Daily Market Highlights

Cattle futures closed mostly lower Monday, despite logic suggesting a friendly to neutral Cattle on feed report Friday. Besides technical pressure and near expiration of spot Live Cattle, less estimated week-to-week cattle slaughter and the higher year-to-year cattle inventory could have lent bearishness.

Live Cattle futures closed an average of 90¢ lower, except for 75¢ higher in the back contract.

Feeder Cattle futures closed an average of $1.90 lower (35¢ to $3.12 lower), except for an average of 22¢ higher in the back three contracts.

Choice boxed beef cutout value was 78¢ lower Monday afternoon at $202.55/cwt. Select was 50¢ lower at $190.13.

Corn futures closed mostly fractionally mixed.

Soybean futures closed mostly 2¢ to 3¢ higher.

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Major U.S. financial indices closed higher Monday, led by tech stocks and buoyed by hopes surrounding another round of federal economic aid to address COVID-19.

The Dow Jones Industrial Average closed 114 points higher. The S&P 500 closed 23 points higher. The NASDAQ closed 173 points higher.

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There’s still plenty of backlogged market-ready fed cattle to work through, but it appears progress is being made, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“The calculated estimates of cattle on feed over 120 days are still very large compared to last year, but the difference has decreased by some 160,000 head since May,” Peel says, referring to Friday’s monthly Cattle on Feed report. “It appears that the backlog is decreasing but a sizable number of cattle remain to be cleaned up before feedlots will be current. In the January-April period, feedlot placements were down just over 1 million head year over year.”

Peel also notes the report may highlight some regional drought impacts, with increased June placements of cattle weighing less than 700 lbs. in Texas and Colorado.

As for the semiannual Cattle inventory report, also issued Friday, Peel says the slow decrease in beef cow numbers, relative to January, and the same number of beef replacement heifers suggest no accelerated liquidation at this point.

“The second half of the year may tell the tale as cow-calf producers react to fall calf market conditions,” Peel says. “Overall, it appears that cattle numbers continue a slow tightening of inventories going forward.”  

Through Thursday, the average five-area direct fed steer price was $97.23/cwt. on a live basis, which was 91¢ higher than the previous week, but $18.20 less than the same time last year.

Regionally, negotiated cash fed cattle trade for the week was generally $1-$2 higher on a live basis at $96/cwt. in the Southern Plains, $98 in the Northern Plains and $99-$100 in the western Corn Belt. Dressed trades were mostly $1 higher at $158.

Cattle futures closed narrowly mixed Friday.

Live Cattle futures closed an average of 29¢ higher, except for 35¢ and 32¢ lower in Feb and Apr and unchanged in away Dec.

Except for 2¢ higher in spot Aug, Feeder Cattle futures closed from unchanged to an average of 34¢ lower.

Choice boxed beef cutout value was 49¢ lower Friday afternoon at $201.77/cwt. Select was 16¢ lower at $190.63.

Corn futures closed mostly unchanged to fractionally higher.

Soybean futures closed mostly fractionally higher to 1¢ higher, except for fractionally lower to 2¢ lower in the front four contracts.

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Major U.S. financial indices closed lower Friday, led by tech stocks once again.

The Dow Jones Industrial Average closed 182 points lower. The S&P 500 closed 20 points lower. The NASDAQ closed 98 points lower.

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USDA’s monthly Cattle on Feed report—for feedlots with 1,000 head or more capacity—was close to widespread expectations.

Cattle on feed July 1 of 11.44 million head was 42,000 head fewer (-0.36%) than the prior year. That was the second highest inventory for the date since the series began in 1996, according to the National Agricultural Statistics Service.

Placements in June of 1.80 million head were 37,000 head more (+2.10%) than the prior year. That was on the low end of expectations, which could be considered market friendly. In terms of weights, 41% went on feed weighing 699 lbs. or less, 43% weighing 700-899 lbs. and 16% weighing 900 lbs. or more.

Marketings in June of 1.97 million head were 26,000 head more (+1.33%) than a year earlier.

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USDA’s semiannual Cattle report mainly mirrored pre-report estimates and suggests a continued plateau in beef cow numbers, with potential downside pressure.

The National Agricultural Statistics Service pegs all cattle and calves July 1 at 103 million head, which is 100,000 head more (+0.09%) than a year earlier.

There were 32.05 million beef cows and heifers that calved, which was 250,000 head fewer (-0.77%) less than the same time a year earlier.

The 4.4 million beef heifers retained for replacement were the same as a year earlier.

Cattle on feed July 1 (all feedlots) was 13.6 million head, the same as in 2019.

Cattle on feed in feedlots with capacity of 1,000 or more head accounted for 84.1% of the total cattle on feed on July 1, which was slightly less than the prior year.

Estimated feeder cattle outside feedlots July 1 of 37.4 million head was 300,000 head more (+0.80%) than a year earlier.

Negotiated cash fed cattle trade for the week so far is generally $1-$2 higher on a live basis at $96/cwt. in the Southern Plains, $98 in the Northern Plains and $99-$100 in the western Corn Belt. Dressed trades are mostly $1 higher at $158.

Cattle futures softened a touch Thursday, despite firmer cash fed cattle and wholesale beef prices, and ahead of Friday’s Cattle on Feed report and the semiannual Cattle inventory report.

Live Cattle futures closed an average of 51¢ lower (20¢ at the back to $1.12 lower toward the front).       

Except for 50¢ higher in spot Aug, Feeder Cattle futures closed from unchanged to an average of 14¢ lower.

Choice boxed beef cutout value was $1.11 higher Thursday afternoon at $202.26/cwt. Select was $1.51 higher at $190.79.

The average dressed heifer weight for the week ending July 11 was 902 lbs. which was 6 lbs. heavier than the previous week and 37 lbs. heavier than the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 829 lbs. was 3 lbs. heavier than the prior week and 38 lbs. more than the prior year.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed 4¢ to 7¢ higher through Mar ’21 and then mostly 1¢ to 3¢ higher.

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Major U.S. financial indices closed lower Thursday, led by tech stocks and pressured by indicators of ongoing COVID-based unemployment.

Initial unemployment claims for the week ending July 18 were 1.42 million, which was up 109,000 from the previous week, according to data from the U.S. Department of Labor.

The Dow Jones Industrial Average closed 353 points lower. The S&P 500 closed 40 points lower. The NASDAQ closed 244 points lower.

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USDA’s monthly Livestock Slaughter report for June underscores the massive recovery in cattle slaughter, as well as the impact of continued heavier carcass weights. What follows is slaughter and production under federal inspection.

June fed cattle slaughter of 2.4 million head was 542,900 head more (+31.94%) than in May, and 13,000 head more (+0.58%) than the same month last year.

Keep in mind there were 26 business days, counting Saturdays, versus 25 last year.

However, year to date, fed cattle slaughter through June of 12.08 million was 772,600 head fewer (-6.01%) than the same time last year.

Total cattle slaughter in June of 2.82 million head was 597,600 head more (+26.89%) than in May and 51,300 head more than last year (+1.85%).

Year to date, total cattle slaughter through June of 15.50 million was 769,200 head fewer (-4.73%) than the same time last year.

Federally inspected beef production in June of 2.33 billion lbs. was 507 million lbs. more (+27.74%) than in May, and 134.9 million lbs. more (+6.13%) than a year earlier.

Year to date through June, however, beef production of 12.78 billion lbs. was 279.7 million lbs. less (-2.14%) than the same time last year.

Heavier carcass weights continue to close the gap between beef production and the number of cattle harvested. For instance, the average dressed steer weight in June of 893 lbs. was 42 lbs. heavier year over year. Year to date through June, the average dressed steer weight of 897 lbs. is 33 lbs. heavier.

Likewise, the average dressed heifer weight in June of 824 lbs. was 37 lbs. heavier than the previous year. Year to date through June, the average dressed heifer weight of 829 lbs. is 25 lbs. heavier.

Total red meat production in June under federal inspection of 4.74 billion lbs. was 1.03 billion lbs. more than in May (+27.71%) and 403.50 million lbs. more than a year earlier (+9.31%).

Year to date through June, total red meat production of 26.55 billion lbs. is just 14.7 million lbs. less (-0.06%) than the same time a year ago.

Negotiated cash fed cattle prices trended higher through Wednesday afternoon, according to the Agricultural Marketing Service (AMS). Live sales in Colorado were $2 higher than last week at $98/cwt. In Nebraska, live trades were 50¢ to $2 higher at $98; dressed sales were $1.00-$1.50 higher at $158.00-$158.50.

Cattle feeders sold 422 head of the 1,022 offered in the weekly Fed Cattle Exchange auction—all from the Southern Plains. Of those 103 head sold for a weighted average price of $96/cwt. (1-9 day delivery) and 319 head sold for a weighted average price of $96.12 (9-17 day delivery). Those prices mirrored country trade in the region on Tuesday.

Cattle futures closed mixed, but mostly slightly higher on Wednesday, with more strength later in the session. Some positioning is likely Thursday, ahead of Friday’s Cattle on Feed report and the semiannual Cattle inventory report.

Live Cattle futures closed mixed, from an average of 24¢ lower through the front four contracts to an average of 42¢ higher.  

Feeder Cattle futures closed an average of 31¢ higher.

Choice boxed beef cutout value was 27¢ higher Wednesday afternoon at $201.15/cwt. Select was $2.02 lower at $189.28.

Corn futures closed 2¢ to 4¢ higher.

Soybean futures closed mostly 1¢ to 2¢ higher.

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Major U.S. financial indices closed higher Wednesday, buoyed by promising coronavirus vaccine news and chatter about additional federal economic stimulus.

The Dow Jones Industrial Average closed 165 points higher. The S&P 500 closed 18 points higher. The NASDAQ closed 25 points higher.

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USDA released its investigation into cattle and beef price reactions to last summer’s fire at the Tyson plant in Holcombe, KS and to disruptions wrought by COVID-19.

The report—Boxed Beef & Fed Cattle Price Spread Investigation Report—details market conditions and prices before, during and after those events, although the pandemic continues.

Keep in mind this USDA investigation does not examine potential violations of the Packers and Stockyards Act. USDA continues to cooperate with the Department of Justice Antitrust Division in that agency’s current investigation.

Instead, the report provides the logic and details behind the price reactions of the two black swan events: higher wholesale beef prices and lower fed cattle prices spawned by disruption to packing capacity and by altered demand flow, in the case of the pandemic.

No surprises, no matter how distasteful the reality.

“Record high meat prices are not a surprise,” says Stephen Koontz, agricultural economist at Colorado State University, reflecting on COVID impacts, specifically, in Economic Reasons for What was Observed in Fed Cattle and Beef Markets During the Spring of 2020.

“The grocery store supply chain was emptied during the closures of local economies and then had difficulty catching up,” Koontz explains. “Further, prices associated with specific cuts that consumers typically prepare at home were the highest. Prices of cuts sold at restaurants initially dropped to record lows and then rallied as consumers made substitutions and began purchasing cuts they did not buy typically. However, all rallied as total beef supplies diminished with closures and partial operations.

“Record low livestock prices are also not a surprise. If packers cannot run or cannot run at typical throughput levels—especially if animal supplies are abundant—then the marginal value of that last group of animals that is not sold is close to zero. And the last pen or truckload or group of animals is a perfect substitute for the first. It is the marginal value of the last product that sets the market. This point is critical. In fact, that is what is communicated by economists when supply and demand curves are drawn. The equilibrium quantity and price are what is traded at the lowest marginal value to buyers and the highest marginal value to sellers.”

The USDA report also offers considerations relative to price discovery, market transparency and price risk management.

Although too few to trend, there were some early live sales in the Southern Plains on Tuesday at $96/cwt., which was $1 higher than last week.

Cattle futures closed mixed on Tuesday, amid sluggish activity, as traders apparently waited for more cash direction.

Except for 2¢ higher in Apr, Live Cattle futures closed an average of 34¢ lower.        

Except for 27¢ lower and 2¢ lower in the front two contracts, Feeder Cattle futures closed an average of 57¢ higher (15¢ to $1.30 higher at the back).

Choice boxed beef cutout value was 86¢ lower Tuesday afternoon at $200.88/cwt. Select was 29¢ lower at $191.30.

Corn futures closed 3¢ to 5¢ lower.

Soybean futures closed 5¢ to 7¢ lower through Mar ’21 and then fractionally lower to 3¢ lower.

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Major U.S. financial indices closed mixed Tuesday, with apparent profit taking in tech stocks, but more optimism in financials.

The Dow Jones Industrial Average closed 159 points higher. The S&P 500 closed 5 points higher. The NASDAQ closed 86 points lower.

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Total customer transactions at major U.S. restaurant chains eroded the week ending July 12, down 14% compared to a year earlier, and down 3% more than the previous week, according to the NPD Group (NPD).

Transactions at quick service restaurants (QSRs) led the decline, down 4% week to week and 13% less than a year earlier. Full service restaurant (FSR) transactions improved 3% week to week to 26% less year over year, according to NPD’s CREST® Performance Alerts. That was something of a surprise given the fact that QSR transactions so far are faring the pandemic more positively than FSRs.

“Last week, when quick service restaurants drove the improvements in restaurant customer transaction declines, I highlighted the apparent divergence in trend between quick service and full service restaurants, supported by sound reasoning about on-premises and off-premises models, the pace of reopening and reclosing, and the resurgence in COVID-19 cases around the country,” explains David Portalatin, NPD food industry advisor. “The flip in declines this week from quick service restaurants to full service restaurants is a reminder that the world is unpredictable today and we should expect twists and turns on the bumpy road to recovery. Still, the pre-COVID trend that favored quick service restaurants and the segment’s expertise in offering off-premises services, like drive-thru and delivery, has accelerated during the pandemic and will continue to do so in the long-term.”

The estimated percentage of U.S. restaurants permitted to have on-premises dining in the week ending July 12 declined to 82% from 90% in the prior week, according to NPD’s restaurant census ReCount®.  The majority of the change was in California, where the state government rolled back recent reopening to off-premise dining only.

Cattle futures softened some on Monday, likely with some profit taking from last week’s strong performance.

Live Cattle futures closed an average of 39¢ lower (25¢ lower to $1.00 lower in spot Aug). 

Feeder Cattle futures closed an average of $1.31 lower (32¢ to $2.30 lower).

Wholesale beef values edged higher Monday after dropping to the lowest levels last week since December of 2017.

Choice boxed beef cutout value was $1.27 higher Monday afternoon at $201.74/cwt. Select was $1.28 higher at $191.59.

Corn futures closed 2¢ to 4¢ lower through Jly ’21 and then fractionally lower to 1¢ lower.

Soybean futures closed mostly 3¢ to 5¢ higher.

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Major U.S. financial indices closed higher Monday, led by tech stocks, which were paced by Amazon.

The Dow Jones Industrial Average closed 8 points higher. The S&P 500 closed 27 points higher. The NASDAQ closed 263 points higher.

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“Beef production will be higher year over year for the remainder of the year. This may combine with limited demand to keep wholesale beef prices under pressure going forward,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his latest weekly market comments.     

The most recent World Agricultural Supply and Demand Estimates project beef production this year at 26.93 billion lbs., which would be just 0.81% less than last year. Heavier carcass weights are making up for lost slaughter earlier in the year.

For seasonal perspective, Peel explains carcass weights typically decline significantly in April, May and June. Last year, for instance, steer carcass weights declined 54 lbs. from January (896 lbs.) to a low of 842 lbs. the first week of June. This year, he notes average steer carcass weights in June of 896 lbs. were 16 lbs. less than in January.

“Longer term, beef demand may be affected by the economic recession,” Peel says. “Impacts have not been obvious thus far but unemployment is still high and some unemployment benefits will end this month. With COVID-19 far from controlled, considerable uncertainty remains regarding how school schedules, sporting activities and business travel could affect beef demand this fall.”

Negotiated cash fed cattle prices ended the week generally steady.

The weighted average five-area direct fed steer price through Thursday was $96.32/cwt. on a live basis, which was 35¢ higher than the previous week, but $16.70 less than the same week last year. The average steer price in the beef was $157.58, which was 9¢ less than the previous week and $25.39 less than a year earlier.

Cattle futures meandered higher by Friday’s close, supported by the week’s optimism built by cash feeder prices and thoughts that the low may be in the books for fed cattle prices.

Except for unchanged in spot Aug, Live Cattle futures closed an average of 36¢ higher.       

Feeder Cattle futures closed an average of 38¢ higher.

Choice boxed beef cutout value was 33¢ lower Friday afternoon at $200.47/cwt. Select was 99¢ lower at $190.31.

The average dressed steer weight for the week ending July 4 was 896 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was even with the previous week and 35 lbs. heavier than the previous year. The average dressed heifer weight was 826 lbs., on par with the previous week but 34 lbs. heavier than the same week last year.

Estimated total cattle slaughter for the week ending July 18 was 650,000 head, according to USDA’s Agricultural Marketing Service. That would be 7,000 head fewer (-1.07%) than the previous week’s estimate and 5,000 head fewer (-0.76%) than the same week last year. Year to date estimated total cattle slaughter of 17.15 million head is 1.01 million head fewer (-5.56%) than last year.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed 4¢ higher through Jly ’21 and then fractionally higher to 3¢ higher.

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Major U.S. financial indices closed narrowly mixed Friday. Pressure included the expanding number of coronavirus cases.

The Dow Jones Industrial Average closed 62 points lower. The S&P 500 closed 9 points higher. The NASDAQ closed 23 points higher.

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U.S. beef exports are typically viewed in terms of tonnage, dollars and the impact on the U.S. beef industry, specifically. Export benefits run deeper, though.

Since 2015, indirect exports of corn and soybeans through beef and pork exports has been the fastest-growing category of corn and soybean use, according to the U.S. Meat Export Federation (USMEF).

For perspective, U.S. beef and pork exports last year used 480 million bushels of corn. Corn revenue generated by beef and pork exports totaled $1.8 billion (480 million bushels x average annual price of $3.75/bushel).

U.S. beef and pork exports also used about 3 million tons of distiller’s dried grains with solubles (DDGS) in 2019 at an annual average price of $137/ton, generating $411.8 million in revenue for ethanol mills’ co-products.

U.S. pork exports last year also used 2.12 million tons of soybean meal, which is the equivalent of 89.2 million bushels of soybeans. Soybean revenue generated by pork exports totaled $751.7 million (89.2 million bushels x average annual price of $8.43/bushel).

Snubbed to a different post, beef and pork exports last year contributed more than 12% of the per-bushel price of corn ($0.46/bushel) of an annual average price of $3.75/bushel.

All of that comes from a recently updated study conducted by World Perspectives, Inc. It helps explain why domestic corn and soybean growers invest a portion of their checkoff dollars in market development efforts conducted by USMEF.

“These are challenging times for everyone in U.S. agriculture, with producers facing difficult choices every day,” says Dan Halstrom, USMEF president and CEO. “USMEF greatly appreciates the foresight and confidence shown by the corn and soybean sectors when they invest in red meat exports. This study provides a detailed analysis of the value delivered by that investment.”

Cattle futures stepped higher Thursday, supported by firmer cash prices, chatter about the low for fed cattle being established and an increase in weekly exports.

Net beef export sales of 27,800 metric tons for the week ending July 9 were up noticeably from the previous week and up 68% from the prior four-week average, according to the U.S. Export Sales report from USDA’s Foreign Agricultural Service. Increases were primarily for South Korea, Japan, Mexico, Taiwan, and Canada.

Live Cattle futures closed an average of $1.33 higher (67¢ to $2.05 higher).  

Feeder Cattle futures closed an average of $1.92 higher (67¢ to $3.20 higher).

Choice boxed beef cutout value was 4¢ higher Thursday afternoon at $200.80/cwt. Select was 7¢ lower at $191.30.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 7¢ to 8¢ higher through Mar ’21 and then mostly 4¢ higher.

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Major U.S. financial indices closed lower amid mixed economic news.

Although 10,000 fewer than the previous week, initial jobless claims of 1.3 million, reported by the U.S. Department of Labor, were more than traders expected.

On the other hand, U.S. retail sales beat expectations, climbing 7.5% month to month in June, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 135 points lower. The S&P 500 closed 10 points lower. The NASDAQ closed 76 points lower.

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Based on the monthly Cattle on Feed report, USDA’s Economic Research Service (ERS) estimated 971,000 head of cattle on feed more than 150 days, as of June 1, which was 42% more than the same time last year.

“With expectations of steadying demand for slaughter cattle and a large number of market-ready cattle in feedlots, price forecasts (fed cattle) for both the third and fourth quarters were lowered by $4 to $100/cwt. and by $3 to $103, respectively,” says ERS analysts, in the latest monthly Livestock, Dairy and Poultry Outlook.

In turn, expected higher fed cattle slaughter and increased feedlot marketings should improve demand for feeder cattle, according to those analysts. 

ERS projects the average feeder steer price (basis Oklahoma City) at $133/cwt. in the third quarter and $131 in the fourth quarter for an annual average of $131.70. Prices are projected at $129 in the first quarter of next year and at $132 in the second.

Negotiated cash fed cattle trade continued on Wednesday at mainly steady prices, with live sales at $95/cwt. in the Southern Plains and $96 in the Northern Plains, according to the Agricultural Marketing Service. Dressed trade in the western Corn Belt was at $157-$160.

Cattle feeders offered 1,224 head in the weekly Fed Cattle Exchange auction. Of those, 275 head–three Kansas lots–sold for a weighted average price of $95.62/cwt. with delivery of 1-9 days.

Choice 2-4 steers (169 head) weighing an average of 1,379 lbs. brought an average of $101.79 at the fat auction in Tama, IA, which was 50¢ to 75¢ lower than the prior week.

At Sioux Falls Regional in South Dakota, though, slaughter steers and heifers sold steady to $2 higher. There were 459 Choice 2-3 steers weighing an average of 1,451 lbs. and bringing an average of $100.88.

Cattle futures bounced higher, supported by firm cash fed cattle, as well as current cash demand for feeder cattle.

Live Cattle futures closed an average of 85¢ higher (30¢ higher at the back to $2.50 higher in spot Aug).

Feeder Cattle futures closed an average of $1.40 higher (32¢ higher to $2.70 higher in spot Aug).

Choice boxed beef cutout value was 16¢ lower Wednesday afternoon at $200.76/cwt. Select was 52¢ higher at $191.37.

Corn futures closed mostly fractionally higher.

Soybean futures got a boost from Wednesday’s announcement that China bought 389,000 metric tons for delivery in 2020-21.

Soybean futures closed 4¢ to 8¢ higher through Mar ’21 and then mostly 3¢ higher.

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Major U.S. financial indices continued higher Wednesday, with promising trial results for a COVID-19 vaccine (Moderna), as well as quarterly earnings from Goldman Sachs that beat expectations.

The Dow Jones Industrial Average closed 227 points higher. The S&P 500 closed 29 points higher. The NASDAQ closed 61 points higher.

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COVID-19 is accelerating the divergence between full service restaurants (FSRs) and quick service restaurants (QSRs) that began before the pandemic, according to David Portalatin, food industry advisor for The NPD Group (NPD).

“Long before anyone ever heard of social distancing, consumers were showing an increasing preference for off-premise restaurant meals. Then suddenly this March, we entered a reality where the entire restaurant industry was off-premise only,” Portalatin explains. “That harsh reality was far harsher for FSRs, a segment that saw transaction declines near 80% or worse at the depth of the pandemic in the U.S. In contrast, QSR declines were roughly half as severe thanks to their abundance of drive-thru windows, capacity for high volume pick-up, and the ability of large QSR chains to leverage digital apps as an accelerant, as well as provide a contactless experience.”

For current perspective, FSR customer transactions were 30% less than a year earlier for the week ending July 5, representing a week-to-week decline of 5%, according to NPD’s CREST^®Performance Alerts. Conversely, QSR customer transactions that same week continued to improve, up 4% week to week to a level that was 13% less year over year.

Since mid-March, when the pandemic closed dine-in services, Portalatin explains QSR chains doubled down on their off-premise prowess with streamlined menus optimized for volume and efficiency and by expanding drive-thru capacity with reconfigured traffic flow and added lanes. These and other changes allow continued improvement in QSR customer transactions, whether or not government regulations allow reopening dining rooms.

In fact, Portalatin says many QSR chain operators are finding the incremental cost of opening a dining room to be greater than any incremental margin dollars they might gain and are remaining closed even when governing bodies allow reopening.  

FSR performance, on the other hand, remains largely at the mercy of governmental regulation and the persistence of the coronavirus. 

Pivoting to off-premise is far more difficult for many FSRs, Portalatin explains. These restaurants can employ similar tactics as QSRs, like streamlined menus, and temporary drive-thrus, but none play to the inherent strengths of FSRs. Moreover, as on-premise dining restrictions ease, he says many FSR operators are forced to dismantle much of their temporary off-premise infrastructure so that guests can park, have a waiting area that allows for social distancing, and labor can be redirected to the front of the house.

Negotiated cash fed cattle trade got off to a steady start Tuesday with live prices in the Southern Plains at $95/cwt., but a few up to $96.25 in Kansas, according to the Agricultural Marketing Service.

Cattle futures softened with some likely profit taking as traders take stock of the potential upside beyond the backlog of fed cattle.

Live Cattle futures closed an average of 73¢ lower (32¢ lower to $1.22 lower).          

Feeder Cattle futures closed an average of 64¢ lower (30¢ to $1.20 lower).

Choice boxed beef cutout value was $2.34 lower Tuesday afternoon at $200.92/cwt. Select was $1.03 lower at $190.85.

Corn futures closed mostly 2¢ lower.

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

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Major U.S. financial indices bounced higher Tuesday. Support included more positive quarterly earnings than expected from J.P Morgan Chase.

The Dow Jones Industrial Average closed 556 points higher. The S&P 500 closed 42 points higher. The NASDAQ closed 97 points higher.

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“The COVID impacts on cattle and beef markets are not all behind us, but the majority of the disruptions appear to have passed,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “Beef cutout prices have returned to normal levels with tenderloins being rather weak. Fed steer and heifer slaughter volumes have returned to strong levels and the Saturday kill is very comparable to last year’s high values. Packer margins remain rather strong, but are well off of record highs, and are being realized as plants are back to operating at or close to full capacity.”

Koontz notes exceptions to normality, which will remain for some time, include the inventory of cattle on feed, the number of long-fed cattle and the resulting heavier carcass weights.

“The supply scenario is usually difficult this time of year with gradual declines in numbers but higher animal weights. And that difficult scenario is usually on the tail of market opportunities in the spring,” Koontz explains. “The disruptions this year eliminated the most persistent opportunity and could not have been worse timed. I, and the futures market, think it will take us through December or into next year for the market outlook to clearly improve.”

Koontz also points to deepening drought conditions as another near-term market factor.

“I expect to see beef cow liquidation be more substantial in the fall and I expect to see stronger western forage prices through the rest of the year; the extent of both, depending on the weather,” Koontz says. “Forecasts are for high and dry through the remainder of this year, with the potential for more normal weather during next year and starting next winter.”

Although beef cow slaughter increased significantly in recent weeks, Koontz notes there is no indication of drought-forced cow liquidation currently, but beef cow feeding is reported in the West.