Daily Market Highlights

The weighted average five-area direct fed steer price last week was $95.98/cwt. on a live basis, which was $1.11 higher than the previous week but $17.39 less than the same week last year. The average price in the beef was $157.60, which was $3.92 higher than the prior week but $25.21 less than the prior year, according to USDA. Fed cattle transactions of 83,634 head were 3,098 head fewer than the prior week but 19,304 head more (+30%) than the same week a year earlier.

Firmer to higher cash fed cattle prices helped Cattle futures close mostly higher Monday. Feeder Cattle were also supported by a steep decline in Corn futures.

Except for an average of 25¢ lower through the front three contracts, Live Cattle futures closed an average of 31¢ higher.       

Feeder Cattle futures closed an average of $1.41 higher.

Choice boxed beef cutout value was $1.24 lower Monday afternoon at $203.26/cwt. Select was $2.41 lower at $191.88.

Friday’s World Agricultural Supply and Demand Estimates and continued positive crop progress weighed on grain futures to start the week.

Corn futures closed 6¢ to 7¢ lower through Jul ’21 and then mostly 2¢ to 4¢ lower.

Soybean futures closed 12¢ to 15¢ lower through May ’21 and then 5¢ to 10¢ lower.

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Major U.S. financial indices roared higher early Monday, buoyed by positive coronavirus vaccine progress. Investor sentiment turned bearish, though, after California announced it was closing indoor restaurants, bars and movie theatres, in order to slow recently escalating COVID-19 cases.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 29 points lower. The NASDAQ closed 226 points lower.

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Nationwide, pasture and range conditions continue to erode, according to the latest USDA Crop Progress report for the week ending July 12.

36% of pasture and range was rated in Good (31%) or Excellent (5%) condition, which was 32% less than last year. 30% was rated in Poor (19%) or Very Poor (11%) condition, compared to 8% at the same time last year.

Cattle states with 30% or more of the pasture and range in Poor and Very Poor condition include: Arizona (31%); California (55%); Colorado (44%); New Mexico (58%); Oregon (54%); Texas (39%); Wyoming (36%).

According to the U.S. Drought Monitor (July 7) 48.51% of the Continental U.S. was rated from abnormally dry to extreme drought. That was 3.09% more than the previous week and 37.68% more than the same time last year.

29% of corn was silking, which was 3% less than last year but 15% more than the five-year average. 3% was at the dough stage, which was 1% more than last year, but on par with the average. 69% is rated as Good (52%) or Excellent (17%), which is 11% more than last year. 8% was rated as Poor (6%) or Very Poor (2%), which was 4% less than a year earlier.

48% of soybeans were blooming, which was 29% more than last year and 8% more than the average. 11% were setting pods, compared to 3% last year and 10% for average. 68% was rated as Good (54%) or Excellent (14%), which was 14% more than last year. 7% was rated as Poor (5%) or Very Poor (2%), compared to 12% the previous year.

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Beef production played a role in the precipitous decline in May U.S. beef exports, but higher prices and economic turmoil wrought by COVID-19 were likely factors, too.

As mentioned in Cattle Current last week, U.S. beef exports in May were 33% less than a year earlier, and the least in 10 years, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Value was 34% less than the same time last year at $480.1 million.

“It is not clear how much of the drop in May beef exports was due to reduced supply and how much was due to reduced demand because of global recession,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Beef production dropped 19.7% in April followed by a 19.9% drop in May. There is little doubt that May beef exports were curtailed in part simply due to a lack of available product. No doubt, some export orders were simply unable to be filled in May. It is likely, however, that part of the decrease in beef exports was due to macroeconomic weakness in some countries, combined with higher U.S. beef prices. Choice boxed beef prices increased to a monthly average of $263.35/cwt. in April, up from the March level of $228.05/cwt. May Choice boxed beef prices increased to $420.00/cwt., up 84.2% over the March levels.”

In terms of specific markets, Peel explains May exports to Japan, the leading U.S. market, were 26.3% less year over year. Beef exports to Korea, the second leading U.S. market were 21.7% less. They were 78.0% less to Mexico, which recently occupied the position as third largest importer of U.S. beef.

“The drop in beef exports to Mexico, in particular, is very concerning,” Peel says. “It is doubtful that reduced supply alone explains the 78.0% drop. Mexico is experiencing a sharp recession, compounded by a weaker Mexican Peso in April and May (with some recovery in June). In 2019, Mexico accounted for 14.0% of total U.S. beef exports for the year, but in May only amounted to 4.4% of total monthly exports. May exports of pork to Mexico were down 21.9% and broiler exports were down 27.6%, highlighting the overall demand weakness in Mexico.”

Looking ahead, Peel notes U.S. beef production in June recovered to about 97% of year-ago levels. Choice boxed beef prices declined to an average of $242.30/cwt.

 “Now that production has substantially recovered, the U.S. industry is better able to meet the needs of both domestic and international customers,” explains Dan Halstrom, USMEF president and CEO. “While the foodservice and hospitality sectors face enormous challenges, they are on the path to recovery in some markets while retail demand remains strong. Retail sales have also been bolstered by a surge in e-commerce and innovations in home meal replacement, as convenience remains paramount.”

“June beef exports will likely bounce back significantly from the May drop but it will be important going forward to monitor both the residual impact of April-May processing disruptions and the ongoing global economic weakness to see how beef export prospects develop in the second half of the year,” Peel says.

The weighted average five-area direct fed steer price through Thursday was $95.97/cwt. on a live basis and $157.67 in the beef. That was $1.06 and $3.84 higher, week to week, respectively.

Speculation by some that that the low is in for cash fed cattle price, along with normalizing wholesale beef values, helped support Cattle futures to end the week. Lower Corn futures on Friday also supported Feeder Cattle.

Live Cattle futures closed an average of 76¢ higher.

Feeder Cattle futures closed an average of $1.24 higher.

Choice boxed beef cutout value was 91¢ higher Friday afternoon at $204.50/cwt. Select was 54¢ lower at $194.29.

Increased beginning corn and soybean stocks projected in the monthly World Agricultural Supply and Demand Estimates (see below) weighed on futures Friday.

Corn futures closed mostly 10¢ to 11¢ lower through Jul ’21 and then mostly 6¢ lower.

Soybean futures closed 9¢ to 12¢ lower.

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Major U.S. financial indices closed higher Friday, with much of the overall support attributed to promising results for a coronavirus treatment.

The Dow Jones Industrial Average closed 369 points higher. The S&P 500 closed 32 points higher. The NASDAQ closed 69 points higher.

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USDA’s monthly World Agricultural Supply and Demand Estimates increased expectations for 2020 beef production and total red meat and poultry production.

Beef production for this year was projected at 26.93 billion lbs., which was 260 million lbs. more (+0.97%) than the previous month’s estimate, based on higher cattle slaughter and heavier carcass weights. The total would be 221 million lbs. less (-0.81%) than in 2019.

“Cattle price forecasts for 2020 are lowered from last month on prices to date and continued large supplies of fed cattle,” according to analysts with USDA’s Economic Research Service (ERS).

ERS projects the five-area direct weighted average steer price at $100/cwt. in the third quarter and at $103 in the fourth quarter for an annual average price of $106.80. That’s $1.80 less than the June projection. The projected annual price next year is $110, with prices estimated at $104 in the first quarter and $105 in the second.

ERS estimates total red meat and poultry production for this year at 106.54 billion lbs., which is 1.54 billion lbs. more (+1.46%) than the previous month’s estimate. That would be 1.28 billion lbs. more (+1.21%) than last year.

Among other WASDE highlights:

Corn

USDA estimated corn production for this year at 15.0 billion bu., which was 995 million bu. less (-6.22%) than the previous month’s estimate, given 5 million fewer planted acres projected in June’s Acreage report.

Corn production, with projected yield of 178.5 bu./acre, would be 1.38 billion bu. more than last year (+10.16%). Beginning corn stocks were projected 145 million bu. higher, based on lower estimated use forecast for 2019-20.

However, with 2020-2021 supply declining more than use, the forecast season-average corn price received by producers was raised 15¢ to $3.35/bu. 

Soybeans

Soybean production is projected at 4.14 billion bu., up 10 million on increased harvested area (83.0 million acres) in the June 30 Acreage report. The soybean yield forecast was unchanged at 49.8 bu./acre. With higher beginning stocks, 2020-21 soybean supplies were raised 45 million bu.

The U.S. season-average soybean price for 2020-21 is forecast at $8.50/bu., up 30¢, partly reflecting higher price expectations following the June Acreage report. The soybean meal price is projected at $300/short ton, up $10 from the previous month. The soybean oil price forecast is unchanged at 29.0¢/lb. 

Wheat

The outlook for 2020-21 U.S. wheat is for larger supplies, lower domestic use, unchanged exports, and increased stocks. Supplies were raised, with larger beginning stocks more than offset by lower production.

Ending wheat stocks for 2020-21 were projected 17 million bu. higher than the previous month at 942 million. The projected season-average farm wheat price (SAFP) was unchanged at $4.60/bu., compared to the revised 2019-20 SAFP of $4.58.

The week’s mostly steady to stronger negotiated cash fed cattle trade helped lift Cattle futures on Thursday.

Except for 30¢ lower in the back contract, Live Cattle futures closed an average of 50¢ higher.

That was despite the latest U.S. Export Sales report from USDA’s Foreign Agricultural Service. For the week ending July 6, net U.S. beef export sales of 9,500 metric tons (mt) were 23% less than the previous week and 51% less than the previous four-week average. Increases were primarily for Japan, South Korea, China, Mexico, and Taiwan.

Feeder Cattle futures closed an average of 56¢ higher.

At $133.69, the CME Feeder Cattle Index was at the highest level since the first part of March.

Choice boxed beef cutout value was 24¢ lower Thursday afternoon at $203.59/cwt. Select was 69¢ lower at $194.83.

USDA’s latest weekly Actual Slaughter Under Federal Inspection report underscores the continued recovery in beef packing capacity. Total fed cattle slaughter for the week of June 27 was 532,820 head, which was 20,029 more than the previous week–the most since the last week of March–but 5,221 head fewer than the previous year. Total cattle slaughter of 664,812 head was 19,151 head more than the previous week, but 5,499 head fewer than the previous year.

That same report speaks to the continued backlog of fed cattle, with the average dressed steer weight for the week at 896 lbs., which was 6 lbs. heavier than the previous week and 42 lbs. more than the previous year. The average dressed heifer weight of 826 lbs. was 3 lbs. heavier than the previous week and 37 lbs. heavier than the same time a year earlier.

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Grain futures continued to firm and gain Thursday, helped along by weather and harvest, in the case of wheat. There was also likely some positioning ahead of the monthly World Agricultural Supply and Demand Estimates, due out Friday.

The aforementioned Export Sales report was also supportive.

Net corn export sales of 599,200 mt for 2019-2020 were up 66% from the prior week and up 30% from the prior four-week average. Increases were primarily for China, Colombia, Mexico, Honduras and Nicaragua.

Net soybean export sales of 952,200 mt for 2019-2020 were up noticeably from the previous week and up 60% from the prior four-week average. Increases were primarily for China, Indonesia, Pakistan, Bangladesh and Mexico.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed 1¢ to 4¢ higher.

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Major U.S. financial indices closed mixed on Thursday. While tech stocks continued to surge higher, climbing coronavirus infections in the U.S. cast a pall.

The Dow Jones Industrial Average closed 361 points lower. The S&P 500 closed 17 points lower. The NASDAQ closed 55 points higher.

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“The COVID-19 pandemic continues to have devastating impacts on public health and the economies of the U.S. and many other countries. There is much uncertainty about the future impacts of COVID-19, but even in the best of circumstances, the economic impacts are enormous,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his latest market comments.

He points to the sobering GDP projections made by a host of organizations.

The U.S. Federal reserves estimates U.S. GDP this year at -6.5%. The Organization for Economic Cooperation and Development projects -7.3%, but -8.5% if there’s a secondary coronavirus outbreak. The International Monetary Fund (IMF) sees GDP at -8.0%.

Further, Peel says the Federal Reserve’s most recent forecast is for the U.S. unemployment rate this year to be 9.3%.

Peel shared this observation from the IMF:

“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021 global growth is projected at 5.4%. Overall, this would leave 2021 GDP some 6.5 percentage points lower than in the pre-COVID-19 projections of January 2020.”

Negotiated cash fed cattle trade continued on Wednesday with prices mainly steady to higher, compared to last week. Live prices in the Texas Panhandle were steady to $2 higher at $95/cwt.; steady to $1 lower in Kansas at $94-$95. For the week, live sales are steady in Nebraska at $95-$96 and $3-$5 higher in the beef at $157-$160. In the western Corn Belt, live sales are $3 higher than last week at $99-$100 and $5-$7 higher in the beef at $160.

Cattle feeders offered 1,390 head in the weekly Fed Cattle Exchange auction. Of those, 659 head sold, all from Kansas: 509 head for delivery at 1-9 days for a weighted average price of $95.16; 150 head for delivery at 1-17 days for a weighted average price of $95.

Live Cattle futures closed an average of 41¢ lower.

Feeder Cattle futures closed an average of 69¢ lower.

The monthly five-area direct average steer price in June was $103.82/cwt. on a live basis (FOB), which was $7.71 less than the previous month and $8.10 less than the prior year, according to USDA’s monthly report. The average live weight was 1,441 lbs., which was 21 lbs. lighter month to month, but 61 lbs. heavier year over year. The average dressed steer price (delivered) was $165.69 in June, which was $13.33 less than in May and $16.01 less than the previous year. The average dressed steer weight in June of 926 lbs. was 9 lbs. lighter than the previous month, but 43 lbs. heavier than the same time a year earlier. For January through June, total five-area direct confirmed sales of 1.91 million head were 9.75% less than the same period a year earlier.

Choice boxed beef cutout value was $1.47 lower Wednesday afternoon at $203.83/cwt. Select was $1.32 lower at $195.52.

Corn futures closed mostly 1¢ to 2¢ higher.

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

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The Wall Street seesaw continued Wednesday, to the upside this time, with tech stocks leading Major U.S. financial indices higher.

The Dow Jones Industrial Average closed 177 points higher. The S&P 500 closed 24 points higher. The NASDAQ closed 148 points higher.

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Recovery of U.S. restaurant customer transactions stalled for the second week in a row as COVID-19 cases continue to increase in a number of states, according to The NPD Group (NPD).

For the week ending June 28, total customer transactions at major U.S. restaurant chains were down 14% versus the same week a year ago.  That’s a 1% decline from the previous week, based on NPD’s CREST® Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 72 quick service, fast casual, midscale, and casual dining chains.

The rise in COVID-19 case counts is causing local and state authorities to delay reopening, and in some cases, reinstating on-premise restaurant dining restrictions. In Texas, for example, restaurants may continue to offer on-premise dining, but capacity was rolled back from 75% to 50%. California announced last week the closing of its nearly 86,000 restaurants to on-premise dining. 

Nationwide, full service restaurant customer transactions were 25% less than a year earlier, for the week ending June 28. That was a 1% weekly decline overall, while transactions fell 6-9% in states where coronavirus is increasing.

Customer transactions at major quick service restaurant chains declined by 13% compared to the same week last year, down 1 point from the previous week’s decline.

“It’s apparent that the road to recovery is going to be a challenging one for the U.S. restaurant industry,” says David Portalatin, NPD food industry advisor. “Consumer demand is there, as is the want for normalcy, but there is nothing normal about this situation.”

Although too few to trend, there were a few early negotiated cash fed cattle sales in the Texas Panhandle on Tuesday at $95/cwt. on a live basis, and a few in Kansas at $94-$95. There were also a few dressed trades in Nebraska at mostly $157-$160 and a few in the western Corn Belt at $160 (a few live sales at $100).

Cattle futures paused the recent rally, giving back a minority of gains.

Except for 25¢ higher in near Oct and 2¢ higher at the back, Live Cattle futures closed an average of 37¢ lower.

Except for 5¢ higher in Apr, Feeder Cattle futures closed an average of 60¢ lower (25¢ lower at the back to $1.22 lower in spot Aug).

Choice boxed beef cutout value was 16¢ lower Tuesday afternoon at $205.30/cwt. Select was 13¢ lower at $196.84.

Corn futures closed mostly 3¢ lower through Jul ’21 and then mostly fractionally lower.

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

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Major U.S. financial indices closed lower Tuesday, with most pressure apparently tied to surging coronavirus cases in the U.S.

The Dow Jones Industrial Average closed 396 points lower. The S&P 500 closed 34 points lower. The NASDAQ closed 89 points lower.

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Agricultural producer sentiment improved in June for the second month in a row, according to the Purdue University/CME Group Ag Economy Barometer. The index was up 14 points from May to a reading of 117.

The Index of Current Conditions rose 19% from May to a reading of 99, and the Index of Future Expectations climbed 12% from May to a reading of 126.

The Ag Economy Barometer is based on responses from 400 U.S. agricultural producers. The most recent survey was conducted June 22-26.

“This month’s survey was conducted after the USDA announced details regarding the Coronavirus Food Assistance Program (CFAP),” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “A more favorable spring planting season combined with assistance from CFAP helps explain this month’s improvement in farmer sentiment, yet a majority of producers believe additional economic assistance will be needed in 2020.”

The majority of producers (60%) indicated that CFAP somewhat (53%) or completely (7%) relieved their concerns about the impact of the virus on their 2020 farm income. However, 64% of respondents indicated that they think it will be necessary for Congress to pass another bill to provide more economic assistance to U.S. farmers.

Early dressed sales in the western Corn Belt on Monday were $5-$7 higher than last week at $160/cwt., according to USDA’s Agricultural Marketing Service. Although too few to trend, there were some live sales in Kansas at $93-$95 (steady to $2 lower) and some dressed sales in Nebraska at $155-$160 ($5-$6 higher).

Cattle futures built on the previous session’s gains, supported by surging outside markets and likely helped along by technicals.

Live Cattle futures closed an average of 96¢ higher (40¢ higher to $1.25 higher).

Feeder Cattle futures closed an average of $1.09 higher (55¢ to $1.37 higher).

Choice boxed beef cutout value was 2¢ higher Monday afternoon at $205.46/cwt. Select was $1.79 lower at $196.97.

Corn futures closed 2¢ to 4¢ higher through Jul ’21 and then fractionally higher to 1¢ higher.

Soybean futures closed mostly 7¢ to 9¢ higher.

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Major U.S. financial indices closed solidly higher Monday, led by tech stocks and despite the continuing escalation in COVID-19 infections.

The Dow Jones Industrial Average closed 459 points higher. The S&P 500 closed 49 points higher. The NASDAQ closed 226 points higher.

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Recent export demand underscores the negative global impact of COVID-19.

U.S. beef exports in May were 33% less in may than a year earlier at 79,280 metric tons (mt)—the lowest monthly total in 10 years—according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Value was 34% less than the same time last year at $480.1 million.

For January through May, beef exports fell 3% below last year’s pace in volume (512,596 mt) and were 5% lower in value ($3.14 billion).

“As protective measures related to COVID-19 were being implemented, plant disruptions peaked in early May with a corresponding temporary slowdown in exports,” explains USMEF President and CEO Dan Halstrom. “Unfortunately, the impact was quite severe, especially on the beef side. Exports also faced some significant economic headwinds, especially in our Western Hemisphere markets, as stay-at-home orders were implemented in key destinations and several trading partners dealt with slumping currencies.”

Halstrom notes that the recent rebound in beef and pork production will help exports regain momentum in the second half of 2020. The global economic outlook is challenging, but he looks for export volumes to recover quickly in most markets as U.S. red meat remains an important staple, not only in the United States but for many international consumers as well.

“In what has been a remarkably turbulent year, consumer demand for U.S. red meat has proven very resilient,” Halstrom says. “Now that production has substantially recovered, the U.S. industry is better able to meet the needs of both domestic and international customers. While the foodservice and hospitality sectors face enormous challenges, they are on the path to recovery in some markets while retail demand remains strong. Retail sales have also been bolstered by a surge in e-commerce and innovations in home meal replacement, as convenience remains paramount.”

May U.S. pork exports of 243,823 mt were 12% more than a year earlier but down 13% from the monthly average for the first quarter of 2020. Export value was $620.9 million, up 9% year-over-year but 16% below the first quarter monthly average.

Negotiated cash fed cattle trade ended the holiday-shortened week steady to $2 lower on a live basis in the Southern Plains at $93-$95/cwt.; steady to $1 higher in Nebraska at $95-$96 and unevenly steady in the western Corn Belt at $96-$97. Dressed trade was $1 lower in Nebraska at $154-$155 and steady to $4 lower in the western Corn Belt at $152-$155.

Cattle futures extended gains, though, for no apparent reason.

Live Cattle futures closed an average of $1.08 higher (32¢ higher to $2.10 higher in spot Aug).

Feeder Cattle futures closed an average of $1.78 higher ($1.47 to $2.55 higher).

Choice boxed beef cutout value was 6¢ higher Thursday afternoon at $205.44/cwt. Select was 33¢ higher at $198.76.

The average dressed steer weight for the week ending June 20 was 890 lbs., which was 6 lbs. lighter than the previous week, but 36 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 823 lbs. was 1 lb. lighter than the previous week, but 33 lbs. heavier than the same week a year earlier.

Grain futures softened Thursday, following strong gains earlier in the week. Pressure likely included week-end positioning and profit taking, as well as the bearish weekly Export Sales report (week ending June 25) from USDA’s Foreign Agricultural Service.

Net export corn sales of 361,100 metric tons (mt) for 2019-2020 were down 22% from the previous week and 32% from the prior four-week average.

Net soybean export sales of 241,700 mt for 2019-2020 were a marketing-year low, down 60% from the previous week and 63% from the prior four-week average.

Corn futures closed mostly 3¢ to 7¢ lower.

Soybean futures closed fractionally lower to 2¢ lower.

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Major U.S. financial indices climbed higher Thursday on the back of a national employment report that shattered expectations to the upside.

Total nonfarm payroll employment rose by 4.8 million in June, according to the Employment Situation Summary from the U.S. Bureau of Labor Statistics. The unemployment rate declined to 11.1%.

“These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it,” according to the report. “In June, employment in leisure and hospitality rose sharply. Notable job gains also occurred in retail trade, education and health services, other

services, manufacturing, and professional and business services.”

Average hourly earnings for all employees on private nonfarm payrolls in June fell by 35¢ to $29.37.

The Dow Jones Industrial Average closed 92 points higher. The S&P 500 closed 14 points higher. The NASDAQ closed 53 points higher.

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“To further aid in a gentle transition back toward economic normality, federal economic policy will have to shift from sending families money to maintain social distancing to helping businesses maintain employment,” says Jeffrey Dorfman, professor of agricultural and applied economics at the University of Georgia. That’s part of a recent publication from the Council for Agricultural Science and Technology (CAST): Macroeconomic Impacts and Policies in the Face of COVID-19.

Although the government extended forgivable loans to small businesses through the Paycheck Protection Program, Dorfman explains the current unemployment bonus of $600 per week could make it harder for some businesses to reopen.

“Workers are currently making more from unemployment than from working, particularly in the retail, hospitality, and personal services sectors that are home to so many small businesses,” Dorfman says. “With the unemployment bonus, not working can pay the equivalent of about $50,000 per year. Few small businesses can compete with that when roughly half of all workers made less than that just a few months ago.”

Worker challenges aside Dorfman says, economic recovery requires customers feeling safe about returning to restaurants, local shops, movie theaters and all of the rest.

“Until a vaccine and/or effective treatments are widely available, the best confidence restorer will be clearly posted and followed safety protocols that minimize the risk of frequenting public businesses and maximize the amount of economic activity that can safely take place,” Dorfman says. “But a full recovery requires either a vaccine or treatment that convinces people contracting the virus is more a nuisance than a mortal risk.”

Negotiated cash fed cattle prices Wednesday were steady to $2 lower in the Southern Plains at $95/cwt. on a live basis; steady to $1 higher in Nebraska at $95-$96. Dressed trade for the week is $1 lower in Nebraska at $154-$155; steady to $4 lower in the western Corn Belt at $152-$155.

Cattle feeders offered 1,814 head in the weekly Fed Cattle Exchange Auction. There were 144 head—one lot of Kansas steers—selling for a weighted average price of $95/cwt., for delivery at 1-9 days. Two other lots were passed out at $93.

Cattle futures wobbled to start the day but picked up steam as the day progressed. Depending on your leanings, Live Cattle seem to be looking past the current backlog of fed cattle, or largely priced it in a ways back.

Live Cattle futures closed an average of $1.31 higher.

Feeder Cattle futures closed an average of 80¢ higher (22¢ higher in spot Aug to $1.42 higher).

Choice boxed beef cutout value was $1.59 lower Wednesday afternoon at $205.38/cwt. Select was $1.47 lower at $198.43.

Grain futures extended gains Wednesday, buoyed by USDA’s recent reports.

Corn futures closed 8¢ to 10¢ higher through Jul ’21 and then 3¢ to 4¢ higher.

Soybean futures closed 16¢ to 19¢ higher.

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Major U.S. financial indices closed mixed on Wednesday, with nervousness about the economy’s start-and-stop reopening countered by positive employment news.

Private sector employment increased by 2.37 million in June, according to the ADP National Employment Report^®.

“As the economy slowly continues to recover, we are seeing a significant

rebound in industries that once experienced the greatest job losses. In fact, 70% of the jobs added this month were in the leisure and hospitality, trade and construction industries,” says Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

The Dow Jones Industrial Average closed 77 points lower. The S&P 500 closed 15 points higher. The NASDAQ closed 95 points higher.

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“Slaughter cow prices have been one of the few bright spots for cattle producers over the past few months. Slaughter cow prices in the Southern Plains averaged $57.84/cwt. over the past six weeks of available data, which is 19.5% above the same period in 2019. Generally, cull cow markets are most directly related with ground beef demand,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest issue of In the Cattle Markets.

Total cow slaughter so far this year is about par with 2019, with beef cow slaughter up about 2% and dairy cow slaughter down about 2%, according to Maples. He notes the 6.7% increase in beef cow slaughter during the first two weeks of June is likely due in part to delayed marketing by some producers.

“Lower calf prices could drive increased beef cow culling later in the year,” Maples says. “Dairy slaughter is near the seasonal low point and milk prices have rebounded, which may prevent significant dairy cow culling. While the supply picture is becoming a little clearer, ground beef demand will continue to be key for support of beef cow cull prices.”

There was no Afternoon Slaughter Cattle Review from USDA at press time. However, the Direct Slaughter Cattle Reporting Dashboard from AMS had live cattle on Tuesday bringing an average of just over $97/cwt.; close to $153 in the beef.

Cattle futures started the day in positive territory before USDA’s grain-friendly Acreage and Grain Stocks reports pounded Feeder Cattle futures.

Other than $3.35 lower in expiring spot Jun and 20¢ higher in the back contract, Live Cattle futures closed an average of 20¢ lower.

Feeder Cattle futures closed an average of $1.00 lower (65¢ lower in spot Aug to $1.20 lower).

Choice boxed beef cutout value was $1.39 lower Tuesday afternoon at $206.97/cwt. Select was 81¢ lower at $199.90.

Corn and soybean futures bounced higher Tuesday, buoyed by the aforementioned USDA reports.

Corn futures closed 12¢ to 15¢ higher through Jul ’21 and then 4¢ to 7¢ higher.

Soybean futures closed 16¢ to 20¢ higher through Mar ’21 and then mostly fractionally higher to 12¢ higher.

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Major U.S. financial indices closed higher again Tuesday, led by tech stocks and despite continuing concerns about increasing coronavirus cases.

In remarks to the U.S. House Committee on Financial Services, Federal Reserve Chair, Jerome Powell put it this way: “Output and employment remain far below their pre-pandemic levels. The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus. A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.”

The Dow Jones Industrial Average closed 217 points higher. The S&P 500 closed 47 points higher. The NASDAQ closed 184 points higher.

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USDA projects acres of all hay harvested this year at 52.38 million acres, which would be 44,000 fewer acres (-0.08%) than last year, according to the Acreage report from the National Agricultural Statistics Service (NASS).

The decline comes in forecast acres of alfalfa and alfalfa mixtures at 16.35 million acres, which would be 381,000 fewer acres (-2.33%) than last year. All other hay acres of 36.03 million acres would be 347,000 acres more (+0.97%) than the previous year.

Corn acreage is projected at 92.01 million acres, which would be 2.31 million acres more (+2.57%) than last year. However, the projection is about 5 million acres less than the initial outlook in USDA’s Prospective Plantings report that came out at the end of March. Acreage harvested for grain is forecast at 84.02 million acres, which would be 2.70 million acres more (+3.32%) than last year.

Corn stocks in all positions June 1 totaled 5.22 billion bu., according to USDA’s Grain Stocks report. That’s 21.43 million bu. more (+0.41%) than the same time last year.

Of total corn stocks, 3.03 billion bu. are stored on farms, up 3% from a year earlier. Off-farm stocks, at 2.20 billion bu., are down 2% percent from a year ago.

Soybean acres are estimated to be 7.73 million acres more (+3.32%) than last year at 83.83 million acres. That’s about 325,000 acres more than the Prospective Plantings projection. Harvested soybean acres are forecast at 83.02 million acres, which would be 8.07 million acres more (+10.77%) than the previous year.

Soybean stocks in all positions June 1 of 1.39 billion bu. were 397.09 million bu. less (-22.7%) than the same time a year earlier.

On-farm soybean stocks totaled 633 million bu., down 13% from a year ago. Off-farm stocks, at 753 million bu., were 28% less than a year ago.

Acreage for all wheat this year is estimated at 44.25 million acres, which would be 908,000 fewer acres (-2.01%) than last year and the least since records began in 1919. Harvested wheat acres are projected at 36.68 million acres, which would be 484,000 fewer acres (-1.30%) than the prior year.

Wheat stocks stored in all positions June 1 of 1.04 billion bu. were 35.92 million bu. less (-3.32%) than the prior year.

On-farm all wheat stocks were estimated at 232 million bu., up 12% from a year earlier. Off-farm stocks of 812 million bu., are 7% less.

Packers up north got a head start on the holiday-shortened week Monday, paying steady to $3 less for negotiated cash fed cattle at $153/cwt. on a dressed basis in the western Corn Belt.

The five-area average direct fed steer price last week was $96.21/cwt. on a live basis, which was $4.57 less than the prior week. The average steer price in the beef was $154.78, which was $5.92 less. Prices the same week last year were $110.13 and $179.02, respectively.

Even so, Cattle futures ended Monday higher, helped along by outside markets and despite the bounce in Corn futures. Higher wholesale beef values also helped.

Live Cattle futures closed an average of 64¢ higher.

Except for 20¢ lower in the back contract, Feeder Cattle futures closed an average of 50¢ higher. 

Choice boxed beef cutout value was $1.19 higher Monday afternoon at $208.36/cwt. Select was $1.86 higher at $200.71.

Grain futures traded higher, perhaps buoyed by positioning ahead of Tuesday’s Grain Stocks and Acreage reports due from USDA.

Corn futures closed 7¢ to 9¢ higher through Sep ’21 and then 4¢ to 6¢ higher.

Soybean futures closed mostly 1¢ higher through Jan ’21 and then mostly 5¢ to 6¢ higher.

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Major U.S. financial indices on Monday bounced back from steep losses in the previous session.

Positive news on the day included a record rebound in pending home sales, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, rose 44.3% to 99.6 in May, the stoutest month-over-month gain since NAR started the series in January 2001. However, contract signings were 5.1% less year over year.

“The outlook has significantly improved, as new home sales are expected to be higher this year than last, and annual existing-home sales are now projected to be down by less than 10%, even after missing the spring buying season due to the pandemic lockdown,” says Lawrence Yun, NAR’s chief economist.

The Dow Jones Industrial Average closed 580 points higher. The S&P 500 closed 44 points higher. The NASDAQ closed 116 points higher.

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“After the disappointing shortages and high beef prices during Memorial Day, the improved beef situation for this grilling holiday is a great relief,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.  “Grocery stores should be well stocked in time for July 4 and retail prices are adjusting down rapidly. For individual stores, it may depend on their particular supply arrangements.” 

In his weekly market comments, Peel explains actual slaughter for the week ending June 13 exceeded year-ago levels for the first time since the first week of April.

Of course, supplies of competing meats are growing, too.

Although decreased broiler chick placements in April and May will likely lead to a modest third-quarter decrease in production, Peel says total production for beef, pork and broilers is projected to increase to a new annual record this year.

As for pork, Peel explains, the most recent Quarterly Hogs and Pigs (June) report pegged the total hog inventory at 79.6 million head, up 5.2% year over year and 3.0% more than in March.

According to Peel, beef production this year is projected at 27.41 billion lbs., 0.6% more than last year. Pork production for the year is estimated to be 3.4% more the last year at 28.47 billion lbs. and broiler production is projected 1.7% more at 44.16 billion lbs. Total red meat and poultry production is projected to be 1.9% more than last year at 106.74 billion lbs.