Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Thursday afternoon, with too few transactions to trend. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.
For the week, live prices are steady at $114/cwt. in the Southern Plains, steady to $1 higher at $114 in Colorado, steady in Nebraska at $113-$114 and steady to $1 lower in the western Corn Belt at $112-$113. Dressed trade is steady in Nebraska at $180 and steady to $2 lower in the western Corn Belt at $178-$180.
Net U.S. beef export sales for the week ending Mar. 4 were 20,900 metric tons, according to USDA’s weekly U.S. Export Sales report. That was 8% less than the previous week but 17% more than the previous four-week average. Increases were primarily for South Korea, Japan, Mexico, China and Taiwan.
Cattle futures closed mixed Thursday. Live Cattle closed mostly higher, supported by a strong rally in front-month Lean Hog futures. Feeder Cattle futures edged mostly lower with higher Corn futures and the sluggish recovery in cash prices.
Live Cattle futures closed an average of 48¢ higher, except for 5¢ to 30¢ lower in three contracts.
Feeder Cattle futures closed an average of 43¢ lower, except for unchanged to 7¢ higher in three contracts.
Choice boxed beef cutout value was 62¢ lower at $226.67/cwt. Thursday afternoon. Select was 25¢ higher at $220.07.
The average dressed steer weight the week ending Feb. 27 was 899 lbs., which was 10 lbs. lighter than the previous week and 2 lbs. heavier year over year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 834 lbs. was 7 lbs. lighter than the previous week and 1 lb. heavier year over year.
Corn futures closed mostly 2¢ to 4¢ higher.
Soybean futures closed mostly 5¢ to 9¢ higher though May ‘22, and then mostly 11¢ to 16¢ higher.
Major U.S. financial indices closed higher Thursday, supported by President Biden singing the COVID-19 relief bill and a more positive labor outlook than the trade expected.
Initial unemployment insurance claims for the week ending Mar. 6 were 712,000, according to the U.S. Department of Labor. That was 42,000 fewer than the previous week.
The Dow Jones Industrial Average closed 188 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 329 points.
“U.S. corn market prices continue to rise, largely driven by strong export demand and tight global supplies,” say analysts with USDA’s Economic Research Service (ERS), in the latest USDA Feed Outlook. “The average cash-spot corn-market prices for Central Illinois and the Gulf for February 2021 were $5.56/bu. and $6.24/bu., respectively. By comparison, the same prices in February 2020 were $3.75 and $4.29.”
Through the first five months of the 2020-21 marketing year, U.S. corn exports totaled 857 million bu., significantly higher than the same time a year earlier. For the year, corn exports are projected at 2,600 million bu., according to ERS.
“The Foreign Agricultural Service’s (FAS) Export Sales Report system shows record amounts of total commitments and outstanding sales for U.S. corn—mostly driven by large purchases for China’s market,” ERS analysts explain. “In order to meet these outstanding sales, the U. S. export program would have to operate at a very high pace, consistently, for the remainder of the marketing year. Inspections data indicate a high export level for February—potentially a February export record—with strong demand to China, Mexico, and Japan. While the strong pace may be logistically feasible, the United States is also likely to face increased competition from Southern Hemisphere corn exporters in the second half of the marketing year.”
Ethanol is another key wild card for corn prices going forward.
With demand for ethanol this year—and the derived demand for corn—primarily driven by trends in gasoline consumption, ERS analysts say how and when U.S. consumers return to the roads will be the most important factor relative to that aspect of the corn market.
“Overall, gasoline prices through the end of 2020 remained lower than pre-COVID-19 levels, indicating that demand was still relatively weak. The RBOB spot price averaged $1.43/gal. in December 2020, which was up 204% from the April 2020 average of $0.47/gal., but was still lower than $1.66/gal. in December 2019,” say ERS analysts. “Through early 2021, however, prices have been steadily climbing back to pre-COVID-19 market levels, indicating that supply is continuing to adjust to current levels of demand, as well as higher crude oil prices. The USDA’s 2020-21 corn used for ethanol forecast is currently 4,950 million bu., which assumes higher corn use for ethanol from March to August relative to 2019-20.