Daily Market Highlights

Negotiated cash fed cattle prices stepped $3-$5 higher in the western Corn Belt Tuesday at $190/cwt. according to the Agricultural Marketing Service. Trade was slow on light to moderate demand. Dressed prices there last week were $288-$292.

There were a few early sales in Nebraska through Tuesday afternoon at $190 on a live basis and $300 in the beef, but too few to trend. Last week, live prices were $183-$189 and dressed prices were $285-$292.

Trade in the Southern Plains was mostly inactive with very light demand. Last week, live prices were $175-$180 in the Texas Panhandle and $178-$180 in Kansas.

Stronger cash fed cattle prices helped lift Cattle futures.

Live Cattle futures closed an average of $1.60 higher (97¢ higher toward the back to $2.67 higher in spot Jun).

Feeder Cattle futures closed an average of $1.27 higher (65¢ higher in spot Aug to $1.57 higher at the back).

Resurgent wholesale beef values added support. Choice boxed beef cutout value was $7.21 higher Tuesday afternoon at $321.40/cwt. Select was $2.71 higher at $299.44/cwt.

Corn futures closed 3¢ to 10¢ higher through Jly ‘24 Tuesday on a more bearish weather outlook.

KC HRW Wheat closed 2¢ to 3¢ lower through May’24 and then 9¢ to 13¢ lower.

Soybean futures closed mostly 3¢ to 5¢ higher.

******************************

Major U.S. financial indices mainly paddled water Tuesday with investors looking for direction.

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

West Texas Intermediate Crude Oil futures (CME) closed 39¢ to 41¢ lower through the front six contracts.

******************************

Agricultural producer sentiment grew more bearish last month, according to the Purdue University/CME Group Ag Economy Barometer. It fell 19 points in May to 104, the weakest level since July 2022. The Index of Future Expectations was down 22 points to a 98, while the Index of Current Conditions was down 13 points at 116.

Weaker crop prices likely fueled declining producer optimism. In mid-May, compared to a month earlier, new-crop wheat bids for June-Jly delivery were down 50¢ per bushel, soybean bids were $1 per bushel less and Eastern Corn Belt fall delivery bids for corn declined more than 50¢ per bushel.

“Producers are feeling the squeeze from weakened crop prices which has reduced their expectations for strong financial performance in the coming year,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

In May, 38% of respondents said they expected weaker financial performance for their farm this year, compared to 23% who felt that way in April. Higher input cost remains the top concern among producers in the year ahead; however, concern over the risk of lower crop and/or livestock prices is growing.

Producers’ expectations for short-term farmland values fell 13 points to 110 in May, the weakest short-term index reading since August 2020. Just 29% of respondents said they expected farmland values to rise over the next 12 months compared to 54% who felt that way a year earlier.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between May 15-19.

Cattle futures continued higher Monday, helped along by surging wholesale beef prices and softer Corn futures.

Live Cattle futures closed an average of 47¢ higher.

Feeder Cattle futures closed an average of 68¢ higher.

Corn futures softened a touch Monday, following the previous session’s strong gains, perhaps pressured in part by rain forecast in the Corn Belt.

Corn futures closed mostly 2¢ to 4¢ lower.

KC HRW Wheat closed 4¢ to 10¢ higher.

Soybean futures closed mostly 2¢ to 5¢ lower.

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $175-$180/cwt. in the Texas Panhandle, $178-$180 in Kansas, $183-$189 in Nebraska and $185-$187 in the western Corn Belt. Dressed prices were $285-$292 in Nebraska and $288-$292 in the western Corn Belt.

Choice boxed beef cutout value was $4.26 higher Monday afternoon at $314.19/cwt. Select was $5.80 higher at $296.73/cwt.

******************************

Major U.S. financial indices closed lower Monday, with likely profit taking from last week’s strong gains.

The Dow Jones Industrial Average closed 199 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 11 points.

West Texas Intermediate Crude Oil futures (CME) closed 28¢ to 42¢ higher through the front six contracts.

******************************

Dwindling beef production and resilient wholesale beef demand are lifting cattle prices.

“Tighter supplies of beef and cattle are dominating market fundamentals and will continue to do so,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel points out beef production was 4.8% less year over year for the first 20 weeks of this year, with lighter year-over-year carcass weights magnifying the decline.

“Choice boxed beef prices finished last week at $309.93/cwt., up $6/cwt. from the Friday before Memorial Day,” Peel notes. “Boxed beef prices previously peaked in late April but decreased through May with holiday buying completed. The increase in Choice boxed beef prices into June suggests that post-Memorial Day beef demand remains strong.” 

As cattle slaughter declines, harvest remains weighted toward a higher percentage of females than is typical.

“Total cattle slaughter is down 2.8% so far this year compared to last year, with fed slaughter down 2.4% and total cow slaughter down 4.1% year over year,” Peel says. “However, heifer slaughter remains 0.6% higher year over year for the year to date and total female (heifer plus cow) so far this year accounts for 52.4% of total cattle slaughter.”

Increasing fed cattle, calf and feeder cattle prices are providing economic incentive for herd expansion, and it appears Mother Nature is beginning to cooperate.

“Recent improvement in drought conditions increases the odds that heifer retention will begin in earnest in the second half of the year,” Peel says. “Increased heifer retention, combined with reduced cow culling will increasingly squeeze cattle slaughter for the remainder of the year and into 2024 and beyond.”  

Negotiated cash fed cattle trade ranged from slow with moderate demand to mostly inactive on light demand through Friday afternoon with too few transactions to trend, according to the Agricultural marketing Service.

For the week, live prices were $5-$9 higher in the Texas Panhandle at $175-$180/cwt., $7-$9 higher in Kansas at $178-$180, $3-$6 higher in Nebraska at $183-$188 and $3-$5 higher in the western Corn Belt at $185-$187. Dressed prices were $5-$6 higher in Nebraska at $285-$292 and $3-$7 higher in the western Corn Belt at $288-$292.

Through Thursday, the five-area direct weighted average fed steer price was $3.64 higher week to week at $181.35. The weighted average dressed steer price was $5.30 higher at $289.66.

Choice boxed beef cutout value was $3.49 higher Friday afternoon at $309.93/cwt. Select was $4.61 higher at $290.93/cwt.

Week to week on Friday, Feeder Cattle futures closed an average of $8.32 higher and Live Cattle futures closed an average of $6.12 higher. On Friday, Live Cattle futures closed an average of 31¢ higher and Feeder Cattle futures closed an average of 25¢ higher.

Grain and soybean futures caught a gear higher Friday, with the latest U.S. drought monitor showing expanding dryness in the Corn Belt. It indicates 34% of U.S. corn and 28% of soybean production was affected by drought June 1.

Corn futures closed mostly 10¢ to 16¢ higher through Jly ‘24 and then 2¢ to 5¢ higher.

Soybean futures closed mostly 12¢ to 18¢ higher.

KC HRW Wheat closed 7¢ to 9¢ higher.

******************************

Major U.S. financial indices surged higher Friday, fueled by Senate passage of the Debt Ceiling bill, as well as a stronger jobs report than anticipated.

Total non-farm payroll employment increased by 339,000 in May, according to the U.S. Bureau of Labor Statistics.  The unemployment rate rose by 0.3% to 3.7%. Average hourly earnings for all employees on private non-farm payrolls in May rose by 11¢ cents to $33.44. Over the past 12 months, average hourly earnings have increased by 4.3%.

The Dow Jones Industrial Average closed 701 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 139 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.48 to $1.64 higher through the front six contracts.

******************************

As welcome as significantly higher cattle prices are to producers, Andrew P. Griffith, agricultural economist at the University of Tennessee cautions the economic incentive for rapid herd expansion could add to eventual downside price pain.

“There is no reason to say the prices represented on the futures market are not attainable. However, if cash prices reach such a level in today’s economic environment, it will likely do more harm to cattle industry participants than good over the next five to eight years,” Griffith says, in his weekly market comments. “The concern here is some repeat performance of 2016 through 2018 following the strong prices in 2014 and 2015.”

It was a classic example of feast or famine.

“There is no way to predict what cattle prices will look like in five years, but the price levels being anticipated the next 12 months scream and shout herd expansion at as fast of a rate as possible,” Griffith says. He explains a moderate pace of herd expansion would support stronger prices for a longer period, whereas rapid expansion sets the stage for a steep price decline.

In the meantime, Griffith notes narrowing to negative packer margins amid high fed cattle prices likely point to increased sector consolidation.

“The packers this will be toughest on are the smaller operations and the new operations that are trying to pay down loans,” Griffith says. “The large and established packers can deal with negative margins a little longer than those who are highly leveraged. Red margins are nothing new in the packing industry, but they are something new to many of the operations that have opened the past couple of years. Beef packers will be competing for a relatively small number of cattle the next couple of years, which could lead to buyouts, consolidation, or straight-out closures … This type of price environment will lead to changes in the cattle industry. What those changes are and how they impact the industry will only be revealed with time.”

Negotiated cash fed cattle prices roared higher Thursday.

Trade in the Southern Plains was active with very good demand. Live prices were $5-$9 higher in the Texas Panhandle at $175-$180/cwt. and $7-$9 higher in Kansas at $178-$180.

Elsewhere, trade was moderate with very good demand. Live prices were $3-$6 higher in Nebraska at $183-$188 and $3-$5 higher in the western Corn Belt $185-$187. Dressed prices in Nebraska were $5-$6 higher at $285-$292. Last week, dressed prices in the western Corn Belt were $285.

Choice boxed beef cutout value was 60¢ higher Thursday afternoon at $306.44/cwt. Select was 83¢ lower at $286.32/cwt.

The extraordinary ascent of cash fed cattle prices fueled another bounce in Cattle futures.

Live Cattle futures closed an average of $3.65 higher ($2.25 higher at the back to $5.77 higher in spot Jun).

Feeder Cattle futures closed an average of $3.38 higher ($2.47 to $4.20 higher).

Traders appeared to add weather premium to markets Thursday.

Corn futures closed mostly 5¢ to 8¢ higher.

KC HRW Wheat closed 12¢ to 19¢ higher.

Soybean futures closed 18¢ to 29¢ higher though May ‘24 and then mostly 11¢ to 18¢ higher.

******************************

Major U.S. financial indices closed higher Thursday with optimism fueled by U.S. House passage of a debt ceiling bill. 

The Dow Jones Industrial Average closed 153 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 165 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.79 to $2.01 higher through the front six contracts.

******************************

Ranch and farm labor wages increased in the latest semiannual Farm Labor report from USDA’S NASS.

Operators paid their hired workers an average wage of $18.08 per hour during the April 2023 reference week (April 9-15, 2023), up 5% from the April 2022 reference week. Field workers received an average of $17.26 per hour, up 5%, while livestock workers earned $16.48 per hour, up 4%. The field and livestock worker combined wage rate of $16.99 per hour, was up 4% from the 2022 reference week. Hired laborers worked an average of 40.6 hours during the reference week, up 2% year over year.

Ranch and farm operators hired 651,000 workers directly during the reference week, which was 3% more than the previous year.

Another day of weaker Corn futures and the outlook for steady to stronger cash fed cattle prices this week helped Cattle futures extend gains Wednesday.

Feeder Cattle futures closed an average of $1.46 higher.

Live Cattle futures closed an average of 63¢ higher (25¢ higher in the spot month to $1.10 higher).

Expectations of record production in Brazil helped pressure Corn futures Wednesday.

Corn futures closed mostly 1¢ to 3¢ lower.

KC HRW Wheat closed 2¢ to 6¢ higher in the front three contracts and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 6¢ to 16¢ lower.

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

Last week, live prices were $170-$171/cwt. in the Texas Panhandle, $171 in Kansas, $180-$182 in Nebraska and $182 in the western Corn Belt. Dressed prices were $280-$286 in Nebraska and $285 in the western Corn Belt.

Choice boxed beef cutout value was 88¢ higher Wednesday afternoon at $305.84/cwt. Select was 62¢ lower at $287.77/cwt.

******************************

Major U.S. financial indices closed lower Wednesday with investors focused on continued debt ceiling talks.

The Dow Jones Industrial Average closed 134 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 82 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.29 to $1.37 lower through the front six contracts.

******************************

USDA forecast beef exports for fiscal year (FY) 2023 at $9.3 billion, in the quarterly Outlook for U.S. Agricultural Trade from the Economic Research Service (ERS) and Foreign Agricultural Service (FAS). The total would be $700 million less than February’s projection on weaker unit values for beef muscle cuts more than offsetting firm shipments to Mexico and East Asia.

Total livestock, poultry, and dairy exports were lowered $1.2 billion to $39.3 billion with lower beef and poultry estimates outweighing gains in dairy.

U.S. agricultural exports were forecast at $181.0 billion, down $3.5 billion from the February forecast. This revision was driven by decreases in corn, wheat, beef, and poultry exports.

“Corn exports are forecast $2.1 billion lower to $14.5 billion on lower unit values and volumes as Brazil is poised to harvest a record second crop of corn,” say ERS and FAS analysts.

For overall perspective, the global economic outlook remained mostly unchanged.

“Inflation remains on a slowing trend, but economic growth challenges are materializing as monetary conditions tighten,” explains ERS and FAS analysts. “North America is still projected to grow moderately, with growth in the Eurozone projected to remain at lower levels. World real gross domestic product (GDP) is projected to increase by 2.8% in 2023, unchanged from the previous forecast.”

The quarterly outlook pegs projected growth for the United States’ real GDP in 2023 0.2% higher at 1.6%. 

Last week’s strong cash fed cattle prices, recent higher wholesale beef prices and Tuesday’s break in Corn futures helped propel Cattle futures higher.

Feeder Cattle futures closed an average of $3.24 higher.

Live Cattle futures closed an average of $1.53 higher.

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $170-$171/cwt. in the Texas Panhandle, $171 in Kansas, $180-$182 in Nebraska and $182 the western Corn Belt Dressed. prices were $280-$286 in Nebraska and $285 in the western Corn Belt.

The weighted average five-area direct fed steer price last week was $2.79 higher at $177.94/cwt. The average fed steer price in the beef was $4.02 higher at $284.36.

Choice boxed beef cutout value was $1.03 higher Tuesday afternoon at $304.96/cwt. Select was $2.85 higher at $287.77/cwt.

Grain and Soybean futures closed sharply lower Tuesday as traders appeared to take back weather premium, as well as profits from last week’s rally. 

Corn futures closed mostly 6¢ to 10¢ lower.

KC HRW Wheat closed 22¢ to 35¢ lower in the front five contracts and then 8¢ to 12¢ lower.

Soybean futures closed 30¢ to 41¢ lower through Aug ’24 and then 21¢ to 26¢ lower.

******************************

Major U.S. financial indices closed little changed Tuesday with investors focusing on continued debt ceiling talks.

The Dow Jones Industrial Average closed 50 points lower. The S&P 500 closed fractionally higher. The NASDAQ was up 41 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.81 to $3.21 lower through the front six contracts, pressured by concerns about global demand.

******************************

“Increasingly tight cattle supplies suggest that margins at all levels above the cow-calf sector will be squeezed in the coming months.  The severity of the squeeze and the timing will vary across beef industry segments,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Stating with the cow-calf sector, Peel explains calf prices are currently about 50% higher year over year. 

“With calf prices increasing faster than feeder cattle prices, stocker margins or value of gain is eroding. However, similar to feedlots, the time lags in stocker production will allow the uptrend in feeder prices to offset part of the high calf purchase prices,” Peel explains. “Calf prices are likely to continue increasing faster than feeder cattle prices in the coming months.”

So far, feedlot returns remain positive, due to long time lags associated with the sector and the recent rise of fed cattle prices to record levels, according to Peel.

“The increase in fed cattle prices is balanced against the price of feeder cattle placed in feedlots roughly six months ago,” Peel says.  “However, it’s just a matter of time before feedlot margins feel the squeeze of rising cattle prices. The prices of feeder cattle currently being placed in feedlots are up about 39% year over year.  Feedlot breakevens for fed cattle will increase sharply by the end of the year.”

As for the packing sector, Peel points out margins are already being squeezed as the 25% year-over increase in fed cattle prices runs ahead of boxed beef prices, which are about 14% higher.

“Additionally, packers will face increased overhead costs as declining cattle numbers will reduce packing plant utilization rates in the coming months,” Peel says.

Finally, comes the retail sector, where Peel says prices have remained mostly static during the last 16 months.

“It appears that retail margins are decreasing as wholesale values are increasing faster than retail prices,” Peel explains.  “The reported retail beef prices reflect only grocery sales and less is known about beef price adjustments in food service and export markets.  The ability of retail beef prices to move higher as limited supplies and rising wholesale prices squeeze retail margins is perhaps the biggest concern in beef markets currently.”

Live Cattle futures continued to grind higher, closing an average of 49¢ higher (5¢ higher at the front to 92¢ higher at the back), supported by stronger cash prices and wholesale beef values.

Feeder Cattle futures closed an average of 75¢ lower in light trade, pressured by the bounce higher in Corn futures.

Grain and Soybean futures closed higher Friday as traders appeared to add weather premium with the dry, hot outlook in the Corn Belt for the next couple of weeks.

Corn futures closed mostly 10¢ to 18¢ higher.

KC HRW Wheat closed 1¢ to 5¢ higher in the front five contracts and then 13¢ to 15¢ higher.

Soybean futures closed 10¢ to 17¢ higher.

******************************

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

For the week, live prices were $1 higher in the Southern Plains at $171/cwt., $2-$4 higher in Nebraska at $180-$182 and $4-$5 higher in the western Corn Belt at $182. Dressed prices were $4-$5 higher in Nebraska at $285-$286 and $3-$5 higher in the western Corn Belt at $285.

Choice boxed beef cutout value was $3.99 higher Friday afternoon at $303.93/cwt. Select was 38¢ higher at $284.92/cwt.

Estimated total cattle slaughter last week of 625,000 head was 17,000 head fewer than the prior week and 16,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 13.2 million head was 441,000 head less (-3.2%). Estimated year-to-date beef production of 10.8 billion pounds was 523.7 million pounds less (-4.6%).

U.S. beef exports appear to regaining some momentum. Net U.S. beef sales (2023) for the week ending May 18 totaled 18,300 metric tons. That was 5% more than the previous week and 15% more than the prior four-week average. Increases were primarily for Japan, South Korea, China, Mexico and Taiwan.

******************************

Major U.S. financial indices closed higher Friday with renewed optimism surrounding debt ceiling talks. Tech stocks continued to add support.

The Dow Jones Industrial Average closed 328 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 277 points.

West Texas Intermediate Crude Oil futures (CME) closed 81¢ to 84¢ higher through the front six contracts.

******************************

Fuel and fertilizer prices remain historically high but are lower year over year, according to analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

“Prices have been elevated for the better part of two years, and although they have been trending lower, they are still well above historic levels,” LMIC analysts say. “Anhydrous Ammonia prices started the year at $1,308.33 per ton, which was 12% below prices at the start of 2022. Through mid-May, Anhydrous Ammonia prices have fallen almost 17% to the most recent price reported of $1,089.58 per ton. Typically, Anhydrous Ammonia prices range from about $520 to $575 per ton during the first five months of the year.”

Likewise, based on USDA’s Illinois Production Cost Report, LMIC analysts offer other examples, compared to a year earlier (May 26): Diesel prices are 29% less at $3.27 per gallon; Liquid Nitrogen prices are 17% less at $535.75 per ton; Urea prices are 31% less at $653 per ton.

“Urea prices still need to move lower to get closer to more typical prices, which are usually around $400 per ton for this time of year,” according to LMIC analysts.

Negotiated cash fed cattle trade ranged from inactive on light demand to limited on light demand through Thursday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are $1 higher in the Southern Plains at $171/cwt., $2-$4 higher in Nebraska at $180-$182 and $4-$5 higher in the western Corn Belt at $182. Dressed prices are $4-$5 higher in Nebraska at $285-$286 and $3-$5 higher in the western Corn Belt at $285.

Choice boxed beef cutout value was $1.64 higher Thursday afternoon at $299.94/cwt. Select was 75¢ higher at $284.54/cwt.

Cattle futures continued to edge higher Thursday, supported by the week’s stronger cash prices.

Feeder Cattle futures closed an average of 25¢ higher, except for unchanged at either end of the board.

Live Cattle futures closed an average of 51¢ higher (25¢ to $1.20 higher in spot Jun).

Corn futures closed mostly 2¢ to 4¢ lower Thursday with likely profit taking and positioning ahead of the long weekend.

KC HRW Wheat closed mostly unchanged to 5¢ higher.

Soybean futures closed mostly 9¢ to 12¢ lower.

******************************

Major U.S. financial indices closed mixed Thursday with gains in tech stocks but overall uncertainty tied to the debt ceiling talks.

The Dow Jones Industrial Average closed 35 points lower. The S&P 500 closed 36 points higher. The NASDAQ was up 213 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.08 to $2.51 lower through the front six contracts.

******************************

Rural economic growth improved last month, according to the Rural Mainstreet Index, which increased from 50.1 in April to 55.8 in May. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. 

“The Rural Mainstreet economy continues to experience slow economic growth,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “Only 11.5% of bankers reported improving economic conditions for the month, with 88.5% indicating no change in economic conditions from April’s slow growth.”

After declining below growth neutral for March, the overall Rural Mainstreet Index expanded above the threshold for a second straight month, according to the May monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

The region’s farmland price index dropped to 56.3 from April’s 64.6. This was the 32nd straight month that the index has advanced above 50.0. 

Bankers reported that non-pasture farmland prices in their area grew by an average of 4.3% over the past 12 months. Respondents expected no price growth over the next 12 months.

The May loan volume index expanded to a strong 75.0 from 62.5 in April. The checking-deposit index plummeted to a second consecutive low of 22.0 from April’s 25.0, while the index for certificates of deposit and other savings instruments declined to 70.0 from April’s 74.0.

“Two consecutive record low checking deposit indices point to higher deposit outflows, even for community banks,” Goss says. 

Negotiated cash fed cattle trade was slow to moderate on moderate demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Prices were $1 higher at $171/cwt.

In Nebraska, trade was slow to moderate with moderate to good demand. Live prices were $2-$4 higher at $180-$182 and dressed prices were $4-$5 higher at $285-$286.

Although too few to trend, there were some live sales in the western Corn Belt at $180-$182 on slow trade with light to moderate demand. Live prices there last week were $177-$178 on a live basis; $280-$282 in the beef.

Cattle futures blossomed with the higher cash fed cattle prices.

Feeder Cattle futures closed an average of $1.33 higher, (87¢ to $2.17 higher).

Live Cattle futures closed an average of $1.04 higher (60¢ to $1.82 higher).

Choice boxed beef cutout value was $2.44 lower Wednesday afternoon at $298.30/cwt. Select was $2.51 higher at $283.79/cwt.

Corn futures closed mostly fractionally higher to 3¢ higher.

KC HRW Wheat closed mostly 15¢ to 29¢ lower.

Soybean futures closed mostly 2¢ to 4¢ lower.

******************************

Major U.S. financial indices closed lower Wednesday with a negative rating watch for the U.S. AAA rating.

The Dow Jones Industrial Average closed 255 points lower. The S&P 500 closed 30 points lower. The NASDAQ was down 76 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.37 to $1.44 higher through the front six contracts.

******************************

Total pounds of beef in freezers April 30 were down 6% from the previous month and down 16% from last year, according to USDA’s Cold Storage report.

Frozen pork supplies were 6% more than the previous month 6% more than the previous year.

Total red meat supplies in freezers were up slightly from the previous month but down 5% from last year.

Total frozen poultry supplies were up 1% from the previous month and up 9% from a year ago.

Cattle futures traded mixed Monday, holding their own in the face of higher grain futures.

Feeder Cattle futures closed an average of 36¢ higher, except for an average of 15¢ lower in two contracts.

Live Cattle futures closed mixed, from an average of 38¢ lower (10¢ to 70¢ lower) through Feb and then unchanged to an average of 10¢ higher.

Grain and Soybean futures bounced back some Monday with apparent technical resistance to the downside and perhaps some weather premium with the drier, hotter near-term outlook in parts of the Corn Belt.

Corn futures closed mostly 7¢ to 8¢ higher.

KC HRW Wheat closed fractionally higher to 3¢ higher.

Soybean futures closed mostly 15¢ to 21¢ higher.

Negotiated cash fed cattle trade was at a standstill in all regions through Monday afternoon, according to the Agricultural Marketing Service.

For the week, live prices were steady in the Southern Plains at $170/cwt., $2 higher in Nebraska at $178 and steady to $3 higher in the western Corn Belt at $177-$178. Dressed prices were steady to $2 higher at $280-$282.

The five-area direct weighted average fed steer price was $1.02 higher last week at $175.15/cwt. The weighted average fed steer price in the beef was $1.36 higher at $280.84.

Choice boxed beef cutout value was $2.80 higher Monday afternoon at $303.90/cwt. Select was 51¢ lower at $283.43/cwt.

******************************

Major U.S. financial indices closed mixed Monday, as investors continued to eye debt ceiling negotiations. 

The Dow Jones Industrial Average closed 140 points lower. The S&P 500 closed fractionally higher. The NASDAQ was up 62 points.

West Texas Intermediate Crude Oil futures (CME) closed 32¢ to 44¢ higher through the front six contracts.

******************************

Beef cow slaughter continues less than last year but the year-to-date decline of 11%, with about five months of the year already gone, suggests the herd will continue to liquidate some more this year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“In 2014, beef cow slaughter dropped just over 18% from the previous year to put the brakes on herd liquidation. I suspect that the ongoing drought is masking continued liquidation in some areas up to this point,” Peel explains. “The low bred heifer inventory combined with the relatively slow reduction in beef cow slaughter makes additional beef cow herd liquidation this year probably unavoidable. In other words, if drought conditions continue to improve, 2024 will probably be the low point of the herd similar to 2014, albeit at even lower beef cow inventories.”

Assuming drought continues to fade, Peel explains, “What all of this means is that heifer retention likely will begin in earnest this fall with heifer calves to be bred in 2024. Modest herd expansion is possible next year with faster herd expansion after 2024.”