Daily Market Highlights

Negotiated cash fed cattle trade was mostly slow on light to moderate demand through Friday 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 $1-$3 higher in the western Corn Belt at $178. Dressed prices in Nebraska were steady to $2 higher at $280-$282.

Stronger cash fed cattle prices in the North, coupled with erosion in Corn futures helped lift Cattle futures again on Friday.

Feeder Cattle futures closed an average of 64¢ higher (17¢ to 77¢ higher).

Live Cattle futures closed an average of 49¢ higher.

Choice boxed beef cutout value was $2.79 higher Friday afternoon at $301.10/cwt. Select was 33¢ higher at $283.94/cwt.

Estimated total cattle slaughter last week of 642,000 head was 4,000 head fewer than the previous week and 15,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 12.6 million head was 423,000 head fewer (-3.3%) than a year earlier. Estimated year-to-date beef production of 10.3 billion pounds was 513.6 million pounds less (-4.7%).

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As alluded to, market bears continued to pressure the grain complex Friday. Faster than average domestic planting, extension of the Black Sea Grain Initiative and China’s continued cancellation of contracts for U.S. corn all fueled bearishness in grain markets during the week.

Corn futures closed mostly 1¢ lower.

KC HRW Wheat closed 25¢ to 32¢ lower through May ‘24 and then 4¢ to 11¢ lower.

Soybean futures closed mostly 6¢ to 11¢ lower.

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Major U.S. financial indices closed lower Friday, dampened by stalled debt ceiling negotiations.

The Dow Jones Industrial Average closed 109 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 30 points.

West Texas Intermediate Crude Oil futures (CME) closed 25¢ to 39¢ lower through the front six contracts.

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USDA announced confirmation of an atypical case of Bovine Spongiform Encephalopathy (BSE) at a slaughter plant in South Carolina. According to Friday’s announcement, the cow, approximately 5 years old, never entered slaughter channels and at no time presented a risk to the food supply or to human health in the United States. Given the United States’ negligible risk status for BSE, USDA does not expect any trade impacts as a result of the finding.

USDA Animal and Plant Health Inspection Service’s (APHIS) National Veterinary Services Laboratories (NVSL) confirmed the cow was positive for atypical L-type BSE. The animal was tested as part of APHIS’s routine surveillance of cattle that are deemed unsuitable for slaughter.

Atypical BSE generally occurs in older cattle and seems to arise rarely and spontaneously in all cattle populations.

This is the nation’s 7th detection of BSE. Of the six previous U.S. cases, the first, in 2003, was a case of classical BSE in a cow imported from Canada; the rest have been atypical (H- or L-type) BSE.

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Markets will likely view the monthly Cattle on Feed report — feedlots with 1,000 head or more capacity — as neutral.

Placements in April of 1.7 million head were 76,000 head fewer (-4.2%) than a year earlier. That was 0.6% fewer than average estimates ahead of the report.

In terms of placement weights, 35% went on feed weighing less than 600 pounds, 49% weighing 700-899 pounds and 16% weighing 900 pounds or more.

Marketings in April of 1.7 million head were 192,000 head fewer (-10.1%) year over year. That was 0.3% less than pre-report estimates.

Cattle on feed May 1 of 11.6 million head were 414,000 head fewer (-3.4%) than the same time last year, about dead even with expectations.

Year-over-year on-feed numbers May 1 were 10% less in Colorado, 2% less in Kansas, 5% less in Nebraska, 9% less in Oklahoma and 4% less in Texas. Inventory was 5% more in Idaho, 2% more in Iowa and 9% more in Washington.

Cattle futures stepped higher Thursday, supported by recently lower Corn futures, bullish cash strength for feeder cattle, cattle feeders’ resolve to hold the line on fed cattle prices and perhaps some positioning ahead of Friday’s Cattle on Feed report.

Feeder Cattle futures closed an average of $2.83 higher ($1.55 to $3.35 higher).

Live Cattle futures closed an average of 78¢ higher.

Bearish sentiment continued in the grain complex.

Corn futures closed mostly 1¢ higher.

KC HRW Wheat closed mostly 18¢ to 28¢ lower.

Soybean futures closed mostly 1¢ to 3¢ lower.

Negotiated cash fed cattle trade was slow on light demand in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. Prices were steady at $177/cwt.

Elsewhere, trade was limited on light demand. Although too few to trend, there were some live trades in the western Corn Belt at $178.

Last week, live prices were $170/cwt. in Kansas, mostly $176 in Nebraska and $175-$177 in the western Corn Belt. Dressed prices were $280.

Choice boxed beef cutout value was 16¢ higher Thursday afternoon at $298.31/cwt. Select was 16¢ higher at $283.61/cwt.

Net U.S. beef export sales (2023) were 17,400 metric tons for the week ending May 11, according to the U.S. Export Sales report. That was 5% more than the previous week and 7% more than the prior four-week average. Increases primarily were for Japan, South Korea, China, Mexico and Taiwan.

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Major U.S. financial indices closed higher again Thursday, once again supported by apparent optimism about debt ceiling talks.

The Dow Jones Industrial Average closed 115 points higher. The S&P 500 closed 39 points higher. The NASDAQ was up 188 points.

West Texas Intermediate Crude Oil futures (CME) closed 77¢ to 97¢ lower through the front six contracts.

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USDA’s Economic Research Service (ERS) raised the expected second-quarter feeder steer price by $5 to $204/cwt. That’s basis 750-800 lbs. at Oklahoma City. The increase was based on recent data and forecast declines in season-average corn prices, according to ERS analysts, in the May Livestock, Dairy and Poultry Outlook.

Projected feeder steer prices were unchanged for the third quarter at $214, but $4 lower in the fourth quarter at $220. The average annual price was little changed at $205.37. ERS projected next year’s annual average price at $220.75.

As mentioned recently in Cattle Current, ERS increased forecast fed steer prices (five-area direct) higher for the remainder of this year, in the May World Agricultural Supply and Demand Estimates (WASDE). Prices were projected $3 higher in the second quarter at $172/cwt., and $2 higher in the third and fourth quarters at $164 and $169, respectively. The annual average price estimate increased $2 to $166.50.

Lingering drought in the Central and Southern Plains continues to hold market sway.

“Despite recent rains, for some producers, the very low hay supplies may not be sufficient to offset poor pastures to sustain herds this summer and allow producers to retain breeding stock to rebuild their herds,” ERS analysts say. “As a result, the culling of beef cows continues at a relatively high rate. Based on USDA, Agricultural Marketing Service reports for weekly slaughter under federal inspection, the pace of monthly beef cow slaughter remains relatively high despite dropping to below the pace for the last two years in March and April. This has the potential to weaken the outlook for calf crops in late 2023 and 2024, further reducing potential cattle placements year over year in 2024.”

ERS projects new highs for cattle prices in 2024, as cattle numbers decline.

“The relatively strong pace of beef cow slaughter and relatively large placements of heifers in feedlots in 2022 and into early 2023 will likely yield a smaller year-over-year calf crop in 2023, tightening future cattle supplies,” ERS analysts say. “Further, this will likely lead to fewer cows and bulls in the slaughter mix in 2024, both as absolute numbers are lower and—assuming a return to normal pasture conditions—producers hold back animals for herd expansion.”

ERS projects 2024 beef production 8% less than this year at 24.7 billion pounds.

Cattle futures closed mostly lower Wednesday, apparently with spillover pressure from apparent long liquidation in grain futures.

Feeder Cattle futures closed an average of 88¢ lower (32¢ to $1.15 lower).

Live Cattle futures closed an average of 27¢ lower, except for an average of 58¢ higher in the front three contracts.

Negotiated cash fed cattle trade was limited on light to moderate demand in all regions through Wednesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

Last week, live prices were $170/cwt. in the Southern Plains, mostly $176 in Nebraska and $175-$177 in the western Corn Belt. Dressed prices were $280.

Choice boxed beef cutout value was $1.32 lower Wednesday afternoon at $298.15/cwt. Select was $1.46 lower at $282.89/cwt.

Grain and Soybean futures tumbled Wednesday. At least from a psychologic perspective, widespread selling appeared to be tied to the U.N. Secretary General’s announcement that Russia agreed to extend the Black Sea Grain initiative for another 60 days (see below). As well, private exporters reported the cancellation of sales of 272,000 metric tons of corn for delivery to China during the 2022/2023 marketing year.

Corn futures closed mostly 5¢ to 9¢ lower.

KC HRW Wheat closed mostly 12¢ to 20¢ lower.

Soybean futures closed mostly 15¢ to 19¢ lower.

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Major U.S. financial indices closed higher Wednesday, supported by gains in regional bank stocks and apparent optimism about debt ceiling talks. 

The Dow Jones Industrial Average closed 408 points higher. The S&P 500 closed 48 points higher. The NASDAQ was up 157 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.97 to $2.16 higher through the front six contracts.

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You might recall one reason Russia continues to threaten withdrawing from the aforementioned Black Sea Grain Initiative is that it says economic sanctions imposed by the West — in response to the Russian invasion of Ukraine — are limiting its ability to export agricultural goods.

“Russia complains that its exports of food and fertilizers are hampered by sanctions. Let me be clear: Russia is exporting just fine. It is exporting grain and fertilizer at the same levels, if not higher, than before the full-scale invasion,” said Ambassador Linda Thomas-Greenfield, U.S. Representative to the United Nations, during a Foreign Press Center news briefing last week. “Russia’s threats are about money and power. The more Russia obstructs Ukraine’s exports, the higher prices go, and with Russian exports moving well, they’re making more profits.”

Despite Russia’s claims of export challenges, that nation’s grain and oilseed exports have thrived during the current marketing year, according to analysts with USDA’s Foreign Agricultural Service (FAS).

“Throughout 2022/23, Russia has benefited from large supplies, both beginning stocks and record production,” FAS analysts explain, in a report published last week. “Russia has exported significant quantities of both grains and oilseeds, despite its lack of transparent trade data. Additional sources of data validate the strong export volumes amid low prices.”

In fact, Russian wheat exports are forecast to hit a record 45.0 million tons in 2022/23, up 36% from the prior year and 3.5 million tons above its previous record in 2017/18, according to the report.

“While recent Russian government statements have claimed that economic sanctions have hampered Russia’s ability to export, in the case of grains and oilseeds, the Russian government itself has applied export taxes and quotas that affect its prices and export volumes,” FAS analysts say.

Feeder Cattle futures closed an average of 35¢ higher, except for 80¢ and 72¢ lower at either end of the board, supported by continued erosion in Corn futures.

Live Cattle futures closed an average of 25¢ lower, awaiting cash direction.

Wheat futures closed mostly 1¢ to 4¢ lower Tuesday with likely profit taking.

Corn futures closed 9¢ to 11¢ lower through Jly ‘24, and then mostly 7¢ lower.

Soybean futures closed mostly 19¢ to 36¢ lower.

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

Last week, live prices were $170/cwt. in the Southern Plains, mostly $176 in Nebraska and $175-$177 in the western Corn Belt. Dressed prices were $280.

Choice boxed beef cutout value was $2.51 lower Tuesday afternoon at $299.47/cwt. Select was 36¢ lower at $284.35/cwt.

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Major U.S. financial indices closed lower amid heightened recession fears, fueled by weaker retail sales than anticipated and a lower annual financial forecast from bellwether, Home Depot. 

The Dow Jones Industrial Average closed 336 points lower. The S&P 500 closed 26 points lower. The NASDAQ was down 22 points.

West Texas Intermediate Crude Oil futures (CME) closed 25¢ lower through the front six contracts.

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Left to their own devices, markets rise and fall, discount and reward and find their way to economic truths, whether or not anyone likes the ride or the destination.

A recent editorial by the Wall Street Journal (WSJ) Editorial Board, and shared by the North American Meat Institute, provides a reminder.

Authors note Tyson Foods last week reported its first quarterly loss since 2009 as meat prices declined.

“Tyson’s stock plunged after it reported anemic sales and downgraded its forecast. The quarterly loss at the largest U.S. meat supplier marks a stunning reversal from 2021 and early last year when it earned record profits amid a run-up in meat prices,” write WSJ authors.

Back then, they also note lawmakers accused beef packers of conspiring to manipulate the market to pad profits.

“Are they now conspiring to lose money?” wonder the authors. “…If markets were ‘distorted,’ the culprit was pandemic transfer payments that were a disincentive to work. As these programs lapsed, hiring became easier. Competition for workers and market share raised supplier costs while pushing down prices and profits. Meat prices fell 0.4% in April and are up only 0.3% over the past 12 months…

“Tyson’s stock has fallen by nearly half over the past year and is trading at the lowest levels since 2015. This doesn’t look like an antitrust conspiracy or market oligopoly…”

Cattle futures, especially Feeder Cattle, extended gains Monday, closing an average of $1.34 higher (67¢ to $2.07 higher).

Live Cattle futures closed an average of 66¢ higher, except 7¢ lower in spot Jun.

That was with Corn futures closing 5¢ to 7¢ higher through Jly ‘24, on the coattails of Wheat futures (KC HRW), which closed 21¢ to 27¢ higher through May ‘24, fueled by follow-through support from the World Agricultural Supply and Demand Estimates, along with concerns about the Black Sea Initiative.

Soybean futures closed 5¢ to 10¢ higher through Jly ‘24.

Negotiated cash fed cattle trade was inactive on light demand in all regions through Monday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

Last week, live prices were $2 lower in the Southern Plains at $170/cwt., mostly steady to $2 lower in Nebraska at mainly $176 and $1 lower to $3 higher in the western Corn belt at $175-$177. Dressed prices were $1 lower in Nebraska at $280 and steady to $5 lower in the western Corn Belt at $280.

The weighted average five-area direct fed steer price was 20¢ higher on a live basis last week at $174.13/cwt. but $1.46 lower in the beef at $279.48.

Choice boxed beef cutout value was $2.63 lower Monday afternoon at $301.98/cwt. Select was 3¢ higher at $284.71/cwt.

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Major U.S. financial indices closed little changed but higher Monday, with apparent optimism about the debt ceiling talks. 

The Dow Jones Industrial Average closed 47 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 80 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.07 to $1.08 higher through the front six contracts.

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Despite improving moisture conditions in many parts of the country, persistent drought in key cattle states continues to impact the overall industry, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel notes two recent USDA reports underscore forage challenges in the Southern Plains and Central Plains.

One is the weekly Crop Progress report for the week ending May 7.

Peel points out year-over-year pasture and range conditions were significantly worse in Kansas and Oklahoma.

As well, Peel says the recent crop production report paints a dour picture of hay inventory in those same areas.

“For the beginning of the hay crop year, May 1, U.S. hay stocks were down 13.4% year over year and were down 26.4% from the 10-year 2012-2021 average,” Peel says. “Compared to the 10-year average, in Kansas, May 1 hay stocks were down 25.5%; Nebraska was down 51.6%; Oklahoma was down 62.3%; and Texas was down 41.3%.” He adds dry conditions are challenging new hay production in four off the top 10 hay-producing states, which account for about 21% of total U.S. hay production on average: Texas, Nebraska, Kansas and Oklahoma.

“These four states accounted for 9.3 million beef cows on Jan. 1, 2023, just over 32% of the total U.S. beef cow herd and include four of the top 10 beef cow states, Texas (1), Oklahoma (2), Nebraska (4) and Kansas (6),” Peel says. “Delayed, slow and limited pasture and hay growth in these areas is likely still provoking some cattle liquidation. Total beef cow slaughter through April this year is down 11.2% from last year’s elevated level.  However, it is likely that reduced beef cow slaughter in drought-free areas is masking some additional herd liquidation in these worst drought areas … The much-anticipated herd rebuilding and corresponding market conditions in the beef cattle industry cannot begin in earnest until drought conditions ease significantly in these major beef cattle states.”

You can hear more of Peel’s market insights here.

Cattle futures closed higher Friday, supported by lower corn prices suggested by the monthly World Agricultural Supply Demand Estimates (see below).

Feeder Cattle futures closed an average of $2.20 higher on Friday and an average of $6.53 higher week to week ($2.95 to $8.20 higher).

Live Cattle futures closed an average of $1.02 higher ($1.65 higher toward the front to 12¢ higher at the back). They were an average of $2.27 higher week to week on Friday ($1.82 higher at the back to $2.95 higher toward the front).

Negotiated cash fed cattle trade was limited on light to moderate demand in all regions through Friday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

For the week, live prices were $2 lower in the Southern Plains at $170/cwt., mostly steady to $2 lower in Nebraska at mainly $176 and $1 lower to $3 higher in the western Corn belt at $175-$177. Dressed prices were $1 lower in Nebraska at $280 and steady to $5 lower in the western Corn Belt at $280.

Estimated cattle slaughter last week of 646,000 head was 23,000 head more than the previous week but 15,000 head fewer than the same week last year. Year-to-date estimated cattle slaughter of 11.9 million head was 386,000 head fewer (-3.1%). Estimated year-to-date beef production of 9.8 billion pounds was 483.8 million pounds less (-4.7%).

Choice boxed beef cutout value was $1.11 lower Friday afternoon at $304.61/cwt. Select was 10¢ higher at $284.68/cwt.

USDA’s Economic Research Service increased forecast fed steer prices (five-area direct) higher for the remainder of this year, in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). Prices were projected $3 higher in the second quarter at $172/cwt., and $2 higher in the third and fourth quarters at $164 and $169, respectively. The annual average price estimate increased $2 to $166.50.

“The 2023 cattle price forecast is raised on recent data and tighter supplies expected later in the year,” ERS analysts say. “For 2024, cattle prices are forecast above 2023 on tighter supplies.”

Estimated beef production this year would be 1.4 million pounds less than last year (-4.8%).

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As mentioned, Corn and Soybean futures closed lower Friday with the World Agricultural Supply and Demand Estimates forecasting record or near record production and increased ending stocks for both.

Corn futures closed mostly 2¢ to 4¢ lower, except for fractionally higher to 4¢ higher in remaining old-crop contracts. Week to week, they closed an average of 21’7¢ lower through the front six contracts.

The WASDE 2023/24 U.S. corn outlook was for larger production, greater domestic use and exports, and higher ending stocks. ERS projected the corn crop at a record 15.3 billion bushels, up more than 10% from last year on increases to both area and yield. The yield projection of 181.5 bushels per acre was based on a weather-adjusted trend assuming normal planting progress and summer growing season weather. With beginning stocks up slightly, total corn supplies were forecast at 16.7 billion bushels, the highest since 2017/18.

The season-average farm price was projected at $4.80 per bushel, down $1.80 from 2022/23.

Soybean futures closed mostly 17¢ to 24¢ lower on Friday. They were an average of 50’4¢ lower through the front six contracts lower week to week.

The 2023/24 outlook for U.S. soybeans was for higher supplies, crush, and ending stocks, and lower exports compared with 2022/23. The soybean crop was projected at 4.51 billion bushels, up 5% from last year’s crop mainly on higher yields. With lower beginning stocks partly offsetting increased production, soybean supplies were forecast at 4.75 billion bushels, up 4% from 2022/23.

The 2023/24 U.S. season-average soybean price was forecast at $12.10 per bushel, which would be $2.10 less than 2022/23. Soybean meal prices were forecast $90 less than last year at $365 per short ton. Soybean oil prices were forecast 6¢ less at 58¢ per pound.

KC HRW Wheat closed 20¢ to 35¢ higher through May ‘24, and then 4¢ to 7¢ higher, supported by the WASDE.

U.S. wheat supplies were forecast lower than last year with smaller beginning stocks and only slightly larger production. All wheat production was projected at 1,659 million bushels, up modestly from last year on increased harvested area. All wheat yield was projected at 44.7 bushels per acre, which would be 1.8 bushels lower than last year.

Ending stocks were projected 11% lower than last year and the lowest in 16 years. The projected 2023/24 season-average farm price was $8.00 per bushel, down 85¢ from last year’s record.

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Major U.S. financial indices closed little changed but lower Friday, with continued concerns about regional bank health and overall economic growth.

The Dow Jones Industrial Average closed 8 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 43 points.

West Texas Intermediate Crude Oil futures (CME) closed 83¢ to 88¢ lower through the front six contracts.

Negotiated cash fed cattle trade ranged inactive on light demand in the Southern Plains to moderate on moderate demand in the North through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early sales in Nebraska at $175-$176/cwt. on a live basis and $280 in the beef, and at $176-$177 and $280 in the western Corn Belt.

On Wednesday, live trade in the Southern Plains was $2 lower at $170.

Last week, live prices were $176-$178 in Nebraska and $172-$178 in the western Corn Belt. Dressed prices were $281 in Nebraska and $280-$285 in the western Corn Belt.

The five-area direct monthly weighted average price for fed steers in April was $177.09/cwt., on a live basis, which was $35.43 (+25.0%) than a year earlier. The weighted average fed steer price in the beef was $285.28, which was $56.42 more (+24.6%) year over year.

Choice boxed beef cutout value was $1.15 lower Thursday afternoon at $305.72/cwt. Select was 4¢ higher at $284.58/cwt.

Net U.S. beef export sales (2023) for the week ending May 4 were 16,600 metric tons. That was 18% less than the previous week, but 16% more than the prior four-week average, according to the weekly U.S. Export Sales report. Increases were primarily for South Korea, Japan, Canada, Mexico and Taiwan.

Cattle futures were Mixed Thursday with Feeder Cattle benefitting from lower Corn futures and Live Cattle stalling with the weaker cash outlook for the week.

Feeder Cattle futures closed an average of 86¢ higher except for $1.25 lower in spot May.

Live Cattle futures closed an average of 31¢ lower (5¢ to 82¢ lower) except for 12¢ higher in Away Aug.

Grain and soybean futures continued under pressure Thursday from the fast pace of domestic planting to positioning ahead of Friday’s monthly World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 5¢ to 7¢ lower.

KC HRW Wheat closed mostly 12¢ to 13¢ lower.

Soybean futures closed mixed, mostly fractionally higher to 4¢ lower.

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Major U.S. financial indices closed mixed Thursday with pressure from regional bank stocks.

The Dow Jones Industrial Average closed 221 points lower. The S&P 500 closed 7 points lower. The NASDAQ was up 22 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.61 to $1.69 lower through the front six contracts.

Cattle futures gave back some of the previous sessions gains on Wednesday amid likely profit taking and uncertainty about this week’s cash fed cattle direction.

Feeder Cattle futures closed an average of 91¢ lower except for 25¢ higher in the back contract.

Live Cattle futures closed an average of 42¢ lower except for 27¢ higher in the back contract.

Corn futures firmed Wednesday with likely short covering, while Wheat and Soybean futures eroded as traders position ahead of Friday’s World Agricultural Supply and Demand Estimates.

Corn futures closed mostly fractionally higher to 3¢ higher.

KC HRW Wheat closed mostly 1¢ to 10¢ lower.

Soybean futures closed 7¢ to 15¢ lower through Sep ‘23 and then mostly 1¢ to 3¢ lower.

Negotiated cash fed cattle trade was limited on light demand in all regions through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales in the Southern Plains at $170/cwt.

Last week, live prices were $172/cwt. in the Southern Plains, $176-$178 in Nebraska and $172-$178 in the western Corn Belt. Dressed prices were $281 in Nebraska and $280-$285 in the western Corn Belt.

Choice boxed beef cutout value was 51¢ lower Wednesday afternoon at $306.87/cwt. Select was 35¢ lower at $284.54/cwt.

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Major U.S. financial indices closed mixed Wednesday as investors considered lower than expected inflation, but still high inflation.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in April on a seasonally adjusted

basis, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 4.9% before seasonal adjustment.

The Dow Jones Industrial Average closed 30 points lower. The S&P 500 closed 18 points higher. The NASDAQ was up 126 points.

West Texas Intermediate Crude Oil futures (CME) closed 95¢ to $1.15 lower through the front six contracts.

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Record high fed cattle prices and moderating input costs fueled gains in cattle feeding returns last month, according to the Livestock Information Center (LMIC).

“April cattle feeding returns calculated by LMIC soared over $300 per head in April as live steers in the five-area recorded record-breaking highs at mid-month. Live steer prices hit a new daily high of $182.86/cwt., more than $10 higher than the previous daily high of $172.08 recorded in late November 2014,” LMIC analysts say, in the most recent Livestock Monitor. “Nearly all of April recorded prices above that previous record. The monthly simple average calculated in Dodge City (price used in the LMIC calculation) for Choice fed steers was $173.43, equivalent to what feedlots were paying for 700-800-pound steers seven months prior. LMIC calculates a breakeven price at time of placement, which was estimated at $149.96/cwt.”

LMIC analysts note, April’s calculation is based off a feeder steer price that dipped $6 from the month before.

“Seasonally, fed cattle prices should be hitting a bottom, and with higher placements than the industry expected, this fall live cattle market may not be as tight as originally expected,” say LMIC analysts. “Still, cattle feeders are expected to have an excellent year, with no month currently projected to be negative in 2023. LMIC estimates the average returns for cattle feeders will be over $200 per head in 2023. Through April, cattle feeding returns have averaged $175 per head monthly.”

Sharply lower Corn futures helped Cattle futures regain more lost ground on Tuesday.

Feeder Cattle futures closed an average of $2.94 higher.

Live Cattle futures closed an average of $1.20 higher.

Corn and Soybean futures weakened Tuesday, with pressure from the fast domestic planting pace and renewed hopes for renewal of the Black Sea Initiative. Corn received added pressure from China’s cancellation of sales of 272,000 metric tons.

Corn futures closed 9¢ to 14¢ lower through Jly ‘24, and then mostly 3¢ to 5¢ lower.

Soybean futures closed 13¢ to 18¢ lower through May ‘24 and then 9¢ to 11¢ lower.

KC HRW Wheat closed 1¢ to 15¢ higher through May ‘24 and then 1¢ to 5¢ lower.

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

Last week, live prices were $172/cwt. in the Southern Plains, $176-$178 in Nebraska and $172-$178 in the western Corn Belt. Dressed prices were $281 in Nebraska and $280-$285 in the western Corn Belt.

Choice boxed beef cutout value was $1.18 lower Tuesday afternoon at $307.38/cwt. Select was 23¢ lower at $284.89/cwt.

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Major U.S. financial indices edged lower Tuesday as investors await key inflation data later this week and ponder the outcome of debt ceiling talks. 

The Dow Jones Industrial Average closed 56 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 77 points.

West Texas Intermediate Crude Oil futures (CME) closed 55¢ to 62¢ higher through the front six contracts.

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“Tightening beef supplies, underlying general strength in beef demand and seasonal grilling demand are all pushing wholesale beef prices higher,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Consumer beef demand has continued to be remarkably resilient and wholesale beef prices are likely to go higher yet as beef production continues to decrease going forward.”

For perspective, Peel notes Choice boxed beef prices the first week of May averaged 309.41/cwt., which was 9% higher than the beginning of this year and 20% higher year over year. He explains prices so far this year are following a seasonal pattern — typically a peak in May ahead of grilling season before declining in the second half of the year.

“The May peak in boxed beef price is largely driven by retail grocery demand for Strip Loins and Sirloin cuts that move primarily through retail grocery channels. Chuck Roll prices are also very strong currently, which may be driven by export demand and retail grocery demand, including ground beef,” Peel says. “The most valuable cuts of Tenderloin and Ribeye are not typically seasonally strong this time of year, but both have been higher all year so far in 2023, reflecting continued strong restaurant demand.”

Peel adds ground beef demand typically increases during the summer due to grilling demand as well as increased consumer use of quick-service restaurants.

“The price of 90-percent lean trimmings (mostly cow beef) have been rising all year and are currently moving higher than year-ago levels,” Peel says. “More dramatically, the price of 50-percent lean trimmings has moved sharply higher to a current level that is unprecedented except for a brief spike during the pandemic in 2020.”

Cattle futures rebounded some Monday, especially Feeder Cattle, supported by lower new-crop Corn futures and overall positive fundamentals.

Feeder Cattle futures closed an average of $1.55 higher (90¢ higher in spot May to $2.02 higher at the back).

Live Cattle futures closed an average of 67¢ higher.

There was no Monday negotiated cash fed trade summary from USDA available at press time.

The weighted average five-area direct fed steer price last week was $3.22 lower on a live basis at $173.93/cwt. The average steer price in the beef was $3.11 lower at $280.94.

Choice boxed beef cutout value was 63¢ lower Monday afternoon at $308.56/cwt. Select was $3.04 lower at $285.12/cwt.

Corn futures closed 4¢ to 6¢ lower after old-crop contracts, perhaps pressured in part by rapid planting progress.

KC HRW Wheat closed 9¢ to 11¢ higher through Dec ‘23 and then 2¢ to 6¢ higher.

Soybean futures closed mostly 4¢ to 8¢ lower through Mar ‘25.

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Major U.S. financial indices closed little changed Monday as investors await key inflation data later this week.

The Dow Jones Industrial Average closed 55 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 29 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.72 to $1.82 higher through the front six contracts.

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Calves and feeder cattle sold from $3/cwt. lower to $3 higher in the North Central and South Central regions last week, according to the Agricultural Marketing Service. They sold $1-$4 higher in the Southeast. Auction volume continued stronger year over year.

Through the first four months of this year, the number of stocker and feeder cattle sold was 4% higher year over year, according to Josh Maples, Extension livestock economist at Mississippi State University, in the latest Cattle Market Notes Weekly. That is based on the weekly AMS National Weekly Feeder and Stocker Cattle Summary.

“On the surface, the stronger receipts totals are at odds with the 2% smaller calf crop in 2022 than in 2021. However, the data are most likely indicating market timing differences instead of changes in total cattle inventory,” Maples explains. “Cattle prices have been significantly stronger this year as compared to a year ago and drought continues to be a key issue in Texas, Oklahoma, Kansas, Nebraska and other areas which is limiting grazing opportunities. These factors have likely led to more cattle moving into feedlots or grow yards earlier than normal. Compared to the 5-year average from 2017-2021, receipts are 1% lower so far in 2023.”