Daily Market Highlights

Cattle futures closed lower Tuesday, especially Feeder Cattle, with the lack of cash direction, demand wonderments and perhaps queasiness over the next Cattle on Feed report due out Friday.

Live Cattle futures closed an average of 64¢ lower (20¢ to $1.02 lower).

Except for 62¢ higher in spot Sep, Feeder Cattle futures closed an average of $1.33 lower (47¢ to $1.67 lower).

Choice boxed beef cutout value was 78¢ lower Tuesday afternoon at $215.44/cwt. Select was 48¢ higher at $206.30.

Corn futures closed unchanged to fractionally mixed.

Soybean futures closed 1¢ to 3¢ lower through Sep ’21 and then 5¢ to 8¢ lower.

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Major U.S. financial indices closed higher Tuesday, with technical buying the apparent driver.

The Dow Jones Industrial Average closed 140 points higher. The S&P 500 closed 34 points higher. The NASDAQ closed 184 points higher.

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Total pounds of beef in freezers as of Aug. 31 were 5% more than the previous month but 2% less than last year, according to the latest Cold Storage report from USDA.

Frozen pork supplies were up 2% from the previous month but down 23% from last year.

Total red meat supplies in freezers were 3% more than the previous month but 13% less than last year.

Total frozen poultry supplies were up 1% from the previous month but down 2% from a year earlier.

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Projected cattle feeding returns improve significantly in September, compared to recent months, according to the latest monthly Historical and Projected Kansas Feedlot Net Returns from Kansas State University.

Net returns for closeouts in August were estimated at -$162.33/head for steers and -$101.76 for heifers. Keep in mind, estimates are on a cash basis and do not include price risk management.

Starting in September, though, net returns for steers are projected to be positive for the next seven months (September through March), ranging from $20.56/head in September to $101.52 in October, with feedlot cost of gain ranging from $80.01/cwt. in September to $84.71 in February.

Projected net returns are positive for heifers during the same period of time, ranging from $8.41/head in January to $66.18 in October, with feedlot cost of gain of $87.67/cwt. in September to $91.42 in March.

The five-area direct average fed steer price last week was $103.54/cwt. on a live basis, which was $2.33 more than the previous week. The average steer price in the beef was $163.25, which was $2.59 higher.

However, sharply lower outside markets and likely profit taking pressured Cattle futures Monday.

Live Cattle futures closed an average of 89¢ lower (65¢ to $1.25 lower).

Except for 20¢ higher in spot Sep and Nov, Feeder Cattle futures closed an average of 58¢ lower.

Wholesale beef prices found some traction, though.

Choice boxed beef cutout value was 58¢ higher Monday afternoon at $216.22/cwt. Select was $1.88 higher at $205.82.

Lower outside markets and harvest pressure pushed grain futures lower Monday.

Corn futures closed 8¢ lower through May ’21 and then mostly 4¢ to 5¢ lower.

Soybean futures closed 17¢ to 21¢ lower through Mar ’21 and then mostly 10¢ to 12¢ lower.

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Major U.S. financial indices closed sharply lower on Monday, but well off of session lows. Pressure included worries about another surge of COVID-19 leading to renewed shutdowns in different parts of the world, as well as the inability of Congress to come to terms on more economic stimulus for businesses and individuals.

The Dow Jones Industrial Average closed 509 points lower. The S&P 500 closed 38 points lower. The NASDAQ closed 14 points lower.

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Analysts with the Livestock Marketing Information Center (LMIC) expect fourth-quarter beef production to be more than in 2019, but note cattle flows will also contend with smaller placements in March and April.

“The supply situation for beef is still unfolding,” say LMIC analysts, in the latest Livestock Monitor. “Dressed weights have not followed the normal seasonal pattern through the summer but look to be closing the gap between last year and 2020. In the latest week of data, steer dressed weights are only 25 lbs. heavier than a year ago. This is a significant decrease compared to summer increases of 40 lbs. or more in June. Slaughter levels in August were below a year ago, but the last two weeks of actual slaughter data has picked up.”

USDA estimated total cattle slaughter last week at 645,000 head, which was 71,000 head more than the previous week, but 16,000 head fewer than the same week last year. Estimated total cattle slaughter year to date of 22.85 million head is still 1.07 million fewer (-4.49%) than the same time last year.

On the other side of the trade, LMIC points to the odds of a weaker economy pressuring beef demand.

“Corporate holiday parties and other holiday gatherings had been a boost to beef demand in recent years; the frequency of those events will likely decrease significantly in 2020,” LMIC analysts explain. “Retail featuring high-end meat cuts is expected this holiday season as the Restaurant Expectation and Performance Index remains in contraction territory and those cuts have struggled to move quantities. But, it seems unlikely the retail all fresh beef demand index will take out the record set in 2019. First and second quarter indexes have been above a year ago in 2020, but none were record highs. Third quarter data is still pending.”

USDA estimated beef production last week of 540.1 million lbs., which was 60.4 million lbs. more than the previous week and just 3.8 million lbs. less than the same week last year.

Negotiated cash fed cattle trade continued higher on Friday with dressed trade in Nebraska at $165/cwt., which was $2 higher than earlier in the week and $4-$5 higher than the prior week. Dressed trade was $2-$3 higher in the western Corn Belt at $163.

Live sales for the week ended up $1.50-$2.00 higher in the Southern Plains at $103.00-$103.50, $2.50 higher in Nebraska at $103.50 and $2-$4 higher in the western Corn Belt at $104-$105.

Stronger cash prices to end the week helped lift Cattle futures on Friday.

Live Cattle futures closed an average of 37¢ higher.

Except for 25¢ lower in the back contract, Feeder Cattle futures closed an average of 64¢ higher.

Choice boxed beef cutout value was 59¢ higher Friday afternoon at $215.64/cwt. Select was 55¢ higher at $203.94.

Corn futures closed 2¢ to 3¢ higher.

Soybean futures closed 9¢ to 15¢ higher through Aug ’21 and then mostly 1¢ to 4¢ higher.

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Major U.S. financial indices closed lower on Friday, pressured once again by big tech stocks, uncertainty over federal pandemic stimulus and political sabre rattling between the U.S. and China.

The Dow Jones Industrial Average closed 244 points lower. The S&P 500 closed 37 points lower. The NASDAQ closed 117 points lower.

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“As consumers continue to eat at home, and the longer sit-down restaurants are closed or at limited capacity, the longer lean beef imports will remain strong,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Griffith explains most beef imported to the U.S. is lean beef meant for grinding to produce ground beef, hot dogs, taco meat and the like. He notes that U.S. beef imports in July of 376.8 million lbs. represented the largest monthly total in 15 years.

The July total was 41.1% more than a year earlier, pushing imports for the first seven months of the year 8.5% higher year over year, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

“Beef imports were up from each of the four largest beef import sources,” Peel explains, in his weekly market comments. “Canada, the largest source of beef imports, was up 12.7% in July but was down 5.8% for the year to date. Mexico was up 34.3% in July compared to last year and was up 25.5% so far this year.  Mexico now exceeds Australia as the number two source of U.S. beef imports.  Australia was up 17.1% year over year in July but was down 2.7% for the year to date. New Zealand was up 94.2% in July and was 13.3% higher for the year to date. So far in 2020, Canada and Mexico account for 44.3% of total beef imports. Combined with Australia and New Zealand, the top four source represent 82.4% of total beef imports.”

On the other side of the trade ledger, Griffith points out U.S. beef exports began to recover in July, compared to year-over-year weakness the previous three months.

“Currency exchange rates are important factors affecting international beef trade,” Peel explains. “Since the COVID-19 impacts began in mid-March, the U.S. dollar has been significantly stronger compared to the Argentinian, Brazilian and Mexican currencies and somewhat stronger against the Canadian, Australian and New Zealand dollars. A strong U.S. dollar is a headwind for beef exports and favors beef imports. The U.S. dollar has weakened slightly against the Japanese Yen, and the Hong Kong dollar, which does help support beef exports to those two major markets.”

Negotiated cash fed cattle trade continued on Thursday. For the week, live sales are $2-$4 higher than last week at $103.00-$103.50/cwt. in the Southern Plains, $103 in Nebraska and $104-$105 in the western Corn Belt. Dressed trade is $1-$3 higher at $162-$163.

Even so, Cattle futures closed mostly lower Thursday, with pressure from the grain side of the ledger, as well as demand wonderments.

Except for 5¢ higher to 82¢ higher in three contracts, Live Cattle futures closed an average of 38¢ lower.

Feeder Cattle futures closed an average of 77¢ lower (32¢ to $1.32 lower).

Choice boxed beef cutout value was 33¢ lower Thursday afternoon at $215.05/cwt. Select was $1.12 lower at $203.39.

Actual fed cattle slaughter for the week ending Sept. 5 of 508,955 head was 18,484 head fewer than the prior week, but 58,883 head more than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report.

Total cattle slaughter for the week of 635,387 head was 18,353 head fewer than the prior week, but 64,324 head more than the previous year.

The average dressed steer weight of 918 lbs. was 2 lbs. heavier than the previous week, but 25 lbs. more than the same week a year earlier. The average dressed heifer weight of 832 lbs. was 2 lbs. lighter than the previous week, but 17 lbs. more than a year earlier.

Net U.S. beef export sales for 2020 of 14,300 metric tons (mt) were 8% less than the previous week and 2% less than the prior four-week average, according to the Weekly Export Sales report from USDA’s Foreign Agricultural Service, for the week ending Sept. 10. Increases were primarily for South Korea, Japan, China, Mexico and Canada. 

Net U.S. pork sales for 2020 of 50,600 mt were 68% more than the previous week and 41% more than the prior four-week average. Increases were primarily for China, Mexico, Japan, Canada and Australia.

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

Soybean futures closed 9¢ to 17¢ higher through Mar ’21 and then mostly 1¢ to 4¢ higher.

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Major U.S. financial indices closed lower on Thursday, pressured by big tech stocks, as well as uncertainty over the next round of federal pandemic economic stimulus.

The Dow Jones Industrial Average closed 130 points lower. The S&P 500 closed 28 points lower. The NASDAQ closed 140 points lower.

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“The reduction in slaughter capacity in the second quarter continues to show up in the year-over-year higher number of cattle on feed over 150 days (although diminishing since June) and in the carcass weights of steers and heifers,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “The improved pace of slaughter, combined with an ample supply of fed cattle at heavier weights, led to higher expected beef production in third-quarter 2020 relative to 2019, which is likely putting pressure on cattle prices.”

ERS projects the average five-area direct Choice fed steer price at $101/cwt. for the third quarter, $104 for the fourth quarter and at $107.30 for the annual average, the same as the previous month.

Heading into 2021, however, ERS forecast average Choice steer prices $2 higher than the previous month’s estimate at $107 in the first and second quarters of next year with an annual average price of $112.

That’s based on expectations that a larger proportion of available feeder cattle supplies available July 1 were placed on feed, which will limit supplies available for placement in the first half of next year.

“This pulls feedlot marketings, and consequently steer and heifer slaughter, forward from the latter quarters of 2021,” say ERS analysts. “With fewer steers and heifers in the slaughter mix and higher forecast feed costs affecting the length of time on feed, carcass weight gains next year will be limited. Because of this, anticipated average carcass weights were reduced in 2021. Based on these factors combined, the forecast for 2021 beef production was reduced by 265 million lbs. from last month to 27.4 billion lbs.”

ERS left projected feeder cattle prices unchanged from the previous month as higher feed costs and the slower expected pace of marketing outweigh declining supplies.

The average feeder steer price (basis Oklahoma City) is projected at $140/cwt. in the third and fourth quarters for an annual average of $135.70. The projected feeder steer price is $131 for the first quarter of next year, $134 for the second quarter and at $137 for the 2021 average.

“The result of greater placements in second-half 2020 without increased marketings in the second half will likely keep cattle in feedlots above year-ago levels through the remainder of 2020,” say ERS analysts. “Because of this, anticipated feeder cattle supplies will diminish in 2021. However, the increase in fed cattle prices will likely offset higher corn prices forecast for next year.”

Negotiated cash fed cattle trade began to develop in the Southern Plains on Wednesday, according to the Agricultural Marketing Service. Live prices were $2 higher in Kansas at $103/cwt. and $1.50-$2.00 higher in the Texas Panhandle at $103.00-$103.50.

That helps explain why there were no sales in the weekly Fed Cattle Exchange Auction, where 613 were offered—all from the Southern Plains. Two lots in that sale were passed on at $102.25.

At the fat auction in Tama, IA, though, 221 head of Choice 2-4 steers weighing an average of 1,379 lbs. brought an average of $104.63, which was more than the $100-$103 country trade in the region last week.

Similarly, slaughter steers sold steady to $2 higher in the fat auction at Sioux Falls Regional in South Dakota, where 250 head of Choice 2-3 steers weighed an average of 1,431 lbs. and brought an average of $105.20.

Cattle futures closed mixed again, with Feeder Cattle receiving some pressure from grains.

Live Cattle futures closed mixed but mostly marginally higher (an average of 15¢ lower to an average of 20¢ higher).

Feeder Cattle futures closed an average of 71¢ lower (27¢ to $1.27 higher).

Choice boxed beef cutout value was 71¢ lower Wednesday afternoon at $215.38/cwt. Select was $1.77 lower at $204.51.

Corn futures closed 4¢ to 5¢ higher through Jly ’21 and then mostly 2¢ to 3¢ higher. 

Soybean futures closed 13¢ to 19¢ higher through Aug ’21 and then mostly 3¢ to 8¢ higher, helped along by recent export sales.

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Major U.S. financial indices closed mixed on Wednesday, pressured by big tech stocks, while some other sectors received support from the FOMC announcement it was maintaining the current interest rate levels.

“The Committee decided to keep the target range for the federal funds rate at 0% to 0.25% and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time,” according to the FOMC statement.

In other words, it will likely be a good while before they entertain an increase in interest rates.

The Dow Jones Industrial Average closed 36 points higher. The S&P 500 closed 15 points lower. The NASDAQ closed 139 points lower.

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“Farm commodity prices are down by 10.4% over the last 12 months. As a result, and despite the initiation of $32 billion in USDA farm support payments in 2020, only 8% of bankers reported their area economy had improved compared to July, while 18.4% said economic conditions had worsened,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Goss is referring to the Creighton University Rural Mainstreet Index (RMI) and monthly survey of bankers in 10 regional states, dependent on agriculture and/or energy. It focuses on approximately 200 rural communities with an average population of 1,300, and offers the most current real-time analysis of the rural economy.

The RMI increased slightly in August to 44.7, compared to 44.1 in July. The index ranges between 0 and 100; a reading of 50.0 represents growth neutral.

Bank CEOs included in the survey note that August’s index represented the sixth straight month with a reading in a recessionary economic zone.

For only the second time in the last 81 months, the farmland price index moved above growth neutral with an August reading of 50.1, up from July’s 45.6.

Economic COVID-19 impacts vary among state economies, depending on government enforced shutdowns. For instance, Todd Douglas, CEO of the First National Bank in Pierre, South Dakota, says, “We were a state that did not shut down. Western parts of the state have seen a significant boost to the economy due to tourism from shut down states.”

Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005.

Bankers estimated that farm loan defaults would rise by 5.3% over the next 12- month period. That’s slightly higher than the 5% recorded the previous month, and the 4.8% a year earlier.

Cattle futures closed narrowly mixed Tuesday, awaiting cash direction.

Live Cattle futures closed mixed but mostly marginally lower (an average of 17¢ lower to an average of 25¢ higher).

Feeder Cattle futures closed an average of 72¢ higher (17¢ higher in spot Sep to $1.10 higher).

Choice boxed beef cutout value was $1.12 lower Tuesday afternoon at $216.09/cwt. Select was $1.48 lower at $206.28.

Corn futures closed mostly 3¢ lower. 

Soybean futures closed 4¢ to 8¢ lower through May ’21 and then 2¢ higher to 2¢ lower.

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Major U.S. financial indices edged higher Tuesday, with support from tech stocks and ahead of the FOMC meeting scheduled for Wednesday and Thursday. 

The Dow Jones Industrial Average closed 2 points higher. The S&P 500 closed 17 points higher. The NASDAQ closed 133 points higher.

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“La Niña conditions were present in August, and there’s a 75% chance they’ll hang around through the winter,” according to the latest update from the National Oceanic and Atmospheric Administration (NOAA), which issued a La Niña Advisory in recent days.

While every El Niño Southern Oscillation is different, the NOAA folks say it makes certain outcomes more likely. In this case, La Niña winters tend to be warmer and drier in the Southern tier of the United States and tend to be colder in the Northern tier.

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“Drive-thru and other off-premises operations will be a major part of the U.S. restaurant industry’s recovery and future,” says David Portalatin, food industry advisor for The NPD Group (NPD). “Drive-thru operations are delivering a high ROI during the pandemic, offering convenience, speed, and the comfort of social distance to consumers using them. Fast casual and traditional quick service chains have already announced expansion plans for their drive-thru operations, and we will hear about more chains doing the same.”

Compared to pandemic lows, drive-thru restaurant visits increased by 26% in the April, May, and June quarter and represented 42% of all restaurant visits, according to NPD. Although more restaurants reopened in July, drive-thru visits still increased by 13%.

For perspective, according to NPD, drive-thru visits declined 17% year over year in the second quarter, but they fared significantly more positively than other restaurant categories and segments.

Visits to fast casual chains were down 26% year over year in the second quarter. Prior to the pandemic, and for the last several years, they outpaced the U.S. restaurant industry in visits and unit growth. Many of them don’t have drive-thru operations.

Likewise, most full service restaurants don’t have drive-thrus. They were most impacted by the mandated dine-in closure, with year-over-year declines of 48% in April, May and June, before improving to a year-over-decline of 32% in July.

The five-area direct average steer price last week was $101.21/cwt. on a live basis, according to the Agricultural Marketing Service. That was $1.91 less than the prior week. The average steer price in the beef of $160.66 was $2.41 less.

Cattle futures took a step higher Monday, building on last week’s gains, tied to the outlook for slightly snugger supplies and support from lean hog prices, which appear ready to advance, on South Korea and China banning pork exports from Germany, due to African Swine Fever discovered in that nation.

Live Cattle futures closed an average of $1.20 higher (77¢ to $1.80 higher).

Feeder Cattle futures closed an average of $1.75 higher ($1.50 to $2.02 higher).

Choice boxed beef cutout value was $2.68 lower Monday afternoon at $217.21/cwt. Select was 66¢ higher at $207.76.

After 7¢ higher in spot Sep, Corn futures closed mostly fractionally mixed to 1¢ lower. 

After 13¢ higher in spot Sep, Soybean futures closed 4¢ to 8¢ higher.

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Major U.S. financial indices closed higher Monday, buoyed by merger and acquisition news, as well as increasing optimism about a COVID-19 vaccine being developed by the end of the year.

The Dow Jones Industrial Average closed 327 points higher. The S&P 500 closed 42 points higher. The NASDAQ closed 203 points higher.

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Although food and meat supplies continue to strengthen, following the worst of pandemic disruptions, returning to a balanced marketplace requires an economic recovery that reduces unemployment and revives household incomes, according to Greg Pompelli, director of the Texas A&M AgriLife-led Center of Excellence for Cross-Border Threat Screening and Supply Chain Defense Center. He adds that, given the importance of global markets to U.S. agriculture, the focus will be on returning to pre-pandemic trade levels.

In the meantime, David Anderson, Extension livestock economist at Texas A&M University says the pandemic may prompt a new normal in consumer purchasing practices.

For instance, Anderson points to more delivery services, boxed meals and curbside grocery pickup options as consumers maintain some of their habits from when store shelves and meat cases were bare and people were asked to stay home.

“Another adjustment I think we are going to continue to see over time is more delivery services of groceries and food. More and more of the shoppers in the grocery aisles are employees putting together grocery orders, either for curbside pickup or for companies that bring the order to your home,” Anderson explains.

“Where we see changes at the retail level boils down to human behavior,” Pompelli says. “In the early days of the pandemic, with paper towels or toilet paper, people assumed they wouldn’t be able to find these products for a year, so they stocked up.” Now, he says, consumers are adapting and moving away from their initial reactions as their concerns about food availability diminish.

Prior to the COVID-19 shutdowns, consumers typically purchased about 50% of their food from grocery stores for home consumption and 50% from food services, such as restaurants and schools.

With restaurants continuing to operate at limited capacity and with students recently returning to schools, Anderson explains the food supply chain is still adjusting to the changing markets.

Negotiated cash fed cattle prices in the Texas Panhandle through Friday afternoon were mostly $1 higher than earlier in the week at $102/cwt., which was $1 lower than last week, according to the Agricultural Marketing Service.

Cattle futures edged higher Friday, supported by resurgent Lean Hog futures, tied to South Korea banning pork exports from Germany after a wild boar carcass in that European nation tested positive for African Swine Fever.

Live Cattle futures closed an average of 34¢ higher (7¢ to 47¢ higher).

Feeder Cattle futures closed an average of 47¢ higher (7¢ to 97¢ higher).

Choice boxed beef cutout value was 94¢ lower Friday afternoon at $219.89/cwt. Select was 22¢ lower at $207.10.

Corn and soybean futures gained some lift from the monthly World Agricultural Supply and Demand Estimates (see below), with soybeans receiving added support from recently strong export sales.

Corn futures closed 3¢ to 7¢ higher through May ’21 and then mostly 1¢ to 2¢ higher. Week to week on Friday, they closed an average of 11¢ higher through the front six contracts.

Soybean futures closed 16¢ to 20¢ higher through the front four contracts and then 6¢ to 12¢ higher across the next three; mostly 1¢ to 2¢ lower the rest of the way. Week to week on Friday, they closed an average of 25¢ higher through the front six contracts.

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Major U.S. financial indices closed mixed Friday, with continued pressure from the selloff in big tech stocks.

The Dow Jones Industrial Average closed 131 points higher. The S&P 500 closed 1 point higher. The NASDAQ closed 66 points lower.

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USDA increased expected beef production for this year by 20 million lbs. to 27.05 billion lbs., in September’s World Agricultural Supply and Demand Estimates (WASDE), compared to the previous month’s estimate. That’s based on increased expected slaughter in the second half of 2019. The total would be 107 million lbs. less than last year. Estimated beef production is forecast at 27.36 billion lbs. next year, which would be 307 million lbs. more (+1.14%) than this year.

The projected annual average fed steer price (five-area direct) for this year is $107.30/cwt., which would be $9.48 less than last year. ERS analysts increased the forecast annual price next year by $2 to $112, compared to the previous month’s projection, based on expected lower production. More immediately, the WASDE pegs the average third-quarter price this year at $101, followed by an average of $104 in the fourth quarter and $107 in the first quarter of 2021.

Estimated total red meat and poultry production for this year was lowered from the previous month, with lower forecast pork and broiler production more than offsetting higher beef and turkey production.

Total red meat and poultry production is estimated at 106.30 billion lbs. this year, which would be 1.03 billion lbs. more (+0.98%) than in 2019. Next year’s total red meat and poultry production is forecast at 107.35 billion lbs., which would be 1.05 billion lbs. more than this year.

Corn

Corn production for grain is projected 2% less than the previous month at 14.9 billion bu. That’s 378 million bu. less, based on reducing harvested corn acres by 550,000 acres, due to the late-summer derecho, according to the latest Crop Production report from the National Agricultural Statistics Service (NASS). Estimated production would still be 9% more than last year.

Although 3.3 bu./acre less than the previous moth’s projection, forecast yield of 178.5 bu./harvested acre would be record large and 11.1 bu./acre more than last year. That’s based on conditions as of Sept. 1

With a smaller crop more than offsetting increased beginning stocks–mostly due to lower estimated exports for 2019-20–WASDE reduced projected ending stocks by 253 million bu. and increased the season-average corn price by 40¢ to $3.50/bu.

Soybeans

Soybean production for beans was forecast at 4.31 billion bu., down 3% from the previous forecast, but up 21% from last year, according to the Crop Production report. Expected average yield is a record high 51.9 bu./harvested acre, down 1.4 bu. from the previous forecast but 4.5 bu. more than in 2019. Area harvested for beans in the United States is forecast at 83.0 million acres, unchanged from the previous forecast and 11% more than last year.

The U.S. season-average soybean price is forecast at $9.25/bu., up 90¢ from last month. The soybean meal price is projected at $315 per short ton, up $25 dollars. The soybean oil price forecast is 32.0¢/lb., up 2¢.

Wheat

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

So far this week, negotiated cash fed cattle prices are mainly $2-$3 lower on a live basis at $101/cwt. in the Southern Plains and Nebraska and at $100-$101 in the western Corn Belt, according to the Agricultural Marketing Service. Dressed trade is $2-3 lower at $160-$161.

Cattle futures reversed course again on Thursday, regaining most of what was lost in the previous session and despite the surge in Corn futures. At least part of the support came from limit-up moves in nearby Lean Hog futures, after news that a wild boar carcass in Germany tested positive for African Swine Fever. In turn, South Korea banned pork imports from Germany, which was the second largest European pork exporter last year.

Except for 17¢ lower in away Feb, Live Cattle futures closed an average of 72¢ higher (27¢ to $1.00 higher).

Feeder Cattle futures closed an average of $1.59 higher (77¢ higher in spot Sep to $1.95 higher).

Choice boxed beef cutout value was $2.12 lower Thursday afternoon at $220.83/cwt. Select was 19¢ lower at $207.32.

Actual total fed cattle slaughter for the week ending Aug. 29 was 527,439 head, according to USDA’s Actual Slaughter Under Federal Inspection report. That was 4,100 more than the previous week and 6,872 head more than the prior year. The average dressed steer weight of 916 lbs. was 6 lbs. heavier than the previous week and 32 lbs. heavier than a year earlier. The average dressed heifer weight of 834 lbs. was 1 lb. heavier than a week earlier and 23 lbs. heavier than the same week last year.

After 7¢ higher in spot Sep, Corn futures closed 3¢ to 4¢ higher through Sep ’21 and then fractionally mixed to 2¢ higher. Support included reports of successive typhoons impacting China’s main corn-growing region.

After 5¢ higher in spot Sep, Soybean futures closed mostly 1¢ to 3¢ lower

USDA’s monthly World Agricultural Supply and Demand Estimates are due out Friday morning.

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Major U.S. financial indices closed strongly lower Thursday, amid a resumed selloff in big Tech stocks.

Also negative, initial weekly unemployment insurance claims last week were 884,000, more than traders expected. The number was on par with the previous week’s revised figure, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 405 points lower. The S&P 500 closed 59 points lower. The NASDAQ closed 221 points lower.

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“With the large cow slaughter levels of recent years, there has been a lack of harvest capacity, especially in some regions of the U.S. That will become a less critical factor depressing prices if culling rates begin to subside as expected,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. Plus, LMIC forecasts some strength in fed cattle prices, which tends to be supportive of cull cow prices.

As it is, AMS pegged the national live cull cow price (packer direct) at $57.65/cwt. the last week of August, according to LMIC. That was about $2 more than a year earlier, but more than $15 less than the five-year average (2014-18). 

“Generally, year-over-year increases in cull cow prices are expected for the balance of this year and throughout next year,” say LMIC analysts. That runs counter to typical seasonal expectations, when cull cow prices usually begin dropping in late September through November.

However, the LMIC folks say it’s essential to also consider non-typical changes within seasonal cull cow slaughter patterns. For instance, they point to beef imports. Most non-fed, lean beef imported to the U.S. comes from South America and Australia. Long-term, widespread Australian drought increased cow slaughter and non-fed beef exports in recent years. Easing drought in that country suggests a reduction in U.S. imports.

Negotiated cash fed cattle prices were $1-$2 lower than last week in Nebraska on a live basis Wednesday at $101/cwt., according to the Agricultural Marketing Service. Dressed sales were $2-$3 lower at $160-$161. Although too few to trend, there were a few live sales in Kansas at $101 and a few dressed sales in the western Corn Belt at $160-$161.

At Sioux Falls Regional in South Dakota, though, slaughter steers and heifers sold steady to $1 higher. There were 200 head of Choice 2-3 steers weighing an average of 1,468 lbs. that brought an average of $102.02/cwt.

The weekly Fed Cattle Exchange auction was postponed Wednesday, due to technical difficulties.

With packer inventory apparently abundant and wholesale beef values continuing to erode, lower cash prices pressured Cattle futures Wednesday, amid active trade.

Live Cattle futures closed an average of 63¢ lower (35¢ lower to $1.07 lower in spot Oct).

Feeder Cattle futures closed an average of $1.39 lower (55¢ lower in spot Sep to $2.00 lower).

Choice boxed beef cutout value was $1.87 lower Wednesday afternoon at $222.95/cwt. Select was 95¢ lower at $207.51.

Corn futures closed fractionally lower to 1¢ lower.

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

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Major U.S. financial indices rebounded Wednesday, led by the big tech stocks that applied pressure in the previous session.

West Texas Intermediate Crude Oil futures on the CME pared losses from the previous session, up $1.07 to $1.29 through the front six contracts.

The Dow Jones Industrial Average closed 439 points higher. The S&P 500 closed 67 points higher. The NASDAQ closed 293 points higher.

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“Bunched-up yearlings that have been on summer grazing programs and forced off grass due to drought, especially in the Western regions of the U.S., have dampened feeder cattle prices (e.g., 700-to 800-pound steers). That may spill back into the calf market (e.g., 500-to 600-pound steers),” say analysts with the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor.

From January through August, steer calf prices (500-600 lbs., Southern Plains) averaged $159.41/cwt., according to LMIC. Prices reached their highest level since before the pandemic in August at an average $161.78. 

“Weather conditions may continue to play a significant role in how calves are priced in the coming months,” say LMIC analysts. “For example, in the Southern Plains, small grain (e.g., wheat) pasture prospects used for grazing recently received some beneficial rain, and there is some optimism about grazing availability. However, it is still early in the planting season for those crops/pastures. That forage will not be available for cattle to graze until October, and in some situations until even later in the year. Steer calf prices in the Southern Plains may falter slightly in September and finish the quarter between $157-158.”

LMIC expects steer calf prices in the fourth quarter to remain a little below $160. The average price in the fourth quarter last year was $158.18, when markets were still dealing with the fallout from the Tyson plant fire.

Further ahead, the LMIC folks say smaller calf crops the last couple of years should provide price support. Plus, they point out lower year-over-year corn prices that helped underpin calf prices through most of the summer should remain lower well into next year.