Southern Plains at $106/cwt.; $3-$4 lower in Nebraska at $104-$105 and $2 lower in the western Corn Belt at $103-$105. Dressed prices are $4-$7 lower in Nebraska at $162-$165 and $3-$4 lower in the western Corn Belt at $163-$165.

Total cattle slaughter the week ending Oct. 10 was 637,073 head, according to USDA’s Actual Slaughter Under Federal Inspection report. That was 26,074 head fewer (-4.02%) than the previous week and 11,205 head fewer (-1.73%) than the previous year. Total fed cattle slaughter of 502,345 head was 22,199 head fewer than the prior week (-4.23%) and 7,117 head fewer (-1.40%)than the same week last year.

The average dressed steer weight for that week of 928 lbs. was 4 lbs. more than the previous week and 27 lbs. more than the prior year. The average dressed heifer weight of 846 lbs. was 3 lbs. more than the previous week and 18 lbs. more than a year earlier.

Cattle futures continued to erode amid light trade on Thursday as grain prices hold their ground and cash fed cattle prices soften. As well, there was likely skittishness over the monthly Cattle on Feed report due to be published Friday afternoon.

Live Cattle futures closed an average of 70¢ lower, 30¢ to $1.30 lower

Feeder Cattle futures closed an average of 82¢ lower, from 57¢ lower in spot Oct to $1.05 lower.

On a positive note, wholesale beef values edged higher. Choice boxed beef up 39¢ at 208.86. Select up 17¢ at 191.08.

As well, U.S. net 2020 beef export sales of 21,700 metric tons (mt) for the week ending Oct. 15 were 62% more than the previous week and 13% more than the prior four-week average, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service. Increases were primarily for South Korea, China, Japan, Mexico, and Hong Kong.

Corn futures closed 1¢ to 2¢ higher through Sep ’21 and then fractionally lower to 3¢ lower.

Net export sales of 2020-21 corn for the week ending Oct. 15 was 1.83 million metric tons, up noticeably from the previous week and 21% more than the prior four-week average.

Soybean futures closed mostly unchanged to fractionally mixed.

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Major U.S. financial indices closed higher on Thursday, supported by increased optimism surrounding economic stimulus talks and FDA approval of a drug for treating coronavirus.

The Dow Jones Industrial Average closed 152 points higher. The S&P 500 closed 17 points higher and the NASDAQ was up 21 points.

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The Creighton University Rural Mainstreet Index (RMI) rose for the sixth consecutive month in October to its highest level since January, before the onset of the pandemic. The RMI is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

The overall index for October climbed above growth neutral (50.0) to 53.2 from  46.9 in September. The farmland price index advanced above growth neutral to 50.6 in October; only the third time in the last 82 months.

“Recent improvements in agriculture commodity prices, federal farm support, and the Federal Reserve’s record low interest rates have underpinned the Rural Mainstreet Economy. Still, 35.5%, of bank CEOs reported their local economies were experiencing recessionary economic conditions,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Bankers were asked in the latest survey to identify the industry in their area most harmed by the pandemic. More than eight of 10 (80.6%) named restaurants/bars as experiencing the greatest negative impacts. Others areas identified by bankers as economically impacted were: farmers (3%), medical care (3.4%), retailers (6.3%) and hourly workers (6.7%).

“Our worst problem right now is that so much anti-COVID-19 vaccine information has been spread for political reasons that about half the people I talk to say they won’t take the vaccine when it is available. That will hurt our hopes for an economic recovery looking forward,” says Lonnie Clark, president of the State Bank of Chandler, in Chandler, MN.

“It will take many months of above growth neutral readings to get back to pre-COVID-19 employment levels for the region,” Goss says.

Negotiated cash fed cattle trade and demand were moderate in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Live sales were $3 lower than last week at $104-$105/cwt. Dressed sales were $4-$7 lower at $162-$165. Earlier in the week, live sales in the Southern Plains were $2 lower at $106.

Cattle feeders offered 1,096 head in the weekly Fed Cattle Exchange auction. Of those, 702 head—four lots from the Southern Plains—sold: 558 head for a weighted average price of $106.50/cwt. on delivery at 1-9 days; 144 head for a weighted average price of $106.25 on delivery of 1-17 days.

Choice steers and heifers sold $1.00-$1.50 lower at the fat auction in Tama, IA. There were 159 Choice 2-4 steers weighing an average of 1,410 lbs. selling for an average price of $105.23. That was steady to $2 lower than country trade in the region last week.

Cattle futures continued to stabilize Wednesday, closing narrowly mixed, with continued pressure from grain prices, as well as demand uncertainty and wonderments about the monthly Cattle on Feed report due out on Friday.

Live Cattle futures closed an average of 40¢ lower, except for unchanged and 30¢ higher in the back two contracts.

Feeder Cattle futures closed from an average of 27¢ higher in five contracts to an average of 33¢ lower.

Choice boxed beef cutout value was $2.13 lower Wednesday afternoon at $208.47/cwt. Select was 76¢ lower at $190.91.

Corn futures closed 1¢ to 5¢ higher through Sep ’21 and then mostly 1¢ to 3¢ lower.

Soybean futures closed 4¢ to 8¢ higher through Sep ’21 and then mostly 2¢ higher.

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Major U.S. financial indices closed lower Wednesday, with pressure from unresolved economic stimulus talks and election uncertainty.

The Dow Jones Industrial Average closed 97 points lower. The S&P 500 7 points lower. The NASDAQ down 31 points.

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Current markets offer promising value of gain across a wide range of weights, according to Brenda Boetel, agricultural marketing specialist at the University of Wisconsin-River Falls.

“Relative weights are the largest driving factor for the relationship between feeder cattle prices,” Boetel explains, in the latest issue of In the Cattle Markets. “The normal relationship between different cattle prices is for prices per hundredweight to decline when cattle weights increase. This price slide is because the prices reflect what it costs to add weight to the animal. The price slide is a big indicator for gross margin, or value of gain, for stocker production.

“Currently, the value of gain is a bit stronger for gains towards the heavy end of feeder weights. A 650-lb. beginning weight has a value of gain of $1.19/lb. for 300 lbs. of gain up to 950 lbs., whereas a 450-lb. beginning weight has a value of gain of $1.11/lb. for 300 lbs. of gain up to 750 lbs. These values suggest that stocker producers have considerable flexibility about what weight to buy and how much weight to put on stocker cattle at this time.”

She notes the above analysis does not indicate profit potential. It assumes the same prices for all weights at completion of the stocker period as when purchased. So, the question is what prices levels could be early next year.

“June to September 2020 saw larger feedlot placements compared to 2019, indicating larger fed cattle supply for early 2021 than previously anticipated. Feedlots looking to fill lots in early 2021, coupled with two consecutive years of declining calf crops provides the potential for heavyweight feeder cattle prices to remain steady to slightly higher than fall 2020 prices,” Boetel says. “Given the drought in the West, the forage availability is the biggest challenge for southern and western stocker cattle. Many of these operations will likely not have adequate forage this winter, indicating that heavyweight feeder cattle supply for spring may be tighter than anticipated as lightweight animals are placed directly on feed this winter. If heavyweight feeder cattle prices remain stable and if the producer has adequate forage available, there is some potential for profit from stocker cattle this winter.”

Boetel emphasizes producers need to analyze their own costs and revenue potential. Wisconsin Extension has some decision tools available here.