Daily Market Highlights

Feeder Cattle futures closed $1.72 lower Tuesday, pressured by grain futures.

Live Cattle futures closed, though, closed an average 23¢. in the front three contracts to down an average of 30¢the rest of the way, with support from cash prices and wholesale beef values.

Choice boxed beef cutout value was down 74¢Tuesday afternoon at $216.24/cwt. Select was $1.17 lower at $206.84.

Grain futures rallied with support from crop conditions overseas and potential positioning ahead of Friday’s USDA World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 3¢to 5¢higher.

Soybean futures closed mostly 12¢ to 22¢ higher through May ’21 and then fractionally higher to 9¢ higher. 

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Major U.S. financial closed lower Tuesday on the announcement President Trump is halting economic stimulus talks until after the November election.

The Dow Jones Industrial Average closed 375 points lower. The S&P 500 closed 47 points lower. The NASDAQ was 177 points lower.

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Agricultural producer sentiment rose to its highest level in September since the start of the pandemic, according to the Purdue University/CME Group Ag Economy Barometer. The index increased 12 points to 156, compared to August… the low for the year was 60 in April. The Current Conditions Index jumped 18 points to 142 in September. The Future Expectations Index rose 9 points to 163.

The Ag Economy Barometer is based on survey responses from 400 U.S. agricultural producers and was conducted Sept. 21-25.

According to James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture, “In September, producers were more optimistic about both current conditions and the future for agriculture than they’ve been since the pandemic began. He explains “A continued crop price rally and the announcement of the USDA’s Coronavirus Food Assistance Program payments appear to be fueling much of their optimism.”

However, there was less optimism concerning the future of U.S. agriculture’s trade prospects. In September, 58% of respondents said they expect agriculture exports to increase over the next five years, down from 67% in August. The shift was primarily due to more producers indicating they expect exports to remain about the same in the future, rather than increase.

In a related question, producers were asked whether they expect China to fulfill the food and agricultural import requirements established in the Phase One trade agreement signed earlier this year. Farmers’ opinions were split, with less than half (47%) of respondents indicating they expect China to fulfill its commitment to import food and ag products from the U.S.

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.

Live sales last week were at mostly $107/cwt. in the five-area feeding regions. Dressed prices were at $168 in Nebraska and at $167-$168 in the western Corn Belt.

The average five-area direct steer price was last week was $107.12/cwt. on a live basis, which was $2.07 higher than the previous week. The average price in the beef was $2.81 higher at $167.70.

Cattle futures firmed with last week’s stronger cash prices, as well as an increase in slaughter.

Live Cattle futures closed up an average 42¢ higher.

Feeder Cattle futures closed an average 47¢ higher (5¢ to 85¢ higher).

Choice boxed beef cutout value was $1.90 lower Monday afternoon at $216.98/cwt. Select was 40¢ higher at $208.01.

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Major U.S. financial rallied Monday. Most attributed the lift to President Trump able to leave the hospital and renewed hopes for another round of federal economic stimulus.

The Dow Jones Industrial Average closed 465 points higher. The S&P 500 closed 60 points higher. The NASDAQ was up 257 points.

CME WTI Crude Oil futures also rallied on the day, up $2.06 to $2.17 through the front six contracts.

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“The current feeder price patterns mean that producers should consider the implications of current animal weight, short-term weight gain and timing as they evaluate fall marketing alternatives,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. For example, he explains, in his weekly market comments, “In the current market, the value of 50 to 100 lbs. of gain will be significantly lower for steers less than 600 lbs. compared to steers over 600 lbs.”

Peel is referring to Oklahoma price patterns, specifically, which he says are developing along typical lines.

“The price slides across steer weights are very different for feeder cattle below 600 lbs. compared to cattle over 600 lbs. A larger price slide for the lightweight cattle means that the value of gain is lower,” Peel explains.

By way of illustration, using current combined Oklahoma auction prices, he calculated the value of gain at 60¢/lb. to add 50 lbs. to a steer weighing 500 lbs., versus $1.37 for adding the same weight to a steer weighing 600 lbs.

In the meantime, Peel points out La Niña conditions, expanding drought in the Southern Plains and the impact on wheat pasture could pressure stocker cattle prices this fall.

“On average, Oklahoma calf prices are at or near the seasonal low in the late September/early October period. With larger fall runs of calves expected in October and November, the lack of wheat pasture demand may add additional seasonal pressure to calf markets this fall.

Moreover, he says the lack of wheat pasture and other forages may change the timing of calf and feeder cattle sales this fall. 

Through Thursday, the average five-area direct steer price was $107.11/cwt. on a live basis, which was $2.08 higher than the previous week. The average price in the beef was $2.81 higher at $167.68.

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

For the week, live sales in the Southern Plains were mostly $2 higher at $107/cwt., with a few up to $108 in the Texas Panhandle. Live prices were $2 higher in Nebraska at $107 and $2-$3 higher in the western Corn Belt at $107-$108. Dressed trade was $2-$3 higher at $167-$168.

According to Andrew P. Griffith, agricultural economist at the University of Tennessee, “Prices are still a long way from the fourth quarter target high of $115 to $120, but he says a $7 to $8 price improvement over the next two months is obtainable.

Moreover, in his weekly market comments, Griffith says “Reaching those fed cattle price levels will likely result in strong competition for feeder cattle moving forward.”

In the meantime, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University explains, “The July-August bulge in placements suggests higher feedlot marketings in the first quarter of 2021. He adds that July placements were skewed to the lighter weight cattle, while August placements included more heavyweight placements, which further implies that cattle could be somewhat bunched up. However, Peel says, winter weather typically spreads cattle out a bit, so the exact timing is uncertain.

Estimated total cattle slaughter last week of 665,000 head was 14,000 head more than the previous week and 20,000 head more than the previous year. Year-to-date estimated total cattle slaughter of 24.17 million head is 1.04 million head less than the same time last (-4.14%) year.

Cattle futures softened, with pressure from outside markets.

Live Cattle down an average 61¢.

Except for an average of 39¢ lower in two contracts, Live Cattle futures closed an average of 48¢ higher week to week on Friday.

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Nationwide, calves and feeder cattle sold from $2/cwt. lower to $2 higher, according to the Agricultural Marketing Service.

“Demand remains good for yearling cattle, with light to moderate demand for fresh calves,” say AMS analysts. They explain, “Bawling and un-weaned calves continue to see discounts, while Buyers are quite willing to pay premiums for cattle if producers invest time in them and provide a documented health program.”

Feeder Cattle futures took the brunt of the pressure from last week’s crop-friendly quarterly Grain Stocks report. They were down an average $1.04 on Friday. Week to week they closed an average of 72¢ lower. 

Old crop corn stocks in all positions on Sept. 1 of 2.00 billion bu., were 10% less than a year earlier and significantly less than the trade expected, according to the aforementioned grain stocks report.

Week to week on Friday, Corn futures closed an average of 13¢ higher through the front six contracts.

Similarly, old crop soybeans stored in all positions were 42% less than a year earlier at 523 million bu., significantly less than the trade expected.

Week to week on Friday, Soybean futures closed an average of 18¢ higher through the front six contracts.

“As we work through 2020 and into 2021, feeder cattle supplies should continue to tighten modestly,” Peel says. In his weekly market comments, he points out total feedlots placements are 4.2% less than last year for the year to date, despite significant increases the last two months.

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Wholesale beef values hovered on either side of steady last week. Choice boxed beef cutout value was 46¢ lower week to week on Friday at $218.88/cwt. Select was 63¢ higher at $207.61.

The average dressed steer weight for the week ending Sept. 19 was 919 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. Although 23 lbs. heavier than the previous year, the average weight was 1 lb. lighter than the previous week. That was the first week-to-week decline since mid July, according to AMS.

“There are several factors that may influence the beef market moving through the last quarter of the year, Griffith says. “The first would be more stimulus money being deposited in the bank accounts of American consumers. If Congress passes another substantial stimulus package, then this could result in more beef purchases as discretionary income inevitably increases… A second major factor will continue to be the export market.”

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Major U.S. financial indices closed lower amid volatile trade Friday.

Pressure included increased uncertainty with announcements that President Trump tested positive for COVID-19.

As well, the monthly national Employment Situation Summary was less robust than traders expected. Total non-farm payroll increased 661,000 from August to September. The nation’s unemployment rate declined to 7.9%, according to the U.S. Bureau of Labor Statistics. Average hourly earnings for all employees on private non-farm payrolls increased 2¢ to $29.47.

The Dow Jones Industrial Average was down 134 points. The S&P 500 was down 32 points. The NASDAQ closed 251 points lower.

West Texas Intermediate Crude Oil on the CME was $1.56 to $1.67 lower through the front six contracts.

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Rep. Dusty Johnson (R-SD) and bipartisan cosponsors, introduced the Price Reform in Cattle Economics (PRICE) Act last week, aimed at improving cattle markets for producers. It includes existing legislative proposals to open new markets for state-inspected beef products, such as the Direct Interstate Retail Exemption for Certain Transactions (DIRECT) Act, and new provisions to aid producer-owned beef processing facilities and increase transparency in fed cattle transactions.

“The Tyson fire in Holcomb, KS and the supply chain disruptions caused by the COVID-19 pandemic have brought the issues of price transparency in the cattle markets and beef processing capacity to a boiling point within our industry,” says Ethan Lane, Vice President of Government Affairs for the National Cattlemen’s Beef Association (NCBA). “This legislation is a significant step in the right direction as we continue to explore ways to support producers who have been impacted by two major black swan events, in an already volatile cattle market. We are grateful to Rep. Johnson and all the cosponsors for their bipartisan leadership in this space, and will continue working alongside them to see these reforms enacted.”

Provisions of the legislation include (section by section explanation from Rep. Johnson’s office in italics):

Feasibility study on implementing requirements with respect to reported negotiated cash sales of cattle to individual packing plants…This section directs the USDA office of the Chief Economist to conduct a feasibility study and cost-benefit analysis for various proposals to increase price discovery through Mandatory Price Reporting.

Cattle Contract Library…This section amends the Packers and Stockyards act to include beef contracts in USDA’s existing reporting on swine contracts. This section directs requires the Secretary of Agriculture to establish and maintain a library or catalog of the types of contracts offered by packers to beef producers for the purchase of cattle.

Research on meat and poultry processing facilities…This section directs the National Institute of Food and Agriculture to commission a feasibility study or studies to determine if and where there are new opportunities for new or expanding packing plants, what challenges there are to entry and implications for compliance with federal inspection requirements.

Assistance for new and expanded livestock or meat processors…This section establishes a stand-alone direct and guarantee loan program at USDA Rural Development for new and expanding meat processors capacity.

Improving farm management knowledge and skills for livestock producers…This section creates a NIFA grant program to allow land-grant universities to establish livestock marketing tools to help producers utilize the futures market to manage risk by partnering with trade association and other outreach groups.

Although there were too few transactions to trend, negotiated cash fed cattle prices on Thursday continued steady to $1 higher than the week’s higher prices of $2 higher on a live basis at $107/cwt., except for in the Texas Panhandle, where prices are $2-$3 higher at $107-$108. Dressed trade is $2 higher at $167.

Live Cattle futures closed narrowly mixed, from an average of 26¢ lower to an average of 18¢ higher.

Feeder Cattle futures closed an average of 51¢ lower, except for an average of 17¢ higher in the back three contracts.

Choice boxed beef cutout value was $1.24 higher Thursday afternoon at $218.98/cwt. Select was 8¢ higher at $207.62.

The average dressed steer weight for the week ending Sept. 19 was 919 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. lighter than the previous week, but 23 lbs. heavier than the previous year. The actual dressed heifer weight of 836 lbs. was the same as a week earlier, but 13 lbs. heaver than the same week last year.

Actual total fed cattle slaughter of 513,153 was 7,154 head fewer than the prior year. Total cattle slaughter of 648,427 head was 12,430 head fewer (-1.88%). Beef production for the week of 543.3 million lbs. was just 600,000 lbs. less (-0.11%) than a year earlier.

Net U.S. beef export sales the week ending Sept. 24 totaled 24,700 metric tons for 2020, according to the U.S. Export Sales report from USDA’s Foreign Agricultural Service. That was 37% more than the previous week and 67% more than the prior 4-week average. Increases were primarily for Japan, Hong Kong, and Mexico.

Corn futures closed mostly 2¢ to 3¢ higher through Mar ’22 and then fractionally lower to 1¢ higher.

Soybean futures closed unchanged to fractionally mixed through Jan ’22 and then mostly 3¢ to 5¢ lower.

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Major U.S. financial indices mostly edged higher Thursday amid mixed economic news and shadowed by the inability of lawmakers to come to terms on another round of economic stimulus.

Weekly initial jobless claims for the week ending Sept 26 decreased by 36,000 from the previous week to 837,000, according to the U.S. Department of Labor. That was more positive than traders expected.

On the other hand, although economic activity in the manufacturing sector grew for the fifth consecutive month, it declined month to month, according to the Institute for Supply Management^®(ISM) manufacturing report on business^®. The September Purchasing Managers Index (PMI^®) registered 55.4%, down 0.6% from the August reading of 56%.

“After the coronavirus (COVID-19) pandemic brought manufacturing activity to historic lows, the sector continued its recovery in September. Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories and are becoming more proficient at maintaining output,” says Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

The Dow Jones Industrial Average closed 35 points higher. The S&P 500 closed 17 points higher. The NASDAQ closed 159 points higher.

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Restaurant traffic in August was 9% less than the previous year, while revenue was 10% less, according to the NPD Group (NPD). That was with slightly fewer than 25% restaurants nationwide operating with COVID-19 restrictions for on-premises dining.

“As the summer progressed and mandated restrictions were lifted, an increasing number of consumers became more comfortable dining out based on the safety protocols restaurants put in place,” says David Portalatin, NPD food industry advisor “After months of staying at home and cooking their own meals or ordering in, they were ready for the restaurant experience again.”

Since April, at the height of the stay-at-home and mandated dine-in closures, several areas of the restaurant industry improved or returned closer to pre-pandemic levels over the last months, according to NPD’s CREST® foodservice market research.

For example:

On-premises visits improved every month since April as the mandated dine-in closures lifted and restaurants were able to offer varying levels of dine-in capacity.

Digital orders accounted for more than 20% of all restaurant occasions in April, but declined to 17% of occasions in August.

A buy-one-get-one-free or other type of deal, was utilized in 30% of occasions in April but slowed every month since, and represented 27% of occasions in August.

In August, adult-only parties represented 63% of all restaurant occasions and parties with kids (families in most cases) represented 37%. In April, adult-only parties represented 59% of visit share and parties with kids 41% share.

Negotiated cash fed cattle trade was limited on light to moderate demand in Nebraska and the western Corn Belt through Wednesday afternoon. Although too few transactions to trend, there were some early live sales in both regions at $107/cwt. and some in the beef at $167. That’s $2 higher than prices in the regions last week.

Similarly, slaughter steers and heifers sold $2-$3 higher at the fat auction in Sioux Falls, SD, where 245 head of Choice 2-3 steers weighing an average of 1,479 lbs. brought an average price of $104.60.

Cattle feeders offered 901 head in the weekly Fed Cattle Exchange auction on Wednesday. Of those, 358 sold for delivery at 1-17 days for a weighted average price of $106/cwt., which was $1 higher than last week’s country trade.

However, Cattle futures closed lower, especially Feeder Cattle, in the wake of USDA’s quarterly Grain Stocks report.

Old crop corn stocks in all positions on Sept. 1 totaled 2.00 billion bu., according to the report. That’s 10% less than the same time last year and significantly lower than the trade expected.

Corn futures closed 10¢ to 14¢ higher through Sep ’21 and then mostly 7 to 8¢ higher.

Similarly, old crop soybeans stored in all positions were 42% less than a year earlier at 523 million bu., significantly less than the trade expected.

Soybean futures closed 21¢ to 30¢ higher through Sep ’21 and then mostly 11¢ to 19¢ higher.

All wheat stored in all positions of 2.16 billion bu., was 8% less than a year earlier, also less than expected.

Hard Red Kansas City Winter Wheat futures closed 26¢ to 33¢ higher through May ’22.

Live Cattle futures closed an average of 33¢ lower, except for an average of 21¢ higher in the back three contracts.

Feeder Cattle futures closed an average of $1.33 lower, giving back most of what was gained in the previous session.

Choice boxed beef cutout value was 58¢ higher Wednesday afternoon at $217.74/cwt. Select was 55¢ higher at $207.54.

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Major U.S. financial indices closed higher Wednesday with hopes that lawmakers can reach agreement on another round of economic stimulus, as well as more promising news regarding candidate COVID-19 vaccines and treatments

The Dow Jones Industrial Average closed 329 points higher. The S&P 500 closed 27 points higher. The NASDAQ closed 82 points higher.

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John R. Tunheim, Chief Judge for the U.S. District Court in Minnesota ordered dismissal of the consolidated antitrust lawsuit brought against the nation’s four largest beef packers in 2019.

The suit alleged conspiracy to fix and suppress fed cattle prices between 2005 and 2019 by means including, according to the order: 1) periodically restraining or reducing slaughter numbers to reduce demand for fed cattle; 2) curtailing purchases of cash cattle during these periods; 3) coordinating procurement practices with respect to the cash cattle they did purchase; 4) importing foreign cattle to depress demand for cheaper domestic cattle; and 5) closing or idling slaughter plants while refraining from expanding their remaining slaughtering capacity.

Plaintiffs included R-CALF and the Farmers Union, as well as individuals, businesses and consumers.

Bottom line, according to the order, “Because Plaintiffs have not pleaded their direct evidence with sufficient detail and because they have not pleaded parallel conduct sufficient to support an inference of a price-fixing conspiracy, the Court will grant Defendants’ Motions to Dismiss. The Court will also grant Plaintiffs leave to amend their Complaints.”

Cattle futures took a strong step higher Tuesday, buoyed by the outlook for steady to higher cash prices, as well as strong exports indicated in the weekly boxed beef report.

Live Cattle futures closed an average of 89¢ higher, from 12¢ higher at the back to $1.47 higher toward the front.

Feeder Cattle futures closed an average of $1.70 higher, from 80¢ higher at the back to $2.67 higher toward the front.

Choice boxed beef cutout value was 56¢ lower Tuesday afternoon at $217.16/cwt. Select was 57¢ higher at $206.99.

Corn futures closed 1¢ to 2¢ lower.

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

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Major U.S. financial indices closed lower with most of the pressure appearing to stem from worries about resurgent coronavirus and prolonged impact on the economy. Potentially, there was also some positioning ahead of Tuesday night’s presidential debate.

The Dow Jones Industrial Average closed 131 points lower. The S&P 500 closed 16 points lower. The NASDAQ closed 32 points lower.

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Last week, Sen. Deb Fischer (R-Neb.), a member of the Senate Agriculture Committee, introduced the Cattle Market Transparency Act of 2020.

Among other things, according to Sen. Fischer’s office, the legislation would:

“Establish regional mandatory minimum thresholds of negotiated cash trades to enable price discovery in cattle marketing regions.

“Require USDA to create and maintain a library of marketing contracts between packers and producers, and require packers to supply this information to USDA.

“Make clear that all information should be reported in a manner that ensures confidentiality…

“Mandate that a packer report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days. This requirement already exists for the swine industry.”

Many of those mirror suggestions made in USDA’s Boxed Beef and Fed Cattle Price Spread Investigation Report, published July 22. That report was the result of USDA’s investigation into cattle market volatility in the wake of the pandemic and last summer’s Tyson plant fire in Kansas.

“Sen. Fischer’s bill explores many avenues to improve transparency in the cattle markets,” according to a statement from the National Cattlemens Beef Association (NCBA). “The creation of a cattle contracts library and clarification of confidentiality rules will provide crucial data to cattle producers as they seek to make informed marketing decisions. However, our policy dictates that the voluntary framework we are developing be allowed the opportunity to succeed or fail before we can lend our support to regional mandatory minimums for negotiated trade.”

NCBA’s 46 state affiliate organizations unanimously adopted a fed cattle price discovery policy at their 2020 Summer Business Meeting, directing NCBA to pursue a voluntary approach to price discovery that includes triggers established by a working group of producer members which, if tripped due to a lack of regionally sufficient negotiated trade, would prompt NCBA to seek legislative or regulatory solutions—such as those outlined in Sen. Fischer’s bill.

Similarly, striving for voluntary solutions to increased cash cattle trade is supported by the recent report from the American Farm Bureau Federation’s (AFBF) Cattle Market Working Group, which also examines cattle market volatility in the wake of the pandemic and last summer’s Tyson plant fire in Kansas.

“A key point to remember when discussing the optimal level of negotiated transactions is that PRICE DISCOVERY is not the same as PRICE DETERMINATION,” according to the AFBF report. “While enhanced price discovery is a good thing, it does not necessarily mean it will result in higher prices (as many proponents of minimum thresholds contend). Mandatory minimum negotiated trade could potentially inhibit a producer’s ability to enter into AMAs (alternative marketing arrangements), which are typically a premium paid above market value. Current AFBF policy does not endorse a mandatory minimum negotiated trade.”

The five-area direct weighted average steer price last week was $105.05/cwt. on a live basis, which was $1.51 higher week to week. The average price in the beef was $1.64 higher at $164.89.

After apparent positioning ahead of Friday’s monthly Cattle on Feed report, traders seemed to take increased placements in stride (see below), as Cattle futures closed narrowly mixed to higher Monday, likely buoyed by cash cattle and wholesale beef prices.

Other than an average of 21¢ lower in the back three contracts, Live Cattle futures closed an average of 36¢ higher.

Other than an average of 19¢ lower in three contracts, Feeder Cattle futures closed an average of 43¢ higher, from 15¢ higher at the back to 95¢ higher toward the front.

Choice boxed beef cutout value was $1.62 lower Monday afternoon at $217.72/cwt. Select was 56¢ lower at $206.42.

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

Soybean futures closed mostly 3¢ to 6¢ lower.

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Major U.S. financial indices extended gains from the previous session Monday, with support from tech stocks, as well as renewed optimism about Congress striking a deal for another round of economic stimulus.

The Dow Jones Industrial Average closed 410 points higher. The S&P 500 closed 53 points higher. The NASDAQ closed 203 points higher.

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Although the latest Cattle on Feed report appears to be bearish, with August placements higher than expected and the most cattle on feed September 1 since the data series began, Derrell Peel says perspective is required to understand the current feedlot situation.

“Despite large placements the past two months, total feedlots placements are down 4.2% for the year to date (down 4.3% in the last six months),” says Peel, Extension livestock marketing specialist at Oklahoma State University. “Two months of large placements does not mean that we suddenly have more cattle. Over the course of the year, the total number of feeder cattle in the pipeline has not changed from what was indicated early in the year. Cattle inventories peaked in 2019 and Jan. 1 estimated feeder supplies were down 0.4% year over year. As we work through 2020 and into 2021, feeder cattle supplies should continue to tighten modestly. The indications are that September placements will not follow the pattern of July and August.” As mentioned, placements in August were 9% higher year over year; they were 11% higher in July.

In his weekly market comments, Peel explains the 12-month moving average (12MA) of feedlot inventory, placements and marketings offers valid month-to-month comparison and a longer-term view of feedlot production, due to seasonality.

“The 12MA of feedlot inventories peaked in March and, despite increasing the past two months, is currently 0.6% below the peak,” Peel says. “The 12MA of marketings peaked cyclically in March 2020 as well. The 12MA of placements peaked recently in December 2019 and is currently 2.7% below the peak. The cyclical peak in 12MA placements was in Feb 2018. All of these highlight the fact that the industry has moved past the cyclical peak in cattle numbers and will see modestly tighter supplies going forward.”

Even so, he points out atypical fluctuations in recent placements imply altered short-term dynamics.

“The July-August bulge in placements suggests higher feedlot marketings in the first quarter of 2021. July placements were skewed to the lighter weight cattle,  while August placements included more heavyweight placements, which further implies that cattle could be somewhat bunched up,” Peel says. “However, winter weather typically spreads cattle out a bit, so the exact timing is uncertain. The ripples from the first half of 2020 will extend into early 2021.”

Negotiated cash fed cattle prices ended the week generally $2 higher on a live basis at mostly $105/cwt. in the five-area feeding region, according to the Agricultural Marketing Service. Dressed trade was $1-$2 higher at mostly $165.

Through Thursday, the five-area direct weighted average steer price was $105.03/cwt. on a live basis, which was $1.49 higher than the previous week. The average steer price in the beef was $164.87, which was $1.94 higher.

Even so, Feeder Cattle futures closed lower on Friday, likely based mostly on expectations of a bearish Cattle on Feed report, which came to fruition (see below). Live Cattle followed along, to a lesser degree.

Live Cattle futures closed an average of 72¢ lower, from 7¢ lower at the back to $1.05 lower.

Feeder Cattle futures closed an average of $1.70 lower, from 97¢ lower at the back to $2.20 lower.

Choice boxed beef cutout value was $1.86 higher Friday afternoon at $219.34/cwt. Select was 76¢ lower at $206.98.

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed 2¢ to 5¢ higher through Nov ’21 and then mostly higher to 1¢ to 4¢ lower.

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Major U.S. financial indices closed higher Friday, buoyed by tech stocks, and despite ongoing wonderments about domestic and international economic recovery.

The Dow Jones Industrial Average closed 358 points higher. The S&P 500 closed 51 points higher. The NASDAQ closed 241 points higher.

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If anything, the monthly USDA Cattle on Feed report issued Friday (feedlots with 1,000 head or more capacity) will likely be viewed as bearish, with 2.06 million head placed in August, which was 173,000 head more (+9.2%) than a year earlier. That’s about 3% more than expectations heading into the report. In terms of weights, 36% went on feed weighing 699 lbs. or less, 48% weighing 700-899 lbs. and 16% weighing 900 lbs. or more.

Marketings in August of 1.89 million head were 61,000 head fewer (-3.1%) than last year, in line with expectations.

Cattle on feed Sept. 1 of 11.39 million head were 412,000 head more (+3.8%) than a year earlier, which was the most for the date since the data series began in 1996.

Although there were too few transactions to trend in any region, early negotiated cash fed cattle sales were at mostly higher prices week to week on Thursday.

There were a few live trades in Kansas at $105/cwt. and a few in the western Corn Belt at $104-$105. Early dressed trades were at $165 in Nebraska and the western Corn Belt.

Cash optimism and another day of higher wholesale beef prices helped Cattle futures extend gains on Thursday.

Live Cattle futures closed an average of 83¢ higher.

Feeder Cattle futures closed an average of 93¢ higher, from 45¢ higher in expiring Sep to $1.20 higher at the back.

Wholesale beef values gained for another day. Choice boxed beef cutout value was $1.61 higher Thursday afternoon at $217.48/cwt. Select was 14¢ higher at $207.74.

The average dressed steer weight of 920 lbs. for the week ending Sept. 12, was 2 lbs. heavier than the previous week and 29 lbs. heavier than the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 836 lbs. was 4 lbs. heavier than the prior week and 14 lbs. heavier than a year earlier.

Net U.S. beef export sales for 2020 of 18,000 metric tons were up 26% from the previous week and 36% from the prior four-week average, according to the Weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service, for the week ending Sept. 17. Increases were primarily for Japan, South Korea, China, Taiwan, and Hong Kong.

Corn futures closed mostly 3¢ to 5¢ lower.

Soybean futures closed 12¢ to 16¢ lower through Sep ’21 and then fractionally higher to 9¢ lower.

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Major U.S. financial indices edged higher Thursday, following the previous session’s selloff.

On the one hand, initial weekly job insurance claims increased by 4,000 week to week to 870,000, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

On the other, new and existing home sales continue at a blistering pace.

Existing-home sales increased in August for the third consecutive month, according to the National Association of Realtors^®. For the month, total existing-home completed transactions rose 2.4% from July. Through July, existing home sales were 10.5% higher year over year.

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” says Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

As for new home sales, they were 4.8% higher from July to August and 43.2% higher year over year.

The Dow Jones Industrial Average closed 52 points higher. The S&P 500 closed 9 points higher. The NASDAQ closed 39 points higher.

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Income growth, reduced trade barriers and technological advancements are driving the increase in global value chains, transforming markets and trade processes, linking farmers to traders and consumers across regions and countries. That’s according to a new report from the Food and Agriculture Organization of the United Nations (FAO).

The State of Agricultural Commodity Markets, 2020 (SOCO 2020) argues that global trade and well-functioning markets lie at the heart of the development process as they can spur inclusive economic growth and sustainable development, and strengthen resilience to shocks.

Global agri-food trade more than doubled since 1995, amounting to $1.5 trillion in 2018, with emerging and developing countries’ exports on the rise and accounting for over one-third of the world’s total, according to the report.

Technological progress, urbanization, population and income growth, lower transport costs, trade policies and a decline in average import tariffs are driving the growth.

“We need to rely on markets as an integral part of the global food system. This is all the more important in the face of major disruptions, whether they come from COVID-19, locust outbreaks or climate change,” according to FAO Director-General QU Dongyu in his introduction to the report.

The report estimates that about one-third of global agricultural and food exports are traded within a global value chain and cross borders at least twice.

Among the report highlights:

Upper and lower middle income countries, together, increased their share in global agri-food exports from about 25% in 2001 to 36% in 2018.

Although global agri-food trade doubled since 1995 in real value, its growth rate slowed since the 2008 financial crisis. This is expected to be further impacted by the COVID-19 pandemic.

Digital technologies are transforming all stages of the food value chain from farm to table. They improve efficiency, create jobs and save resources. But it is difficult to foresee all the impacts technological innovation can have on how food is grown, processed, traded and consumed.  

While countries in Europe and Central Asia, and East Asia and the Pacific tend to trade within the same regions, countries in South Asia, Latin America and the Caribbean, sub-Saharan Africa, North America, and the Middle East and North Africa trade more globally.

Cattle feeders offered 683 head in the weekly Fed Cattle Exchange Auction, all from the Southern Plains. They sold 219 head (two lots) for an average of $104.16/cwt., for delivery at 1-17 days. That was higher than last week’s country trade of $103.00-$103.50.

Similarly, Choice steers and heifers sold 75¢ to $1 higher at the fat auction in Tama, IA. Choice 2-4 steers (217 head) weighing an average of 1,450 lbs. sold for an average price of $105.55/cwt., at the top of last week’s price range for country trade.

On the other hand, slaughter steers sold $2-$3 lower at Sioux Falls Regional in South Dakota, where 332 Choice 2-3 steers weighing an average of 1,490 lbs. brought an average price of $102.92.

The notion of firm to higher cash prices helped support Cattle futures Wednesday, although trade was sluggish.

Live Cattle futures closed an average of 51¢ higher (10¢ to $1.02 higher).

Feeder Cattle futures closed an average of 55¢ higher.

Choice boxed beef cutout value was 43¢ higher Wednesday afternoon at $215.87/cwt. Select was $1.30 higher at $207.60.

Corn futures closed fractionally lower to 1¢ lower.

Soybean futures closed 3¢ to 5¢ lower through Nov ’21 and then mostly fractionally higher.

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Major U.S. financial indices closed lower Wednesday, hamstrung by big tech stocks and wariness over the pace of economic recovery.

The Dow Jones Industrial Average closed 525 points lower. The S&P 500 closed 78 points lower. The NASDAQ closed 330 points lower.

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As the COVID-19 pandemic continues to unfold, some researchers are getting their arms wrapped around the resulting economic damage so far, and into the future.

For instance, a recent Texas A&M AgriLife coordinated study suggests the pandemic will reduce U.S. gross domestic product (GDP), by $2.5 trillion and employment by 19 million full-time equivalent jobs over the next year.

The study includes researchers from Texas A&M’s Department of Homeland Security (DHS) Center of Excellence Cross-Border Threat Screening and Supply Chain Defense (CBTS), Arizona State University’s DHS Center of Excellence, the Center for Accelerating Operational Efficiency, and researchers at the Victoria University in Australia.

Researchers utilized a model of the U.S. economy with a special emphasis on major food and agriculture sectors.

Compared to most other sectors–tourism, air transport, education, restaurants and lodging–the report concludes U.S. food and agricultural sectors will experience smaller economic impacts because they were not subject to shutdowns and reductions in aggregate consumer spending brought on by job losses.

Researchers also suggests livestock operations will suffer economically more than crop operations. They explain USDA’s latest figures show that animal product receipts in 2020 are down just over 8.1%, while cash receipts for crops are expected to increase 6.9%.

“This analysis gives us a critical and realistic evaluation of how the pandemic has and will continue to impact our nation’s and the world’s food supply,” says Patrick J. Stover, vice chancellor of Texas A&M AgriLife, dean of the College of Agriculture and Life Sciences and director of Texas A&M AgriLife Research. “It will be critical that we work together to elevate food system concerns and develop solutions that address the economic consequences to serve as a foundation for lasting recovery.”

Here you can read the full article by Kay Ledbetter, associate editor/communication specialist for Texas A&M AgriLife Research.