Daily Market Highlights 2017-06-02T12:08:41-06:00

Daily Market Highlights

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Cattle Current Daily—Dec. 3, 2021

Negotiated cash fed cattle prices took another step higher Thursday.

Live prices were $2 higher in the Southern Plains at $142/cwt., steady to $4 higher in Nebraska at $140 and steady to $5 higher in the western Corn Belt at $140. Dressed trade in Nebraska was $3 higher at $220.

Last week, live prices in Colorado were $140 and dressed prices in the western Corn Belt were $213-$217.

Cattle futures, especially font-month Live Cattle, gained Thursday with the stronger cash prices. They closed an average of 71¢ higher, from $1.65 higher in spot Dec to 7¢ higher in the back contract.

The weekly U.S. Export Sales report added support. For the week ending Nov. 25, net U.S. beef export sales (2021) of 21,600 metric tons were 12% more than the previous week and 5% more than the prior four-week average. Increases were primarily for South Korea, China, Japan, Mexico, and Chile.

Choice boxed beef cutout value was $1.80 higher Thursday afternoon at $272.02/cwt. Select was 28¢ higher at $258.25.

Feeder Cattle gains were capped by stronger Corn futures prices. They closed an average of 36¢ higher, except for 5¢ lower in spot Jan.

Corn futures closed 3¢ to 6¢ higher in the front five contracts and then fractionally higher to 1¢ higher.

Soybean futures closed 11¢ to 16¢ higher in the front five contracts and then mostly 3¢ to 4¢ higher.

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Volatile major U.S. financial indices reversed course and closed sharply higher, putting a sizable dent into the previous day’s losses. There was little news to push them good or bad.

The Dow Jones Industrial Average closed 617 points higher. The S&P 500 closed 64 points higher. The NASDAQ was up 127 points.

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The Federal Trade Commission (FTC) ordered nine large retailers, wholesalers, and consumer good suppliers to provide detailed information that will help the FTC shed light on the causes behind ongoing supply chain disruptions and how these disruptions are causing serious and ongoing hardships for consumers and harming competition in the U.S. economy.

“Supply chain disruptions are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber. I am hopeful the FTC’s new study will shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects,” says FTC Chair Lina M. Khan. “The FTC has a long history of pursuing market studies to deepen our understanding of economic conditions and business conduct, and we should continue to make nimble and timely use of these information-gathering tools and authorities.”

The FTC is issuing the orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose. The orders are being sent to Walmart Inc., Amazon.com, Inc., Kroger Co., C&S Wholesale Grocers, Inc., Associated Wholesale Grocers, Inc., McLane Co, Inc. Procter & Gamble Co., Tyson Foods, Inc., and Kraft Heinz Co. The companies will have 45 days from the date they received the order to respond.

In addition to better understanding the reasons behind the disruptions, the study will examine whether supply chain disruptions are leading to specific bottlenecks, shortages, anticompetitive practices, or contributing to rising consumer prices.

The orders require the companies to detail the primary factors disrupting their ability to obtain, transport and distribute their products; the impact these disruptions are having in terms of delayed and canceled orders, increased costs and prices; the products, suppliers and inputs most affected; and the steps the companies are taking to alleviate disruptions; and how they allocate products among their stores when they are in short supply.

By | December 2nd, 2021|Daily Market Highlights|

Cattle Current Daily—Dec. 2, 2021

The early-day rebound in equity markets, as well as positive supply fundamentals helped Cattle futures regain some recently lost ground Wednesday.

Feeder Cattle futures closed an average of $1.39 higher (97¢ higher at the front to $1.77 higher at the back of the board).

Live Cattle futures closed an average of 74¢ higher, from 12¢ higher in spot Dec to $1.12 higher.

Corn futures closed 3¢ to 5¢ higher in the front three contracts and then mostly 1¢ to 2¢ higher.

Soybean futures closed 5¢ to 11¢ higher through Jan ’23 and then mostly 1¢ to 3¢ higher.

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

Last week, live prices were at $140/cwt. in the Southern Plains, $136-$140 in Nebraska, $140 in Colorado and $135-$140 in the western Corn Belt. Dressed trade was at $217 in Nebraska and at $213-$217 in the western Corn Belt. 

Choice boxed beef cutout value was $1.46 lower Wednesday afternoon at $270.22/cwt. Select was $2.32 lower at $257.97/cwt.

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Major U.S. financial indices started Wednesday’s session paring losses, but announcement of the first confirmed case of the new COVID variant (Omicron) in the U.S. took them sharply lower by the end of the day.

Positive news helping bolster stocks prior to the announcement included more jobs than expected in the ADP National Employment Report. Private sector employment increased by 540,000 from October to November.

The Dow Jones Industrial Average closed 461 points lower. The S&P 500 closed 53 points lower. The NASDAQ was down 283 points.

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Global economic recovery is continuing but its momentum has eased and is becoming increasingly imbalanced according to the latest Economic Outlook from the Organization for Economic Cooperation and Development (OECD).

“The strong rebound we have seen is now easing and supply bottlenecks, rising inflation, and the continuing impact of the pandemic are clouding the horizon,” says OECD Secretary-General Mathias Cormann. “The risks and uncertainties are large, as is being seen with the emergence of the Omicron variant, aggravating the imbalances and threatening the recovery. Keeping the recovery strong and on track will entail addressing a number of imbalances, but above all it will mean managing the health crisis through better international coordination, improving health systems and massively stepping up vaccination programs worldwide.”

OECD projects real global GDP growth at 5.6% this year, 4.5% next year and 3.2% in 2023.

For the U.S., OECD projects real GDP at 5.6% this year, 3.7% next year and 2.4% in 2023.

Among the key points in the OECD Economic Outlook:

Surging demand for goods since economies reopened, and the failure of supply to keep pace, generated bottlenecks in production chains. Labor shortages, pandemic-related closures, rising energy and commodity prices, and a scarcity of some key materials are all holding back growth and adding to cost pressures. Inflation has increased significantly in some regions.

Alongside cost pressures from manufacturing supply bottlenecks and food price increases, imbalances in the energy market are a key factor driving up inflation in all economies. Gas prices have risen sharply, notably in Europe, and risks are high, with storage levels around 28% lower than they would normally be at this time of the year. Rising food and energy costs are inevitably hitting low-income households the hardest.  

Inflationary pressures are proving stronger and more persistent than expected a few months ago. Consumer price inflation in the OECD is now projected to start fading in 2022, before moderating as key bottlenecks ease, capacity expands, more people return to the labor force and demand rebalances. The Outlook underlines the risk that continued supply disruptions, perhaps associated with further waves of COVID-19 infections, may result in longer and higher inflationary pressure.

Another risk, exposed by the emergence of the Omicron variant in recent days, is a worsening health situation due to COVID-19 resulting in further restrictions that would jeopardize the recovery. Ensuring improved access to vaccines for all must be an urgent policy priority, according to the report. A faster, better coordinated, worldwide vaccine roll-out is not only essential for saving lives and preventing the emergence of new variants, but would also help tackle some of the bottlenecks undermining the strength of the recovery by allowing factories, ports and borders to re-open fully.

A potential sharp slowdown in China, if activity in the property market declined abruptly amid concerns about the financial soundness of some of the largest real estate developers, could also disrupt the global recovery. The impact of such a slowdown would spread rapidly to other countries, particularly if it generated uncertainty in global financial markets and added to the current bottlenecks in supply.

By | December 1st, 2021|Daily Market Highlights|

Cattle Current Daily—Dec. 1, 2021

Cattle futures, especially Live Cattle lost some steam Tuesday. While technical correction and month-end position squaring were likely behind some of the pressure, most commodities followed the sharp drop in equity markets, which were tied to uncertainty about the Covid variant, Omicron, and its potential economic impact.

Feeder Cattle futures closed an average of 60¢ higher (17¢ to $1.00 higher), except for an average of 46¢ lower in the front two contracts.

Live Cattle futures closed an average of 80¢ lower, from 12¢ lower toward the back to $1.45 lower toward the front of the board.

Corn futures closed 12¢ to 15¢ lower through the front five contracts and then mostly 8¢ to 9¢ lower.

Soybean futures closed 20¢ to 27¢ lower through the front seven contracts and then mostly 10¢ to 18¢ lower.

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

Last week, live prices were $7 higher in the Southern Plains at $140/cwt., $3-$6 higher in Nebraska at $136-$140, $5-$8 higher in Colorado at $140 and $3-$6 higher in the western Corn Belt at $135-$140. Dressed trade was $7 higher in Nebraska at $217 and $3-$7 higher in the western Corn Belt at $213-$217.

Choice boxed beef cutout value was $5.90 lower Tuesday afternoon at $271.68/cwt. Select was $1.73 lower at $260.29/cwt.

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Major U.S. financial indices closed sharply lower Tuesday, with apparent pressure from COVID variant worries.

“The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation. Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” explained Federal Reserve Chair Jerome Powell, in testimony before the U.S. Senate Committee on Banking, Housing and Urban Affairs.

Moreover, based on various reports, Powell suggested the FOMC might consider accelerated tapering of the federal bond buying program as inflation continues higher.

The Dow Jones Industrial Average closed 652 points lower. The S&P 500 closed 88 points lower. The NASDAQ was down 245 points.

CME WTI Crude Oil futures closed $3.72 to $3.79 lower in the front six contracts.

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“There should be three strong weeks of cattle prices leading up to the cattle market break that will occur during the Christmas and New Year holidays. However, prices are expected to strengthen moving into January,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his most recent market comments. “The number of cattle marketed the next three weeks will depend on a producer’s desire to market cattle before the end of the year or after the start of the new year as it can have tax implications. Regardless of the month producers decide to market calves, prices are expected to slowly increase from December through April. The expectation is to see the strongest prices since the spring of 2016.”

Likewise, Stephen Koontz, agricultural economist at Colorado State University points out underlying cattle market fundamentals continue pointing to increasing price strength.

“Boxed beef cutout valuations continue to drift lower following summer seasonal highs, but packer margins remain incredibly strong by historical standards,” Koontz explains, in the most recent issue of In the Cattle Markets. “Federally inspected steer and heifer slaughter remain at elevated levels and repeatedly press on what I perceive as industry capacity of 525,000 head per week. Saturday slaughter also is at elevated levels. Cattle on feed over 120 days and over 150 days continue the seasonal decline but remain above last year. The leverage remains with the packer in this situation, but the packer has a strong incentive to run as many hours as possible. Beef cow slaughter also remains strong. The beef herd liquidation, at least partially, continues and will impact next year’s supply.”

Plus, Koontz explains reduced beef cold storage inventory amid increased beef supplies suggest ongoing domestic demand strength.

“There are solid underlying supply and demand fundamentals, and it is clear that the bottleneck in the packing sector remains,” Koontz says. “It is reasonable to have long-term optimism but at the same time be willing to periodically and aggressively reduce risk.”

By | November 30th, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 30, 2021

Cattle futures softened Monday amid likely profit taking and month-end positioning. Although some would say they started the week in oversold territory in need of technical correction, the fundamental pathway continues clear.

Feeder Cattle futures closed an average of 91¢ lower, from $1.42 lower at the front to 22¢ lower at the back.

The CME Feeder Cattle Index was $3.34 higher at $161.29/cwt.

Live Cattle futures closed an average of $1.25 lower, from 55¢ lower toward the back to $1.90 lower near the front of the board.

Negotiated cash fed cattle trade was mostly inactive on very light demand through Monday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $7 higher in the Southern Plains at $140/cwt., $3-$6 higher in Nebraska at $136-$140, $5-$8 higher in Colorado at $140 and $3-$6 higher in the western Corn Belt at $135-$140. Dressed trade was $7 higher in Nebraska at $217 and $3-$7 higher in the western Corn Belt at $213-$217.

Recent trade volume and delivery patterns suggest cash prices this week have the potential to gain more.

Choice boxed beef cutout value was $2.43 lower Monday afternoon at $277.58/cwt. Select was 26¢ lower at $262.02/cwt.

Corn futures closed mostly 5¢ to 9¢ lower.

Soybean futures closed 9¢ to 11¢ lower.

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Major U.S. financial indices pared sharp losses from the previous session on Monday  as traders and everyone else tried to sort out the potential impact of the new COVID variant announced last week.

The Dow Jones Industrial Average closed 236 points higher. The S&P 500 closed 60 points higher. The NASDAQ was up 291 points.

West Texas Intermediate Crude Oil futures on the CME rebounded $1.80 to $1.89 through the front six contracts.

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“As 2021 winds to a close, cattle markets seem to finally be able to move out from under the specter of the pandemic impacts that began 18 months ago…The recent breakout of fed cattle markets, after struggling under the weight of beef packer capacity constraints, clears the way for cattle markets to move forward with the optimism that has been building in the industry in recent months,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel adds that plenty of challenges remain, including COVID uncertainty and economic ripple effects, higher input costs and drought. But, he explains, market fundamentals continue to improve.

“The beef cow herd has been declining since 2019 and declined even faster in 2021. It will decline again in 2022 and likely in 2023,” Peel says. “However, strong domestic beef demand bolstered by even stronger demand and potential in international markets suggests that cyclical expansion could resume in the not-to-distant future. Exactly what the future path will be remains to be determined but producers should consider strategic and tactical plans for industry outcomes.”

With that in mind, Peel suggests winter is an appropriate time for producers to consider both animal and forage production and management plans for the coming year. 

“Once calf marketing is complete and herd culling decisions are implemented, a relative down-time is ideal for a bit of review of the past year and planning for next year with a series of questions,” Peel says. “What are the conditions of pastures and rangeland going into the next growing season; should grazing plans or stocking rates be adjusted? Were production and reproductive rates and weaning weights as expected?  What is the current body condition of the cows?  What is the herd health status?  Are upcoming herd nutritional needs evaluated and matched with feed and supplement resources? Planning now can help manage costs and production next year.”

Bottom line, Peel says relative market stability offers producers the opportunity to play offense rather than defense for the first time in a long while, if they’re prepared to do so.

By | November 29th, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 29, 2021

Cattle futures closed narrowly mixed Friday amid holiday-shortened trade.

Live Cattle futures closed an average of 15¢ lower, except for an average of 26¢ higher in the front two contracts.

Feeder Cattle futures closed an average of 10¢ higher, except for unchanged to an average of 5¢ lower in three contracts.

Corn futures closed mostly 4¢ to 5¢ higher.

Soybean futures closed 11¢ to 14¢ lower through the front six contracts and then mostly 4¢ to 7¢ lower.

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

Last week, live prices were $7 higher in the Southern Plains at $140/cwt., $5-$6 higher in Nebraska at $138-$140, $5-$8 higher in Colorado at $140 and $6 higher in the western Corn Belt at $138-$140. Dressed trade was $7 higher in Nebraska at $217.

Total estimated cattle slaughter last week of 566,000 head was 111,000 head fewer than the previous week. Total year-to-date estimated cattle slaughter of 30.16 million head was 863,000 head more (+2.9%) than a year earlier. Total year-to-date estimated beef production of 24.95 billion lbs. was 601.5 million lbs. more (+2.5%) than a year earlier.

The average dressed steer weight the week ending Nov. 13 was 924 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 5 lbs. heavier than the previous week but 6 lbs. lighter than a year earlier. The average dressed heifer weight of 844 lbs. was 2 lbs. heavier than the previous week but 2 lbs. lighter than the previous year.

Choice boxed beef cutout value was 90¢ higher Friday afternoon at $280.01/cwt. Select was $1.19 lower at $262.28/cwt.

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Major U.S. financial indices closed sharply lower Friday, in response to reports from the World Health Organization about a new COVID variant (Omicron) discovered in South Africa, where COVID infections increased in recent weeks.  

The Dow Jones Industrial Average closed 905 points lower. The S&P 500 closed 106 points lower. The NASDAQ was down 353 points.

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Last year, there were 19.7 million full-time and part-time jobs related to the agricultural and food sectors — 10.3% of total U.S. employment — according to USDA’s Economic Research Service (ERS).

“Direct on-farm employment accounted for about 2.6 million of these jobs, or 1.4% of U.S. employment,” according to ERS analysts. “Employment in agriculture-related and food-related industries supported another 17.1 million jobs. Of these, food service, eating and drinking places accounted for the largest share at 10.5 million jobs. Food and beverage stores supported 3.3 million jobs.”

For recent perspective, 772,000 workers were hired directly by operators of the nation’s farms and ranches the week of Oct. 10-16, 2021, according to the most recent Farm Labor report from the National Agricultural Statistics Service (NASS). That was 2% more than the reference week in October 2020.

Farm and ranch operators paid their hired workers an average gross wage of $16.59 per hour during the October 2021 reference week. That was 5% more than the previous year. Field workers received an average of $16.08 per hour, up 5%. Livestock workers earned $15.45 per hour, up 6%. The field and livestock worker combined gross wage rate of $15.92 per hour was 5% more than the 2020 reference week.

By | November 27th, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 25 and 26, 2021

Negotiated cash fed cattle prices are soaring. So far this week, live prices in the Southern Plains are $7 higher at $140/cwt., $4-$6 higher in Nebraska at $138-$139 and $4 higher in the western Corn Belt at $136-$138. Trade through Wednesday afternoon was moderate with good demand in the Southern Plains and Nebraska, according to the Agricultural Marketing Service.

Live prices in Colorado last week were at $132-$135. Dressed prices last week were at $210.

Cash bullishness added fuel to the rally in Cattle futures.

Feeder Cattle futures closed an average of $1.60 higher ($1.07 higher at the back to $2.55 higher in spot Jan).

Live Cattle futures closed an average of $1.09 higher, (37¢ higher toward the back to $2.50 higher in spot Dec).

Choice boxed beef cutout value was 47¢ higher Wednesday afternoon at $279.11/cwt. Select was 80¢ higher at $263.47/cwt.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed 6¢ to 7¢ lower through the front five contracts and then mostly 2¢ to 3¢ higher.

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Major U.S. financial indices closed narrowly mixed Wednesday.

Initial unemployment insurance claims for the week ending Nov. 20 were 199,000, according to the U.S. Department of Labor. That was 71,000 fewer than the previous week and the fewest since Nov. 15 in 1969.

The Dow Jones Industrial Average closed 9 points lower. The S&P 500 closed 10 points higher. The NASDAQ was up 70 points.

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Historically large exports of U.S. beef to China continue to help buoy this year’s record pace of exports overall.

“Through the first three quarters of the year, the U.S. has shipped 394.5 million pounds to China, a more than 9-fold increase from the same period last year,” according to analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Since March of this year, China has ranked as the number three destination for U.S. beef exports each month. In September, China accounted for 18.1% of total exports for the month behind South Korea (22.4%) and Japan (24.0%).”

Based on weekly exports and net sales data, LMIC analysts say beef exports to China are expected to remain elevated through the end of the year.

“The last two weeks, USDA FAS reported new sales of 8,230 and 13,751 metric tons (or 18.1 and 30.3 million lbs.) to China,” say LMIC analysts. “Net sales are new export sales which were purchased for delivery to the destination. Two consecutive weeks of large new sales of beef to China is an indication that they are likely sourcing beef supplies for the Chinese New Year (February 1, 2022) and 2022 Winter Olympics (February 4-20, 2022).”

By | November 24th, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 24, 2021

Negotiated cash fed cattle trade ranged from slow on light demand in the Southern Plains to limited on light demand in other regions through Tuesday afternoon, according to the Agricultural Marketing Service. Although there were too few transactions to trend, early live sales were $3 higher in the Southern Plains at $136/cwt.

Prices last week were at $133 in the Southern Plains, $133-$134 in Nebraska, $132-$135 in Colorado and $132-$134 in the western Corn Belt. Dressed trade was at $210.

Cattle futures continued to gain ground Tuesday with recent cash strength and the likelihood of another step forward this week.

Feeder Cattle futures closed an average of $1.46 higher.

Live Cattle futures closed an average of 68¢ higher, from 37¢ to $1.22 higher.

Choice boxed beef cutout value was 61¢ lower Tuesday afternoon at $278.64/cwt. Select was $1.06 lower at $262.67/cwt.

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Major U.S. financial indices closed mixed again Tuesday as bond yields continued to hamper tech stocks.  

The Dow Jones Industrial Average closed 194 points higher. The S&P 500 closed 7 points higher. The NASDAQ was down 79 points.

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U.S. beef and veal exports are projected at $9.1 billion next year, which would be $428 million more than this year, according to the latest quarterly Outlook for U.S. Agricultural Trade from USDA’s Economic Research Service (ERS) and Foreign Agricultural Service (FAS). The increase is based mostly on expected higher unit values.

Livestock, poultry, and dairy exports are forecast to increase by $1.9 billion to $38.7 billion, with gains across all major commodities except pork.

Total U.S. agricultural exports for 2022 are projected at $175.5 billion, down $2.0 billion from the August forecast, driven by forecast reductions in oilseed and oilseed product exports. If realized, however, the total would be record large.

“The global economic recovery continues to make progress, but with continued disruptions posed by both price pressures and supply issues. Continued supply-chain backlogs and coronavirus (COVID-19) variants have slowed the economic recovery,” say ERS-FAS analysts. “Despite these continued challenges, global employment statistics continue to gain strength, pointing to momentum in the economic recovery through the end of the calendar year. World real gross domestic product (GDP) is projected to increase by 5.9% in 2021, and subsequently increase by 4.9% in 2022.”

ERS-FAS projects U.S. real GDP at 6.0% this year and 5.2% next year.

By | November 23rd, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 23, 2021

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

Live prices last week were $1 higher in the Southern Plains at $133/cwt., $1-$2 higher in Nebraska at $133-$134, steady to $2 higher in the western Corn Belt at $132-$134 and steady to $3 higher in Colorado at $132-$135. Dressed trade was $3 higher at $210.

Cattle futures gained some traction Monday with support from last week’s stronger cash prices and the neutral Cattle on Feed report.

Feeder Cattle futures closed an average of 62¢ higher, except for unchanged in the back contract, amid light trade.

Live Cattle futures closed an average of 68¢ higher, from 32¢ higher at the back to $1.27 higher toward the front. 

Choice boxed beef cutout value was 84¢ higher Monday afternoon at $279.25/cwt. Select was 10¢ lower at $263.73/cwt.

Corn futures closed mostly 4¢ to 7¢ higher, riding wheat’s coattails.

Soybean futures closed 7¢ to 11¢ higher through the front six contracts, and then mostly 4¢ to 5¢ higher.

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Major U.S. financial indices closed mixed Monday as bond yield rates and the Dollar index increased.  

The Dow Jones Industrial Average closed 17 points higher. The S&P 500 closed 15 points lower. The NASDAQ was down 202 points.

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“Market-ready supplies of fed cattle have tightened and packers are actively chasing cattle for the first time in many months,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. He notes the upper end of last week’s negotiated cash fed cattle price range was $9-$10 higher than the last week of October.

At the same time, Peel explains Oklahoma auction prices for feeder steers (800-850 lbs., Medium and Large #1) increased nearly 6% since September and are about 21% higher than when the year began.

“This increase in feeder prices reflects generally tighter feeder cattle supplies and fed market optimism as reflected in Live Cattle futures prices in 2022,” Peel explains. “This is despite sharply higher feedlot cost of gain — up 33% from January to September in Kansas feedlot surveys.”

Stocker steer and calf prices are up sharply from early October lows. Oklahoma auction prices for Medium and Large #1 steers weighing 450-500 lbs. rose 13% over the last seen weeks and are nearly 8% more than the beginning of the year, according to Peel.

“In general, cattle prices are higher now compared to last year and are expected to continue improving in 2022. Live Cattle and Feeder Cattle futures have priced in considerable optimism for 2022,” Peel says. “However, plenty of challenges remain for cattle producers with continued drought, higher input prices, supply chain disruptions and considerable short-term macroeconomic uncertainty. It will still be a bumpy ride, but producers can focus more on managing costs with cattle prices generally moving higher.”

By | November 22nd, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 22, 2021

Refreshing might be the most apt way to describe last week’s negotiated cash fed cattle trade. For the first time in what seems like forever, packers chased cattle to fill their pipelines. Cattle feeders passed early-week bids and carved mainly another $1-$3 from the market.

Live prices last week were $1 higher in the Southern Plains at $132/cwt., $1-$2 higher in Nebraska at $133-$134 and $1-$4 higher in the western Corn Belt at $133-$134. Dressed trade was $3 higher at $210. Live prices in Colorado the previous week were at $132. There were a few sales reported at $135 in Nebraska through Friday afternoon, but too few to trend.

The five-area direct average fed steer price through Thursday was $1.66 higher than the previous week at $133.01/cwt. The average steer price in the beef was $2.99 higher at $209.59.

Estimated total cattle slaughter the week ending Nov. 20 of 677,000 head was 22,000 head more than the previous week. Year-to-date estimated total cattle slaughter of 29.59 million head is 857,000 head more (+2.98%) than a year earlier. Estimated year-to-date beef production of 24.47 billion lbs. is 605.8 million lbs. (+2.54%) than a year earlier.

Cattle futures closed narrowly mixed Friday, but rode the coattails of stronger cash prices to weekly gains.

Feeder Cattle futures closed an average of 21¢ lower, except for unchanged to 12¢ higher in three contracts. They were an average of $2.83 higher week to week.

Live Cattle futures closed an average of 27¢ higher, except for 5¢ lower in Jun and unchanged at the back of the board. Week to week, they were an average of $1.15 higher.

Choice boxed beef cutout value was $2.25 higher Friday afternoon at $278.41/cwt. Select was 67¢ higher at $263.85/cwt. Week to week, though, Choice was $5.89 lower and. Select was $5.70 lower.

Corn futures closed mostly 1¢ to 2¢ lower, except for 1¢ higher in four contracts mid-board.

Soybean futures closed 1¢ to 4¢ higher, except for fractionally lower to 2¢ lower in the front five contracts.

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Except for the tech-heavy NASDAQ, major U.S. financial indices closed lower Friday, pressured by the new COVID lockdown in Austria.

The Dow Jones Industrial Average closed 268 points lower. The S&P 500 closed 6 points lower. The NASDAQ was up 63 points.

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Logic suggests markets should view the latest monthly Cattle on Feed report — feedlots with 1,000 head or more capacity — as neutral, coming in line with pre-report expectations.

Cattle feeders placed 2.25 million head in October, which was 53,000 head more (+2.4%) than a year earlier.

In terms of placement weights, 48% went on feed weighing 699 lbs. or less, 40% weighing 700-899 lbs. and 12% weighing 900 lbs. or more.

Marketings in October of 1.79 million head were 85,000 head fewer (-4.5%) than the same time last year.

Cattle on feed Nov. 1 of 11.95 million head were on par with a year earlier.

Analysts with the Livestock Marketing Information Center (LMIC) point out the inventory of cattle on feed more than 120 days tightened by 175,000 head month to month. That’s the least in 10 months, they say, but still nearly 100,000 head more year over year.

“Continued placements of heifers is likely still happening to boost cattle placements and to maintain these levels of inventory,” say LMIC analysts in the latest Livestock Monitor. “The Jan. 1 cattle inventory is just around the corner and it’s looking more and more like the beef herd will be down more than 2%.”

Last week, USDA’s Economic Research Service (ERS) raised the expected fourth-quarter feeder steer price (750-800 lbs., basis Oklahoma City) by $3 to $154/cwt., compared to the previous monthly projection.

That’s based on current price strength and improved prospects of winter pasturing stocker cattle, which will likely increase competition, according to ERS analysts, in the latest Livestock, Dairy and Poultry Outlook. They point out October feeder steer prices at Oklahoma City averaged about $16 more year over year at $153.52/cwt. 

The forecast average feeder steer price for next year was unchanged at $155.50, compared to the projected average price of $145.55 this year.

ERS projects the average feeder steer price at $153 in the first quarter, $151 in the second quarter and $156 in the third quarter.

By | November 20th, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 19, 2021

Negotiated cash fed cattle prices perked up another $1-$3 on Thursday with light to moderate trade and demand, according to the Agricultural Marketing Service.

Live prices were $1 higher in the Southern Plains at $132/cwt., $1-$2 higher in Nebraska at $133-$134 and $1-$3 higher in the western Corn Belt at $133. Dressed trade was $3 higher at $210. Live prices in Colorado last week were at $132.

Stronger cash prices helped push Cattle futures higher.

Feeder Cattle futures closed an average of $1.90 higher, except for 15¢ lower in nearly spent Nov.

Live Cattle futures closed an average of 70¢ higher.

Lower grain futures prices added support.

Corn futures closed narrowly mixed, from 2¢ lower to 1¢ higher.

Soybean futures closed mostly 11¢ to 15¢ lower.

Wholesale beef prices continued to drift lower. Choice boxed beef cutout value was $3.66 lower Thursday afternoon at $278.47/cwt. Select was $2.53 lower at $264.06/cwt.

Net U.S. beef export sales of 25,500 metric tons (2021) for the week ending Nov. 11 were 23% more than the previous week and 58% more than the prior four-week average, according to the U.S. Export Sales report. Increases were primarily for China, Taiwan, Japan, South Korea, and Mexico.

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Major U.S. financial indices closed narrowly mixed Thursday.

Weekly initial unemployment claims decreased by 1,000 to 268,000 for the week ending Nov. 13, according to the U.S. Department of Labor. That was in line with trader expectations.

The Dow Jones Industrial Average closed 60 points lower. The S&P 500 closed 15 points higher. The NASDAQ was up 72 points.

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Rabobank analysts expect operational beef packing capacity and cattle numbers to regain some relative balance by the second quarter of next year.

“Although packers will still have healthy margins compared to pre-pandemic levels, the price spread between beef and cattle will begin a multi-year narrowing trend in 2022,” say Rabobank analysts, in the recent Rabobank Global Animal Protein Outlook 2022. “Even as domestic beef demand (willingness to pay) falls slightly from its pandemic highs, continued export growth, declining beef production and general economic inflation will provide price support.”

Along those same lines, Don Close, Rabobank senior animal protein analyst notes North American feed costs are expected to remain at high levels. “Producers will need to be vigilant in finding opportunities to lock in profitable margins,” he says.

Animal protein supply chains face across-the-board cost inflation with the most significant increases coming in four key areas – animal feed, labor, energy and freight, according to the report.

“This next year has the potential to accelerate structural change as a result of escalating costs,” says Christine McCracken, senior animal protein analyst for Rabobank. “Success will most likely go the players that adapt to the changing business environment; embracing consumer preferences for sustainability and preparing for a surge in demand as economies continue to reopen and adjust following COVID-19-induced lockdowns.”

By | November 18th, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 18, 2021

Apparent resolve by cattle feeders to ignore early, steady-money negotiated cash fed cattle bids helped underpin the slightly higher close in Cattle futures.

Feeder Cattle futures closed an average of 32¢ higher, except for 35¢ lower in Jan

Live Cattle futures closed an average of 39¢ higher, except for unchanged in the back contract.

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

Prices last week were at $132/cwt. on a live basis in the Northern Plains, the Southern Plains and Colorado. They were $131-$132 in the western Corn Belt. Dressed prices were at $207.

Choice boxed beef cutout value was $3.66 lower Wednesday afternoon at $278.47/cwt. Select was $2.53 lower at $264.06/cwt.

Grain futures strengthened on news ranging from reduced ethanol tariffs in South America to speculation about China buying interest in 2022.

Corn futures closed 5¢ higher through the front four contracts and then mostly 2¢ to 3¢ higher.

Soybean futures closed 19¢ to 25¢ higher through the front six contracts, 11¢ to 17¢ higher through the middle of the board and then 3¢ higher.

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Major U.S. financial indices closed lower Wednesday, as investor concern about inflation appeared to be the main driver.

The Dow Jones Industrial Average closed 211 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 52 points.

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Early 10-year baseline projections (2022 to 2031) from USDA’s Economic Research Service suggest livestock prices, except hogs, will increase over the next decade, while U.S. crop prices will decline.

“Beef cattle and broiler prices are expected to demonstrate a modest increase in the early years of the projection period before leveling off to slower growth, resulting in an average price increase of 8% to 17% over the decade,” according to ERS analysts.

The projected five-area direct fed steer price is forecast to increase steadily from $121.06/cwt. this year and $128.75 next year to $142.55 by 2031.

Feeder steer prices (basis Oklahoma City) are projected to grow from this year’s average of $144.80/cwt. to $155.50 next year and $171.19 in 2023. From there, the price increases to $181.41 by 2031.

That’s with the beef cow herd projected to be 30.56 million head in 2022, declining to 30.53 million in 2023 and then expanding steadily to 31.46 million head in 2031.

During the same period, season-average corn prices received by producers are projected to decline from $4.80/bu. in 2022-23 to $4.00 by 2026-27. ERS pegs the season-average corn price this year (2021-22) at $5.45.

“Expected declines for crops follow a period of generally higher prices that have peaked during the current marketing year,” say ERS analysts. “The price-bolstering effects of economic recovery, renewed export demand, and logistical problems in supply chains are forecast to subside after the recent peak during the 2021-22 marketing year, and crop prices are forecast subsequently to return to the earlier pattern of generally lower prices through 2031.”

By | November 17th, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 17, 2021

A break in Corn futures prices and improving supply fundamentals helped Feeder Cattle futures close an average of 79¢ higher Tuesday (37¢ to $1.10 higher), except for 27¢ lower in the waning spot month.

Corn futures closed 5¢ to 6¢ lower through near Jly and then mostly 1¢ lower.

Soybean futures closed mostly 4¢ to 5¢ lower through Sep ‘23 and then 2¢ to 7¢ lower.

Incidentally, with most of the winter wheat in the ground as of Nov. 14, there was 46% rated as Good (39%) or Excellent (7%), according to the latest USDA Crop Progress report. That was on par with the same time last year.

Despite recently stronger cash prices, Live Cattle futures closed narrowly mixed again —  from an average of 15¢ lower in five contracts to an average of 17¢ higher — with pressure from the lack of cash direction and what appear to have been peak wholesale beef prices for the season.

Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Tuesday afternoon. There were too few transactions to trend, according to the Agricultural Marketing Service.

Prices last week were at $132/cwt. on a live basis in the Northern Plains, the Southern Plains and Colorado. They were $131-$132 in the western Corn Belt. Dressed prices were at $207.

Early indications suggest prices no worse than steady this week.

Choice boxed beef cutout value was $1.07 lower Tuesday afternoon at $282.13/cwt. Select was 69¢ lower at $266.59/cwt.

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Major U.S. financial indices closed higher Tuesday, on the back of robust U.S. retail sales in October.

Advance estimates of U.S. retail and food services sales for October — adjusted for seasonal variation and holiday and trading-day differences, but not for price changes — were 1.7% more month to month at $638.2 billion, according to the U.S. Census Bureau. That was 16.3% more than a year earlier.

The Dow Jones Industrial Average closed 54 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 120 points.

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With global demand for U.S. red meat surging and exports on a record pace this year, Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF) says the severity of current transportation challenges can’t be overstated.

That was among many topics discussed at last week’s USMEF Strategic Planning Conference and Board of Directors Meeting, where panelists provided insight to the logistical challenges exporters face when moving chilled and frozen product through West Coast ports.

Veteran logistics journalist Bill Mongelluzzo, trans-Pacific senior editor at Journal of Commerce, noted that media outlets too often describe current shipping difficulties as gridlock, which misrepresents the situation and draws attention only to the number of vessels waiting at anchor.

“Gridlock means nothing is moving, when in fact the Port of Long Beach and other ports are moving record or near-record volumes of cargo every month, Mongelluzzo explained. “This has gone on for 16 consecutive months beginning in July 2020. The big issue right now are the warehouses – not just in Southern California where there’s close to 2 billion square feet of industrial space. You name the gateway – New York, New Jersey, Norfolk, Savannah – and these warehouses are totally and completely packed.”

On the other side of equation, Port of Long Beach Chief Operating Officer Noel Hacegaba shared steps the Port of Long Beach has taken to improve the flow of the surging volume of containers carrying imported cargo, which face several bottlenecks between U.S. point of entry and their final destination. Those steps include expansion of port operating hours and the recent imposition of dwell fees assessed on inbound containers that are not picked and removed promptly.

“Why are we assessing additional charges at a time when they need relief? Well, you can’t let the terminal, or even the ships at anchor, serve as warehouses – and that’s effectively what they’re doing,” Hacegaba explained. “We need to get those boxes out, and since we made that announcement, those boxes that this surcharge targets are down 20% at the Port of Long Beach, and this shows there is still room for improvement.”

Hacegaba and Mongelluzzo both cautioned that it is difficult to estimate when U.S. exporters will see significant improvement in the shipping industry’s ability to move their cargo to overseas destinations. Projections range from early 2022, when the Lunar New Year holidays tend to slow the volume of imports arriving at U.S. ports, to late 2022 or early 2023. The uncertainty is a growing concern for international customers who rely on prompt delivery of U.S. beef and pork.

By | November 16th, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 16, 2021

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

Prices last week were at $132/cwt. on a live basis in the Northern Plains and the Southern Plains. They were $131-$132 in the western Corn Belt. Dressed prices were at $207.

The average dressed steer weight the week ending Oct. 30 was 920 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 2 lbs. heavier than the previous week but 6 lbs. lighter than the previous year. The actual dressed heifer weight of 842 lbs. was the same as a week earlier but 6 lbs. lighter than the previous year.

Cattle futures traded sideways to slightly higher Monday, amid lackadaisical trade.

Live Cattle futures closed narrowly mixed, from an average of 17¢ lower in five contracts to an average of 21¢ higher.

Feeder Cattle futures closed an average of 57¢ higher, except for 32¢ lower in the waning spot month.

Corn futures closed fractionally lower to 1¢ lower through near Mar and then mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 10¢ to 12¢ higher through Sep ’23 and then mostly 7¢ higher.

Choice boxed beef cutout value was $1.10 lower Monday afternoon at $283.20/cwt. Select was $2.25 lower at $267.28/cwt.

Net U.S. beef export sales for the week ending Nov. 4 of 20,600 metric tons for 2021 were 23% more than the previous week and 39% more than the prior four-week average, according to USDA’s weekly U.S. Export Sales report. Increases were primarily for China, Taiwan, Japan, Mexico and South Korea.

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Major U.S. financial indices closed marginally lower Monday as investors awaited monthly economic data this week, including U.S. retail sales.

The Dow Jones Industrial Average closed 12 points lower. The S&P 500 closed fractionally lower. The NASDAQ was down 7 points.

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Steer and heifer calves traded counter-seasonally stronger in most regions last week, mostly steady to $5/cwt. higher with instances of $7-$10 higher, according to the Agricultural Marketing Service (AMS).

“There were places in South Dakota where very heavy supplies of calves are dominating the market and traded lower as trucking has also been an issue,” according to AMS analysts.

The dwindling supply of yearlings traded most firm to $5 higher.

In his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University notes calf prices are moving counter-seasonally higher amid what’s typically the peak calf marketing period of the year.

In Oklahoma, for instance, Peel says Medium and Large #1 steers the week ending Nov. 12 averaged $184.95/cwt. at 450-500 lb. That was $8.61 more than the prior week.

“The average price noted for value-added calves in the USDA-AMS report for the 450-500 lbs. steers was $194.57, nearly $10.00/cwt. higher than the average price for similar steers,” Peel says. “By contrast, the price for similar steers marked as un-weaned was reported at $174.86, about $10.00/cwt. lower than the average and about $20.00/cwt. lower than the price for the value-added calves. The value-added calves were valued $93.62/head more than un-weaned calves and $45.70/head over average calves.”

By | November 15th, 2021|Daily Market Highlights|

Cattle Current Daily—Nov. 15, 2021

Negotiated cash fed cattle prices finished last week $2 higher in Nebraska on a live basis at $132/cwt. and $2-$4 higher at $132 in the Southern Plains and the western Corn Belt. Fed cattle in Colorado also sold for $132, but there’s been no trend reported in that region for some time. Dressed prices were $3-$5 higher at $207.

Through Thursday, the five-area direct average steer price was $131.35/cwt. on a live basis, which was $3.23 more than the previous week. The five-area average steer price in the beef was $4.55 higher at $206.60.

“This week’s five-area weighted average price is the highest price since June 2017 and the first week the price has exceeded $130 since that same time period,” explained Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The spring price peak in 2017 was just over $144/cwt., but the spring price spike was short lived. The difference in today’s market is that the market is in a position to sustain prices in excess of $130 for several months. Fed cattle prices are not likely to spike, but methodically increase.”

Total estimated cattle slaughter last week was 655,000 head, which was 5,000 head more than the previous week. Year-to-date total estimated cattle slaughter of 28.9 million head was 844,000 head more (+3.0%) than the same period a year earlier. Total estimated year-to-date beef production through last week of 23.9 billion lbs. was 601.8 million lbs. more (+2.6%) than a year earlier.

Rallying Corn futures pressured Cattle futures Friday, especially Feeder Cattle.

Live Cattle futures closed an average of 25¢ lower, except for 25¢ higher in spot Dec. They closed an average of 33¢ lower week to week on Friday, except for an average of 27¢ higher in two contracts. 

Corn futures faded early-week pressure from the monthly World Agricultural Supply and Demand Estimates. On Friday, they closed 5¢ to 7¢ higher through Jly ’22 and then mostly 2¢ higher. Week to week on Friday, they were an average of 18¢ higher through the front six contracts. 

Soybean futures rallied higher, helped along by decreased projected yield in the WASDE. They closed 21¢ to 23¢ higher through Aug ’22 and then mostly 10¢ to 17¢ higher. Week to week on Friday, they were an average of 38.4¢ higher through the front six contracts.

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Cash calf and feeder cattle prices were mixed last week, but continued to show upside promise.

“The strong run of lightweight calves and slaughter cows the past several weeks has pressured prices for these classes of cattle, but prices have not faltered as much as the seasonal tendency would predict,” according to Griffith. “Most producers with spring calving herds will have marketed the 2021 calf crop and culled cows from the herd by early December. This means the price of these two classes of cattle will soon turn around and begin to seasonally increase as supply begins to wane.”

In the meantime, rallying grain futures pressured Feeder Cattle futures last week. They closed an average of $2.02 lower week to week on Friday ($1.50 lower toward the back to $2.62 lower in spot Nov). That was with an average decline of $1.13 on Friday. 

“The longer term outlook is for prices of cattle to continue increasing as there is an expectation of a bull market the next two to three years,” Griffith says. “However, the higher cattle price expectation in 2022 may not be able to overcome higher input costs for feed, fuel and fertilizer. Producers are encouraged to begin evaluating alternative production plans to reduce the dependency on these three inputs as prices are expected to remain elevated through the spring and potentially longer.”

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Wholesale beef values show signs of reaching a seasonal peak sooner than normal, but robust international demand for U.S. beef continues to strengthen the price floor.

Choice boxed beef cutout value was 38¢ lower Thursday afternoon at $285.14/cwt. Select was 67¢ higher at $267.29. Week to week, Choice was $5.24 lower. Select was $2.01 higher.

“Despite the wholesale price of beef remaining elevated, international markets continue to be a vacuum for the high-quality beef and beef products being produced in the United States. The fact beef continues to move at a strong pace to international customers is a good indicator that demand remains strong for beef,” Griffith says. “There are sure to be some market analysts who will raise concerns about export demand slowing, which is always a possibility with customers like China. However, Japan and South Korea continue to lead the way as the top destinations with China being a solid third place followed by Mexico and Canada.”

Year-to-date U.S. beef exports remained on a record pace through September.

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Major U.S. financial indices closed higher Friday, bouncing back from pressure earlier in the week from the stoutest inflation in three decades.

 The Dow Jones Industrial Average closed 179 points higher. The S&P 500 closed 33 points higher. The NASDAQ was up 156 points.

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On Friday, the National Cattlemen’s Beef Association (NCBA) called on Agriculture Secretary Tom Vilsack to immediately suspend all imports of fresh beef from Brazil to the United States.

In the letter to USDA, NCBA asked for a suspension until the agency conducts a thorough risk assessment and review of the processes that Brazil’s Ministry of Agriculture, Livestock, and Food Supply (MAPA) uses to detect disease and other threats to consumers. NCBA also urged USDA to review Brazil’s veterinary diagnostic laboratory system.

The U.S. and Brazil share “Negligible Risk” status for bovine spongiform encephalopathy (BSE) with the World Organization for Animal Health (OIE). However, according to NCBA, reports published by OIE indicate Brazil took more than eight weeks to report two confirmed cases of atypical BSE in September. The OIE requires countries to report within 24 hours for any animal disease event that could be of international concern for public health emergencies.

“It’s time to keep Brazilian fresh beef out of this country until USDA can confirm that Brazil meets the same consumer and food safety standards that we apply to all our trade partners,” says Ethan Lane, NCBA Vice President of Government Affairs.

“NCBA has long expressed concerns about Brazil’s history of failing to report atypical BSE cases in a timely manner, a pattern that stretches back as far as 2012. Their poor track record and lack of transparency raises serious doubts about Brazil’s ability to produce cattle and beef at an equivalent level of safety as American producers. If they cannot meet that bar, their product has no place here,” Lane says.

By | November 14th, 2021|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.”

By | November 11th, 2021|Daily Market Highlights|

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.”

By | November 10th, 2021|Daily Market Highlights|

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.

By | November 9th, 2021|Daily Market Highlights|

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.

By | November 8th, 2021|Daily Market Highlights|

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.

By | November 7th, 2021|Daily Market Highlights|

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.”

By | November 4th, 2021|Daily Market Highlights|

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.

By | November 3rd, 2021|Daily Market Highlights|

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.

By | November 2nd, 2021|Daily Market Highlights|

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.

By | November 1st, 2021|Daily Market Highlights|

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.”

By | October 31st, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 29, 2021

Cattle futures softened Thursday with a sense of retrenching as market fundamentals improve.

Live Cattle futures closed an average of $1.30 lower (80¢ lower to $2.72 lower in spot Oct).

Rising Corn futures prices continued to pressure Feeder Cattle futures, which closed an average of $1.50 lower (82¢ to $2.02 lower), except for 17¢ higher in expiring Oct.

Corn futures closed 5¢ higher through near Jul and then mostly 1¢ higher.

Soybean futures closed mixed, 2¢ to 5¢ lower through Sep ’22 and then mostly 2¢ to 3¢ higher.

Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service (AMS).

So far this week, live prices are $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 is $4 higher at $200.

Choice boxed beef cutout value was $1.26 higher Thursday afternoon at $284.89/cwt. Select was 95¢ higher at $262.64.

The average dressed steer weight of 922 lbs. (week ending Oct. 16) was 1 lb. heavier than the previous week but 7 lbs. lighter than the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 840 lbs. was 1 lb. heavier week to week but 10 lbs. lighter year over year.

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Major U.S. financial indices closed higher Thursday, bolstered by continued strong quarterly corporate earnings reports.

Initial weekly unemployment insurance claims were 281,000 the week ending Oct. 23, according to the U.S. Department of Labor. That was 10,000 fewer than the previous week, the fewest since March 14 last year and fewer than expected.

On the other hand, domestic economic growth was slower than expected in the third quarter.

Real gross domestic product (GDP) increased at an annual rate of 2.0% in the third quarter of 2021, following an increase of 6.7% in the second quarter, according to the U.S. Bureau of Economic Analysis. Slower consumer spending led the deceleration, as government assistance payments decreased. Also, the resurgence of COVID-19 cases resulted in new restrictions and delays in the reopening of establishments in some parts of the country.

The Down Jones Industrial Average closed 239 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 212 points.

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Globally, companies invested more than $30 billion in sustainability initiatives in 2020, and publicly traded companies and banks are quickly moving to capitalize, according to Kim Stackhouse-Lawson, Ph.D., during the 16th annual Feeding Quality Forum in Fort Collins, Colo.

“These investments outperformed traditional stocks. There will be an influx of dollars that enters this sustainability space quickly, and it’s going to be top-down driven,” says Stackhouse-Lawson. But, consumers also believe they can influence change with their investment choices.

“Seventy-five percent of millennials believe that their investments can influence climate change, and 84% of them believe their investments can help lift people out of poverty,” Stackhouse-Lawson explains. “The Gen Z group is coming up now, and they care too.” She points out nearly all the major food processing companies are making net zero commitments to decrease their carbon emissions and footprint in the next couple of decades.

“What I want you guys to know is that when a company commits to net zero, it 100% includes their entire value chain all the way down to the kernel of corn,” she said. “And even the fertilizer that’s going to go on that kernel of corn.”

Although cattle producers have a long track record of producing more beef with fewer resources, Stackhouse-Lawson says there is room for improvement.

“You have probably heard the industry and scientists, me included, say that we have gotten better over time,” Stackhouse-Lawson explains. “And we have, but it depends on the lens in which you look through. We are efficient, but absolute emissions are still increasing.” Ranchers have a good story to tell, but she says it must be done carefully.

“The first thing I think is important to acknowledge when you talk about sustainability is that emotion and science are on equal footing,” Stackhouse-Lawson says. “If you put them in a head-to-head race, emotion wins in the sustainability space nearly every time.”

By | October 28th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 28, 2021

Negotiated cash fed cattle prices finally moved beyond steady money Wednesday.

Live prices 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.

Trade was slow on light demand in the Southern Plains and western Corn Belt, according to the Agricultural Marketing Service. It was slow to moderate on good demand in Nebraska.

Despite stronger cash prices, Live Cattle futures closed narrowly mixed, from an average of 28¢ higher through the front five contracts to an average of 18¢ lower.

Although turning the seasonal corner higher, wholesale beef prices were lower Wednesday afternoon. Choice was down $1.13 to $283.63/cwt. Select was 85¢ lower at $261.69.

Feeder Cattle futures softened, though, in the wake of a strong surge in Corn futures.

Feeder Cattle closed and average of $1.34 lower, except for 52¢ higher in nearly spent Oct.

Corn futures closed mostly 10¢ to 13¢ higher with support from ethanol production and lower corn production in Brazil.

Soybean futures closed mostly 2¢ to 3¢ higher.

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Major U.S. financial indices closed mixed Wednesday amid what appeared to be rally fatigue, likely profit taking and skittishness about economic growth. Crude Oil futures were also down sharply on higher weekly inventories than expected.

The Dow Jones Industrial Average closed 266 points lower. The S&P 500 closed 23 points lower. The NASDAQ was up fractionally.

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“Solid grain prices, the Federal Reserve’s record-low interest rates and growing exports have underpinned the Rural Mainstreet Economy,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “USDA data show that 2021 year-to-date agriculture exports are more than 25.4% above that for the same period in 2020. This has been an important factor supporting the Rural Mainstreet economy.”

Creighton University’s Rural Mainstreet Index (RMI) remained above growth neutral in October for the eleventh consecutive month. It rose to 66.1 from 62.5 in September. The index is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

The majority of bankers (82.1%) indicate farmers in their area are in solid cash position with little need for borrowing.

The region’s farmland price index slid to a very strong 81.5 from September’s record high 85.2. October’s reading represented the 14th straight month that the index was above growth neutral.

By | October 27th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 27, 2021

Cattle futures stepped higher Tuesday, helped along by follow-through support from the friendly Cattle on Feed report, as well as early indications of cash prices pushing past steady this week and wholesale beef prices turn seasonally higher.

Feeder Cattle futures closed an average of $1.33 higher (35¢ to $2.05 higher).

Those gains came despite Corn futures closing mostly 3¢ to 5¢ higher.

Soybean futures closed mostly fractionally higher to 2¢ higher.

Live Cattle futures closed an average of $1.48 higher.

Negotiated cash fed cattle trade was slow on light demand in the Texas Panhandle through Tuesday afternoon, according to the Agricultural Marketing Service. Prices were mainly steady with last week at $124/cwt., but a few traded $1 higher at $125.

Elsewhere, trade ranged from mostly inactive on light demand to a standstill with too few transactions to trend.

Last week, live prices were $124 in Kansas and $124-$125 in Nebraska and the western Corn Belt. Dressed prices were $196.

Choice boxed beef cutout value was $1.72 higher at $284.76/cwt. Select was 65¢ lower at $262.54.

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Major U.S. financial indices edged higher Tuesday, fueled once again by strong corporate quarterly earnings reports. Consumer confidence added luster.

The Conference Board Consumer Confidence Index® increased to 113.8 in October from 109.8 in September.

“Consumer confidence improved in October, reversing a three-month downward trend as concerns about the spread of the Delta variant eased,” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “While short-term inflation concerns rose to a 13-year high, the impact on confidence was muted. The proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October—a sign that consumer spending will continue to support economic growth through the final months of 2021. Likewise, nearly half of respondents (47.6%) said they intend to take a vacation within the next six months—the highest level since February 2020, a reflection of the ongoing resurgence in consumers’ willingness to travel and spend on in-person services.”

The Dow Jones Industrial Average closed 15 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 9 points.

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“While the incentives to retain cattle and put on additional weight appear to be present this year in some locations, producers must calculate their operations’ value and cost of gain to determine if it is a correct decision,” says Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln. “Using some form of risk management could be appropriate given the assumptions about volatility and price certainty.”

In the latest issue of In the Cattle Markets from the Livestock Marketing Information Center, Dennis explains feed costs and beef demand are two factors that could take the shine of what currently appear to be price trends conducive for cow-calf producers to retain cattle for longer this fall.

Although projected corn production is more than expected just a couple of months ago, the forecast season-average price of $5.45/bu. is significantly higher than last year, as are other feeds. Drought raised the price floor beneath forage and hay prices. Odds favor La Nina conditions through the winter, which point to similar temperature and moisture conditions as last year.

“If this weather forecast materializes, then the price for grass and hay will continue to rise, pasture rental rates adjust higher and likely continue the cow herd liquidation this has persisted over the last three years,” Dennis says. “…Some feeding regions are coming off two years of drought conditions and many producers have already sold off both feeder cattle and parts of the cow herd.”

 As for beef demand, Dennis says there are early indications that higher beef prices are creating consumer reluctance to continue buying at the same pace.

“Beef exports have started to slow from their record-setting pace and as of yet, there are few advanced purchases for beef into 2022. This is one indication that the export markets have started to potentially move away from higher-priced U.S. beef,” Dennis explains. “In the domestic market, advanced purchases of wholesale beef from retail stores have also started to slow, indicating that perhaps domestic retailers are more willing to live in the cash market and then adjust featured products in the short run. This is perhaps one of the first signs that the price of beef is just too high for retailers to take any longer.”

By | October 26th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 26, 2021

Cattle futures found traction Monday from the friendly Cattle on Feed report.

Feeder Cattle futures closed an average of $1.25 higher, except for 20¢ higher in waning spot Oct.

Live Cattle futures closed an average of 92¢ higher.

Corn futures closed mostly marginally higher.

Soybean futures closed 9¢ to 16¢ higher.

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

Last week, trade was at $124.00/cwt. on a live basis in the Southern Plains and mainly $124-$125  in Nebraska and the western Corn Belt. Dressed trade was at $196.

Choice boxed beef cutout value was $1.22 higher Monday afternoon at $283.04/cwt. Select was 8¢ higher at $263.19.

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Major U.S. financial indices closed higher Monday, propelled by strong quarterly corporate earnings reports from tech heavyweights. The S&P 500 reached an all-time high, buoyed by consumer discretionary, energy and materials sectors. Crude oil reached $85/barrel for the first time since 2014.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 137 points. 

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“Following the ripple effects of last year’s pandemic volatility, it appears that feedlot production has moved past the cyclically peak numbers and will decrease consistently going forward,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. He was talking about the most recent Cattle on Feed report published Friday.

“These numbers indicate that feedlots are front-loaded with heavy cattle and will remain so for a few more weeks, likely into December. This explains much of the inability of the fed cattle market to move into the tighter numbers needed to break out of current levels. However, the September placements show a very different picture ahead,” Peel explains.

Although cattle on feed Oct. 1 of 11.55 million head was 1.4% less than the previous year at 11.55 million head, the number was the second largest for the date since the data series began in 1996.

On the other hand, September placements were 2.9% less year over year and about 4% less than expected.

“Placements under 600 lbs. were down 1.2% year over year and placements over 800 lbs. were down 5.3%, including a 7.4% year-over-year decrease in placements over 900 lbs. The implication is that, while it is taking longer than expected to turn the corner on tighter feedlot numbers, the change may be relatively sudden and dramatic when it does arrive,” Peel explains. “Feedlots have responded to higher costs of gain by focusing more on heavy placements as long as possible. However, the overall decline in cattle numbers and the seasonal dynamics of fall placement weights should result in a rapidly changing feedlot situation by December and into 2022.”

By | October 25th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 25, 2021

Cash cattle price were generally mixed to steady last week as more calves make their way to town and as fed cattle keep slugging for extra traction.

“Seasonal weakness in the calf market is evident as producers have been setting wheels under calves the past several weeks at a rapid pace,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “…As more calves make their way to the market, stocker producers become more selective in the cattle they will pay a premium for. Freshly-weaned calves tend to have an increased incidence of sickness this time of year as weaning stress is compounded by large temperature swings. From the stocker perspective, there is an opportunity to profit on calves being purchased and sold in truckload lots. The value of gain for an October purchase of a 525-pound steer and the sale of an 825-pound steer in March is $1.42 per pound with a 5% death loss. That is favorable math.”

Feeder Cattle futures closed an average of $1.99 lower on Friday (83¢ to $2.68 lower). Week to week, they were an average of $2.54 lower, amid profit taking from recent gains, slack interest, stagnant cash prices and skittishness about the monthly Cattle on Feed report. They received added pressure from resurgent Corn futures, which closed an average of 11¢ higher through the front six contracts week to week on Friday, with strong export demand.

However, Feeder Cattle perked up on Monday in response to the Cattle on Feed report. More on those numbers momentarily.

As mentioned in Cattle Current last week, in the monthly Livestock, Dairy and Poultry Outlook, ERS increased the projected annual average feeder steer price for next year by 50¢ to $155.50, based on expectations of tighter feeder cattle supplies in the second half of the year. Prices are forecast to average $153.00 in the first quarter, $151 in the second and $156.00 in the third quarter.

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Although there was some uptick on live prices in the North, negotiated cash fed cattle prices last week were mainly steady.

Regionally, trade last week, trade was at $124.00/cwt. on a live basis in the Southern Plains, $124.00-$126.50 in Nebraska and $124-$125 in the western Corn Belt. Dressed trade was at $196.

The five-area average direct fed steer price was 55¢ higher at $124.39/cwt. The average five-area price in the beef was 29¢ higher at $195.99.

“Cattle feeders and the industry have to be expecting prices to break one way or the other,” Griffith explains. “They will certainly do it, but the timing of such a price movement is becoming more difficult to decipher with week-after-week of steady prices.”

Live Cattle futures closed an average of $1.41 lower week to week on Friday, except for 5¢ higher in the back contract.

ERS projected the annual average fed steer price for next year at $128.75, compared to this year’s expected average of $121.06. Average prices are forecast at $130.00 in the first quarter, $128 in the second and $126.00 in the third quarter.

In the meantime, wholesale beef prices continue to show signs of turning the seasonal corner. Choice boxed beef cutout value was $1.58 higher week to week on Friday at $281.82/cwt. Select was $2.49 higher at $263.11.

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Major U.S. financial indices closed mixed on Friday. Tech stocks were pressured by Snap Inc. issuing a warning on ad spending, which took more than $100 billion in market value from various social media companies.

Also pressuring stocks was Fed a warning from Federal Reserve Chair Powell  that U.S. inflation is likely to last into next year and that it was, “time to taper.”  Overt the weekend, Treasury Secretary Janet Yellen echoed Powell, saying she expected inflation to remain through mid-year 2022.

The Dow Jones Industrial Average closed 74 points higher. The S&P 500 closed 5 points lower. The NASDAQ was down 126 points.

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For feedlots with 1,000 head or more capacity, according to the latest Cattle on Feed report, there were 2.16 million head placed in September, which was 64,000 fewer year over year (-2.9%). That was 4.1% fewer than the average of analyst estimates ahead of the report.

Marketing’s in September of 1.79 million head were 3.1% less than a year earlier, which was 0.4% less than average estimates.

Cattle on feed Oct. 1 of 11.55 million head was 167,000 head fewer than the previous year. That was 1.43% less. Average estimates ahead of the report saw a decline of 0.5%. The total was the second largest for the date since the data series began in 1996.

By | October 25th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 22, 2021

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

So far this week, live prices are steady in the Southern Plains at $124/cwt., steady to $2.50 higher in Nebraska at $124.00-$126.50 and steady to $1 higher in the western Corn Belt at $124-$125. Dressed prices are steady at $196.

Cattle futures closed mixed Thursday.

Live cattle were down an average of 63¢ lower on likely profit taking, pressure from Lean Hogs and positioning ahead of Friday’s Cattle on Feed report. Feeder Cattle managed to close narrowly mixed.

Feeder Cattle futures closed narrowly mixed, from an average of 36¢ lower to an average of 19¢ higher.

Choice boxed beef cutout value was 63¢ higher at $280.66/cwt. Select was 8¢ lower at $262.72/cwt.

As for grains, Corn and soybean futures closed lower Thursday beneath the weight of profit taking and lower crude oil prices.

Corn futures closed mostly 4¢ to 7¢ lower.

Soybean futures closed mostly 18¢ to 21¢ lower.

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Major U.S. financial indices closed mainly higher Thursday. Support included fewer weekly jobless claims than the trade expected. Initial weekly unemployment claims for the week ending Oct. 16 was 290,000, according to the U.S. Department of Labor. That was 6,000 fewer than the previous week and the lowest level since March 14 last year.

The Dow Jones Industrial Average closed 6 points lower. The S&P 500 closed 13 points higher. The NASDAQ was up 94 points.

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Slaughter data continues to suggest beef cow herd liquidation.

“The cow herd is in contraction mode this year as the drought and tough economical factors have made ranchers think of ways to keep the cow herd together,” according to analysts with the Agricultural Marketing Service. “Preliminary data from NASS puts the beef cow slaughter rate at around 9% more than a year ago and near 20% more than the previous five-year average. Heifer slaughter is 4.3% more than last year and 10.7% more than the previous five-year average. Producers will be looking at pregnancy checking females even more serious this year as production costs continue to rise.”

August beef and dairy cow slaughter was 6% higher year over year, according to USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. Combined cow slaughter was 7% more through the first four weeks of September, compared to the previous year.

“The increase in cow slaughter is likely the result of weaker margins in the dairy sector, which is affecting herd decisions and concerns about forage availability, and continued drought in parts of the country. These conditions are expected to result in increased cow slaughter in the fourth quarter.” say ERS analysts.

ERS increased forecast beef production for next year by 120 million lbs. to 26.99 billion lbs. on higher anticipated overall cattle slaughter.

“Dry conditions are expected to support relatively large placements in the second half of 2021, supporting a higher forecast of fed cattle slaughter in 2022,” ERS analysts explain. “However, production in the second half of the year will reflect lower placements as a result of expected tighter supplies of cattle outside feedlots in 2022.”

By | October 21st, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 21, 2021

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

Trade in the Southern Plains was mostly steady at $124/cwt.

Although too few to trend, there were some early live sales in Nebraska at $124.00-$126.50, and some in the western Corn Belt at $124-$125, compared to $124 in both regions last week. Early dressed sales were steady at $196.00.

Cattle futures closed higher Wednesday, bolstered by higher outside markets, leveling wholesale beef values, slightly higher cash prices and positioning ahead of Friday’s Cattle on Feed report. Trade volume remained on the low side.

Live Cattle futures closed an average of 74¢ higher (50¢ to 95¢ higher).

Choice boxed beef cutout value was 85¢ lower Wednesday afternoon at $280.03/cwt. Select was $1.27 higher at $262.80/cwt.

Feeder Cattle futures closed an average of $1.05 higher (50¢ to $1.32 higher).

Higher outside markets and energy prices helped boost Corn Futures Wednesday, while exports and more non-commercial interest boosted the entire grain complex.

Corn futures closed 7¢ to 9¢ higher — mostly 8¢ higher — across most of the board.

Soybean futures closed mostly 18¢ to 20¢ higher through Jan ‘23.

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Major U.S. financial indices closed mainly higher on the back of quarterly corporate earnings reports that continue to beat estimates.

The Dow Jones Industrial Average closed 152 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 7 points.

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Projected cattle feeding returns are expected to improve for most of the next eight months, reflecting higher fed cattle prices and lower cost of gain compared to recent months, according to the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University. 

After a projected -$4.24 per head for fed steers in October, forecast returns between November and June of next year range from -$9.26 in January to +$94.49 in March.

Losses are projected in only three of those months: -$1.24/head in November, -$9.26 in January and -$3.25 in June.

Feedlot Cost of Gain for steers was projected to be $115.22/cwt. in October. It declines steadily from there: $112.81 in November to $100.83 in June.

Keep in mind that these projections are cash-based and reflect no price risk management.

By | October 20th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 20, 2021

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

Live prices last week were steady in the Southern Plains on a live basis at $124/cwt. and steady to $2 higher at $124 in Nebraska and the western Corn Belt. Dressed prices were at $196, which was steady in Nebraska but steady to $3 higher in the western Corn Belt.

Choice boxed beef cutout value was 79¢ higher Tuesday afternoon at $280.88/cwt. Select was $1.72 higher at $261.53/cwt.

Cattle futures closed narrowly mixed Tuesday amid light trade with Feeder Cattle futures showing signs of firming.

Live Cattle futures closed mixed, from an average of 25¢ lower to an average of 13¢ higher.

Feeder Cattle futures closed mixed, from an average of 34¢ lower through the front five contracts to an average of 64¢ higher the rest of the way.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 6¢ to 8¢ higher.

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Major U.S. financial indices closed higher Tuesday, propelled once again by strong quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 198 points higher. The S&P 500 closed 33 points higher. The NASDAQ was up 107 points.

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Higher costs make this a good winter to focus more intently on feed management, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

Based on USDA’s Agricultural Prices for August, Peel points out national average alfalfa hay prices week 20.5% higher year over year. The national average price for other hay was up 13.4%.

“The epicenter of hay market impacts appears to be North Dakota along with surrounding states. Prices for alfalfa hay in August (North Dakota) were up 109.5% year over year with other hay prices up 69.4%,” Peel explains, in his weekly market comments. “In South Dakota, August alfalfa hay price was up 62.0% and other hay price was up 62.9%. Minnesota prices for alfalfa and other hay were up 63.1% and 54.5%, respectively. In Montana, alfalfa hay price was up 53.8% over last year in August and other hay price was up 39.3%.”

Even in the Southern Plains, where there was less drought impact, hay prices were higher. Specifically, Peel says other hay prices are 23.5% higher year over year in Oklahoma and up 10.6% in Texas. At the same time, current corn prices in the region are 40-50% higher.

“With higher prices for hay and supplement feeds, producers can reduce winter feeds costs with enhanced management. The process begins with understanding nutritional requirements of cattle by stage of production. Testing and weighing hay will help determine the nutritional contribution of hay to meet cattle needs,” Peel says. “Careful feeding of hay can help reduce waste and make hay stretch farther. Determine the additional needs for protein and energy and source supplement feeds that provide needed nutrients.”

By | October 19th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 19, 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. There were too few transactions to trend.

Live prices last week were steady in the Southern Plains on a live basis at $124/cwt. and steady to $2 higher at $124 in Nebraska and the western Corn Belt. Dressed prices were at $196, which was steady in Nebraska but steady to $3 higher in the western Corn Belt.

The five-area direct average steer price last week was 88¢ higher at $123.84/cwt. The average steer price in the beef was 33¢ higher at $195.70.

Cattle futures started the week softer amid technical considerations and traders apparently seeking more price direction. Another day of stronger Corn futures added pressure to Feeder Cattle. Some might also be considering positions ahead of the monthly Cattle on Feed report due out Friday.

Feeder Cattle futures closed an average of $1.52 lower, (50¢ lower at the back to $2.07 lower toward the front).

Live Cattle futures closed an average of 43¢ lower, except for an average of 8¢ higher in the back two contracts.

Choice boxed beef cutout value was 15¢ lower Monday afternoon at $280.09/cwt. Select was 81¢ lower at $259.81/cwt.

Corn futures got a follow-through boost from export sales, which were 85% more than the prior four-week average, according to the latest U.S. Export Sales report for the week ending Oct. 7. They closed mostly 4¢ to 5¢ higher.

Soybean futures closed mostly 1¢ to 3¢ higher.

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Major U.S. financial indices closed mainly higher Monday, buoyed by strong quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 36 points lower. The S&P 500 closed 15 points higher. The NASDAQ was up 124 points.

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USDA’s Economic Research Service lowered the projected average fourth-quarter feeder steer price (basis 750-800 lbs., Oklahoma City) by $4 compared to the previous month to $151.00/cwt., based on more quarterly feedlot placements than expected. That took about $1.00 from the average annual price projection — compared to the previous month — to $144.80.

However, in the latest monthly Livestock, Dairy and Poultry Outlook, ERS increased the projected annual average feeder steer price for next year by 50¢ to $155.50, based on expectations of tighter feeder cattle supplies in the second half of the year. Prices are forecast to average $153.00 in the first quarter, $151 in the second and $156.00 in the third quarter.

As mentioned in Cattle Current previously, ERS lowered the forecast fourth-quarter five-area direct average steer price by $4 to $127, based on seasonal trends and large supplies of fed cattle. However, the projected fed cattle price increased for the second half of 2022 on anticipated firm demand and tighter fed cattle supplies.

ERS projected the annual average fed steer price at $128.75, compared to this year’s expected average of $121.06. Average prices are forecast at $130.00 in the first quarter, $128 in the second and $126.00 in the third quarter.

By | October 18th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 18, 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. There were too few transactions to trend.

Live prices last week were steady in the Southern Plains on a live basis at $124/cwt. and steady to $2 higher at $124 in Nebraska and the western Corn Belt. Dressed prices were at $196, which was steady in Nebraska but steady to $3 higher in the western Corn Belt.

Estimated total cattle slaughter last week of 646,000 head was 11,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 26.3 million head is 806,000 head more than last year (3.2%). Year-to-date estimated total beef production of 21.72 billion lbs. is 588.9 million lbs. more than a year earlier (+2.8%).

Live Cattle futures closed an average of 50¢ higher with follow-through support from the previous session tied to firmer cash prices and higher outside markets.

Feeder Cattle futures closed an average of 71¢ lower, pressured by a surge in Corn futures and week-end positioning.

Corn futures closed mostly 7¢ to 9¢ higher.

Soybean futures closed mostly 9¢ to 11¢ higher.

Choice boxed beef cutout value was 8¢ lower Friday afternoon at $280.24/cwt. Select was 6¢ lower at $260.62.

The average dressed steer weight for the week ending Oct. 2 was 916 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 2 lbs. heavier than the previous week but 8 lbs. lighter than a year earlier. The average dressed heifer weight of 836 lbs. was 3 lbs. heavier than the previous week but 7 lbs. lighter than the same week last year.

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Major U.S. financial indices closed higher again Friday, boosted by follow-through support and another day of strong corporate quarterly earnings reports. U.S. food service and retail sales also grew more than expected in September — up 0.7%, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 382 points higher. The S&P 500 closed 33 points higher. The NASDAQ was up 73 points.

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Due to increasing natural gas prices, nitrogen fertilizer prices are relatively high compared to recent years and are expected to remain high and possibly increase through next spring, says Dave Franzen, Extension soil science specialist at North Dakota State University.

“China has supplied about a third of the world’s phosphate, and it has essentially banned exports through 2022,” Franzen explains. “That puts the burden of supply on other countries, including the United States.”

According to Franzen, the U.S. is not in a great position for mine and production expansion due to serious environmental concerns. This means that phosphate prices, which are already high, will continue to increase at least through 2022.

As for the Nitrogen side of the equation, the price for taking winter delivery of natural gas is now trading at a seven-year high as global scarcity concerns and a more measured return to domestic production growth have fueled early buying, according to the latest quarterly report from CoBank’s Knowledge Exchange Division (CKE).

“The market appears to be concerned that the demand for U.S. natural gas exports is so strong that there may be little flexibility in meeting domestic demand, should another cold winter unfold. Exports have risen significantly, with the U.S. now exporting about 10% of its dry gas production, a 30% increase compared to year ago levels,” say CoBank analysts.

As mentioned in Cattle Current last week, the CKE report explains rapidly rising input costs and product shortages are hitting agriculture particularly hard, as agricultural commodity prices have flattened and inflation compresses margins. In part, input shortages and increasing input costs stem from ongoing supply chain disruptions spun by the pandemic.

“Supply chain snarls are likely to persist well into 2022, and so will elevated inflation,” says Dan Kowalski, CKE vice president. “The latest producer price index data for August was up 20% year-over-year, while the consumer price index increased just 5.2%. So it’s clear that many businesses are passing only a small portion of those cost increases on to the final consumer. We expect that will change in the months ahead and many businesses will raise prices.”

Noting recent volatility in grain markets, Andrew P. Griffith, agricultural economist at the University says,  “At the end of the day, most of this volatility stems from a broader uncertainty in the U.S. economy and abroad as fertilizer prices continue to skyrocket and as energy prices do the same.”

“This means cattle producers need to put an increased focus on managing input prices,” Griffith says, in his weekly market comments. “Producers do not control the price of an input, but a producer does control how much of each input they utilize. High input prices will likely mean cattle producers will be forced to pick and choose the most important inputs for their operation and look for alternative solutions for the other inputs.”

By | October 17th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 15. 2021

Negotiated cash fed cattle trade was limited on moderate demand in Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. Live sales were steady to $2 higher in the western Corn Belt at $124/cwt., while dressed prices were steady at $196. There were too few to trend in Nebraska, where prices the previous day were steady to $2 higher at $124; steady in the beef at $196.

Trade in the Southern Plains was mostly inactive on light demand with too few transactions to trend. On Wednesday, live prices were steady at $124.

Higher outside markets and the slight increase in some regional cash prices helped draw more buying interest to Cattle futures Thursday.

Live Cattle futures closed an average of 78¢ higher (35¢ higher toward the back to $1.30 higher toward the front).

Feeder Cattle futures closed an average of 84¢ higher.

Choice boxed beef cutout value was 30¢ higher Thursday afternoon at $280.32/cwt. Select was $1.98 higher at $260.68.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 5¢ to 11¢ higher through Sep ’22 and then mainly 1¢ lower.

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Major U.S. financial indices closed sharply higher Thursday, fueled by blue-chip quarterly earnings reports beating expectations. The continued rally in oil added spark, as did fewer weekly initial jobless claims than expected.

Weekly unemployment insurance claims for the week ending Oct. 9 numbered 293,000, according to the U.S. Department of Labor. That was 36,000 less than the previous week and the lowest level since March 14 of last year when they tallied 256,000.

The Dow Jones Industrial Average closed 534 points higher. The S&P 500 closed 74 points higher. The NASDAQ was up 251 points.

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Open interest in Cattle futures continues to dwindle.

For recent perspective, Live Cattle open interest declined from a high of 314,114 contracts toward the beginning of September to a low of 289,222 Sept. 21 and then bounced as high as 292,326 before the end of the month. So far in October, Live Cattle open interest ranges from a high of 292,386 contracts Oct. 4 to a low of 281,581 Oct. 13.

Matthew Diersen, risk and business management specialist in the Ness School of Management and Economics at South Dakota State University provides some insight in the latest issue of In the Cattle Markets, published by the Livestock Marketing Information Center. He uses Live Cattle futures settlement Oct. 5 and the Commitment of Traders (COT) report from Oct. 8.

“In Live Cattle, the open interest held by producers (very large feedlots and processors) has been declining by those with short positions and increasing by those with long positions. The opposite has been happening with managed money; with more shorts and fewer longs,” Diersen says. “In Feeder Cattle, the largest share of open interest is held by managed money. In recent weeks they have reduced long positions and added short positions.”

Diersen explains many commodity indexes include Live Cattle and some include Feeder Cattle.

“The COT includes a supplement with a breakdown of index traders that includes futures and options. For Live Cattle, about one-third of open interest is long positions of index traders. Generally, these would be fund managers that buy and hold futures, then repeatedly roll to new contracts, always maintaining some exposure to cattle. Their net exposure is about opposite that of commercial traders at this time,” he says. “For Feeder Cattle, the contracts held by index traders is much smaller compared to Live Cattle contracts and the balance is more evenly split between long and short positions, though they are still net long.”

By | October 14th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 14, 2021

Negotiated cash fed cattle trade was steady with the previous week in the Southern Plains at $124/cwt. through Wednesday afternoon, according to the Agricultural Marketing Service. Trade was limited on light demand in the Texas Panhandle; slow on moderate demand in Kansas.

Trade in other regions was slow on light demand.

Live sales in Nebraska were steady to $2 higher at $124; steady in the beef at $196. Although too few to trend, there were some early live sales in the western Corn Belt at $123-$124, and a few in the beef at $196. Price there last were $122 and $193-$196, respectively.

Cattle futures closed lower Wednesday. Along with lower outside markets early in the day, most pressure seemed tied to WASDE increasing expected beef production for this year, as wholesale beef prices decline and cash fed cattle prices remain tough to budge.

Feeder Cattle futures closed an average of 85¢ lower (22¢ to $1.32 lower).

Live Cattle futures closed an average of 71¢ lower (25¢ lower at the front to $1.15 lower.

Choice boxed beef cutout value was $1.05 lower Wednesday afternoon at $280.02/cwt. Select was $2.65 lower at $258.70.

Corn futures closed mostly 6¢ to 10¢ lower.

Soybean futures closed mostly 4¢ to 7¢ lower.

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Major U.S. financial indices closed mixed Wednesday. News was mixed, too

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4% in

September on a seasonally adjusted basis after rising 0.3% in August, according to the U.S. Bureau of Labor Statistics. Leave food and energy out, and the month-to-month increase was 0.2%. The all-items index increased 5.4% over the last 12 months, before seasonal adjustment.

Minutes from the Federal Reserve meeting in September suggest stimulus tapering as soon as next month, which was expected.

The Dow Jones Industrial Average closed fractionally lower. The S&P 500 closed 13 points higher. The NASDAQ was up 105 points.

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Pent-up demand provided a tailwind for the meat industry in recent months, but the full effect of inflation is expected to test consumers’ appetite for meat during the fourth quarter, according to analysts with CoBank’s Knowledge Exchange Division (CKE).

Pandemic-disrupted supply chains have plenty to do with recent inflationary price pressure.

According to a new CKE Quarterly report, supply chains are arguably in the most dire condition since the start of the pandemic, as lead times for manufacturing inputs recently reached record highs. Persistent supply chain disruptions and labor shortages are adding significant costs to business operations, and consumers will feel these effects through higher prices for months to come.

“Supply chain snarls are likely to persist well into 2022, and so will elevated inflation,” says Dan Kowalski, CKE vice president. “The latest producer price index data for August was up 20% year-over-year, while the consumer price index increased just 5.2%. So it’s clear that many businesses are passing only a small portion of those cost increases on to the final consumer. We expect that will change in the months ahead and many businesses will raise prices.”

Rapidly rising input costs and product shortages are hitting agriculture particularly hard, as agricultural commodity prices have flattened and inflation compresses margins, according to the CKE report. However, CKE analysts say robust exports have kept much of agriculture in the black.

By | October 13th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 13. 2021

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

Live prices last week were at $124/cwt. in the Southern Plains, $122-$124 in Nebraska and $122 in the western Corn Belt. Dressed prices were $196 in Nebraska and $193-$196 in the western Corn Belt.

Cattle futures were a mixed bag Tuesday with Live Cattle, especially the front months, pressured by increased beef production estimates in the latest World Agricultural Supply and Demand Estimates  (WASDE).

Live Cattle futures closed an average of 42¢ lower (5¢ lower at the back to 92¢ lower toward the front).

On the other hand, Feeder Cattle futures closed an average of 45¢ higher except for 75¢ lower in spot Oct. Support included higher corn production and corn price stability suggested by the latest WASDE. More on those estimates momentarily.

Choice boxed beef cutout value was 5¢ lower Tuesday afternoon at $281.07/cwt. Select was $2.29 lower at $261.35.

Wheat futures gained Tuesday but Corn and especially Soybean futures softened in the wake of the latest World Agricultural Supply and Demand Estimates (see below).

Corn futures closed mostly 5¢ to 10¢ lower.

Soybean futures closed 20¢ to 30¢ lower through Jan ’23 and then 12¢ to 17¢ lower.

K.C. Wheat futures were mostly 3¢ to 5¢ higher.

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Major U.S. financial indices coasted lower Tuesday as investors awaited the monthly Consumer Price Index and minutes from the last Federal Reserve meeting, both due to be published Wednesday.

The Dow Jones Industrial Average closed 117 points lower. The S&P 500 closed 10 points lower. The NASDAQ was down 20 points.

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USDA’s Economic research Service (ERS) lowered fed cattle price projections for 2021 on current prices and relatively large supplies, in the latest monthly World Agricultural Supply and Demand Estimates (WASDE).

The annual five-area direct fed steer price average this year was projected $1.14 lower than the previous month at $121.06/cwt. with average prices at $123.51 in the third quarter and $127.00 in the fourth quarter.

However, ERS increased the 2022 price forecast on tighter expected supplies. The annual five-area direct average fed steer price next year was forecast $1.00 higher than the previous month at $129.00 with average prices at $130.00 in the first quarter and $128.00 in the second quarter.

ERS projected beef production this year 90 million lbs. more than the previous month’s estimate at 27.83 billion lbs., which would be 658 million lbs. more than last year (+2.4%). ERS forecasts next year’s beef production at 26.99 billion lbs., which would be 837 million lbs. less than this year (-3.0%).

Total estimated red meat and poultry production this year of 106.56 billion lbs. would be just 5 million lbs. more than last year. Projected total red meat and polity production next year of 106.25 billion lbs. would be 306 million lbs. less than this year’s estimate (-0.29%).

Corn

ERS projected 2021-22 U.S. corn production 23 million bu. more than the previous month at 15.019 billion bu. with yield of 176.5 bu./acre. Corn ending stocks were projected 92 million bu. higher.

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

Soybeans

ERS forecast U.S. soybean production 74 million bu. higher than the previous estimate at 4.4 billion bu. with yield of 51.5 bu./acre. Ending stocks were projected 135 million bu. more than the previous month at 320 million bu.

The season-average soybean price for 2021-22 was forecast 55¢ lower at $12.35/bu.  Soybean meal price was projected at $325/short ton, which was $35 less than the previous estimate. The soybean oil price forecast was unchanged at 65¢/lb. 

Wheat

ERS lowered forecast 2021-22 U.S. wheat supplies, domestic use and ending stocks. Projected 2021-22 ending stocks were reduced 35 million bu. to 580 million, which would be the lowest U.S. ending stocks since 2007-08.

“Significantly reduced supplies of Hard Red Spring, Durum, and White wheat for 2021-22 are expected to curtail feed and residual use for the remainder of 2021-22 along with the continued large price premium of wheat over corn,” say ERS analysts.

The projected 2021-22 season-average farm price was raised 10¢/bu. to $6.70 on reported NASS prices to date and price expectations for the remainder of 2021-22.

By | October 12th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 12, 2021

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

Live prices last week were at $124/cwt. in the Southern Plains, $122-$124 in Nebraska and $122 in the western Corn Belt. Dressed prices were $196 in Nebraska and $193-$196 in the western Corn Belt. Between last week’s increased slaughter level and recent futures prices hopes are growing to budge cash prices higher this week.

Estimated total cattle slaughter last week of 657,000 head was 20,000 head more than the previous week and year. Estimated total year-to-date cattle slaughter of 25.63 million head was 815,000 head more (+3.3%) than the same time last year. Estimated year-to-date total beef production of 21.8 billion lbs. was 604.7 million lbs. more (+2.9%) than a year earlier.

Cattle futures found a little more traction Monday as traders appeared more confident in recent gains.

Feeder Cattle futures closed an average of 73¢ higher, except for 15¢ lower in spot Oct.

Live Cattle futures closed an average of 37¢ higher, except for 7¢ and 10¢ lower toward either end of the board.

Choice boxed beef cutout value was $2.15 lower Monday afternoon at $281.12/cwt. Select was 90¢ higher, though, at $263.64.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 9¢ to 14¢ lower.

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Major U.S. financial indices closed closer Monday. Most of the pressure appeared to be investor worries about slowing economic growth as corporate earnings season arrives.

The Dow Jones Industrial Average closed 250 points lower Monday. The S&P 500 closed 30 points lower. The NASDAQ closed 93 points lower.

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Cattle feeding returns continue positive this year, according to data from the Livestock Marketing Information Center (LMIC).

“September is the fifth month of 2021 to post positive returns,” say LMIC analysts, in the most recent Livestock Monitor. “Since April, estimated returns have been between $30-40 per head. Expectations are for the rest of 2021 feedlots to see continued profits, but are unlikely to see ‘home-run’ returns this year.” That’s based on LMIC’s data series that tracks cash-to-cash returns.

LMIC analysts note profit continues to be limited by high input costs. For instance, they point out September closeouts were based on a feeder cattle input cost of $139.28/cwt., the highest price in Dodge City since October of 2020.

“The next three months, all except one of the closeouts will see higher feeder cattle input costs. The good news is those higher feeder prices will be partially offset by feed costs that are easing lower than they were earlier in the year. Corn, sorghum, and protein costs have all fallen more than a dollar per unit from the summer highs. Still, cattle placed over the summer were very likely fed some very high- cost rations,” explain the LMIC folks.

LMIC currently projects fourth-quarter returns to average $30 per head, which would make for an average of $15 per head for the year.

“Expectations are for the first quarter of next year to face some rather steep declines, maybe as large as $80+ per head losses,” says LMIC analysts. “However, after the first quarter of 2022, feedlot profit outlook is expected to improve substantially.”

By | October 11th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 11, 2021

Negotiated cash fed cattle trade ranged from a standstill to mostly inactive with light demand in all major feeding regions through Friday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.

Live prices last week were steady in the Southern Plains at $122-$124/cwt. in Kansas and $124 in the Texas Panhandle. Prices were steady in the western Corn Belt at $122 but mostly steady to $2 higher in Nebraska at $122-$124. Dressed prices were $196, which was steady in Nebraska and toward the top of last week’s price range in the western Corn Belt.

Feeder Cattle futures closed an average of 39¢ lower as traders positioned for the weekend following the surge higher. Week to week on Friday, they closed an average of $5.17 higher.

Similarly, Live Cattle futures closed narrowly mixed from an average of 37¢ lower to an average of 17¢ higher. They closed an average of $3.92 week to week on Friday.

Choice boxed beef cutout value was $2.03 lower Friday afternoon at $283.27/cwt. Select was $1.74 lower at $262.74/cwt.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed mostly 4¢ to 7¢ lower.

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Major U.S. financial indices fell on Friday after jobs data came out weaker than expected for September, right as most expect the Federal Reserve to start tapering efforts. Only 194,000 workers were added last month, even though the jobless rate declined to 4.8% – partly due to folks who have quit looking for jobs. The biggest loss in jobs was seen from government entities, although a bright side came from leisure and hospitality, which nearly doubled the rate of jobs added in that sector.

The Dow Jones Industrial Average closed 9 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 74 points.

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Fundamental economics and credible research continue to suggest voluntary efforts to improve cattle price discovery offer less risk and more opportunity than government mandates.

Last week, the Texas A&M University Agricultural and Food Policy Center (AFPC) issued proceedings from an in-depth workshop on cattle markets titled The U.S. Beef Supply Chain: Issues and Challenges.

It stems from the Committee on Agriculture in the U.S. House of Representatives asking USDA to commission a study to look into the issues surrounding fed cattle pricing. Ultimately, USDA partnered with the AFPC.

Leading agricultural economists from across the nation address a number of key cattle market issues at the heart of current debate and legislative proposals. Arguably, the most complex surrounds Alternative Marketing Agreements (AMAs), which enable pricing cattle based on individual value rather than averages, reduce transaction costs and increase marketing efficiency, among other things. As more cattle trade through AMAs and outside of the spot cash market, some argue price discovery erodes. This notion is behind legislative proposals calling for mandated levels of weekly regional negotiated cash fed cattle trade.

“The beef industry’s move to AMAs (alternative marketing arrangements) represents part of the progression to value-based marketing and economic pressures to reduce transaction costs. Legislation or efforts to increase negotiated trade will increase industry costs,” according to the AFPC study. “Those increased costs are estimated to result in lower calf prices and higher beef prices. Cattle pricing and market signals have evolved over the last 40 years. Premiums that were not present prior to AMAs are now common. One of the challenges is maintaining the reward for quality if the method of pricing changes. Thinking through  the effect of the pricing mechanism on market signals is an important consideration to prevent even more negative impacts of potential changes.”

For perspective, Stephen Koontz, agricultural economist at Colorado State University conducted research more than a decade ago, estimating that participants realized $25 per head in value from formula pricing due to lower costs and increased marketing efficiency. AFPC researchers say the value is likely significantly more today. However, they used the $25 value in an equilibrium displacement model (EDM) to quantify the effect of an increase in costs at the feeder-packer level on cattle and beef prices if all cattle sold via negotiated cash trade.

“As expected, increasing transaction costs results in lower live animal prices and higher wholesale and retail beef prices. The impact on live prices ranges from -$1.75/cwt. for fed cattle to -$2.62/cwt. for calf prices,” according to the report. Beef prices at the wholesale (cutout) and retail levels increase. The impact on live prices is larger, in percentage terms, than meat prices. If the live-to-cutout spread is a concern, the end result is a widening price spread.”

In the AFPC study, Koontz examines and models the economic impact of mandating packing facilities procure 30% or 50% of their fed cattle needs via the negotiated market for delivery within 14 days.

“The bottom-line impact of any intervention into the cattle market is the fact that there are modest benefits and considerable costs due to lost efficiency and product quality from mandates,” Koontz says.  “Similarly, but context reversed, this is because AMA use has considerable benefits and modest costs due to solid economic foundations. This was the conclusion across the fed cattle and beef, hog and pork, lamb and lamb meat, and downstream meat distribution industries in the LMMS (Livestock and Meat Marketing Study conducted by GIPSA). For the cattle and beef industry, the costs are ultimately incurred by cow-calf producers and beef consumers. The short-term impact for a policy most like that being considered is a $2.5 billion negative impact in the first year and a cumulative negative impact of $16 billion over 10 years, inflated to 2021 dollars. This cost is leveled mainly on cattle producers. The 50/14 proposal would have these negative impacts and the 30/14 would have similar negative impacts albeit approximately halved.”

By | October 10th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 8, 2021

Feeder Cattle futures took center stage Thursday, closing sharply higher and leading Live Cattle along. Support seemed to stem mainly from increased trader confidence based on notions the seasonal low is in the books.

Feeder Cattle futures closed an average of $2.34 higher ($1.50 higher at the back to $3.55 higher in spot Oct).

Live Cattle futures closed an average of $1.29 higher (47¢ higher at the back to $1.87 higher toward the front.)

Corn futures closed mixed, mostly 1¢ lower to 1¢ higher.

Soybean futures closed mostly 5¢ to 9¢ higher.

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

So far this week, live prices are steady in the Southern Plains at $122-$124/cwt. in Kansas and $124 in the Texas Panhandle. Prices are steady in the western Corn Belt at $122 but mostly steady to $2 higher in Nebraska at $122-$124. Dressed prices are $196, which is steady in Nebraska and toward the top of last week’s price range in the western Corn Belt.

Choice boxed beef cutout value was $1.32 lower Thursday afternoon at $285.30/cwt. Select was $1.52 higher at $264.44.

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Major U.S. financial indices extended gains Thursday, buoyed by reports Congress reached a deal to raise the nation’s debt ceiling through early December.

The Dow Jones Industrial Average closed 337 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 152 points.

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“There are lingering questions about consumer beef demand as we close out 2021 and move into 2022,” says James Mitchell, an Extension livestock economist at the University of Arkansas. “Last year, we learned that consumers were willing to buy beef at higher prices. Recovery in the restaurant sector was certainly a positive for the beef industry in 2021. As the holiday beef buying season approaches, will we observe a return to company holiday parties and large family gatherings? Will beef demand remain strong next year?”

In the most recent issue of In the Cattle Markets, Mitchell says insight to those questions can be had by monitoring boxed beef cutout values for the remainder of this year, which includes their seasonal nature.

“Seasonality in the cutout value is driven by price seasonality for individual beef cuts. Based on monthly data from 2014-2018, Choice boxed beef prices were seasonally highest in May, averaging 6.7% above the annual average price,” Mitchell says. “The seasonal high in May aligns with peak beef demand during grilling season (Memorial Day to Labor Day). Choice cutout prices decline through the summer, reaching a low in October when prices average 5.5% below the annual average Choice cutout value. Choice boxed beef prices recover, but remain below the annual average, during November and December’s holiday beef buying season.”

Although cutout values are following a similar trend so far this year this year, Mitchell notes prices were boosted further earlier by increased demand from restaurants as that sector replenished supplies amid loosening COVID-19 restrictions. More recently, wholesale prices continue to decline, in part due to seasonality.

“For the week ending Oct. 1, the Choice cutout value was $297.79/cwt., down 3.6% from the previous week but still 36.5% above this time last year,” Mitchell explains. “The rib primal, which is the highest valued beef primal, was down 4.5% last week. The loin and chuck primals were down 3.8% and 4.3% compared to the previous week. The round primal was 1.9% higher last week, while the brisket primal observed the largest weekly decline, down 11.5%.”

By | October 7th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 7, 2021

Negotiated cash fed cattle trade was slow on moderate demand in the Southern Plains and Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices in the Texas Panhandle were steady at $124/cwt., steady to $2 higher in Kansas at $124 and steady to $2 higher in Nebraska at $122-$124. Dressed trade in Nebraska was steady at $196.

Trade was limited on light demand in the western Corn Belt. There were a few dressed sales at $196, but there were too few to trend. Prices last week were mostly $122 on a live basis and $192-$197 in the beef.

Live Cattle futures closed and average of 56¢ higher.

Feeder Cattle futures closed and average of $1.15 higher, except for 32¢ lower in the back contract.

Choice boxed beef cutout value was $1.09 lower Wednesday afternoon at $286.62/cwt. Select was $4.87 lower at $262.91.

Corn futures closed mostly 3¢ to 5¢ lower.

Soybean futures closed 3¢ to 9¢ lower.

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Major U.S. financial indices settled higher Wednesday after a volatile trading session. Support included an apparent short-term solution to suspending or raising the nation’s debt ceiling, which would enable avoiding a national default and the economic chaos that would entail.

Also, private sector employment increased by 568,000 jobs from August to September according to the latest ADP®National Employment ReportTM. That was more than the trade expected.

The Dow Jones Industrial Average closed 102 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 68 points.

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U.S. beef exports blasted to another new value record in August, topping the $1 billion mark for the first time, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Pork exports also posted another strong month in August, remaining ahead of the record pace established in 2020.

Record shipments to China and the largest exports of the year to Japan, led beef exports in August. Beef exports totaled 132,577 metric tons (mt), which was 21% more year over year and the second largest of this year. Export value climbed 55% to $1.04 billion.

For January through August, beef exports increased 18% from a year ago to 955,407 mt, with value up 34% to $6.62 billion. Exports were 6% higher in volume and up 20% in value compared to the record pace established in 2018. In addition to setting new records in China, beef exports are also on a record pace to South Korea and Central America and have rebounded significantly to Mexico.

“The August export results would be impressive under any circumstances, but achieving these totals despite all the COVID-related obstacles at home and overseas is truly remarkable,” says USMEF President and CEO Dan Halstrom. “Our transportation and labor situation is challenging, and customers continue to face an uncertain business climate due to foodservice restrictions and other economic headwinds. Yet international buyers remain committed to the quality and consistency delivered by U.S. red meat, and the U.S. industry has gone to tremendous lengths to keep shipments moving.”

August beef export value equated to a record $468.75 per head of fed slaughter, up 55% from a year ago. Through August, export value was $381.91 per head, up 28%.

Halstrom emphasized the broad-based growth achieved in 2021 bodes well for both near and long-term exports.

“Obviously breaking the $1 billion mark in a single month is a huge milestone for U.S. beef, and that’s not possible unless a wide range of markets are hitting on all cylinders,” Halstrom explains. “But the trendlines for U.S. pork are also very encouraging. Just a few years ago, it was an achievement to reach $6 billion in pork export value in a full year. In 2021, exports will exceed that total with an entire quarter to spare.”

By | October 6th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 6, 2021

Negotiated cash fed cattle trade was mostly inactive with light demand in all trading regions through Tuesday afternoon, according to the Agricultural Marketing Service. There were not enough sales for a market trend.

Live prices last week were at $124/cwt. in the Texas Panhandle, at $122-$124 in Kansas, at $122 in Nebraska and at $122-$123 in the western Corn Belt. Dressed prices were $196 in Nebraska and $192-$196 in the western Corn Belt. 

Cattle futures received follow-through support Tuesday amid continued oversold conditions and outside support.

Feeder Cattle futures closed an average of $1.37 higher (60¢ higher in Aug ’22 up to $1.85 in nearby Nov.

Live Cattle futures closed an average of 66¢ higher (20¢ at the front of the board to 95¢ at the back) except for nearby Dec, down 20¢.

Choice boxed beef cutout value was $1.47 lower Tuesday afternoon at $287.71/cwt. Select was $2.62 higher at $267.78/cwt.

Corn futures closed 2¢ to 4¢ lower.

Soybean futures closed 7¢ to 15¢ higher.

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Major U.S. financial indices closed higher on Tuesday amid continued volatility in the markets. Part of that uncertainty stems from mixed news about the economy and its recovery. On the positive side, a report from the Institute for Supply Management Tuesday showed service provides expanded in September more quickly than anticipated. Despite continued problems with inventories and labor, 17 of 18 service industries grew last month, with retail, entertainment and management/support experiencing the biggest growth.

The Dow Jones Industrial Average closed 312 points higher. The S&P 500 closed 45 points higher. The NASDAQ closed 178 points higher.

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The Purdue University/CME Group Ag Economy Barometer declined in September, down 14 points to a reading of 124. That’s the weakest agricultural producer sentiment reading since July 2020 when the index stood at 118. The Index of Current Conditions declined 12 points to a reading of 140 and the Index of Future Expectations fell 16 points to a reading of 116.

In September, fewer respondents said they expected their ranch or farm financial performance to match last year’s, while the percentages of producers expecting both worse and better financial performance rose.

“Although the combined responses left the Farm Financial Performance Index unchanged from a month earlier, the increasing divergence in expectations among respondents from August to September could reflect differences in how individual farms managed risk in a period of rapidly fluctuating commodity prices,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Producer concerns about rising input costs rose sharply this month with over one-third of respondents saying they expect input prices to rise by more than 12% in the coming year, which is six times the average farm input inflation rate of the last decade. Inflation expectations were higher this month across the board with the percentage of respondents expecting input inflation to rise above 12% doubling since July with an increase to 34%, up from 21% last month.

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 Sept. 27-29, 2021.

By | October 5th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 5, 2021

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

Live prices last week were at $124/cwt. in the Texas Panhandle at $122-$124 in Kansas, at $122 in Nebraska and at mostly $122 in the western Corn Belt. Dressed prices were $196 in Nebraska and $192-$197 in the western Corn Belt.

Estimated total cattle slaughter last week of 637,000 head was 4,000 head fewer than the previous week and 27,000 head fewer than the same time last year.

Cattle futures plowed higher Monday, buoyed in part by extremely oversold conditions.

Live Cattle futures closed an average of $1.64 higher (75¢ higher at the back to $2.85 higher toward the front).

Feeder Cattle futures closed an average of $1.30 higher Monday (32¢ higher toward the back to $2.25 higher in spot Oct) except for $2.00 lower in Sep.

Choice boxed beef cutout value was $3.18 lower Monday afternoon at $289.18/cwt. Select was 32¢ higher at $265.16.

Corn futures closed fractionally lower to 2¢ higher across most of the board.

Soybean futures closed 6¢ to 10¢ lower through Jly ’22 and then mostly fractionally lower to 3¢ lower.

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Major U.S. financial indices closed mostly sharply lower Monday, led by tech stocks as investors seemed to grow squeamish about the impact of rising bond yield rates on high-value shares.

The Dow Jones Industrial Average closed 323 points lower. The S&P 500 closed 56 points lower. The NASDAQ was down 311 points.

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Forty-seven percent of the winter wheat crop was in the ground as of Oct. 3, according to USDA’s latest Crop Progress report. That was 3% less than the same time last year but 1% more than the 5-year average. Emergence was at 19% compared to 22% last year and 20% for average.

Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides a regional perspective in his weekly market comments, based on the previous week’s data. 

“Although the numbers are about average, general indications are that wheat pasture prospects are limited at this time,” Peel says. “Some producers have “dusted in” wheat into dry soil, which will germinate quickly with the recent rains. Pockets of heavy rain may have crusted over fields with un-germinated or very small wheat and may require replanting.” That’s similar to the prognosis I heard from producers in western Kansas last week.

By | October 4th, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 4, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the Western Corn Belt through Friday afternoon, according to the Agricultural Marketing Service. There were a few live sales at $122/cwt., however not enough in either region for a full market trend. Trading was at a standstill in the Southern Plains. 

Live prices last week were steady in the Texas Panhandle at $124/cwt., steady to $1 lower in Kansas at $123-$124, $2 lower in Nebraska at $122 and steady to $1 lower in the western Corn Belt at $122-$123. Dressed prices were $2 lower in Nebraska at $196 and steady to $1 lower in the western Corn Belt at $192-$196.

Cattle futures ended the week mixed as traders continued to position for the new month. Conditions remain as oversold as buyer interest is limited.

Feeder Cattle futures closed mixed from an average of 66¢ lower in four contracts (7¢ to $1.95 lower) to an average of 57¢ higher (20¢ to $1.95 higher).

Live Cattle futures closed mixed, an average of 38¢ lower through the front four contracts to an average of 21¢ higher in the back four contracts.

Choice boxed beef cutout value was $2.62 lower at $292.36/cwt. Select was $4.48 lower at $264.84/cwt.

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed 6¢ to 9¢ lower in the front four contracts, 3¢ to 5¢ lower through Jan ’23 and then mostly 1¢ lower to fractionally higher.

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Major U.S. financial indices gained some lost ground on Friday, closing higher after a run of down days. Part of the market optimism came from Merck’s announcement of promising trial data for a pill that could be a game changer for treatment of Covid-19. Friday the Labor Department reported improvement in the jobs market – payrolls increased by about 500,000 in September, almost twice that of August. The unemployment rate is forecast at 5.1% compared to 5.2% a month earlier.

The Dow Jones Industrial Average closed 483 points higher. The S&P 500 closed 50 points higher. The NASDAQ was up 118 points. 

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Glynn Tonsor, agricultural economist at Kansas State University (K-State) shared price forecasts from the Livestock Marketing Information Center (LMIC) during last week’s K-State Beef Stocker Field Day.

In his Beef Cattle Outlook, according to Tonsor, LMIC sees steer calves (basis 500-600 lbs., the Southern Plains) averaging $175-$178/cwt. next year with average prices at $167-$170 in the first quarter, $172-$176 in the second, $179-$189 in the third and $177-$187 in the fourth quarter. The annual average price in 2023 is projected at $193-$203.

For feeder steers (basis 700-800 lbs., Southern Plains) LMIC projects next year’s annual average price at $156-$160, with average prices at $153-$156 in the first quarter, $154-$159 in the second, $157-$167 in the third and $155-$165 in the fourth quarter. The annual average price in 2023 is projected at $170-$180.

LMIC projects the 2022 average fed steer price (five-area direct) at $128-$130 with average prices at $127-$130 in the first quarter, $132-$136 in the second, $122-$130 in the third and $126-$134 in the fourth quarter. The annual average price in 2023 is projected at $134-$144.

By | October 3rd, 2021|Daily Market Highlights|

Cattle Current Daily—Oct. 1, 2021

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

So far this week, Live prices are steady in the Texas Panhandle at $124/cwt., steady to $1 lower in Kansas at $123-$124, $2 lower in Nebraska at $122 and steady to $1 lower in the western Corn Belt at $122-$123. Dressed prices are $2 lower in Nebraska at $196 and steady to $1 lower in the western Corn Belt at $192-$196.

Position squaring for the end of the week, month and quarter, along with softer cash prices and sharply lower outside markets helped push Cattle futures lower Thursday.

Feeder Cattle futures closed an average of $2.35 lower, except for 35¢ lower in expiring Sep.

Live Cattle futures closed an average of $1.60 lower.

Choice boxed beef cutout value was $2.35 lower Thursday afternoon at $294.98/cwt. Select was $2.46 lower at $269.32/cwt.

Corn futures closed lower and Soybean futures closed sharply lower Thursday. Pressure included higher projected stocks than anticipated (see below) and the recently stronger dollar weighing on exports. As with cattle, week-end and month-end and positioning likely also contributed.

Corn futures closed mostly 2’2¢ to 2’6¢ lower.

Soybean futures closed 21¢ to 28¢ lower through Aug ’22 and then 15¢ lower to 3¢ higher.

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Major U.S. financial indices closed sharply lower Thursday to close out a volatile month of trade, with investor frets including slowing economic growth, stimulus tapering, rising inflation and interest rates along with the Congressional war over the budget.

The Dow Jones Industrial Average closed 546 points lower. The S&P 500 closed 51 points lower. The NASDAQ was down 63 points.

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USDA’s quarterly Grain Stocks report offered some market surprises.

Although, estimated old-crop corn stocks Sept. 1 were 36% less year over year at 1.24 billon bu., they were more than the trade expected. Of the total stocks, 395 million bu. were stored on farms, down 47% from a year earlier. Off-farm stocks, of 842 million bu. were 28% less than a year ago.

Likewise, old-crop soybean stocks of 256 million bu. were 51% less than a year earlier, but more than trade expectations. Soybean stocks stored on farms totaled 68.1 million bu., down 52% from a year ago. Off-farm stocks, of 188 million bu. were 51% less year over year. 

All wheat stored in all positions was bullish at 1.78 billion bu. which was 18% less year over year and less than expected. On-farm stocks were estimated at 419 million bu., down 41% from last September. Off-farm stocks of 1.36 billion bu. were 6% less year over year.

By | September 30th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 30, 2021

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

Live sales traded steady in the Texas Panhandle at $124/cwt. and steady to $2 lower in Nebraska at $122-$124/cwt. Dressed trade in Nebraska was $2 lower at $196.

Although too few to trend, there were some live sales in Kansas at $123-$124 and some in the western Corn Belt at $121.00-$123.50.

Those softer prices and declining wholesale beef values pressured Live Cattle futures Wednesday, which closed an average of 26¢ lower, except for 10¢ higher in away Oct and unchanged in away Dec.

Choice boxed beef cutout value was $4.23 lower Wednesday afternoon at $297.33/cwt. Select was $2.57 lower at $271.78/cwt.

Weakness on the live side and a day of stronger Corn futures added pressure to Feeder Cattle, which closed an average of $1.08 lower.

Corn futures closed mostly 4¢ to 6¢ higher.

Soybean futures closed mostly 4¢ to 6¢ higher through Aug ‘22 and then mainly 2¢ to 4¢ higher.

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Major U.S. financial indices closed mixed Wednesday with the third straight day of losses in NASDAQ, while the dollar rose to its highest level since November 2020.

The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 7 points higher. The NASDAQ closed 34 points lower.

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Although the global economy is growing more than expected a year ago — buoyed by extraordinary support from governments and central banks — recovery remains uneven, according to the latest Interim Economic Outlook from the Organization for Economic Cooperation and Development (OECD).

“Large differences in vaccination rates between countries are adding to the unevenness of the recovery,” according to the report. “Renewed outbreaks of the virus are forcing some countries to restrict activities, resulting in bottlenecks and adding to supply shortages.” 

Similarly, inflationary price pressure is variable. OECD notes inflation is rising rapidly in the U.S. and some emerging economies, but remains relatively low in many other advanced economies, particularly in the euro area.

“A rapid increase in demand as economies reopen pushed up prices in key commodities such as oil and metals as well as food, which has a stronger effect on inflation in emerging markets,” according to OECD. “The disruption to supply chains caused by the pandemic has added to cost pressures. At the same time, shipping costs have increased sharply.”

OECD projects inflation in the G20 countries to peak toward the end of this year and then slow throughout 2022.

OECD forecasts strong global growth of 5.7% this year and 4.5% in 2022.

“Even in the countries where output or employment have recovered to their pre-pandemic levels, the recovery is incomplete, with jobs and incomes still short of the levels expected before the pandemic,” according to the Interim Economic Outlook.

By | September 29th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 29, 2021

Short covering and lower Corn futures helped Feeder Cattle futures mostly rebound from the previous day’s pressure.

Feeder Cattle futures closed an average of $1.00 higher.

Live Cattle futures closed mixed, from an average of 17¢ lower in four contracts to an average of 39¢ higher.

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

Fed cattle prices last week were generally steady on a live basis at $123-$124/cwt. Dressed trade was $2 lower at $198 in Nebraska and $194-$198 in the western Corn Belt.

Choice boxed beef cutout value was $1.14 lower Tuesday afternoon at $301.56/cwt. Select was 3¢ lower at $274.35.

Corn futures closed 5¢ to 7¢ lower through new-crop contracts and then 2¢ lower to 1¢ higher.

Soybean futures closed mostly 9¢ to 10¢ lower.

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Spiking treasury yield rates and the Congressional budget stalemate weighed on equity markets Tuesday.

The Dow Jones Industrial Average closed 569 points lower. The S&P 500 closed 90 points lower. The NASDAQ was down 423 points.

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Despite bad weather and the delta variant spread, consumer online and physical restaurant visits in August continued to recover from last year’s steep declines, according to the NPD Group (NPD). U.S. restaurant traffic increased by 5% over the 10% decline in August 2020 and was 5% less than the pre-pandemic level in August 2019. Larger average check sizes drove a 13% increase in dollars compared to a year ago and a 3% gain in dollars over the same month two years ago, according to NPD’s daily tracking of the U.S. restaurant industry. 

“Overall, the state of the U.S. restaurant industry today reflects the steady state of the home-centric lifestyle that has us eating more meals at home,” says David Portalatin, NPD food industry advisor. “This behavior pre-dates the pandemic and will continue into the foreseeable future. To meet the needs of today’s restaurant consumers, restaurant operators need to think about getting meals and snacks into the home.”

Quick service restaurant visits, representing most U.S. restaurant traffic, were down 3% in August compared to August 2019, up 2% versus the same time last year. Visits to full service restaurants declined by 9% this August compared to the same month two years ago, and increased by 20% versus a 25% decrease in August 2020. 

While restaurant visits improved overall, dine-in or on-premises traffic continues to struggle compared to pre-pandemic levels. Dine-in visits were down 34% in August compared to August 2019. Off-premises orders, which gained significant ground during the pandemic, represented 73%, of all restaurant visits this August. Of off-premises services, delivery continues its meteoric growth, with orders increasing by 128% in August compared to the same month two years ago, and now represents 10% of off-premises visits. Carry-out visits, which hold a 49% share of off-premises traffic, increased by 6% compared to pre-pandemic levels. Drive-thru visits rose by 11% in August compared to August 2019 and represented 41% of off-premises visits in the month. Although digital ordering has grown by triple-digits since the pandemic began, non-digital orders represented 85% in of all restaurant orders in August.

By | September 28th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 28, 2021

Cattle futures closed lower Monday, pressured by Friday’s Cattle on Feed report with unexpectedly higher placements. 

Live Cattle futures closed an average of 40¢ lower.

Feeder Cattle futures closed an average of $1.68 lower (38¢ to $3.00 lower). They received extra pressure from Corn futures, which closed an average of 12¢ higher in the front six contracts, apparently based on early yields.

Soybean futures closed up across the board, mostly 2¢ to 6¢ higher.

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

Live price last week were generally steady at $123-$124/cwt. Dressed trade was $2 lower at $198 in Nebraska and $194-$198 in the western Corn Belt.

 Choice boxed beef cutout value was 62¢ lower Monday afternoon at $302.70/cwt. Select was 15¢ lower at $274.38.

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Major U.S. financial indices closed mixed on Monday, after the Federal Reserve chair said last week tapering of stimulus efforts could start as soon as November. Brent crude closed at the highest mark since 2018. Two regional Fed presidents stepped down unexpectedly on Monday amid scrutiny over their 2020 stock trading.

The Dow Jones Industrial Average closed 71 points higher. The S&P 500 12 closed points lower. The NASDAQ closed 78 points lower. 

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“Going forward, the expectation is that fed cattle supplies will continue to tighten and drop below the slaughter capacity cap that has separated the fed market from beef markets,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “Beef production is expected to drop in the fourth quarter and fed markets should participate more fully in the market strength. Barring any new disruptions or “Black Swans,” cattle and beef markets should get lined up in a more typical fashion and move forward with tighter supplies and continued strong demand.”

In his weekly market comments, providing insight to Friday’s Cattle on Feed report, Peel notes cattle feeders appear to making headway with front-end supplies, albeit slowly.

“The 12-month moving average of feedlot placements peaked recently in April, with declines since, except for a slight move higher with the large August placements,” Peel explains. “Generally, declining placements imply smaller feedlot numbers, eventually. The large heavy placements in August will front-end load future production somewhat. The 12-month moving average of marketings peaked recently in June and is moving lower in July and August suggesting that the peak feedlot production is past.” He adds that the 12-month moving average feedlot inventory also peaked recently in June and is also moving lower.

As for August placements, Peel explains, the unexpected increase came almost exclusively in weights heavier than 700 lbs. For instances he points to the 15.4% year-over-year increase in cattle placed weighing more than 900 lbs.

By | September 27th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 27, 2021

Negotiated cash fed cattle trade ranged from a standstill to mostly inactive on light demand through Friday afternoon, according to the Agricultural Marketing Service. There were too few transactions to trend in any region.

Live price last week were generally steady at $123-$124/cwt. Dressed trade was $2 lower at $198 in Nebraska and $194-$198 in the western Corn Belt.

Cattle futures closed mixed on Friday, amid fairly light action as traders positioned ahead of the monthly Cattle on Feed report and the end of the week.

Feeder Cattle futures closed an average of 50¢ higher, except for 27¢ lower in spot Sep.

Live Cattle futures closed an average of 34¢ lower.

Estimated total cattle slaughter last week was 641,000 head, according to USDA’s Agricultural Marketing Service (AMS). That was 16,000 head fewer than the previous week. Year-to-date estimate total cattle slaughter of 20.11 million head was 627,000 head more (+3.2%) than the same period last year. Estimated year to date beef production of 20.1 billion lbs. was 627 million lbs. more (+3.2%) than the same time last year.

The average dressed steer weight the week ending Sept 11 was 909 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 3 lbs. heavier than the previous week but 11 lbs. lighter than the same week last year. The average dressed heifer weight of 831 lbs. was 9 lbs. heavier than the previous week but 5 lbs. lighter than the previous year.

Choice boxed beef cutout value was $2.28 lower Friday afternoon at $303.32/cwt. Select was 46¢ lower at $274.53.

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Major U.S. financial indices closed narrowly mixed Friday, ending a volatile week of trade.

The Dow Jones Industrial Average closed 33 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 4 points.

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Markets may deem Friday’s monthly Cattle on Feed report a bit bearish with August placements about 3% more than estimates ahead of the report.

There were 2.10 million head placed in feedlots with 1,000 head or more capacity, which was 2.3% more than a year earlier. Pre-report estimates, on average, saw a decline of 0.7%. In terms of weight, 34% went on feed weighing 699 lbs. or less, 48% weighing 800-999 lbs. and 18% weighing 900 lbs. or more.

Cattle marketed in August of 1.88 million head were 0.37% less than a year earlier, about even with pre-report expectations.

Cattle on feed Sept. 1 of 11.23 million head were 160,000 head fewer (-1.40%), which was 0.5% more than expected. That’s the second highest inventory for the date since the data series began in 1996, according to the Agricultural Marketing Service.

By | September 26th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 24, 2021

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

So far this week, live price are generally steady with last week at $123-$124/cwt. Dressed trade is $2 lower at $198 in Nebraska and $194-$198 in the western Corn Belt.

Resurgent equity markets helped Cattle futures mainly increase Thursday.

Live Cattle futures closed an average of 47¢ higher, except for 5¢ lower in spot Oct.

Recently higher Corn futures capped Feeder Cattle, which closed from an average of 33¢ lower in three contracts to an average of 37¢ higher.

Corn futures closed mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 1¢ to 3¢ higher.

Choice boxed beef cutout value was $2.23 lower Thursday afternoon at $305.60/cwt. Select was 51¢ lower at $274.99.

Net U.S. beef export sales (2021) for the week ending Sept. 16 totaled 15,800 metric tons, according to the weekly U.S. Export Sales report. That was 3% more than the previous week and 17% more than the prior four-week average. Increases were primarily for Japan, South Korea, China, Taiwan, and Canada. 

Consensus favors Friday’s monthly Cattle on Feed report coming in about even with the previous year; slightly few placements and total cattle on feed.

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Major U.S. financial indices continued to rally Thursday with follow-through support from the Fed’s dovish tone a day earlier.

The Dow Jones Industrial Average closed 506 points higher. The S&P 500 closed 53 points higher. The NASDAQ was up 155 points.

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Federally Inspected (FI) total cattle slaughter in August of 2.83 million head was 83,300 head more (+3.02%) year over year, according to the monthly Livestock Slaughter report from USDA. The average live weight was down 11 lbs. from the previous year, at 1,354 lbs. For January through August, total FI cattle slaughter of 22.08 million head was 964,100 head more (+4.6%) than the same time last year.

Total commercial beef production in August of 2.36 billion lbs. was 24.4 million lbs. more (+1.04%) than the previous year. Beef production for January through August of 18.53 billion lbs. is 782.6 million lbs. more (+4.41%) year over year.

Total commercial red meat production in August of 4.59 billion lbs. was 104.3 million lbs. less (-2.20%) year over year, due to lower year-over-year production of veal, pork, lamb and mutton. For January through August, total red meat production of 36.88 billion lbs. was 541.4 million lbs. more (+1.49%) than the same period last year.

By | September 23rd, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 23, 2021

Negotiated cash fed cattle trade was slow with moderate demand in Kansas and Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices were steady in Kansas at $123-$124/cwt., but $1 lower in Nebraska at $124. Dressed trade in Nebraska was $2 lower at $198.

Trade was limited on light demand in other regions. A light test brought steady money of $124 in the Texas Panhandle. Live sales in the western Corn Belt last week were $123-$124; dressed sales were $196-$200.

Higher outside markets and potential positioning ahead of Friday’s Cattle on Feed report helped lift Cattle futures Wednesday.

Feeder Cattle futures closed an average of $1.09 higher (87¢ to $1.27 higher) except for 5¢ lower in spot Sep.

Live Cattle futures closed an average of $1.02 higher (65¢ to $1.30 higher).

Choice boxed beef cutout value was $3.54 lower Wednesday afternoon at $307.83/cwt. Select was $2.51 lower at $275.50.

Corn futures closed 7¢ to 8¢ higher through new-crop contracts and then mostly 1¢ to 3¢ higher.

Soybean futures closed 6¢ to 9¢ higher through the front six contracts and then mostly 1¢ to 4¢ higher.

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Major U.S. financial indices rallied back Wednesday.

The Federal Reserve seemed to soothe some investor worries with its statement Wednesday, acknowledging progress in domestic economic recovery — and the likelihood of tapering its bond buying program soon — while holding interest rates steady and reiterating it will do so until maximum employment is achieved and inflation rises to 2% and moderately exceeds that level for some time.

“With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen,” according to the statement. “The sectors most adversely affected by the pandemic have improved in recent months, but the rise in COVID-19 cases has slowed their recovery. Inflation is elevated, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.”

The Dow Jones Industrial Average closed 338 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 150 points.

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USDA’s latest monthly Cold Storage report continues to reflect strong red meat demand.

Total pounds of beef in freezers Aug. 31 were 4% more than the previous month but 8% less year over year.

Frozen pork supplies were up 4% from the previous month but down 1% percent from the same time last year.

Total red meat supplies in freezers were 4% more than the previous month but 6% less than a year earlier. 

Total frozen poultry supplies were down 3% from the previous month and down 20% from a year ago.

By | September 22nd, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 22, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. In Nebraska, trading was mostly inactive with very light demand and not enough purchases to trend.

Last week in the Texas Panhandle, live sales traded at $124/cwt. In Kansas, live sales traded from $123-$124. In Nebraska, live sales traded at $124 and dressed mostly at 200. In the Western Corn Belt, live sales traded from $123-$124 and dressed at $196-$200.

Cattle futures mostly firmed Tuesday, despite continued pressure in Lean Hogs, tied to queasiness over China’s economic growth. After the bell, USDA announced confirmation of African Swine Fever in Haiti, which shares an island with the Dominican Republic, where it was recently confirmed.

Feeder Cattle futures closed an average of 48¢ higher, except for an average of 7¢ lower in the front two contracts.

Live Cattle futures closed an average of 38¢ higher, except for an average of 22¢ lower in the front three contracts.

Choice boxed beef cutout value was $4.29 lower Tuesday afternoon at $311.37/cwt. Select was $2.74 lower at $278.01.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed mostly 9¢ to 11¢ higher.

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Major U.S. financial indices retained most of the previous session’s steep losses on Tuesday as investors awaited the Fed’s quarterly economic outlook and interest rate notions.

The Dow Jones Industrial Average closed 51 points lower. The S&P 500 closed 4 points lower. The NASDAQ was up 33 points.

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The venerable cattle cycle is alive and well. Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides insight to the systematic ebb and flow of the U.S. beef cattle inventory.

“Cattle cycles continue to be a regular feature of the industry for several reasons,” Peel explains, in his latest weekly market comments. “It takes rather exaggerated price signals to encourage the cow-calf sector to change course and the lengthy biology of cattle production makes changing course a slow process. Perhaps most important is the interaction between production and reproduction in the cattle industry. Since cattle have offspring one at a time, the process of expanding production when inventories are too low means that tight supplies are made even tighter to retain heifers for increased production and likewise too much supply is made even larger in the short run as more cows are culled and fewer heifers are retained for production.”

Peel points out the most recent cyclical expansion from 2014 to 2019 was the first significant one since 1990 to 1996. 

“A muted cycle from 2004 to 2007 resulted in very little expansion before more liquidation to 2014.  Cattle inventories declined 15 of 18 years from 1996 to 2014,” Peel explains. “The most recent cattle cycle began with an inventory low of 88.24 million head in 2014 with cattle numbers increasing to 94.8 million head in 2019. Modest cyclical liquidation in 2019 and 2020 brought cattle inventories down to 93.6 million head in January 2021. Herd liquidation is being exaggerated by drought in 2021. It is not clear exactly how much and how fast the industry will liquidate going forward but cattle cycles continue to be an important fundamental feature affecting cattle markets in the U.S.”

By | September 21st, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 21, 2021

Plenty of Monday’s market attention was focused beyond cattle to equities and other commodities as Wall Street investors sold heavily, apparently mostly due to concerns tied to China’s property market. Fears are a potential global domino effect in financial markets on top of ongoing worries about the pandemic and economic growth. The Dow Jones Industrial Average was down 614 points, the S&P 500 closed 75 points lower and the NASDAQ was down 330 points.

Despite the heavy outside pressure, Cattle futures held their own.

Feeder Cattle futures closed an average of 29¢ higher, except for unchanged in Mar and 5¢ lower in May.

Live Cattle futures closed an average of 16¢ lower except for 55¢ higher in near Dec.

Corn futures closed 2¢ to 5¢ lower through new-crop contracts and then mostly 1¢ lower to 1¢ higher.

Soybean futures closed mostly 15¢ to 21¢ 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, prices were steady to unevenly steady in the Southern Plains and Nebraska with live prices at $124/cwt. in the Texas Panhandle, $123-$124 in Kansas and $124 in Nebraska. Live prices in the western Corn Belt were $1-$3 lower at $123-$124. Dressed traded was unevenly steady at $200 in Nebraska but unevenly steady to $4 lower in the western Corn Belt at $196-$200.

Choice boxed beef cutout value was $1.19 higher Monday afternoon at $315.66/cwt. Select was $1 higher at $280.75.

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Reduced U.S. beef imports from Australia are helping lift domestic ground beef prices, according to USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook.

“While the United States is a major global supplier of beef, it also imports beef and processing-grade beef (used for ground beef) to meet a growing consumer demand,” ERS analysts explain. “Historically, Australia is the predominant supplier of processing-grade beef to the United States, with smaller amounts coming from Brazil, Canada, and New Zealand, among other countries.”

As Australia restocks pastures from a multi-year drought, that nation has less beef to export.

For perspective, the price for 90% lean beef from Australia was $240/cwt. in February of this year, according to ERS. The price was $274 in July.

Although it will take Australia a good while to restock, ERS expects that nation’s cattle inventory to ultimately realign close to former supply levels.

“Meanwhile, as the economy reopens, the demand for beef and ground beef is expected to support beef prices,” say ERS analysts.

By | September 20th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 20, 2021

Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

For the week, prices are steady to unevenly steady in the Southern Plains and Nebraska with live prices at $124/cwt. in the Texas Panhandle, $123-$124 in Kansas and $125 in Nebraska. Live prices in the western Corn Belt were $1-$3 lower at $123-$124. Dressed traded was unevenly steady at $200.

Through Thursday, the five-area direct fed steer price was 83¢ lower on a live basis at $123.90/cwt. The average steer price in the beef was $2.14 lower at $200.81.

Estimated total cattle slaughter last week was 83,000 head more than the previous week at 660,000. Year-to-date estimated total cattle slaughter of 23.7 million head was 843,000 head more (+3.7%) than the same time last year. Total year-to-date beef production of 19.57 billion lbs. was 643.3 million lbs. more (+3.4%) than the same period last year.

Cattle futures sagged lower Friday amid outside market weakness and week-end positioning.

Feeder Cattle futures closed an average of 89¢ lower (57¢ lower at the back to $1.20 lower).

Live Cattle futures closed an average of 78¢ lower.

Choice boxed beef cutout value was $3.53 lower at $314.47/cwt. Select was 52¢ lower at $279.75.

Corn futures closed 1¢ to 3¢ lower.

Soybean futures closed 8¢ to 12¢ lower through Aug ‘22 and then mostly 4¢ to 6¢ lower.

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Major U.S. financial indices closed lower Friday as investors seemed content to pick up their chips and ponder recent equity and commodity market weakness amid the continued pandemic. 

The Dow Jones Industrial Average closxed 166 points lower. The S&P 500 closed 40 points lower. The NASDAQ was down 137 points.

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U.S. beef exports’ record pace so far this year is even more impressive when you consider growing demand from countries that are just now becoming key markets.

As mentioned previously in Cattle Current, U.S. beef exports set another new value record in July, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). July export value climbed 45% from a year ago to $939.1 million, while volume was the third largest of the post-BSE era at 122,743 metric tons (mt), up 14% year-over-year.

Yet, according to analysts with USDA’s Economic Research Service (ERS), shipments were less year over year to five of the top seven U.S. customers, albeit relatively small reductions.

“The rise in part reflects large shipments of U.S. beef to China, the largest U.S. beef exports to China, ever recorded, totaling almost 45 million lbs. more than the previous year,” according to ERS, in the September Livestock, Dairy and Poultry Outlook. “Indonesia, a smaller destination, made a sizeable contribution to the increase in beef exports in July. U.S. beef exports to Indonesia totaled 7.1 million lbs., by far the largest volume the United States has ever exported to that country.”

ERS projected third-quarter U.S. beef export shipments 20 million lbs. higher than the previous estimate; 10 million lbs. higher for the fourth quarter.

The annual forecast for 2021 was revised up 30 million lbs. to 3.41 billion lbs. The forecast for 2022 was unchanged from last month at 3.27 billion lbs.,” say ERS analysts.

By | September 19th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 17, 2021

Cattle futures managed to close marginally lower to narrowly mixed Thursday.

Feeder Cattle futures closed narrowly mixed, from an average of 34¢ lower in four contracts to an average of 56¢ higher.

Live Cattle futures closed an average of 38¢ lower, except for an average of 6¢ higher in two contracts.

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and mostly inactive on light demand in the North through Thursday afternoon, according to the Agricultural Marketing Service.

For the week, prices are steady to unevenly steady in the Southern Plains and Nebraska with live prices at $124/cwt. in the Texas Panhandle, $123-$124 in Kansas and $125 in Nebraska. Live prices in the western Corn Belt are $1-$3 lower at $123-$124. Dressed traded is unevenly steady at $200.

Choice boxed beef cutout value was $1.82 lower Thursday afternoon at $318.00/cwt. Select was $3.62 lower at $280.27.

Net U.S. beef export sales for the week ending Sept. 9 were 15,300 metric tons, according to USDA’s weekly U.S. Export Sales report. That was 23% more than the previous week and 24% more than the prior four-week average. Increases were primarily for Japan, South Korea, China, Mexico, and Canada.

Corn futures closed mostly 3¢ to 4¢ lower.

Soybean futures closed fractionally higher to 1¢ higher through May ‘22 and then mostly 1¢ to 4¢ lower.

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Major U.S. financial indices mainly hovered in place Thursday amid investor caution. Weekly initial unemployment insurance claims for the week ending Sept. 11 were 332,000, which was 20,000 more than the previous week and a tad gloomier than expected.

The Dow Jones Industrial Average closed 63 points lower. The S&P 500 closed 6 points lower. The NASDAQ was up 20 points.

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Price projections in the latest monthly Livestock, Dairy and Poultry Outlook from USDA’s Economic Research Service (ERS) continue to be optimistic, especially heading into 2022.

ERS sees the 2022 annual average feeder steer price (basis 750-800 lbs., Oklahoma City) at $155.00/cwt., which would be $9.12 more than this year’s estimate and $19.55 more than the 2020 average. Prices are projected at $154 in the third quarter and $155 in the fourth quarter for an annual average of $145.88. Prices are forecast at $153 in the first quarter next year and at $151 in the second.

ERS projects the 2022 annual average five-area direct fed steer price at $128.25/cwt., which would be $6.07 more than this year’s projection and $19.74 more than 2020. Prices are projected at $124 in the third quarter and $131 in the fourth quarter for an annual average of $122.18. Prices are forecast at $133 in the first quarter next year and at $128 in the second.

“Cow slaughter is expected to be higher during the second half of the year, partly offsetting declines in steer and heifer slaughter. But, coupled with lighter expected dressed weights, the forecast for 2021 beef production was reduced to 27.74 billion lbs., down 130 million lbs. from last month,” according to ERS analysts.

By | September 16th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 16, 2021

Negotiated cash fed cattle trade was slow on light to moderate demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were generally steady at $124/cwt. in the Texas Panhandle and $123-$124 in Kansas.

Prices were unevenly steady in Nebraska at $125 on a live basis and $200 in the beef.

There were too few transactions to trend in the western Corn Belt.

Choice boxed beef cutout value was $3.07 lower Wednesday afternoon at $319.82/cwt. Select was $6.73 lower at $283.89.

Cattle futures retreated Wednesday but held on to most of the previous session’s gains. Resurgent Corn futures added pressure to Feeder Cattle.

Feeder Cattle futures closed an average of $1.20 lower (2¢ at the back to  to $2.15 lower toward the front).

Live Cattle futures closed an average of 59¢ lower (10¢ lower at the front to $1.10 lower at the back), except for 5¢ higher in spot Oct.

Corn futures closed 11¢ to 13¢ higher through new-crop contracts and then mostly 3¢ to 6¢ higher.

Soybean futures closed 8¢ to 12¢ higher through Nov ‘22 and then mostly 4¢ to 6¢ higher.

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Major U.S. financial indices rose Wednesday, supported by tech and energy stocks.

The Dow Jones Industrial Average closed 236 points higher. The S&P 500 closed 37 points higher. The

NASDAQ closed 123 points higher

Crude Oil futures (WTI-CME) closed $1.65 to $2.15 higher through the front six contracts.

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“…while the four-firm concentration in fed cattle beef packing has remained relatively constant since 1994, the CPI (Consumer Price Index) for beef has been variable over that same period; sometimes above and sometimes below the overall consumer price index. If concentration is causing the recent rise in consumer prices for meat and poultry products, why did concentration not cause inflation five or 10 years ago?,” wonders Julie Anna Potts, president and CEO of the North American Meat Institute, in a letter sent Tuesday to Agriculture Secretary Tom Vilsack.

The letter was in response to a White House press briefing last week where the primary focus was climbing consumer food prices. Brian Deese, National Economic Council (NEC) director and Secretary Vilsack unveiled what they called a study. You’d be hard-pressed to find a credible economist able to connect the dots and conclusions. The abbreviated bottom line is that industry consolidation is at the root of higher red meat and poultry prices.

“…Just four large conglomerates control the majority of the market for each of these three products, and the data show that these companies have been raising prices while generating record profits during the pandemic…The dynamic of a hyper-consolidated pinch point in the supply chain raises real questions about pandemic profiteering. During the pandemic, wholesale prices for beef rose much faster than input prices for cattle. That means that the prices the processors pay to ranchers aren’t increasing, but the prices collected by processors from retailers are going up.”

There’s neither time nor space to start filling in the fictional holes and inferential leaps.

Good luck getting profit data from privately owned companies, which represent a fair bit of beef packing capacity. Never mind what gross packing margins have and don’t have to do with profitability.

Few would argue that food retail prices are increasing. As mentioned in yesterday’s Cattle Current, beef and veal values were 9.6% higher year over year in pandemic-ravaged 2020, according to according to the Consumer Food Price Index from ERS. Year over year in July, those values were 6.5% higher; 4.2% higher year to date compared to the same time last year.

Everything from increased labor costs and supply chain disruptions to inflation and derived demand contribute to increasing consumer prices and the price imbalance between industry sectors.

“Before the administration attempts to recreate the animal agriculture industry, it is prudent to look back and acknowledge the benefits that flow from the food supply chains as they exist, which ERS described as ‘efficient,’ Potts explained in her letter. “In 2020, according to ERS, Americans spent an average of 8.6 percent of their disposable personal incomes on food. Indeed, Americans spend less of their disposable personal income on food than any other country in the world. This remarkable drop is attributable largely to systematic efficiencies that allow food processors to offer food to consumers at lower prices.”  

By | September 15th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 15, 2021

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

Last week, live prices were at $123-$124/cwt. in the Southern Plains and $124-$127 in the North. Dressed trade was at $198-$203.

Cattle futures were finally oversold and cheap enough to generate buying interest Tuesday. Support included the fact that the JBS plant in Grand Island — offline Monday due to a fire on the rendering side — was reportedly back up and running.

Feeder Cattle futures closed an average of $2.96 higher ($2.57 to $3.45 higher).

Live Cattle futures closed an average of $2.16 higher ($1.65 to $2.82 higher).

Choice boxed beef cutout value was $3.04 lower Tuesday afternoon at $322.89/cwt. Select was $1.54 lower at $290.62.

Corn futures closed 3¢ to 7¢ higher across the front half of the board and then fractionally higher to 3¢ higher.

Soybean futures closed 1¢ to 2¢ lower, except for 4¢ higher in spot Sep.

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Major U.S. financial indices weakened after a respite the previous day and despite the fact that the closely watched Consumer Price Index (CPI) was slightly less than the trade expected month over month and year over year. The CPI for All Urban Consumers (CPI-U) increased 0.3% in

August on a seasonally adjusted basis after rising 0.5% in July, according to the U.S. Bureau of Labor Statistics. The unadjusted index for all items was 5.3% more than 12 months earlier.

The Dow Jones Industrial Average closed 292 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 67 points.

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Wholesale beef prices continue to decline, while retail beef prices edge higher.

Although wholesale beef prices remain elevated, Choice boxed beef prices continue downward, from a recent summer high in of $348.03/cwt. in August to $322.89 yesterday afternoon. Likewise, Select declined from $319.59 to $290.62.

Conversely, the most recent summary of retail beef prices, published by USDA’s Economic Research Service (ERS) yesterday shows the Choice beef price increasing steadily from $6.48/lb. in March to $7.64 in August. During the same period, the all fresh retail beef price increased from $6.38/lb. to $7.14.

According to the Consumer Food Price Index from ERS, beef and veal values were 9.6% higher year over year in pandemic-ravaged 2020. Year over year in July, those values were 6.5% higher; 4.2% higher year to date compared to the same time last year.

By way of comparison, the Consumer Food Price Index for all food was 3.4% higher year over year in 2020, 3.4% higher year over year in July and 2.4% higher year to date.

Year over year in July, food-at-home (grocery store or supermarket food purchases) CPI increased 2.6%, while food-away-from-home (restaurant purchases) increased 4.6%, according to the ERS Food Price Outlook.

Year to date, ERS analysts say, “Of all the CPI food-at-home categories tracked by USDA-ERS, the fresh fruits category has had the largest relative price increase (4.9%) and the fresh vegetables category the smallest (0.4%). No food categories have decreased in price in 2021 compared to 2020.”

As for the overall consumer price index, according to the latest update from the U.S. Bureau of Labor Statistics, the unadjusted index for all items was 5.3% higher over the last 12 months.

By | September 14th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 14, 2021

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 at $123-$124/cwt. in the Southern Plains, $124-$126 in Nebraska and $124-$127 in the western Corn Belt. Dressed trade was at $198-$203. 

Last week’s five-area direct average steer price was $124.79/cwt. on a live basis, which was 64¢ less than the previous week. The average steer price in the beef was 97¢ lower at $200.82.

Widespread reports of an overnight for at the JBS packing facility in Grand Island, Neb. — apparently halting production, at least for Monday — shoved already faltering Cattle futures lower. Overall weakness in commodity markets also contributed pressure.

Feeder Cattle futures closed an average of $2.09 lower.

Live Cattle futures closed an average of $1.06 lower

Choice boxed beef cutout value was 57¢ lower Monday afternoon at $247.59/cwt. Select was 82¢ lower at $218.01/cwt.

Corn futures closed mostly 4¢ lower through Jly ’22 and then 1¢ to 2¢ lower.

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

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Major U.S. financial indices closed mixed on Monday, snapping a five-day slide as investors await Tuesday’s report on consumer prices to gauge both inflation and the Federal Reserve’s timing to taper stimulus efforts. Crude oil continued to rally in part due to port disruptions spawned by Hurricane Ida.

The Dow Jones Industrial Average closed 262 points higher. The S&P 500 closed 10 points higher. The NASDAQ closed 10 points lower. 

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Beef byproduct values continue significantly higher in recent months than they were for several years. During the ebb in 2020, those values were the lowest since 2009, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. For perspective, he says hide and offal values were $6.93/cwt. (live fed steer basis) in July last year. They were $14.99 last month. They were $15.25 yesterday.

“The sharp jump in byproduct values is due to increases in hide values along with several other products included in the by-product totals,” Peel explains, in his weekly market comments. “The largest component of byproduct values is the hides. The August steer hide value was up 115% year over year. In recent years, hides have dropped from roughly half of total byproduct values to about 30% of the total. Despite the doubling of hide values in the past year, hides still only represent 31.7% of current byproduct value. This is because numerous other byproduct values have likewise increased sharply in the past year.”

For instance, Peel explains inedible tallow values are up 177% year over year while edible tallow values increased 85% percent. Combined, he says edible and inedible tallow represent 25.4% of August total byproduct values. Tongue prices were up 111% year over year in August and accounted for 19.5% of total byproduct values. 

“The majority of hides and offals are exported. Over the past decade, exports of hides, variety meat, and tallow have added an average of $2.42 billion to total beef industry exports. In 2020, the value of hide, variety meat and tallow exports was $1.7 billion,” Peel says.

By | September 13th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 13. 2021

Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural marketing Service.

Last week, live prices were steady to $1 lower at $123-$124/cwt. in the Southern Plains, $124-$125 in Nebraska and $124-$127 in the western Corn Belt. Dressed trade was $2-$5 lower in Nebraska at $198 and steady to $3 lower in the western Corn Belt at $203.

Cattle futures continued lower Friday, pressured by growing concerns about rising Delta variant infections hampering economic recovery and demand.

Feeder Cattle futures closed an average of $1.47 lower (50¢ lower in the back contract to $2.10 lower in Nov ’21).

Live Cattle futures closed an average of 76¢ lower, (33¢ lower in the front contract to $1.13 lower at the back).

Choice boxed beef cutout value was $5.36 lower Friday at $327.22/cwt. Select was $3.08 lower at $298.37.

The average dressed steer weight the week ending Aug. 28 was 901 lbs., which was 2 lbs. lighter than the previous week and 15 lbs. lighter than the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 821 lbs. was 1 lb. heavier than the previous week but 13 lbs. lighter than the previous year.

Estimated total cattle slaughter the holiday shortened week was 577,000 head, according to USDA, which was 47,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 23.04 million head is 834,000 more (+3.76%) than the same period last year.

Estimated year-to-date total beef production of 19.03 billion lbs. was 648.1 million lbs. more (+3.53%) than the same time the previous year.

Corn futures closed higher Friday, despite bearish World Agricultural Supply and Demand Estimates that increased ending stocks with more projected planted acres and higher estimated yield (see below).

Corn futures closed mostly 1¢ to 9¢ higher.

Soybean futures closed 15¢ to 19¢ higher.

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Major U.S. financial indices closed lower Friday as investors continued to fret over growing cases of the Delta variant and its impact on economic growth, while inflation indicators continue to rise. For instance, the Producer Price Index for final demand increased 0.7% in August, according to the U.S. Bureau of Labor Statistics. On an unadjusted basis, the final demand index rose 8.3% for the 12 months ended in August, the largest advance since 12-month data were first calculated in November 2010.

The Dow Jones Industrial Average closed 271 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 132 points.

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The monthly World Agricultural Supply and Demand Estimates published Friday increased expected fed steer prices and lowered expected corn prices.

ERS lowered projected beef production for this year by 130 million lbs. to 27.74 billion lbs. based on lower expected steer and heifer slaughter and lighter carcass weights more than offsetting higher cow slaughter. However, the total would be 586 million lbs. more (+2.1%) than last year. Total beef production next year is forecast to be 26.87 billion lbs., which would be 867 million lbs. less (-3.1%) than this year.

ERS increased this year’s expected five-area direct annual average fed steer price by $1 to $122.20/cwt. Average projected prices are $124 in the third quarter, $131 in the fourth quarter and $133 in the first quarter of next year. Expectations for next year’s annual average price increased by $2 to $128.

Total red meat and poultry production  this year is projected to be 106.6 billion lbs., which would be 59 million lbs. more than last year. Next year, total red meat and poultry production is forecast to be 204 million lbs. (+0.19%) more than this year on increased pork and poultry production.

Corn

USDA forecast corn production for 2021-22 at 15.0 billion bu., up 246 million from last month on increases to harvested area and yield. The national average yield is forecast at 176.3 bu./acre, up 1.7 bu. Harvested area for grain is forecast at 85.1 million acres, up 0.6 million. With projected supply rising more than use, ending stocks increased 166 million bu. to 1.4 billion. The season-average corn price received by producers was lowered 30¢ to $5.45/bu. 

Soybeans

Soybean production is projected at 4.4 billion bu., up 35 million with lower harvested area more than offset by a higher yield forecast of 50.6 bu./acre. Ending stocks are projected at 185 million bushels, up 30 million from last month.

The U.S. season-average soybean price was forecast at $12.90/bu., down 80¢. The soybean meal price was forecast $25 less at $360 per short ton. The soybean oil price forecast was unchanged at 65¢/lb. 

Wheat

Projected 2021-22 ending wheat stocks were reduced 12 million bu. to 615 million and would be 27% less than last year, the lowest in eight years. The projected 2021-22 season-average farm price was lowered 10¢/bu. to $6.60 on reported NASS prices to date and price expectations for the remainder of 2021-22.

By | September 12th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept 10, 2021

Negotiated cash fed cattle trade was slow on light demand in Nebraska through Thursday afternoon. Although there were too few transactions to trend, there was some live trade at $124-$125/cwt. and some in the beef at $198. The previous day, established trend was as $126 and $203, respectively.

Trade was limited on light demand in Kansas with a few live sales steady with the previous day at $123.

Trade was limited on light demand in the western Corn Belt. Live prices the previous day were at $124-$125; $203 dressed.

Trade was at a standstill in the Texas Panhandle. Live prices the previous day were at $123-$124.

Cattle futures offered hope again early in yesterday’s session but closed lower yet again, except for front-month Live Cattle.

Feeder Cattle futures closed an average of 69¢ lower (2¢ lower toward the front to $1.28 lower at the back).

Live Cattle futures closed an average of 51¢ lower, except for 2¢ to 65¢ higher in the front three contracts.

Choice boxed beef cutout value was $2.28 lower Thursday afternoon at $332.58/cwt. Select was $1.72 lower at $296.45.

Corn futures closed mostly 2¢ to 5¢ lower.

Soybean futures closed 7¢ to 12¢ lower with most of the pressure in new-crop contracts.

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Major U.S. financial indices closed down for the second consecutive day on Thursday amid volatile trade. First-time unemployment claims fell to the lowest level since the pandemic started, but more large companies like Microsoft announced plans to delay reopening due to the continued spread of the delta variant of Covid-19.

The Dow Jones Industrial Average closed 152 points lower. The S&P 500 closed 21 points lower. The NASDAQ was down 38 points. 

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“Boxed beef prices have started what is expected to be a slow and long price decline following the Labor Day holiday. There may be some buying in the next week or so to restock meat counters, but beef prices are expected to soften until fourth-quarter holiday buying takes center stage,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Beef is the major value determinant of cattle, but the drop credit is also important to finished cattle value. Hide and offal does not play into the boxed beef valuation equation, but packers count on its value to pay the bills. In 2020, the hide and offal value peeked at $9.41/cwt., which is about where it started the current year. However, hide and offal values have been on a linear trajectory and averaged $15.14 last week, which is nearly 44% higher than the five-year average price for the last week of August. Current hide and offal values are at the highest level since January 2015 when cattle supplies were tight, and prices may be destined to go higher.”

By | September 9th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 9, 2021

Negotiated cash fed cattle trade was slow on light demand in Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, there were a few live sales in Nebraska at $126/cwt. There were also some early dressed sales in Nebraska and the western Corn Belt at $203. Last week, live prices were $125-$126 in Nebraska and $125-$128 in the western Corn Belt. Dressed trade in the regions was at $200-$203.

Trade in the Southern Plains was limited on light demand. There were a few live sales at $124, steady with the previous day. Last week, live sales in Kansas were at $125-$126 and at $123-$124 in the Texas Panhandle.

Cattle futures tried to gain traction early in Wednesday’s session but ran out of steam amid continued concerns about declining beef values and demand uncertainty.

Feeder Cattle futures closed an average of $1.18 lower (22¢ lower at the front to $1.77 lower toward the back).

Live Cattle futures closed an average of 76¢ lower amid heavy trade.

Choice boxed beef cutout value was 33¢ lower Wednesday afternoon at $334.86/cwt. Select was $3.73 lower at $298.17.

Corn futures closed mostly fractionally lower to 1¢ lower, except for 2¢ higher in spot Sep.

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

For the record, 59% of the nation’s corn crop was in Good or Excellent condition (week ending Sept. 5), according to the latest USDA Crop Progress report. That was 1% less than the previous week and 2% less than the five-year average.

57% of the soybean crop was in good or excellent condition versus 56% the previous year and 65% for average

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Major U.S. financial indices softened Wednesday amid investor nervousness about inflation and economic growth.

“Economic growth downshifted slightly to a moderate pace in early July through August,” according to the Federal Reserve’s Beige Book. “…The deceleration in economic activity was largely attributable to a pullback in dining out, travel, and tourism in most Districts, reflecting safety concerns due to the rise of the Delta variant, and, in a few cases, international travel restrictions. The other sectors of the economy where growth slowed or activity declined were those constrained by supply disruptions and labor shortages, as opposed to softening demand.”

As for inflation, according to the Beige Book, “…With pervasive resource shortages, input price pressures continued to be widespread. Most Districts noted substantial escalation in the cost of metals and metal-based products, freight and transportation services, and construction materials, with the notable exception of lumber whose cost has retreated from exceptionally high levels. Even at greatly increased prices, many businesses reported having trouble sourcing key inputs. Some Districts reported that businesses are finding it easier to pass along more cost increases through higher prices. Several Districts indicated that businesses anticipate significant hikes in their selling prices in the months ahead.”

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 87 points.

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“Weather is and will clearly play a role as to the timing and availability of calf numbers. And will also impact the distribution of calf weight,” says Stephen Koontz, agricultural economist at Colorado State University. “There is the potential for an interesting dynamic between regional calf marketings and weights and then the resulting placement into feedlots, which may bunch marketing of fed animals well into next year. There are also interesting opportunities for retaining calves across the different regions. All are worth following.”

In the latest issue of In the Cattle Markets, Koontz explains weather — drought specifically — is creating regional variation in heifer trade.

“There is modest evidence of heifers being sold into the meat supply chain as opposed to being used as replacements into the beef production system. This is especially the case in the North and West,” Koontz says. “In the South and East there is very modest evidence – supported by discussions with producers – about retaining and actually purchasing of heifers. The regional dynamics will likely play out well into next year as the late summer saw only some drought relief for the Southern Plains and desert Southwest.”

As for recent declines in Cattle futures, from a technical standpoint, Koontz says market optimism that pushed contracts higher over the last four months is broken or simply exhausted.

By | September 8th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 8, 2021

Negotiated cash fed cattle trade was at a standstill in all feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service. Last week, live sales were at $124/cwt. in the Texas Panhandle $123-$124 in Kansas, $125-$126 in Nebraska and $125 in the western Corn Belt. Dressed trade was at $200-$203.

Although seemingly plumb oversold, Cattle futures continued to melt down Tuesday. Many other commodity and equity markets suffered, too, as growing cases of the cover delta variant sap risk appetite. For Cattle, that’s on top of everything from cash market leverage woes to post-Labor Day demand uncertainty to the weekend announcement about atypical BSE confirmed in Brazil (see below).

Feeder Cattle futures closed an average of $2.20 lower.

Live Cattle futures closed an average of $1.29 lower, amid active trade.

Choice boxed beef cutout value was $1.23 lower Tuesday afternoon at $335.19/cwt. Select was $2.23 lower at $301.90.

Corn futures closed 10¢ to 13¢ lower through new-crop contracts and then mostly 2¢ to 6¢ lower.

Soybean futures closed mostly 10¢ to 14¢ lower.

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Major U.S. financial indices closed lower Tuesday on follow-through pressure and worries about the impact of the covid variant on global economic growth.

The Dow Jones Industrial Average closed 269 points lower. The S&P 500 closed 15 points lower. The NASDAQ closed 11 points higher.

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“Over the weekend, the Brazilian Ministry of Agriculture, Livestock, and Food Supply confirmed two atypical cases of BSE (bovine spongiform encephalopathy). Atypical cases are very rare and are believed to occur spontaneously. These cases occurred outside the United States and do not pose a risk to American consumers—U.S. beef is safe,” according to Colin Woodall, CEO of the National Cattlemen’s Beef Association (NCBA).

You might recall that USDA prohibited importing fresh Brazilian beef into the U.S. in 2017, based on persistent food safety concerns. The ban was lifted in 2020 after Brazilian exporters demonstrated the ability and willingness to meet U.S. protocols.

“Given Brazil’s history of failing to report BSE cases in a timely manner, we must remain vigilant in enforcing our safeguards and holding them accountable,” Woodall says. “The U.S. has the highest animal health and food safety standards in the world. We must make sure that all countries wishing to export beef to the U.S. continue to meet our standards—even a country with a small footprint like Brazil. We have full faith and confidence in the abilities of the U.S. Department of Agriculture (USDA) and Office of the U.S. Trade Representative (USTR) to enforce our safety standards and trade rules to protect America’s cattle producers and consumers.”

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U.S. beef exports set another new value record in July, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). July beef exports were 45% more than the previous year at $939.1 million. Beef export volume was the third largest of the post-BSE era at 122,743 metric tons (mt), up 14% year-over-year.

“Beef exports were really outstanding in July, especially with COVID-related challenges still impacting global foodservice as well as persistent obstacles in shipping and logistics,” says USMEF President and CEO Dan Halstrom. “Retail demand continues to be tremendous, as evidenced by the new beef value record.”

July beef exports to the mainstay Asian markets of Japan, South Korea and Taiwan were relatively steady with last year, but at significantly higher value. Record-large shipments to China and a strong year-over-year rebound in Western Hemisphere markets drove export volume growth.

For January through July, U.S. beef exports increased 18% from a year ago to 822,830 mt, with value up 30% to $5.58 billion. Compared to the pace established in 2018, the record year for U.S. beef exports, shipments were up 6% in volume and 17% in value.

July beef export value equated to $425.68 per head of fed slaughter, up 52% from a year ago. Through July, export value was $369.15 per head, up 24%.

Pork exports in July were steady with last year at 221,809 mt, but export value jumped 20% to $657.3 million. Pork variety meat exports were especially strong at 49,092 mt, up 54% from the low total posted a year ago and 16% above July 2019. Variety meat export value was the second highest on record at $116.7 million, up 69% from a year ago and 39% above 2019.

By | September 7th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 6-7, 2021

Cattle futures took it on the chin Friday as traders seemed to grow more concerned about post-Labor Day beef demand and the continued apparent inability of cattle feeders to gain currentness, given the anemic packing pace.

Feeder Cattle futures closed an average of $2.04 lower Friday ($1.00 to $2.57 lower).

Live Cattle futures closed an average of $1.02 lower (45¢ to $1.27 lower) amid expanding open interest.

Negotiated cash fed cattle trade has was mostly inactive on very light demand in all major feeding regions through Friday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service (AMS).

For the week, AMS reported live prices $2 lower in Nebraska at $126/cwt. and $2-$3 lower in the western Corn Belt at $125-$126. Dressed trade was $2-$5 lower in Nebraska at $200-$203.

The Texas Cattle Feeders Association reported its members trading steers at an average of $123.94/cwt., which was $1.57 more than the previous week. They traded heifers for $1.67 more at $123.80.

Corn futures closed 8¢ lower in spot Sep, then fractionally lower to 2¢ lower through Dec ’22, and then fractionally higher to 1¢ higher.

Soybean futures closed mostly 8¢ to 10¢ higher through new-crop contracts and then mostly 2¢ to 4¢ higher.

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Wholesale beef values continued to erode.

Choice boxed beef cutout value was $1.50 lower Friday afternoon at $336.42/cwt. Select was 84¢ lower at $304.13.

Total estimated cattle slaughter last week of 624,000 head was 27,000 head fewer than the previous week and 11,000 fewer than the same week last year. Year-to-date total cattle slaughter of 22.46 million head is 836,000 head more (+3.86%) than last year. Total estimated year-to-date beef production of 18.56 billion lbs. is 659.9 million lbs. more (+3.69%) than the same time last year.

The average dressed steer weight the week ending Aug. 21 was 903 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 5 lbs. heavier than the previous week but 7 lbs. lighter than the previous year. The average dressed heifer weight of 820 lbs. was 3 lbs. heavier than the previous week but 13 lbs. lighter than the prior year.

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Major U.S. financial indices closed mixed Friday on a disappointing jobs report – only 235,000 new non-farm jobs were added in August, the smallest gain in the last seven months. Some analysts say this news may slow down the Federal Reserve’s tapering timeline.

Average hourly earnings for all employees on private non-farm payrolls rose by 17¢ to $30.73 in August, following increases in the prior four months.

The Dow Jones Industrial Average closed 74 points lower. The S&P 500 closed 1 point lower. The NASDAQ closed 32 points higher.

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The United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,380 per acre for 2021, up $220 per acre (+7.0%) from 2020, according to USDA’s Land Values 2021 Summary.

The United States cropland value averaged $4,420 per acre, an increase of $320 per acre (+7.8%) from the previous year.

The United States pasture value averaged $1,480 per acre, an increase of $80 per acre (+5.7%) from 2020. For broader perspective, average pasture value increased $150 per acre (+11.3%) since 2017.

By | September 5th, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 3, 2021

There were too few negotiated cash fed cattle transactions to trend in any major cattle feeding region through Thursday afternoon, according to the Agricultural Marketing Service. So far this week, amid anemic trade, live prices are $2 lower in Nebraska at $126/cwt. and $2-$3 lower in the western Corn Belt at $125-$126. Dressed trade in Nebraska is $2-$5 lower at $200-$203.

Choice boxed beef cutout value was 53¢ lower Thursday afternoon at $337.92/cwt. Select was $2.60 lower at $304.97.

Cattle futures continued to sag lower Thursday amid sluggish interest ahead of the long holiday weekend, declining wholesale beef values and the lackluster packing pace. Feeder Cattle led the charge lower.

Feeder Cattle futures closed an average of $2.42 lower ($1.65 to $3.00).

Live Cattle futures closed an average of $1.38 lower ($1.05 to $1.60).

Corn futures closed mostly 2¢ higher through new-crop contracts, then mostly 1¢ to 2¢ lower.

Soybean futures closed 1¢ to 5¢ higher through new-crop contracts, then mostly unchanged to fractionally higher

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Major U.S. financial indices closed higher on Thursday with the S&P 500 hitting another record. Weekly initial unemployment insurance claims the week ending Aug. 28 were 340,000, a decrease of 14,000 from the previous week’s revised level. That’s the lowest level since March 14, 2020. The number was also more positive than the trade expected.

The Dow Jones Industrial Average closed 131 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 22 points.

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USDA’s Food Safety and Inspection Service (FSIS) published an advance notice of proposed rulemaking on Thursday to solicit comments and information regarding the labeling of meat and poultry products made using cultured cells derived from animals under FSIS jurisdiction. FSIS will use these comments to inform future regulatory requirements for the labeling of such food products.

In 2019, USDA and FDA announced a formal agreement to jointly oversee the production of human food products made using animal cell culture technology and derived from the cells of livestock and poultry to ensure that such products brought to market are safe, unadulterated and truthfully labeled. Under the agreement, FDA will oversee cell collection, growth, and differentiation of cells. FDA will transfer oversight at the cell harvest stage to FSIS. FSIS will then oversee the cell harvest, processing, packaging, and labeling of products. FDA and FSIS also agreed to develop joint principles for the labeling of products made using cell culture technology under their respective labeling jurisdictions. Seafood, other than Siluriformes fish, falls under FDA’s jurisdiction, whereas meat, including Siluriformes fish, and poultry are under FSIS’ jurisdiction.

Other than new labeling regulations concerning this product, FSIS does not intend to issue any other new food safety regulations for the cell-cultured food products under its jurisdiction. According to FSIS, “Current FSIS regulations requiring sanitation and Hazard Analysis and Critical Control Point systems are immediately applicable and sufficient to ensure the safety of products cultured from the cells of livestock and poultry.”

By | September 2nd, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 2, 2021

Negotiated cash fed cattle trade was slow on light demand in all major regions through Tuesday afternoon, according to the Agricultural Marketing Service. A few dressed sales in Nebraska traded at $203/cwt.

Last week, live prices were at $122-$123/cwt. in the Southern Plains at $123/cwt. Live and dressed sales were at $128 and $202-$208, respectively, in Nebraska and the western Corn Belt.

The Choice boxed beef cutout value was $3.66 lower Wednesday afternoon at $338.45/cwt. Select was $4.46 lower at $307.57.

Likely short covering helped Cattle futures regain some recently lost ground Wednesday. Further erosion in grain futures, tied to Hurricane Ida impacts, also helped Feeder Cattle futures.

Feeder Cattle futures closed an average of $1.11 higher (30¢ to $1.53), except for 7¢ lower in spot Sep.

Live Cattle futures closed an average of 43¢ higher, except for an average of 43¢ lower in the back two contracts.

Grain futures continued to fall Wednesday beneath the weight of export shipping disruptions wrought by Hurricane Ida.

Corn futures closed 10¢ to 18¢ lower through new-crop contracts and then mostly 2¢ to 4¢ lower.

Soybean futures closed 9¢ to 21¢ lower through new-crop contracts and then mostly 6¢ to 9¢ lower.

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Major U.S. financial indices closed mixed on Tuesday after an ADP Research Institute report showed companies added fewer jobs than anticipated in August. However, manufacturing grew at a faster pace than forecast even as global supply chains continue to be bottlenecked.

Private sector employment increased by 374,000 jobs from July to August, according to the August ADP National Employment Report.

“Our data, which represents all workers on a company’s payroll, has highlighted a downshift in the labor market recovery. We have seen a decline in new hires, following significant job growth from the first half of the year,” says Nela Richardson, ADP chief economist. “Despite the slowdown, job gains are approaching 4 million this year, yet still 7 million jobs short of pre-COVID-19 levels.”

The Dow Jones Industrial Average closed 48 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 50 points. 

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As mentioned previously in Cattle Current, USDA’s Agricultural Marketing Service (AMS) began publishing two new reports in August, based on Livestock Mandatory Reporting and aimed at bolstering market transparency.

The National Weekly Direct Slaughter Cattle-Formulated Base and Forward Contract Base Purchases report provides more detail about foundational prices used in cattle market formulas, grids and contracts. The base prices are published in the morning and afternoon each day, as is an overall summary. Those prices are then aggregated into a weekly report.

Matthew Diersen, a risk and business management specialist at South Dakota State University weighs in with some of his initial observations, in the latest issue of In the Cattle Markets.

“The weekly formulated base shows the formula base price across gender, general quality level, and delivery type. For example, there is now a head count and price range for the base price for formula priced steers, delivered dressed, grading 65-80% Choice,” Diersen explains. “The average net price is there too, thus any major skew in the data would be easier to infer than in the past. The main averages are also broken out by state or region. It is all informative and overwhelming. However, knowing the base you are dealing with as a buyer and as a seller should mean better signals about the value of quality.”

The other new report, the National Weekly Cattle Net Price Distribution report shows at what price and volume levels trade occurred across the weekly weighted average price for each purchase type.

Diersen points out average net prices were available previously and were most useful for monitoring forward net prices over time relative to the negotiated and formula prices. If many cattle were forward contracted during a period of higher expected prices, and prices subsequently fell, then the forward net would be much higher than the negotiated. The opposite could also happen.

The new report provides volumes in $2 increments from the average price levels.

“The more transparent base prices and more complete net prices seem to fill in more of the gap between the average value of average quality cattle and fair values for higher quality cattle being traded today,” Diersen says.

By | September 1st, 2021|Daily Market Highlights|

Cattle Current Daily—Sept. 1, 2021

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

Last week, live prices were at $122-$123/cwt. in the Southern Plains at $123/cwt. Live and dressed sales were at $128 and $202-$208, respectively, in Nebraska and the western Corn Belt.

Cattle futures declined Tuesday with follow-through pressure tied to concerns about recently slower packer production, post Labor Day demand and declining wholesale beef prices. Month-end position squaring was also a factor.

Feeder Cattle futures closed an average of 72¢ lower (7¢ to $1.20), except for 7¢ higher in May.

Live Cattle futures closed an average of 76¢ lower (10¢ to $1.43 lower). 

Through midday today, though, Cattle futures were rebounding some, helped along by further declines in Grain futures.

Choice boxed beef cutout value was 67¢ lower Tuesday afternoon at $342.11/cwt. Select was 52¢ lower at $312.03/cwt.

Corn and Soybean futures closed lower with continued pressure from uncertainty surrounding the impact of Hurricane Ida.

Corn futures closed down mostly 5¢ to 8¢.

Soybean futures closed mostly 4¢ to 10¢ lower through new-crop contracts, and then mostly 2¢ to 3¢ higher.

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Major U.S. financial indices softened Tuesday, pressured in part by weaker consumer confidence. The Conference Board Consumer Confidence Index® declined to 113.8 in August from 125.1 in July.

“Consumer confidence retreated in August to its lowest level since February 2021 (95.2),” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Concerns about the Delta variant—and, to a lesser degree, rising gas and food prices—resulted in a less favorable view of current economic conditions and short-term growth prospects. Spending intentions for homes, autos, and major appliances all cooled somewhat; however, the percentage of consumers intending to take a vacation in the next six months continued to climb. While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead.”

The Dow Jones Industrial Average closed 39 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 7 points.

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How many beef cows are going to town due to drought is a popular current wonderment, one with no easy answer, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“We do know is that beef cow slaughter is up 8.7% year over year through mid-August. If we assume the current level of year-over-year increase continues for the remainder of the year, it implies an annual beef cow slaughter of 3.55 million head. That would be a net culling rate of 11.4%, the highest beef herd culling rate since 2011,” Peel says. “The average culling rate the past two years, since the cyclical peak in 2019, has been 10.25%. Over the past 35 years, across cycles of expansion and liquidation, the average herd culling rate has been 9.65% annually.

“However, because the drought started so early in the year (carried over from last year), it is likely that beef cow slaughter was shifted earlier in the year. Producers likely have already culled cows that would have been culled later in the year anyway. I doubt that the 8.7% year-over-year beef cow slaughter rate will persist for the remainder of the year. Nevertheless, the drought continues unabated and cow slaughter rates will likely remain strong.”

Further, Peel says heifer retention levels remain unclear.

 “The January Cattle report showed that beef replacement heifers were 18.7% of the cow herd, a level that would support stable herd inventories,” Peel explains. “The total number of beef replacement heifers (which includes heifer calves and coming first calf heifers) and the subset of heifers calving in 2021 were both fractionally higher year over year in the January numbers. No doubt, producers in drought areas have had to adjust replacement heifer numbers along with cows. Some heifer calves that were indicated as replacements in January likely were shifted into feedlots. It is not clear how many.”

Heifer slaughter is 1.4% higher so far this year, but Peel points out last year’s slaughter levels were skewed by Covid disruptions.

“Finally, there is the question of how producers not in drought areas have responded in 2021,” Peel says. “Forage conditions have been good in some regions and it is not clear if producers may be holding more cows and heifers to offset some of the drought region impacts. In short, we don’t know what would have happened in the absence of the drought and we don’t know for sure how the remainder of the year will finish. After playing with lots of numbers and assumptions, my best guess at this point is that the drought has added one-half to one percent of additional beef herd liquidation this year.”

By | September 1st, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 31, 2021

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

Last week, live prices were at $122-$123/cwt. in the Southern Plains at $123/cwt. Live and dressed sales were at $128 and $202-$208, respectively, in Nebraska and the western Corn Belt.

Lower Corn futures helped boost Feeder Cattle futures Monday. They closed an average of 62¢ higher (10¢ to $1.75), except for spot Sep, down 60¢.

Recent sluggishness in the pace of packer buying continued to pressure Live Cattle futures again Monday. They closed an average of 57¢ lower (18¢ to $1.75). 

Choice boxed beef cutout value was $2.56 lower Monday afternoon at $342.78/cwt. Select was $2.97 lower at $312.55/cwt.

Front-month Corn and Soybean futures fell hard with barge delivery uncertainty stemming from Hurricane Ida.

Corn futures closed 6¢ to 17¢ lower through new-crop contracts and then mostly 3¢ lower.

Soybean futures closed 11¢ to 54¢ lower in the front seven contracts and then mostly 4¢ to 7¢ lower.

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Major U.S. financial indices closed mixed on Monday, with tech stocks pushing the S&P 500 to its 12th all-time high in August. The after-effects of Hurricane Ida pushed gasoline higher but hurt insurers.

The Dow Jones Industrial Average closed 56 points lower. The S&P 500 19 points higher. The NASDAQ was up 136 points. 

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Logic and current calf prices suggest the nation’s calf crop may be less than what USDA estimated in the semiannual Cattle report released last month, according to the Livestock Marketing Information Center (LMIC).

“Steer calf prices in the Southern Plains have been robust in 2021. Calves weighing 500-600 lbs. have averaged between 6% and 16% higher from June through mid-August. The calf market is incredibly hot, given the higher cost of feed,” say LMIC analysts, in the latest Livestock Monitor. “Reports of droughts and liquidation would have implied early weaning was a given in 2021 but the data has shown little signs that is happening to a large degree.”

For instance, they point to the most recent monthly Cattle on Feed report, which pegged 15% fewer July placements weighing less than 700 lbs., compared to the previous year.

“High feed costs should drive calf prices lower, reducing the incentive to place lighter weight cattle into feedlots. Drought affected areas should have started early weaning and shipped more small animals to feedlots,” say LMIC analysts. “Given the limited forage and high hay costs, it would seem likely that more calves would be moving at these prices that are substantially higher than a year ago. These incongruent signals point towards a smaller calf crop (July 1 estimate). That would explain both the higher prices and limited number of placements seen in July. August might show greater movement of smaller feeders, and the timing may be slower than initially thought.”

By | August 31st, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 30, 2021

Despite the lack of sustained follow-through support from the most recent Cattle on Feed report, volatile outside markets and an apparent top in wholesale beef values, cash cattle and futures mainly gained last week.

Live Cattle futures closed an average of $1.02 higher (7¢ to $1.45 higher) week to week on Friday, except for $2.27 lower in almost-spent spot Aug.

On the cash side of the fence, negotiated fed cattle prices last week, were $1-$2 higher on a live basis in the Southern Plains at $123/cwt. However, the anemic pace of trade meant there was  no established trend in the North. Live prices the previous week were at $125-$127 in Nebraska and at $127 in the westerner Corn Belt. Dressed trade the previous week was at $200 in Nebraska and at $200-$205 in the western Corn Belt.

Sluggish trade pressured Live Cattle futures on Friday. Part of that stemmed from reports of mechanical problems at various plants last week.

Through Thursday, USDA’s Agricultural Marketing Service (AMS) reported 33,363 head traded direct in the five-area regions, compared to 60,342 at the same time the previous week and 65,386 head a year earlier.

Live Cattle futures closed an average of 52¢ lower through the front four contracts (5¢ lower to $1.27 lower in spot Aug) and then an average of 28¢ higher.

Overall, though, recently expanding open interest provided support, as does the reality of improving supply-side fundamentals.

As Derrell Peel, Extension livestock marketing specialist at Oklahoma State University pointed out in his weekly market comments,

“August represents the sixth consecutive monthly decline in feedlot inventories from the February peak, a decrease of 1.032 million head or 8.5% over the six months. In the previous five years, he says the average feedlot inventory decline from the spring high to summer low has been 6.2%.” 

Moreover, Peel notes lighter year-over-year carcass weights also provide more indication that feedlots are getting more current. He adds lower carcass weights also reflect the impact and incentives stemming from sharply higher feedlot cost of gain, which should help hold carcass weights in check.

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“Auction calf and stocker prices have moved counter-seasonally higher in July-August, while feeder cattle markets, which typically increase through the summer, have shown a strong seasonal price increase,” Peel says.

Feeder Cattle futures closed an average of 60¢ higher on Friday (15¢ higher toward the front to $2.40 higher at the back). Week to week they closed an average of 88¢ higher, except for 85¢ lower in new spot Sep. That was with Corn futures closing an average of 16.4¢ higher through the front six contracts.

The CME Feeder Cattle Index was $3.60 higher week to week on Thursday at $159.39.      

In his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee explains stronger prices suggested by Feeder Cattle futures are helping keep cash prices higher for lighter weight calves than would be normally expected this time of year.

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Wholesale beef values appeared to top last week with Labor Day purchases mostly in the books.

Choice boxed beef cutout value was 28¢ higher week to week on Friday at $345.34/cwt. Select was $3.01 lower at $315.52.

However, Griffith points out beef in cold storage at the end of July was the least since November of 2014 when slaughter was light and beef prices were elevated.

“Strong beef prices in the current market are again what is reducing the quantity of beef in cold storage,” Griffith says. “Generally, 91% or more of the beef in cold storage is boneless beef, which is primarily made up of grinding beef. As is evident in wholesale beef prices, beef demand remains strong and continues to support higher prices. This strong demand and strong prices will likely continue to result in beef in cold storage remaining below year-ago levels. However, beef in cold storage will seasonally increase throughout the remainder of the year as cattle weights increase and more animals enter the slaughter mix. The big question is how long can wholesale beef prices remain at such strong levels. The answer is not clear, but prices are not expected to collapse in the near future.”

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Major U.S. financial indices closed higher Friday, buoyed by comments from Federal Reserve Chair Jerome Powell.

“The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff, for which we have articulated a different and substantially more stringent test,” explained Powell. “We have said that we will continue to hold the target range for the federal funds rate at its current level until the economy reaches conditions consistent with maximum employment, and inflation has reached 2% and is on track to moderately exceed 2% for some time. We have much ground to cover to reach maximum employment, and time will tell whether we have reached 2% inflation on a sustainable basis.”

The Dow Jones Industrial Average closed 242 points higher. The S&P 500 closed 39 points higher. The NASDAQ was up 183 points.

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Consumer prices for food surged in July, compared to the previous year but overall year-to-date prices remain closer to the 20-year average.

Consumer at-home food prices were 2.6% higher year over year in July, according to the Change in Food Price Indexes from USDA’s Economic Research Service. At-home meat prices were 5.9% higher — beef and veal prices were 6.5% more, pork prices were up 7.8% and poultry prices were 5.3% higher. Prices for food away from home were up 4.6% year over year.

Year to date, at-home food prices were up 1.9% — beef and veal prices were 4.2% more, pork prices were up 4.4% and poultry prices were 2.6% higher. Prices for food away from home were up 3.1% year over year.

The forecast is for at-home prices to be up an average 2.5% to 3.5% this year — beef and veal prices are projected 4.0% to 4.5% higher, pork prices are forecast 5.0% to 6.0% higher and poultry prices are projected 3.0% to 4.0% higher. Prices for food away from home are projected to 3.5% to 4.5% higher.

For perspective, the 20-year average annual price change for at-home food prices is 2.0% — 4.4% for beef and veal prices, 2.2% for pork prices and 2.1% for poultry prices. The annual average change for food away from home is 2.8%.

By | August 28th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 27, 2021

Negotiated cash fed cattle trade was mostly inactive on light demand in Kansas through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was slow on light demand.

Live sales in the Texas Panhandle were $1-$2 higher at $123/cwt. Although too few to trend, early live sales were $1-$3 higher in Nebraska at $128 and $1 higher in the western Corn Belt at $127. Early dressed sales were $1-$2 higher at $202 in Nebraska and $202.00-$206.50 in the western Corn Belt.

Weaker outside markets and the lack of follow-through support pressured Cattle futures Thursday.

Feeder Cattle futures closed an average of 95¢ lower, except for 15¢ higher spot Aug.

Live Cattle futures closed an average of 55¢ lower, except for 15¢ higher in the back contract.

Choice boxed beef cutout value was 38¢ higher Thursday afternoon at $347.27/cwt. Select was $3.90 higher at $319.59.

Corn futures closed mostly 1¢ to 6¢ lower, except for 1¢ higher in spot Sept.

Soybean futures closed mostly 6¢ to 10¢ lower, except for 21¢ higher in spot Sept.

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Major U.S. financial indices closed lower on Thursday after explosions in Kabul, outside an airport gate, killed both U.S. service members and civilians. Investors are also uncertain whether the Federal Reserve will give a clear signal this week for timing on tapering emergency support.

The Dow Jones Industrial Average closed 192 points lower. The S&P 500 closed 26 points lower. The NASDAQ was down 96 points.

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USDA increased expectations for U.S. beef exports during the current fiscal year, in the latest Outlook for U.S. Agricultural Trade. Compared to the last quarterly report, projected U.S. beef export value increased $800 million to $8.4 billion on higher unit values and volumes to China, Mexico, and South Korea.

Projected export value for U.S. livestock, dairy and poultry exports increased $2.2 billion to $36.4 billion due to increases in all product groups except pork.

Next year, USDA expects beef exports to be $100 million less than this year due to lower exportable supplies. Fiscal year 2022 livestock, poultry, and dairy exports were forecast $400 million higher than this year at $36.8 billion primarily due to growth in dairy and poultry products.

Forecast total U.S. agricultural export value this year increased $9.5 billion from the previous estimate to $173.5 billion, mainly due to higher livestock, poultry, and dairy exports, as well as the adoption of a new definition of agricultural products.

“Beginning with this publication, the report is adopting the World Trade Organization’s (WTO) definition of ‘Agricultural Products,’ which adds ethanol, distilled spirits, and manufactured tobacco products, among others, while removing rubber and allied products from the previous USDA definition,” according to analysts with USDA’s Economic Research Service (ERS).

U.S. agricultural exports next year were projected $4.0 billion higher than this year at $177.5 billion.

“The global COVID-19 pandemic remains the primary factor affecting economic activity across the globe. The prevalence of the Delta variant has renewed concerns over pandemic-induced pressure on public health infrastructures, softening consumer spending and global supply chain recovery,” say ERS analysts. “Microchip manufacturing and the shipping of physical goods are two aspects of the global economy that continue to observe elevated prices from supply chain disruptions. Despite these economic challenges, employment statistics and consumer confidence have remained strong, pointing to a continued economic recovery through the end of 2021. World real gross domestic product (GDP) is projected to increase by 5.7% in the remainder of 2021, and subsequently increase by 4.6% in 2022.”

Growth projections for real U.S. GDP this year were raised to 6.2% from previous estimate of 5.8%.

By | August 26th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 26, 2021

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

Last week, live sales were at $121-$122/cwt. in the Texas Panhandle, $122 in Kansas, $125-$127 in Nebraska and $127 in the western Corn Belt. Dressed sales were at $200 in Nebraska and at $200-$205 in the western Corn Belt.

There was just a light run for Wednesday’s fat cattle auction in Tama, IA (313 head), but Choice steers and heifers traded $1.50 to $1.75/cwt. higher. There were 127 Choice 2-4 steers weighing an average of 1,377 lbs., bringing an average of $131.43.

Slaughter steers sold $2-$4 lower at Sioux Falls Regional in South Dakota. Fat heifers traded steady to $1 lower. There were 313 Choice 3-4 steers weighing an average of 1,532 lbs., bringing an average of $126.52/cwt.

Lack of cash direction, positioning from strong gains to start the week and softer wholesale beef values weighed on Live Cattle futures Wednesday.

Live Cattle futures closed an average of 76¢ lower (5¢ to $1.40 lower), except for unchanged to an average of 7¢ higher in three contracts toward the middle of the board.

Higher Corn futures added pressure to Feeder Cattle.

Feeder Cattle futures closed an average of 58¢ lower, except for 72¢ higher in almost spent Aug and 17¢ higher in the back contract.

Wholesale beef prices trended lower for the second consecutive day.

Choice boxed beef cutout value was 69¢ lower Wednesday afternoon at $346.89/cwt. Select was $1.21 lower at 315.69.

Total federally inspected cattle slaughter in July of 2.8 million head was 65,800 fewer (-2.3%) than the previous year. Total cattle slaughter for January through July of 19.25 million head was 880,700 more (+4.8%) year over year.

Commercial beef production in July of 2.3 billion lbs. was 104 million lbs. less (-4.3%) year over year. For January through July, beef production of 16.2 billion lbs. was 758.1 million lbs. more (+4.9%) than the same time last year. The average live weight was down 14 lbs. from the previous year, at 1,349 lbs.

Total commercial red meat production in July of 4.4 billion lbs. was 429.5 million lbs. less (-8.9%) than the previous year. Total commercial red meat production for January through July was 32.3 billion lbs., which was 645.6 million lbs. more (+2.0%).

Corn futures closed mostly 6¢ to 12¢ higher.

Soybean futures closed mostly 8¢ to 12¢ higher, except for mainly 1¢ higher in new-crop contracts.

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Major U.S. financial indices edged higher Wednesday amid optimism variant Covid infections could be peaking in the U.S.

The Dow Jones Industrial average closed 39 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 22 points.

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“Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy,” according to Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “USDA data show that 2021 year-to-date agriculture exports are more than 25% above that for the same period in 2020. This has been a prime factor supporting the Rural Mainstreet economy.”

Creighton University’s Rural Mainstreet Index (RMI) was 65.3 in August, the ninth consecutive month above the growth-neutral level of 50.0. The index is based on surveys of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Approximately, 34.4% of bank CEOs reported that their local economy expanded between July and August.

The farmland price index advanced 5.6 points from July to 76.6 in August. That was the 11th consecutive month of levels above growth-neutral. The last time such a stretch occurred was in 2012-13.

The August farm equipment-sales index declined to 64.7 from 67.2 in July. Readings over the last several months represent the strongest consistent growth since 2012.

Approximately 15.6% of bankers reported that continuing drought conditions were the greatest threat to their banking operations over the next 12 months.

“Rising COVID-19 infections, the turmoil in Afghanistan, and negative views of current infrastructure bills before Congress damaged the economic outlook of bank CEOs. Only 9.4% of bankers support passage of the $3.5 trillion infrastructure bill currently winding through Congress,” says Goss.

By | August 25th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 25, 2021

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

Last week’s five-area direct average steer price was $2.19 higher on a live basis at $125.47/cwt. The average steer price in the beef was 5¢ higher at $200.68.

Cattle futures closed mixed Tuesday. Follow-through support prevailed through most of the session.

Live Cattle closed mainly higher, boosted by the cash outlook and the 13,688-contract increase in open interest the previous day.

Live Cattle futures closed an average of 47¢ higher, except for an average of 45¢ lower in the front two contracts.

Choice boxed beef cutout value was 45¢ lower Tuesday afternoon at $347.58/cwt. Select was $2.50 lower at $316.90.

Rising Corn futures prices, as well as  likely position squaring and profit taking pressured Feeder Cattle.

Feeder Cattle futures closed an average of 81¢ lower, except for 37¢ higher in spot Aug.

Corn and Soybean futures closed higher Tuesday, supported by crop conditions in the weekly Crop Progress report (see below).

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed 30¢ to 43¢ higher through Aug ’22 and then mostly 23¢ to 28¢ higher.

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Major U.S. financial indices closed higher Tuesday, buoyed by follow-through support from FDA’s full approval of the Pfizer-BioNTech Covid vaccine.

The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 77 points.

Crude Oil futures (WTI-CME) continued to climb, up $1.83 to $1.91 through the front six contracts.

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Total pounds of beef in freezers July 31 were down slightly from the previous month and down 9% from last year, according to USDA’s monthly Cold Storage report.

Frozen pork supplies were up slightly from the previous month but down 4% from last year.

Total red meat supplies in freezers were up slightly from the previous month but down 8% from last year.

Total frozen poultry supplies were 2% more than last month but 17% less year over year.

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Nationally, pasture and range conditions continue to erode slightly for the week ending Aug. 22, according to the latest USDA Crop Progress report.

29% of pasture and range was rated as Good (23%) or Excellent (6%), which was the same as the previous week and 5% more than a year earlier. Conversely, 43% was rated as Poor (21%) or Very Poor (22%), which was 1% less than a week earlier and 1% more than a year earlier.

85% of corn was in the dough stage, which was 1% less than last year, but 4% more than the average. 41% was dented, the same as last year and 3% more than the average. 4% was mature, which was 1% less than last year but on par with average. 60% was in Good (46%) or Excellent (14%) condition, which was 2% less than the previous week and 4% less than a year earlier.

97% of soybeans were blooming, which 2% less than last year but the same as the five-year average. 88% were setting pods, which was 3% less than last year but 1% more than average. 3% were dropping leaves, compared to 4% last year and 3% for average. 56% were in Good (45%) or Excellent (11%) condition, which was 1% less than a week earlier and 13% less than the same week last year.

77% of spring wheat was harvested, which was 31% more than the previous year and 22% more than the five-year average.

By | August 24th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 24, 2021

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

Cash fed cattle prices last week were $1 higher in the Southern Plains at $122/cwt., $1-$2 higher in Nebraska at $125-$127 and $1-$2 higher in the western Corn Belt at $127. Dressed trade was mostly $2 higher in Nebraska at $200; from $1 to $2 higher to $4 lower in the western Corn Belt at $200.

Last week’s five-area direct average steer price was $2.19 higher on a live basis at $125.47/cwt. The average steer price in the beef was 5¢ higher at $200.68.

Lower year-over-year July feedlot placements and fewer cattle on feed year over year — based on the latest Cattle on Feed report — helped boost Cattle futures Monday, amid heavy and active trade.

Choice boxed beef cutout value was $2.97 higher Monday afternoon at $348.03/cwt. Select was 87¢ higher at $319.40.

Corn futures closed mainly narrowly mixed from 1¢ lower to 1¢ higher.

Soybean futures closed 2¢ to 9¢ higher through Sep ’22 and then mostly 11¢ to 14¢ higher.

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Major U.S. financial indices climbed Monday, due in part to FDA’s full approval of the Pfizer-BioNTech COVID vaccine.

The Dow Jones Industrial Average closed 215 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 227 points.

Crude Oil futures (CME-WTI) roared back Monday, up an average of $3.42 through the front six contracts.

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“August is a tough time for fed cattle markets to move higher, but the market seems poised to break out from the constraints of the first half of the year as we move into the last part of the third quarter,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Meanwhile, auction calf and stocker prices have moved counter-seasonally higher in July-August, while feeder cattle markets, which typically increase through the summer, have shown a strong seasonal price increase.” He adds cull cow prices remain above year-ago levels, although they’re less than summer peak prices.

Reflecting on the monthly Cattle on Feed report that came out Friday, Peel notes feedlot inventories continue to fall, partly seasonally, but also reflecting the cleanup of the backlog of feedlot cattle from earlier in the year. 

“August represents the sixth consecutive monthly decline in feedlot inventories from the February peak, a decrease of 1.032 million head or 8.5% over the six months. In the previous five years, the average feedlot inventory decline from the spring high to summer low has been 6.2%.” 

Moreover, lighter year-over-year carcass weights also provide more indication that feedlots are getting more current. 

“Steer and heifer carcass weights dropped below year-ago levels in May and continue below year-earlier levels,” Peel says. “Carcass weights reached a seasonal low in June, a tad later than the normal May low and are rising seasonally into the last part of the year. Most recently, weekly steer carcass weights were 896 lbs., down 10 lbs. year over year but still 18 lbs. heavier than 2019 levels. Heifer carcass weights are currently 817 lbs., down 15 lbs. from last year but 11 lbs. above 2019.”

Peel adds that lower carcass weights also reflect the impact and incentives stemming from sharply higher feedlot cost of gain, which should help hold carcass weights in check.

“Cash feeder cattle markets continue to adjust to higher feed costs, partly in terms of general price levels but particularly in the relative prices of lightweight and heavy feeder cattle,” Peel says. “The flattening of the price line across weights translates into higher value of gain potential for added feeder cattle weight gain.”

By | August 23rd, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 23, 2021

Negotiated cash fed cattle trade was mostly inactive with light demand in all feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

Live prices last week were $1 higher in the Southern Plains at $122/cwt., $1-$2 higher in Nebraska at $125-$127 and $1-$2 higher in the western Corn Belt at $127. Dressed trade was mostly $2 higher in Nebraska at $200; $2 higher to $4 lower in the western Corn Belt at $200.

The down day in grain futures Friday sparked Feeder Cattle futures, as did likely positioning ahead of what turned out to be a positive Cattle on Feed report (see below).

Feeder Cattle futures closed an average of $1.47 higher (75¢ to $2.60 higher). Week to week on Friday, they were an average of $1.17 higher.

Live Cattle futures closed an average of 53¢ higher, except for unchanged and 5¢ lower toward the back. Strength in wholesale beef values and slightly higher cash fed cattle prices provided support.

Choice boxed beef cutout value was $3.43 higher Friday afternoon at $345.06/cwt. Select was $2.12 higher at $318.53.

Corn futures closed down an average of 13¢ lower through the front six contracts, then mostly 5¢ to 9¢ lower.

Soybean futures closed an average of 27¢ lower through the front six contracts, then mostly 9¢ to 18¢ lower.

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Major U.S. financial indices closed higher Friday after a week of volatility. Investors have seemed concerned the Federal Reserve will initiate tapering plans just as the rapid spread of the delta variant may slow the economy. This week’s Jackson Hole symposium – now virtual – may offer more clues to what the Fed’s plans are for tapering.

The Dow Jones Industrial Average closed 226 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 173 points.

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Heading into Monday, it seemed likely traders would view Friday’s monthly Cattle on Feed report (feedlots with 1,000 head or more capacity) as neutral to somewhat friendly.

Placements in July of 1.74 million head were 154,000 head fewer (-8.1%) than the previous year. The average of analyst expectations ahead of the report projected a 7.0% decline.

As for placement weights, 36.2% went on feed weighing 600 lbs. or less, 48.0% weighing 700-899 lbs. and 15.8% weighing 900 lbs. or more.

Marketings in July of 1.9 million head were 90,000 fewer (-4.5%) year over year, compared to analysts expecting a decline, on average, of 3.6%.

Cattle on feed Aug. 1 of 11.07 million head were 210,000 head fewer (-1.9%) than the same time last year. That was about even with pre-report expectations.

Through midday Monday, Feeder Cattle and Live Cattle futures are strongly higher. Live Cattle were more than $2 higher in the front months, while Feeder Cattle were an average of $2.15 higher, except for spot Aug.

By | August 23rd, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 20, 2021

Negotiated cash fed cattle trade was mainly slow on light demand through Thursday afternoon, according to the Agricultural Marketing Service. So far this week, live prices in the North are generally $1-$2 higher at $125-$127/cwt. Price are steady to $1 higher in the Southern Plains at $121-$122.

Choice boxed beef cutout value was $1.55 higher Thursday afternoon at $341.63/cwt. Select was $6.61 higher at $316.41/cwt.

Net U.S. beef export sales for the week ending Aug. 12 were 11,100 metric tons for 2021, according to USDA’s weekly U.S. Export Sales report. That was 18% less than the previous week and 42% less than the prior four-week average. Increases were primarily for Japan, South Korea, China, Taiwan, and Mexico.

Cattle futures softened Thursday. More than anything, pressure seemed mostly tied to weakness in outside markets and in commodities overall as fund managers assess the impact of surging COVID cases on economic growth.

Live Cattle futures closed an average of 53¢ lower (20¢ to 90¢)

Feeder Cattle futures closed an average of 38¢ lower (23¢ to 58¢ lower)

Corn futures closed an average of 13¢ lower through the front six contracts, then fractionally to 7¢ lower.

Soybean futures closed an average of 30¢ lower through the front six contracts, then mostly 8¢ to 25¢ lower.

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Major U.S. financial indices closed mixed Thursday amid volatile trade. As mentioned, pressure included surging delta COVID-19 infections, as well as fretting over when the Fed will begin tapering stimulus.

The Dow Jones Industrial Average closed 67 points lower. The S&P 500 6 points higher. The NASDAQ was up 15 points higher at 14,542

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Most analysts expect the monthly Cattle on Feed report, due out Friday to be neutral to friendly.

For instance, David Anderson, Extension livestock economist at Texas A&M University looks for July placements to be 6-7% less year over year.

“Over the last five years, on average, placements have tended to decline slightly from June to July with last year being the exception,” Anderson says, in the latest issue of In the Cattle Markets. “One area of interest in the report will be any evidence of drought-forced earlier placements out of the West and Northern Plains.”

Anderson expects July marketings to be 3% less and the inventory of cattle on feed Aug. 1 to be 1.5% less. He adds that on-feed inventory tends to decline seasonally from June to a low in September.

“The Cattle on Feed report will likely provide more evidence of tightening fed cattle numbers and beef production to begin in 2022,” Anderson says. “Beef production has been below a year ago for five out of the last six weeks. Average federally inspected steer and heifer dressed weights continue to run below a year ago, fueling the decline in beef production. It’s also worth noting that the amount of beef grading Choice as a percent of all beef graded has been below last year for about seven weeks…Tighter supplies of Choice beef is likely keeping the Choice-Select spread wider than at this time last year and wider than the five-year average.

By | August 19th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 19, 2021

Negotiated cash fed cattle trade was slow on moderate demand in the North Tuesday at steady to higher money.

Live sales in Nebraska were $2 higher at $125 to $128/cwt. Dressed sales were generally $2 higher at $200, but some up to $205.

In the western Corn Belt, live sales were $1-$2 higher at $127. Although too few to trend, there were some dressed sales at $200, compared to $198-$204 last week.

Trade in the Texas Panhandle was slow on light demand. There were some live trades at $121 to $122 — steady to $1 higher than last week — but too few to trend.

In Kansas, trade was mostly inactive.

Cattle futures retraced recent softness, led by Feeder Cattle Wednesday. Support included the outlook for steady to higher cash fed cattle prices, as well as optimism about the monthly Cattle on Feed report due out Friday.

Feeder Cattle futures closed an average of $1.74 higher ($1.35 to $2.42 higher).

Live Cattle futures closed an average of 52¢ higher (2¢ to 92¢ higher), except for 17¢ lower in the back contract.

Choice boxed beef cutout value was $2.02 higher Wednesday afternoon at $340.08/cwt. Select was $3.03 higher at $309.80.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 4¢ to 10¢ lower through Jly ’22 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices stepped lower Wednesday, pressured by the Federal Reserve making plans to begin tapering its bond buying program, possible by the end of the year, according to FOMC minutes released yesterday.

“Almost 60% of respondents anticipated the first reduction in the pace of net asset purchases to come in January, though, on average, respondents placed somewhat more weight than in the June surveys on the possibility of tapering beginning somewhat earlier,” according to the minutes.

The Dow Jones Industrial Average closed 382 points lower. The S&P 500 closed 47 points lower. The NASDAQ was down 120 points.

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USDA increased the projected average feeder steer price (750-800 lbs., basis Oklahoma City) for the remainder of this year and the first half of next year, based on recent price strength and declining cattle numbers.

In the latest Livestock, Dairy and Poultry Outlook, analysts with USDA’s Economic Research Service (ERS) project the average feeder steer price this year at $145.13/cwt., which is $3 more than last month. Average prices are projected at $153 in the second and third quarter. Compared to the previous month, that’s $7 higher in the third quarter and $5 higher in the fourth quarter.

ERS forecasts next year’s annual average feeder steer price $5 higher at $151.50. Prices are projected to average $149 in the first quarter next year and $147.00 in the second.

“The July five-area price for fed steers was $122.03/cwt., up more than $25 year over year and about $9 higher than the July 2019 average price,” according to ERS analysts. “The average five-area steer price for the week ending August 8 was $123.83, over $22 above a year ago.”

ERS increased the forecast fed steer price $4 to $124/cwt. in the third quarter and to $127 in the fourth quarter. The projected 2021 annual price increased  $2.00 to $121.20, compared to the previous month. ERS raised the expected average fed steer price next year by $4 to $126.

By | August 18th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 18, 2021

Although too few to trend, there were some early live sales in the western Corn belt at $127/cwt. and a few in the beef at $204, the top end of last week’s price range in the region.

Elsewhere, trade ranged from a standstill to mostly inactive with very light demand.

Weaker outside markets and the lack of cash direction weighed on Cattle futures Tuesday.

Feeder Cattle futures closed an average of 75¢ lower (32¢ to $1.30 lower).

Live Cattle futures closed an average of 56¢ lower (22¢ to $1.00 lower) except for 5¢ higher in the back contract.

That was despite another day of strong gains for wholesale beef prices. Choice boxed beef cutout value was $8.26 higher Tuesday afternoon at $338.06/cwt. Select was $3.22 higher at $306.77/cwt.

Corn futures close mostly 4¢ to 5¢ lower.

Soybean futures closed 3¢ to 7¢ lower through Jly ’22 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed lower Tuesday, amid various reports pointing to a slowing domestic and international economy.

U.S. retail and food service sales were 1.1% less month to month in July, according to advanced estimates from the U.S. Census Bureau. That was a steeper decline than expected.

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USDA’s Agricultural Marketing Service (AMS) began publishing two new reports this month, based on Livestock Mandatory Reporting, aimed at bolstering market transparency.

The National Weekly Direct Slaughter Cattle-Formulated Base and Forward Contract Base Purchases report provides more detail about foundational prices used in cattle market formulas, grids and contracts.

More specifically, according to USDA, it enables stakeholders to see the correlation between the negotiated trade and reported formula base prices, as well as the aggregated values being paid as premiums and discounts. Ultimately, it sounds like there will be daily reports, as well.

“Daily formula base price reports will be national in scope and released in morning, summary and afternoon versions,” according to the announcement. “The weekly and monthly formula base reports will be both national and regional in scope and include forward contract base purchase information.”

The other new report, the National Weekly Cattle Net Price Distribution report details at what price and volume levels trade occurred across the weekly weighted average price for each purchase type – negotiated, negotiated grid, formula and forward contract.

“Currently, the market speculates whether large or small volumes of cattle trade on both sides of the price spread. And in fact, with premiums and discounts applied to the prices, the spreads shown on reports can be wide. Publishing a price distribution for all cattle net prices will offer more transparency to each of the purchase type categories,” according to the USDA announcement. “This report is a window into what producers are paid for cattle (net) and retains confidentiality by segregating volumes purchased in $2.00 increments (plus or minus) the daily weighted average price depending upon premiums and discounts.”

By | August 17th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 17, 2021

Negotiated cash fed cattle trade ranged from a standstill to mostly inactive with very light demand through Monday afternoon, according to the Agricultural Marketing Service. Prices last week were generally steady. Live sales were at $121/cwt. in the Southern Plains, $123-$126 in Nebraska and $125-$126 in the western Corn Belt. Dressed sales were at $198 in Nebraska and at $198-$203 in the western Corn Belt.

Live Cattle futures rode surging wholesale beef values higher through nearby contracts.

Choice boxed beef cutout value was $4.97 higher Monday afternoon at $329.80/cwt. Select was $5.53 higher at $303.55/cwt.

Live Cattle futures closed an average of 81¢ higher through the front three contracts on Monday and then an average of 45¢ lower.

Feeder Cattle futures softened on likely profit taking and wariness about sustained strength. They closed an average of 71¢ lower, except for 17¢ higher toward the back of the board.

Corn futures closed 2¢ to 4¢ lower through new-crop contracts, and then mostly fractionally lower to 1¢ higher.

Soybean futures closed mostly 3¢ to 5¢ higher.

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Major U.S. financial indices closed mixed on Monday. Investors look to Tuesday’s town hall with Federal Reserve Chairman Jerome Powell for possible signals on how and when the Fed may taper bond buying.

The Dow Jones Industrial Average closed 110 points higher. The S&P 500 12 points higher. The NASDAQ closed 29 points lower.

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Although production costs are unknown at this time, especially the cost of wheat pasture, early budgets suggest decent return potential for fall stocker programs, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

Using prices in his state, Peel explains over the last four weeks 450 lb. steers (Med. and Lg. #1) averaged $186.08/cwt., while 750 lb. steers averaged $156.31. That adds up to $1.12/lb. for 300 lb. of gain.

“Values of stocker gain are higher this year and reflect the increased feedlot cost of gain due to high feed grain prices,” Peel explains. “Stocker value of gain is expected to remain elevated in the coming months. The value of gain reflects the broad market environment for adding weight to feeder cattle.  Actual profitability will, of course, depend on actual purchase and sale prices and production costs for stockers.”

Further, Peel points out March Feeder Cattle futures are in the $166-$167 range. For Oklahoma producers, where basis is about $2 for 750 lb. steers, the estimated average March price is $168-$169.

“Another question for stocker producers is the expected purchase price of stocker calves later in the fall. The price of 450-500 lb. steers typically decreases seasonally from summer to an October low, dropping about 4.5% from August to October. This suggests a price of roughly $177/cwt., for 450 lb. steers in October,” Peel says. “However, cattle markets are trending higher and may offset the seasonal price patterns. Current October feeder futures plus average basis for calves suggests a price for 450 lb. steers of roughly $196/cwt. I suspect the most likely calf price for October will be between these values, perhaps in the range from $180-$190/cwt.”

Peel points out multiple factors — including the size and timing of fall calf marketings — will determine actual calf prices.

“Good pasture conditions could result in some delay in calf weaning and marketing this fall,” Peel explains. “Stocker prices will also be affected by the development, availability and supply of wheat pasture. Conditions may be favorable for early wheat planting but the threat of armyworms appears to be elevated this year.”

By | August 16th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 16, 2021

Negotiated cash fed cattle trade ranged from mostly inactive to limited on light demand through Friday afternoon, according to the Agricultural Marketing Service. Prices for the week were generally steady. Live sales were at $121/cwt. in the Southern Plains, $123-$126 in Nebraska and $125-$126 in the western Corn Belt. Dressed sales were at $198 in Nebraska and at $198-$203 in the western Corn Belt.

Cattle futures softened in front-month contracts Friday, but strengthened in away months, supported by improving supply fundamentals.

Live Cattle futures closed an average of 28¢ higher, except for an average of 30¢ lower in the front three contracts.

Feeder Cattle futures closed an average of 67¢ higher (15¢ to $1.40 higher), except for an average of 56¢ lower in the front two contracts.Choice boxed beef cutout value was $6.90 higher Friday afternoon at $324.83/cwt. Select was $7.71 higher at $298.02/cwt.

Corn futures wavered on the positive weather outlook.

Corn futures closed mixed, fractionally lower to 1¢ higher through new-crop contracts and then mostly 3¢ lower to 2¢ higher.

Soybean futures gained on confirmed strong weekly exports.

Soybean futures closed 11¢ to 26¢ higher through Aug ’22 and then 5¢ to 9¢ higher

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Major U.S. financial indices closed slightly higher on Friday. Consumer sentiment, as measured by the University of Michigan index, fell 11 points to the lowest level since 2011. Analysts believe consumers are growing more concerned about the ongoing surge in the Covid virus and its effects on slowing the economy, as well as inflation.

The Dow Jones Industrial Average closed 15 points higher. The S&P 500 closed 7 points higher. The NASDAQ was up 7 points.

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Weather the remainder of this year and Chinese demand will continue to bolster domestic feed grain prices, says Mike Murphy, CattleFax vice president of research and risk management services.

“As China rebuilds its pork industry following their battle with African Swine Fever, they are looking for higher quality feed ingredients, such as corn and soybeans” Murphy explained, during last week’s CattleFax Outlook Seminar in Nashville, Tennessee. “Exceptional demand from China is leading U.S. corn exports to a new record in the current market year, and strong demand for U.S. soybeans has elevated prices in the last 12 months.”

CattleFax expects spot soybeans prices to be $13 to $16/bu. for the next 18 months. They forecast Corn futures at $4.75 to $6.25 during the same period.

As for weather, long-time CattleFax meteorologist, Art Douglas, professor emeritus at Creighton University, forecasts La Niña conditions to return this fall, which would intensify drought in the West and Plains into early 2022. He adds that the precipitation outlook for fall through early next year suggests drought increasing in the Pacific Northwest with above-normal precipitation across the inter-mountain West – leaving the Midwest drier. He expects less tropical storm activity to reduce Southeast rainfall into late fall.

Drier weather in the Northern Plains and West will pressure hay production and quality in the 2021 season – supporting prices into the next year, according to Murphy.

“May 1 on-farm hay stocks were down 12% from the previous year, at 18 million tons,” Murphy explains. “The USDA estimates hay acres are down 700,000 from last year at 51.5 million acres. So, expect current-year hay prices to average near $170/ton; 2022 average prices should be steady to $10 higher due to tighter supplies and stronger demand.”

By | August 15th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 13, 2021

Negotiated cash fed cattle trade continued at a listless pace Thursday. Although too few transactions to trend, there were some live trades in Nebraska at $123-$126/cwt. and at $198 in the beef, compared to $125 and $198, respectively, last week. Elsewhere, trade was inactive to limited.

Feeder Cattle futures started Thursday’s session strong, retreated in the face of higher Corn futures — in the wake of the monthly World Agricultural Supply and Demand Estimates (WASDE) — and then mostly firmed by the end of the session.

Feeder Cattle futures closed mixed, from an average of 14¢ lower to an average of 38¢ higher.

Surging wholesale beef prices helped lift Live Cattle futures, but sluggish cash trade limited the potential. Choice boxed beef cutout value was $7.13  higher Thursday afternoon at $317.93/cwt. Select was $2.32 higher at $290.31/cwt.

Live Cattle futures closed an average of 64¢ higher.

The average dressed steer weight the week ending July 31 was 3 lbs. lighter than the previous week at 891 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 2 lbs. lighter at 814 lbs.

Corn futures gained on the WASDE report, amid volatile intra-day trading. They closed 9¢ to 14¢ higher through new-crop contracts and then mostly 1¢ to 3¢ higher.

Soybean futures closed mixed, mostly 3¢ lower to 2¢ higher.

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Major U.S. financial indices closed higher on Thursday, supported by the third consecutive decline in weekly initial unemployment insurance claims.

The Dow Jones Industrial Average closed 15 points higher. The S&P 500 closed 13 points higher. The NASDAQ closed 51 points higher.

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USDA’s Economic Research Service (ERS) increased the projected annual average five-area direct fed steer price this year by $2 to $121.20/cwt., based on current price strength and firm demand. The estimated annual price for next year increased by $4 to $126.

That’s in the latest World Agricultural Supply and Demand Estimates (WASDE)

More specifically, the average fed steer price was projected at $124 in the third quarter, $127 in the fourth quarter and $131 in the first quarter of next year.

Some of that bullishness is based on lower expected beef production this year and next.

Total beef production this year was projected at 27.87 billion lbs., which was 33 million lbs. less than the prior month. It would be 698 million lbs. more (+2.57%) than last year. ERS analysts say the decline is mostly due to lighter expected carcass weights due to a higher expected proportion of non-fed cattle being slaughtered through the end of the year.

Total estimated beef production next year of 26.96 billion lbs. was 360 million lbs. less (-1.31%) than the previous month and would be 907 million lbs. less (-3.25%) than this year’s estimate. That’s based on  tighter expected supplies of both fed and non-fed cattle.

Lower expected beef production pushed total anticipated red meat and poultry production lower.

Projected total red meat and poultry production this year of 106.82 billion lbs. was 315 million lbs. less (-0.29%) than the previous month. That would be 265 million lbs. more (+0.25%) than last year.

Corn

ERS reduced forecast corn production for 2021-22 by 415 million bu. to 14.8 billion bu., based on projected yield of 174.6 bu./acre, which was 4.9 bu. less than the previous month’s estimate.Ending stocks were projected 190 million bu. lower at 1.2 billion.

The season-average corn price received by producers was raised 15¢ to $5.75/bu.

Soybeans

ERS reduced estimated soybean production for 2021-22 by 66 million bu. to 4.34 billion bu., based on lower projected yield. But, beginning stock estimates increased based on decreased expectations for crush and exports.

The U.S. season-average soybean price for 2021-22 was forecast at $13.70/bu., unchanged from last month. The soybean meal price was forecast at $385 per short ton, down $10. The soybean oil price forecast was unchanged at 65.0¢/lb. 

Wheat

ERS reduced estimated wheat production for 2021-22 by 49 million bu. to 1,697 million bu., based on yield of 44.5 bu./acre, which was 1.3 bu. less than the previous forecast. Projected 2021-22 ending stocks were reduced 38 million bu. to 627 million, which would be 26% less than last year.

The projected 2021-22 season-average farm price was raised 10¢/bu. to $6.70.

By | August 12th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug.12, 2021

Negotiated cash fed cattle trade was slow on light to moderate demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. A few early live sales traded steady with last week at $121.

In Nebraska and the Western Corn Belt, trading was limited with light demand

Last week in Kansas, live sales traded at $121. In Nebraska live sales traded at $125 and dressed at $198. In the Western Corn Belt, live sales were at $125-$126 and dressed at $198.

Stronger Corn futures and sluggish cash prices helped pressure Cattle futures Wednesday. There might have also been some defensiveness ahead of Thursday’s monthly World Agricultural Supply and Demand Estimates.

Live Cattle futures closed mixed from an average of 34¢ lower to an average of 15¢ higher

Feeder Cattle futures closed an average of 64¢ lower (22¢ lower toward the front of the board to $1.12 lower in the back contract).

Choice boxed beef cutout value was $5.48  higher Wednesday afternoon at $310.80/cwt. Select was $3.38 higher at $287.99/cwt.

Corn futures closed 2¢ to 7¢ higher through the front six contracts, then fractionally higher to 1¢ higher.

Soybean futures closed mostly fractionally higher to 2¢ higher, except for 42¢ lower in waning Spot Aug. 

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Major U.S. financial indices closed mixed on Wednesday with both the S&P 500 and the Dow Jones hitting record highs. Support included the moderating Consumer Price Index in July.

The Dow Jones Industrial Average closed 220 points higher. The S&P 500 closed 11 points higher. TheNASDAQ closed 23 points lower.

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Declining cattle numbers, finally working through backlogged cattle supplies, as well as strong beef demand are setting the stage for significantly higher cattle prices next year and beyond, according to the 2021-22 CattleFax Industry Outlook yesterday at the 2021 Cattle Industry Convention and NCBA Trade Show in Nashville.

CattleFax projects the average fed steer price next year to be $135/cwt., up $14 from this year. That’s with the forecast average carcass composite price at $265/cwt., up $5 from this year.

In turn, projected feeder steer prices (850 lbs.) are forecast $20 higher next year at an average of $165/cwt. Steer calf (550 lbs.) prices are projected to average $200/cwt., which would be $30 more than this year.

Bred cows are projected to average $1,750/head, which would be $125 more than this year.

Rounding out prices, CattleFax sees Utility cows averaging $70/cwt., up $6.

Declining Cow Numbers

CattleFax expects the beef cowherd to decline 400,000 head by Jan. 1 of next year, reaching 30.7 million head. Part of that has to do with lingering drought.

Art Douglas, professor emeritus at Creighton University expects La Niña conditions to return this fall, intensifying drought in the West and Plains into early 2022.

According to Kevin Good, CattleFax vice president of industry relations and analysis, total cattle inventory peaked at 94.8 million head. He explains those numbers remain in the system due to the COVID-19 induced slowdown in harvest over the past year. So, fed cattle slaughter will remain elevated through 2021 as carryover from pandemic disruptions works through the processing sector, which remains hindered by labor issues.

Ultimately, during the current contraction phase, CattleFax expects feeder cattle and calf supplies to decline roughly 1 million head from the cyclical peak.

“While fed cattle slaughter nearly equals 2019 highs at 26.5 million head this year, we expect a 500,000-head decline in 2022,” Good says. “This, combined with plans for new packing plants and expansions, possibly adding near 25,000 head per week of slaughter capacity over the next few years, should restore leverage back to the producer.”

Beef Demand Remains Strong

Aftershocks from the pandemic continue to keep domestic demand at elevated levels not seen since 1988, say CattleFax analysts.

“Customer traffic remained strong at restaurants and retail – even as those segments pushed on the higher costs, proving consumers are willing to pay more for beef,” Good explains. He notes the boxed beef cutout price peaked at $336/cwt. in June, while retail beef prices pushed to an annual high at $7.11/lb. Retail beef prices are expected to average $6.80/lb. in 2021 and increase to $6.85/lb. in 2022, he says.

At the same time, global U.S. beef export demand is on a record pace this year.

“Tightening global protein supplies will support stronger U.S. red meat exports in 2022,” according to Good. “U.S. beef exports are expected to grow 15% in 2021 and another 5% in 2022.”

By | August 11th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 11, 2021

Negotiated cash fed cattle trade was again at a standstill in the Southern Plains and Nebraska through Tuesday afternoon, according to the Agricultural Marketing Service. In the Western Corn Belt, trading was still mostly inactive on light demand.

Last week in the Texas Panhandle, live sales traded from $121 to $122. In Kansas, live sales traded at $121. In Nebraska live sales traded at $125 and dressed at $198. In the Western Corn Belt, live sales were at $125-$126 and dressed at $198.

Cattle futures firmed after early pressure to close higher Tuesday, helped along by the extraordinary run in wholesale beef prices.

Live Cattle futures closed an average of 40¢ higher (3¢ to 65¢).

Feeder Cattle futures closed an average of 34¢ higher, except for 15¢ lower in Sept.

Corn futures closed fractionally lower to 4¢ lower through the front six contracts.

Soybean futures closed 6¢ to 7¢ higher in the front six contracts, except for 14¢ higher in Spot Aug.

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Major U.S. financial indices closed mixed on Tuesday, with support including Senate passage of the trillion-dollar infrastructure bill.

The Dow Jones Industrial Average closed 163 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 72 points.

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The massive $1 trillion infrastructure bill took a long step toward fruition Tuesday with Senate passage.

According to a statement from Agriculture Secretary Tom Vilsack, “Rural America stands to benefit from this historic long-term investment in our infrastructure and economic competitiveness. From tackling some of the greatest challenges we face today, to making long-term investments in the rural areas that are the heart of our nation, the Bipartisan Infrastructure Investment and Jobs Act will ensure we build back better, stronger, and more resilient and equitable than ever before.”

If passed, Secretary Vilsack says the legislation will deliver broadband to rural homes, communities and businesses across the country, as well as increasing access to jobs, education, health care, banking, and markets for farmers and rural small businesses.

“It also upgrades our power infrastructure, improves drinking water, and connects rural communities through upgraded roads and bridges,” he says.

The bill now goes to the House for consideration.

By | August 10th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 10, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Nebraska through Monday afternoon, according to the Agricultural Marketing Service. It was mostly inactive on light trade in the Western Corn Belt.

Last week in the Texas Panhandle, live sales traded from $121 to $122. In Kansas, live sales traded at $121. In Nebraska live sales traded at $125 and dressed at $198. In the Western Corn Belt, live sales were at $125-$126 and dressed at $198.

Steep declines in Lean Hog futures pressured Cattle futures Monday despite last week’s stronger cash trade and surging wholesale beef prices. By the end of the session, though, they were back to about even.

Live Cattle futures closed an average of 27¢ lower (15¢ to 45¢), except for unchanged in spot Aug.

Feeder Cattle futures closed mixed, down an average of 19¢, except for 28¢ higher in Apr.

Choice boxed beef cutout value was $3.54 higher Monday afternoon at $299.80/cwt. Select was $3.72 higher at $280.81/cwt.

Crop progress and an improved weather outlook pressured Corn futures Monday.

Corn futures closed mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 4¢ to 7¢ lower, except for 11¢ higher in Spot Aug.

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Major U.S. financial indices closed mixed Monday. The spread of the Delta variant of Covid, as well as anticipation of year-end stimulus tapering, weighed on the market.

The Dow Jones Industrial Average closed 107 points lower. The S&P 500 closed 4 points lower.The NASDAQ closed 24 points higher. 

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“Triple-digit gains in Choice cutout values last week created optimism, however traders are still questioning where beef prices will land once Labor Day buying is complete,” says Brenda Boetel, Extension livestock economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “Feeders are expected to focus on further advancement of cash values following the moderate $1 to $2/cwt. gains last week. This could create a wider gap between asking prices and bids once each side becomes more active.”

By | August 10th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 9, 2021

Negotiated cash fed cattle trade was limited with light demand in all feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

Last week were generally $1-$2 higher on a live basis in the Texas Panhandle at $121-$122/cwt.; $1 higher in Kansas at $121; $3 higher in Nebraska at $125; $1-$2 higher in the western Corn Belt at $125-$126. Dressed trade was $2 higher in Nebraska at $198; $3 higher to $3 lower at $198 in the western Corn Belt.

Surging wholesale beef values, position squaring and stronger cash fed cattle prices, albeit with anemic trade, helped buoy Cattle futures Friday.

Live Cattle futures closed an average of 78¢ higher (30¢ to $1.225)

Feeder Cattle futures closed an average of $1.62 higher (80¢ to $2.20)

Corn futures closed 3¢ to 6¢ higher through the front six contracts, except for up fractionally in spot Sept, and then mostly 8¢ to 9¢ higher.

Soybean futures closed 6¢ to 8¢ higher, except for 20¢ higher in Spot Aug.

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After a better-than-expected employment report for July, major U.S. financial indices once again closed at record highs although the NASDAQ was down. The report from the labor department showed 943,000 new jobs last month, which brought the unemployment rate down to 5.4%.

The Dow Jones Industrial Average closed 144 points higher. The S&P 500 closed 7 points higher. The NASDAQ was down 59 points.

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U.S. red meat exports closed the first half of the year at record levels, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Although volume and value eased from the enormous totals posted in April and May, export value was still the highest on record for the month of June and first-half shipments established a record pace for both beef and pork exports.

June beef exports totaled 112,249 metric tons (mt), up 42% from a year ago when exports were still hampered by a COVID-related slowdown in production. Export value was $804.4 million, up 68% from a year ago and the third highest on record after April and May of this year. First-half exports reached 700,087 mt, up 18% from a year ago, valued at $4.64 billion (up 28%). Compared to 2018, the record year for U.S. beef exports, first-half results were up 6% in volume and 15% in value.

“USMEF had expected a continued strong performance in June for both beef and pork exports, despite significant headwinds,” said USMEF President and CEO Dan Halstrom. “2021 has presented many formidable challenges for the U.S. industry, including a very tight labor situation, logistical obstacles that slowed product movement and foodservice restrictions in many key markets. So the fact that first-half exports reached record levels speaks to the loyalty of our international customer base, strong consumer demand for high-quality, nutritious U.S. red meat and the U.S. industry’s ability to adapt to a challenging and rapidly changing business climate. We have also seen a welcome rebound in beef and pork variety meat volumes, which had been down last year.”

Beef export value equated to $351.18 per head of fed slaughter in June, up 60% from last June’s COVID-impacted average. The first-half per-head average was $359.49, up 20% from a year ago. June exports accounted for 13.6% of total beef production and 11.5% of muscle cuts, both dramatically higher than a year ago. In the first half, exports accounted for 14.7% of total beef production and 12.5% for muscle cuts, each up about 1.5 percentage points from a year ago.

Pork exports reached 238,935 mt in June, up 15% from a year ago, while export value climbed 35% to $696.8 million. First-half pork exports topped last year’s record pace by 1% at 1.58 million mt, valued at $4.33 billion (up 7%).

By | August 8th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 6, 2021

Negotiated cash fed cattle trade was limited with light demand in all feeding regions through Thursday afternoon, according to the Agricultural Marketing Service.

So far this week, live sales are: $1-$2 higher in the Texas Panhandle at $121-$122/cwt.; $1 higher in Kansas at $121; $3 higher in Nebraska at $125; $1-$2 higher in the western Corn Belt at $125-$126. Dressed trade is $2 higher in Nebraska at $198; $3 higher to $3 lower at $198 in the western Corn Belt.

Heavy pressure in Lean Hog futures weighed on Live Cattle Thursday, despite higher cash and wholesale prices.

Live Cattle futures closed an average of 96¢ lower with more pressure at the front (52¢ to $1.47 lower).

Higher Corn futures pressured Feeder Cattle futures.

Feeder Cattle futures closed an average of $1.59 lower.

Choice boxed beef cutout value was $3.24 higher Thursday afternoon at $292.58/cwt. Select was $2.62 higher at $273.77/cwt.

Corn futures closed 5¢ to 10¢ higher through the front six contracts and then mostly fractionally higher to 1¢ higher.

Soybean futures mixed, from 4¢ lower to 3¢ higher.

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Major U.S. financial indices closed at record highs, supported by declining weekly initial unemployment insurance claims. Perhaps there was also speculation on Friday’s monthly employment report.

The Dow Jones Industrial Average closed 272 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 115 points.

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USDA’s Agricultural Marketing Service will begin publishing two new reports this month, based on Livestock Mandatory Reporting, aimed at bolstering market transparency.

The National Daily Direct Formula Base Cattle report is supposed to provide more information about foundational prices used in cattle market formulas, grids and contracts. It begins publication Monday (Aug. 9)

According to USDA’s announcement Thursday, “National Daily Direct Formula Base Cattle reports will enable stakeholders to see the correlation between the negotiated trade and reported formula base prices, as well as the aggregated values being paid as premiums and discounts. Daily formula base price reports will be national in scope and released in morning, summary and afternoon versions. The weekly and monthly formula base reports will be both national and regional in scope and include forward contract base purchase information.”

The National Weekly Cattle Net Price Distribution report will show the volume of cattle purchased at each different level of pricing within those formulas, grids, and contracts. It begins publication next Tuesday (Aug. 10).

“The National Weekly Cattle Net Price Distribution report will show at what levels (price and volume) trade occurred across the weekly weighted average price for each purchase type – negotiated, negotiated grid, formula and forward contract,” according to USDA. “Currently, the market speculates whether large or small volumes of cattle trade on both sides of the price spread. And in fact, with premiums and discounts applied to the prices, the spreads shown on reports can be wide. Publishing a price distribution for all cattle net prices will offer more transparency to each of the purchase type categories. This report is a window into what producers are paid for cattle (net) and retains confidentiality by segregating volumes purchased in $2.00 increments +/- the daily weighted average price, depending upon premiums and discounts. AMS has published a similar net price distribution report for direct hogs since January 2010.”

By | August 5th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 5, 2021

Negotiated cash fed cattle prices leaned higher Wednesday: $1 higher in Kansas at $121/cwt. on a live basis; steady to $1 higher in Nebraska at $125 (compared to Tuesday); steady with the previous day at $125 in the Western Corn Belt. Although too few to trend, live prices in the Texas Panhandle were $2 higher at $122. Dressed trade was $2 higher in Nebraska at $198. All of that was on slow trade with light to moderate demand.

Stronger cash prices and surging wholesale beef values provided support for Cattle futures Wednesday.

Live Cattle futures closed an average of 55¢ higher.

Feeder Cattle futures closed an average of 42¢ higher.

Through mid session today, limit-down moves in Lean Hogs are weighing on Live Cattle, while a bounce in Corn futures is pressuring Feeder Cattle.

Corn futures closed mixed mixed Wednesday, down 4¢ to 5¢ through new-crop contracts and then mostly fractionally higher.

Soybean futures closed 5¢ to 11¢ higher through Jul ’22 and then 4¢ higher.

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Major U.S. financial indices closed mixed on Wednesday as investors speculate about the Federal Reserve tapering stimulus support.

The Dow Jones Industrial Average closed 324 points lower at 34,793. The S&P 500 closed 21 points lower. The NASDAQ was down 19 points. 

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“My farm gains from red meat exports in the price of every acre of crops that we grow,” says Dean Meyer, who produces corn, soybeans, cattle and hogs near Rock Rapids, Iowa. “Red meat exports are vital to my family’s operation.”

Myer was speaking about a recent study conducted by World Perspectives, Inc. and released by the U.S. Meat Export Federation (USMEF), indicating U.S. beef and pork exports added 41¢/bu. to the value of corn and $1.06/bu. to soybeans in 2020.

Corn and soybean producers support the international promotion of U.S. pork, beef and lamb by investing a portion of their checkoff dollars in market development efforts conducted by USMEF. This funding is leveraged with support from pork and beef checkoff programs and USDA.

Meyer also highlights the industry-wide collaboration behind the promotion of value-added U.S. red meat in international markets. “Something else this study points to is how different sectors of U.S. agriculture can work together to benefit the industry as a whole.” With such collaboration, Meyer adds, “there is great potential for U.S. agriculture on the world stage.”

Key findings from the study, based on 2020 export data:

Beef and pork exports used 530.5 million bu. of corn. At an average annual price of $3.52/bu., beef and pork exports accounted for $1.87 billion in market value to the corn industry.

U.S. pork exports used 2.45 million tons of soybean meal, which is the equivalent of 103.2 million bu. of soybeans. At an average annual price of $8.98/bu., pork exports accounted for $927 million in market value to the soybean industry.

Beef and pork exports also used 3.03 million tons of distiller’s dried grains with solubles (DDGS) at an annual average price of $154.59/ton, generating $468 million in market value for ethanol mills’ co-products.

“USMEF’s efforts to promote U.S. red meat in international markets have paid off for producers, whether they raise livestock or grow corn and soybeans – or, like me, they do both,” says Mark Legan, a hog farmer from Coatesville, Ind. “The study adds numbers to the story – a story those of us in this business have been telling for a long time – that global trade is vital to all of us involved in U.S. agriculture.”

By | August 5th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 4, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. In the Western Corn Belt, a few live sales traded at $125/cwt. 

Trade was mostly inactive on light demand in the Southern Plains.

Surging wholesale beef prices helped lift Live Cattle.

Choice boxed beef cutout value was $4.84 higher Tuesday afternoon at $285.84/cwt. Select was $4.11 higher at $267.49/cwt.

Live Cattle futures closed an average of 50¢ higher, (25¢ higher at the back to $1.12 at the front), except for 10¢ lower in the back contract.

Feeder Cattle futures were buoyed by lower Corn futures.

Feeder Cattle futures closed an average of 59¢ higher, except for an average of 17¢ lower in the back two contracts.

Grain futures trended lower with the weekly Crop Progress report (see below), profit taking and the lack of follow-through for Wheat.

Corn futures closed 6¢ to 8¢ lower through new-crop six contracts, then mostly unchanged to fractionally lower.

Soybean futures closed 22¢ to 33¢ lower through Aug ’22 and then mostly 15¢ to 16¢ lower.

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Major U.S. financial indices closed higher Tuesday on strong earnings reports. The S&P 500 hit a record level. Investors will be looking for this week’s report on jobs data to gauge the strength of the recovery.

The Dow Jones Industrial Average closed 278 points higher. The S&P 500 36 points higher. The NASDAQ was up 80 points.

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The Purdue University/CME Group Ag Economy Barometer leveled off after two months of sharp declines, down 3 points in July to a reading of 134.

“This month’s sentiment index marks the lowest barometer reading since July of 2020 and actually marks a return to sentiment readings observed from much of 2017 through 2019, when annual average barometer readings ranged from 131 to 133,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Producers’ sentiment regarding their farms’ financial condition was more optimistic when prices for corn, soybeans and wheat were surging last fall, winter and early spring. Still, recent sentiment readings suggest farmers remain cautiously optimistic about financial conditions on their farms.”

The Index of Current Conditions was down 6 points to a reading of 143, primarily as a result of weakened principal crop prices. The Index of Future Expectations was down 2 points to a reading of 130.

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 July 19-23, 2021.

The Farm Capital Investment Index declined for the fourth consecutive month down 4 points to a reading of 50. Weakness in the investment index was primarily attributable to more producers indicating they plan to reduce their farm building and grain bin purchases in the upcoming year. Two-thirds of July’s respondents said their construction plans were lower than a year earlier, compared to 61% in June. Plans for farm machinery purchases were also somewhat weaker, with a shift of more respondents planning to reduce their machinery purchases compared to last year instead of holding them constant.

By | August 3rd, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 3, 2021

Negotiated cash fed cattle trade was limited on very light demand in Nebraska and at a standstill in all other major feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Cattle futures edged higher Monday with stronger wholesale beef prices and optimism for pushing cash prices higher this week.

Live Cattle futures closed an average of 31¢ higher.

Feeder Cattle futures closed an average of 53¢ higher, from 7¢ higher in spot Aug to $1.05 higher at the back.

Choice boxed beef cutout value was $2.54 higher Money afternoon at $281.00/cwt. Select was $4.19 higher at $263.38/cwt.

CME Feeder Cattle Index $1.54 higher at $155.58

Rallying wheat futures led grains higher Monday.

Corn futures closed mostly 10¢ to 14¢ higher.

Soybean futures closed mostly 4¢ to 6¢ higher through Aug ‘22, and then mostly 11¢ to 17¢ higher.

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Major U.S. financial indices closed mixed on Monday as manufacturing growth slowed and worries about economic growth, combined with supply issues and the Delta Covid-19 variant’s continued spread all weighed on stocks.

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

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“Cattle carcass weights will rise seasonally the remainder of the year but are expected to remain lower year over year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.  “Lower steer and heifer carcass weights likely reflect several influences, including feedlots becoming more current in marketings, higher feed prices and perhaps a return to longer-term carcass weight trends. Beef production for the remainder of 2021 is predicted to be 4-5% lower year over year as a result of lower slaughter totals and lighter carcass weights.”

For the first 28 weeks this year, Peel says average weekly yearling slaughter averaged 501,392 head, fractionally higher than the same period last year. 

“However, he adds, Monday-Friday slaughter thus far in 2021 has averaged 2.7% lower than 2019 and is covered by a 31.0% increase in Saturday slaughter of steers and heifers,” Peel says. “The 2021 average Saturday yearling slaughter total is 50,430 head compared to 38,492 head in 2019. Saturday slaughter accounts for 10.4% of total yearling slaughter in 2021 compared to 7.6% of slaughter for the same period in 2019.”

By | August 3rd, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 2, 2021

Negotiated cash fed cattle prices last week were $1 higher in the Southern Plains at $122/cwt. and unevenly steady in Nebraska at $122. Dressed trade in Nebraska was $1 higher at $196. Dressed prices in the western Corn Belt were $196, compared to $195-$202 the previous week; no established trend for live trade.

Through Thursday, the average five-area direct fed steer price was $121.05/cwt., 40¢ more than the previous week. The average steer price in the beef was $197.49, which was 70¢ more.

Cattle futures softened further Friday amid week-end and month-end position squaring.

Live Cattle futures closed an average of  60¢ lower.

Feeder Cattle futures closed an average of  32¢ lower (5¢ to $1.02 lower).

Choice boxed beef cutout value was $3.24 higher Friday afternoon at $278.46/cwt. Select was $2.37 higher at $259.19/cwt.

Estimated total cattle slaughter last week of 649,000 head was 1,000 more than the previous week and 13,000 more than the same week last year. Estimated year-to-date total cattle slaughter of 19.24 million head is 826,000 more (+4.5%) than the same period last year.

Corn futures closed 10¢ 11¢ lower through new-crop contracts and then mostly 5¢ to 7¢ lower.

Soybean futures closed mostly 14¢ to 29¢ lower.

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Major U.S. financial indices closed the week lower on Friday as concern among investors seems to be corporate earnings, while strong in the second quarter, may have peaked – especially with megacap tech companies like Amazon.

The Dow Jones Industrial Average closed 149 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 106 points. l

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The Livestock Marketing Information Center (LMIC) revised beef production lower this year based on the reduced beef cow numbers in the recent semiannual Cattle report.

“LMIC is now projecting prices could be almost 7% higher than a year ago for fed cattle, which would support strong gains in the feeder cattle complex,” say the organization’s analysts, in the latest Livestock Monitor.

These are among specific points LMIC made regarding the Cattle report:

“The beef cow decline was expected, given year-to-date slaughter is up 9% or 152,000 head. Heifer slaughter, too, was in line with a decline, up 9% over last year.”

“One of the more surprising numbers was the calf crop, which was reported as even with a year ago, even though total cows (beef + dairy) was down by 500,000 head.” 

“…the dairy cow herd has shown stronger growth in 2021 reaching 9.5 million head, a 1.6% increase over 2020. Dairy replacements indicated that trend may continue as dairy farmers held back 2.5% more heifers than a year ago.” 

By | August 1st, 2021|Daily Market Highlights|

Cattle Current Daily—July 30, 2021

Negotiated cash fed cattle trade was slow on light to moderate demand in in all major feeding regions through Thursday afternoon, according to the Agricultural Marketing Service. In the Southern Plains compared to last week, live purchases traded $1 higher at $120/cwt.

In Nebraska, live sales traded unevenly steady at $122/cwt. and dressed sales were $1 higher at $196/cwt. In the Western Corn Belt, dressed sales traded unevenly steady at $196/cwt. while live sales last week traded from $120-$124/cwt.

Higher grain futures prices weighed on Cattle futures Thursday.

Feeder Cattle futures closed an average of $1.23 lower, from 85¢ lower at the back to $1.67 lower in spot Aug.

Live Cattle futures closed just an average of 21¢ lower. Part of the support was Lean Hog futures recovering from the previous day’s slide, when there was chatter about African Swine Fever being confirmed closer to the Continental United States — it was confirmed the Dominican Republic.

Choice boxed beef cutout value was $2.06 higher Thursday afternoon at $275.22/cwt. Select was 70¢ higher at $256.82.

The average dressed steer weight the week ending July 17 was 888 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 3 lbs. heavier than the previous week but 11 lbs. lighter than the same week last year. The average dressed heifer weight of 813 lbs. was 1 lb. heavier than the prior week but 16 lbs. lighter than the previous year.

Net U.S. beef export sales were 22,500 metric tons (2021) the week ending July 22, according to the weekly U.S. Export Sales report. That was 11% less than the previous week but 28% more than the prior four-week average. Increases were primarily for South Korea, Japan and China.

Hotter, drier weather in the Corn Belt helped lift grain futures prices Thursday.

Corn futures closed 7¢ to 8¢ higher through new-crop contracts, then mostly 3¢ to 5¢ higher.

Soybean futures closed mostly 11¢ to 16¢ higher.

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Major U.S. financial indices closed higher Thursday, despite less robust economic growth in the second quarter than traders expected. Real Gross Domestic Product in the second quarter was 6.5%, according to the U.S. Department of Commerce.

The Dow Jones Industrial Average closed 153 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 15 points.

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Retail food prices (food at home) are 1.6% higher year over year, for the first six months of 2021, according to USDA’s Economic Research Service (ERS). That’s about equal to the pace of increase for the same periods in 2000 to 2019. Food away from home prices for the same period are 2.8% higher. The Consumer Price Index (CPI) for all food is up an average of 2.1%.

“In addition to factors influencing prices for specific food categories, economy-wide inflation is also high and is contributing to overall price increases,” ERS analysts explain. “The Consumer Price Index (CPI) for all-items, which encompasses food, housing, transportation, and other categories, has increased 2.9% so far in 2021 compared to 2020. For context, annual all-items inflation has averaged 2.0% over the past 20 years. Inflation in 2021 is already nearly 50% higher than average annual inflation only halfway through the year. Above-average inflation is expected to continue through 2022.”

ERS expects beef and veal prices to be up between 3.0% and 4.0% this year.

By | July 29th, 2021|Daily Market Highlights|

Cattle Current Daily—July 29, 2021

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

Central Stockyards offered 7,773 head in its weekly Fed Cattle Exchange auction. Of those, 1,085 head sold (436 heifers and 649 steers), all from the Southern Plains. Steers brought a weighted average price of $119.78/cwt. The weighted average price for heifers was $119.14.

Cattle futures limped to narrowly mixed trade Wednesday amid sluggish interest

Live Cattle support included another day of higher boxed beef prices.

Live Cattle futures closed marginally mixed, from an average of 7¢ lower in four contracts to an average of 9¢ higher. 

Feeder Cattle futures wavered with pressure from higher Corn futures, led by sharply higher Wheat futures. Kansas City Wheat on the CME was 14¢ to 18¢ higher through May ’23. Chicago Wheat was 10¢ to 14¢ higher through Sep ’22.

Feeder Cattle futures closed narrowly mixed, from an average of 37¢ lower through the front five contracts to an average of 19¢ higher.

Choice boxed beef cutout value was $3.43 higher Wednesday afternoon at $273.16/cwt. Select was $2.18 higher at $256.12/cwt. The CME Boxed Beef Index was $1.19 higher at $262.75.

Corn futures closed fractionally higher to 3¢ higher through the front six contracts, then mostly fractionally higher to 1¢ higher.

Soybean futures closed 13¢ higher in spot Aug, then 1¢ to 3¢ higher through Jan ’23.

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Major U.S. financial indices closed mixed on Wednesday after Federal Reserve Chairman Jerome Powell announced interest rates would continue near zero while acknowledging the economic recovery has made progress.

The Dow Jones Industrial Average closed 128 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 102 points.

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“Despite the challenges of the past couple of years, the beef cattle system responded remarkably well to a series of large, unexpected disruptions. Producer prices have been on the rise. Consumer demand is strong. These core facts should remain front of mind when considering changes that would significantly affect the cattle industry going forward.”

That’s the conclusion of testimony Wednesday from Jayson Lusk, noted agricultural economist at Purdue University, to the U.S. House Agriculture Subcommittee on Livestock and Foreign Agriculture. This was in a hearing titled, State of the Beef Supply Chain: Shocks, Recovery, and Rebuilding. You likely recall the U.S. Senate Agriculture Committee recently held a similar hearing.

Lusk explored central topics in his testimony, topics receiving much of the attention when it comes to cattle markets. Among them: packing capacity and price discovery. Here’s some of what he had to say.

Packing capacity

“My research with Purdue colleague Meilin Ma indicates that even if we would have had a more distributed packing sector consisting of more small and medium sized plants instead of a small number of larger plants, the price spread dynamics and beef supply disruptions would not have likely been appreciably different than what we witnessed. The problem at the time was not the size and localness of the plants but total industry capacity.”

“Support for small and local processors might benefit local economic ecosystems and increase custom harvest operations for producers, but these operations, because they lack economies of scale, must focus on quality and service to be competitive, and are such a small part of the national industry that investments at this size are unlikely to significantly alter the aggregate industry capacity.”

Price discovery

“In efforts to improve price discovery, an important distinction needs to be made: price levels and price volatility. Even if all cattle were traded on a negotiated cash basis, the price level would not necessarily improve; however, we might be more confident that any given transaction would be reflective of the ‘true’ underlying supply and demand conditions at the time and location. Whether, in fact, there are too few cash transactions to reflect market fundamentals is debatable.”

“The best economic case for mandating more negotiated transactions rests on the argument that price discovery is a public good. Are there less costly ways to improve price discovery…Even if a mandate were pursued, it might be made more efficient if coupled with a ‘cap and trade’ system, where obligations to secure cattle in the cash market might be bought and sold in a secondary ‘offset’ market, similar to what currently exists for fuel manufacturers to blend a given amount of biofuels…”

By | July 28th, 2021|Daily Market Highlights|

Cattle Current Daily—July 28, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in Nebraska and the Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. In Nebraska last week, live sales were at $120-$123/cwt. and dressed at $195/cwt.

In the Western Corn Belt last week, live sales traded from $120-$124/cwt. and dressed sales from $195-$202/cwt.

Trading was at a standstill in the Southern Plains. Last week in the Southern Plains, live sales traded at $119/cwt.

Cattle futures drifted lower Tuesday amid likely profit taking and with traders awaiting cash direction.

Feeder Cattle futures closed an average of 50¢ lower, except for unchanged in the back contract. 

Live Cattle futures closed an average of 42¢ lower, except for an average of 20¢ higher in the back three contracts.

Wholesale beef prices continued to gain on Labor Day stocking. Choice boxed beef cutout value was $1.80 higher Tuesday afternoon at $269.73/cwt. Select was $3.02 higher at $253.94/cwt.

Grain futures on Tuesday battled between tougher crop conditions and a mixed to favorable weather forecast.

Corn futures closed fractionally lower to 3¢ lower.

Soybean futures closed 1¢ to 5¢ higher through Jan ’22, then fractionally lower to 11¢ lower.

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Major U.S. financial indices closed lower on Tuesday, led by declines in tech stocks and consumer-reliant companies.

The Dow Jones Industrial Average closed 86 points lower. The  S&P 500 closed 21 points lower. The NASDAQ  closed 180 points lower.

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The International Monetary Fund (IMF) left projections for global economic growth this year at 6.0%, in the latest quarterly World Economic Outlook Update (WEOU). Compared to the last update, IMF increased expectations for global growth next year by 0.5% to 4.9% mostly based on higher expectations for advanced economies, particularly for the U.S.

IMF projections for inflation are a mixed bag.

“Recent price pressures for the most part reflect unusual pandemic-related developments and transitory supply-demand mismatches. Inflation is expected to return to its pre-pandemic ranges in most countries in 2022 once these disturbances work their way through prices, though uncertainty remains high,” according to the WEOU. “…Central banks should generally look through transitory inflation pressures and avoid tightening until there is more clarity on underlying price dynamics…There is, however, a risk that transitory pressures could become more persistent and central banks may need to take preemptive action.”

Among risks to the downside, IMF cites:

  • Slower-than-anticipated COVID-19 vaccine rollout, allowing allow the virus to mutate further.
  • Rapidly tightening financial conditions; for instance, stemming from a reassessment of the monetary policy outlook in advanced economies if inflation expectations increase more rapidly than anticipated.

“Vaccine access has emerged as the principal fault line along which the global recovery splits into two blocs: those that can look forward to further normalization of activity later this year (almost all advanced economies) and those that will still face resurgent infections and rising COVID death tolls,” according to the report. “The recovery, however, is not assured even in countries where infections are currently very low, so long as the virus circulates elsewhere.”

By | July 27th, 2021|Daily Market Highlights|

Cattle Current Daily—July 27, 2021

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

In the Western Corn Belt last week, live sales traded from $120-$124/cwt. and dressed sales from $195-$202.

Live trade in the Southern Plains last week was at $119.

In Nebraska last week, live sales were at $120-$123 and dressed at $195.

Cattle futures gained traction Monday, buoyed by last Friday’s friendly USDA reports (see below).

Feeder Cattle futures closed an average of $1.44 higher. 

Live Cattle futures closed an average of 97¢ higher.

Choice boxed beef cutout value was $1.30 higher Monday afternoon at $267.93/cwt. Select was 98¢ higher at $250.92/cwt.

Grain futures edged higher Monday on a hotter, drier near-term weather outlook.

Corn futures closed up 2¢ to 3¢ through new-crop contracts, then mostly 6¢ to 7¢ higher.

Soybean futures closed up mostly 8¢ to 9¢, except for mostly 6¢ higher in the front four contracts.

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Major financial indices posted modest gains on Monday, as investors appeared content to wait for Wednesday’s Federal Reserve update on the economy and interest rates.

The Dow Jones Industrial Average closed 83 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 4 points.

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“While it is not clear that drought has contributed significantly to cattle liquidation thus far, the potential is high for additional herd liquidation in the remainder of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel was referring to Friday’s semiannual USDA Cattle report, which pegged the July 1 beef cow inventory at 31.4 million, which was 650,000 head fewer (-2.03%) than the same time a year earlier.

Beef heifers retained for replacement of 4.3 million head were 100,000 head fewer (-2.27%) than the previous year.

“Tighter cattle supplies, combined with continued strong beef demand leads to expectations for modestly higher prices for the remainder of 2021 and beyond,” Peel says. “Fourth-quarter prices for calves, feeders and fed cattle are currently projected to average 8-12% higher year over year. However, profitability will be tempered by higher input costs, including sharply higher prices for feed grains and supplements.”

Likewise, Peel explains the feedlot situation continues to improve relative to slaughter capacity constraints.

“It appears that the feedlot industry has finally moved past the cyclical bulge of cattle numbers and should be operating with declining numbers going forward for the foreseeable future,” Peel says, citing the latest Cattle on Feed report.

As mentioned in Monday’s Cattle Current, June feedlot placements (feedlots with 1,000 head or more capacity) of 1.67 million head were 7.1% less (128,000 head fewer) than last year. June marketings of 2.02 million head were 2.7% more (53,000 head more) than a year earlier. Total cattle on feed July 1 of 11.29 million head was 1.3% less (148,000 head fewer) than the previous year.

“The overall message of these two reports is that declining cattle numbers are improving cattle market conditions both for the remainder of the year and into 2022 and beyond,” Peel says. 

By | July 26th, 2021|Daily Market Highlights|

Cattle Current Daily—July 26, 2021

Negotiated cash fed cattle prices ended up lower last week: $1 lower in the Southern Plains on a live basis at $119/cwt.; steady to $3 lower in Nebraska at $122-$123; $1 lower in the western Corn Belt at $124. Dressed trade was $1-$7 lower in Nebraska at $195; $1-$2 lower in the western Corn Belt at $195.

Through Thursday, the five-area average direct fed steer price was $120.65/cwt. on a live basis, which was $2.15 less than the previous week. The average steer price in the beef was $196.79, which was 96¢ less.

Cattle futures, especially Feeder Cattle gained Friday, buoyed by lower Corn futures and expectations of a friendly Cattle on Feed report (see below).

Feeder Cattle futures closed an average of $1.76 higher across the board. 

Live Cattle futures closed an average of 46¢ higher through Aug ’22; then down 30¢-45¢ in the back contracts.

Choice boxed beef cutout value was 49¢ higher Friday afternoon at $266.63/cwt. Select was 17¢ higher at $249.94/cwt.

Estimated total cattle slaughter last week was 652,000 head, which was 1,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 18.60 million head is 820,000 head more (+4.61%) than the same period last year.

Positive weather expectations and lower weekly exports pressured Grain futures Friday.

Corn futures closed down 10¢ to 18¢ through the front six contracts, then down 1¢ to 9¢ through Dec ’23.

Soybean futures closed down 10¢ to 15¢ in the through Jan ’22, then down 3¢ to 6¢.

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Major financial indices closed at record highs on Friday with more corporate profits beating Wall Street estimates. The Dow Jones closed above 35,000 for the first time.

The Dow Jones Industrial Average closed 238 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 53 points.

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Both the latest Cattle on Feed and Cattle inventory reports should be price-supportive.

Cattle feeders (feedlots with 1,000 head or more capacity) placed 1.67 million head in June, which was 7.1% less (128,000 head fewer) than last year and 1.3% less than average expectations heading into the report.

In terms of weights, 36.2% went on feed weighing 699 lbs. or less, 46.8% weighing 700-899 lbs. and 17.1% weighing 900 lbs. or more.

Marketings in June were 2.02 million head, which was 2.7% more (53,000 head more) than the previous year and in line with expectations.

Total cattle on feed July 1 of 11.29 million head were 1.3% less (148,000 head fewer) than the previous year, also in line with pre-report expectations.

Beef Cows 2% Less

USDA’s semiannual Cattle report published Friday offers the first insight to the potential degree of herd contraction for the year.

There were 31.4 million beef cows July 1, which was 650,000 head fewer (-2.03%) than the same time a year earlier.

Beef heifers retained for replacement were 4.3 million head, which was 100,000 head fewer (-2.27%) than the previous year.

The calculated number of calves outside feedlots July 1 of 36.1 million head was 600,000 head fewer (-1.63%) than the same time last year.

Total cattle and calves, including dairy, was 100.9 million head, which was 1.3 million head fewer (-1.27%) than the previous year.

By | July 25th, 2021|Daily Market Highlights|

Cattle Current Daily—July 23, 2021

Negotiated cash fed cattle trade was limited on moderate demand in Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service.

For the week, live sales in Nebraska are steady to $2 lower at $122-$123/cwt. Dressed trade is $1-$7 lower at $195.

Live sales in the western Corn Belt are $5 lower at $120. Dressed trade is $1 lower to $5 higher at $195-$202.

Live sales in the Southern Plains this week are mainly steady at $120.

Feeder Cattle closed higher Thursday, supported by lower Corn futures.

Feeder Cattle futures closed an average of $1.40 higher across the board. 

Live Cattle benefitted from higher wholesale beef prices the last couple of days, although it seems way too early to call a seasonal bottom.

Live Cattle futures closed an average of 68¢ higher across the board.

Strong weekly export sales also provided support.

U.S. net beef export sales for 2021 totaled 25,100 metric tons the week ending July 15, according to USDA’s weekly U.S. Export Sales report. That was noticeably more than the previous week and 63% more than the prior four-week average. Increases primarily were for South Korea, Japan, China, Canada, and Mexico.

Choice boxed beef cutout value was 90¢ higher Thursday afternoon at $266.14/cwt. Select was $1.00 higher at $249.77/cwt. Steer byproduct value was $14.07/cwt., the first time it reached that mark since April of 2015. It started this calendar year right at $9.00. 

The average dressed steer weight the week ending July 10 was 885 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week but 17 lbs. lighter than the same week last year. The average dressed heifer weight of 812 lbs. was 1 lb. lighter than the previous week but 17 lbs. lighter than the previous year.

Grain futures softened, with reported pressure from the aforementioned export report.

Corn futures closed 6¢ to 7¢ lower through Jul ’22; then 2¢ lower to fractionally higher.

Soybean futures closed mostly 18¢ to 28¢ lower.

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Major financial indices closed higher Thursday, led by tech stocks. Positive earnings are damping investor anxiety over inflation and the resurgence of COVID-19 cases. Economic data was mixed, though. Sales of previously owned homes increased for the first time in five months, but jobless claims also rose.

Initial weekly unemployment insurance claims the week ending July 17 were 419,000, which was 51,000 more than the previous week and significantly more than analysts were expecting.

The Dow Jones Industrial Average closed 25 points higher. The S&P 500 closed 9 points higher. The NASDAW was up 53 points.

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Total pounds of beef in freezers June 30 were 4% less than the previous month and 7% less than last year, according to USDA’s monthly Cold Storage report.

Frozen pork supplies were 4% less than the prior month and 4% less year over year. 

Total red meat supplies in freezers were down 4% from the previous month and down 8% from last year.

Total frozen poultry supplies were 2% more than the previous month, but 15% less than a year earlier.

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Total federally inspected cattle slaughter in June was 2.90 million head, according to USDA’s monthly Livestock Slaughter report. That was 76,500 more (+2.71%) year over year. Total cattle slaughter from January through June of this year was 16.45 million head, which was 945,600 head more (+6.10%) than the same period last year.

Commercial beef production in June of 2.4o billion lbs. was 23.6 million lbs. more (+1.0%) than last year. Commercial beef production for January through June was 13.85 billion lbs., which was 862.4 million lbs. more (+6.64%) than last year.

Total commercial red meat production for January through June was 27.91 billion lbs., which was 1.1 billion lbs. more (+4.0%) than the same period last year.

By | July 22nd, 2021|Daily Market Highlights|

Cattle Current Daily—July 22, 2021

Negotiated cash fed cattle trade and demand were moderate in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Compared to last week, live sales traded $1 lower at $119/cwt.

Although too few transactions to trend, there was limited trade and light demand in Nebraska, where a few live sales traded at $122-$123, compared to $123-$125 last week.

Cattle futures, especially Feeder Cattle, gained Wednesday. It was tough to pinpoint any particular reason. Perhaps some of the support came from early positioning ahead of the Cattle on Feed and semiannual Cattle reports due out Friday.

Feeder Cattle futures closed an average of $1.12 higher. 

Live Cattle futures closed an average of 48¢ higher.

Choice boxed beef cutout value was 36¢ higher Wednesday afternoon at $265.24/cwt. Select was 19¢ higher at $248.77/cwt.

Corn futures closed mostly fractionally higher to 2¢ higher.

Soybean futures closed mixed, down 1¢ to 4¢ in the front two contracts, then mostly 2¢ to 6¢ higher through Sep ’22 and then mostly fractionally higher to 7¢ lower.

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Major financial indices closed higher driven by positive corporate earnings reports.

The Dow Jones Industrial Average closed 286 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 133 points.

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Domestic beef demand continued higher year over year in May, according to the recently updated monthly Domestic Meat Demand Indices provided by Glynn Tonsor, agricultural economist at Kansas State University.

Specifically, the Choice Retail Beef Demand Index was 1.96% more than the previous year and the All-fresh Retail Beef Demand Index was 4.43% more.

Keep in mind, that’s amid continued strength in retail prices.

“The June all fresh beef price was $7.11/lb., down 1.2% from last year but the third highest level only behind record prices of June ($7.56) and May ($7.59) set last year during the pandemic,” say analysts with the Livestock Marketing Information Center (LMIC). “The Choice sirloin steak, beef for stew, and all uncooked beef steaks each set all-time high prices in June. Choice sirloin steak was $10.78/lb. rising 3.4% over last year, which was the prior record price at $10.42. Beef for stew and all uncooked beef steaks were $6.80 and $9.75/lb., respectively, beating the prior record prices set exactly one year ago.”

On the other end of the scale, ground beef prices decline 8.0% year over year in June to $4.36/lb., according to LMIC. Chuck roast and round roast both fell 7.4% and 5.1%, to $6.64 and $6.21/lb., respectively.

“Many of the retail beef price data for June last year were record prices, which led to some of the reported prices posting year-over-year declines,” LMIC analysts explain, in the latest Livestock Monitor.

By | July 21st, 2021|Daily Market Highlights|

Cattle Current Daily—July 21, 2021

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

Cattle futures closed lower amid light trade Tuesday, led by Feeder Cattle, which was pressured by Corn futures once again.

Feeder Cattle futures closed an average of $1.25 lower through the front five contracts, then down 18¢ to 30¢ at the back. 

Live Cattle futures closed an average of 47¢ lower, except for 73¢ higher in the back contract.

Choice boxed beef cutout value was $1.61 lower Tuesday afternoon at $264.88/cwt. Select was 91¢ lower at $248.58/cwt. Also of note, steer byproduct value spiked 80¢ to $13.93/cwt.

Grain futures bounced higher Tuesday with hotter, drier weather forecast in the Corn Belt and wheat challenges in the West.

Corn futures closed 12¢ to 16¢ higher through Jly ‘22, and then mostly 2¢ to 6¢ higher.

Soybean futures closed 10¢ to 15¢ higher through Sep ‘22, and then 8¢ to 9¢ higher.

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Major U.S. financial indices recovered a majority portion of what was lost in the previous day’s steep selloff as investors seemed content to bet on the dip.

The Dow Jones Industrial Average closed 550 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 224 points.

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“Across day-parts, the motivations for visiting restaurants are evolving, necessitating a refocus on how restaurant operators target consumers,” says David Portalatin, food industry advisor for the NPD Group (NPD). “Quality, value, and innovation will always be relevant to the consumer, but we also need to recognize that in many ways the world has fundamentally changed.”

Depending on new consumer rhythms of home, school, and work-life, recovery of each day-part — morning meal, lunch, dinner, and P.M. Snack — will be key to the restaurant industry’s recovery.

For instance, online or physical visits for the morning meal (breakfast and morning snack periods) were 5% less in May than the same time last year and 11% less than two years earlier. Since morning meal visits are habitual, recovery for this day-part will depend on consumers returning to workplaces and schools, according to NPD.

Lunch traffic was 4% less year over year in May and 10% less than two years ago, so recovery relies on more employees returning to workplaces, as well as more midday activities such as shopping.

Visits during the dinner day-part were 5% less than a year earlier and 12% less than two years ago. According to NPD, restaurant’s ability, particularly full service restaurants, to operate at total capacity will aid in recovery of this day-part, as will consumer comfort with dining in, and more business and recreational travel.

On the other hand, P.M. Snack visits in May were 8% more than last year and 3% more than two years ago as more flexible work schedules blur day-parts. Operators need to innovate their food and beverage offerings to grow traffic in this day-part, say the NPD folks.

Overall, total restaurant visits were 23% percent more year over year in May but were 6% less than two years earlier.

By | July 20th, 2021|Daily Market Highlights|

Cattle Current Daily—July 20, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in the western Corn Belt through Monday afternoon. Elsewhere, it was at a standstill, according to the Agricultural Marketing Service.

Last week, live trade was generally steady: $120/cwt. in the Southern Plains; $123-$125 in Nebraska; $125 in the western Corn Belt. Dressed trade was steady in Nebraska at $196-$202 and steady to $5 lower in the western Corn Belt at $196-$197.

Cattle futures faded early pressure from outside markets to close mostly higher.

Feeder Cattle futures closed an average of 52¢ higher, except for 5¢ lower in Apr. 

Live Cattle futures closed narrowly mixed, from and average of 46¢ lower to an average of 16¢ higher.

Choice boxed beef cutout value was $1.45 lower Monday afternoon at $266.49/cwt. Select was $2.30 lower at $249.49/cwt.

Grain futures closed mixed Monday with traders eyeing sharply lower outside markets and weather.

Corn futures closed narrowly mixed, mostly 1¢ lower to fractionally higher.

Soybean futures closed 14¢ to 26¢ lower through Sep. ’22 and then mostly 9¢ lower.

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Equity markets tumbled Monday with investors fretting the potential economic slowdown from resurgent COVID-19 cases among the unvaccinated.

The Dow Jones Industrial Average closed 725 points lower. The S&P 500 closed 68 points lower. The NASDAQ was down 152 points.

CME WTI Crude Oil futures closed $4.77 to $5.39 lower through the front six contracts.

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“High feed prices mostly impact how cattle are produced. In an environment of high feed prices, the industry incentives are to make cattle bigger before feedlot placement and to slow down the rate of cattle production somewhat. For cow-calf and stocker producers, this means more opportunities for retained stockers and stocker production to heavier weights in response to those market signals,” says Derrell Peel, Extension livestock marketing specialist, in his weekly market comments.

More specifically, Peel explains feeder cattle markets respond to increased feed costs by reducing the price premium of lightweight feeders.

“This represents a reduction in the price rollback or price slide for feeder cattle as weight increases,” Peel says. “The result is to increase the value of gain for stocker production and thereby encourage cattle to achieve more weight prior to placement in the feedlot. More emphasis on stocker production also slows down the movement of cattle into the feedlot and reduces feed demand by spreading out feeder cattle over more time.”

Another way of looking at it, Peel says is that the price of lightweight feeder cattle would be significantly higher relative to heavy feeders with lower feed costs and the market line would be steeper and would be close to the green line.

By | July 19th, 2021|Daily Market Highlights|

Cattle Current Daily—July 19, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light to moderate demand with too few transactions to trend.

For the week, live trade was generally steady in the Southern Plains at $120/cwt. and at $123 in Nebraska. It was unevenly steady in the western Corn Belt at $125.00-$125.50. There was no established dressed trade.

Choice boxed beef cutout value was $1.93 lower Friday afternoon at $267.94/cwt. Select was 69¢ lower at $251.79/cwt.

Total estimated cattle slaughter last week was 653,000 head, which was 78,000 head more than the previous holiday-shortened week.

Year-to-date estimated total cattle slaughter of 17.94 million head is 802,000 head more (+4.68%) than the same period last year.

Year-to-date estimated total beef production of 14.85 billion lbs. is 706.5 million lbs. more (+4.99%) than last year.

Cattle futures lost some ground Friday amid generally steady cash prices, lower outside markets and stronger Wheat futures.

That was despite front-month Lean Hog futures surging higher in response to news that African Swine Fever (ASF) was confirmed in Germany’s domestic swine population for the first time, by the National Reference Laboratory for African Swine Fever at the nation’s Friedrich-Loeffler Institute (FLI). The disease was confirmed in one sow at an organic farm and two pigs at a smallholdings farm, in districts near the border between Germany and Poland. The disease was confirmed in a wild boar in the same region last September.

Feeder Cattle futures closed an average of $1.14 lower (72¢ to $1.75 lower).

Live Cattle futures closed an average of 68¢ lower (12¢ to 95¢ lower).

Grain futures closed mixed Friday.

Corn futures closed 3¢ to 8¢ lower through new-crop contracts and then fractionally higher to 3¢ higher.

Soybean futures closed 7¢ to 11¢ higher through Aug. ’22 and then mostly 2¢ to 3¢ higher.

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Even though U.S. retail and food service sales increased 0.6% month to month in June — more than analysts expected — according to the U.S. Census Bureau, major U.S. financial indices faltered Friday, amid inflation worries and some likely profit taking.

The Dow Jones Industrial Average closed 299 points lower. The S&P 500 closed 32 points lower. The NASDAQ was down 115 points. 

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USDA boosted expected average feeder steer prices by $5/cwt. for upcoming quarter, based on current price strength.

Specifically, in the latest Livestock, Dairy and Poultry Outlook, USDA projects the average price of feeder steers (750-800 lbs., Oklahoma City) at $146/cwt. in the third quarter and $148 in the fourth quarter for an annual average of $142.13. Next year, prices are forecast to be $144 in the first quarter and $142 in the second quarter with an annual average price of $146.50 in 2022.

Earlier in the week, analysts with USDA’s Economic Research Service (ERS) raised expectations for fed steer prices, too. In the July World Agricultural Supply and Demand Estimates, ERS forecast the average five-area fed steer price at $120/cwt. in the third quarter, $123 in the fourth quarter and $127 in the first quarter of next year.

“Based on Agricultural Marketing Service data — actual and estimated daily cattle slaughter — the percentage of heifer slaughter compared to that of steers for June 2021 was estimated 2.5% higher than a year ago. The estimated percentage of federally inspected cow slaughter to total slaughter for June 2021 was 0.5% higher than June 2020,” say ERS analysts.

Based on the U.S. Drought Monitor, ERS estimates approximately 34% of the nation’s cattle are in regions experiencing some level of drought.

“Pasture and range in much of the western and northern United States continue to be in very poor to poor conditions, which is likely affecting cow slaughter in regions where forage availability has become critical,” say ERS analysts. “However, to the extent that the increase in aggregate slaughter numbers is driven by higher expected cow numbers and that heifers have recently been a higher proportion of steer and heifer slaughter, average carcass weights are expected to be lower.”

By | July 18th, 2021|Daily Market Highlights|

Cattle Current Daily—July 16, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Thursday afternoon. Elsewhere, it was limited on light to moderate demand with too few transactions to trend.

On Wednesday, live sales in Nebraska were steady with the previous week at $123/cwt. and unevenly steady in the western Corn Belt at $125.00-$125.50. Last week, dressed trade in both regions was at $196-$202.

A day earlier, live trade in the Southern Plains was generally steady at $120.

Cattle futures closed narrowly mixed Thursday with pressure from sluggish cash fed cattle sales and continued erosion of wholesale beef values. Weekly U.S. beef export sales also took a breather.

Net U.S. beef export sales for the week ending July 8 were 9,300 metric tons (2021), which was 61% less than the previous week and 44% less than the prior four-week average, according to the Weekly U.S. Export Sales report. Increases were primarily for Japan, Mexico, China, Taiwan), and South Korea. 

Feeder Cattle futures closed mixed, from 25¢ lower to 43¢ higher.

Live Cattle futures closed mixed, from an average of 17¢ lower to an average of 9¢ higher, except for unchanged in the back contract.

Choice boxed beef cutout value was $3.01 lower Thursday afternoon at $269.87/cwt. Select was $1.27 lower at $252.48/cwt.

The average dressed steer weight the week ending July 3 was 884 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week but 12 lbs. lighter than the same week a year earlier. The average dressed heifer weight of 811 lbs. was 1 lbs. lighter than the previous week and 15 lbs. lighter than the previous year.

Corn futures closed 2¢ to 4¢ lower through Jul ’22 and then 2¢ to 3¢ higher.

Soybean futures closed 3¢ to 6¢ lower across the board.

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Major U.S. financial indices closed mixed Thursday, despite positive quarterly corporate earnings reports and jobless progress.

Initial unemployment insurance claims the week ending July 10 were 360,000. That was 26,000 fewer than the previous week and the fewest since March 14 last year.

The Dow Jones Industrial Average closed 54 points higher. The S&P 500 closed 14 points lower. The NASDAQ was down 102 points.

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“With record U.S. beef production forecast this year, U.S. beef exports are forecast to strengthen their position in the global marketplace,” according to a special report from USDA’s Foreign Agricultural Service (FAS). “Meanwhile, lower production in Australia and tighter exportable supplies from Argentina are expected to limit the global availability of beef. For 2021, U.S. beef exports are forecast to reach a record 1.5 million metric tons (mt) carcass weight equivalent (cwe), up 16% compared to last year and 8% above the 2018 high.”

Through the first five months this year, exports to South Korea accounted for 25% of all U.S. beef export in terms of both volume and value, according to the report.

FAS analysts note that exports to China continue to grow, although they still represent a sliver of that nation’s imports.

“U.S. beef has benefited from the Economic and Trade Agreement between the United States and the People’s Republic of China (also known as the Phase One Agreement), which expanded market access for U.S. beef by eliminating several long-standing non-tariff barriers,” according to the report. Through May 2021, China ranks as the third-largest U.S. market by both volume and value, surpassing both Mexico and Canada which have historically been ranked as top U.S. markets.”

By | July 15th, 2021|Daily Market Highlights|

Cattle Current Daily—July 15, 2021

Negotiated cash fed cattle trade in Nebraska was slow on light demand through Wednesday afternoon, according to the Agricultural Marketing Service. Compared to the last reported market on Monday, live sales traded $2 lower at $123/cwt. Last week, dressed sales were at $196-$202/cwt.

In the Southern Plains and Western Corn Belt, trade was mostly inactive on light demand. On Tuesday in the Southern Plains, live sales traded mostly at $120/cwt. In the Western Corn Belt, last week live sales traded from $124-$126/cwt. and dressed at $196-$202/cwt.

Cattle futures tried to extend gains early Wednesday but apparently ran out of technical steam.

Feeder Cattle were also pressured by strong gains in Corn futures.

Feeder Cattle futures closed an average of $2 lower (from $1.55 to $2.42).

Live Cattle futures closed an average of 41¢ lower, except for 12¢ higher in the back contract.

Choice boxed beef cutout value was 46¢ lower Wednesday afternoon at $272.88/cwt. Select was $2.99 lower at $253.75/cwt.

Front-month grain futures continued higher with a hotter, drier forecast and reports of storm-damaged beans in some areas of the Corn Belt.

Corn futures closed 15¢ to 18¢ higher through new-crop contracts and then mostly unchanged to fractionally higher.

Soybean futures closed 29¢ to 38¢ higher through the front six contracts and then mostly 20¢ to 25¢ higher.

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Major U.S. financial indices closed narrowly mixed on Wednesday.

Support included testimony from Federal Reserve Chair Jerome Powell to the U.S. House Committee on Financial Services. He stressed the Fed remained committed to maintaining the federal funds rate near zero and the current level of asset purchases until the Fed’s long-term goal of inflation exceeding 2% for some time.

“Inflation has increased notably and will likely remain elevated in coming months before moderating. Inflation is being temporarily boosted by base effects, as the sharp pandemic-related price declines from last spring drop out of the 12-month calculation,” Powell explained. “In addition, strong demand in sectors where production bottlenecks or other supply constraints have limited production has led to especially rapid price increases for some goods and services, which should partially reverse as the effects of the bottlenecks unwind. Prices for services that were hard hit by the pandemic have also jumped in recent months as demand for these services has surged with the reopening of the economy.”

The Dow Jones Industrial Average closed 44 points higher. The S&P 500 closed 5 points higher. The NASDAQ closed 33 points lower.

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Despite increased beef cow slaughter this year, less dairy cow slaughter and beef imports are helping maintain cull cow prices at higher levels, according to James Mitchell, Extension livestock economist with the University of Arkansas.

“Southern Plains slaughter cow prices have averaged 8.1% above 2020 and 14.7% above 2019 prices,” Mitchell says, in the most recent issue of In the Cattle Markets. “In 2021, dairy cow slaughter has averaged 0.9% below 2020 slaughter and 3.7% lower than 2019 slaughter. USDA forecasts beef imports to be down 10% this year.”

“Cull beef cows contribute to ground beef production as a source of 90% lean trimmings, blended with 50% lean trimmings to make the majority of our ground beef and hamburger,” Mitchell explains. “The other two sources of lean trimmings are dairy cows and lean beef imports. For context, in 2019 and 2020, cull beef and dairy cows represented 28.4% and 27.6% of total U.S. beef trim supplies, respectively. Fed cattle trimmings are the main source of 50% lean trim. In 2020, fed trim accounted for 41.3% of total U.S. supplies.”

Lean trim and ground beef prices are also underpinning cull cow prices, Mitchell says.

“Fresh 90% lean trimmings have averaged 4% below 2020 prices but 11% higher than 2019 prices, Mitchell explains. “BLS data through May 2021 shows that ground beef prices have averaged $4.04/lb.  or 0.5% higher than 2020. Lean ground beef prices have averaged 1.6% and 9.9% above 2020 and 2019 prices, respectively. The only way to have higher prices with larger supplies of cull cows and lean trimmings is with strong ground beef demand.”

By | July 14th, 2021|Daily Market Highlights|

Cattle Current Daily—July 14, 2021

Negotiated cash fed cattle trade was limited on light demand in the Texas Panhandle through Tuesday afternoon, according to the Agricultural Marketing Service. Compared to last week, early live sales traded steady at $120/cwt. In Kansas, trading was slow on moderate demand. Compared to last week, early live sales traded steady to $1 higher, mostly at $120/cwt.

In Nebraska and the Western Corn Belt, cash trading was mostly inactive on light demand. In Nebraska on Monday, live sales traded at $125/cwt.; dressed sales last week traded from $196-$202/cwt. In the Western Corn Belt, last week live sales traded from $124-$126/cwt. and dressed at $196-$202/cwt.

Whether it was hedging for inflation (see below) or simply considering the fundamentals and optimistic prices ahead, Live Cattle futures closed higher Tuesday, dragging Feeder Cattle along.

Live Cattle futures closed an average of $1 higher (45¢ to $1.92 higher).

Feeder Cattle futures closed an average of 82¢ higher (62¢ to $1.17 higher).

Choice boxed beef cutout value was $1.66 lower Tuesday afternoon at $273.34/cwt. Select was $2.03 lower at $256.74/cwt.

Net U.S. beef export sales were 23,700 metric tons (for 2021) the week ending July 1, according to USDA’s Weekly Export Sales report. That was 96% more than the previous week and 64% more than the prior four-week average.

Increases were primarily for South Korea, Japan, China, Mexico, and Canada. 

Grain futures edged higher with follow-through support from the previous day’s, WASDE.

Corn futures closed 7¢ to 8¢ higher through Jly ‘22, and then mostly 3 higher

Soybean futures closed mostly 1¢ to 3¢ higher.

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Major U.S. financial indices closed lower on Tuesday after reports the consumer price index rose 0.9% last month and 5.4% compared to June 2020 – higher than expected and the biggest jump since 2008.

The index for all items less food and energy rose 0.9% in June after increasing 0.7% percent in May, according to the U.S. Bureau of Labor Statistics.

The food index increased 0.8% in June. The beef index rose 4.5% in June, its steepest one-month increase since June of last year.

The Dow Jones Industrial Average closed 107 points lower. The  S&P 500 closed 15 points lower. The NASDAQ was down 56 points.

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Despite elevated feed costs, prospects for higher fed cattle prices are pushing projected feedlot returns higher, according to the latest monthly Focus on Feedlots Survey (FFS) from Kansas State University.

Currently, net returns projected for closeouts in June are -$11.22/head for steers and -$47.34/head for heifers. Estimated returns in May were +$3.71 for steers and -$39.91 for heifers.

After projected returns for steers of -$19.30/head in July, the FFS forecasts positive returns for the remainder of the year ranging from $3.34 (Sept.) to +$76.33 (Dec.). Feedlot cost of gain for September through December ranges from $126/cwt. (Sept.) to $137.08 (Dec.).

Projected returns follow a similar path for fed heifers.

Keep in mind that estimates exclude any price risk management.

By | July 13th, 2021|Daily Market Highlights|

Cattle Current Daily—July 13, 2021

Negotiated cash fed cattle trade was slow on light demand in Nebraska through Monday afternoon, according to the Agricultural Marketing Service. Early live sales traded steady to $2 higher than last week at $125/cwt. Dressed sales there last week were at $196-$202/cwt.

Trading in the Western Corn Belt was mostly inactive on very light demand. Last week, live sales traded from $124-$126/cwt. and dressed sales were at $196-$202/cwt.

In all other major trading regions, trading was at a standstill. Last week in the Texas Panhandle, live sales traded at $120/cwt. In Kansas, live sales were at $119-$120/cwt.

Live Cattle futures gained Monday, supported by higher prices forecast in the latest World Agricultural Supply and Demand Estimates (see below).

Live Cattle futures closed an average of 52¢ higher.

Feeder Cattle futures faltered with another session of higher Corn futures.

Feeder Cattle futures closed an average of 70¢ lower.

Choice boxed beef cutout value was $3.59 lower Monday afternoon at $275.00/cwt. Select was $1.36 higher at $258.77.

Grain futures closed higher, supported by the WASDE.

Corn futures closed 15¢ to 16¢ higher through new-crop contracts, and then mostly 11¢ to 12¢ higher.

Soybean futures closed mostly 18¢ to 20¢ higher.

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Major U.S. financial indices closed higher on Monday, reaching all-time highs, with second-quarter earnings reports due this week.

The Dow Jones Industrial Average closed 126 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 31 points.

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USDA’s Economic Research Service (ERS) boosted expected fed cattle prices in the latest World Agricultural Supply and Demand Estimates (WASDE).

Specifically, based on recent price strength, ERS forecast the annual average five-area direct fed steer price $2.20 higher than the previous month at $119.20/cwt. Average prices are projected at $120 in the third quarter, $123 in the fourth quarter and $127 in the first quarter of next year.

Beef production for this year was estimated to be the same as the previous month at 27.91 billion lbs., which would be 731 million lbs. more (+2.69%) than last year. Projected beef production next year of 27.33 billion lbs. would be 580 million lbs. less (-2.08%) than this year.

Total red meat and poultry production is forecast to be 107.14 billion lbs. this year, which would be 580 million lbs. more (+0.54%) than last year. Next year’s total red meat and poultry production is forecast at 107.19 billion lbs.

Corn

Corn production for 2021-22 was projected 175 million bu. higher than the previous month based on increased planted and harvested area. National average corn yield was unchanged at 179.5 bu./acre.

With supply rising more than use, ending stocks were projected 75 million bu. more than the previous month.

The season-average farm price received by producers was lowered 10¢ to $5.60/bu. 

Soybeans

Soybean production was projected at 4.4 billion bu., the same as last month with harvested area of 86.7 million acres unchanged, as well as forecast yield of 50.8 bu./acre. With offsetting changes in supply and use, ending stocks were unchanged at 135 million bu.

The U.S. season-average soybean price for 2020-21 was forecast at $11.05/bu., down 20¢ from the previous month based on early-season sales at lower prices. The soybean meal price was projected at $395.00/short ton, down $10 from last month. The soybean oil price was forecast at 57.5¢/lb., down 1.5¢.

Wheat

All wheat production was lowered 152 million bu. to 1,746 million. The forecast all wheat yield of 45.8 bu./acre was 4.9 bu. less than last month. Beginning stocks were reduced on the latest NASS Grain Stocks report.

Projected exports and feed and residual usage were lowered to 875 and 170 million bu., respectively, on the reduction in durum and other spring wheat supplies. These would be the smallest U.S. wheat exports since the 2015-16 marketing year. Projected 2021-22 ending stocks were reduced 105 million bu. to 665 million, the lowest since 2013-14.

The projected 2021-22 season-average farm price was raised 10¢/bu. to $6.60.

By | July 12th, 2021|Daily Market Highlights|

Cattle Current Daily—July 12, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle though Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was limited on light demand.

For the week, live prices were generally steady to $2 lower in the Southern Plains at $119-$120/cwt. and steady to either side of steady at $123-$126 in the north. Dressed trade was steady in the western Corn Belt at $196-$202 but steady to $4 higher in Nebraska at  $198-$202.

The five-area direct average steer price through Thursday was $122.01/cwt. on a live basis, which was $1.81 less than the same period a week earlier. The average steer price in the beef was 34¢ higher at $198.48.

Feeder Cattle futures faded pressure through much of the session to close higher Friday, perhaps supported by some positioning ahead of Monday’s monthly World Agricultural Supply and Demand Estimates.

Feeder Cattle futures closed an average of $1.68 higher ($1.30 to $2.12 higher).

Live Cattle futures managed to edge higher but remained under pressure from declining wholesale beef values. Monday’s markets could come under pressure from the Executive order signed by President Biden Friday, aimed at a number of broad issues, including concentration and competition in several industries, including agriculture (see below).

Live Cattle futures closed an average of 51¢ higher, except for 5¢ lower in spot Aug.

Choice boxed beef cutout value was $3.38 lower Friday afternoon at $278.59/cwt. Select was $2.65 lower at $257.41

Corn futures closed 6¢ to 8¢ lower through new-crop contracts, and then fractionally higher to 3¢ lower.

Soybean futures closed mostly 10¢ to 14¢ higher.

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Major U.S. financial indices closed higher Friday amid general economic optimism.

The Dow Jones Industrial Average closed 448 points higher. The S&P 500 closed 48 points higher. The NASDAQ up up 142 points. 

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Buckle Up.

President Biden signed an Executive order and USDA announced intentions Friday that could have plenty to say about producer marketing opportunities in decades to come.

“The COVID-19 pandemic led to massive disruption for growers, food workers, and consumers alike. It exposed a food system that was rigid, consolidated, and fragile. Meanwhile, those growing, processing and preparing our food are earning less each year in a system that rewards size over all else,” said Agriculture Secretary Tom Vilsack. “To shift the balance of power back to the people, USDA will invest in building more, better, and fairer markets for producers and consumers alike. The investments USDA will make in expanding meat and poultry capacity, along with restoration of the Packers and Stockyards Act, will begin to level the playing field for farmers and ranchers. This is a once in a generation opportunity to transform the food system so it is more resilient to shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds. I am confident USDA’s investments in expanded capacity will spur millions more in leveraged funding from the private sector and state and local partners as our efforts gain traction across the country.”

Specifically, USDA intends to invest $500 million in American Rescue Plan funds to expand meat and poultry processing capacity, “…so that farmers, ranchers, and consumers have more choices in the marketplace.” USDA also announced more than $150 million for existing small and very small processing facilities.

“Concentration in food processing has contributed to bottlenecks in America’s food supply chain, too. Just a few meatpackers, with a few large processing facilities, process most of the livestock that farmers and ranchers raise into the meat that we buy,” according to the announcement. “For example, just four large meat-packing companies control over 80% of the beef market alone. One of the lessons from the COVID-19 pandemic is that this system is too rigid and too fragile. When COVID slowed or shuttered meat processing, many farmers had no place to go. Farmers were forced to depopulate their animals, while grocery store shelves went bare and demand for food assistance spiked. These vulnerabilities are not new. And, given current concerns about climate and cybersecurity, these risks are likely to grow even more sharply in the future.”

For the record, I’m unaware of any cattle depopulation due to the processing backlog, never mind other hyperbole in the USDA statements.

“…To facilitate effective enforcement of the Act (Packer and Stockyards), USDA will be conducting three rulemakings,” according to the announcement. “First, the rulemakings will clarify the conduct that USDA considers a violation of the Packers and Stockyards Act, including conduct that is unfair, deceptive, or unjustly discriminatory against farmers and growers. Second, they will address oppressive practices in chicken processing. Third, the rulemakings will reinforce the longstanding USDA position that it is not necessary to demonstrate harm or likely harm to competition in order to establish a violation of the Act.”

Lots to ponder in all of that, and to monitor closely.

By | July 11th, 2021|Daily Market Highlights|

Cattle Current Daily—July 9, 2021

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service.

Elsewhere, trade was slow with moderate demand.

For the week, live prices are generally steady to $2 lower in the Southern Plains at $119-$120/cwt. and steady to either side of steady at $123-$125 in the north. Dressed trade is steady in the western Corn Belt at $196-$202 but steady to $4 higher in Nebraska at  $198-$202.

Cattle futures closed lower Thursday, pressured by declining wholesale beef prices and softer cash prices.

Feeder Cattle futures closed an average of $1.28 lower.

Live Cattle futures closed an average of $1.24 lower.

Choice was boxed beef cutout value was $2.93 lower Thursday afternoon at $281.97/cwt. Select was $2.02 lower at $260.06

Favorable weather continued to pressure Corn and Soybean futures Thursday.

Corn futures closed down between 6¢ and 14¢ lower through the front six contracts.

Soybean futures closed between 1¢ and 7¢ lower through the front six contracts, except for spot July, up 3¢.

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Major U.S. financial indices fell on Thursday on fears prompted by the continued spread of the Delta variant of Covid-19. Reports suggest traders have gone from worrying that economic growth would fuel inflation to fears the virus will cause further damage economically.

The Dow Jones Industrial Average closed 260 points lower. The S&P 500 37 points lower. The NASDAQ was down 105 points.

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“Domestic beef demand looks to continue strong in the second half of the year and beef exports are expected to increase as well,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Strong beef demand and year-over-year decreases in beef production in the third and fourth quarters is expected to continue supporting wholesale beef values for the remainder of the year.”

The seasonal increase in boxed beef cutout prices was stronger than usual this year, according to Peel. He explains weekly average Choice boxed beef prices increased 63.8% from early January to early June. 

“Among the four major beef primals, values were higher across the board, led by the loin (up 93.0%), rib (up 60.0%), round (up 43.8%) and chuck (up 39.0%),” Peel says. “The smaller primals were also up strongly with increases for brisket (up 99.3%), short plate (up 107.5%) and flank (up 85.7%).”

According to Peel, wholesale price strength stemmed from a number of factors, including increased seasonal beef demand, strong export demand and food service inventory rebuilding, all underpinned by generally strong domestic protein demand.

Boxed beef prices declined since the early June peak but remain up since the beginning of the year. 

By | July 9th, 2021|Daily Market Highlights|

Cattle Current Daily—July 8, 2021

Negotiated cash fed cattle trade was moderate with moderate demand in the Texas Panhandle through Wednesday afternoon, according to the Agricultural Marketing Service. In Kansas, trading was slow on moderate demand. Live sales in both regions were steady to $2 lower at $120/cwt.

Trading in Nebraska and the Western Corn Belt was limited on light demand.

In Nebraska, a few dressed sales traded at $198-$202/cwt. Prices last week were $198 in the beef and $125.00-$126.50 on a live basis.

In the Western Corn Belt, a few live sales traded at $125/cwt. and a few dressed from $200-$202/cwt. Last week, prices were $124-$126 and $197-$202, respectively.

Feeder Cattle futures closed an average of $1.71 lower Wednesday amid likely profit taking from solid gains in the previous session.

Live Cattle futures closed an average of $1.15 lower with the steady to lower cash market and continued decline in wholesale beef values.

Choice boxed beef cutout value was $1.78 lower Wednesday afternoon at $284.90/cwt. Select was $1.23 lower at $262.08

Corn futures continued under pressure from the wetter, cooler forecast: 3¢ and 9¢ lower through the front six contracts.

Soybean futures bounced back from the previous day’s steep decline, helped along by eroding crop conditions. They closed 20¢ and 22¢ higher through the front six contracts.

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Major U.S. financial indices rose moderately on Wednesday with the S&P 500 closing at another record high.

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 1 point.

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“Over the last three months, beef cow slaughter totaled 818,000 head, the most since the 837,000 during the same period in 2010,” says David Anderson, livestock economist with Texas A&M AgriLife Extension Service. “Total cow slaughter over the same period is the largest since 2013. At that time, the industry was reducing the number of beef cows due mostly to low prices and then the drought in Texas and the Southwest.”

More specifically, in the July 5 issue of In the Cattle Markets, Anderson explains beef cow slaughter for the previous three months was the most since 2011 in the region that includes Texas, New Mexico and Oklahoma. It was the most since 2013 for the region including Arizona and Nevada.

Even so, Anderson points out cull cow prices are higher year over year.

“Cull cow prices usually increase from the beginning of the year until mid-year,” Anderson explains. “Southern Plains 85-90% lean cows increased at a normal seasonal rate to about $65/cwt. at the end of June, about $8 higher than last year. National cutter cow prices hit $67 (end of June), also about $8 above a year ago.”

By | July 7th, 2021|Daily Market Highlights|

Cattle Current Daily—July 7, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. It was at a standstill in the Southern Plains.

Last week, live prices were at $120-$122/cwt. in the Southern Plains and at $124-$126 in the North. Dressed prices were at $197-$198.

Feeder Cattle futures closed an average of $3.03 higher across the board Tuesday, taking advantage of the wide berth opened by Corn futures.

That helped support Live Cattle, despite the decline in wholesale beef prices, in tandem with climbing retail prices that could challenge demand.

Live Cattle futures closed narrowly mixed, from 40¢ higher in spot Aug to 23¢ lower in Dec with the back two contracts unchanged.

Choice boxed beef cutout value was $1.24 higher Tuesday afternoon at $286.68/cwt. Select was $1.10 lower at $263.31

Corn and Soybean futures plunged Tuesday, pressured by a wetter, cooler forecast.

Corn futures closed down between 38¢ and 41¢ lower through the front six contracts.

Soybean futures closed down between 86¢ and 95¢ lower through the front six contracts.

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Major U.S. financial indices mostly fell on Tuesday, ending seven consecutive record-high closings. However, NASDAQ closed slightly higher thanks to gains from Amazon.

The Dow Jones Industrial Average closed 209 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 24 points.

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U.S. beef exports shattered volume and value records in May, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Pork exports also set a value record.

U.S. beef export volume soared to a record 133,440 metric tons (mt) for the month, up 68% from a year ago, while value increased 88% to $904.3 million. May marked the third consecutive monthly value record for beef exports, which had never exceeded $800 million before March 2021. Record-large exports to South Korea, continued growth in China and a strong rebound in Japan and Taiwan were all part of the strong month.

“The outstanding May performance is especially gratifying when you consider where red meat exports stood a year ago,” says USMEF President and CEO Dan Halstrom. “The industry faced unprecedented, COVID-related obstacles at all levels of the supply chain, and a very uncertain international business climate. These challenges are still not behind us, but international demand has been very resilient and the U.S. industry has shown a tremendous commitment to serving its global customers.”

For January through May, exports reached 587,838 mt, up 15% from a year ago, while value increased 22% to $3.84 billion.

Halstrom cautions U.S. labor availability remains a major concern and limitation for the industry, and exporters continue to face significant obstacles when shipping product overseas. Due to the ongoing, fluid impact of COVID-19, foodservice restrictions also continue to affect several key markets where dine-in service is either suspended or subject to capacity limits and shorter hours, and tourism has not yet returned in many countries.

“USMEF remains optimistic that international demand will remain strong in the second half of 2021, but the road ahead is not an easy one,” Halstrom explains. “The U.S. industry must continue to be innovative and aggressive in defending existing market share, while also expanding our customer base by responding to COVID-driven changes in the marketplace and shifts in consumer trends and preferences.”

By | July 6th, 2021|Daily Market Highlights|

Cattle Current Daily—July 5-6, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the Western Corn Belt through Friday afternoon, according to the Agricultural Marketing Service. It was at a standstill in the Southern Plains.

For the week, live prices were steady to $2 lower in the Southern Plains at $120-$122/cwt. and unevenly steady in the North at $124-$126. Dressed prices were steady to $1 higher at $197-$198.

Stagnant cash trade and lower wholesale beef prices pressured Live Cattle futures Friday.

Live Cattle futures closed mostly lower, from 2¢ lower toward the back to $1.57 lower in spot Aug, except for unchanged to 2¢ higher in three contracts.

Softer Corn futures helped Feeder Cattle futures close an average of 70¢ higher, except for 50¢ lower at the back.

Choice boxed beef cutout value was $2.21 lower Friday afternoon at $285.44/cwt. Select was $2.52 lower at $264.41.

Estimated total cattle slaughter last week was 623,000 head, according to USDA, which was 38,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 16.71 million head is 865,000 head more (+5.5%) than last year. Year-to-date estimated beef production of 13.85 billion lbs. is 784.7 million lbs. more (+6.0%).

Thin trade volume and positive weather pressured Corn and Soybean futures.

Corn futures closed 22¢ lower in spot Jly and then 8¢ and 9¢ lower in new crop contracts. Soybean futures closed mostly 2¢ to 5¢ higher.

For the week, though, Corn futures closed an average of 59¢ higher through the front six contracts, while Soybean futures closed an average of $1.27 higher through the front six contracts.

That had everything to do with USDA’s Acreage report issued on Wednesday. USDA estimated corn planted area for all purposes to be 1.87 million acres more than last year at 92.7 million acres, and soybean planted area 5% more at 87.6 million acres. That was significantly less than analysts expected for both crops.

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Major U.S. financial indices closed higher Friday, buoyed by the positive employment outlook. Total non-farm payroll employment increased 850,000 in June, according to the U.S. Bureau of Labor Statistics. The unemployment rate was little changed at 5.9%. Average hourly earnings for all employees on private non-farm payrolls increased 10¢ to $30.40.

The Dow Jones Industrial Average closed 153 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 117 points.

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Members of the Texas Cattle Feeders Association (TCFA) are proving their willingness and ability to increase cash trade on a voluntary basis. According to the most recent weekly TCFA newsletter, members are exceeding regional quarterly cash trade goals outlined by what’s termed the industry’s 75% plan, a voluntary framework adopted by the National Cattlemen’s Beef Association (NCBA).

“TCFA members have surpassed levels established in the NCBA plan. More specifically, our members averaged 13,681 head per week in Q2 2021; 10,893 head per week in Q1 2021 and 9,593 head per week in Q4 2020 compared to the TCFA goal of 9,750 head in the NCBA plan,” says TCFA Chairman, Scott Anderson. “By any measure, we have proven that an industry solution to increasing negotiated trade will work. We do not need a government mandate and all the unintended consequences that could result. Our members have clearly demonstrated their commitment to increasing negotiated trade and improving price discovery. We want the market to work and will continue to also focus on leverage and competition issues that are negatively impacting the market.”

By | July 5th, 2021|Daily Market Highlights|

Cattle Current Daily—July 2, 2021

Negotiated cash fed cattle trade was limited on light demand in all major feeding regions through Thursday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are steady to $2 lower in the Southern Plains at $120-$122/cwt. and unevenly steady in the North at $124-$126. Dressed prices are steady to $1 higher at $197-$198.

Cattle futures rallied back Thursday, following heavy pressure from grains in the previous session.

Live Cattle futures closed an average of $1.03 higher.

Feeder Cattle futures closed an average of $1.27 higher.

Choice boxed beef cutout value was $2.17 lower Thursday afternoon at $230.23/cwt. Select was $1.52 lower at $205.35.

The average dressed steer weight the week ending June 19 was 879 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 3 lbs. lighter than the previous week and 11 lbs. lighter than the same week last year. The average dressed heifer weight was 2 lbs. heavier week to week at 813 lbs., but 10 lbs. lighter than a year earlier.

Corn and Soybean futures finished Thursday a touch softer amid volatile trade, following the previous day’s limit-up and near limit-up moves in the front months.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed down between 1¢ and 3¢ lower through the front six contracts and then mostly 3¢ to 6¢ lower.

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Major U.S. financial indices closed higher Thursday on positive economic reports, including a new low in initial jobless claims since the pandemic started and news that U.S. manufacturing expanded.

For the week ending June 26, initial unemployment insurance claims tallied 364,000, which was 51,000 fewer than the previous week and the lowest level since March 14 last year.

The Dow Jones Industrial Average closed 131 points higher. The S&P closed 22 points higher. The NASDAQ was up 18 points. 

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“Currently, U.S. cattle inventories are cyclically high, but beef demand is also high both domestically and in our major export markets. The clearest solution to meeting this demand while fostering profitability throughout the supply chain is to expand beef processing capacity,” according to comments from the Texas Cattle Feeders Association (TCFA). These comments were submitted in response to the supply chain executive order (14017) issued by the Biden administration earlier this year. In part, the order seeks to develop initiatives that bolster cattle and beef supply chain resiliency.

“Meatpackers of all sizes face similar operational challenges, the most consistent and severe of which is labor recruitment and retention. The largest barrier to entry, however, is access to sufficient capital for construction,” according to the TCFA comments. “The industry average startup cost for a meat processing facility is roughly $100,000 per hook. This means that a 1,000-head-per-day plant would need to secure $100 million in financing just to build the infrastructure. As a further complication, traditional lending institutions are sometimes unable to provide adequate financing due to the capital requirements of meatpacking business models.”

Although expanding domestic beef processing capacity is a key mid-to-long term strategy to improve supply chain resiliency, TCFA also points out current infrastructure offers added opportunity.

“Most major meatpackers are not operating plants at 100% throughput capacity,” according to TCFA. “Unfortunately, due to the proprietary nature of firm-by-firm and plant-by-plant efficiency data, the exact number of hooks which are not being utilized is unknown. TCFA urges USDA to examine ways to support the industry in reaching 100% processing capacity utilization.”

By | July 1st, 2021|Daily Market Highlights|

Cattle Current Podcast—July 1, 2021

Negotiated cash fed cattle prices were unevenly steady through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were steady to $1 higher in Nebraska at $125-$126/cwt., but steady to $2 lower in Kansas at $120-$122 (compare to two weeks earlier). Dressed prices in Nebraska were $1 higher at $198.

Although too few to trend, there were some live sales in the western Corn Belt steady to $1 higher at $126 and some in the beef $1 higher at $198.

So far this week, live prices in the Texas Panhandle are steady to 75¢ lower than two weeks earlier at $121.25 to $122.00.

Feeder Cattle futures sagged lower Wednesday beneath the weight of surging Corn futures, while Live Cattle received support from outside markets.

Live Cattle futures closed an average of 63¢ higher, except for 5¢ lower in expiring Jun.

Feeder Cattle futures closed an average of $2.19 lower through the front four months, then an average of 73¢ lower.

Choice boxed beef cutout value was $1.05 lower Wednesday afternoon at $291.29/cwt. Select was $1.13 lower at $269.27

USDA’s Acreage and Grain Stocks reports (see below) fueled grain futures Wednesday. Along with month-end position squaring, the wetter forecast and the coming holiday, some expect extreme price volatility in the coming days.

Corn futures closed between 25¢ and 40¢ higher through the front six contracts. That included limit-up in the front four new-crop contracts.

Soybean futures closed between 73¢ and 90¢ higher through the front six contracts

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Major U.S. financial indices closed mixed on slow trading Wednesday.

The Dow Jones Industrial Average closed 210 points higher. The S&P 500 closed 6 points higher. The NASDAQ down 24 points.

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Grain futures surged Wednesday as the latest USDA reports underscored the necessity of yield-favorable weather. Planted acre projections were significantly less than analyst expectations ahead of the report. Estimated grain stocks were less than expected, too.

Acreage

USDA estimates corn planted area for all purposes this year at 92.7million acres, according to the Acreagreport released Wednesday. That would be 1.87 million acres more (+2%) than last year.

Soybean planted area for 2021 is estimated at 87.6 million acres, up 5% from last year.

All wheat planted area this year is projected to be 46.7 million acres, which would be 5% more than last year, but still the fourth lowest all wheat planted area since records began in 1919. The 2021 winter wheat planted area, projected at 33.7 million acres, would be 11% more than last year.

Estimated acres of all hay harvested this year is forecast at 51.5 million acres, which would be 701,000 fewer acres (-1.34%) than last year.

Grain Stocks

Corn stocks in all positions on June 1 were 18% less than a year earlier at 4.11 billion bu., according to USDA’s quarterly Grain Stocks report. Of the total stocks, 1.74 billion bu. are stored on farms, down 39% from a year earlier. Off-farm stocks, at 2.37 billion bu., are up 11% from a year ago.

Soybeans stored in all positions on June 1 totaled 767 million bu., down 44% from the same time last year. On-farm stocks totaled 220 million bu., down 65% from a year ago. Off-farm stocks, at 547 million bu., are down 27% from a year ago.

Old crop all wheat stored in all positions on June 1 totaled 844 million bu., down 18% from a year earlier. On-farm stocks are estimated at 142 million bu., down 38% from last year. Off-farm stocks, at 702 million bu., are down 12% percent from a year ago.

By | June 30th, 2021|Daily Market Highlights|

Cattle Current—June 30, 2021

Negotiated cash fed cattle trade was at a standstill in most regions through Tuesday afternoon, according to the Agricultural Marketing Service. In the Western Corn Belt, trading was mostly inactive on very light demand. Last week in the region, live sales traded from $125-$126/cwt. and dressed at $197/cwt.

The latest reported market in the Southern Plains was two weeks ago with live sales at $122/cwt.

On Monday in Nebraska, live sales traded at $126.50/cwt. and dressed sales at $197/cwt.

Cattle futures closed narrowly mixed Tuesday, able to fade some early pressure, but remained mired in uncertainty surrounding potential contract-end volatility (Live Cattle), limited cash trade last week, coupled with next week’s holiday and how Wednesday’s USDA Grain Stocks and Acreage reports will influence feed prices.

Live Cattle futures closed mixed with an average of 33¢ higher through the front three contracts then from 15¢ lower to 25¢ higher.

Feeder Cattle futures closed mixed, up an average of 64¢ higher in the front four contracts.

Choice boxed beef cutout value was $5.09 lower Tuesday afternoon at $292.34/cwt. Select was $3.56

Grain futures closed mainly narrowly mixed as traders awaited direction from the aforementioned USDA reports due out Wednesday.

Corn futures closed mostly 2¢ lower to 1¢ higher, except 19¢ higher in spot Jly.

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Major U.S. financial indices were little changed on Tuesday.

The Dow Jones Industrial Average closed 9 points higher. The S&P 500 closed a point higher and the NASDAQ was up 28 points.

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“Before trying to “fix” something it is prudent to look back and acknowledge the benefits that flow from the system as it exists,” says Mark Dopp, senior vice president of government affairs for the North American Meat Institute (Meat Institute). “In 2019, Americans spent an average of 9.5% of their disposable personal incomes on food—divided between food at home (4.9%) and food away from home (4.6%).

“Between 1960 and 1998, the share of disposable personal income spent on total food by Americans, on average, fell from 17.0% to 10.1%, driven by a declining share of income spent on food at home. Indeed, Americans spend less of their disposable personal income on food than any other country in the world. This remarkable drop is attributable largely to systemic efficiencies that allow food processors to offer food to consumers at lower prices.”

Dopp’s perspectives come from a letter submitted in response to a request by U.S. Agriculture Secretary Tom Vilsack for comments about efforts to improve supply chains for the production of agricultural commodities and food products.

In the letter, Dopp outlines some of the myths and misconceptions surrounding current debate and proposed legislation aimed at cattle markets. Some of that focuses on strained beef packing capacity, resulting in lost producer market leverage.

In written testimony to the U.S. Senate Agriculture Committee last week, Julie Anna Potts, Meat Institute President and CEO Julie Anna Potts pointed out publicly announced plans for beef packing capacity expansion would add more than 5,200 head per day capacity.

“These new entrants or company expansions were based on decisions to build or expand based on market conditions, not because of government intervention. Government interference into the market could well undermine this industry growth,” Potts says.

“Demands for more harvest capacity also ignore another fundamental issue: a significant, perhaps the biggest, problem facing the meatpacking industry is labor, or the shortage of it, “Dopp explained in his comments. “Labor challenges were not caused by the pandemic; COVID-19 only exacerbated the issue.”

By | June 29th, 2021|Daily Market Highlights|

Cattle Current Daily—June 29, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Monday afternoon, according to the Agricultural Marketing Service. The latest reported market in the Southern Plains was two weeks ago with live sales at $122/cwt.

Trading was slow on light demand in Nebraska with early live sales steady to $1.50 higher at $126.50/cwt. Last week in Nebraska, dressed sales traded at $197/cwt.

Trading in the Western Corn Belt and Kansas was mostly inactive on very light demand. Last week in the Western Corn Belt, live sales traded from $125-$126/cwt. and dressed sales traded at $197/cwt.

A surge in Corn futures pressured feeder cattle futures on Monday, while live cattle futures traded narrowly mixed.

Live Cattle futures closed mixed from an average of 78¢ lower through the front four contracts to an average of 9¢ higher except for the back contract, unchanged.

Feeder Cattle futures closed down across the board an average of $1.73 lower, from $3.20 lower at the front to $1 lower at the back.

Choice boxed beef cutout value was $7.13 lower at $297.43/cwt. Select was $2.22 lower at $273.96.

Grain futures closed rallied back on Monday as weekend weather conditions deteriorated.

Corn futures closed mostly 17¢ to 39¢ higher through Dec ’22.

Soybean futures closed mostly 36¢ to 42¢ higher through Sept ’22.

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Major U.S. financial indices closed mixed to start the week, with tech companies rallying on news that Facebook won dismissal of two monopoly lawsuits. Economic news to come out this week include a jobs report on Friday.

The Dow Jones Industrial Average closed 151 points lower. The S&P 500 closed 10 points higher. The NASDAQ closed up 140 points.

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Cattle feeders have yet to turn the corner toward reduced average feedlot inventories, but Derrell Peel says it’s getting closer.

Peel, Extension livestock marketing specialist at Oklahoma State University explains in his weekly market comment that feedlot inventories declined by 3.4% from February to June of this year, the largest decrease for that period since 2012. He notes the average change in feedlot inventories from February to June in the five years from 2016-2020 was an increase of 0.3%.

At the same time, Peel points out the 12-month moving average feedlot inventory has been record large since March.

“The current fed cattle market will show improvement faster than the moving average (figure below), which takes time to reflect changing conditions, and that appears to be happening,” Peel says. “Cash fed cattle prices last week averaged $122/cwt., the highest level in eight weeks. Barring some new disruption, feedlot inventories should drop below 2020 (and 2019) levels in the next month or two and remain there going forward. However, the ongoing drought could represent such a disruption if dry conditions force feeder cattle into feedlots sooner than usual. Drought could slow down the process of tightening beef supplies in 2021 but increased cowherd liquidation would lead to even smaller supplies in the coming years.”

By | June 28th, 2021|Daily Market Highlights|

Cattle Current Daily—June 28, 2021

Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.     

Through Thursday, AMS reported 43,484 confirmed negotiated sales for the week, compared to 76,273 head the previous week and 86,986 the previous year.

Although there were too few transactions to trend, a few live sales traded $1-$2 higher in Nebraska at $125-$126/cwt. and a few $2 higher in the western Corn Belt at $126.

The previous week, live prices were at $122/cwt. in the Southern Plains and $124 in the North. Dressed prices were at $195.

Through Thursday, the five-area direct average steer price was $2.69 higher week to week on a live basis at $125.54/cwt. The average steer price in the beef was $2.32 higher at $197.86.

Lower Corn futures helped Feeder Cattle futures gain steam on Friday, while Live Cattle inched higher with relatively few traded in the cash market this week.

Live Cattle futures closed an average of 19¢ higher, from 53¢ higher in Dec ’21 to 3¢ higher in Jun ’22.

Feeder Cattle futures closed an average of $2.40 higher, from $2.40 higher at the front to 93¢ higher toward the back.

Choice boxed beef cutout value was $2.86 lower Friday afternoon at $304.56/cwt. Select was 4¢ higher at $276.18.

Grain futures closed mostly down on Friday with more rain forecast. As well, the Supreme Court ruled in favor of small refineries seeking exemptions from federal requirements to blend ethanol or other bio-fuels with their products.

Corn futures closed mostly 10¢ to 17¢ lower through July ’23.

Soybean futures closed mostly 20¢ to 40¢ lower through Sept ’22.

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Major U.S. financial indices closed the week on a mostly steady note, reflecting easing investor worries about the Federal Reserve raising interest rates – at least for now. The S&P had its best week since February. New economic reports out on Friday indicated personal spending was stagnate in May, and consumer sentiment grew in June, but by less than expected.

The Dow Jones Industrial Average closed 237 points higher. The S&P 500 closed 14 points higher. The NASDAQ was down 9 points.

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USDA’s monthly Cattle on Feed report for June (feedlots with 1,000 head or more capacity) will likely be viewed as bullish. Compared to expectations ahead of the report, placements were 2% less, marketings were on par and cattle on feed were slightly less.

Cattle feeders placed 1.91 million on feed in May, which was 141,000 head fewer (-6.87%) than the same time a year earlier.

In terms of placement weights, 31.92% went on feed weighing up to 699 lbs. 50.81% weighing 700-899 lbs. and 17.27% weighing 900 lbs. or more.

Feeders marketed 355,000 head more (+23.43%)  in May than the previous year.

Cattle on feed June 1 were 11.70 million head, the second most for the date since the data series began in 1996. However, the total was just 28,000 more (+0.24%) than the previous year.

By | June 27th, 2021|Daily Market Highlights|

Cattle Current Daily—June 25, 2021

Negotiated cash fed cattle trade was mostly inactive on light demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service. In Nebraska and the Western Corn Belt, trading was limited on light demand. A few live sales in Nebraska traded at $125-$126. 

Last week, live prices were at $122/cwt. in the Southern Plains and $124 in the North. Dressed prices were at $195.

Cattle futures faded early pressure Thursday to close mostly higher, perhaps with positioning ahead of this afternoon’s Cattle on Feed report. Heading into mid-day Friday, Feeder Cattle futures continued to edge higher, while Live Cattle were mostly a touch softer.

Live Cattle futures closed an average of 47¢ higher, except for 25¢ lower in near Aug. 

Feeder Cattle futures closed an average of 84¢ higher, from 52¢ higher to $1.45 higher at the front.

Choice boxed beef cutout value was $4.63 lower Thursday afternoon at $312.05/cwt. Select was 73¢ higher at $276.14.

Corn and Soybean futures continued mostly lower Thursday with weather pressure.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed 7¢ to 13¢ lower through Aug ’22, and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices rose to all-time highs on Thursday as agreement was announced on a $579 billion infrastructure plan.

The Dow Jones Industrial Average closed 323 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 97 points. 

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As noted in Cattle Current Thursday, Dustin Aherin, RaboResearch animal protein analyst, shared insight about planned beef packing capacity expansion in his testimony to the U.S. Agriculture Committee. He also cited the estimated cost of $100-$200 million per 1,000 head of daily capacity.

Today, the National Cattlemen’s Beef Association (NCBA) announced it secured introduction of the Butcher Block Act in the U.S. House, a bipartisan bill that would provide critical funding to expand capacity for small, regional, and independent processing facilities.

“When there’s not enough capacity to process the current supply of live cattle, our producers lose leverage in the market. Expanding capacity is an essential component of the multifaceted effort to increase the opportunities for profitability for cattle producers, and we’ve been hearing for months that the two biggest obstacles standing in the way of that are lack of capital and lack of labor,” says NCBA President Jerry Bohn. “The Butcher Block Act addresses both of those hurdles, and would go a long way to alleviating the bottleneck that is depressing live cattle prices for our farmers and ranchers.”

Introduced by Rep. Dusty Johnson (R-SD) and Rep. Abigail Spanberger (D-VA), the legislation would establish a stand-alone loan program through the U.S. Department of Agriculture (USDA) to help processors expand capacity, improve marketing options for cattle producers, and encourage competitive markets and pricing for live cattle.

The legislation would also authorize the Secretary of Agriculture to establish a grant program that would support a range of research and training efforts aimed at strengthening the workforce to meet labor needs, and helping processors become federally inspected.

A recent study by Rabobank found that under the current dynamics of supply and demand, the industry could economically accommodate an additional 5,700 hooks per day of processing capacity, or processing roughly 1.5 million additional head per year. However, access to capital is a major barrier. The average start-up cost for a beef processing facility is roughly $100,000 per hook, which means that someone trying to open a modest 25-hear-per-day facility has to secure $2.5 million in financing just to turn on the lights.

By | June 25th, 2021|Daily Market Highlights|

Cattle Current Daily—June 24, 2021

Negotiated cash fed cattle trade was mostly inactive on light demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. In Nebraska and the Western Corn Belt, trading was limited on light to moderate demand. A few live sales in Nebraska traded at $126 and a few dressed at $197.

Choice boxed beef cutout value was $3.70 lower Wednesday afternoon at $312.05/cwt. Select was $4.34 lower at $275.41.

Cattle futures softened Wednesday, pressured by crumbling Lean Hog futures, the lack of cash direction and perhaps some early positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 89¢ lower, from 30¢ to $1.40 lower.

Feeder Cattle futures closed an average of $2.11 lower, from $1.85 to $2.65 lower.

Corn futures closed mostly 1¢ to 3¢ lower through new-crop contracts, and then mostly fractionally higher to 2¢ higher.

Soybean futures closed 1¢ to 9¢ lower through the front five contracts and then mostly 6¢ to 10¢ higher.

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Major U.S. financial indices traded narrowly on Wednesday as investors continue to evaluate the strength of the economy.

The Dow Jones Industrial Average closed 71 points lower. The S&P 500 closed 5 points lower. The NASDAQ was up 18 points.

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Arguably, the root cause of much of the current debate surrounding the lack of producer leverage in recent and current markets — compounded by several black swan events — revolves around available packing capacity, relative to cattle supplies.

That was one of the issues discussed in Wednesday’s U.S. Agriculture Committee hearing: Examining Markets, Transparency, and Prices from Cattle Producer to Consumer. Dustin Aherin, RaboResearch animal protein analyst was one of five expert witnesses invited to testify. As part of his testimony, Aherin explained plans for new and expanded packing facilities announced in recent months could add about 8,000 head per day daily fed cattle capacity and 2,000 head of non-fed daily capacity over the next five years.

“Even before the extremes of 2020, recent margins suggest that there is opportunity to add packing capacity. However, that opportunity does not come without significant risk,” Aherin explained. “First, the upfront cost of a new or expanded plant is extremely expensive. Industry sources estimate that a new plant costs $100 to $120 million (USD) for every 1,000 head of daily capacity. Increasing construction costs over the past year likely put current costs near or even above the high end of that estimate. Then, a new endeavor must meet regulatory requirements, build a labor force, and keep enough cash on hand to absorb losses. It’s not just about building facilities, it’s about building a business model.”

By | June 23rd, 2021|Daily Market Highlights|

Cattle Current Daily—June 23, 2021

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains and Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. In Nebraska, trading was mostly inactive on light demand.

Last week, live prices were at $122/cwt. in the Southern Plains and $124 in the North. Dressed prices were at $195.

Softer Corn futures helped Feeder Cattle futures gain Tuesday, while apparently oversold conditions and reports of higher cash prices in the North spurred Live Cattle.

Live Cattle futures closed an average of $1.65 higher, from $2.12 higher at the front to 65¢ higher at the back.

Feeder Cattle futures closed an average of $2.70 higher, from $3.25 higher at the front to $2.275 higher toward the back.

Choice boxed beef cutout values was $5.45 lower Tuesday afternoon at $315.75/cwt. Select was $1.71 lower at $279.75.

Grain futures were pressured Tuesday by timely rains forecast across the Midwest.

Corn futures closed mostly 11¢ to 18¢ lower through Dec ’22, except for fractionally higher in spot July.

Soybean futures closed mostly 16¢ to 18¢ lower through Nov ’22.

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Major U.S. financial indices closed higher on Tuesday, buoyed by Fed Chief Jerome Powell downplaying recent inflation as transitory.

The Dow Jones Industrial Average 69 points higher. The S&P 500 closed 22 points higher. The NASDAQ up 112 points.

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Total pounds of beef in freezers as of May 31 were 8% less than the previous month and 1% less than the same time last year, according to USDA’s most recent Cold Storage report.

Frozen pork supplies were up 1% from the previous month but down 1% from last year.

Total red meat supplies in freezers were 4% less than the previous month and 3% less than a year earlier.

Total frozen poultry supplies were up 3% from the previous month, but down 12% percent from a year ago.

By | June 22nd, 2021|Daily Market Highlights|

Cattle Current Daily—June 22, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in the western Corn Belt through Monday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was at a standstill.

Last week, live prices were at $122/cwt. in the Southern Plains and $124 in the North. Dressed prices were at $195.

Cattle futures closed narrowly mixed Monday, supported by improving fundamentals but balanced by declining wholesale beef values and weaker Lean Hog futures.

Live Cattle futures closed an average of 23¢ lower.

Feeder Cattle futures closed an average of 47¢ higher, from 7¢ higher at the front to $1.12 higher toward the back.

So far this morning, both are higher.

Choice boxed beef cutout value was $2.08 lower Monday afternoon at $321.20/cwt. Select was $2.15 lower at $281.46.

Although new-Crop Corn futures eased Monday, overall Corn and Soybean futures were supported by weaker crop conditions (Good and Excellent) week over week and year over year.

Corn futures closed mostly 6¢ to 9¢ lower through new-crop contracts, and generally 3¢ to 5¢ higher in other contracts.

Soybean futures closed mostly 6¢ to 9¢ higher in new-crop contracts and mostly 13¢ to 22¢ higher in the others.

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Major U.S. financial indices rallied back Monday, supported by higher crude oil prices. CME WTI Crude Oil futures closed $1.21 to $2.02 higher through the front six contracts.

The Dow Jones Industrial Average closed 586 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 111 points.

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USDA and lawmakers continue to focus more money and proposed legislation on addressing the nation’s meat packing industry.

USDA announced Monday $55.2 million in competitive grant funding available through the new Meat and Poultry Inspection Readiness Grant (MPIRG) program.

“We are building capacity and increasing economic opportunity for small and midsized meat and poultry processors and producers across the country,” said Agriculture Secretary, Tom Vilsack. “Through MPIRG, meat and poultry slaughter and processing facilities can cover the costs for necessary improvements to achieve a Federal Grant of Inspection under the Federal Meat Inspection Act or the Poultry Products Inspection Act, or to operate under a state’s Cooperative Interstate Shipment program.”

MPIRG’s Planning for a Federal Grant of Inspection (PFGI) project is for processing facilities currently in operation and are working toward Federal inspection.

Earlier this month (June 11), as mentioned in Cattle Current, USDA announced it was beginning work on three proposed rules to support enforcement of the Packers and Stockyards (P&S) Act.

First, USDA intends to propose a new rule that will provide greater clarity to strengthen enforcement of unfair and deceptive practices, undue preferences, and unjust prejudices. Second, USDA will propose a new poultry grower tournament system rule, with the current inactive proposal to be withdrawn. Third, USDA will re-propose a rule to clarify that parties do not need to demonstrate harm to competition in order to bring an action under section 202 (a) and 202 (b) of the P&S Act.

Earlier that week, USDA announced $4 billion in assistance as part of the Build Back Better initiative, an effort designed to strengthen and transform critical parts of the U.S. food system. Investments made through Build Back Better will include a mix of grants, loans and innovative financing to address the shortage of small meat processing facilities across the country as well as the necessary local and regional food system infrastructure needed to support them.

Also on June 11, Senator Chuck Grassley (R-Iowa), along with Senators Jon Tester (D-Mont.) and Mike Rounds (R-S.D.) announced new bipartisan legislation they said was meant to address anticompetitive practices in the meat and poultry industries.

“Increased consolidation is driving concerns about competitive market access for Iowa livestock producers,” Grassley said. “The recent cyberattack (JBS) added to existing vulnerabilities in our food supply chain, underscoring the importance of protecting the livelihoods of our family farmers. Food security is national security. This bill provides USDA with the necessary tools to beef up enforcement of the Packers and Stockyards Act, increase coordination with DOJ, FTC, and DHS and to foster a fair and functional marketplace for farmers and consumers alike.”

The Senators’ bill, the Meat Packing Special Investigator Act, would create the “Office of the Special Investigator for Competition Matters” within the U.S. Department of Agriculture’s (USDA) Packers and Stockyards Division.

By | June 22nd, 2021|Daily Market Highlights|

Cattle Current Daily—June 21, 2021

Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

Live prices last week were $2-$3 higher in the Southern Plains at $122/cwt. and $3-$4 higher in the North at $124. Dressed prices were $4-$5 higher at $195.

Live Cattle futures closed higher Friday, regaining some of what was lost in the previous session, supported by higher cash prices and improving fundamentals.

Live Cattle futures closed an average of $1.00 higher (37¢ to $1.92 higher).

Resurgent grain futures prices pressured Feeder Cattle futures.

Feeder Cattle futures closed an average of $1.41 lower, from an average of (85¢ lower at the back to $2.37 lower at the front.

Choice boxed beef cutout value was $2.97 lower at $323.28/cwt. Select was $3.63 lower at $283.61.

Estimated total cattle slaughter for the week ending June 19 was 663,000 head, which was 2,000 head fewer than the previous week, but 17,000 head more than a year earlier, according to USDA. Year-to-date estimated total cattle slaughter of 15.4 million head is 820,000 more (+5.62%) than the same period last year. Total estimated beef production so far this year is 12.81 billion lbs., which is 772.6 million lbs. more (+6.42%).

Grain futures bounced back Friday from the previous day’s steep selloff, looking for the trading range encompassing the stronger U.S. dollar, weather risk, uncertainty about potential changes to the Renewable Fuel Standard and all of the rest.

Corn futures closed 22¢ to 34¢ higher through Jly ‘22 , and then mostly 14¢ to 17¢ higher.

Soybean futures closed mostly 54¢ to 66¢ higher.

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Major U.S. financial indices sagged lower Friday, beneath the weight of investor worries about the Fed raising interest rates sooner than 2023.

The Dow Jones Industrial Average closed 533 points lower. The S&P 500 closed 55 points lower. The NASDAQ down 130 points.

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“Strong grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. Even so, current rural economic activity remains below pre-pandemic levels,” says Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey, which underpins the Creighton University Rural Mainstreet Index (RMI), covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. 

The June RMI remained above growth neutral for the seventh consecutive month at 70.0. The RMI was record high a month earlier at 78.8. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

The farmland price index was significantly above growth neutral for the ninth consecutive month; the first time since 2013. The June reading slipped to 75.9 from May’s 78.1.

The June farm equipment-sales index rose to 71.6 from 67.9, its highest level since 2012 and the seventh consecutive month of a reading above growth neutral.

Approximately, 46.7% of bank CEOs reported their local economy expanded between May and June, but several bankers raised future concerns.

For instance, according to Steve Simon, CEO of South Story Bank and Trust in Huxley, Iowa, “Continued dry conditions will start to have an effect on markets and crops soon.”

Longer term, Larry Winum, CEO of Glenwood State Bank in Glenwood, Iowa, says, “In my view, $29 trillion in total debt with no real plan to reduce that debt, or balance the annual budget is the biggest threat to our economy’s success.” He argues that neither political party, nor the Federal Reserve, has engaged in a serious discussion to solve the problem.

When asked to name the greatest threat to 2021-22 bank operations, approximately 25% cited a downturn in farm income. Another 25%  pointed to rising government regulation.

By | June 20th, 2021|Daily Market Highlights|

Cattle Current Daily—June 18, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand with too few transactions to trend. So far this week, live prices are $2-$3 higher in the Southern Plains at $122/cwt., $4 higher in Nebraska at $124 and $3-$4 higher in the western Corn Belt at $124. Dressed prices are $4-$5 higher at $195.

Live Cattle futures closed sharply lower Thursday with apparent profit taking, limit-down moves in Lean Hog futures and spillover pressures from widespread commodity selling (see below).

Live Cattle futures closed an average of $2.85 lower. 

Despite the pressure, sharply lower grain futures supported Feeder Cattle futures.

Feeder Cattle futures closed mixed, from an average of 49¢ lower to an average of 55¢ higher.

Choice boxed beef cutout value was $2.92 lower Thursday afternoon at $326.25/cwt. Select was $2.72 lower at $287.24.

The average dressed steer weight the week ending June 5 was 891 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. less than the previous year. The average dressed heifer weight of 812 lbs. was 12 lbs. lighter.

Grain futures tanked Thursday with promising weather in the Corn Belt. Growing uncertainty about whether President Biden will bolster or relax the current Renewable Fuel Standard added pressure, as did the sharply higher U.S. Dollar.

Moreover, there was broad-based commodity selling, tied to reports of China directing state-owned firms to reduce exposure to foreign commodity markets, in an effort to curb inflation.

Corn futures closed limit down 40¢ through the front six contracts, and then mostly 26¢ to 30¢ lower.

Soybean futures closed 82¢ to $1.18 lower through Jly ‘22. And then mostly 55¢ to 69¢ lower.

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Major U.S. financial indices closed mixed Thursday. Along with continued pressure from the Fed’s expectation of raising interest rates a year earlier than previously intended, initial weekly unemployment insurance claims were more than expected. Those claims tallied 412,000 for the week ending June 12, up 37,000 from the previous week.

The Dow Jones Industrial Average closed 210 points lower. The S&P 500 closed 1 point lower. The NASDAQ was down 121 points.

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Delays and congestion at U.S. ports continue to hamstring U.S. agriculture exports, including meat and poultry products.

“Perhaps the most egregious action perpetrated by ocean carriers is their growing proclivity to decline to carry U.S. agricultural commodity exports, including meat and poultry exports, instead choosing to hasten empty containers to Asian markets to fill them with more lucrative consumer goods to export to the U.S.,” explained Julie Anna Potts, Meat Institute president and CEO. “In some instances, common carriers are collecting freight rates as high as $12,000 per container to carry cargo from Asia to the U.S., while containers carrying U.S. agriculture exports earn only $1,800.” That was part of the testimony she delivered earlier this week to the House Committee on Transportation and Infrastructure Subcommittee On Coast Guard and Maritime Transportation.

Further, Potts explained ocean carriers and marine terminal operators are charging excessive and unreasonable detention and demurrage fees.

“Failure to hold these carriers accountable could have long-lasting, detrimental effects for the trade-dependent U.S. meat and poultry industry and agriculture sector which has caused $1.5 billion in lost revenue,” said Potts. “If current ocean carrier practices persist, and are not subject to oversight, then the U.S. meat and poultry industry, its workers and the communities it supports will struggle to access these vital markets that have been cultivated over decades.”

The U.S. Department of Agriculture estimates that the $141.6 billion in U.S. agricultural export value in 2019 generated an additional $160 billion in economic activity for a total of $301.6 billion in economic output.

The Meat Institute is urging U.S. Secretary of Agriculture Tom Vilsack and the Congress to confront the crisis as part of efforts to improve and strengthen the food supply chain.

By | June 17th, 2021|Daily Market Highlights|

Cattle Current Daily—June 17, 2021

Negotiated cash fed cattle prices continued higher in Kansas and Nebraska on slow trade and light demand through Wednesday afternoon, according to the Agricultural Marketing Service. So far this week, live prices are $2-$3 higher in the Southern Plains at $122/cwt. and $4 higher in Nebraska at $124. Dressed prices in Nebraska are $4-$5 higher at $195.

Last week, prices in the western Corn Belt were $120-$121 on a live basis and $190-$191 in the beef.

Cattle feeders offered 6,049 head in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 1,006 sold — all from the Southern Plains and all on a live weight basis. Steers brought a weighted average price of $121.65/cwt. and heifers brought an average of $121.22.

Cattle futures mostly gained again Wednesday, supported by the recent break in grain futures, as well as higher cash prices. That came in the face of limit-down moves in front-month Lean Hog futures.

Feeder Cattle futures closed an average of 87¢ higher (17¢ to $2.30 higher), except for an average of 25¢ lower in the back two contracts.

Live Cattle futures closed an average of 72¢ higher (12¢ to $1.35 higher). 

Choice boxed beef cutout value was $5.26 lower Wednesday afternoon at $329.17/cwt. Select was $8.32 lower at $289.96. The Choice/Select spread was $39.21/cwt.

Positive weather kept pressure on Corn futures Wednesday.

Corn futures closed 1¢ to 7¢ lower, except for 5¢ higher in spot Jly.

Soybean futures closed mostly 18¢ to 30¢ lower.

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Major U.S. financial indices closed lower Wednesday, pressured by information from the Federal Reserve, indicating inflation was running higher than previously expected and interest rates may increase sooner than expected. In this case, sooner means 2023 versus 2024.

In the meantime, according to the FOMC statement, the committee expects to maintain its current accommodative monetary policy until inflation averages 2% over time and longer‑term inflation expectations remain “well anchored” at 2%.

In prepared remarks, Federal Reserve Chair Jerome Powell said, “Inflation has increased notably in recent months. The 12-month change in Personal Consumption Expenditure (PCE) prices was 3.6% in April and will likely remain elevated in coming months before moderating.” The committee increased PCE expectations for this year by 1% from its previous estimate to 3.4%. 

The Dow Jones Industrial Average closed 265 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 33 points.

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Although total cattle slaughter in May was more than last year’s pandemic-ravaged pace, it was 1% less than in 2019, according to USDA’s Economic Research Service (ERS). Cow slaughter, though, was 6% more than last year and 7% more than in 2019.

“While there have been improvements in drought conditions in some regions since last month, pasture and range conditions in areas like the Northwest and North Dakota remain very poor compared to last year,” say ERS analysts, in the latest Livestock, Dairy and Poultry Outlook.

ERS increased expected cow slaughter for the second and third quarters this year, but analysts say projected total cattle slaughter remained static based on less fed cattle slaughter in the second quarter, and reduced expectation for fourth-quarter cow slaughter. Expected annual beef production this year is 5 million lbs. more than the previous month at 27.905 billion lbs.

In the monthly World Agricultural Supply and Demand Estimates, ERS forecast the annual average five-area direct fed steer price at $117/cwt. Average prices are projected at $120 in the second quarter, $115 in the third quarter and $120 in the fourth quarter. Next year’s forecast annual average price is $121.50.

ERS projects the annual average feeder steer price (basis Oklahoma City) this year at $139.33/cwt. Average prices are forecast at $139 in the second quarter, $141 in the third quarter and $143 in the fourth quarter. ERS pegs the average annual price for next year at $144.25.

By | June 16th, 2021|Daily Market Highlights|

Cattle Current Daily—June 16, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service (AMS). Although too few to trend, there were a few dressed trades at $195/cwt., compared to $190-$191 last week. Elsewhere, trade ranged from mostly inactive on very light demand to a standstill.

Live prices last week were at mostly $119-$120 in the Southern Plains, $120 in Nebraska and $120-$121 in the western Corn Belt.

The recent decline in Corn futures moderated Tuesday but continued to bolster Cattle futures, which were also supported by the outlook for steady to higher cash prices this week.

Feeder Cattle futures closed an average of $1.34 higher (62¢ to $2.22 higher).

Live Cattle futures closed an average of $1.91 higher through the front four contracts ($1.32 to $1.62 higher) and then an average of 26¢ higher, except for 12¢ lower in the back two contracts.

Choice boxed beef cutout value was $1.04 lower at $334.43/cwt. Select was $5.13 lower at $298.28. At $36.15, the Choice/Select spread was the highest since June 2017, when it peaked at $30.92.

Grain futures continued mainly lower Tuesday with the progress-friendly weather forecast in the Corn Belt.

Corn futures closed mostly 3¢ to 7¢ lower, except for 8¢ higher in spot Jly.

Soybean futures closed mostly 17¢ to 21¢ lower.

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Major U.S. financial indices softened Tuesday, with weaker economic data.

Advance estimates of U.S. retail and food services sales for May 2021 were less than expected at $620.2 billion, a decrease of 1.3% month to month, according to the U.S. Census Bureau.

The Producer Price Index (PPI) for final demand increased 0.8% in May, according to the U.S. Bureau of Labor Statistics. On an unadjusted basis, the final demand index advanced 6.6% for the 12 months ended in May, the largest increase since 12-month data were first calculated in November 2010.

The Dow Jones Industrial Average closed 94 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 101 points.

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U.S. beef exports this year are forecast to exceed the level of the last two years and perhaps that of the record year in 2018, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

As noted in Cattle Current last week, U.S. beef exports set another new value record in April at $808.3 million, up 35% from a year ago, according to data released by USDA and compiled by the U.S. Meat Export Federation. Export volume was 23% more year over year and the fifth largest on record at 121,050 metric tons (mt).

“Beef exports represent a component of total beef demand in terms of quantity and value,” Peel says, in his weekly market comments. “Moreover, beef exports represent a wide range of product types and qualities exported to various markets and augment domestic beef demand by providing markets for products less desired in the U.S.” He explains exporting products that have more value to international consumers than domestic ones enables maximizing domestic beef value.

U.S. beef export value per head of fed slaughter reached a new monthly high in April at $367.45.

More broadly, total global food and agricultural exports grew by almost $52 billion last year (+3.2% annualized), according to the Food and Agriculture Organization of the United Nations (FAO). Developing countries accounting for about 40% of the increase.

This year, FAO forecasts global agricultural exports to increase 8%, or $137 billion. Much of that growth reflects demand from East Asia.

FAO analysts expect meat production this year to increase 2% to 346 million tons, reflecting an anticipated rebound in meat production in China, especially for pork.

“The average worldwide consumer price of protein in May 2021 was 23% above its May 2020 level,” according to FAO’s semiannual Food Outlook. “Calories, in prices, meanwhile, were up 34% year-on-year and hit their highest level since February 2013. The difference reflects stronger price rises for wheat, coarse grains and vegetable oils compared to meats, dairy products and fish.”

By | June 15th, 2021|Daily Market Highlights|

Cattle Current Daily, June 15, 2021

Negotiated cash fed cattle trade was limited on very light demand in Nebraska through Monday afternoon, according to the Agricultural Marketing Service. There were a few live sales at $124/cwt., but too few to trend. Elsewhere, trade was at a standstill.

Live prices last week were at mostly $119-$120 in the Southern Plains, $120 in Nebraska and $120-$121 in the western Corn Belt. Dressed trade was at $190-$191.

Feeder Cattle futures roared higher Monday, buoyed by a sharp break in Corn futures. Live Cattle futures edged higher, with interest apparently constrained by what appears to be post-top wholesale prices for a while.

Feeder Cattle futures closed an average of $2.78 higher ($2.00 higher at the back to $3.42 higher at the front). That’s right at an average of $5 higher in the last two sessions.

Live Cattle futures closed an average of 48¢ higher.

Choice boxed beef cutout value was $2.09 lower through Monday afternoon at $335.47/cwt. Select was $1.80 lower at $303.41.

Grain futures prices fell Monday, swamped by more weekend rain than expected in the Corn Belt, as well as increased chances for rain and cooler temperatures in that region for the next couple of weeks.

Corn futures closed 25¢ to 31¢ lower through Jly ‘22, and mostly 13¢ and 16¢ lower. 

Soybean futures closed mostly 31¢ to 41¢ lower.

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Major U.S. financial indices closed mixed Monday, with the strongest performance in tech stocks.

The Dow Jones Industrial Average closed 85 points lower. The S&P 500 closed 7 points higher. The NASDAQ closed 104 points higher.

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Nationally, pasture and range conditions held about steady, according to the latest USDA Crop Progress report, for the week ending June 13.

35% of pasture and range was rated as Good (28%) or Excellent (7%), the same as a week earlier, but 10% less than a year earlier. Conversely, 36% was rated as Poor (20%) or Very Poor (16%), compared to 37% a week earlier and 22% a year earlier.

According to the U.S. Drought Monitor (week beginning June 10), 61.2% of the continental U.S. ranged from abnormally dry to Exceptional Drought. That was 2.1% more than the previous week, but 5.2% less than at the beginning of the year.

Crop progress continues strong for row crops.

96% of corn was emerged, which was 2% more than last year and 5% more than the five-year average. 68% was in Good (56%) or Excellent (12%) condition, which was 4% less than the previous week and 3% less than the five-year average.

94% of soybeans were in the ground, which was 2% more than last year and 6% more than the average. 86% were emerged, which was 7% more than the prior year and 12% more than the five-year average. 62% were in Good (53%) or Excellent (9%) condition, which was 5% less than the previous week and 10% less than the same week last year.

92% of winter wheat was headed, compared to 90% the previous year and 92% for the five-year average. 4% was harvested, which was 10% less than a year earlier and 11% less than average. 48% was rated in Good (40%) or Excellent (8%) condition, compared to 50% the prior week and a year earlier. 20% was rated Poor (14%) or Very Poor (6%) compared to 18% a week earlier and 19% at the same time last year.

By | June 14th, 2021|Daily Market Highlights|

Cattle Current Daily—June 14, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, it ranged from limited to mostly inactive on light demand with too few transactions to trend.

Negotiated cash fed cattle prices for the week were mainly steady at mostly $120/cwt. on a live basis, except for $2 higher in the western Corn belt at $122. Dressed trade was steady at $190-$191.

Cattle futures gained Friday with support from softer Corn futures, continued elevated consumer demand and the likelihood improved supply fundamentals are getting closer.

Feeder Cattle futures closed an average of $2.19 higher ($1.57 higher at the back to $2.77 higher at the front).

Live Cattle futures closed an average of $1.16 higher.

Choice boxed beef cutout value was 48¢ lower at $337.77/cwt. Select was $4.89 lower at $305.51.

Estimated total cattle slaughter the week ending June 12 was 665,000 head, according to USDA. That was 127,000 more than the previous holiday-shortened week. Estimated beef production of 545.7 million lbs. was 102.7 million lbs. more.

Corn and Soybean Futures softened Friday with more near-term rain forecast for the Corn Belt and likely week-end profit taking.

Corn futures closed mostly 1¢ to 6¢ lower, except for 14¢ and 8¢ lower in the front two contracts.

Soybean futures closed 20¢ to 35¢ lower through Jan ‘22, 11¢ to 18¢ lower through the next five contracts, and then mostly 3¢ to 6¢ lower.

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Major U.S. financial indices closed higher again Friday, with investors apparently feeling confident the surging inflation suggested by the previous day’s Consumer Price Index is transitory.

The Dow Jones Industrial Average closed 13 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 49 points. 

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USDA announced Friday it is beginning work on three proposed rules to support enforcement of the Packers and Stockyards (P&S) Act.

“The Packers and Stockyards Act is a vital tool for protecting farmers and ranchers from excessive concentration and unfair, deceptive practices in the poultry, hog, and cattle markets, but the law is 100 years old and needs to take into account modern market dynamics. It should not be used as a safe harbor for bad actors,” says Agriculture Secretary Tom Vilsack. “The process we’re beginning today will seek to strengthen the fairness and resiliency of livestock markets on behalf of farmers, ranchers and growers.”

First, USDA intends to propose a new rule that will provide greater clarity to strengthen enforcement of unfair and deceptive practices, undue preferences, and unjust prejudices. Second, USDA will propose a new poultry grower tournament system rule, with the current inactive proposal to be withdrawn. Third, USDA will re-propose a rule to clarify that parties do not need to demonstrate harm to competition in order to bring an action under section 202 (a) and 202 (b) of the P&S Act.

As an aside, the latter point will likely be a sticky subject. Previously, much of the cattle industry rallied against a similar proposal. In part, the opposition was based on worries that it would lead packers to pay the same price to everyone — no premiums or discounts — rather than risk lawsuits.

USDA’s pending action was noted in the Unified Agenda of Regulatory and Deregulatory Actions released by the White House Office of Management and Budget (OMB).

Earlier last week, USDA announced $4 billion in assistance as part of the Build Back Better initiative, an effort designed to strengthen and transform critical parts of the U.S. food system. Investments made through Build Back Better will include a mix of grants, loans and innovative financing to address the shortage of small meat processing facilities across the country as well as the necessary local and regional food system infrastructure needed to support them.

By | June 13th, 2021|Daily Market Highlights|

Cattle Current Daily—June 11, 2021

Compared to the previous month, USDA increased projected 2021 beef production by 5 million lbs. to 27.905 billion lbs., in the latest World Agricultural Supply and Demand Estimates (WASDE). Analysts with the Economic Research Service (ERS) note higher expected cow slaughter is largely offset by lower steer and heifer slaughter.

USDA forecast the five-area direct fed steer price 70¢ higher for this year to $117/cwt., reflecting current price strength. Projected average prices are $120 in the second quarter, $115 in the third quarter and $120 in the fourth quarter.

Negotiated cash fed cattle trade in the Southern Plains was at a standstill through Thursday afternoon, according to the Agricultural Marketing Service. For the week so far, live sales are at $119-$120/cwt.

Elsewhere, trade ranged from slow to inactive on light demand.

Live sales in Nebraska and the western Corn Belt earlier in the week were at $120 on a live basis and at $190-$191 in the beef.

Cattle futures traded mostly higher on Thursday, amid light trade, especially for Live Cattle.

Feeder Cattle futures closed an average of 36¢ higher.

Live Cattle futures closed an average of 19¢ higher, except for down an average of 10¢ in the back two contracts.

Choice boxed beef cutout value was 40¢ lower Thursday afternoon at $338.25/cwt. Select was $2.53 higher at $310.40

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Despite USDA lowering projecting beginning and ending corn stocks by 150 million bu. in the latest World Agricultural Supply and Demand Estimates, Corn Futures trended mostly 3¢ to 6¢ higher with support from the weather outlook. The WASDE left the projected season-average corn price unchanged at $5.70/bu.

USDA forecast beginning soybean stocks (2021-22) 15 million bu. more month to month. Ending stocks were projected 15 million bu. higher at 155 million bu. The season-average soybean price remained unchanged at $13.85/bu.

Soybean futures closed mixed, with the front three contracts down fractionally to 18¢, then up between 4¢ to 11¢ through Sep ’22.

Soybean futures closed 13¢ and 18¢ lower in the front two contracts, then mainly 8¢ to 11¢ higher through new-year contracts, followed by mostly 5¢ to 7¢ lower the rest of the way.

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Major U.S. financial indices closed higher on Thursday, despite the Consumer Price Index coming in a little stronger than expected. A wide array of analysts viewed increased consumer prices as expected in the categories bolstered by the reopening of the economy rather than a long-term rise in inflation.

The Dow Jones Industrial Average closed 19 points higher. The S&P 500 closed 20 points higher. The NASDAW was up 109 points.

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JBS USA (JBS) announced yesterday it’s investing $130 million to increase production capacities at two of its major beef processing facilities in Nebraska. The company is on schedule to complete, in late summer, a significant expansion of its Grand Island beef production facility, including the construction of a new harvest floor and enhanced animal welfare facilities. JBS is also expanding cooler capacity and upgrading the fabrication floor at its Omaha beef production facility. The expanded facilities and upgrades will increase processing capacity by nearly 300,000 head of cattle per year, according to the company.

“At JBS USA, we recognize the importance and cultural significance of beef – from the men and women who raise cattle, to the frontline essential workers who process beef, to the families who enjoy a tender steak or hamburger as part of the family meal,” says Tim Schellpeper, President of the JBS USA Fed Beef business unit. “Our longstanding commitment to the U.S. beef industry and continued reinvestment in its success will help ensure that beef remains at the center of plates around the world for years to come.”

To ensure consistent access to a skilled workforce, JBS also increased annualized wages by $150 million over the last 12 months. This permanent yearly investment is in addition to more than $71 million in short-term incentives and non-permanent bonus payments JBS provided to its U.S. beef workforce during the pandemic.

The JBS USA Grand Island facility is a two-shift, beef-processing plant in central Nebraska employing more than 3,600 people. Grand Island has the capacity to process more than 1.4 million cattle per year and currently exports to 20 different countries. The Omaha facility is a single-shift, beef processing plant employing more than 650 people. The plant offers a range of high-end specialty beef products.

By | June 10th, 2021|Daily Market Highlights|

Cattle Current Daily—June 10, 2021

Negotiated cash fed cattle trade in the Southern Plains, Nebraska and Western Corn Belt was limited on moderate demand through Wednesday afternoon, according to the Agricultural Marketing Service. In the Texas Panhandle live sales were steady to 50¢ lower than last week at $119.50 to $120.00/cwt. In Kansas, live sales traded mostly steady at $120.00. In Nebraska, a few live sales traded from $120 to $121.

Cattle futures traded mixed Wednesday. Higher Corn futures pressured Feeder Cattle once again, while steady cash helped Live Cattle tread water.

Feeder Cattle futures closed an average of $1.11 lower (52 to $1.47 lower), except for unchanged and up $1.02 in the back two contracts.

Live Cattle futures closed narrowly mixed, from an average of 36¢ lower to an average of 35¢ higher.

Choice boxed beef cutout value was 4¢ higher Wednesday afternoon at $338.65/cwt. Select was $1.69 higher at $307.87

Grain markets were mixed on Wednesday, with corn futures getting help from ethanol demand and soybeans down across most of the board. The monthly World Agricultural Supply and Demand Estimates due out Thursday will likely have plenty to say about direction for the rest of the week.

Corn futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed 13¢ to 17¢ lower through the front three contracts and then mostly 3¢ to 7¢ lower.

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Major U.S. financial indices closed lower on Wednesday with investors apparently jittery about Thursday’s inflation reading.

The Dow Jones Industrial Average closed 153 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 13 points.

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U.S. beef exports set another new value record in April at $808.3 million, up 35% from a year ago, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Export volume was 23% more year-over-year and the fifth largest on record at 121,050 metric tons (mt).

“Looking back at April 2020, it was a difficult month for red meat exports as we began to see COVID-related supply chain interruptions, and foodservice demand took a major hit in many key markets,” says Dan Halstrom, USMEF President and CEO. “While it is no surprise that exports performed much better in April 2021, we are pleased to see that global demand continued to build on the broad-based growth achieved in March.”

Beef export value per head of fed slaughter reached a new monthly high in April at $367.45.

As for customers, April beef exports to South Korea increased 21% from a year ago and just missed setting a new value record at $182.7 million. Beef exports to China continued to soar in April, reaching a record 17,233 mt (up from just 1,367 mt a year ago). Export value to China was $130.6 million – up from $11.5 million.

U.S. pork exports built on the previous month’s record pace as well. Pork exports were the sixth largest on record in April at 269,918 mt, up 2% from a year ago. Export value was $749.2 million, up 10% and the fourth highest on record.

Halstrom cautioned that the COVID-19 pandemic is still a major concern for the U.S. meat industry, adding uncertainty to the business climate in many export destinations. Logistical challenges, including container shortages and ongoing vessel congestion at many U.S. ports, also present significant obstacles for red meat exports.

“While conditions are improving in many key markets, the COVID impact is the most intense it has ever been in Taiwan and heightened countermeasures are also in place in Japan and other Asian countries,” Halstrom explains. “But foodservice activity is climbing back in our Latin American markets and retail demand – both in traditional settings and in e-commerce – has been outstanding and USMEF continues to find innovative ways for the U.S. industry to capitalize on these opportunities. We are also working with ag industry partners and regulatory agencies to find ways to improve the flow of outbound cargo, which is essential to maintaining export growth.”

By | June 9th, 2021|Daily Market Highlights|

Cattle Current Daily—June 9, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Tuesday afternoon, according to the Agricultural Marketing Service. Last week in the Southern Plains, live sales traded at $120. In Nebraska and the Western Corn Belt, trade was slow on moderate demand. Live sales in Nebraska traded steady at $120, dressed at $190-$191. In the Western Corn Belt, a few lives sales traded from $120-$121 and dressed from $190-$193. In Kansas, trading was limited on light demand with a few live sales at $119.

Cattle futures traded mixed Tuesday with Feeder Cattle mainly pressured by higher Corn futures, while Live Cattle edged higher, helped along by early cash direction.

Feeder Cattle futures closed an average of 59¢ lower through the front half of the board and then an average of 30¢ higher, except for $1.15 lower in the back contract.

Live Cattle futures closed an average of 36¢ higher, except for 30¢ lower in the back contract.

Choice boxed beef cutout value was 1¢ higher Tuesday afternoon at $338.61/cwt. Select was $2.99 lower at $306.18

A continued hot and dry forecast in the Midwest and Northern Plains helped push  grain markets higher on Tuesday.

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed mostly 6¢ to 17¢ higher, except for 15¢ to 17¢ lower in most ‘23 contracts.

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Major U.S. financial indices were little changed Tuesday with some investors likely waiting for Thursday’s inflation reading that comes with the consumer price index. The Dow Jones Industrial Average closed 31 lower. The S&P 500 closed 1 point higher. The NASDAQ up 43 points.

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Good, bad or otherwise, the state of cattle markets is drawing more Congressional attention.

Yesterday, Representative Vicky Hartzler (R-MO) introduced the Optimizing the Cattle Market Act of 2021 in the U.S. House. The legislation builds on a growing consensus among cattle producers, industry leaders, and Members of Congress that current market dynamics are unsustainable for the beef supply chain.

If enacted, the bill would direct the U.S. Department of Agriculture (USDA) to create a cattle formula contracts library, and increase the reporting window for “cattle committed” from seven to 14 days. These measures would increase transparency in the industry and improve the opportunity for robust price discovery.

Rep. Hartzler’s legislation also reiterates the need for expedited reauthorization of USDA’s Livestock Mandatory Reporting (LMR) program. That jibes with one of the recommendations from the coalition of national cattlemen’s organizations that met last month.

The bill would also require USDA, in consultation with the Chief Economist, to establish mandated minimums for regional negotiated cash and negotiated grid live cattle trade. Minimums would be set within two years of passage of the bill, and would invite stakeholder input through a public comment period and the consideration of key, peer-reviewed research from land grant universities.

Mandatory requirements versus voluntary ones remain a difference of opinion between producers and producer groups. In the case of the National Cattlemen’s Beef Association (NCBA), for instance, grassroots policy supports voluntary regional minimums, but also provides for pursuing a legislative or regulatory solution determined by membership. 

“The growing momentum we’re seeing in the House and Senate behind addressing these critical concerns in the cattle markets is reflective of the urgency producers are feeling across the country,” says Ethan Lane,  NCBA Vice President of Government Affairs. “Extreme market volatility, unpredictable input costs, a shifting regulatory landscape and natural crises like drought leave cattle farmers and ranchers with a growing list of threats to their continued financial viability. Something needs to give.”

Also on Tuesday, Representative Mike Guest (R-MS) and Representative Darren Soto (D-FL) led a bipartisan group of 52 lawmakers in pushing the U.S. Department of Justice (DOJ) to complete its investigation into the meatpacking sector, and whether or not anticompetitive practices have contributed to a persistent imbalance in the cattle markets.

By | June 8th, 2021|Daily Market Highlights|

Cattle Current Daily—June 8, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Western Corn Belt through Monday afternoon, according to the Agricultural Marketing Service. In Nebraska, trading was mostly inactive with very light demand. Last week, live prices were at $120. Dressed prices in Nebraska and the Western Corn Belt were at $190-$191.

Cattle futures tread water to the downside Monday with pressure from new-crop grain prices and the appearance of an imminent top for wholesale beef values.

Feeder Cattle futures closed an average of 18¢ lower, except for 28¢ and 55¢ higher at either end of the board.

Live Cattle futures closed an average of 33¢ lower through the front four contracts and then an average of 68¢ higher (37¢ higher to $1.60 higher in the back contract).

Choice boxed beef cutout value was 38¢ lower Monday afternoon at $338.60/cwt. Select was $2.56 lower at $309.17.

Except for nearby contracts, grain futures continued to extend gains Monday.

Corn futures closed 10¢ to 14¢ higher in new-crop contracts, and then mostly 4¢ to 7¢ higher. Spot Jly was down 3¢.

Soybean futures closed mostly 7¢ to 14¢ higher, except for 4¢ to 23¢ lower in the front three contracts.

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Major U.S. financial indices fell on Monday, due mostly to concern over inflation risks and speculation about the Fed’s looming decision on interest rates. However, the NASDAQ gained on biotech stocks.

The Dow Jones Industrial Average closed 126 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 67 points.

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“Calmer times may be coming but we are not quite there yet,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “It will take a few more weeks to work through current fed cattle supplies and get the packing industry below capacity constraints. That will allow fed cattle markets to once again fully reflect market conditions.”

Peel points out domestic and international beef markets are very strong as economies continue to open.

“Feed prices are expected to remain elevated and feeder cattle markets will continue to adjust to both feed market and fed cattle market conditions,” Peel says. “Drought impacts remain uncertain and the short-term and long-term impacts on cattle markets are unknown. If enough herd liquidation is forced by the drought, short-term cattle slaughter and beef production will be higher than expected and beef production prospects beyond 2021 will be reduced.”

By | June 7th, 2021|Daily Market Highlights|

Cattle Current Daily—June 7, 2021

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on light demand.

Regionally, negotiated prices last week were mostly steady to $1 either side of steady. Live prices were at $120/cwt. and dressed prices were at $189-$191.

Estimated total cattle slaughter for the week ending June 5 was 538,000 head, according to USDA. That was 91,000 head fewer than the previous week and 90,000 head fewer than the same week a year earlier. Estimated beef production for the week was 443.0 million lbs., which was 75 million lbs. less than the previous week.

Surging Corn futures prices hammered Feeder Cattle futures on Friday. It’s likely week-end profit taking also played a role.

Feeder Cattle futures closed an average of $2.09 lower ($1.32 lower at the back to $3.02 lower in spot Aug).

Although mainly lower Friday, Live Cattle futures continued to consolidate, supported by wholesale beef values and slaughter data suggesting a return to post-pandemic normal following disruptions at JBS earlier in the week.

Live Cattle futures closed an average of 47¢ lower, except for 5¢ and $1 higher at either end of the board and unchanged in away Aug.

Net U.S. beef export sales of 12,600 metric tons for 2021 were 55% less than the previous week and 38% less than the prior four-week average, according to USDA’s Export Sales report for the week ending May 27. Increases were primarily for Japan, South Korea, Taiwan, Mexico and Chile.

Choice boxed beef cutout value was $1.57 lower Friday afternoon at $338.98/cwt. Select was $1.43 lower at $311.73.

Grain markets were sharply higher on Friday as extreme heat gripped the Western Corn Belt and Northern Plains.

Corn futures closed up through Jul ’22 an average of 24¢ higher.

Soybean futures closed up an average of 33¢ through Jan ’22.

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Major U.S. financial indices rallied on Friday despite a somewhat disappointing jobs report and downward pressure on the dollar. The S&P 500 almost hit an all-time high as investor anxiety seemed to lessen about the Federal Reserve changing rates and tapering support. NASDAQ posted its best day in three weeks.

The Dow Jones Industrial Average closed 179 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 200 points.

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Drought continues to elevate beef cow slaughter.

“The start of pasture and range conditions (this year) was the worst since the 2012 and 2013 growing seasons. These early weeks are showing a large portion of the U.S. was already requiring supplemental feed to maintain herds,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “For the west, this is a second year of continued hardship and will result in a second year of beef cow culling. As of this week (June 4) about 25% of the beef cowherd was in areas where pasture and range conditions were assessed as poor and very poor. This is an improvement from a few weeks ago, when 40% of the cowherd was assessed to be in those conditions. Still, pasture and range is not improving evenly.”

More specifically, utilizing regional USDA cow slaughter reports, LMIC analysts point out beef cow slaughter is 29% higher year over year in Region 5 (IL, IN, MI, MN, OH, WI), 12% higher in Region 6 (AR, LA, NM, OK, TX) and 18% higher in Region 9 (AZ, CA, HI, NV).

“Total U.S. beef cow slaughter in federally inspected plants is up 10.1% year to date,” explain LMIC analysts. “In the last couple of weeks, beef cow slaughter accelerated, hitting above 70,000 head per week. The percent change is being amplified by below average slaughter levels of last year during April and May…In addition to the West, drought has been creeping into the Southeast, and the Northern Plains continue to struggle with limited moisture.”

By | June 6th, 2021|Daily Market Highlights|

Cattle Current Daily—June 4, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light to moderate demand.

So far this week, live sales are steady to $4 higher in the Texas Panhandle at $120/cwt., steady in Kansas at $119 to $120 and steady at $120 in Nebraska and the western Corn Belt. Dressed trade is steady with the upper end of last week’s range at $190-$191.

Cattle futures, especially Feeder Cattle faded early pressure to close mainly higher Thursday with continued support from higher wholesale beef values.

Feeder Cattle futures closed an average of $1.54 higher (62¢ higher in spot Aug to $2.92 higher at the back).

Live Cattle futures closed an average of 60¢ higher (12¢ to $1.02 higher), except for an average of 44¢ lower in the front three contracts.

Choice boxed beef cutout value was 39¢ higher Thursday afternoon at $340.55/cwt. Select was $1.28 higher at $313.16.

Grain markets were mainly lower on Thursday with weather forecasts continuing to cast a shadow.

Corn futures closed 6¢ to 13¢ lower through Jly ’22 and then mostly unchanged to fractionally higher.

Soybean futures closed 9¢ to 13¢ lower through Jan ‘22 and then mostly 5¢ higher, except for fractionally lower to 4¢ lower in a few middle contracts.

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Major U.S. financial indices fell on Thursday with uncertainties about the strength of the economy and anticipation over when the Federal Reserve may slow or stop support. Friday’s jobs report is expected to give a strong indication of where the economy stands.

The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 142 points.

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Agricultural producer sentiment declined significantly last month, according to the Purdue University/CME Group Ag Economy Barometer. Month to month, the index dropped 20 points to 158, the lowest level since September last year.

“The potential for changing tax rules and rising input costs appeared to be on producers minds this month and were the primary drivers for the Ag Barometer’s decline,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

More specifically, producers’ expectations for good versus bad times in U.S. agriculture shifted dramatically. In May, just 27% of respondents said they expect good times in U.S. agriculture during the next five years, the lowest reading in the survey’s history and down 12 points from a month earlier. One driver appears to be the dichotomy between expectations for the crops versus livestock sectors. More than half (54%) of respondents said they expect widespread good times for the crops sector in the next five years, but just one-fourth (26%) of producers said they expect the same for the livestock sector.

“The difference in expectations for these two principal sectors of the agricultural economy could help explain why producers appear to be very bullish about farmland values and cash rental rates while at the same time expressing less optimism about both current conditions and future expectations for the agricultural economy overall,” Mintert says.

By | June 3rd, 2021|Daily Market Highlights|

Cattle Current Daily—June 3, 2021

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains. A few live sales in the Texas Panhandle traded from $119 to $120/cwt. through Wednesday afternoon, according to the Agricultural Marketing Service. In Kansas, a few live purchases traded at $120. In Nebraska and the Western Corn Belt, negotiated cash trading was slow with moderate demand. There were a few dressed trades in Nebraska at $190 to $191. In the western Corn Belt, there were a few live sales at $120 and few in the beef at $190-$191.

Feeder Cattle futures rallied higher with news JBS was resuming operations following the cyber-attack on its IT systems.

Feeder Cattle futures closed an average of $2.08 higher, from $3.18 to $2.40 higher in the front three months and $1.90 to $1.40 higher across the rest of the board.

Live Cattle futures closed an average of $1.61 higher, with the most gain ion the front two contracts. Only Apr ’22 and Jun ’22 gained less than $1 at 75¢ and 88¢ respectively.

Choice boxed beef cutout value was was $5.60 higher Wednesday afternoon at $340.16/cwt. Select was $5.43 higher at $311.88.

Grain markets were mixed on Wednesday with weather weighing on the corn market.

Corn futures closed down across the board an average of 6¢ lower through Jly ‘22.

Soybean futures closed up up an average of 16¢ through Mar ’22.

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Major U.S. financial indices closed narrowly higher on Wednesday, remaining near all-time highs.

The Dow Jones Industrial Average closed 25 points higher at 34,600. The S&P 500 closed 6 points higher at 4,208. The NASDAQ closed 20 points higher at 13,756.

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“Cattle producers are frustrated, and with good reason. In sale barns and state meetings across the country, we’re hearing the same story of sky-high input costs and intense market volatility. Across the industry, there’s a consensus that market dynamics which consistently squash producer profitability are not sustainable for live cattle or beef producers,” says NCBA President Jerry Bohn, president of the National Cattlemen’s Beef Association (NCBA). “As members of Congress create policy that directly impacts business conditions for our producers, it is critical that they consider the grassroots input and firsthand experiences of folks on the ground. Our letter provides that perspective and reinforces how urgently we need something to shift here to strengthen the security of the beef supply chain. NCBA has strong working relationships with members on both sides of the aisle, we have grassroots policy to back the actions we outlined today, and we hope the conversation in Washington around these critical policy areas will progress quickly.”

The letter Bohn refers to is one NCBA sent—with the support of 37 affiliate state cattle organizations— urging the leadership of the U.S. Senate and House Agriculture Committees to address critical areas of concern in the cattle and beef industry.

Specifically, NCBA pushed Sen. Debbie Stabenow (D-MI), Sen. John Boozman (R-AR), Rep. David Scott (D-GA-13), and Rep. Glenn “GT” Thompson (R-PA-15) to consider swift Congressional action to:

  • Expand beef processing capacity
  • Broaden labor policies to strengthen the beef processing workforce
  • Increase transparency in cattle markets by reauthorizing Livestock Mandatory Reporting (LMR)
  • Support industry efforts to reform “Product of the USA” generic labeling
  • Ensure proper oversight of cattle market players by concluding the ongoing U.S. Department of Justice investigation into the meatpacking sector
By | June 3rd, 2021|Daily Market Highlights|

Cattle Current Daily—June 2, 2021

Cattle futures dropped hard Tuesday, in response to the uncertainties spawned by disruptions to JBS processing facilities, caused by the Sunday cyber-attack on that company’s global IT infrastructure. They clawed back some of the losses by the end of the session, though.

According to a JBS news release: “On Sunday, May 30, JBS USA determined that it was the target of an organized cyber-security attack, affecting some of the servers supporting its North American and Australian IT systems. The company took immediate action, suspending all affected systems, notifying authorities and activating the company’s global network of IT professionals and third-party experts to resolve the situation. The company’s backup servers were not affected, and it is actively working with an Incident Response firm to restore its systems as soon as possible.

“The company is not aware of any evidence at this time that any customer, supplier or employee data has been compromised or misused as a result of the situation. Resolution of the incident will take time, which may delay certain transactions with customers and suppliers.”

Widespread reports suggested JBS packing facilities closed. At press time there was no word on when normal production would resume. However, there were unconfirmed reports Tuesday evening that operations would resume Wednesday.

There was no negotiated trade report from the Agricultural Marketing Service as of press time Tuesday evening.

Negotiated cash fed cattle prices last week were at $116-$120/cwt. in the Texas Panhandle, at $119-$120 in Kansas and at $120 in Nebraska and the western Corn Belt. Dressed prices were at $191 in Nebraska and at $189-$191 in the western Corn Belt.

Feeder Cattle futures closed mixed on Tuesday, with JBS uncertainty weighing on the front months.

Feeder Cattle futures closed an average of $1.28 lower through the front half of the board, (45¢ lower to $2.20 lower in spot Aug) and then an average of 36¢ higher.

Live Cattle futures closed an average of $1.70 lower in the front three contracts (77¢ to $2.32 lower) and then an average of 89¢ higher, except for unchanged in the back contract.

Choice boxed beef cutout value was $3.59 higher Tuesday afternoon at $334.56/cwt. Select was $5.55 higher at $306.45.

Grain markets were up on Tuesday on news of a hot, dry forecast for the next two weeks in northern U.S. growing areas as well as southern Canada. Brazil’s drought also worsened.

Corn futures closed 28¢ to 32¢ higher through Jly ’22 and then mostly 10¢ to 15¢ higher.

Soybean futures closed mostly 16¢ to 24¢ higher.

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Major U.S. financial closed narrowly mixed Tuesday as investors wait for economic data coming out this week to indicate how well the economy is rebounding and to get a feel for inflation.

The Dow Jones Industrial Average closed 46 points higher. The S&P 500 2 points lower. The NASDAQ closed 12 points lower.

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“With the economy opening up and growing rapidly, meat markets of all types are enjoying strong demand,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “In numerous cases, wholesale prices for specific meat products are at record levels, exceeding the levels provoked by the pandemic disruptions one year ago; and unlike last year, lack of supply is not the issue. Year-to-date production of beef, pork and broilers is higher, not only compared to last year but also compared to 2019 levels.”

Wholesale beef tenderloin set a new record at more than $17/lb., Peel says, in his weekly market comments. Ribeye prices also set a new record at more than $13/lb.

“Tenderloin is almost exclusively a restaurant item, while ribeye is popular in restaurants, at retail grocery and for export,” Peel explains. “Strip loins are very popular at retail grocery and prices have also increased sharply this year but failed to exceed the pandemic levels from last year. Brisket prices have increased dramatically since January, averaging over $7/lb. in May; another indication that BBQ is back.”

Prices for chuck and round products—driven by retail grocery for use as value cuts and ground beef—are higher, too, but less steeply than middle meats, Peel says.

By | June 1st, 2021|Daily Market Highlights|

Cattle Current Daily—May 31 and June 1, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

Live prices last week were steady to $3 lower in the Texas Panhandle at $116-$120/cwt., steady to $1 lower in Kansas at $119-$120 and steady at $120 in Nebraska and the western Corn Belt. Dressed prices were steady to $1 higher in Nebraska at $191; steady in the western Corn Belt $189-$191.

Live Cattle futures closed mixed Friday, an average of 46¢ lower through the front four contracts, and then unchanged to an average of 7¢ higher. Part of the pressure likely stemmed from the lack of budge in cash prices, while the rally in wholesale beef values appears long in the tooth.

Choice boxed beef cutout value was 99¢ higher Friday at $330.97/cwt. Select was $3.20 lower at $300.90.

Feeder Cattle futures closed an average of $1.28 lower. Even though Corn futures were mostly 3¢ to 9¢ lower, the steep climb in the previous session continued to apply pressure. Feeder Cattle were down an average of about $3 in the last two sessions.

Total estimated cattle slaughter the week ending May 29 was 629,000 head, according to USDA. That was 40,000 head fewer than the previous week. Total estimated beef production for the week was 518.0 million lbs., which was 32.7 million lbs. less than the prior week.

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Major U.S. financial indices edged higher Friday on generally positive economic news.

Personal consumption expenditures (PCE), excluding food and energy, increased $80.3 billion (0.5%), according to the U.S. Bureau of Economic Analysis. The core PCE price index, excluding food and energy—a key inflation gauge the Federal Reserve monitors—was 3.1% more than a year earlier, according to the U.S. Commerce Department. The pace of inflation was slightly more than analyst expectations but reportedly less than many traders feared.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 12 points.

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Between new packing plants and plans for expanding current facilities, the North American Meat Institute (the Meat Institute) estimates there’s an additional 4,150 head per day (+4%) packing capacity in various stages of completion. However, even with added capacity, Sarah Little, vice president of communications for the Meat Institute explains, “Labor is, and is likely to remain, a significant factor that affects utilization of production; and is also a factor that will challenge new small and medium sized facilities entering the market.”

As mentioned previously in Cattle Current, there are no easy solutions to the ongoing predicament of lower derivative demand for fed cattle from packers, relative to elevated derivative demand from wholesalers and overall strong consumer beef demand. Economic fundamentals explain the current reality, no matter how frustrating.

Plenty of emotion is understandably involved, but sharing myths as fact hinders legitimate discussion and the search for long-term market solutions. With that in mind, the Meat Institute shared facts to counter several popular cattle market myths. Among them:

Myth: Fed cattle marketing options such as forward contracting and formula-based sales, allow meatpackers to exert more control, limit competition and depress sales in the live cash market.

Fact: Forward contracts and formula-based sales provide an effective way for producers to hedge their risk and lock in prices. They also often pay premiums for quality. This allows packers and producers and feeders to predict needs in advance…In its 2018 report to Congress, USDA’s Agricultural Marketing Service reported, “Stakeholders were in general agreement that formula-based purchases provide greater benefits, in terms of operational efficiency, for both packers and feedlots.”

Fact: From 2002 to 2019, according to USDA data compiled by economist and industry expert Nevil Speer, PhD, while the number of cattle sold on a cash market basis declined 55%, beef grading in the top two quality grades (Choice and Prime) increased 39%. During the same period of time, consumer per capita beef expenditures increased 56%.

Myth: Packers can control prices and defy expectations of market fundamentals.

Fact: The cattle market works as economists would have predicted, given the current conditions: when supplies of cattle increase, prices decrease, and vice versa.

Fact: There appears to be insufficient long-term profitability to attract many investors to the beef packing sector. According to Rabobank analysts, “Several considerable hurdles must be addressed by both incumbents and new entrants…First, the upfront cost of a new plant is extremely expensive…$100 million to $120 million USD for every 1,000 head of daily capacity.

“… the capital depth and longevity required to build and maintain a new plant through its first cattle cycle precludes most would-be investors from considering such a project…That’s not a recipe for thin capital or weak hearts.”

By | May 30th, 2021|Daily Market Highlights|

Cattle Current Daily—May 28, 2021

Negotiated cash fed cattle trade was at a standstill in Colorado through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was mostly inactive on very light demand.

So far this week, live prices are $116-$120/cwt. in the Texas Panhandle, $119-$120 in Kansas and at $120 in Nebraska and the western Corn Belt. Dressed prices are at $191 in Nebraska and $189-$191 in the western Corn Belt.

Feeder Cattle futures closed an average of $1.69 lower Thursday, from 20¢ lower in spot May to $2.35 lower. Corn futures applied the pressure, up 33¢ to 40¢ higher through Jly ’22 and then mostly 13¢ to 24¢ higher. Dryness in the forecast and strong exports helped fuel the bounce. Soybean futures tagged along, closing 26¢ to 34¢ higher.

Live Cattle futures edged an average of 20¢ higher, except for 10¢ lower in spot Jun. Support included positive export news.

Net U.S. beef export sales of 27,900 metric tons (mt) for 2021 were 19% more than the previous week and 45% more than the prior four-week average, according to USDA’s U.S. Export Sales report for the week ending May 20. Increases were primarily for China, Japan, South Korea, Indonesia, and Taiwan.

Choice boxed beef cutout value was 49¢ higher Thursday afternoon at $329.98/cwt. Select was 5¢ higher at $304.10

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Major U.S. financial indices closed flat to higher Thursday, supported by fewer initial weekly unemployment insurance claims than analysts expected. Initial claims were 406,000 for the week ending May 22, according to the U.S. Department of Labor. That was 38,000 fewer than the previous week and the least since March of last year.

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 1 point.

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La Niña conditions ended earlier this month and NOAA forecasters estimate about a 67% chance that neutral conditions will continue through the summer.

As it is, dryness and drought continues across much of the United States, according to the U.S. Drought Monitor. Specifically, 61.4% of the nation is classified from abnormally dry to exceptional drought, compared to 34.4% a year earlier; 21.3% is experiencing extreme or exceptional drought versus 1.2% last year.

By | May 27th, 2021|Daily Market Highlights|

Cattle Current Daily—May 27, 2021

Negotiated cash fed cattle trade was slow on light demand through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices in the Texas Panhandle Prices were steady to $3 lower than last week at $116-$120/cwt., steady to $1 higher in Kansas at $119-$120 and steady in Nebraska at $120. Dressed trade was steady to $1 higher in Nebraska at $191.

Although there were too few transactions to trend in the western Corn Belt, early live trades were steady at $120, while dressed sales were steady to $3 higher at $191.

Cattle futures edged lower Wednesday. Pressure included softer cash prices in the south and a deceleration in wholesale beef values.

Feeder Cattle futures closed an average of 49¢ lower (5¢ to $1.47 lower), except for an average of 24¢ higher in two contracts. 

Live Cattle futures closed an average of 34¢ lower.

Corn futures edged mostly 2¢ to 5¢ higher Wednesday, following the previous day’s steep break.

Front-month Soybeans continued to soften with the lack of follow-through export sales. Soybean futures closed fractionally lower to 8¢ lower through Jly ‘22 and then mostly 7¢ higher.

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Major U.S. financial indices closed mainly flat Wednesday.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 7 points higher. The NASDAQ was up 80 points.

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USDA projects U.S. beef exports this year to be record large for both volume and value at $7.6 billion, according to the latest quarterly Outlook for U.S. Agricultural Trade. That’s $200 million more than forecast three months earlier, based on both increased volume and unit values.

For that matter, USDA forecasts record-high levels of exports for other red meats and poultry, as well as for U.S. agricultural products overall. Total value of U.S. farm exports for fiscal year 2021 is projected to be $164 billion, which would be $28 billion more (+21%) than the previous year and the highest total on record. The annual export record of $152.3 billion was set in 2014.

“U.S. agricultural trade has proven extraordinarily resilient in the face of a global pandemic and economic contraction,” says Agriculture Secretary Tom Vilsack. “Today’s estimate shows that our agricultural trading partners are responding to a return to certainty and reliability from the United States.” 

Key drivers of the surge in projected U.S. agricultural exports include a record outlook for China, record export volumes and values for a number of key products, sharply higher commodity prices, and reduced foreign competition.

China is poised to be back on top as the United States’ number one customer, with U.S. exports to that nation forecast at $35 billion, eclipsing the previous record of $29.6 billion set in 2014.

“The comparatively early post-pandemic re-emergence of the manufacturing sector in China facilitated the boost in global demand for goods, helping China’s GDP to grow by 2.3% in 2020,” say analysts with USDA’s Economic Research Service (ERS). GDP in China this year is projected to be 8.2%.

As the global economy emerges from the pandemic, ERS analysts note the significant price increase for commodities, such as lumber and copper, used in manufacturing and construction.

“The current level of backwardation or inversion of commodity future contracts, where the nearby delivery contract is priced above more distant delivery dates, suggests the price boom is in part due to near-term supply constraints,” say ERS analysts. “The U.S. dollar is expected to depreciate by 2.4% in 2021, which is likely to continue to support higher commodity demand and prices into next year.”

By | May 26th, 2021|Daily Market Highlights|

Cattle Current Daily—May 26, 2021

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains, Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales at $119 to mostly $120/cwt., except for $118 in the western Corn Belt. Early dressed sales in Nebraska were at $191.

Feeder Cattle futures closed higher Tuesday, boosted by another sharp break in Corn futures prices.

Feeder Cattle futures closed an average of $2.07 higher, from 35¢ higher in spot May to $2.55 higher. 

Live Cattle futures mainly edged higher, supported by wholesale beef values and resurgent front-month

Live Cattle futures closed an average of 30¢ higher, except for unchanged to an average of 9¢ lower in three contracts.

Choice boxed beef cutout value was $2.09 higher Tuesday afternoon at $329.92/cwt. Select was 87¢ higher at $304.26

Corn futures wilted Tuesday, pressured by planting progress and crop development, forecast rain and chatter about more corn acres.

Corn futures closed 23¢ to 37¢ lower though Jly ‘22 and then mostly 8¢ lower

Soybean futures closed 10¢ to 15¢ lower through May ‘22 and then mostly 6¢ lower.

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Major U.S. financial indices softened Tuesday after early gains.

The Dow Jones Industrial Average closed 81 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 4 points. 

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Total pounds of beef in freezers April 30 were 6% less than the previous month and 5% less than a year earlier, according to USDA’s monthly Cold Storage report. 

Frozen pork supplies were up 1% from the previous month but down 26% from last year. Stocks of pork bellies were down 3% from last month and down 58% from last year.

Total red meat supplies in freezers were 3% less than the previous month and 17% less than the same time last year.

Total frozen poultry supplies were down slightly from the previous month and down 20% from a year ago.

By | May 25th, 2021|Daily Market Highlights|

Cattle Current Daily—May 25, 2021

Negotiated cash fed cattle trade was mostly inactive with very light demand in Nebraska and the western Corn belt through Monday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was at a standstill.

Live prices last week were at $119-$120/cwt. in the Texas Panhandle, at $119 in Kansas and at $120 in other regions. Dressed trade was at $190-$191 in Nebraska, $191 in Colorado and at $188-$191 in the western Corn Belt.

Feeder Cattle futures shrugged off Friday’s Cattle on Feed report and mostly extended gains Monday, helped along by further softness in Corn futures and recently stronger cash prices.

Feeder Cattle futures closed an average of 57¢ higher, except for 95¢ lower in spot May and unchanged in Mar.

Live Cattle futures weakened. Besides the lack of early-week cash direction, traders are likely trying to decide whether beef prices decline significantly after the Memorial Day push or slowly recede from current levels with further reopening of restaurants and food service.

Live Cattle futures closed an average of 55¢ lower, from 15¢ lower toward the back to 92¢ lower in spot Jun.

Choice boxed beef cutout value was $2.66 higher Monday afternoon at $327.83/cwt. Select was $1.08 higher at $303.39

Corn futures closed mostly 5¢ to 6¢ lower. 

Soybean futures closed mostly 3¢ to 4¢ higher, after 1¢ to 3¢ lower in the front three contracts.

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Major U.S. financial indices closed higher Monday, apparently buoyed most by stocks that gain more with the reopening economy.

The Dow Jones Industrial Average closed 186 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 190 points.

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“Current futures prices imply fourth-quarter margins will be very good for feedlots,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “LMIC projected break-evens currently list October at about $115/cwt., nearly $10 under the current October Live Cattle Contract. More distant deferred Live Cattle contracts are even higher, which should bode well for cattle feeding returns into the first half of 2022.”

So far this year, LMIC estimates cattle feeding returns at -$60 to +$40 per head, due in part to escalating feed costs on the negative side of the ledger, but supported by declining feeder cattle prices from August of last year through January this year.

“Break-evens have been declining since January because of the rapid decline in feeder prices six months prior,” say LMIC analysts. “However June will be the last month of declining feeder costs, and those breakeven prices are expected to rise at least through September. May feeder cattle costs are expected to drop significantly, offering an opportunity for cattle feeders to make money in the fourth quarter.”

By | May 24th, 2021|Daily Market Highlights|

Cattle Current Daily—May 24, 2021

Negotiated cash fed cattle trade was mostly inactive with very light demand in Nebraska and the western Corn belt through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was at a standstill.

For the week, live prices were steady to 50¢ higher in the Texas Panhandle at $119-$120/cwt., $1 lower in Kansas at $119, steady in Nebraska at $120 and mostly steady in the western Corn Belt at $120. Dressed prices were steady to $1 lower at $190-$191 in Nebraska and at $188-$191 in the western Corn Belt.

Cattle futures closed mainly higher Friday, with a late surge after two-sided trading. Support included softer, more stable Corn futures, along with continued demand strength.

Feeder Cattle futures closed an average of $1.69 higher. 

Live Cattle futures closed an average of 66¢ higher, (27¢ to $1.07 higher), except for and average of 30¢ lower in the back to contracts.

How the market reacts to the monthly Cattle on Feed report (see below) is anybody’s guess.

Boxed beef cutout value (p.m.): Choice boxed beef cutout value was 99¢ higher Friday afternoon at $325.17/cwt. Select was 70¢ higher at $302.31.

Estimated total cattle slaughter of 669,000 head last week was 29,000 head more than the previous week. Estimated year-to-date total cattle slaughter of 12.9 million head is 757,000 head more (+6.2%) than last year’s pandemic-ravaged pace. Estimated beef production last week was 550.7 million lbs., which was 23.1 million lbs. more than the previous week.

Corn futures closed mostly 3¢ to 5¢ lower. 

Soybean futures closed 7¢ to 14¢ lower. 

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Major U.S. financial indices closed mixed Friday, with most of the pressure on big tech stocks. The Dow Jones Industrial Average closed 123 points higher. The S&P 500 3 points lower. The NASDAQ down 64 points.

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Reaction to the monthly Cattle on Feed report for feedlots with 1,000 head or more capacity could range from neutral to widely diverse.

April placements of 1.82 million head were 389,000 head more (27.16%) more than the previous year, which was about 6.3% more than the average of analyst expectations ahead of the report. However, comparing to last year’s pandemic blip seems a fool’s errand. Compared to 2019, April placements were 21,000 head fewer (-1.14%).

In terms of placement weight, 35% went on feed weighing 699 lbs. or less, 49% weighing 700-899 lbs. and 16% weighing 900 lbs. or more.

Marketings in April of 1.94 million head were 479,000 head more (32.83% more) than a year earlier, about even with the average of analyst expectation. The number was 10,000 head more (0.5%) than the same month in 2019.

Cattle on Feed May 1 of 11.73 million head were 525,000 head more (4.69%) more than last year and the second most for the date since the data series began in 1996. That was about 1% more than what analysts expected, on average. Compared to two years earlier, there were 93,000 head fewer (-0.79%) cattle on feed.

By | May 23rd, 2021|Daily Market Highlights|

Cattle Current Daily—05-21-21

Negotiated cash fed cattle trade was slow on moderate demand in Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service.

Live trade continued at $120/cwt. in Nebraska, which is steady with the previous week. Dressed trade earlier in the week was at $190-$191, which was steady to $1 lower.

Although too few to trend, there were some live trades in the western Corn Belt at $120 and some in the beef at $191. Prices last week were at mostly $120 and $188-$191, respectively.

Trade was limited on light demand in Kansas with a few live trades at $119, steady with earlier in the week but steady to $1 lower than last week.

Elsewhere, trade was mostly inactive on very light demand. Earlier in the week live trades were at $119-$120 in the Texas Panhandle, which was steady to 50¢ higher than last week.

Feeder Cattle futures closed and average of $1.54 lower Thursday, pressured by the bounce higher in Corn futures and the dour fed cattle market.

Live Cattle futures closed mixed (average of 22¢ lower to average of 43¢ higher), helped along by stellar wholesale beef prices.

Choice boxed beef cutout value was 80¢ higher Thursday afternoon at $324.18/cwt. Select was $1.92 higher at $301.61.

Net U.S. beef export sales added optimism. For the week ending May 13, they were 56,900 metric tons (mt), according to the U.S. Export Sales report from USDA. That’s a market-year high, up noticeably from the prior week and from the previous four-week average. Increases were primarily for the Netherlands, China, Japan, South Korea and Taiwan.

The average dressed steer weight the week ending May 8 was 896 lbs., which was 5 lbs. heavier than the previous week and even with the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 826 lbs., which was 2 lbs. heavier than the prior week but 3 lbs. lighter than the previous year.

Corn futures closed mostly 12¢ to 13¢ higher through Jly ‘22 and then mostly 3¢ to 4¢ higher.

Soybean futures closed mostly fractionally lower to 3¢ lower.

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Major U.S. financial indices closed higher Thursday, lifted by a rebound from the previous session’s sharp decline in digital Bitcoin currency, as well as positive employment news. Weekly initial unemployment insurance claims were 444,000, according to the U.S. Department of Labor. That was 34,000 fewer than the previous week and a pandemic-era low.

The Dow Jones Industrial Average was up 188 points. The S&P 500 closed 43 points higher. The NASDAQ was up 236 points.

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Beef production next year is projected to be 2% less than this year at 27.3 billion lbs., according to USDA’s Economic Research Service (ERS). If so, that would be the first year-over-year decline of domestic beef production in seven years.

That’s based on expectations drought conditions will accelerate the pace of cattle slaughter in the second-half of this year, likely reducing cattle supplies for next year. “However, carcass weights are expected to increase year over year as non-fed cattle will be a smaller portion of the slaughter mix,” ERS analysts explain.

The same expectations for increased cattle slaughter in the second half of this year led ERS to increase projected 2021 beef production to 27.9 billion lbs., which was 260 million lbs. more than the previous month.

“A greater number of feeder cattle than expected were placed in first-quarter 2021, raising the expected pace of fed cattle marketed for slaughter,” say ERS analysts in the latest Livestock, Dairy and Poultry Outlook. “In second-quarter 2021, poor pasture conditions and higher feed costs will likely favor a faster pace of cattle entering feedlots, supporting higher fed cattle marketings in the second half of 2021. Further, in the face of expected tightening forage supplies, producers will likely increase culling of breeding stock—both cows and bulls—in second-half 2021.”

By | May 20th, 2021|Daily Market Highlights|

Cattle Current Daily—May 20, 2021

Negotiated cash fed cattle trade was slow on light to moderate demand in Kansas, Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service.

For the week, live sales are steady to $1 lower in Kansas at $119/cwt.. steady in Nebraska at $120, and steady to 50¢ higher in the Texas Panhandle at $119-$120. Dressed trade in Nebraska is steady to $1 lower at $190-$191.

Slaughter steers sold steady to $1 higher at the Sioux Falls Regional fat auction Wednesday. Slaughter heifers traded $1-$2 higher. There were 246 Choice 3-4 steers weighing an average of 1,536 lbs., bringing an average of $120.57/cwt.

Feeder Cattle futures were mostly higher Wednesday, buoyed by pressure in grain markets. They closed an average of 85¢ higher (10¢ to $1.22 higher), except for 62¢ lower in spot May. 

Live Cattle futures closed narrowly mixed as traders balanced sluggish cash prices and cattle movement with expectations for lower boxed beef prices after Memorial Day buying ends. They closed an average of 34¢ lower, except for an average of 22¢ higher in the front three contracts.

Choice boxed beef cutout value was 4¢ higher Wednesday afternoon at $323.38/cwt. Select was 64¢ higher at $299.69

Corn futures closed mixed, from 4¢ lower to 1¢ higher with most of the pressure in nearby contracts.

Soybean futures closed mostly 21¢ to 36¢ lower through Jly ‘22 and then mostly 6¢ to 10¢ lower. 

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Major U.S. financial indices closed lower Wednesday, but well off of session lows as a sudden, sharp decline in digital Bitcoin currency rattled investors and fueled a decline in speculative stocks.

The Dow Jones Industrial Average closed 164 points lower. The S&P was down 12 points. The NASDAQ was down 3 points. 

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“With decreased forages available, feeder cattle may need to enter feedlots earlier, depressing feeder cattle prices and possibly having a seasonal low mid-summer as opposed to early fall,” says Brenda Boetel, Extension livestock economist at the University of Wisconsin-River Falls. “With continued labor shortages and high levels of cattle on feed, there is limited bullish news for fat cattle prices. Corn prices will remain volatile and will move with any weather news.”

Even so, in the latest issue of In the Cattle Markets, Boetel notes fed cattle profit potential increased slightly last week. “The potential shows up in the gross feeding margins and the idea that corn price has decreased more than the increase in feeder cattle prices,” she says.

For all of the recent price volatility and elevated costs, the outlook is more positive than one might guess, based on the monthly Focus on Feedlots Survey (FFS) conducted by Kansas State University and published in Historical and Projected Kansas Feedlot Net Returns.

Net returns projected for steer closeouts in April were -$39.01/head for steers and $2.77/head for heifers, according to the Kansas data. Estimated returns the previous month were -$69.52 for steers and -$61.18 for heifers. Keep in mind no price risk management is included in the calculations.

Looking ahead, FFS projected returns for steers range from $105.09/head in May to -$56.12 in October, with feedlot cost of gain ranging from $100.82/cwt. in May to $115.80 in October. Projected heifer returns follow a similar pattern.

“Pay attention to basis levels, especially with feed purchases,” Boetel says. “Producers may also want to consider using the futures and options markets more effectively and explore hedging strategies to protect any profit potential. Finally, reconsider your marketing plan, including your marketing strategies and price risk management strategies. Purchasing and selling decisions need to be made in a timely manner and without emotion. Volatility in the cattle/feed markets is not likely to decrease. However, given good cattle marketing and some price risk management, there are still opportunities for profitability.”

By | May 19th, 2021|Daily Market Highlights|

Cattle Current Daily—May 19, 2021

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains through Tuesday afternoon at $119-$120/cwt. That was steady in Kansas and steady to 50¢ higher in the Texas Panhandle. Although too few to trend, there were a few live trades at $120 in Nebraska and the western Corn Belt, mainly steady with the prior week.

Feeder Cattle futures weakened amid higher Corn futures prices Tuesday.

Feeder Cattle futures closed an average of 66¢ lower, except for 40¢ higher in the back contract.

Live Cattle futures closed mainly higher on Tuesday, with support from a bounce higher in Lean Hog futures and the relentless climb in wholesale beef values. There were also reports that Argentina banned exporting beef for the next 30 days.

Live Cattle futures closed an average of 90¢ higher (22¢ to $1.40 higher), except for an average of 21¢ lower in two contracts.

Choice boxed beef cutout value was $3.72 higher Tuesday afternoon at $323.34/cwt. Select was $2.16 higher at $299.05

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed mostly 6¢ to 8¢ higher after 1¢ to 13¢ lower in the front three contracts.

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Major U.S. financial indices closed lower Tuesday, despite positive earnings reports from the likes of Home Depot and Walmart. Negative economic news included less robust housing news than traders expected. Housing starts in April of 1.57 million were 9.5% less than the previous month, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 267 points lower. The S&P 500 closed 35 points lower. The NASDAQ was down 75 points.

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“Packers appear unable to increase weekday slaughter levels to process the market-ready supply in a timely manner as the sector enters a period of typically higher fed cattle slaughter,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “This appears to be in part due to labor disruptions that packers have dealt with since the beginning of the pandemic, but also interruptions in slaughter due to extreme weather in February and scheduled plant maintenance events.”

Compared to 2019, due to pandemic disruptions last year, ERS analysts say packers are processing about 10,000-15,000 head fewer per week, for the first six weeks of the second-quarter this year. That’s with Saturday kills about 5,000 head more per week than in 2019. As of April 1 they estimated there were 11% more cattle on feed for more than 150 days than last year; about 1% more than in 2019.

At the same time, ERS expects drought, poor pasture and higher feed costs will increase feedlot placements this year more than previously expected.

“Feedlots are constrained in their ability to market cattle in a timely manner. As producers face poor pasture conditions and rising feed costs, they will compete for space in feedlots in an environment with higher expected feed prices and little optimism for fed cattle prices,” ERS analysts explain. “Accordingly, the second-quarter 2021 feeder steer price forecast was lowered $1 on current prices and the third-quarter 2021 price was dropped $2, for a 2021 annual forecast of $139.30/cwt.,” say ERS analysts.

Projected average feeder steer prices (basis Oklahoma City) are $139 for the second quarter, $141 for the third quarter and $143 for the fourth quarter.

By | May 18th, 2021|Daily Market Highlights|

Cattle Current Daily—May 18, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in Kansas and the western Corn Belt through Monday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was at a standstill. Depending on the region last week, live prices were generally $1-$2 higher at $119-$121/cwt. on a live basis and at $188-$191 in the beef.

Feeder Cattle futures gained to start the week as Corn futures maintained their lower pace, in relative terms.

Feeder Cattle futures closed an average of $1.14 higher (37¢ to $1.60 higher).

Live Cattle futures were mixed on Monday, though as the slower pace of slaughter cork potential.

Live Cattle futures closed mixed, from an average of 29¢ lower to an average of 20¢ higher.

Choice boxed beef cutout value was $2.68 higher Monday afternoon at $319.62/cwt. Select was $3.70 higher at $296.89.

Corn futures closed mostly 1¢ to 3¢ higher, except for 8.6¢ higher in new spot Jly and 3¢ to 5¢ lower in most new crop contracts.

Soybean futures closed mostly 1¢ to 4¢ lower.

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Major U.S. financial indices softened Monday, with most of the pressure presumably coming from inflation worries.

The Dow Jones Industrial Average closed 54 points lower. The S&P 500 closed 10 points lower. The NASDAQ was 50 points.

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“Beef cow slaughter increased sharply in the latest data to levels not seen since fall cow culling last November and December,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Weekly beef cow slaughter increased 13-14% in the latest two weeks of data over the previous six-week average. It appears herd liquidation is already happening and more can be expected. Poor pasture conditions now, reduced hay stocks and limited potential for pasture and hay production all suggest that additional beef cow herd liquidation is imminent.”

Although marginally more positive week to week, 25% of the nation’s pasture and range was rated as Good or Excellent for the week ending May 16, compared to 47% a year earlier, according to the latest USDA Crop Progress report. Conversely, 43% was rated as Poor or Very Poor, compared to 16% a year earlier.

The previous week, based on regional aggregation compiled by the Livestock Marketing Information Center, Peel explains 51% of pastures were rated Poor or Very Poor in the eight states of the western region, 43% in the seven states of the Great Plains Region and 29% in the Southern Plains states of Oklahoma and Texas.

“These three regions account for 60.6% of the total beef cow inventory,” Peel says. “Currently 40.1% of all beef cows in the country (12.67 million head) are in states with 40% or more poor to very poor pasture and range conditions.”

At the same time, Peel says May 1 hay stocks were 24.9% less year over year in the West; 34.1% less than the five-year average. Hay stocks in the Great Plains region were down 20.1% year over year and down 6.4% from the five-year average. Southern Plains hay stocks were 28.8% less than the same time a year earlier; 29.3% less than the five-year average. 

By | May 17th, 2021|Daily Market Highlights|

Cattle Current Daily—May 17, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on light demand.

Live prices last week were 50¢ to $1.50 higher in the Texas Panhandle at $119.00-$119.50/cwt., steady to $1 higher in Kansas at $119-$120, $2 higher in Nebraska at $120, and $1 higher in the western Corn Belt at $118-$120. Live prices in Colorado two weeks ago were at $119-$120.

Dressed prices were $1-$4 higher in Nebraska last week at $191. Prices were at $187-$190 in the western Corn Belt the prior week.

Through Thursday, the five-area direct average steer price was $1.35 higher than the previous week at $119.70/cwt., on a live basis. The average five-area direct dressed steer price was $2.01 higher at $190.48.

Feeder Cattle futures mostly gained back on Friday what was lost in the previous session, helped by continued pressure on grain markets.

Feeder Cattle futures closed an average of 52¢ higher, except for an average of 30¢ lower in the back two contracts.

Live Cattle futures mostly extended losses, amid stagnant cash trade and softer Lean Hog futures.

Live Cattle futures closed an average of 44¢ lower, except for an average of 12¢ higher in the back three contracts.

Choice boxed beef cutout value was 16¢ higher Friday afternoon at $316.94/cwt. Select was $2.72 lower at $293.19.

Estimated total cattle slaughter for the week was 2,000 head more than the prior week at 640,000 head. Year-to-date estimated total cattle slaughter of 12.2 million head is 658,000 more than the pandemic-ravaged harvest the same week last year. Estimated beef production for the week of 527.6 million lbs. was 300,000 lbs. more than the previous week. Year-to-date estimated beef production of 10.2 billion lbs. is 660.8 million lbs. more than the same time last year.

Forecast rain in Brazil and the U.S. Corn Belt, reopening barge traffic on the Mississippi River and chatter about private analysts projecting significantly more corn acres all added pressure to Corn futures Friday.

Corn futures closed mostly 13¢ to 15¢ lower, after 20¢ to 34¢ lower in the front three contracts.

Soybean futures closed mostly 2¢ to 6¢ higher, except for 8¢ lower in spot May.

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Major U.S. financial indices continued higher Friday, following the steep selloff earlier in the week. That was despite ongoing inflation worries and flat national retail sales.

Advance estimates of U.S. retail and food services sales for April were $619.9 billion, virtually unchanged from the previous month, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 369 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 304 points.

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Tight corn supplies, coupled with strong international demand, pushed corn prices to their highest level in more than a decade. In turn, higher corn prices are altering the price prospects of other products.

“The key for folks to understand is that corn prices roll through everything else,” said David Anderson, Extension livestock economist at Texas A&M University (TAMU). “High grain prices mean meat will eventually cost more because input costs are up. And corn overlaps with other important crops like wheat and soybeans because prices influence what is planted on the available crop acres.” He explained the ripple effect in a consumer-focused interview last week.

In the same interview, Mark Welch, TAMU Extension grain economist, said the corn market is highly speculative currently, due to current supply and demand, coupled with uncertainty about domestic and foreign production this growing season.

Besides higher corn prices currently trying to buy more acres, Welch pointed out U.S. corn planting started early than usual this season, which typically means planted acres will be more than projected in USDA’s March Prospective Plantings report.

“If we see more acres planted, the weather improves in South America and domestic corn-producing states, then we could see things settle down. If corn stocks get lower, there are problems with corn crops and things get tighter, then we could see all-time high record corn prices,” Welch said.

By | May 15th, 2021|Daily Market Highlights|

Cattle Current Daily—May 14, 2021

Negotiated cash fed cattle trade was limited on light demand in Kansas, Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on very light demand.

So far this week, live trade is $1 higher in Kansas at $119-$120/cwt., 50¢ to $1 higher in the Texas Panhandle at $119.00 to $119.50, steady to $1 higher in Nebraska at $120 and unevenly steady in the western Corn Belt at $118-$120. Dressed trade is steady to $1 higher in Nebraska at $191.

Live Cattle futures plunged Thursday. Besides the break in Lean Hog futures, likely explanations for the reversal include sluggish cattle slaughter due in part to pandemic safety measures, but also reports that labor availability is adding constraint. Achieving feedlot currentness becomes more challenged.

Live Cattle futures closed an average of $2.40 lower ($1.95 lower at the back to $3.00 lower in spot Jun).

That was too much for Feeder Cattle to withstand, despite the sharp selloff in Corn.

Feeder Cattle futures closed an average of 48¢ lower (2¢ to 87¢ lower), except for 70¢ higher in spot May.

Choice boxed beef cutout value was $1.70 higher Thursday afternoon at $316.78/cwt. Select was $1.25 lower at $295.91

The average dressed steer weighing for the week ending May 1 was 891 lbs., which was 5 lbs. lighter than the previous week and 2 lbs. lighter than last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 824 lbs. was 1 lb. lighter than the previous week and 2 lbs. lighter than the same week last year.

Improved weather conditions, including moisture in the Corn Belt forecast, and the previous day’s World Agricultural Supply and Demand Estimates applied heavy pressure to grain futures Thursday.

Corn futures closed 33¢ to 40¢ lower through Jly ‘22 and then mostly 22¢ lower.

Soybean futures closed 45¢ to 58¢ lower through Jan ‘22, then mostly 15¢ to 29¢ lower.

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Major U.S. financial indices bounced back from the previous day’s selloff, supported by new recommendations from the Centers for Disease Control and Prevention that those fully vaccinated against COVID-19 can resume pre-pandemic activities including doing away with masks and social distancing.

The Dow Jones Industrial Average closed 433 points higher. The S&P 500 closed 49 points higher. The NASDAQ was up 93 points.

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Geography will help determine price impacts from potential partial beef cow herd liquidation due to drought, says Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln. He points out drought impacts are currently most severe in the Mountain region and parts of the Northern Plains.

Using data from USDA’s Economic Research Service, Dennis says average grazed pasture acres per beef cow is 55.56 acres in the Mountain Region, 19.17 acres in the Southern Plains, 16.49 acres in the Pacific region and 13.78 acres in the Northern Plains. Those are the nation’s lowest stocking rates and where the most beef cows exist.

“Under a situation of worsening drought, more feeder cattle will enter feedlots earlier than expected lowering feeder cattle prices,” Dennis explains, in the latest issue of In the Cattle Markets. “Areas with lower stocking rates are likely areas that are at more risk to adverse weather conditions since they rely upon either seasonal or harvested feed resources to sustain a beef cow herd. Further, in the absence of seasonal forage, there are not large amounts of crop residues or protein concentrates from ethanol plants to supplement the lack of forage.”

If producers in the Mountain and Pacific regions are forced to liquidate, then Dennis explains feedlots in the Northern Plains and Southern Plains will likely be able to buy feeder cattle cheaper, decreasing demand for calves in the Southeast and Appalachia regions.

On the other hand, Dennis says cull cow prices are more likely to decrease in the Mountain and Northern Plains regions because those prices are generally assumed to be regional.

“A drought scenario combined with elevated corn and soybean prices is a worst-case scenario,” Dennis says. “With elevated feed costs, feedlots would have further incentives to delay feeder cattle placements, especially lighter feeder cattle, since the cost of gain would be too high. This would put further downward pressure on feeder cattle prices. Risk management in the form of USDA-RMA Livestock Risk Protection or CME futures and options can help mitigate some of these potential downward price movements and likely merit a closer look by producers this production year.”

By | May 13th, 2021|Daily Market Highlights|

Cattle Current Daily—May 13, 2021

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains through Wednesday afternoon. Live prices were steady to $1.50 higher in the Texas Panhandle at mostly $119/cwt. There were a few live trades in Kansas at $120, but too few to trend; $119 last week.

Trade was limited on light demand in Nebraska. Dressed trade was at $191, steady with the previous day and $1 to $3 higher than last week. There were a few live trades at $120, but too few to trend; $118 last week.

Elsewhere, trade was mostly inactive on light demand.

Live prices in the western Corn Belt Tuesday were $118-$120, compared to $119 last week. Dressed prices last week were $187-$190.

Cattle feeders offered 2,469 head in Central Stockyards’ weekly Fed Cattle Exchange Auction. Of those, 1,588 head sold (1,114 heifers and 474 steers) for a weighted average price of $119.93/cwt., via live weight and bid-the-grid. The majority was from Texas.

Slaughter steers sold $1-$2 higher at Sioux Falls Regional in South Dakota and slaughter heifers traded steady to $1 higher. There were 168 Choice 3-4 steers weighing an average of 1,534 lbs., bringing an average of $119.56.

Choice steers and heifers sold $4.25 to $5.75 higher at the fat auction in Tama, IA. There were 152 Choice 2-4 steers weighing an average of 1,442 lbs., bringing an average of $125.65.

Feeder Cattle futures continued their nascent rally Wednesday, supported by more optimistic projections of the balance sheet for corn, in the monthly World Agricultural Supply and Demand Estimates. Live Cattle closed narrowly mixed with some likely profit taking and sharply lower outside markets.

Live Cattle futures closed an average of 38¢ higher, except unchanged in two contracts and down an average of 12¢ in two.

Feeder Cattle futures closed an average of $1.79 higher ($1.42 higher at the front of the board to $2.20 higher at the back).

Choice boxed beef cutout value was $2.71 higher Wednesday afternoon at $315.08/cwt. Select was 82¢ higher at $297.16.

The monthly World Agricultural Supply and Demand Estimates (see below) stoked Soybean futures Wednesday, but dampened new-crop Corn futures.

Corn futures closed mostly 13¢ to 18¢ lower through the new crop year and then mostly 2¢ to 9¢ lower.

Soybean futures closed 11¢ to 23¢ higher through Jan ‘22, then mostly 15¢ to 17¢ lower.

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Major U.S. financial indices closed sharply lower Wednesday, pressured by indicators of higher inflation than investors expected.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8% in April, according to the U.S. Bureau of Labor Statistics. That followed an increase of 0.6% the previous month. The all items index is up 4.2% over the last 12 months, the steepest rise since the period ending September 2008.

The Dow Jones Industrial Average closed 681 points lower. The S&P 500 closed 89 points lower. The NASDAQ was down 357 points.

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USDA’s latest monthly World Agricultural Supply and Demand Estimates pegged beef production for this year at 27.9 billion lbs., which would be 260 million lbs. more (0.94%) than the previous month and 726 million lbs. more (2.67%) than last year. Increased fed and non-fed slaughter projections drove the adjustment.

The forecast annual average five-area direct fed steer price was projected at $116.30/cwt., which was 30¢ higher than the previous month. Projected average prices are $118 in the second quarter, $114 in the third quarter and $120 in the fourth quarter.

Hay stocks on farms May 1 of 18.0 million tons were 2.4 million tons less than the same time last year, according to the USDA Crop Production report.

Projections for total red meat and poultry production increased 161 million lbs. (0.15%) month to month. That would be 693 million lbs. more (0.65%) than last year.

Corn

The new corn crop is projected at 15.0 billion bu., up from last year on increased area and a return to trend yield of 179.5 bu./acre. With beginning stocks sharply lower year over year, total corn supplies are forecast to increase modestly to 16.3 billion bu.

The season-average corn price received by producers in 2021-22 was projected at $5.70/bu., up $1.35 from a year ago.

Soybeans

The soybean crop was projected at 4.4 billion bu., up 270 million from last year on increased harvested area and trend yields. With lower beginning stocks, soybean supplies were projected 3% less than last year.

With prices for fall delivery above $14.00/bu. in some locations, the 2021-22 U.S. season-average soybean price was projected at $13.85/bu., up $2.60 from 2020-21. Soybean meal prices were forecast at $400 per short ton, down $5.00 from the revised forecast for 2020-21. Soybean oil prices were forecast at 65.0¢/lb., up 10¢ from the revised 2020-21 forecast.

Wheat

Projected 2021-22 ending stocks were projected 11% lower than last year at 774 million bu., the lowest level in seven years. That’s based on lower carry-in stocks and production increasing 3%.

The projected 2021-22 season-average farm wheat price was $6.50/bu., which would be $1.45 higher than last year’s revised price.

By | May 12th, 2021|Daily Market Highlights|

Cattle Current Daily—May 12, 2021

Negotiated cash fed cattle trade was limited on light to moderate demand in Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service.

Although too few transactions to trend, there were a few dressed trades in Nebraska at $191/cwt., which was $1-$3 higher than last week; a few lives trades in the western Corn Belt at $120, which was $1-$3 higher. Elsewhere, trade was mostly inactive on light demand or at a standstill.

Cattle futures maintained gains from the previous session, supported by the outlook for higher cash prices and continued wholesale strength.

Live Cattle futures closed an average of $1.14 higher (40¢ to $1.70 higher). 

Feeder Cattle futures closed an average of 25¢ higher, except for 12¢ lower in spot May. 

Choice boxed beef cutout value was $3.26 higher Tuesday afternoon at $312.37/cwt. Select was $2.58 higher at $296.34

Grain futures recovered from sharp losses the previous day to surge ahead again in the front months, with likely profit taking and positioning ahead of Wednesday’s monthly World Agricultural Supply and Demand Estimates.

Corn futures closed 10¢ to 11¢ higher in the front two contracts, and then mostly 2¢ to 5¢ higher.

Soybean futures closed 16¢ to 27¢ higher through Jan ‘22,  then mostly 4¢ to 11¢ higher.

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Major U.S. financial indices closed lower Tuesday as ongoing supply chain disruptions and reports of labor shortages fueled inflation worries.

The Dow Jones Industrial Average closed 473 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 12 points.

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“Weekly cattle slaughter has been averaging near 650,000 head per week, except for the first week in January and the winter storm in February. This is near post-pandemic weekly slaughter highs, which signal that COVID-related changes in processing facilities are limiting slaughter levels,” say analysts with the Livestock Marketing Information Center (LMIC), in the May 7 Livestock Monitor. “The capacity-limited flow of cattle has limited upside potential for cattle prices but has led to a rise in the Choice boxed beef cutout value since the start of the year which has increased 41.1% ($85.06) to 291.79 per cwt.” Choice price was $312.37 Tuesday.

On the other side of the trade, LMIC analysts say the five-area direct weekly weighted average steer price rose from $111.28/cwt. at the start of the year to $122.03 in mid-April. Since then, prices declined.

Tyson Foods, Inc. provided another perspective in its second-quarter financial results released Monday.

“Beef sales volume decreased during the second quarter of fiscal 2021 due to a reduction in live cattle processed, partially associated with the impacts of severe winter weather and a challenging labor environment,” according to the Tyson report. “…Average sales price increased in the second quarter and first six months of fiscal 2021 as demand for our beef products remained strong. Operating income increased in the second quarter and first six months of fiscal 2021 due to strong demand as we continued to optimize revenues relative to live cattle supply, partially offset by production inefficiencies and direct incremental expenses related to COVID-19.”

Dean Banks, Tyson Foods President and CEO, noted, “We’re seeing substantial inflation across our supply chain, which will likely create margin pressure during the back half of the year.”

By | May 11th, 2021|Daily Market Highlights|

Cattle Current Daily—May 11, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in the western Corn Belt through Monday afternoon. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.

Live prices last week were at $117.50-$119.00/cwt. in the Texas Panhandle, $119 in Kansas, $118 in Nebraska and $117-$119 in the western Corn Belt. Dressed prices were $187-$190.

Rain in the Corn Belt pressured Corn futures Monday, opening the gate for Cattle futures to trade higher and begin taking a swipe at extremely oversold conditions.

Live Cattle futures closed an average of $1.03 higher, an average of $1.46 higher across the front half of the board and then an average of 61¢ higher, except unchanged in the back contract.

Feeder Cattle futures closed an average of $3.36 higher ($2.35 higher toward the back to $4.42 higher toward the front).

Choice boxed beef cutout value was $3.23 higher at $309.11/cwt. Select was $3.49 higher at $293.76.

Corn futures closed 20¢ to 27¢ lower through Jly ‘22, and then mostly 4¢ to 9¢ lower.

Soybean futures closed mostly 8¢ to 9¢ lower, but as much as 19¢ lower.

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Major U.S. financial indices closed lower Monday, pressured by a selloff in big tech stocks.

The Dow Jones Industrial Average closed 34 points lower. The S&P 500 was down 34 points. The NASDAQ was down 350 points. 

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“It now appears that it will take the remainder of the second quarter and likely much of the third quarter of the year to move the fed cattle industry into tighter numbers and relieve the capacity constraints that are limiting the fed cattle market,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel provides insight to U.S. beef packing capacity over time. In the 1980’s, when much of the current capacity was constructed, he explains cattle inventories averaged 15% more than in the last decade and there was surplus capacity. That fueled closing some plants like the Tyson plant at Emporia, KS in 2008 and the Cargill plant at Plainview, TX in 2013. Before that,  ConAgra never replaced its facility that burned at Garden City, KS in 2000.

“The cyclical expansion in cattle numbers from 2014 to 2019 has now pushed cattle slaughter beyond packing industry capacity,” Peel says. “It is estimated that annual average slaughter has exceeded capacity since 2016. Although cattle numbers peaked cyclically in 2019, feedlot production is just now at a peak in early 2021, partly as a result of pandemic delays in 2020.”

Saturday harvests are used to bridge some of the gap. For instance, Saturday slaughter accounted for 2.7% of weekly slaughter in 2012 and 7.3% in 2007, according to Peel. Saturdays accounted for more than 9% of weekly slaughter in 2019 and 2020; 10% so far this year.

“Slaughter needs will be seasonally larger in the coming weeks and it will be difficult for feedlots to get more current. It will be challenging to maintain, let alone push Saturday slaughter in the coming weeks,” Peel says.

By | May 10th, 2021|Daily Market Highlights|

Cattle Current Daily—May 10, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in Kansas through Friday afternoon. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.

Live prices for the week were steady to 50¢ lower in the Texas Panhandle at $117.50-$119/cwt., steady in Kansas at $119, $1-$2 lower in Nebraska at $118 and steady to $1 lower in the western Corn Belt at$118-$119. Dressed trade was $1-$2 lower in Nebraska at $188-$190 and steady to $4 lower in the western Corn Belt at $187-$190.

Feeder Cattle futures closed mostly higher Friday, but off of session highs, in the face of increasing front-month Corn futures. Live Cattle futures tagged along.

Live Cattle futures closed an average of 32¢ higher in five contracts and then unchanged to 5¢ lower

Feeder Cattle futures closed an average of 65¢ higher through the front five contracts (27¢ to $1.25 higher) and then unchanged to 27¢ lower.

Choice boxed beef cutout value was 49¢ lower at $305.88/cwt. Select was 91¢ higher at $290.27

Total estimated cattle slaughter for the week ending May 7 was 638,000 head, which was 11,000 head fewer than the previous week. Total estimated beef production of 527.3 million lbs. was 10 million lbs. less week to week.

Corn futures closed mostly 11¢ to 13¢ higher through Jly ‘22, and then mostly 2¢ to 3¢ lower.

Soybean futures closed 15¢ to 25¢ higher through May ‘22, and then mostly 9¢ to 13¢ higher.

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Major U.S. financial indices closed higher Friday, amid one of those frequent non-intuitive paradoxes. Presumably, much of the support stemmed from investors betting the Federal Reserve will maintain dovish monetary policy longer, due to April employment numbers falling far short of expectations.

Total non-farm payroll employment increased 266,000 in April, according to the U.S. Bureau of Labor Statistics. Various reports pegged pre-report estimates at closer to 1 million.

Average hourly earnings for all employees on private non-farm payrolls were $30.17 in April, up 21¢ from the previous month.

The Dow Jones Industrial Average closed 229 points higher. The S&P 500 was up closed 30 points higher. The NASDAQ was up 119 points.

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“Timely rains remain critical to being able to stock cattle through the summer,” say analysts with the Livestock Marketing Information Center (LMIC). “ Drought continues to intensify across the U.S. and is looking dismal in key areas.  The Western half of the U.S. is in the worst stages of drought (65%-D0-D4, 47% D3-D4), a situation that has persisted since last year and is escalating.”

As noted in Cattle Current last week, USDA’s first seasonal assessment ranked just 22% of the nation’s pasture and range as Good or Excellent, versus 46% at the same time last year. Conversely, 47% was rated as Poor or Very Poor, compared to 16% a year earlier.

“One of the newer developments in the Drought Monitor has been the spread of dryness across the Corn Belt,” say LMIC analysts, in the latest Livestock Monitor.  The Drought Monitor indicates that 44% of this region is in some level of drought. Dryness is less of a concern when planting, and typically means faster acres planted…The problem is more about soil moisture and growing phases which can affect crop yields.”

Based on USDA’s Crop Progress report last week, LMIC analysts point out top soil moisture conditions are rated as Short or Very short across 37% of cropland in the continental U.S. About 55% of cropland is reporting adequate moisture compared to 65% in 2020

“These figures are worrisome but with most of the growing season ahead of us, it’s early to be calling for yield declines just yet,” say LMIC analysts.

By | May 9th, 2021|Daily Market Highlights|

Cattle Current Daily—May 7, 2021

Negotiated cash fed cattle trade was slow on light demand in Kansas through Thursday afternoon. Live prices were steady with the previous day at $119/cwt., according to the Agricultural Marketing Service.

Elsewhere, trade was limited on light demand with too few transactions to trend.

Earlier in the week, live prices were at $117.50 to $119.00 in the Texas Panhandle, at $118 in Nebraska and at $118 to $119 in the western Corn Belt. Dressed prices were at $187 to $190. Live prices in Colorado last week were at $119-$120.

Feeder Cattle futures gave back everything gained in the previous session as corn prices surged higher yet again on Thursday. Live Cattle futures extended modest gains, supported by blooming wholesale beef values and a sizable gain in open interest the previous day.

Live Cattle futures closed an average of 66¢ higher.

Feeder Cattle futures closed an average of $2.02 lower.

Choice boxed beef cutout value was $1.59 higher Thursday afternoon  at $306.37/cwt. Select was $3.18 higher at $289.36

The average dressed steer weighing for the week ending Apr. 24 was 896 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 2 lbs. lighter than the previous week. The average dressed heifer weight of 825 lbs. was 12 lbs. lighter. Beef production was 16.9 million lbs. at 547.4 million lbs.

Corn futures closed 10¢ to 20¢ higher from Jly ‘21 to Jly ‘22, mostly 6¢ to 8¢ higher in other contracts.

Soybean futures closed 20¢ to 28¢ higher through Mar ‘22, and then mostly 11¢ to 13¢ higher.

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Major U.S. financial indices closed higher Thursday, apparently buoyed by the previous day’s bullish ADP®National Employment ReportTM, and betting on similar results in the government’s employment situation summary due out Friday.

The Dow Jones Industrial Average closed 318 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 50 points.

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U.S. beef exports surged in March, with volume up 8% year over year, the second most in the post-BSE era, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 124,808 metric tons (mt) in March. Export value for the month exceeded $800 million for the first time at $801.9 million, up 14% year-over-year. Beef muscle cut exports set new monthly records for both volume (98,986 mt, up 13% from a year ago) and value ($718.3 million, up 17%). For the first quarter, beef exports pulled even with last year’s pace at 333,348 mt, valued at $2.12 billion. For beef muscle cuts, first quarter exports increased 4% to 262,914 mt, valued at $1.9 billion (up 5%).

March highlights for U.S. beef included record exports to China, Honduras and the Philippines.

March pork exports were record-large at 294,724 mt, up 1% from last year’s strong total, setting a new value record at $794.9 million (up 4%).

“It’s very gratifying to see such an outstanding breakout month for U.S. beef and pork exports,” says Dan Halstrom, USMEF President and CEO. “Exports were off to a respectable start in 2021, considering the logistical and labor challenges the industry is facing and ongoing restrictions on the foodservice sector in many key markets. While these obstacles are not totally behind us, the March results show the situation is improving and the export totals better reflect the strong level of global demand for U.S. red meat.”

Muscle cuts drove March export growth, but Halstrom is also encouraged by a rebound in shipments of beef and pork variety meat.

“The tight labor situation at the plant level has been especially hard on variety meat volumes,” Halstrom explains. “But March variety meat exports matched last year’s performance for pork and were the largest of 2021 on the beef side. It’s important that the capture rate for variety meat continues to improve, as this is a critical component of the export product mix.”

By | May 6th, 2021|Daily Market Highlights|

Cattle Current Daily—May 6, 2021

Negotiated cash fed cattle trade ranged from a standstill to mostly limited on light demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices in Nebraska are $1-$2 lower than last week at $118/cwt. Dressed prices are $1-$2 lower at $188-$190.

Live prices in the western Corn Belt this week are steady to $2 lower at $118-$119. Dressed prices are steady to $4 lower at $187-$190.

Last week, live prices were at $118-$119 in the Southern Plains and at $119-$120 in Colorado.

Cattle feeders offered 1,906 head (12 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 1,091 head (6 lots) sold for mostly $118.50 to $119/cwt., steady with the previous week’s country trade.

At Sioux Falls Regional in South Dakota, fat steers and heifers sold $3-$5 lower. There were 223 Choice 2-3 steers weighing an average of 1,433 lbs., bringing an average of $115.97/cwt., which was $2-$3 lower than established country trade.

Cattle futures found some footing on Wednesday, helped along by technical support and oversold conditions.

Live Cattle futures closed an average of $1.44 higher.

Feeder Cattle futures closed an average of $1.86 higher.

Choice boxed beef cutout value was $3.56 higher Wednesday afternoon at $304.78/cwt. Select was $2.27 higher at $286.18

Corn futures closed 20¢ to 24¢ higher from near Sep to Jly ‘22, mostly 5¢ to 7¢ higher in other contracts.

Soybean futures closed mostly 15¢ to 19¢ higher, except for 4¢ to 9¢ higher in the front three contracts.

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Major U.S. financial indices closed narrowly mixed Wednesday. Support included positive quarterly corporate earnings reports from the likes of GM. Employment data suggested more optimism, as well.

Private sector employment increased by 742,000 jobs from March to April according to the April ADP® National Employment ReportTM. That was more than the trade expected.

The Dow Jones Industrial Average closed 97 points higher. The S&P 500 closed 2 points higher. The NASDAQ was down 51 points.

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Declining cattle futures reflect the market realities cash prices first followed, says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets.

“Optimism from late winter and early spring is being replaced by realism that: it is going to take another two to three months to work through the large front-loaded fed animal inventories; fed animal slaughter is at capacity; costs of gain are now substantially higher than the past several years,” Koontz explains.

As noted recently in Cattle Current, larger than expected ready fed cattle supplies stem from lingering pandemic impacts, as well as the February winter storm that disrupted supply chains. Concurrently, packing capacity remains less than before the pandemic.

“Combined fed steer and heifer slaughter has been just short of 525,000 head per week. It is likely that this is a reasonable maximum that the packing industry can process,” Koontz says. “Packer margins are strong but there is little incentive to pay more for fed cattle when plants are operating six days per week. There is little to no possibility to process more cattle, regardless of the incentive to do so. There are a lot of historical relationships that are irrelevant when the packing industry is essentially at capacity.”

Based on the latest Cattle on Feed report, he says the number of cattle on feed more than 120 days and more than 150 days declined, suggesting some progress in reducing market-ready fed cattle supplies. But, Koontz says supplies will likely be abundant into late summer.

As for increasing feed costs, Koontz points out Corn futures increased $2/bu. from August of last year to mid-January this year and then tacked on another $1.50 since the end of March. He notes the formula cost of gain for fed cattle this summer is well beyond $1/lb.

“If live cattle have little upside and the corn market continues to ration old crop, then it is feeder cattle that have to adjust,” Koontz says.

By | May 5th, 2021|Daily Market Highlights|

Cattle Current Daily—May 5, 2021

Negotiated cash fed cattle trade was light to moderate on moderate demand in Nebraska through Tuesday afternoon. Live prices were steady to 50¢ higher than the previous day at $118/cwt., which was $1-$2 lower than last week. Dressed prices were $1-$2 lower at $188-$190.

Trade in the western Corn Belt was light to moderate on moderate demand. Live prices were steady to $3 lower than last week at $117-$119. There were a few dressed trades at $187-$190, but too few to trend; $190-$191 last week.

Elsewhere, trade was limited on light demand. Live prices in the Southern Plains last week were at $118-$119. Prices in Colorado last week were $119-$120.

Choice boxed beef cutout value was $1.92 higher at $301.22/cwt. Select was 12¢ higher at $283.91

Feeder Cattle futures and front-month Live Cattle wilted Tuesday, pressured by higher feed costs and plentiful fed cattle supplies.

Live Cattle futures closed an average of 82¢ lower across a broad range, from an average of $1.52 lower in the front four contracts to an average of 26¢ lower across the rest of the board.

Feeder Cattle futures closed an average of $3.26 lower.

Grain futures popped higher Tuesday as the market continues trying to buy more acres. That was despite what appeared to be a production-friendly planting report.

Corn futures closed mostly 13¢ to 18¢ higher.

Soybean futures closed mostly 12¢ to 18¢ higher.

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Major U.S. financial indices closed mixed to mainly lower Tuesday. Investor jitters seemed centered around inflation fears. On the one hand, pandemic supply chain disruptions, in tandem with economic reopening are driving up input costs. On the other, there’s concern the Federal Reserve will be forced to raise interest rates and slow monetary easing faster than previously suggested.

The Dow Jones Industrial Average closed 19 points higher. The S&P 500 closed 28 points lower. The NASDAQ was down 261 points.

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Agricultural producers grew more optimistic about the future last month, according to the Purdue University/CME Group Ag Economy Barometer. Month to month, the Index of Future Expectations increased 5 points to 169.

“The strength in commodity prices continues to drive improving expectations for strong financial performance, even as many are seeing rising input costs,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

At the same time, agricultural producers lost some confidence in existing circumstances. The Index of Current Conditions dropped 7 points in April, to a reading of 195.

“The difference in producers’ short-term versus long-term expectations could be an indication they are concerned that the rapid rise in farmland values we’re seeing may not be sustainable over the long run,” Mintert says.

Even so, ranchers and farmers expect farmland values to continue rising over the next year. The Short-Run Farmland Value Expectations Index rose to a record high reading of 159, which was 11 points higher than the previous month. Further out, producers were less optimistic. The Long-Term Farmland Values Expectations Index (looking five years ahead) declined 9 points in April to a reading of 148.

Overall, the Ag Economy Barometer was virtually unchanged, up one point from March to a reading of 178. It’s calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. The current survey was conducted April 19 to 23.

By | May 4th, 2021|Daily Market Highlights|

Cattle Current Daily—May 4, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska through Monday afternoon. There were a few live trades at $117.50 to $118.00/cwt. but too few to trend. Elsewhere, trade ranged from mostly inactive on light demand to a standstill, according to the Agricultural Marketing Service.

The average five-area direct fed steer price last week was $118.89/cwt. on a live basis, which was $2.47 less than the previous week. The average steer price in the beef was $1.67 less at $190.44.

Cattle futures managed to fade stronger pressure early to close mixed on Monday with most of the pressure in nearby contracts.

Live Cattle futures closed an average of 23¢ higher, except for $1.27 and 27¢ lower in the front two contracts.

Feeder Cattle futures closed an average of 69¢ higher (5¢ to $1.40 higher), except for an average of 27¢ lower in three contracts.

Choice boxed beef cutout value was $2.80 higher Monday afternoon at $299.30/cwt. Select was 74¢ higher at $283.

Corn futures closed mixed; mostly fractionally lower to 2¢ higher, except for 7¢ lower and 6¢ higher in the front two contracts.

Soybean futures closed 4¢ to 10¢ lower through the front three contracts, then mostly 2¢ to 5¢ higher through Aug ’22; mostly fractionally lower across the rest of the board.

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Major U.S. financial indices closed mostly higher Monday, buoyed by continued progress in COVID-19 vaccinations and easing health restrictions.

The Dow Jones Industrial Average closed 238 points higher. The S&P 500 closed 11 points higher. The NASDAQ was down 67 points.

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“Overall cattle market conditions are still expected to improve year over year in the second half of the year. However, current challenges are somewhat more severe and taking longer to clear than earlier expected. Market conditions are very dynamic now and the next few weeks may determine the tone of markets for the remainder of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel explains ample supplies are pressuring fed cattle prices as feedlots struggle to get more current.

“On the other end, feeder cattle are being squeezed between a stagnant fed market and rising feed prices. The pressure is weighing on feeder cattle markets with both cash feeder cattle prices and feeder futures moving lower in April,” Peel says.

As well, drought continues to deepen. Peel notes the Drought Severity and Coverage Index (DSCI) is at 180 for the U.S., the highest ever for April or May. He points out hay prices are increasing, too. The national average price for other hay in March was $142/ton versus $134 a year earlier. March prices for alfalfa were $181/ton compared to $172 the previous year.

‘There are indications that beef cow liquidation is accelerating,” Peel says. “March monthly beef cow slaughter was up 10.2% year over year. Beef cow slaughter in April is increasing but is difficult to interpret compared to pandemic-disrupted levels one year ago.”

By | May 3rd, 2021|Daily Market Highlights|

Cattle Current Daily—May 3, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Colorado through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on light demand with too few transactions to trend.

For the week, live prices were steady to $2 lower in the Southern Plains at $118-$119/cwt., $1-$2 lower in Nebraska at $119-$120, $2 lower in Colorado at $119 and $2-$3 lower in the western Corn Belt at $119. Dressed trade was $1-$2 lower in Nebraska and the western Corn Belt at $190-$191.

Continued increase in wholesale beef values helped Live Cattle futures mostly advance Friday, despite the week’s anemic cash trade and another surge higher in Corn futures, which upended Feeder Cattle once again.

Live Cattle futures closed an average of 87¢ higher, except for $3.47 lower in expiring Apr.

Feeder Cattle futures closed an average of $1.43 lower, from 10¢ lower at the back to $3.12 lower toward the front.

Choice boxed beef cutout value was $2.74 higher Friday afternoon at $296.50/cwt. Select was $3.26 higher at $283.05

Total estimated cattle slaughter for the week ending May 1 was 649,000 head, which was 16,000 head fewer than the previous week, according to USDA.

Corn futures closed 13¢ to 38¢ higher through Jly ‘22, and then mostly 5¢ to 9¢ higher.

Soybean futures closed 20¢ to 28¢ higher through Jan ‘22, and then mostly 12¢ to 18¢ higher.

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Major U.S. financial indices closed lower Friday, apparently pressured by profit taking more than anything.

The Dow Jones Industrial Average closed 185 points lower. The S&P 500 closed 30 points lower. The NASDAQ down 119 points.

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Frustration among cattle producers continues to mount as wholesale beef prices escalate, while fed cattle prices weaken and the run-up in feed costs pressures calf and feeder cattle prices.

“Slaughter levels have increased year over year, beef demand is strong, and packers have more cattle available to them than they want to process. This means the packer maintains leverage over cattle feeders despite the market moving into a period of stronger beef demand or at least strong anticipated demand,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Although carcass weights are typically lightest at this time of year, Griffith points out they are heavier than last year and the five-year average.

“Slaughter levels are manageable, but they are expected to increase, given the quantity of cattle on feed. There will be lower prices to come in the finished cattle market,” Griffith says.

Economics explains much of what’s happening, if not the magnitude. More cattle in need of harvesting, compared to existing slaughter capacity, means packers have the leverage, period. Keep in mind, according to various reports, much of the capacity lost to the pandemic last year returned with extraordinary speed. However, measures imposed to protect workers means post-pandemic capacity is less than it was before. If drought forces lots more cows to town in bunches, the challenge will grow.

New processing facilities—more packing capacity—are currently in various stages of construction in different parts of the U.S. I don’t have the numbers to tell you how much capacity or how much it will address the current imbalance.

One Cattle Current podcast listener called me at the end of last week. I know him. His family is one of those in the business for generations. He’s a solid thinker, innovative and progressive as they come, and not given to buying into the fiction some toss around about packer conspiracies and all of that. He wonders why producers don’t create a check-off to fund construction of more producer-owned packing capacity.

Never minding the monumental raw cost and challenges of building and running a packing plant, the notion of producers taking more control of their economic fortunes at the last stage of production is hard to argue.

For my money, those producers who put up the money and took the risk to start U.S. Premium Beef (USPB) proved the possibility. If you’re unfamiliar, the vision began in 1995. By 1997, about 450 cow-calf producers and cattle feeders made a financial commitment, developed a business plan and purchased a minority interest in what was then Farmland National Beef. At one point, USPB was the majority owner of what became National Beef; they still own an interest today. In essence, these producers purchased shares, which not only gave them ownership in the company, annual dividends and whatnot, but it secured them delivery slots for cattle aimed at the value-added grid USPB created.

In some ways, from what little I know of it, that sounds like what producers and other business interests are doing with the recently announced Sustainable Beef LLC packing plant to be constructed at North Platte, NE.

Anyway, building more producer-owned packing capacity is one listener’s idea. What’s yours? If you have ideas you want to share with Cattle Current listeners, please email them to wes@cattlecurrent.com

By | May 2nd, 2021|Daily Market Highlights|

Cattle Current Daily—April 30, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle and Colorado through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was limited on light demand with too few transactions to trend.

So far this week, live prices in the Texas Panhandle are $1-$2 lower than last week in the Southern Plains at $118-$119/cwt., $2-$4 lower in the Northern Plains at $119-$120 and $1-$4 lower in the western Corn Belt at $119. Dressed trade is $1-$4 lower in Nebraska at $188-$191 and $1-$2 lower in the western Corn Belt at $191-$192.

Another day of softer Corn futures prices, after the front of the board, helped Cattle futures mostly extend gains on Thursday.

Live Cattle futures closed an average of 45¢ higher, except for an average of 14¢ lower in three contracts.

Feeder Cattle futures closed an average of 72¢ higher.

Corn futures closed fractionally lower to 5¢ lower, except for 15¢ and 4¢ higher in the front two contracts.

Soybean futures closed 8¢ to 15¢ lower through Jan ‘22, and then mostly 2¢ lower.

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Major U.S. financial indices closed higher Thursday, boosted by mostly positive economic new that included tech giant, Facebook, smashing quarterly revenue estimates and McDonald’s reporting sales higher than before the pandemic.

As well, the U.S. Bureau of Economic Analysis reported real gross domestic product increased at an annual rate of 6.4% in the first quarter of this year, reflecting continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic.

Initial weekly unemployment insurance claims were slightly more than anticipated, though. For the week and Apr. 24, claims were 553,000, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 239 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 31 points.

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Net U.S. beef export sales for 2021 were 23,600 metric tons the week ending Apr. 22, according to weekly U.S. Export Sales report. That was down 4% from the previous week, but up 22% from the prior four-week average. Increases were primarily for South Korea, Japan, Mexico, China, and Hong Kong. 

Since 2000, beef exports accounted for about 9% of U.S. production, while beef imports represented about 11%, according to USDA’s Economic Research Service (ERS).

“U.S. beef trade is largely dependent on domestic production, and shocks to production can lead to a boost in import demand and a reduction in supplies available for export,” say ERS analysts.

For illustration those analysts point to the 2003 discovery of bovine spongiform encephalopathy (BSE) in Canada and then in the United States. U.S. beef exports plummeted. At the same time, U.S. beef imports grew to record high levels in 2004 and 2005. The latter had to do with the fact there were more cattle to slaughter here, in need of more lean trim from outside the country, in order to maximize value.

More recently, of course, weekly beef production plunged as much as 34% year over year in the second quarter of last year as the pandemic forced temporary closures and reduced operations at processing facilities. Consumer beef purchasing patterns shifted dramatically toward retail.

ERS projects U.S. beef exports to grow as a percent of production this year, while imports are expected to decline.

By | April 29th, 2021|Daily Market Highlights|

Cattle Current Daily—April 29, 2021

Negotiated cash fed cattle trade was moderate on moderate demand in the Texas Panhandle and Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices in the Texas Panhandle were $1-$2 lower than last week at $118-$119/cwt.

Live sales in Nebraska were $2-$3 lower at $119-$120. Dressed trade was $1-$4 lower at $188-$191.

Elsewhere, trade was slow on light demand, with too few transactions to trend.

So far this week, live sales in Kansas are $2 lower at $118-$119 and $3-$4 lower in Colorado at $119.

In the western Corn Belt last week, live prices were at $120-$123 and dressed prices were at $192.

Cattle feeders offered 3,231 head (19 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, just 287 head (three lots) sold, all from Texas and all on a live-weight basis. The price was $119/cwt. for two lots of steers and $117.75 for a lot of heifers.

Lower cash prices and less packer processing than expected recently helped pressure Cattle futures Wednesday, despite softer Corn futures and oversold conditions.

Live Cattle futures closed an average of $1.04 lower, except for 57¢ higher in spot Apr.

Feeder Cattle futures closed an average of $1.25 lower, from 32¢ lower at the front to $1.72 lower at the back.

Choice boxed beef cutout value was $1.51 higher Wednesday afternoon at $292.50/cwt. Select was 53¢ lower at $279.00

Corn futures closed 9¢ to 15¢ lower through Sep ‘22 and then 4¢ to 6¢ lower.

Soybean futures closed mostly 13¢ to 14¢ lower through Aug ‘22, except for 15¢  higher in spot May, and then mostly 7¢ lower.

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Major U.S. financial indices closed lower Wednesday. Primary pressure seemed linked to inflation worries, with the Federal Reserve issuing a statement that it will maintain the current lending rate and its accommodative monetary stance as the nation’s the economy and employment strengthen.

The Dow Jones Industrial Average closed 164 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 39 points.

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“A year since COVID-19 changed how we live, work and shop, online grocery demonstrates continued strength and impressive staying power,” says David Bishop, partner, Brick Meets Click. “The monthly active user base remains robust, average order values are at similarly elevated levels and order frequency has gone up.”

There were $9.3 billion in online grocery market sales during March, with 69 million households placing an average of 2.8 online orders, according to the Brick Meets Click/Mercatus Grocery Shopping Survey. Sales were 43% more year over year.

“Over the last 12 months, consumers’ dramatic shift to online grocery shopping has solidified, with curbside pickup attracting the largest share of monthly shoppers at 53% compared to ship-to-home and delivery,” explains Sylvain Perrier, Mercatus president and CEO. “In fact, pickup continues to have stronger consumer demand across all market types compared to delivery. Those brick-and-mortar chains that invested in optimizing pickup services likely will continue to benefit from the high repeat intent rate as indicated in the data.”

By | April 28th, 2021|Daily Market Highlights|

Cattle Current Daily—April 28, 2021

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

Feeder Cattle futures closed mixed across a broad range Tuesday, helped along by a day of respite from rising new-crop Corn futures. Live Cattle softened as traders await cash direction.

Live Cattle futures closed an average of 39¢ lower, except for 15¢ higher in the back contract.

Feeder Cattle futures closed mixed, from an average of 51¢ higher in five contracts (10¢ to $1.45 higher) to an average of 57¢ lower (7¢ to $1.40 lower).

Choice boxed beef cutout value was $5.79 higher at $290.99/cwt. Select was $5.18 higher at $279.53

Corn futures closed mostly 3¢ to 7¢ lower, expect for 15¢ higher in spot May and 2¢ higher in back contracts.

Soybean futures closed 18¢ to 19¢ lower through the front six contracts and then 6¢ to 16¢ lower.

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Major U.S. financial indices closed narrowly mixed Tuesday.

Positive economic news included The Conference Board Consumer Confidence Index®rising 12 points month to month to 121.7 in April.

“Consumer confidence has rebounded sharply over the last two months and is now at its highest level since February 2020,” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

The Dow Jones Industrial Average closed 3 points higher. The S&P 500 closed fractionally lower. The NASDAQ down 48 points.

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Snugger beef supplies in cold storage are supporting the rise in wholesale prices.

Total pounds of beef in freezers Mar. 31 were 5.6% less than the previous month and 3.7% less than the previous year, according to the latest USDA Cold Storage report.

Specifically, analysts with the Livestock Marketing Information Center (LMIC) point out total beef in cold storage declined by 483.7 million lbs. month to month.

“Both boneless beef and beef cuts fell 3.4% and 8.5%, respectively, from last year to 451.3 and 32.3 million lbs.,” say LMIC analysts, in the latest Livestock Monitor. They note boxed beef cutout value rose $66.69/cwt. (+32.3%) from the start of the year to mid-April, when it was $274.42/cwt.

Total pork in cold storage was 6.5% less than the previous month and 26.8% less year over year. LMIC analysts add the 451.8 million lbs. of pork in cold storage was 26.0% less than the five-year average.

Total red meat in cold storage of 969.3 million lbs. was 62.3 million lbs. less (-6.0%) than the previous month and 192.7 million lbs. less year over year (-16.6%).

Total frozen poultry supplies in cold storage of 1.1 billion lbs. were 1.2 million lbs. more than the previous month (+0.1%), but 217.6 million lbs. less (-16.6%) year over year.

By | April 27th, 2021|Daily Market Highlights|

Cattle Current Daily—April 27, 2021

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

Live prices last week ranged from $118-$120 in the Southern Plains to $121 in the Northern Plains  to $120-$122 in the western Corn Belt. Dressed trade was $2-$4 lower at $192.

The five-area direct fed steer price was 67¢ lower on a live basis last week at $121.36/cwt. The average steer price in the beef was $3.43 lower at $192.11.

Cattle futures closed mixed Monday as another surge in Corn futures weighed on Feeder Cattle.

Live Cattle futures closed an average of 69¢ higher (35¢ to $1.10 higher).

Feeder Cattle futures closed an average of 39¢ lower (15¢ to $1.10 lower), except for an average of 31¢ higher in two contracts.

Choice boxed beef cutout value was $1.43 higher Monday afternoon at $285.20/cwt. Select was $2.22 higher at $274.35

Total estimated cattle slaughter last week of 665,000 head was 20,000 head more than the previous week, according to USDA. Total estimated beef production was 20 million lbs. more at 550.2 million lbs.

Corn futures closed 15¢ to limit up 25¢ higher through Jly ‘22, and then mostly 8¢ to 9¢ higher.

Soybean futures closed mostly 21¢ to 26¢ higher.

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Major U.S. financial indices closed mixed Monday, with investors awaiting one of the busiest weeks of the season for quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 61 points lower. The S&P 500 closed 7 points higher. The NASDAQ was up 121 points.

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“Fed cattle prices have been disappointingly stagnant thus far in 2021, largely under the pressure of ample feedlot supplies,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Fed cattle price improvement is expected in the second half of the year but progress has been slower than expected due to residual effects of pandemic disruptions and the February winter storm. Fed prices are expected to be higher year over year for the remainder of the year, mostly when compared to pandemic-reduced prices last year, but also due to improving fed cattle market fundamentals as the year progresses.”

Relative to the cattle cycle, Peel explains pandemic impacts extended the pipeline of cattle supplies, delaying the reduction of fed cattle numbers last year and pushing more cattle into the first half of 2021.

“While feedlot inventories dropped seasonally in March and April, it may be into the second half of the year before feedlot inventories drop cyclically below year earlier levels,” Peel says.

Reflecting on Friday Cattle on Feed report, Peel points out numbers are less than two years earlier. More specifically, he says the Apr. 1 feedlot inventory is 0.5% less than in 2019, March feedlot placements were 0.8% less and March feedlot marketings were 14.8% more than the same time in 2019.

“The March placement total likely did include some increase in placements pushed into March by the February winter storm. Nevertheless, the placement total was not only smaller than pre-report expectations but was somewhat bullish in an absolute sense,” Peel says.

By | April 26th, 2021|Daily Market Highlights|

Cattle Current Daily—April 26, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

Live prices last week ranged from steady to $2 lower in the Southern Plains at $118-$120/cwt. to $1-$5 lower in the Northern Plains at $121; steady to $4 lower in the western Corn Belt at $120-$122. Dressed trade was $2-$4 lower at $192.

Cattle futures closed higher Friday, supported by oversold conditions and a reprieve from another day of higher corn prices.

Live Cattle futures closed an average of 67¢ higher (12¢ to 92¢ higher), except for 47¢ and 12¢ lower in the front two contracts.

Feeder Cattle futures closed an average of $1.42 higher (65¢ to $1.67 higher).

Choice boxed beef cutout value was $1.46 higher at $283.77/cwt. Select was $1.56 lower at $272.13

Corn futures closed 1¢ to 4¢ lower, except for 5¢ and 1¢ higher in the front two contracts.

Soybean futures closed 1¢ to 6¢ higher through Nov ‘22, and then fractionally lower to 2¢ lower.

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Major U.S. financial indices closed higher Friday, amid mainly positive economic news, and as investors took a more measured view of reports that President Biden will seek an increase in capital gains taxes.

The Dow Jones Industrial Average closed 227 points higher. The S&P 500 closed 45 points higher.

The NASDAQ up 198 points.

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Logic suggests markets will view the monthly Cattle on Feed report as neutral to hopefully friendly, with placements significantly less than the average of analysts expectations.

Feedlots with 1,000 head or more capacity placed 2.0 million head in March, which was 440,00 head more (+28.26%) than the previous year’s paltry placements, due to the pandemic. Placements were 5.5% less than expectations.

In terms of placement weights: 36.5% went on feed weighing 699 lbs. or less; 51.6% weighed 700-899 lbs.; 11.75% weighed 900 lbs. or more.

Marketings in March of 2.04 million head were 1.49% more year over year, which was in line with expectations. The total was the second most for the month since the data series began in 1996, according to USDA’s National Agricultural Statistics Service.

There were 11.9 million head on feed Apr. 1, which was 600,000 head more (+5.31%) than last year; the second most for the month since the data series began. That was 0.8% less than analysts expected. The number of heifers and heifer calves on feed were 7% more than the previous year.

By | April 25th, 2021|Daily Market Highlights|

Cattle Current Daily—April 23, 2021

Negotiated cash fed cattle trade was slow on moderate demand in the Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service.

Live trade in Nebraska was at $121/cwt., which was $1-$5 lower than last week. Dressed trade was $4 lower at $192.

In the western Corn Belt, at $121-$122, which was steady to $2 lower than last week. Dressed trade was $2-$4 lower at $192.

Trade was limited on light demand in in Colorado. Live prices were $1-$2 lower at $121.

Trade was mostly inactive on light demand in the Southern Plains. For the week, prices are steady in the Texas Panhandle at $120 and steady to $2 lower in Kansas at $118-$120.

Cattle futures—especially Feeder Cattle—crumbled beneath the weight of surging Corn futures.

Corn futures closed 20¢ to limit up 25¢ in the front three contracts, 15¢ to 16¢ higher through the next four and then mostly 5¢ to 7¢ higher.

Soybean futures closed 28¢ to 36¢ higher in the front six contracts, and then mostly 22¢ to 27¢ higher.

Live Cattle futures closed an average of $1.12 lower (85¢ lower at the back to $1.45 in spot Apr).

Feeder Cattle futures closed an average of $2.70 lower ($1.45 higher at the back to $3.55 lower).

Live Cattle futures closed an average of $1.12 lower (85¢ lower at the back to $1.45 in spot Apr).

Net U.S. beef export sales of 24,600 metric tons (mt) for 2021 were 57% more than the previous week and 38% more than the prior four-week average, according to USDA’s weekly U.S. Export Sales report for the week ending Apr. 15. Increases were primarily for South Korea, Japan, China, Mexico and Taiwan.

Choice boxed beef cutout value was $1.85 higher Thursday afternoon at $282.31/cwt. Select was $1.81 higher at $273.69

The average dressed steer weight the week ending Apr. 10 was 900 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 6 lbs. heavier than the prior week and 4 lbs. heavier than the same week last year. The average dressed heifer weight of 829 lbs. was 3 lbs. lighter than the prior week but 3 lbs. heavier than the prior year.

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Major U.S. financial indices closed lower Thursday, supposedly linked to reports that President Biden is set to try increasing capital gains taxes. That followed early-session support tied to positive quarterly corporate earnings and economic data.

Initial weekly unemployment insurance claims were 547,000 for the week ending Apr. 17, which was less than traders expected.

The Dow Jones Industrial Average closed 321 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 131 points.

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