Negotiated cash fed cattle trade was at a standstill through Monday afternoon, except for the western Corn Belt, where trade was mostly inactive on very light demand, according to the Agricultural Marketing Service.
Live prices last week were at $112/cwt. in the Southern Plains and Colorado, $110-$111 in Nebraska and $110 in the western Corn Belt. Dressed trade was at $176 in Nebraska and at $174-$177 in the western Corn Belt.
The average five-area direct fed steer price last week was $111.27/cwt. on a live basis, which was 24¢ less than the previous week. The average steer price in the beef was $175.79, which was 12¢ more than the previous week.
Cattle futures closed mostly lower Monday, with most of the declines in Live Cattle. Pressure included the inability to spark cash prices higher last week, as well as uneasiness ahead of the monthly World Agricultural Supply and Demand Estimates scheduled to be published Tuesday (see below). There was also likely pressure in the nearby contracts from the monthly Goldman roll, as that firm rolls forward underlying futures contracts in its excess return index portfolio, contracts set to expire in the next month.
Live Cattle futures closed an average of 49¢ lower, except for 7¢ higher in three contracts.
Feeder Cattle futures closed an average of 15¢ lower except for an average of 12¢ higher in the front two contracts.
Choice boxed beef cutout value was 89¢ higher Monday afternoon at $207.69/cwt. Select was 95¢ lower at $195.74.
Corn futures closed 3¢ to 4¢ lower through the front three contracts and then mostly 1¢ to 2¢ higher.
Soybean futures closed 1¢ to 2¢ lower through Aug ‘21 and then mostly 12¢ to 14¢ lower.
Major U.S. financial indices closed lower Monday, with little momentum one direction or the other.
The Dow Jones Industrial Average closed 89 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 165 points. t
“The corn futures rally is following soybeans higher, and cash has struggled to keep pace, widening the basis for this time of year. Although exports have been strong, the fundamentals are not currently holding ending stocks tight enough to justify $5 corn,” say analysts with the Livestock Marketing Information Center (LMIC). “Still, there seems little to move the futures lower ahead of U.S. plantings and harvest in South America.”
In the latest Livestock Monitor, LMIC analysts explain the last time nearby Corn futures prices were closing in on $5/bu. was in May of 2014.
“Corn prices at the farm, as reported by USDA-NASS during the 2013-14 crop year ending on Aug. 31, 2014 averaged $4.46/bu. Nearby corn futures finished August 2014 at $3.59, a $1.50 decline in about three months. A record large corn crop of 14.2 billion bu. was about to be harvested, followed by 1.9 billion bu. of the crop being marketed in export markets and 6.6 billion bu. being used domestically for food, industrial and seed purposes. These figures compare to the current situation where production is pegged at 14.5 billion bu. by USDA-NASS,” say LMIC analysts.
Soybean futures are providing plenty of fuel, with nearby contracts surging by about $1/bu. in the last 10 days to the highest level since June of 2014, according to LMIC.
“The impetus for surging prices (soybeans) has come from adverse crop development conditions in Argentina, the third largest soybean producing country and the leading exporter of soybean meal in the world,” LMIC analysts explain. “Reduced availability of soybeans and soybean products from Argentina is forcing the world to focus on U.S. soybean supplies. Projected exports of U.S. soybeans is expected to be a record at 2.2 billion bu. and soybean meal exports should be close to the record set last year at 14 million tons. As a result, inventories of soybeans at the end of this crop year (Aug. 31, 2021) will be close to 200-220 million bu., down from 909 million bu. two years earlier.
“Tightening supplies support a rising price trend in order to bid more plantings of the crop in the U.S. this spring versus corn and cotton. The average price for soybeans this crop year is currently expected to be $11.50 but the risks to this forecast are all to the high side, depending on weather and the global economy in coming months. The potential for record high soybean prices in the $15-$20 area exists based on possible market conditions.”