Daily Market Highlights

Equities climbed early Tuesday, helping to drag Cattle futures along, but late pressure took them lower.

Other than 5¢ lower in spot Apr, Live Cattle futures closed an average of $1.03 lower (60¢ to $1.47 lower). 

Except for 2¢ lower in spot Mar, Feeder Cattle futures closed an average of $1.96 lower ($1.17 to $2.50 lower).

Wholesale beef values were steady on Choice and higher on Select with moderate demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 9¢ higher Tuesday afternoon at $206.62/cwt. Select was $1.54 higher at $202.70.

Corn futures closed 3¢ to 7¢ higher.

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

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Equities started Tuesday’s Wall Street session extending the previous day’s gains, helped along by the Federal Reserve announcing a 0.50% rate cute, ahead of its regular meeting.

“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate by 0.50% to 1.0% to 1.25%,” according to the Fed statement. “The Committee is closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy.”

Investor attitudes soured later in the session, though, pushing major U.S. financial indices lower. One theory is that investors took the early rate cut by the Fed to mean that worse economic data than expected is in the wings.

The Dow Jones Industrial Average closed 785 points lower. The S&P 500 closed 86 points lower. The NASDAQ was down 268 points.

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Demand for meat is accelerating with $50.5 billion in sales for 2019, according to The Power of Meat 2020—the 15th-annual in-depth study of meat and poultry through shoppers’ eyes—from the Food Industry Association (FMI), the Foundation for Meat and Poultry Research and Education and the foundation for the North American Meat Institute (Meat Institute).

Meat department sales are strong in dollars and volume, driven by beef and chicken, and spending per household increased. When it comes to meat consumption, moderation is far more popular than elimination, with flexitarians (12%) looking to reduce their animal protein through smaller portion sizes and/or a day without meat/poultry.

“One of the most compelling storylines in the analysis is that 83% of shoppers purchase specific cuts of meat and they are eating smaller portions, but with total volume sales up slightly, that means they are eating less more often,” says Rick Stein, FMI Vice President, Fresh Foods.

Among the top 10 findings of the Power of Meat 2020:

Plant-based meat alternatives are a small but growing market. Total store plant-based meat alternative sales were $760 million in 2019 and grew 11.8%. They are mostly an occasional choice driven by perceived health benefits, being a good source of protein, just something different and for environmental reasons. Blended vegetable/meat items, such as mushroom burgers, have a higher and greater cross-population appeal, and can be a bridge to the societal and health benefits people look for, while keeping meat on the plate.

Time-saving solutions drive meat and cooking appliance choices.  While the number of weekly home-cooked meals dropped to 4.5 over 2019, dinners containing animal protein increased to 3.9. Newer cooking appliances, including the Instant Pot and air fryer, continue to make inroads in both ownership and being used to prepare meat and poultry.

Production claims remain popular. Organic, grass-fed and no-antibiotics-ever offerings saw robust sales gains, but overall trust in such claims is only moderate. Building trust in and understanding of claims is key to continued growth.

Supermarkets remain meat powerhouses with some gains in online meat sales. More than half of shoppers primarily buy meat and poultry at supermarkets. Forty percent of shoppers ordered groceries and 19% ordered meat and poultry online, up from 14% last year.

Brands continued to benefit from being a preferred purchase among younger shoppers. 2019 was a strong year for private brands (+12.3%). Shoppers want to hear from brands about nutrition (58%), food safety practices (57%), animal care practices (46%) and the brand’s environmental impact (40%).

Sixty-eight percent of shoppers feel it is important for grocery stores to provide transparency into how and where livestock was raised.

Sustainability concerns impact meat and poultry choices, but 49% believe, if done properly, animal agriculture does not have negative impacts on the planet. Environmental sustainability is affecting protein choices. While 34% of consumers believe raising livestock has some or a lot of negative impact on the planet, this belief is much stronger among younger generations. The industry has an opportunity to improve the availability of unbiased environmental impact information to educate on steps taken to protect the planet.

Feeder Cattle futures led Live Cattle higher Monday. New-month positioning was likely a contributor. As well, the declining number of new coronavirus cases in China suggest the worst may be over in that nation, paving the way toward a resumption toward normal levels of commerce.

Other than 75¢ lower in recently minted away Aug, Live Cattle futures closed an average of $1.82 higher (62¢ higher toward the back to $2.77 higher toward the front). 

Feeder Cattle futures closed an average of $2.09 higher ($1.32 to $2.45 higher).

Wholesale beef values were higher on good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.23 higher Monday afternoon at $206.53/cwt. Select was $2.25 higher at $201.16.

Corn futures closed 3¢ to 8¢ higher through Mar ’21 and then mostly fractionally higher to 1¢ higher.

Soybean futures closed 7¢ to 9¢ higher.

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Major U.S. financial indices charged higher Monday, despite key indicators of slowing manufacturing growth in the U.S. and China.

Although manufacturing in the U.S. continued to grow in February, based on the Institute for Supply Management® (ISM) Purchasing Managers Index® (PMI), growth was slower than expected, down 0.8 percentage points in February to 50.1.

“Comments from the panel were generally positive, with sentiment cautious compared to January,” says Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee. “Global supply chains are impacting most, if not all, of the manufacturing industry sectors.”

A respondent to the survey from the computer and electronic products sector noted: “There are always supply chain challenges with Lunar New Year shutdowns, and this year is no different. Coronavirus is wreaking havoc on the electronics industry. Companies are delayed in starting up production, which is resulting in longer lead times, constraints and increased pricing. It’s a mad dash to dual source stateside in case China isn’t back online soon.”

The closely watched Caixin China General Manufacturing PMI™—a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy—dropped 10.8 points month to month to 40.3 in February, the lowest reading since it began in 2004.

“Production, new work and staffing levels all fell at the quickest rates since the survey began nearly 16 years ago as companies extended their usual Lunar New Year shutdowns to help stem the spread of the virus,” according to the report from Caixin and IHS Markit. “Supply chains were also hit heavily, with average delivery times increasing at the quickest pace on record, leading firms to increase their use of current stocks. However, firms anticipate a recovery in production over the next year due to expectations that production will be ramped up once any coronavirus-related restrictions are lifted. Notably, the degree of positive sentiment was the strongest seen for five years.”

Chatter late in the session about the potential of coordinated rate cuts among the world’s major central banks, in response to the economic impact of coronavirus, added optimism.

The Dow Jones Industrial Average closed 1,293 points higher. The S&P 500 closed 136 points higher. The NASDAQ was up 384 points.

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Higher markets Monday were more than welcome, but likely speak more to the volatility ahead, due to unknowns associated with COVID-19, rather than a market bottom being established.

“Clearly, the uncertainty has not peaked yet and the best we can hope for, from a market perspective, is that there will come a time when it appears the worst is over and we can see a path to a lengthy recovery in markets,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “It seems unlikely that any definitive news is forthcoming, certainly not in the next few weeks, which would allow markets to bounce back with any confidence.”

Near term, at least the next 30-60 days, Peel believes producers should expect markets to remain weak, if not weaker.

“Obviously, the news about COVID-19 is changing constantly and may support brief short-lived market bounces,” Peel says. “Longer term, I don’t think we are ready yet to change the overall outlook for the year, but the prospect is growing that we might have to trim back our expectations for 2020.

“Producers probably should not make dramatic changes to production and marketing plans just yet, but it would be a good idea to think about how you will adjust things if we have to shift from offense to defense for the entire year.”

Through Friday afternoon, negotiated cash fed cattle prices for the week were $4-$5 less on a live basis at $115/cwt. in the Southern Plains and Nebraska. Dressed trade was $3-$5 less in Nebraska at $185-$187 and mostly $7 lower in the western Corn Belt at mainly $183.

Through Thursday, the average five-area direct steer price was $115.07/cwt. on a live basis, which was $4.70 less than a week earlier. The average dressed steer price of $185.45 was $4.65lower.

Cattle futures took another strong step lower Friday, with ongoing pressure in outside markets from novel coronavirus fears, as well as week-end and month-end position squaring. 

Other than 7¢ higher in expiring Feb, Live Cattle futures closed and average of $2.04 lower ($1.45 lower toward the back to $2.90 lower at the front).

Feeder Cattle futures closed an average of $1.62 lower.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 24¢ lower Friday afternoon at $205.30/cwt. Select was 78¢ lower at $198.91.

Corn futures closed mostly fractionally mixed to 1¢ lower.

Soybean futures closed mostly 2¢ to 4¢ lower.

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Major U.S. financial indices mostly fell hard again Friday but closed off of session lows. Fears about novel coronavirus and its potential impact on the domestic and global economies continued to fuel the pressure. Federal Reserve Chair Jerome H. Powell, quelled some fears with this statement late Friday:

“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.”

The Dow Jones Industrial Average closed 357 points lower. The S&P 500 closed 24 points lower. The NASDAQ was fractionally higher.

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Increasing market uncertainty last week, tied to the global spread of novel coronavirus, (COVID-19) took Cattle futures down as steeply as last summer’s plunge following the packinghouse fire in Kansas.

Week to week on Friday, Feeder Cattle futures closed an average of $7.74 lower, while Live Cattle futures closed an average of $6.34 lower. The week following the Tyson fire, Feeder Cattle were down an average of $5.48 and Live Cattle were down an average of $6.53.

Managed money—lots of it—and electronic, algo trading at lightening speeds is likely magnifying market volatility and momentum.

COVID-19 is nothing new, making headlines since the first case was identified in China last December. But fears ratcheted higher last week as economic impact appeared more pronounced in countries like China and South Korea as the likelihood of a pandemic grew.

For instance, the USDA Foreign Agricultural Service (FAS) issued an assessment last week about the current economic impact of COVID-19 in South Korea. “The local economy is slowing down due to weak retail sales and reduced economic activity. Many companies have temporarily closed their offices and processing facilities for the week of Feb. 23 to prevent spread of the virus,” according to the report. “The Korea Economic Research Institute (KERI) reported Feb. 24 that its Business Survey Index (BSI) for February 2020 fell to 78.9, down 7.6 points from January, the lowest level since February 2009.”

As of Feb. 26, 1,146 people in South Korea tested positive for the virus; 11 deaths. A week earlier, the number of cases in Korea was 51.

Meanwhile, according to the World Health Organization, there were 79,394 confirmed COVID-19 cases in China as of Feb. 29. Estimates of current and future economic impact vary widely. Already, companies like Apple are telling investors that previous revenue guidance for the next quarter is likely overstated as COVID-19 in China slows production, constrains supply chains and dampens demand in that nation.

Here at Home

As of Saturday, according to WHO, there were 62 COVID-19 cases in the U.S. The first death, due to the disease, was confirmed over the weekend.

“For the general American public, who are unlikely to be exposed to this virus at this time, the immediate health risk from COVID-19 is considered low. However, it’s important to note that current global circumstances suggest it is likely that this virus will cause a pandemic…,” according to last Tuesday’s situation summary from the Centers for Disease Control and Prevention (CDC).

Wednesday evening, CDC confirmed an infection with the virus that causes COVID-19 in California, in a person who reportedly did not have relevant travel history or exposure to another known patient with COVID-19.

“It’s possible this could be an instance of community spread of COVID-19, which would be the first time this has happened in the United States,” according to the CDC statement. “Community spread means spread of an illness for which the source of infection is unknown. It’s also possible, however, that the patient may have been exposed to a returned traveler who was infected.” So far there are 15 confirmed COVID-19 cases in the U.S.

Negotiated cash fed cattle trade continued lower Thursday with dressed trade in the western Corn Belt losing another $2-$4 at $180-$183/cwt., mostly $183. For the week, dressed prices there are $7-$10 lower than last week.

Although too few to trend, there were also some live trades in Nebraska at $112-$114, another $1-$3 lower than the market established earlier in the week, which was $4-$5 lower than last week.

Lower cash prices are, of course, tied to fears about the potential impact of novel coronavirus on the global economy. Those fears continued to drive equity markets and many futures markets sharply lower again Thursday.

Cattle futures closed off of session lows, but lost plenty of ground, especially in nearby contracts.

Live Cattle futures closed and average of $1.47 lower through the front three contracts and then an average of 34¢ lower to an average of 13¢ higher, with the heaviest volume of trade since last September.

Feeder Cattle futures closed an average of $1.57 lower through the front three contracts and then an average of 15¢ lower to an average of 40¢ higher.

Wholesale beef values were lower on Choice and higher on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 80¢ lower Thursday afternoon at $205.54/cwt. Select was $1.09 higher at $199.69.

Carcass weights continue significantly higher year over year, according to the latest USDA Actual Slaughter Under Federal Inspection report. The average dressed steer weight for the week ending Feb. 15 was 905 lbs., which was 2 lbs. heavier than the prior week and 26 lbs. heavier than the same week a year earlier. The average dressed heifer weight of 833 lbs. was 1 lb. lighter than the previous week but 14 lbs. heavier than a year earlier.

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

Soybean futures closed fractionally higher to 5¢ higher through Nov ’20 and then mostly 1¢ lower.

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Major U.S. financial indices plunged Thursday as fears about novel coronavirus ratcheted higher.

The latest fuel to the panic came with a report from the Centers for Disease Control and Prevention (CDC) Wednesday night, confirming an infection with the virus that causes COVID-19 in California, in a person who reportedly did not have relevant travel history or exposure to another known patient with COVID-19.

“It’s possible this could be an instance of community spread of COVID-19, which would be the first time this has happened in the United States,” according to the CDC statement. “Community spread means spread of an illness for which the source of infection is unknown. It’s also possible, however, that the patient may have been exposed to a returned traveler who was infected.” So far there are 15 confirmed COVID-19 cases in the U.S.

The Dow Jones Industrial Average closed 1,190 points lower. The S&P 500 closed 137 points lower. The NASDAQ was down 414 points.

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Total pounds of beef in freezers Jan. 31 were 2% more than the previous month but 4% less than a year earlier, according to the latest USDA Cold Storage report.

Frozen pork supplies were up 8% from the previous month and up 11% from last year.

Total red meat supplies in freezers were 5% more than the previous month and 3% more than the previous year.

Total frozen poultry supplies were up 4% from the previous month and up 1% from a year ago. Total frozen chicken supplies were record high for the month.

Negotiated cash fed cattle trade continued with a lower undertone, Wednesday, although there were too few transactions to trend. A day earlier, live trade was $4-$5 lower week to week in the Southern Plains and Nebraska at $115/cwt. Dressed trade was $3-$5 lower at $185-$187.

There were 755 head offered in the weekly Fed Cattle Exchange auction—five lots from the Southern Plains. Four lots—627 head—sold for a weighted average price of $115.25/cwt.; 483 head for delivery at 1-9 days and 272 head for delivery at 1-17 days.

Choice steers and heifers sold $1.00-$1.50 lower at the fat auction in Tama, IA. There were 82 head of Choice 2-4 steers weighing an average of 1,457 lbs. and bringing an average price of $120.51. Country trade in the region last week was at $119-$120.

At Sioux Falls Regional in South Dakota, though, fat cattle sold $2-$4 lower with 176 Choice 2-3 steers weighing an average of 1,438 lbs., bringing an average of $116.84.

Cattle futures, especially Feeder Cattle, found some footing Wednesday, likely helped along by short covering.

Live Cattle futures closed mixed, from an average of 69¢ lower through the front four contracts to an average of 28¢ higher.

Except for 12¢ lower in Oct, Feeder Cattle futures closed an average of 80¢ higher (10¢ higher to $1.85 higher in Apr).

Wholesale beef values were lower on light demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.13 lower Wednesday afternoon at $206.34/cwt. Select was $1.30 lower at $198.60.

Corn futures closed mostly fractionally lower to 2¢ lower.

Soybean futures closed mostly fractionally higher to 3¢ higher.

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Despite an attempt at stability early on, major U.S. financial indices continued mainly lower again Wednesday, with persistent coronavirus fears.

The Dow Jones Industrial Average closed 123 points lower. The S&P 500 closed 11 points lower. The NASDAQ was up 15 points.

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Hide prices and subsequent beef byproduct values continue under long-term pressure. Part of it has to do with sheer volume, but another part has to do with consumers choosing synthetics in the place of leather, sometimes with the mistaken belief that fake leather is more environmentally friendly.

“There is no better, more environmentally-friendly alternative to using hides from animals processed for food than to make real leather,” says Stephen Sothmann, president of the Leather and Hide Council of America (LHCA). “Without the leather industry, nearly 2 billion lbs. of unused cattle hides would be diverted to landfills, placing tremendous pressure on the environment that would be further compounded by the shift to synthetic imitations produced from plastic and other non-renewable sources.”

As it is, based on USDA data, Sothmann explains the U.S. processed more than 33 million head of cattle for food last year, but U.S. export data and industry estimates suggest approximately 27.5 million U.S. cattle hides were used in domestic and global leather production. So, about 17% of U.S. cattle hides last year were destroyed or discarded in landfills.

Those discarded or destroyed hides could have been used to produce leather for approximately 99 million pairs of shoes, 110 million footballs or two million sofas, according to the LHCA.

Whereas cattle hides are naturally biodegradable, and may decompose in less than 50 years, Sothmann explains synthetics derived from petrochemicals could take as many as 500 years to break down.

Moreover LHCA suggests the annual percentage of discarded and destroyed cattle hides will likely increase if trends continue in the use of synthetics to produce finished goods in place of real leather.

“As consumers, retailers and brands weigh the versatility, beauty, durability and sustainability of leather compared to its imitations, it’s clear: there’s simply no substitute for real leather,” Sothmann says.

Although Cattle futures tested stability early in yesterday’s session, they crumbled again, beneath overall market panic about novel coronavirus and its potential economic impact. Losses, however, were less than the previous day.

Live Cattle futures closed an average of $1.70 lower through the front four contracts and then an average of 56¢ lower.

Feeder Cattle futures closed an average of $2.06 lower (85¢ to $3.47 lower). That’s an average of $6.32 lower in the last two sessions.

Wholesale beef values were firm on Choice and sharply lower on Select, with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 40¢ higher Tuesday afternoon at $207.47/cwt. Select was $2.47 lower at $199.90.

Grain futures rebounded, perhaps with the help of the lower U.S. dollar.

Corn futures closed mostly fractionally higher to 2¢ higher.

Soybean futures closed mostly 4¢ to 5¢ higher.

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Major U.S. financial indices plunged lower for the second consecutive session Tuesday, again plagued by escalating fears about novel coronavirus—dubbed Coronavirus Disease 2019 (COVID-19)—and how it will impact global economic growth. The virus causing COVID-19 is named SARS-CoV-2.

A key driver in Tuesday’s decline appeared to be the latest Coronavirus Disease 2019 Situation Summary issued by the Centers for Disease Control and Prevention (CDC).

“For the general American public, who are unlikely to be exposed to this virus at this time, the immediate health risk from COVID-19 is considered low,” according to the CDC summary. “However, it’s important to note that current global circumstances suggest it is likely that this virus will cause a pandemic. In that case, the risk assessment would be different.”

CDC defines a pandemic as: “A global outbreak of a new influenza A virus. Pandemics happen when new (novel) influenza A viruses emerge which are able to infect people easily and spread from person to person in an efficient and sustained way.” There were four pandemics in the last 100 years, according to CDC.

The Dow Jones Industrial Average closed 879 points lower. The S&P 500 closed 97 points lower. The NASDAQ was down 255 points. In the last two sessions, those indices are down 1,910 points, 208 points and 610 points, respectively.

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So far, there is little visible impact, positive or negative, from the U.S.-China Phase One Economic and Trade Agreement, including before novel coronavirus began disrupting some supply chains. But, China has taken numerous actions to begin implementing its agriculture-related commitments under the agreement, on schedule, according to U.S. Secretary of Agriculture Sonny Perdue and United States Trade Representative Robert Lighthizer on Tuesday.

Among the actions Perdue and Lighthizer cite:

Lifting the ban on imports of U.S. poultry and poultry products, including pet food containing poultry products.

Lifting restrictions on imports of U.S. pet food containing ruminant material.

Updating lists of facilities approved for exporting animal protein, pet food, dairy, infant formula, and tallow for industry use to China.

Updating the lists of products that can be exported to China as feed additives.

Additionally, China began announcing tariff exclusions for imports of U.S. agricultural products subject to its retaliatory tariffs, and it announced a reduction in retaliatory tariff rates on certain U.S. agricultural goods.

“President Trump and this Administration negotiated a strong trade agreement with China that promises significant benefits for American agriculture,” explains Secretary Perdue. “We look forward to realizing these benefits this year and are encouraged by progress made last week. We fully expect compliance with all elements of the deal.”

Weekend reports of a spike in novel coronavirus cases outside of China sent major U.S. financial indices and futures markets tumbling as investors and traders try to assess the current and potential impact on global economic growth.

Cattle futures plummeted mostly limit-down in Feeder Cattle and near limit-down in Live Cattle. Friday’s announcement that USDA is restoring access to the U.S. for Brazilian beef likely added to the weight.

Live Cattle futures closed an average of $2.72 lower.

Feeder Cattle futures closed an average of $4.26 lower.

Growing pessimism prompted some early negotiated cash fed cattle trade in Nebraska and the western Corn Belt at $187/cwt. in the beef, which was $3 less than last week, but there were too few transactions to establish a trend.

Wholesale beef values were higher on Choice and firm on Select, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.98 higher Monday afternoon at $207.07/cwt. Select was 67¢ higher at $202.37.

Corn futures closed 3¢ to 4¢ lower through Jly ’21 and then mostly fractionally lower to 1¢ lower.

Soybean futures closed 11¢ to 16¢ lower through Jan ’21 and then 5¢ to 9¢ lower.

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Major U.S. financial indices plunged lower Monday, with surging coronavirus cases reported outside China over the weekend and some analysts shaving a full 1% from expected first-quarter GDP growth.

The Dow Jones Industrial Average closed 1,031 points lower. The S&P 500 closed 111 points lower. The NASDAQ was down 355 points.

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With trade negotiations set to begin between the United States and the United Kingdom, the North American Meat Institute (Meat Institute) and the British Meat Processors Association (BMPA) signed a memorandum of understanding (MOU) to benefit members of each organization and to support and promote mutually beneficial regulations, standards and policies to enhance bilateral trade in meat and poultry products.

“Members of the Meat Institute and the British Meat Processors Association share many common goals, especially regarding food safety, sustainability, nutrition and worker safety,” says Bill Westman, Meat Institute Senior Vice President for International Affairs. “As our governments begin trade talks, it is important to members in both organizations to formalize an already beneficial relationship. We look forward to working with the Administration and our British counterparts to improve access to significant trade opportunities between our nations.”

Both organizations will share with the other, and disseminate to their members, information that is not subject to a confidentiality and non-disclosure agreement with their respective governments concerning regulatory, scientific, legislative and international developments that affect the other organization’s members. Each organization also will discuss periodically, and as needed, other mechanisms that would mutually benefit each organization’s members.

Negotiated cash fed cattle trade ended the week steady to $1 higher on a live basis at $120/cwt. in the Southern Plains and $119-$120 in the north. Dressed trade was steady at $190.

Weaker outside markets and ample supplies continued to pressure Cattle futures Friday, although they closed off of session lows.

Live Cattle futures closed an average of 40¢ lower, amid active trade.

Feeder Cattle futures closed an average of $1.03 lower (42¢ to $1.37 lower).

Wholesale beef values were firm on Choice and steady on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 59¢ higher Friday afternoon at $205.09/cwt. Select was 10¢ higher at $201.70.

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USDA projections shared at last week’s 2020 Agricultural Outlook Forum are plumb bullish for corn production this year with expectations for 94.0 million corn acres, which would be about 5 million more than last year.

“The U.S. corn outlook for 2020-21 is for record production and domestic use, increased exports, and higher ending stocks,” according to USDA’s Grains and Oilseeds Outlook. “The corn crop is projected at 15.5 billion bu., 13% above a year ago with an increase in area from last year’s weather-reduced plantings and a return to trend yields. The yield projection of 178.5 bu./acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather. Despite beginning stocks forecast down from a year ago,

total corn supplies at 17.4 billion bu. are forecast to be record high.”

“One of the major concerns heading into planting season is if the soil, and infrastructure can handle this year’s snow melt,” say analysts with the Livestock marketing Information Center (LMIC), in the latest Livestock Monitor. “From the Mississippi Delta through the upper Midwest and Missouri river basin, hydrological conditions are currently showing heavy saturation levels. Additionally, un-harvested acres in North Dakota and South Dakota could become problematic for spring planting.”

Moreover, LMIC analysts say there appears to be a mismatch between futures prices and the level of plantings USDA is suggesting. 

“Even though greater numbers of swine and poultry are expected in 2020, corn export demand has been dismal so far in the 2019-20 marketing year,” LMIC analysts say. “The risk of recession and spread of coronavirus all point to potentially shaky demand moving forward this year. Already, the 2019-20 crop is approaching a 2 billion bu. carryout because of the lack of export demand. That could weigh on corn prices and will likely allow soybeans to bid acres away from corn.”

Corn futures closed fractionally lower to 2¢ lower.

Soybean futures closed mostly 2¢ to 3¢ lower.

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Major U.S. financial indices closed strongly lower Friday as fears about novel coronavirus picked up steam again with reports from China suggesting a deep economic toll in that country.

The Dow Jones Industrial Average closed 222 points lower. The S&P 500 closed 35 points lower. The NASDAQ was down 174 points.

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Feedlots placed fewer cattle year over year in January, according to the monthly USDA Cattle on Feed report released Friday. The report is for feedlots with 1,000 head or more capacity.

Cattle feeders placed 1.96 million head in January, which was 0.61% less (-12,000 head) than the previous year. Ahead of the report, estimates were for placements to be up about 2%.

In terms of placement weights, 43.22% went on feed weighing 699 lbs. or less, 47.82% weighed 700-899 lbs. and 8.95% weighed 900 lbs. or more.

Marketings in January of 1.93 million head were 1.10% more (+21,000 head) than a year earlier.

Cattle on feed Feb. 1 of 11.93 million head were 2.16% (+252,000 head) more than a year earlier.

Both marketings and the on-feed inventory were close to pre-report estimates.

Cattle and calves on feed for slaughter in the United States, for feedlots with capacity of 1,000 or more head, represented 81.5% of all cattle and calves on feed in the United States Jan. 1, 2020, according to USDA’s National agricultural Statistics Service (NASS). That’s comparable to 81.3% a year earlier.

Further, NASS analysts say feedlots with capacity of 1,000 or more head during 2019 represented 87.0% of total cattle marketed from all feedlots in the United States, down slightly from 87.1% during 2018.

Negotiated cash fed cattle trade on Thursday continued $1 higher than last week in the Southern Plains at $120/cwt. Live prices were steady to $1 higher in Nebraska at $119-$120 and steady in the beef at $190.

Near term, increased slaughter numbers and heavier carcass weights year over year, magnified by the mostly open winter so far are keeping a firmer seasonal lid on wholesale beef prices. The average steer carcass weight the week ending Feb. 8 was 903 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 6 lbs. more than the previous week and 18 lbs. more than the same week a year earlier. The average dressed heifer weight of 834 lbs. was 1 lbs. more than the previous week and 12 lbs. more than the same week last year.

Weaker outside markets amid the daily up and down tied to novel coronavirus also helped pressure Cattle futures Thursday.

Live Cattle futures closed an average of $1.03 lower (70¢ to $1.65 lower), but still higher week to week.

Except for 2¢ higher in spot Mar, Feeder Cattle futures closed an average of 78¢ lower. 

Analysts surveyed by Urner Barry and reported by the Daily Livestock Report expect to see January feedlot placements 1.9% more than the previous year, in Friday’s monthly Cattle on Feed report. They anticipate January marketings to be 1% more and the Feb. 1 on-feed inventory to be 2.4%  more.

Wholesale beef values were lower on Choice and steady on Select with light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.07 lower Thursday afternoon at $204.50/cwt. Select was 16¢ lower at $201.60.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed 4¢ to 7¢ lower.

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Major U.S. financial indices closed lower Thursday, presumably on profit taking and vacillating concerns about novel coronavirus..

The Dow Jones Industrial Average closed 128 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 66 points.

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USDA projects U.S. beef and veal export value for the current fiscal year (FY) 2020 at $7.5 billion, in the quarterly Outlook for U.S. Agricultural Trade—released Thursday—from the Economic Research Service (ERS) and the Foreign Agricultural Service (FAS). That’s $100 million less than the November estimate but would be $200 million more than FY 2019. Analysts explain the reduced quarter-to-quarter estimate is based on slightly higher expected prices unable to offset what’s expected to be a slight reduction in volume.

“Livestock, poultry, and dairy exports are forecast up $500 million from the November projection to $32.4 billion as stronger demand for poultry and products, dairy, and variety meats more than offsets declines for beef,” say ERS-FAS analysts.

Overall, U.S. agricultural exports are projected $500 million more for FY 2020, compared to the November forecast, with increased soybean, wheat, and poultry export forecasts more than offsetting reductions in corn and soybean meal. The estimated $139.5 billion this fiscal year would be $4 billion more than last year, when trade wars and issues disrupted export flows.

“Exports for China are raised $3.0 billion from the November forecast to $14.0 billion, largely based on higher projected volumes for soybeans,” say ERS-FAS analysts. “The current outlook for exports to China is tempered by significant uncertainties surrounding the Covid-19 outbreak (novel coronavirus), which may affect the timing of China’s purchases under the Phase One Agreement during the calendar year.”

Despite novel coronavirus, ERS and FAS left expectations for world per capita gross domestic product (GDP) growth little changed. However, those analysts explain, a slowdown across the Eurozone, declining growth rates in China and the damaging global impact of novel coronavirus is expected to dampen growth prospects worldwide.

Negotiated cash fed cattle trade remained largely undeveloped through Wednesday afternoon, based on USDA reports, but had a firm to higher feel.

For one thing, there were some early live trades in the Texas Panhandle at $120/cwt., which was $1 higher than last week.

Earlier in the day, there were three Southern Plains lots (422 head) offered in the weekly Fed Cattle Exchange auction, and no takers. One lot was passed out at $119.75/cwt.

Up North, Choice steers and heifers sold $1.75-$2.25 higher at the fat auction in Tama, IA Wednesday. There were 91 Choice 2-4 steers weighing an average of 1,434 lbs. and bringing an average of $123.15/cwt. Country trade in the western Corn Belt was $119 last week.

Similarly, slaughter steers also sold $2-$3 higher at Sioux Falls Regional in South Dakota, where 184 Choice 2-3 steers weighing an average of 1,447 lbs. brought an average of $120.74.

Feeder Cattle futures gained more ground Wednesday on strong fundamentals, and perhaps positioning ahead of the monthly Cattle on Feed report due out Friday. That helped underpin Live Cattle. 

Live Cattle futures closed narrowly mixed and mostly higher, from unchanged to an average of 11¢ lower in three contracts to an average of 20¢ higher.

Feeder Cattle futures closed an average of 75¢ higher (47¢ to $1.47 higher in spot Mar). That makes for an average of $5.87 higher over the last five sessions.

Wholesale beef values were weak on Choice and lower on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 56¢ lower Wednesday afternoon at $205.57/cwt. Select was $1.97 lower at $201.76.

Corn futures closed mostly 1¢ to 2¢ lower.

Except for 5¢ and 3¢ higher in the front two contracts, Soybean futures closed 1¢ to 2¢ higher.

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Major U.S. financial indices closed higher Wednesday, buoyed in part by various reports suggesting China is containing novel coronavirus.

The Dow Jones Industrial Average closed 115 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 84 points.

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America’s ranchers and farmers took another step toward collectively telling agriculture’s positive sustainability story to consumers and policy makers Wednesday with announcement of Farmers for a Sustainable Future (FSF), a coalition of agricultural organizations committed to environmental and economic sustainability.

“Today’s launch of the Farmers for a Sustainable Future is a defining moment,” said Ethan Lane, Vice President of Government Affairs for the National Cattlemen’s Beef Association (NCBA), who spoke at the FSF rollout event in Washington. “Twenty-one agricultural groups—which represent the vast majority of the agricultural industry in our country—are standing side by side in unity to correct a false narrative that has haunted us for as long as I can remember. We’re here because we support incentivizing innovation, science-based research, resilient infrastructure, and focusing on outcomes.”

Along with NCBA, other founding FSF members include the American Farm Bureau Federation, USA Rice, American Sugar Alliance, the National Corn Growers Association, and the National Pork Producers Council.

“We know that consumers care how beef is produced, and they want to know that it’s done in a way that’s environmentally and socially sustainable,” Lane explains. “In fact, the U.S. is the leader in sustainable beef production, with a carbon footprint 10 to 50 times lower than the rest of the world. And while we’ve already made a lot of progress, American cattle farmers and ranchers are committed to continuous improvement by producing high-quality beef even more sustainably for generations to come.”

NCBA is also a founding member of the U.S. Roundtable for Sustainable Beef, a multi-stakeholder organization composed of more than 220 ranchers, feed yard operators, packers, food service companies, research institutions, and NGOs that share a mission to advance, support, and communicate about beef’s sustainability.

The coalition will share with elected officials, media and the public U.S. agriculture’s commitment to sustainability and the incredible strides already made to reduce agriculture’s environmental footprint. As policy proposals are developed and considered, the goal is for the coalition and its guiding principles to serve as a foundation to ensure the adoption of meaningful and constructive policies and programs affecting agriculture.

FSF’s guiding principles call for policies that support science-based research, voluntary incentive-based conservation programs, investment in infrastructure, and solutions that ensure vibrant rural communities and a healthy planet.