Daily Market Highlights

Cattle Current Daily—Nov. 12, 2021

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Thursday afternoon, according to the Agricultural Marketing Service. There were too few transactions to trend.

So far this week, live prices are $2-$3 higher in the Southern Plains at $131-$132/cwt., $2 higher at $132 in Nebraska and the western Corn Belt. Dressed prices are $3-$5 higher at $207.

Choice boxed beef cutout value was 38¢ lower Thursday afternoon at $285.14/cwt. Select was 67¢ higher at $267.29.

Live Cattle futures wavered in place Thursday, while a break in the Corn rally helped Feeder Cattle breathe higher.

Live Cattle futures closed narrowly mixed from unchanged to an average of 17¢ lower.

Feeder Cattle futures closed an average of 68¢ higher (42¢ to $1.02 higher).

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed 2¢ to 8¢ higher through Sep ’22 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed narrowly mixed Thursday as investors appeared to be digesting direction amid increasing inflation.

The Dow Jones Industrial Average closed 158 points lower. The S&P 500 closed 2 points higher. The NASDAQ was up 81 points.

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“After three Congressional hearings featuring the testimony of industry experts and a major economic analysis of the beef supply chain out of Texas A&M, Senators continue to ignore market fundamentals and are attempting to guarantee higher prices for livestock producers,” according to Julie Anna Potts, President and CEO of the North American Meat Institute.

Potts was referring to new bipartisan compromise legislation — the Cattle Market Price Discovery and Transparency Act — announced by U.S. Senator Deb Fischer (R-Neb.) earlier this week.

Among other things, the law would establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades based on regional average 18-month trade levels.

“If this bill becomes law, there will be cattle producers who want alternative marketing arrangements, but will instead be forced to sell on the cash market, and the industry will turn back time to the days of commodity cattle,” Potts says.

She offers relevant statements made by expert agricultural economists during the aforementioned Congressional hearings.

For instance, in Senate testimony, Glynn Tonsor, agricultural economist at Kansas State University explained, “Stated directly – without contemporary use of alternative marketing agreements I believe cattle prices would be lower as production efforts would not align as well with consumer demands.”

In House testimony, Jayson Lusk, agricultural economist at Purdue noted, “Even if 100 percent of cattle were being sold on the cash market, it doesn’t mean prices would have been any higher than what we recently observed.”

Cattle Current Daily—Nov. 12, 2021 2021-11-11T20:14:20-06:00

Cattle Current Daily—Nov. 11, 2021

Negotiated cash fed cattle trade was slow with light to moderate demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices were $2-$3 higher in the Southern Plains at $131-$132/cwt., $2 higher in Nebraska at $132 and $1-$2 higher in the western Corn Belt at $131-$132. There were too few dressed trades for a trend: $202-$204 last week.

Live Cattle futures were unable to capitalize on the stronger cash price, however. They closed narrowly mixed, from an average of 11¢ lower in five contracts to an average of 11¢ higher. Part of the pressure was likely due to lower wholesale beef prices.

Choice boxed beef cutout value was $2.28 lower Wednesday afternoon at $285.52/cwt. Select was $4.00 lower at $266.62.

Feeder Cattle futures closed an average of $1.26 lower with weight from resurgent grain futures.

Corn futures closed 13¢ to 14¢ higher in the front four contracts and then mostly 6¢ to 8¢ higher.

Soybean futures closed mainly 3¢ to 5¢ higher.

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Major U.S. financial indices closed lower Wednesday with weaker tech stocks and renewed inflation concerns.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9% in October on a seasonally adjusted basis after rising 0.4% in September, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 6.2% before seasonal adjustment.

The Dow Jones Industrial Average closed 240 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 263 points.

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Increasing feedlot cost of gain is pushing cattle out of the feedlot sooner, based on Kansas State University’s (KSU) Focus on Feedlots (FF) data.

In September, compared to a year earlier, analysts with the Livestock Marketing Information Center (LMIC) say the FF data indicates steers were on feed for an average of 159 days, compared to 175 days the previous year and 165 days for the five-year average (2015-19).

Likewise, heifers were on feed for an average of 169 days in September, versus 176 days last year and 160 days for the five-year average.

“Although average days on feed is lower, feedlots show cattle on feed over 120 days in October was up 3.3% from last year and 7.6% above the five-year average,” say LMIC analysts, in the latest Livestock Monitor.

Since the beginning of this year, those analysts explain average cost of gain for steers is up 32.8% ($27/cwt.) and heifer cost of gain is up 37.2% ($32). Average cost of gain in September was $109.29/cwt. for steers and $118.34 for heifers, the priciest in about eight years.

“It is also worth noting that the KSU Feedlot average cost of gain data does not include the cost of feeder, yardage, and interest costs,” LMIC analysts say. “Higher average cost of gain is primarily due to rising feed costs for corn, up 47.7% ($2.25) and ground alfalfa hay, up 31.2% ($43) since the start of the year. The higher cost of gain will also motivate cattle feeders to market cattle quicker.”

Cattle Current Daily—Nov. 11, 2021 2021-11-10T20:13:42-06:00

Cattle Current Daily—Nov. 10, 2021

Cattle futures drifted lower Tuesday with traders apparently waiting for further cash direction.

Live Cattle futures closed narrowly mixed, from an average of 27¢ lower in four contracts to an average of 14¢ higher.

Feeder Cattle futures closed an average of 60¢ lower.

Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.

Last week, prices were at $128-$130/cwt. in the Southern Plains and the western Corn Belt; $130 in Nebraska. Dressed prices were $202-$204.

Early on, bets seem to favor steady to higher prices this week.

Choice boxed beef cutout value was 85¢ lower Monday afternoon at $287.80/cwt. Select was $2.02 higher at $270.62/cwt.

Grain futures, especially Soybeans firmed Tuesday with friendlier projections than expected in the monthly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed mostly 3¢ higher.

Soybean futures closed mostly 19¢ to 23¢ higher.

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Major U.S. financial indices closed lower Tuesday, with seemingly more attention paid to inflation indicators.

The Dow Jones Industrial Average closed 112 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 95 points.

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USDA’s Economic Research Service (ERS) increased the projected annual five-area direct average steer price for this year by $1.25 to $121.31/cwt., in the latest World Agricultural Supply and Demand Estimates (WASDE), based on continued firm demand.

That’s with beef production this year projected to be 53 million lbs. more than the previous month to 27.88 billion lbs. on higher expected slaughter of fed cattle and heavier carcass weights.

The annual average price for next year was forecast $1 higher at $130.

Beef production next year was estimated to be 885 million lbs. less than this year (-3.17%).

Projected average steer prices were projected at $128 in the fourth quarter this year.

Next year, the five are direct average steer price was forecast at $132 in the first quarter, $129 in the second quarter and at $127 in the third quarter.

ERS projected total red meat and poultry production this year 171 million lbs. more than the previous month at 106.73 billion lbs. Total red meat and poultry production next year was forecast to be 463 million lbs. less than this year (-0.43%) at 106.27 billion lbs.

Corn

Corn production was forecast 43 million bu. more than the previous month to 15.06 billion bu., with average yield forecast 0.5 bu./acre more at 177.0bu./acre. Corn used for ethanol production was increased 50 million bu. With use rising slightly more than supply, corn ending stocks were lowered 7 million bu.

The season-average corn price received by producers was unchanged at $5.45/bu.

Soybeans

ERS lowered projected soybean production by 23 million bu. to 4.42 billion bu., but they also reduced expected exports. With use falling more than supply, soybean ending stocks were raised 20 million bu.

The U.S. season-average soybean price for 2020-21 was forecast 25¢ lower to $12.10/bu. Projected soybean meal and oil prices were unchanged at $325.00 per short ton and 65.0¢/lb., respectively.

Wheat

The forecast for 2021-22 U.S. wheat was for lower supplies, higher domestic use, reduced exports, and slightly higher ending stocks, compared to the previous month.

Supplies were reduced 10 million bu. on lower anticipated imports. Total domestic use was projected 2 million bushels higher. Exports were lowered 15 million bu. Projected 2021-22 ending stocks were raised 3 million bu. to 583 million, which would leave the lowest U.S. ending stocks since 2007-08.

The projected 2021-22 season-average farm price for wheat was raised 20¢ to $6.90/bu.

Cattle Current Daily—Nov. 10, 2021 2021-11-09T19:46:38-06:00

Cattle Current Daily—Nov. 9, 2021

Cattle futures edged higher Monday as traders adjusted to last week’s strong rally.

Live Cattle futures closed an average of 23¢ higher (5¢ to 40¢) except for unchanged in Feb ’22.

Feeder Cattle futures closed an average of 62¢ higher, except for 30¢ and 38¢ lower at either end of the board.

Grain futures, especially Soybeans added support, under pressure from apparent positioning ahead of Tuesday’s monthly World Agricultural Supply and Demand Estimates.

Negotiated cash fed cattle trade ranged from limited on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were at $128-$130/cwt. in the Southern Plains and the western Corn Belt; $130 in Nebraska. Dressed prices were $202-$204.

Choice boxed beef cutout value was 89¢ lower Monday afternoon at $288.65/cwt. Select was $1.08 higher at $267.52/cwt.

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Major U.S. financial indices closed higher again with the S&P 500 closing above 4,700 for the first time. Corporate earnings and other positive economic data seem to be overriding inflationary concerns for now.  

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 11 points.

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“The long-awaited improvement in fed cattle markets appears to have arrived with fed cattle prices jumping roughly $5/cwt. the past two weeks,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

He explains the improvements include working through backlogged feedlot placements resulting from supply chain disruptions last year and the Tyson fire in August of 2019.

“Those dynamics pushed the cyclical peak in feedlot production into 2021. The fed cattle market problems are the result of this peak feedlot production constrained by packing industry capacity limitations,” Peel explains. “Long-term reductions in packing industry infrastructure combined with chronic labor limitations, which predate but were made worse by COVID-19, added months to the time needed to improve the fed cattle market situation.”   

As the backlog of cattle finally clears, he explains cattle and beef markets will be able to realign and rebalance.

“The industry will be better positioned to capitalize on the optimism that has been building in recent months,” Peel says. “Tighter supply and continued strong demand will take markets to higher levels.  Strong wholesale and retail prices have been pulling on the industry most of this year. The trade picture continues to improve with the latest data showing additional growth in beef exports and reduced beef imports. On the supply side, feeder cattle markets, already higher year over year, are increasingly supported by cyclically reduced feeder cattle supplies and poised to benefit even more from higher fed cattle prices.”

Plenty of challenges remain, but mostly from the input side of the equation as feed and fertilizer prices escalate.

“Drought continues to be a major factor in many regions and will not only directly impact producers in those regions but will also determine the trajectory of the industry in the coming years. Higher crop and feed ingredient prices are a particular challenge for feedlots but also for cow-calf and stocker producers, most especially those struggling with drought-reduced feed and forage availability,” Peel says. He adds that pervasive labor issues and supply chain disruptions will continue to impact input and output markets in the coming months.

But, barring any new black swans, fundamentals should be driving cattle prices.

Cattle Current Daily—Nov. 9, 2021 2021-11-08T22:10:05-06:00

Cattle Current Daily—Nov. 8, 2021

Negotiated cash fed cattle prices ended last week $3-$4 higher on a live basis at $130/cwt. in all major cattle feeding regions. Dressed trade was $4 higher at $204.

Trade was slow to moderate on moderate to good demand through Friday afternoon, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 68¢ lower Friday afternoon at $289.54/cwt. Select was 70¢ lower at $267.52/cwt.

Total estimated cattle slaughter last week of 650,000 head was 18,000 fewer than the previous week, according to the Agricultural Marketing Service. Year-to-date estimated cattle slaughter of 28.25 million head is 847,000 head more (+3.1%) than the same time last year. Total year-to-date estimated beef production of 23.37 billion lbs. is 610,000 lbs. more (+2.7%) than a year earlier.

Cattle futures closed higher Friday with support from cash prices breaking higher.

Live Cattle futures closed an average of 95¢ higher (50¢ higher at the back to $1.27 higher toward the front).

Feeder Cattle futures closed an average of $1.16 higher (77¢ to $1.45 higher toward the front).

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Major U.S. financial indices closed higher Friday, buoyed by a stronger employment situation than expected.

Total non-farm payroll employment increased by 531,000 in October and the unemployment rate edged 0.2% lower to 4.6%, according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 203 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 31 points. 

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U.S. beef exports remained on a record pace through September, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Beef exports posted one of the best months on record in September, with value climbing nearly 59% above last year at $954.1 million, the second highest monthly total on record. Volume for the month was 20% higher than a year earlier at 123,628 metric tons (mt), the fourth largest on record.

September beef export value equated to $447.46 per head of fed slaughter, up 63% from a year ago.

Through the first three quarters of 2021, beef exports increased 18% from a year ago to 1.08 million mt, valued at $7.58 billion – up more than $2 billion (36%) from the same period last year. Compared to the record year of 2018, January-September exports were 7% higher in volume and up 24% in value. For January through September, U.S. beef export value averaged $389.08 per head (up 32%).

U.S. pork exports are on a record pace, too. For January through September, exports were 1% above last year’s record pace at 2.24 million mt, while value climbed 9% to $6.23 billion.

“Facing significant logistical headwinds and higher costs, these outstanding results are really a testament to the loyalty and strong demand from our international customers and to the innovation and determination of the U.S. industry,” says USMEF President and CEO Dan Halstrom.

Cattle Current Daily—Nov. 8, 2021 2021-11-07T17:47:33-06:00

Cattle Current Daily—Nov. 5, 2021

Cattle futures on Thursday paused from the week’s rally, but stronger cash prices and indicators of feedlot marketing currentness suggest there’s room to roam higher.

For instance, the dressed steer weight the week ending Oct. 23 was 918 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 4 lbs. lighter than the previous week and 13 lbs. lighter year over year. The average dressed heifer weight of 842 lbs. was 2 lbs. heavier week to week but 5 lbs. lighter year over year.

Live Cattle futures closed an average of 43¢ lower (12¢ lower toward the back to $1.02 lower in spot Dec).

Feeder Cattle futures closed an average of 87¢ lower (47¢ lower at the back to $1.15 lower in spot Nov).     

That was despite another day of lower Corn futures which were down mostly 2¢ to 4¢. Weakness came in the face of increased net U.S. corn export sales the week ending Oct. 28, according to USDA’s weekly U.S. Export Sales report. Net U.S. export sales of 1.22 million metric tons for 2021-22 were 37% more than the previous week and 10% more than the prior 4-week average.

U.S. net soybean exports of 1.86 million metric tons were 58% more than the previous week and 19% more than the prior four-week average, but Soybean futures closed 19¢ to 22¢ lower through Sep ‘22 and then mostly 14¢ to 17¢ lower, pressured by oil prices and chatter about a potential record crop in Brazil.

Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Thursday afternoon. So far this week, the only established sales are $2 higher in the Southern Plains at $128/cwt., according to the Agricultural Marketing Service

Last week, live prices were at $124-$126/cwt. in the Texas Panhandle, at $126 in Kansas, $127 in Nebraska and at $126-$127 in the western Corn Belt. Dressed trade was at $200.

Choice boxed beef cutout values were $1.73 higher Thursday afternoon at $290.22/cwt. Select was 50¢ higher at $268.22/cwt.

Net U.S. beef export sales for the week ending Oct. 28 of 16,700 metric tons were 13% less than the prior week but 15% more than the previous four-week average. Increases were primarily for South Korea, China, Japan, Taiwan, and Canada.

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Major U.S. financial indices were mixed Thursday, as investors await the monthly employment report due out Friday.

Positive news included initial weekly unemployment insurance claims of 269,000 for the week ending Oct. 30, according to the U.S. Department of Labor. That was the fewest since March 14 last year and fewer than expected.

The Dow Jones Industrial Average closed 33 points lower. The S&P 500 closed 19 points higher. The NASDAQ was up 128 points.

CME WTI Crude Oil futures closed 94¢ to $2.05 lower in the front six contracts, with follow-through pressure from the previous session.

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Beef and pork demand indexes reflected strength in the second quarter but weakened during the summer months as rising wholesale beef prices started to dampen retail enthusiasm, according to the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

“The third-quarter all-fresh beef demand index fell from 124 last year to 121 this year, but 2021 was the second highest level behind 2020,” according to LMIC analysts. “The pork demand index for the third quarter posted a significant reduction falling from 124 last year (a record) to 100…Record retail price levels will likely be a headwind to demand in the near term, but meat demand indexes are still showing relatively strong levels.”

As mentioned previously in Cattle Current, retail prices in September were record high for beef, pork and broilers. According to LMIC, the all-fresh beef retail price was 17.8% more year over year in September at $7.40/lb. Retail pork prices were 16.4% higher at $4.72/lb. and the broiler composite price was 8.0% higher at $2.16/lb.

The September Consumer Price Index (CPI) was 5.4% more year over year.

“The meat index reported a jump of 12.6% over last year, while the poultry index increased 6.1% from a year ago,” say LMIC analysts. “The September CPI and retail price data also provide the information needed to calculate third-quarter demand indexes. Livestock Marketing Information Center demand indexes use a base year of 2000. Demand indexes, although not exact, do give an indication as to relative changes. Given the record levels for beef, pork, and broiler prices, the third-quarter demand indexes showed a slight pull back from the second quarter and a year ago.”

Cattle Current Daily—Nov. 5, 2021 2021-11-04T20:03:16-06:00

Cattle Current Daily—Nov. 4, 2021

Negotiated cash fed cattle trade ended up fully $2 higher in the Southern Plains on Tuesday at $128/cwt. on a live basis. That and rallying Cattle futures seem to have bolstered cattle feeder resolve to hold packers’ feet to the fire this week.

Through Wednesday afternoon, trade was limited on light demand in all major cattle feeding regions with too few transactions to trend, according to the Agricultural Marketing Service.

Live prices last week were at $124-$126/cwt. in the Texas Panhandle, at $126 in Kansas, $127 in Nebraska and at $126-$127 in the western Corn Belt. Dressed trade was at $200.

The stronger cash outlook and follow-through fundamental support helped Cattle futures take another step higher Wednesday.

Live Cattle futures closed an average of $1.01 higher (17¢ higher toward the back to $1.70 higher in spot Dec), amid heavy trade and expanding open interest.

Feeder Cattle futures closed an average of $1.35 higher (37¢ higher toward the back to $2.20 higher toward the front). They were helped along by Corn futures closing 8¢ to 9¢ lower through Jly ‘22. Corn futures were down on likely profit taking, harvest pressure and chatter about yields coming in at the top of range expectations.

Choice boxed beef cutout value was $1.11 higher Wednesday afternoon at $288.49/cwt. Select was $1.59 higher at $267.72/cwt.

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Major U.S. financial indices closed higher Wednesday, buoyed by comments from the Fed suggesting no plan to increase interest rates any time soon.

“In light of the substantial further progress the economy has made toward the Committee’s goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities,” according to the statement issued by the FOMC.

Addressing the press in making the statement, Federal Reserve Chair, Jerome Powell, explained, “Our decision today to begin tapering our assets purchases does not imply any direct signal regarding our interest rate policy. We continue to articulate a different and more stringent test for the economic conditions that would need to be met before raising the federal funds rate.”

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 161 points.

CME WTI Crude Oil futures closed $2.37 to $3.05 lower in the front six contracts, apparently pressured by news that the EU and Iran will resume nuclear pact talks, would could eventually lead to lifting restrictions on Iranian oil exports.

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Agricultural producer sentiment weakened in October, according to the Purdue University/CME Group Ag Economy Barometer. It declined 3 points to 121, marking the third consecutive month of declining sentiment.

“Recent weakness in farmer sentiment appears to be driven by a wide variety of issues, with concerns about input price rises topping the list,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Rapid run-ups in input prices, especially fertilizer for crop production, are giving rise to concerns among producers’ about their operating margins weakening. Livestock producers are also concerned about a cost-price squeeze, especially in the pork and dairy sectors.”

The Index of Current Conditions was down 5 points to 140, while the Index of Future Expectations fell 2 points to 114.

Rising input costs are also dampening expectations for farmland cash rental rates. In October, the percentage of corn and soybean producers expecting higher year-over-year farmland rental rates in 2022 dipped 7% from the previous month to 43%. Despite these concerns, producers remain bullish about farmland values. The Long-Term Farmland Value Expectations Index set a new record high in October at 161, which was 2 points higher than a month earlier. The short-term index rose 1 point to 156.

Cattle Current Daily—Nov. 4, 2021 2021-11-03T20:48:30-06:00

Cattle Current Daily—Nov. 3, 2021

Feeder Cattle futures blasted higher Tuesday, more than gaining back the previous session’s steep declines. Corn futures were down for the day, but more than anything, Feeder Cattle were likely falling back into fundamental line after what appeared to be a technical-based, algo-fueled late-session selloff the previous day.

Feeder Cattle futures closed an average of $3.80 higher ($3.17 to $4.40 higher).

Live Cattle rallied on the stronger cash outlook and higher wholesale beef values after being anchored by Feeder Cattle the previous day.

Live Cattle closed an average of $1.56 higher (95¢ to $1.97 higher).

Negotiated cash fed cattle trade ranged from limited on very light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.

Live prices last week were at $124-$126 in the Texas Panhandle, $126 in Kansas, $127 in Nebraska and $126-$127 in the western Corn Belt. Dressed trade was at $200. Early indications point to steady, but likely higher prices this week.

Corn futures closed lower mostly 3¢ to 5¢ lower.

Soybean futures closed mostly 6¢ to 9¢ higher.

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Major U.S. financial indices closed higher again Tuesday on continued positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 138 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 53 points.

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Overall pasture conditions are finishing the growing season similar to last year, but poorer in the severest drought areas.

Based on the USDA Crop Progress report for the week ending Oct. 17, the Livestock Marketing Information Center (LMIC) reported 34% of pasture and range was classified as Poor or Very Poor in the Great Plains region (CO, KS, MT, NE, ND, SD, WY). That was 12% more than a year earlier. The region is home to 29% of the nation’s beef cows, according to LMIC.

“Pasture conditions in Montana are the most severe of any state in the country, with 65% of pastures rated Very Poor (moderating from 69% the prior week),” say LMIC analysts, in the latest Livestock Monitor. “Within the same region, Nebraska had 13% of its pastures rated Very Poor compared to 30% very poor rating in the same week a year ago.”

In Oklahoma and Texas — representing 22% of the nation’s beef cow herd — 34% of the pastures were rated as Good or Excellent, which was 10% more than a year earlier, according to LMIC. Analysts there say, “Notable in this region was the condition of pastures this past spring when 14% were rated Very Poor, the worst spring rating since 2014 for that region.”

LMIC analysis the middle of October indicated 23% of the beef cow herd was in states with 40% of the pastures rated Good to Excellent, unchanged from a year earlier. States where 40% of the pastures were rated Poor or Very Poor accounted for 25% of the beef cow herd, down from 33% a year earlier.

Most recently, national pasture and range conditions held about steady for the week ending Oct. 31, according to the latest Crop Progress report.

26% of pasture and range was rated as Good (23%) or Excellent (3%), which was 2% more than the previous week but 6% more than a year earlier. On the other end of the scale, 42% was rated as Poor (20%) or Very Poor (22%), which was 1% less than the previous week and 1% less than a year earlier.

87% of winter wheat was planted, which was 1% less than a year earlier but 1% more than average. 67% was emerged, which was 3% less than a year earlier and 1% less than average. 45% was in Good (40%) or Excellent (5%) condition, which was 2% more than a year earlier. 21% was in Poor (14%) or Very Poor (7%) condition, which was 2% more year over year.

74% of corn was harvested, compared to 81% last year and 66% for the five-year average.

79% of soybeans were harvested, compared to 86% last year and 81% for average.

Cattle Current Daily—Nov. 3, 2021 2021-11-02T18:58:37-06:00

Cattle Current Daily—Nov. 2, 2021

Negotiated cash fed cattle trade ranged from mostly inactive with very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.

Live prices last week were steady to $2 higher in the Texas Panhandle at $124-$126/cwt., $2 higher in Kansas at $126, $2-$3 higher in Nebraska at $127 and $2 higher in the western Corn Belt at $126-$127. Dressed trade was $4 higher at $200.

The five-area average direct fed steer price last week was $1.90 higher than the previous week at $126.29/cwt. on a live basis. The average steer price in the beef was $4.06 higher at $199.89.

Choice boxed beef cutout values were $1.86 higher Monday afternoon at $287.58/cwt. Select was $1.02 higher at $264.39.

Feeder Cattle futures closed an average of $2.22 lower, battered by rising Corn and Wheat futures.

Corn futures were 10¢ higher through the front four contracts and then mostly 5¢ to 7¢ higher.

K.C. Wheat futures were mostly 18¢ to 21¢ higher.

Weakness in Feeder Cattle helped pressure Live Cattle futures an average of 38¢ lower.

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Major U.S. financial indices edged higher Monday, buoyed by energy prices.

The Dow Jones Industrial Average closed 94 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 97 points.

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Winter wheat pasture prospects improved with October rains, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“While wheat for grain-only is still being planted or is newly planted, wheat for forage or dual purpose has progressed significantly with recent rains,” Peel says. “Driving across Oklahoma recently I observed wheat in stages from planting to barely emerged to several inches tall.  Most wheat pasture will not be ready for grazing until December, later than usual, but I have heard reports that some wheat grazing may begin by mid-November.”

Overall, however, Peel says ongoing drought conditions are slightly worse year over year.

“Although there have been some regional changes in drought situation, the overall picture has not changed much. The country started this growing season with the worst average pasture and range conditions on record and is ending the year in the same condition,” Peel explains. “The reemerging La Niña increases the chances for moisture in the northern half of the country and Canada but simultaneously increases the odds of drier conditions redeveloping in the Southwest. In any event, not much will change regarding forage supplies in the next 6-7 months.”

On the upside, cattle prices should continue to improve, according to Peel, as cattle numbers shrink cyclically.

Cattle Current Daily—Nov. 2, 2021 2021-11-01T20:46:06-06:00

Cattle Current Daily—Nov. 1, 2021

Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Friday afternoon, according to the Agricultural Marketing Service.

Live prices last week were $2 higher in the Southern Plains at $126/cwt., $2 higher in the western Corn Belt at $126-$127 and $2-$3 higher in Nebraska at $127. Dressed trade was $4 higher at $200.

Total estimated cattle slaughter last week was 668,000 head, which was 7,000 more than the previous week and 28,000 more than the same week last year. Total estimated year-to-date cattle slaughter of 27.60 million head was 847,000 head more (+3.17%) than the same time last year. Total estimated beef production of 22.83 billion lbs. was 616.2 million lbs. more (+2.77%) than a year earlier.

Cattle futures closed lower Friday, likely mostly due to week-end and month-end position squaring, given improving fundamentals.

Live Cattle futures closed an average of 94¢ lower, except for $2.87 higher in expiring Oct and 12¢ higher at the back.

Feeder Cattle futures closed an average of 96¢ lower (35¢ to $1.45 lower).

Corn futures closed 4¢ to 5¢ higher through near Jly and then mostly 1¢ higher.

Soybean futures closed 2¢ to 3¢ higher through Jan ‘23 and then mostly  fractionally higher to 1¢ higher.

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Major U.S. financial indices closed higher Friday, despite Apple and Amazon missing quarterly earnings estimates.

The Dow Jones Industrial Average closed 89 points higher. The S&P 500 closed 8 points higher. The NASDAQ closed 50 point higher.

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“It’s a challenging time for crop producers to manage input price risk. Input prices for fertilizer, crop protection (chemicals), machinery, fuel, labor, rent, and insurance are up substantially compared to last year at this time,” says Aaron Smith, crop marketing specialist at the University of Tennessee, in his weekly market comments. “Additionally, availability and timeliness of delivery are a major concern.”

Fertilizer prices underscore the dramatic increase in the cost of crop production.

“All three major nutrients—nitrogen, phosphorus and potassium—used in the production of primary row crops in the U.S. have experienced varying degrees of upward price pressure since late 2020,” say members of the Ag CEO Council (ACC). “Since mid-2020, nitrogen prices have climbed from approximately $450 per ton to $750 per ton, phosphorus prices from $400 per ton to more than $700 per ton and potassium prices from over $300 per ton to over $600 per ton.” That’s in a recent letter from the ACC to Michael Shapiro, Deputy Assistant Secretary for Economic Policy, in response to a request for comments to President Biden’s Executive Order on America’s Supply Chains.

According to the Ag CEO Council, supply chain disruptions, higher crop prices and escalating natural gas prices are all drivers of increasing fertilizer cost.

“The primary feedstock and process fuel for ammonia production is natural gas. The recent doubling of the Henry Hub natural gas price is increasing the cost of ammonia production – the building block for all nitrogen fertilizers,” according to the ACC letter.

ACC members explain multiple trade actions continue to affect both phosphorus and potassium prices. That includes U.S. tariffs on phosphorous imports from Morocco and Russia, in response to unfair subsidization from those countries, as well as China banning phosphorous exports through June of next year.

“Most common fertilizers have more than doubled compared to last year. As such, producers are seeking strategies to reduce input costs,” Smith says. “Two recommendations, as a starting point, are soil sampling (know what you’ve got) and crop selection (know current relative cost and revenue relationships for commodities produced on your farm). Unfortunately, there is no ‘silver bullet’ to mitigate rising input costs and availability concerns. So, producers will need to be creative in their approach and con-sider numerous strategies.”

Cattle Current Daily—Nov. 1, 2021 2021-10-31T15:03:35-06:00

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