Daily Market Highlights

The five-area direct weighted average steer price last week was $1.53 higher at $106.59/cwt. on a live basis, according to the Agricultural Marketing Service. The dressed steer price was $1.37 higher at $169.41.

Cattle futures closed lower on Monday, especially Feeder Cattle, pressured by Friday’s Cattle on Feed (see below and note the correction).

Live Cattle futures closed an average of 64¢ lower (22¢ to $1.15 lower).

Feeder Cattle futures closed an average of $1.32 lower (62¢ to $2.45 lower).

Choice boxed beef cutout value was $1.53 higher Monday afternoon at $227.47/cwt. Select was $2.26 higher at $211.25.

Corn futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed mostly 1¢ to 3¢ higher. 

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Major U.S. financial indices closed higher on Monday. Primary support seemed centered around more optimism about the pandemic, with the number of new COVID-19 cases continuing to decline. As well, the Food and Drug Administration approved use of a new plasma treatment for those hospitalized with the virus.

The Dow Jones Industrial Average closed 378 points higher. The S&P 500 closed 34 points higher. The NASDAQ closed 67 points higher.

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Correction As many of you likely noticed, yesterday’s Cattle Current carried a review of the July Cattle on Feed report, rather than for the most recent August report. Sorry about that. Here’s the August report.

Placements in feedlots (feedlots with 1,000 head or more capacity) during July of 1.89 million head were 188,000 more (+11.03%) than a year earlier, according to the monthly Cattle on Feed report. That was significantly more than pre-report expectations of a 6% increase. In terms of placement weight, 38.83% went on feed weighing less than 699 lbs., 47.17% went on feed weighing 700-899 lbs. and 14.0% weighed more than 900 lbs.

For broader perspective, in his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, explains, “Placements were down 17.7% year over year in February, March and April. Despite the 11% increase in July, placements are down 7.1% year over year for the last six months.”

Marketings in July of 1.99 million head were 12,000 head fewer than last year (-0.60%), about in line with average analyst estimates ahead of the report.

“Marketings dropped dramatically in April and May (down 25.6% year over year in those two months) and are down 6.0% in the six months from February to July,” according to Peel.

Total cattle on feed Aug. 1 numbered 11.28 million head, which was 172,000 head more (+1.5%) than the same time a year earlier, a little more than expectations and the largest inventory for the month since the data series began in 1996.

“One of the biggest concerns in fed cattle markets is the extent to which the backlog of fed cattle created in April and May still remains,” Peel says. “Although June and July marketings were about equal to one year ago, a significant portion of those marketings were likely fed cattle that were carried over from April and May. Reductions in placements as far back as February have reduced the number of cattle finishing starting as early as June. Not only were total placements down in the February to July period, but more of the reduction was in heavyweight placements, further reducing the number of cattle finishing now. In the last six months, feedlot placements under 700 lbs. have made up a larger percentage of total placements, which further reduces the number of cattle finishing at this time.” 

Add it all up and Peel says data and anecdotal indications suggest the backlog of fed cattle is rapidly diminishing and may be nearly cleaned up. 

“Going forward, the 1 million head decrease in feedlot placements in February, March and April suggests that front-end feedlot supplies will be relatively tight at least through September,” Peel says.

Based on reports from the Agricultural Marketing Service, negotiated cash fed cattle prices ended the week $2 higher in the Southern Plains at $106/cwt. on a live basis, steady to 50¢ higher in the Northern Plains at $106.00-$106.50 and $2 higher in the western Corn Belt at $107-$109. Dressed trade was unevenly steady at $169.

Through Thursday, the five-area direct weighted average steer price was $106.62/cwt. on a live basis, which was $2.13 more than the previous week and $2.19 less than the same time last year, keeping in mind the market was dealing with the aftermath of the Tyson plant fire in 2019. The dressed steer price of $169.11 was $1.05 higher than the prior week, but $5.91 less the same time a year earlier.

Cattle futures closed lower on Friday as traders awaited the monthly Cattle on Feed report (see below).

Live Cattle futures closed an average of 85¢ lower, (30¢ lower at the back to $1.22 lower at the front).

Feeder Cattle futures closed an average of $1.07 lower (50¢ lower at the front to $1.55 lower at the back).

Choice boxed beef cutout value was 56¢ higher Friday afternoon at $225.94/cwt. Select was $2.68 higher at $208.99.

Total estimated cattle slaughter for the week ending Aug. 22 was 652,000 head, according to USDA. That was 8,000 head more than the previous week’s estimate, but 17,000 head fewer than the same week last year. Estimated beef production for the week of 542.9 million lbs. was 10.5 million lbs. more than the previous week and 7 million lbs. more than the prior year.

Corn futures closed mostly fractionally mixed to 1¢ higher.

Soybean futures closed fractionally lower to 1¢ higher. 

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Major U.S. financial indices closed higher on Friday, buoyed by positive economic news.

For instance, existing home sales in July continued upward for the second consecutive month, according to the National Association of Realtors^®.

Total existing-home sales completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 24.7% from June to a seasonally adjusted annual rate of 5.86 million in July.

“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist. “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”

The Dow Jones Industrial Average closed 190 points higher. The S&P 500 closed 11 points higher. The NASDAQ closed 46 points higher.

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If anything, the market will likely view Friday’s monthly Cattle on Feed report as at least a little bullish, with fewer placements than expected, as well as slightly more marketings and slightly fewer cattle on feed for feedlots with 1,000 head or more capacity.

Placements in June of 1.80 million head were 37,000 head more (+2.1%) than a year earlier, compared to average expectations for an increase of 6%.

In terms of placement weight, 41% went on feed weighing less than 699 lbs., 43% went on feed weighing 700-899 lbs. and 16% weighed more than 900 lbs.

Marketings in June of 1.97 million head were 26,000 head more (+1.34%) than last year, about 1% more than average expectations.

Cattle on feed July 1 of 11.44 million head were 42,000 head fewer (-0.37%) than last year. Ahead of the report average analyst estimates were for the number to be unchanged. Inventory was the second largest to start the month since the data series began in 1996.

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“The controversy surrounding wholesale and farm-level price movements following a packing plant fire in Kansas was but mere prelude to the unprecedented COVID-19-related disruptions and historic rise in the spread between livestock and wholesale meat prices. Concerns about concentration and allegations of anticompetitive behavior have led to several civil suits and inquiries by the U.S. Department of Agriculture and the U.S. Department of Justice, with increases in price differentials serving as a focal point.”

That’s from the introduction to Beef and Pork Marketing Margins and Price Spreads during COVID-19, by agricultural economists Jayson Lusk at Purdue University, Glynn Tonsor at Kansas State University and Lee Schulz at Iowa State University. The stated goal of the effort is to provide data-driven, economic-guided insights to the situation. Along the way, they shatter a popular myth or two.

For instance, these economists document how little concentration has changed since 1998, when considering the largest federally inspected (FI) beef packing plants—those harvesting 1 million head or more of cattle annually.

“In 1998, FI packing plants that slaughtered more than 1 million cattle per year slaughtered 17.9 million head, or 51.7%, of the FI cattle slaughter. More than 20 years later, in 2019, plants with over 1 million head per year capacity slaughtered 17.3 million head, or 52.4%, of the FI slaughter. The total volume slaughtered by the largest plants is down, and it is a stretch to characterize a 0.7 percentage point rise in slaughter market share over 22 years as a takeover,” say the authors. “This suggests that smaller FI slaughter facilities, in aggregate, are maintaining market share. In 2019, packing plants that slaughtered between 1 and 9,999 head slaughtered 424,700 head, or 1.3%, of the FI cattle slaughter annually, 3.3% for plants slaughtering between 10,000 and 99,999 head, and 43.1% for plants slaughtering between 100,000 and 999,999 head. This compares to 1.5%, 4.7% and 42.1%, respectively, in 1998.”

The trio of economists points out the number of FI beef packing plants is the most since 2004, albeit fewer than two decades ago.

Further, these economists define the difference between marketing margins, gross margins and related price spreads, what they can and can’t say about suggested profitability. They also define and demonstrate primary demand versus derived demand and how it is that wholesale beef prices can run counter to fed cattle prices.

“Even though we cannot observe an individual packers’ costs, we can observe the market’s perception of their profitability―at least for publicly traded firms,” according to the economists. “On balance, changes in the stock prices of companies with significant packing operations do not suggest substantial windfalls corresponding with COVID-19 driven developments, and indeed the performance of publicly traded packing companies has lagged that of the overall market since the first of the year. Perhaps market developments are rationale responses to massive shocks from a common enemy to society, COVID-19.”

Bottom line, the study suggests price reactions in the wake of packing disruptions following last summer’s packing plant fire and during the pandemic are in keeping with the expectations of economic theory.

Negotiated cash fed cattle trade developed in the North on Thursday. Dressed sales were unevenly steady with last week at mostly $169/cwt. Live sales in the western Corn Belt were $2 higher at $107-$109.

Cattle futures closed mostly narrowly lower on Thursday.

Live Cattle futures closed an average of 43¢ lower, except for 10¢ higher in away Oct.

Feeder Cattle futures closed an average of 25¢ lower through the front five contracts, and then 27¢ to $1.10 higher the rest of the way.

Choice boxed beef cutout value was $2.34 higher Thursday afternoon at $225.38/cwt. Select was 66¢ higher at $206.31.

Net U.S. beef export sales of 20,000 metric tons for the week ending Aug. 13 were 69% more than the previous week and 13% more than the previous four-week average, according to the U.S. Export Sales report from USDA’s Foreign Agricultural Service.

Corn futures closed mostly fractionally lower.

Soybean futures closed 8¢ to 9¢ lower through Mar ‘21, and then mostly 3¢ to 6¢ lower.

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Major U.S. financial indices closed higher on Thursday, supported by tech stocks and despite higher weekly unemployment claims than the trade expected. Initial unemployment insurance claims for the week ending Aug. 15 were 1.11 million, up from 963,000 the previous week.

The Dow Jones Industrial Average closed 46 points higher. The S&P 500 closed 10 points higher. The NASDAQ closed 118 points higher.

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Heavier carcass weights boosted year-over-year beef production in July, despite less cattle slaughter than in 2019, according to USDA’s monthly Livestock Slaughter report. There were the same number of weekdays and Saturdays this year and last.

Beef production of 2.42 billion lbs. was 60.5 million lbs. more than last year (+2.56%). Total cattle slaughter under federal inspection (FI) in July was 2.87 million head, which was 37,200 head fewer (-1.28%). Fed cattle slaughter of 2.31 million head was 25,000 head fewer than last July (-1.1%).

For January through July, beef production of 15.40 billion lbs. was 187.4 million lbs. less than last year (-1.20%). Total FI cattle slaughter for that same time period was 18.37 million head, which was 806,000 head fewer (-4.20%) than last year. Total fed cattle slaughter for January through July of 14.39 million head was 797,500 head fewer (-5.25%).

Total commercial red meat production in July was 4.81 billion lbs., which was 220.9 million lbs. more than in 2019 (+4.81%). For January through July, total commercial red meat production of 31.63 billion lbs. was 247 million lbs. more than in 2019 (+0.79%).

The average dressed steer weight in July was 902 lbs., which was 36 lbs. more than last year. The average dressed heifer weight for the month of 829 lbs. was 33 lbs. heavier. For January through July, the average dressed steer weight was 34 lbs. heavier year over year at 898 lbs. The average dressed heifer weight for the same period of time was 829 lbs., which was 26 lbs. heavier year over year.

Negotiated cash fed cattle trade on Wednesday continued steady with the previous day in the Southern Plains at $106/cwt. That’s $2 higher than last week.

Cattle futures drifted mostly higher, with continued support from the positive cash outlook and climbing wholesale beef values.

Live Cattle futures closed an average of 50¢ higher, except for an average of 19¢ lower in two contracts.Feeder Cattle futures closed mixed but mostly higher, from an average of 37¢ higher across the front five contracts, to an average of 22¢ lower.

The monthly Cattle on Feed report is due out Friday. Early estimates run about even for year over year marketings in July and the Aug. 1 on-feed inventory, with expectations for July placements to be up about 6%.

Choice boxed beef cutout value was $2.18 higher Wednesday afternoon to $223.04/cwt. Select was $1.00 higher at $205.65.

Corn futures closed mostly 1¢ lower.

Soybean futures closed fractionally mixed through Mar ‘22, and then 1¢ to 3¢ lower.

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Major U.S. financial indices closed lower on Wednesday.

Pressure included the somber economic outlook in the Federal Open Markets Committee minutes from late July and published Wednesday. According to the minutes, participants noted, “…the path of the economy would depend significantly on the course of the virus and that the on-going public health crisis  would weigh heavily on economic activity, employment, and inflation in the near  term and posed considerable risks to the economic outlook over the medium term.”

Further, “The staff still judged that a more pessimistic projection was no less plausible than the baseline forecast. In this alternative scenario, an acceleration of the coronavirus outbreak, with another round of strict limitations on social interactions and business operations, was assumed to begin later this year, leading to a decrease in real GDP, a jump in the unemployment rate, and renewed downward pressure on inflation next year. Compared with the baseline, the disruption to economic activity was more severe and protracted in this scenario, with real GDP and inflation lower and the unemployment rate higher by the end of the medium-term projection.”

The Dow Jones Industrial Average closed 85 points lower. The S&P 500 closed 14 points lower. The NASDAQ closed 64 points lower.

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Domestic beef demand recovered significantly in June from pandemic disruptions, according to the most recent domestic demand indexes maintained by Kansas State University.

The Choice retail beef demand index was 98.87 in June, which was 34.85% more than the previous month and 29.23% more than the previous year. The all fresh retail beef demand index was 40.98% higher month to month and 34.22% more than the previous year.

By way of comparison, the retail pork demand index was 84% higher than previous month and 18% more year over year. The retail chicken demand index was 12.7% more than in May and 9.7% more than in 2019.

Negotiated cash fed cattle trade developed in Kansas on Tuesday at $106-$107/cwt., according to the Agricultural Marketing Service. That was $2-$3 higher than last week with moderate trade and moderate to good demand.

Cattle futures closed mainly higher, buoyed by the positive cash outlook and climbing wholesale beef values.

Other than unchanged to an average of 9¢ lower in four contracts, Live Cattle futures closed an average of 41¢ higher.

Feeder Cattle futures closed an average of 84¢ higher (50¢ to $1.20 higher).

Choice boxed beef cutout value pressed $3.60 higher Tuesday afternoon to $220.86/cwt. Select was $2.71 higher at $204.65.

Corn futures closed 1¢ to 4¢ lower through Sep ’21 and then mostly fractionally lower.

Soybean futures closed narrowly mixed, from unchanged to 1¢ lower to 1¢ higher.

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Major U.S. financial indices closed mixed again on Tuesday, with much of the optimism in big tech stocks.

The Dow Jones Industrial Average closed 66 points lower. The S&P 500 closed 7 points higher. The NASDAQ closed 81 points higher.

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“Based on improved feeding margins, a smaller estimated calf crop in 2020 than a year ago, and fewer cattle outside feedlots than expected, the third-quarter 2020 feeder steer price was raised by $7 to $140/cwt., and the fourth-quarter 2020 forecast was increased $9 from the previous month to $140 per cwt.,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook.

Cash fed cattle prices were higher week to week for five consecutive weeks through Aug. 7, according to ERS. Analysts there recently increased the third-quarter fed steer price forecast $1 to $101/cwt. and by $1 for the fourth quarter to $105.

“Typically, fed cattle prices decline seasonally to a bottom level in late third quarter or early fourth quarter,” say ERS analysts. “As prices appear to have reached a seasonal bottom in the third-quarter, price strength may be further affected by economic uncertainty weighing on beef demand in the fourth quarter, at a time when average carcass weights are more than 3% above last year and rising seasonally.”

The five-area direct weighted average steer price last week was $105.06/cwt. on a live basis, which was $3.72 more than the previous week. The average steer price in the beef was $4.84 more week to week at $168.04.

Cattle futures closed lower, following early lift, with higher Corn futures helping pressure Feeder Cattle the most.

Live Cattle futures closed an average of 66¢ lower.

Feeder Cattle futures closed an average of $1.54 lower (30¢ at the back to $2.22 lower).

Choice boxed beef cutout value was $3.02 higher Monday afternoon at $217.26/cwt. Select was $2.65 higher at $201.94.

Corn and soybean futures closed higher Monday with support from the weather outlook and thoughts last week’s derecho will reduce production. Week-to-week condition ratings also declined slightly for both crops.

Corn futures closed 4¢ to 7¢ higher.

Soybean futures closed 11¢ to 17¢ higher through Jan ’22 and then mostly 9¢ higher.

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Major U.S. financial indices closed mixed on Monday. Uncertainty about the next round of coronavirus economic aid added pressure. Positive news came from the housing sector.

Builder confidence in the market for newly-built single-family homes increased six points to 78 in August, according to the latest National Home Builders Association (NAHB)/Wells Fargo Housing Market Index (HMI) released Monday. That’s the highest index level in the 35-year history of the series, matching the record set in December 1998.

“Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020,” says NAHB Chief Economist Robert Dietz. “Single-family construction is benefiting from low interest rates and a noticeable suburban shift in housing demand to suburbs, exurbs and rural markets as renters and buyers seek out more affordable, lower density markets.”

The Dow Jones Industrial Average closed 86 points lower. The S&P 500 closed 9 points higher. The NASDAQ closed 110 points higher.

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“With a weaker global economic situation, meat trade forecasts have been revised. Total pork and broiler exports are still projected higher year over year, but beef exports are now projected to be lower year over year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel points out that even with pandemic disruptions earlier this year, the U.S. is on track for record production of beef, pork and broilers.

“Before COVID-19, it was recognized that meat trade would be critical for markets in 2020 and that certainly remains true at this point,” Peel says. 

According to Peel, year-to-date beef exports for January through June were down 7.6%, following a year-over-year decrease in June of 33.0% and a similar decline in May.

In terms of specific markets, Peel says Japan remains the largest U.S. beef export market, up 5.6% year over year in the first half of 2020. However, U.S. beef exports to that nation were 20.7% less year over year in June and 23.6% less in May.

South Korea is the second largest export market for U.S. beef. Exports to that nation are 7.4% less year over year through June, following double-digit monthly decreases in April, May and June. 

Second-quarter beef exports to Mexico, the third largest export market in recent years, were 66.9% less year over year, according to Peel. Year-to-date exports to the nation are 37.7% less than a year earlier.

“Four of the five largest beef exports markets dropped sharply in the second quarter and will be watched closely for recovery in the second half of the year,” Peel says. “China will continue to be a major driver of global protein trade, especially pork. China will remain a minor beef export market in 2020 but is likely to continue growing, barring major geopolitical disruptions. Mexico remains a major concern with dramatic economic weakness expected to continue.”

Negotiated cash fed cattle prices last week were mostly $4 higher on a live basis in the Southern Plains at $104/cwt., $3 higher in the Northern Plains at $106 and $2.50-$4.00 higher in the western Corn Belt at $106.50-$107.00. Dressed trade was $2 higher in Nebraska at $165 and $2-$7 higher in the western Corn Belt at $165-$170.

Through Thursday, the five-area direct weighted average steer price was $104.49/cwt. on a live basis, which was $3.21 more than the previous week, and just 91¢ less than the prior year, keeping in mind that the Aug. 9 Tyson fire last year slammed cattle markets. In the beef, the weighted average steer price was $168.06, which was $4.87 more than the previous week, and $2.40 less than the prior year.

Cattle futures closed mixed to end the week, with Feeder Cattle pressured the most.

Live Cattle futures closed unchanged to narrowly mixed (17¢ lower to 55¢ higher in spot Aug).

Feeder Cattle futures closed an average of 71¢ lower (40¢ to $1.05 lower).

Choice boxed beef cutout value was $3.29 higher Friday afternoon at $214.24/cwt. Select was $1.88 higher at $199.29.

Estimated total cattle slaughter last week of 640,000 was 7,000 head more than the previous week’s estimate, but 13,000 fewer than the same week a year earlier. Year-to-date estimated total cattle slaughter is 5.1% less than the same period last year at 19.69 million head. Estimated year-to-date total beef production is 2.4% less at 16.27 billion lbs.

Corn and soybean futures closed slightly lower Friday on likely profit taking from the previous session’s spike higher.

Corn futures closed fractionally mixed.

Soybean futures closed mostly 1¢ to 3¢ lower.

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Major U.S. financial indices closed narrowly mixed on Friday. Positive news included retail sales increasing 1.2% month to month in July, according to the U.S. Census Bureau. On the other hand, Congressional stalemate over additional coronavirus economic aid applied pressure.

The Dow Jones Industrial Average closed 34 points higher. The S&P 500 closed fractionally lower. The NASDAQ closed 23 points lower.

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Stronger Cattle futures the past couple of weeks are offering profitable hedging opportunities for many cow-calf producers, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Although still lower than the contract higher of $156, Griffith points out the August Feeder Cattle contract is $28 higher since the first week of April, at levels last seen toward the end of February.

“It is always a positive thing to hedge a profit on cattle. It is even more positive to be presented with an opportunity to hedge a profit when prices have been extremely volatile and at large losses for several months,” Griffith explains. “The reason many people will not use price risk management in this environment is because they hold out hope that prices will go higher. Prices could continue to increase, but they could also decrease. There is nothing wrong with hedging a profit, and there are methods available to set a price floor and leaving the top side of the market open.”

Negotiated cash fed cattle prices so far this week are mostly $4 higher on a live basis in the Southern Plains at $104/cwt. Live prices are $2.50-$4.00 higher in the western Corn Belt at $106.50-$107.00, where dressed trade is $2-$7 higher at $165-$170. In Nebraska, dressed trade is $2 higher at $165.

Except for the front months, Live Cattle futures edged lower Thursday, while higher corn prices helped pressure Feeder Cattle. The weekly U.S. Export Sales report (week ending Aug. 6) from the Foreign Agricultural Service offered no support. Net beef export sales of 11,600 metric tons for 2020 were down 13% from the previous week and down 46% from the prior four-week average.

Live Cattle futures closed an average of 43¢ higher in four contracts (mostly front months) and then an average of 18¢ lower.

Except for 5¢ higher in Apr, Feeder Cattle futures closed an average of 44¢ lower.

Choice boxed beef cutout value was $1.86 higher Thursday afternoon at $210.95/cwt. Select was $1.42 higher at $197.41.

Actual fed cattle slaughter for the week ending Aug. 1 was 515,150 head, which was 10,353 head more than the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. Total cattle slaughter of 636,304 head was 3,520 head more. The average steer carcass weight that week was 905 lbs., which was 2 lbs. heavier than the previous week and 33 lbs. heavier than the prior year. The average heifer carcass weight of 828 lbs. was 1 lb. lighter than the prior week, but 23 lbs. heavier than the previous year. Beef production for the week of 530.0 million lbs. was 19.3 million lbs. more than last year.

Corn and Soybean futures bounced sharply higher Thursday, likely helped along by wonderments about crop damage in Iowa from the recent widespread storm, and mostly from the positive weekly export sales.

Net corn export sales of 377,200 metric tons (MT) for 2019-2020 were up noticeably from the previous week and up 18% from the prior four-week average.

Net soybean export sales of 570,100 MT for 2019-2020 were up 65% from the previous week and 96% from the prior four-week average, led by sales to China.

Corn futures closed 7¢ to 11¢ higher.

Soybean futures closed mostly 10¢ to 16¢ higher.

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Major U.S. financial indices closed mixed on Thursday. Positive news included weekly initial jobless claims of 963,000,which was 228,000 less than the previous week and the first time the number was less than 1 million since March.

The Dow Jones Industrial Average closed 80 points lower. The S&P 500 closed 6 points lower. The NASDAQ closed 30 points higher.

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USDA’s recent Crop Production report projects lower overall hay production for this year, compared to 2019.

The National Agricultural Statistics Service (NASS) estimated 16.35 million acres of alfalfa and alfalfa mixes harvested this year, which would be 391,000 fewer acres (-2.3%) than last year. Yield is estimated 5.2% less at 2.73 tons/acre. Production of 51.66 million tons would be 3.2 million tons less (-5.9%) than last year.

NASS estimates 347,000 more acres than last year harvested for all other hay at 36.03 million acres, but projected yield is slightly less than last year at 2.04 tons/acre. Production of other hay is projected at 73.59 million tons, which would be 399,000 tons less than last year (-0.5%).

Negotiated cash fed cattle prices continued to bounce higher Wednesday, with live prices mostly $4 higher on a live basis in the Southern Plains at $104/cwt. So far this week, live prices are $2 higher in the western Corn Belt at $105, where dressed trade is $2-$7 higher at $165-$170. In Nebraska, dressed trade is $2 higher at $165.

Cattle feeders offered 890 head—all from the Southern Plains—in the weekly Fed Cattle Exchange auction. Of those, 348 head sold for 1-9 day delivery at a weighted average price of $104.50/cwt. Another 254 head sold for delivery at 1-17 days for a weighted average price of $104.27.

Cash optimism helped lift Cattle futures Wednesday.

Live Cattle futures closed an average of 84¢ higher (15¢ higher at the back to $1.70 higher in spot Aug), except for 5¢ lower in the back contract.

Feeder Cattle futures closed an average of 81¢ higher (17¢ higher at the back to $1.47 higher toward the front).

Choice boxed beef cutout value was $1.01 higher Wednesday afternoon at $209.09/cwt. Select was 97¢ higher at $195.99.

Despite higher estimated yield and production in the monthly World Agricultural Supply and Demand Estimates (see below) forecast ending stocks, lower than expected,  boosted Corn futures, while recent Chinese buying helped Soybean futures.

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

Soybean futures closed 8¢ to 12¢ higher through Jan ’21 and then mostly 5¢-7¢ higher.

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Major U.S. financial indices closed higher on Wednesday, led by tech stocks.

The Dow Jones Industrial Average closed 289 points higher. The S&P 500 closed 46 points higher. The NASDAQ closed 229 points higher.

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USDA’s Economic Research Service (ERS), in the monthly World Agricultural Supply and Demand Estimates (WASDE) increased the expected annual fed steer price for this year 50¢ from the previous month’s projection to $107.30/cwt. Forecast prices are $101 in the third quarter, $104 in the fourth quarter and $105 in the first two quarters next year.

Beef production for this year is forecast at 27.03 billion lbs. That’s 94 million lbs. more than the previous month’s forecast, based on the faster pace of steer and heifer slaughter. Beef production for next year was projected at 27.62 billion lbs., which was 100 million lbs. less than the previous month, as forecast slaughter in the second half of 2021 will reflect lower expected placements in the first half of the year.

Forecast total red meat and poultry production for this year was projected 59 million lbs. less than the previous month at 106.48 billion lbs., as decreases in pork production more than offset higher beef and poultry production. Total red meat and poultry production for 2021 was unchanged at 107.99 billion lbs., which would be 1.5 billion lbs. more than this year.

Among other WASDE highlights:

Corn production for this year was forecast 278 million bu. more than the previous month at 15.3 billion bu., with the season’s first survey-based yield forecast at a record 181.8 bu./acre. With the outlook for larger supplies, greater feed and residual use, increased exports, and higher ending stocks, the season-average corn price received by producers was lowered 25¢ to $3.10/bu. 

As for soybeans, U.S. supply and use changes for 2020-21 include lower beginning stocks and higher production, crush, exports, and ending stocks. Soybean production was forecast at 4.425 billion bu., up 290 million bu. on higher forecast yields of 53.3 bu./acre, which would be 5.9 bu. more than last year.

The U.S. season-average soybean price for 2020-21 was forecast at $8.35/bu., down 15¢ from last month. The soybean meal price was forecast at $290 per short ton, down $10. The soybean oil price was forecast at 30.0¢/lb., up 1¢.

The outlook for 2020-21 U.S. wheat is for increased production offset by lower imports, higher exports, and lower ending stocks. Projected U.S. wheat production was raised 14 million bu. to 1,838 million with increased Hard Red Spring (HRS) and Durum production more than offsetting lower winter wheat production.

With offsetting supply changes and increased use, ending stocks were lowered 17 million bu. to 925 million. If realized, these would be the lowest wheat ending stocks in six years. However, the season-average farm wheat price was decreased 10¢ per bushel to $4.50, on lower U.S. corn prices and reduced wheat price expectations for the remainder of the market year. 

Although too few to trend, there were a few early negotiated cash fed cattle sales in Kansas on Tuesday at $103/cwt. on a live basis, and a few in the western Corn Belt at $105.

The recent bump higher in fed cattle prices and a promising outlook for more of the same this week, along with higher wholesale beef values, helped Cattle futures gain a little ground Tuesday.

Live Cattle futures closed an average of 73¢ higher (50¢ to $1.15 higher), except for 7¢ lower in the back contract.

Feeder Cattle futures closed an average of 93¢ higher.

Choice boxed beef cutout value was 88¢ higher Tuesday afternoon at $208.08/cwt. Select was $1.09 higher at $195.02.

Grain futures mainly hovered on Tuesday as traders awaited Wednesday’s monthly World Agricultural Supply and Demand Estimates.

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

Soybean futures closed unchanged to 1¢ higher through Mar ’21 and then fractionally lower to 3¢ lower.

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Major U.S. financial indices closed lower on Tuesday, apparently pressured mostly by confusion surrounding government attempts to develop another round of COVID economic stimulus.

The Dow Jones Industrial Average closed 104 points lower. The S&P 500 closed 26 points lower. The NASDAQ closed 185 points lower.

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For all of the change spawned by the pandemic, overall inclusion of beef and pork in daily meals remained steady from February through June, according to the first multi-month summary from the Meat Demand Monitor (MDM). That project, partly funded by the beef and pork checkoffs, tracks U.S. consumer preferences, views, and demand for meat, with separate analysis for retail and food service channels.

Launched in February, the MDM summary includes data from over 10,000 survey respondents.

Among highlights:

**Grocery meat demand peaked in April, while food service meat demand was lowest in April.

**Taste, Freshness, Safety, and Price persistently rank highest in importance to protein purchasing decisions, with Price increasing in importance since the pandemic began.

**Away-from-home consumption of beef and pork for all three daily meals declined since February.

**Across restaurant groups, the Fast Casual group gained share, perhaps reflecting drive-thru or curbside capabilities, while the Local Independent group lost share.

**Across sources of protein for at-home consumption, the Grocery Store group gained prevalence while the Mass Merchandiser group lost share.

Agricultural economists at Kansas State University and Purdue University provide MDM coordination and analysis.