Daily Market Highlights

Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service (AMS). There were a few live trades in the Southern Plains at $106/cwt., which was steady with the previous day and $2 lower than last week.

Cattle futures firmed Tuesday, regaining a portion of what was lost in the previous session’s selloff. Other than being oversold, there was no compelling explanation.

Live Cattle futures closed an average of 74¢ higher, from 12¢ higher in spot Oct to $1.07 higher toward the back.

Feeder Cattle futures closed an average of $1.87 higher, (70¢ to $2.40 higher) except for 10¢ lower in spot Oct.

Choice boxed beef cutout value was 86¢ higher Tuesday afternoon at $210.60/cwt. Select was 17¢ lower at $191.67.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 8¢ to 11¢ higher through Sep ’21 and then 5¢ to 6¢ higher.

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Major U.S. financial indices closed higher Tuesday, buoyed by promising chatter about Congress getting closer to agreement concerning an economic stimulus deal.

The Dow Jones Industrial Average 113 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 37 points. 

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Late last week, the National Cattlemen’s Beef Association (NCBA) released its widely anticipated framework for voluntarily enhancing negotiated cash fed cattle trade volume. In broad terms, it calls for minimum levels of cash trade in each of four designated cattle feeding regions, as well as weekly participation by the four largest beef packers.

“The framework explains in detail what we are calling the 75% Plan, which is designed to provide negotiated trade and packer participation benchmarks for the industry to strive toward,” explains, Marty Smith, NCBA president, in a letter to that organization’s members.

To avoid tripping triggers, in any given quarter, each region will have to:

• Achieve no less than 75% of the weekly negotiated trade volume that current academic literature indicates is necessary for robust price discovery in that specific region.
• Achieve this negotiated trade threshold no less than 75% of the reporting weeks in a quarter.
• Achieve no less than 75% of the weekly packer participation requirements, to be determined in short order, and assigned to each specific region (more later).
• Achieve this packer participation threshold no less than 75% of the reporting weeks in a quarter.

That’s outlined in A Voluntary Framework to Achieve Robust Price Discovery in the Fed Cattle Market. It was developed by NCBA’s Regional Triggers Subgroup. The NCBA Live Cattle Marketing Work Group tasked that group to develop a voluntary framework, including triggers, to increase frequent and transparent regional trade to a regionally sufficient level.

Levels of weekly trade volume are based on previous and ongoing cash price discovery research conducted by Stephen Koontz, agricultural economist at Colorado State University.

“For instance, in Kansas, the robust number that Dr. Koontz identified was 21,000 head of negotiated trade on a weekly basis, so 75% of that is 15,750 head per week,” explained Jerry Bohn, chairman of the Regional Triggers Subgroup, during last Friday’s Beltway Beef podcast. “We did that for every region of the country. From there, we put together this trigger plan of 75% of the required volume each week, 75% of the time.”

The framework defines four cattle feeding regions: 1) Texas, Oklahoma and New Mexico; 2) Kansas; 3) Nebraska and Colorado; 4) Iowa and Minnesota. Weekly robust cash trade levels for the regions range from 5,000 head (Colorado) to 31,000 head (Nebraska).

As for the packer side of the equation, according to the framework:

“Each of the four major packers shall be responsible to participate in negotiated trade, at appropriate and adequate levels, within each of the regions from which they predominantly procure fed cattle. At this time, there is insufficient data published under LMR (Livestock Mandatory Reporting) to measure the participation of the major packers in negotiated trade within each region. NCBA is currently involved in conversations with U.S. Department of Agriculture’s Agricultural Marketing Service (USDA-AMS) to determine what packer participation information can be shared under the current LMR statutes and USDA’s rules of confidentiality. The subgroup has drafted a potential framework for the packer participation silo, but will await additional information from USDA-AMS before finalizing.”

Trigger Tripping

The framework defines eight minor triggers, each having to do with whether or not threshold-level negotiated trade volume and threshold-level packer participation were achieved in various regions.

The subgroup will evaluate, on a quarterly basis in arrears, the weekly negotiated trade volume and packer participation information for each reporting region, using LMR data from USDA-AMS.

To avoid tripping a minor trigger, each region must:

• Weekly trade 75% or more of its “robust” price discovery threshold via negotiated means, no less than 75% of the reporting weeks, and
• Weekly fulfill its packer participation obligations (to be determined as outlined above) no less than 75% of the reporting weeks.

In any given quarter, the tripping of three or more minor triggers equals a major trigger.

“In the event that a major trigger is tripped during any two out of four rolling quarters, the subgroup shall recommend NCBA pursue legislative or regulatory measures to compel adequate negotiated trade for robust price discovery,” according to the report.

“While certainly not a silver-bullet solution, I truly believe that this approach provides the industry a goal to strive towards and, perhaps more importantly, a path forward if progress is not demonstrated toward that goal,” wrote Smith.

“It’s not intended to be the ultimate fix to the marketplace, but ultimately what we wanted is to have the industry in the driver’s seat until such a time that it was determined that we can’t achieve what we need to on a voluntary basis,” explained Tanner Beymer, NCBA director of government affairs and market regulatory policy, during the podcast.

Negotiated cash fed cattle trade was $2 lower at $106/cwt. on a live basis in the Southern Plains through Monday afternoon on light demand, according to the Agricultural Marketing Service (AMS). There were a few live sales in Nebraska $3 lower at $105, but too few to trend.

Prices last week:

Southern Plains: $108 on a live basis.

Nebraska: mostly $108 live and at $169 in the beef.

Western Corn Belt: $105-$107 on a live basis and $167-$168 dressed.

Last week’s five-area direct fed steer prices was 74¢ less than the previous week at $107.52/cwt. on a live basis, according to AMS. The average price in the beef of $168.35 was $1.32 lower.

Cattle futures closed sharply lower Monday, with follow-through pressure from the last session, softer outside markets, declining open interest and what appeared to be algorithmic piling on. Recently expanded CME limits offered extra rein.

Live Cattle futures closed an average of $2.90 lower.

Feeder Cattle futures closed an average of $3.67 lower.

Choice boxed beef cutout value was 29¢ lower Monday afternoon at $209.74/cwt. Select was $1.68 lower at $191.84.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed mostly 3¢ to 4¢ higher across the front half of the board and then mostly fractionally higher to 1¢ higher.

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Major U.S. financial indices dropped Monday, beneath the weight of increasing coronavirus cases and continued uncertainty about the government’s ability to come to terms on another round of economic stimulus.

The Dow Jones Industrial Average closed 410 points lower. The S&P 500 closed 56 points lower. The NASDAQ was down 192 points.

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“Despite the rising number of cattle on feed, front-end supplies—the number of cattle on feed over 150 days—diminished for the third consecutive month,” according to analysts with USDA’s Economic Research Service, in the monthly Livestock, Dairy and Poultry Outlook. “This is the result of an improving pace of fed cattle slaughter, which was faster than a year ago for the last two months and above the five-year average. The improving pace, combined with an ample supply of fed cattle at heavier weights, has led to higher expected beef production in third-quarter 2020, relative to 2019. Nonetheless, firm demand and higher than year-ago wholesale prices are likely supporting packer margins, as the recent uptick in steer prices remains in line with year-ago prices.”

ERS increased the expected five-area direct fed steer price for the fourth quarter by $5 to $109/cwt. Projections for the first quarter next year increased by $6 to $113; by $3 to $110 in the fourth quarter.

As for feeder steers (basis Oklahoma City), ERS increased expectations for the fourth quarter by $3 to $143. The annual average price for next year increased by $2 to $139.

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

For the week, prices were $1 lower on a live basis in the Southern Plains at $108/cwt.; steady to $1 lower in Nebraska at $107-$108/cwt.; steady to $3 lower in the western Corn Belt at $105-$107. Dressed prices were $1 lower in Nebraska at $169 and $1-$3 lower in the western Corn Belt at $167-$168.

The five-area direct weighted average steer price through Thursday was $107.61/cwt., which was 2¢ more than the previous week, but $3.35 less than the same week last year. The average steer price in the beef of $168.40 was 89¢ less than the prior week and $8.86 less than the same time last year.

Cattle futures took another step lower on Friday, pressured by lower cash prices, weaker wholesale beef values and increasing demand uncertainty.

Live Cattle futures closed an average of 93¢ lower.

Feeder Cattle futures closed an average of $2.25 lower (82¢ lower at the front to $2.77 lower).

Choice boxed beef cutout value was 45¢ lower Friday afternoon at $210.03/cwt. Select was $2.98 lower at $193.52.

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

Soybean futures closed 6¢ to 12¢ lower through May ’21 and then mostly 1¢ to 5¢ lower.

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Major U.S. financial indices closed mixed Friday. Pressure included resurgent COVID cases. Support included stronger retail sales than expected in September.

U.S. retail sales were up 1.9% more than the previous month and 8.2% more year over year, according to the U.S. Census Bureau. Sales by non-store retailers were up 23.8% year over year.

The Dow Jones Industrial Average closed 112 points higher. The S&P 500 closed fractionally higher. The NASDAQ was up 42 points.

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A recent Cargill study found consumer recognition of the challenges and expectations farmers face grew amid the COVID-19 pandemic, as processing and transportation bottlenecks, especially in the protein industry, stretched the global food supply.

More specifically, the latest Feed4Thought survey conducted by Cargill found nearly one-third of consumers in the U.S., Brazil, Vietnam and Norway have a renewed appreciation for animal agriculture.

“Farmers and ranchers have faced tremendous pressures caused by COVID-19 supply chain disruptions. And those pressures came on top of the multitude of challenges farmers already faced as they worked to feed the world in a safe, responsible and sustainable way,” says David Webster, president of Cargill Animal Nutrition & Health. “When consumers experienced bare shelves at grocery stores, they were reminded of the critical role livestock and aquaculture farmers play in global food security.”

In the study, 71% of consumers express concern about the pandemic’s disruption of the food system; two in three consumers acknowledge increased pressure on animal farmers to supply safe, affordable protein since COVID-19’s onset.

These new challenges have not, however, deterred consumers’ faith in farmers: an overwhelming majority of consumers (84%) indicated they were generally confident in farmers to meet demand and feed growing populations. More than half of consumers indicate they feel positively toward/appreciative of farmers, with one-third saying that their perceptions have improved as compared to pre-pandemic. This high confidence and increased appreciation toward farmers suggest that COVID-19 may be acting as a catalyst in strengthening the relationship between consumers and farmers.

So far this week, negotiated cash fed cattle trade is steady to $1 lower on a live basis in Nebraska and the western Corn Belt at $107-$108/cwt., according to the Agricultural Marketing Service. Dressed sales are $1 lower in Nebraska at $169. Live sales in the Southern Plains are $1 lower at $108.

Cattle futures continued to weaken on Thursday, especially Feeder Cattle, as grain prices continued to strengthen.

Live Cattle futures closed an average of 58¢ lower.

Feeder Cattle futures closed an average of $1.17 lower (82¢ to $1.52 lower), except for 55¢ and 15¢ higher in the front two contracts.

Choice boxed beef cutout value was 60¢ lower Thursday afternoon at $210.54/cwt. Select was $2.38 lower at $196.89.

Corn futures closed 3¢ to 7¢ higher through the front four contracts and then mostly fractionally higher to 1¢ higher.

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

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Major U.S. financial indices softened Thursday. Pressure included resurgent COVID cases in Europe prompting renewed pandemic restrictions in some countries.

Also, weekly initial unemployment insurance claims of 898,000 reported by the U.S. Department of Labor was 53,000 more than the previous week and less robust than the trade expected.

The Dow Jones Industrial Average closed 19 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 54 points.

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“The current concern surrounding Alternative Marketing Arrangements (AMA e.g. formula/grid pricing) has more to do with lower cash prices received by producers due to market reactions to major market disruptions than the role of AMA’s role in thinly traded markets,” says Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln, in the latest issue of In the Cattle Markets.

Dennis discusses the motivation behind recent legislative proposals that would mandate minimum levels of weekly cash trade.

“While both bills would bring increased negotiated cash price discovery and transparency in the feedlot-packer market interface, neither are likely to increase the cash price received by producers since they do not fundamentally change the supply of fed cattle nor the demand for wholesale beef,” Dennis explains. “Further, it is unlikely that if these bills were implemented prior to either the Holcomb Fire or COVID-19 it would have prevented the backlog in cattle, nor affected the demand for wholesale beef. If implemented, these policies would create additional transparency but potentially create increased costs and reduce profitability for the entire beef complex. Consistent with the economic theory of derived demand, the additional costs of these policies are likely to predominately be carried by the cow-calf industry.”

Although there are regional differences and periods when bid-the-grid selling increased, Dennis says there has been little overall average change in the percentage of negotiated cash sales since the beginning of the year.

Negotiated cash fed cattle trade was slow on light to moderate demand in the Southern Plains and Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service.

Live trade in the Southern Plains was $1 lower at $108/cwt. Dressed trades were $1 lower in Nebraska at $169. Elsewhere, trade was limited on light demand.

Cattle feeders offered 774 head in the weekly Fed Cattle Exchange auction. Of those, 671 head (four lots) from the Southern Plains sold: 304 head for a weighted average price of $108/cwt. for delivery at 1-9 days; 367 head at $108.25 for delivery at 1-17 days. That was $1 lower than country trade in the region last week.

Similarly, Choice steers and heifers sold 50¢ to $1.00 lower at the fat auction in Tama, IA. There were 171 head of Choice 2-4 steers weighing an average of 1,423 lbs. selling for an average price of $107.40. That was a touch softer than the top of last week’s negotiated range.

Slaughter steers and heifers sold mainly $2-$3 lower at Sioux Falls Regional in South Dakota. There were 330 head of Choice 2-3 steers weighing an average of 1,472 lbs. bringing an average price of $104.71/cwt.

Cattle futures tottered back lower on Wednesday with pressure including the softer cash price outlook and stagnant wholesale beef values.

Live Cattle futures closed an average of 47¢ lower.

Feeder Cattle futures closed an average of 43¢ lower (2¢ to 90¢ lower), except for 25¢ higher in spot Oct.

Choice boxed beef cutout value was $1.30 lower Wednesday afternoon at $211.14/cwt. Select was 81¢ lower at $199.27.

Exports to China continue adding heft to grain markets. Yesterday, for instance, USDA’s Foreign Agricultural Service reported sales of another 420,000 metric tons of corn and 264,000 metric tons of soybeans to China for delivery in the 2020-21 marketing year that began Sept. 1.

Corn futures closed 2¢ to 5¢ higher through the front three contracts and then mostly 1¢ lower.

Soybean futures closed mostly 3¢ to 12¢ higher through Aug ’21 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed lower again Wednesday, pressured by the lack of a deal for another round of COVID economic stimulus and despite positive corporate quarterly earnings reports.

The Dow Jones Industrial Average closed 165 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 95 points.

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Nationwide, other hay prices increased more than those for alfalfa in July and August, climbing $9 to $137 per ton, compared to $128 in June. Other hay price is 6% above a year ago, while the national alfalfa hay price in August was 4% less than a year earlier at $172 per ton, according to the Livestock Marketing Information Center (LMIC).

“Typically, alfalfa prices are higher than other hay prices, however, the reverse of that trend has been evident in certain states,” say LMIC analysts, in the latest Livestock Monitor. “Colorado other hay prices are over $200 per ton this year and in the last two months went for $5 per ton more than alfalfa in the state. Arizona other hay prices outpaced alfalfa by $15 per ton in July and in August. Montana and Nevada each reported $10 premiums for other hay, and Washington $20. Washington is one of the few states that regularly has other hay commanding a higher value than alfalfa.”

Besides demand from the horse industry, the folks at LMIC explain high quality grasses produced in the Northwest, such as timothy and orchard grass, are in demand internationally.

“As large exporters of grasses to the rest of the world, the export market can have incredible influence on those values,” say LMIC analysts. “According to USDA FAS, other hay exports year to date are up 2%, with China nearly doubling its purchases from last year. Japan, the largest destination for U.S. other hay is up 7%.”  

Negotiated cash fed cattle trade was limited on very light demand in Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few live sales in Nebraska at $107-$108/cwt.

Cattle futures on Tuesday gained back a fair portion of what was lost in the previous session, although it was tough to see a concrete reason, given the 6,000-contract decline in Live Cattle open interest a day earlier. 

Live Cattle futures closed an average of 84¢ higher (40¢ to $1.50 higher).

Feeder Cattle futures closed an average of 79¢ higher (57¢ to $1.27 higher).

Choice boxed beef cutout value was $2.18 lower Tuesday afternoon at $212.44/cwt. Select was 26¢ lower at $200.08.

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Major U.S. financial indices closed lower Tuesday amid mixed economic news. Pressure included resurgent COVID cases and two major pharmaceutical companies suspending late-stage vaccine trials on health concerns.

The Dow Jones Industrial Average 157 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 12 points.

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AGR Partners LLC (AGR), along with existing co-investor StepStone Group, completed the purchase of Green Plains Inc.’s remaining 50% ownership in their joint venture in Green Plains Cattle Company LLC (GPCC), the fourth largest cattle feeder in the United States. Investment funds managed by AGR will become the majority owners of GPCC, with completion of the transaction.

GPCC has a total one-time capacity of more than 355,000 head, according to company sources. The company began in 2014 with the acquisition of Supreme Cattle Feeders in Kismet, KS. In 2017, the company added a 30,000 head operation in Hereford, TX, a 50,000 head operation in Eckley, CO, and a 105,000 head operation in Leoti, KS. A year later they acquired a combined 100,000 head operation in Tulia, TX and Sublette, KS.

AGR and StepStone Group originally completed the purchase of a 50% ownership stake of GPCC in September 2019.

“We are excited to increase our ownership in Green Plains Cattle Company,” says Daniel Masters, managing director of AGR Partners. “GPCC and the management team have a proven operational model delivering strong long-term economic, environmental and social outcomes. We look forward to continuing to build the company.”

Negotiated cash fed cattle trade was limited on very light demand in the Texas Panhandle and western Corn Belt through Monday afternoon. Although too few to trend, there were a few live sales in the Texas Panhandle at $109/cwt. and a few in the western Corn Belt at $107.

Last week’s five-area direct negotiated weighted average fed steer price was $107.12/cwt. on a live basis, which was $1.14 higher than the previous week, but 95¢ less than the same time last year. The average price in the beef of $169.67 was $1.97 more than the prior week but $2.10 less than the previous year.

Cattle futures dropped Monday, with follow through pressure from last week and perhaps some fund selling.

Live Cattle futures closed an average of $1.19 lower.

Feeder Cattle futures closed an average of 81¢ lower (35¢ to $1.00 lower), except for an average of 23¢ higher in three contracts.

Choice boxed beef cutout value was 56¢ higher Monday afternoon at $214.62/cwt. Select was 52¢ higher at $200.34.

Corn futures closed mostly 3¢ to 5¢ lower.

Soybean futures closed down 11¢ to 31¢ lower through Jan ’22 and then 1¢ to 6¢ lower.

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Major U.S. financial indices climbed higher Monday, led by big tech stocks and despite uncertainty regarding additional federal economic stimulus.

The Dow Jones Industrial Average closed 250 points higher. The S&P 500 closed 57 points higher. The NASDAQ was up 296 points.

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“The COVID impacts on the fed cattle market continue to almost have entirely run their course. Marketings have been reasonably strong. The number of long-fed cattle are down off their peaks in June and high inventories in the surrounding months of May and July,” says Stephen Koontz, agricultural economist at Colorado State University. 

In the latest issue of In the Cattle Markets, Koontz says fall feeder cattle prices could be among the highest of the year. While less than the recent peak of $150/cwt. in August, he points out current price levels of near $145 are significantly higher than the $120 seen in April.

“However, cash prices for 4-5-weight animals remain comparable to this spring. Prices are in the high $160s and that is similar to the mid-$160s of April and May,” Koontz says. “Basis for these lightweight animals is soft and the market is rather clearly communicating, for producers who can feed calves for another month or two, that delaying marketing should be considered.”

Although beef cow slaughter has yet to increase much, Koontz expects to see acceleration.

“Beef cow slaughter is up 2.7% for the year to date as of late September,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “At the end of the first quarter, cumulative beef cow slaughter was nearly 11% higher year over year. By the end of the second quarter, cumulative beef cow slaughter had decreased to roughly 3.5% higher than the previous year…Beef cow slaughter is projected to be roughly 2% above year ago levels in the fourth quarter, leading to an annual total beef cow slaughter roughly 2.5% higher year over year.”

Through Friday afternoon, negotiated cash fed cattle prices for the week were generally $2 higher in the Southern Plains at $109/cwt. on a live basis; $1-$2 higher in Nebraska and at $108-$109 and steady to $3 higher in the western Corn Belt at $107-$110. Dressed trade was $2-$3 higher at $170.

Through Thursday, the five-area direct negotiated weighted average fed steer price was $107.59/cwt. on a live basis, which was 48¢ higher than the previous week, but $1.49 less than the same time last year. The average price in the beef of $169.29 was $1.61 more than the prior week but 79¢ less than the previous year.

Live Cattle futures closed an average of 55¢ lower except for 17¢ higher in spot Oct.

Feeder Cattle futures closed an average of 90¢ lower (5¢ to $1.22 lower), except for 20¢ higher in spot Oct.

Choice boxed beef cutout value was $1.94 lower Friday afternoon at $214.06/cwt. Select was $3.28 lower at $199.82.

Total estimated cattle slaughter for the week ending Oct. 10 was 637,000 head, which was 28,000 head fewer (-4.2%) than the previous week and 1.7% less than the same time last year. That’s according to USDA’s Estimated Weekly Meat Production Under Federal Inspection report. Year to date total cattle slaughter 24.81 million head is 1.05 million head fewer (-4.1%) than the same time last year.

Estimated beef production was 535.3 million lbs., which was 4.1% less than the previous week, but a tick higher than the same week last year. Year-to-date beef production of 20.57 billion lbs. is 1.4% less than last year.

Corn and soybean futures found another gear Friday, fueled by the monthly World Agricultural Supply and Demand Estimates (see below).

Corn  futures closed mostly 6¢ to 8¢ higher through Jly ’21 and then mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 15¢ and 26¢ higher.

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Major U.S. financial indices posted another day of gains Friday, with continued optimism regarding additional federal economic stimulus.

The Dow Jones Industrial Average closed 161 points higher. The S&P 500 closed 30 points higher. The NASDAQ was up 158 points.

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USDA’s Economic Research Service (ERS) increased projected fed cattle prices for this year and next, in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). Specifically, ERS increased the 2020 annual average price (five-area direct) by $1.41 to $108.71/cwt., compared to the previous month, with a fourth-quarter price projection of $109. That’s based on current price strength and robust beef demand.

The forecast annual average fed steer price for 2021 increased by $2 to $114. Prices are projected to be $113 in the first quarter, $110 in the second quarter and $114 in the third quarter.

That’s with a projected increase in beef production both this year and next.

ERS projects beef production for this year at 27.14 billion lbs., which was 90 million lbs. more than the previous month’s estimate. That’s based on expectations for increased slaughter in the second half of the year. The total would be 17 million lbs. less than last year. Projections for beef production in 2021 increased 10 million lbs. to 27.37 billion lbs., which would be 227 million lbs. more than this year.

Estimated total red meat and poultry production this year of 106.39 billion lbs. would be 1.13 billion lbs. more than last year. ERS projects total red meat and poultry production next year at 107.46 billion lbs.

Apparently, feed prices will be less supportive to cattle markets than previously thought, according to from USDA’s Economic Research Service (ERS).

Corn

Corn production is forecast 178 million bu. less than the previous month at 14.72 billion bu., based on reduced harvested area and a slight decline in yield to 178.4 bu./acre. Corn supplies are forecast down sharply from last month, on a smaller crop and lower beginning stocks. Corn ending stocks for 2020-21 were lowered 336 million bu. The season average corn price received by producers was increased 10¢ to $3.60/bu.

Soybeans

Soybean production is projected at 4.3 billion bu., down 45 million on lower harvested area. Soybean yield is projected at 51.9 bu./acre, unchanged from the September forecast. Soybean supplies for 2020-21 are forecast 96 million bu. less at 4.8 billion bu. on lower production and beginning stocks. Despite reduced supplies, soybean exports were raised 75 million bu. on record early-season sales. With smaller supplies and increased exports, ending stocks are projected at 290 million bu., down 170 million from last month.

The U.S. season-average soybean price for 2020-21 is forecast at $9.80/bu., up 55¢. The soybean meal price is forecast at $335.00/short ton, up $20.00. The soybean oil price forecast is raised 0.5¢ to 32.5¢/lb. 

Wheat

The 2020-21 U.S. wheat supply and demand outlook was unchanged. The projected season-average farm price for wheat was unchanged at $4.50/bu.

Negotiated cash fed cattle prices in Kansas on Thursday were steady to $2 higher at $107-$108/cwt., according to the Agricultural Marketing Service. Although there were too few transactions to trend, there was some live trade in Nebraska at $108, which was mainly $1 higher than last week. A day earlier, dressed trade started the week $1-$2 higher at $169, but too few to trend.

Cattle futures, especially Feeder Cattle softened Thursday, perhaps with some defensiveness ahead of Friday’s monthly World Agricultural Supply and Demand Estimates.

Live Cattle futures closed an average of 74¢ lower (37¢ to $1.00 lower).

Feeder Cattle futures closed an average of $1.40 lower, from 45¢ lower in spot Oct to $1.75 lower at the back.

Choice boxed beef cutout value was 88¢ lower Thursday afternoon at $216.00/cwt. Select was $2.48 lower at $203.10.

Corn  futures closed mostly 2¢ lower.

Soybean futures closed mostly 3¢ and 6¢ lower.

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Major U.S. financial indices extended gains Thursday, buoyed by continued optimism about another round of economic stimulus sooner than later.

The Dow Jones Industrial Average closed 122 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 56 points.

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The Livestock Marketing Information Center (LMIC) projects cattle prices to rebound next year and in 2022, based in part on expectations that beef production will peak this year.

Glynn Tonsor, agricultural economist at Kansas State University (KSU) offered LMIC price projections as part of his Market Outlook at the recent KSU Beef Stocker Field Day. Prices that follow are basis the Southern Plains.

500-600 pound steer calves: $156-$158/cwt. (fourth quarter); $163-$168 (first-quarter 2021); $169-$175 (second quarter); $167-$171 for the year. For 2022, the annual estimate is $175-$185.

700-800 pound feeder steer: $141-$144/cwt. (fourth quarter); $141-$145 (first-quarter 2021); $142-$148 (second quarter); $148-$152 for the year. For 2022, the annual estimate is $152-$162.

Five-area fed steer: $108-$110/cwt. (fourth quarter); $113-$118 (first-quarter 2021); $116-$122 (second quarter); $117-$120 for the year. For 2022, the annual estimate is $119-$129.

“In the event the macroeconomic environment improves beyond what’s built into these forecasts, I could build an argument for better prices yet,” Tonsor says. “I think there are reasons for optimism that global demand will rebound, but that will hinge on global economic conditions and geopolitical relations.”

You can watch Tonsor’s presentation Here.

Although there were too few transactions to trend, there were some early dressed trades in Nebraska and the western Corn Belt on Wednesday at $169/cwt, according to the Agricultural Marketing Service (AMS). That’s was $1-$2 higher than last week.

Cattle feeders offered 470 head (three lots) in the weekly Fed Cattle Exchange auction. Of those, 367 head (two lots from Texas) sold for delivery at 1-17 days for a weighted average price of $108.50, which was mostly $1.50 higher than last week’s country trade in the region.

Slaughter steers and heifers sold $2-$3 higher at Sioux Falls Regional in South Dakota. There were 406 head of Choice 3-4 steers weighing an average of 1,562 lbs. and bringing an average price of $106.35.

At the fat auction in Tama, IA, Choice steers and heifers sold $2 higher, with 194 head of Choice 2-4 steers weighing an average of 1,421 lbs. and bringing an average price of $108.07.

Cattle futures firmed with the outlook for steady to higher cash fed cattle prices this week.

Live Cattle futures closed mostly higher across a wide range. Except for unchanged and 7¢ lower in the back two contracts, they closed an average of 48¢ higher (12¢ to $1.15 higher).

Feeder Cattle futures closed mostly narrowly higher. Except for 15¢ and 40¢ lower in two contracts, they were an average of 18¢ higher.

Choice boxed beef cutout value was 68¢ higher Wednesday afternoon at $216.88/cwt. Select was $1.26 lower at $205.58.

Corn  futures closed 2¢ to 3¢ higher through Jly ’21 and then mostly fractionally mixed.

Soybean futures closed 7¢ and 6¢ higher in the front two contracts and then mostly 3¢ to 5¢ lower.

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Major U.S. financial indices closed higher Wednesday, supported by indications the White House will entertain renewed economic stimulus talks ahead of the election.

The Dow Jones Industrial closed 530 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 209 points,

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U.S. exports of beef muscle cuts turned the COVID corner in August, according to data compiled by the U.S. Meat Export Federation (USMEF). Exports of beef variety meats continued lower year over year, though, due in part to the lack of available labor required to harvest and export some items.

Led by record-large demand in South Korea and Taiwan, beef muscle cut exports were the largest in more than a year at 89,148 metric tons (mt), up 3.5% year-over-year, while export value increased slightly from a year ago to $611 million. August muscle cut exports also set new records in China and Indonesia and beef exports to Canada continued to gain momentum. Combined beef/beef variety meat exports were 109,752 mt in August, down 4.5% from a year ago. Export value was $673.8 million, down 2% from a year ago but the highest since March.

For January through August, beef muscle cut exports were 6% below last year’s pace in volume (627,248 mt) and 9% lower in value ($4.38 billion). Beef/beef variety meat exports were down 8% to 808,659 mt, valued at $4.95 billion (down 9%).

“Record beef shipments to Korea, Taiwan and China show the kind of rebound U.S. beef can achieve as the foodservice sector gradually recovers and adapts, and we are excited to see demand strengthen further entering the fourth quarter,” says Dan Halstrom, USMEF President and CEO.

U.S. pork exports remain on a record pace in 2020, with January-August muscle cut exports up 22% from a year ago to 1.68 million mt, valued at $4.45 billion (up 20%). Pork/pork variety meat exports were up 17% in volume at just under 2 million mt, with value up 18% to $5.13 billion.

“The upward trend in muscle cut exports is very encouraging and especially critical as beef and pork production continue to rebound from the interruptions earlier in the year,” Halstrom says. “Maintaining variety meat volumes has been especially challenging this year but we continue to expand and develop destinations for these items, which are essential to maximizing carcass value.”