Daily Market Highlights 2017-06-02T12:08:41-05:00

Daily Market Highlights

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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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U.S. consumers are ready, willing and able to return to restaurant dining as more people get vaccinated for COVID-19 and mandated restrictions lessen.

Although still 25% less than two years earlier, major chain transactions at full service restaurants in March were 210% higher than the previous year, according to the NPD Group’s (NPD) CREST®Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 75 quick service, fast casual, midscale, and casual dining chains representing 53% of the commercial restaurant traffic in U.S.

Transactions at quick service restaurant (QSR) chains were 29% higher year over year in March, but 5% less than two years earlier.

Overall, customer transactions at major restaurant chains in March were 32% higher than the previous year but 6% less than in March 2019.

“There is now optimism on the part of the American consumer, which helps to unleash pent up demand for dining out,” says  David Portalatin, NPD food industry advisor. “Although transactions are still down compared to pre-pandemic times, there is improvement and a signal that we’re headed in the right direction on the road to recovery.”

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

Cattle Current Daily—April 22, 2021

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains, Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices were mainly steady in the Texas Panhandle at $120/cwt. and steady to $1 lower in Kansas at $119-$120. Although too few to trend, there were some trades in Nebraska and the western Corn Belt at $123.

In Nebraska last week, prices were $122-$126 on a live basis and at $196 in the beef.

In the western Corn Belt last week, prices were $122-$124 on a live basis and at $194-$196 in the beef.

Live prices in Colorado last week were at $122-$123.

Cattle feeders offered 3,470 head (29 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 1,517 head (7 lots) sold. Six lots from the Southern Plains brought $120/cwt., which was steady to $1 lower than negotiated trade in the region last week. One lot of 457 steers from Nebraska brought $124, which was at the mid point of last week’s negotiated price range.

Cattle futures gave back what they gained in the previous session, and then some, pressured by yet another surge in grain futures prices and disappointing early cash prices. Perhaps there was also some positioning ahead of Friday’s monthly Cattle on Feed report.

As mentioned in Cattle Current Tuesday, the report will likely show March placements significantly higher than last year. Part of that has to do with anemic placements the previous year as the pandemic took hold. However, disrupted placements in February, due to the widespread winter storm and power outages will probably add to the tally.

Live Cattle futures closed an average of 92¢ lower (20¢ lower at the back to $1.95 lower toward the front).

Feeder Cattle futures closed an average of $2.29 lower ($1.97 to $3.17 lower), except for 15¢ lower in spot Apr.

Choice boxed beef cutout value was $2.20 higher Wednesday afternoon at $280.46/cwt. Select was $1.41 higher at $271.88.

Corn futures closed 14¢ to 19¢ higher in the front two contracts, 6¢ to 9¢ higher through the next five and then mostly 1¢ to 2¢ higher.

Soybean futures closed 14¢ to 25¢ higher in the front four contracts, and then mostly 8¢ to 10¢ higher.

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Major U.S. financial indices closed higher Wednesday, supported by positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 316 points higher. The S&P 500 closed 38 points higher. The NASDAQ was up 163 points. 

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“We have an opportunity to take the lessons we’ve learned from the COVID-19 pandemic and apply those to transforming our nation’s food system from the inside out, including our supply chains,” says U.S. Agriculture Secretary Tom Vilsack.

On Wednesday, Secretary Vilsack announced USDA is seeking public comments on a department-wide effort to improve and reimagine the supply chains for the production, processing and distribution of agricultural commodities and food products. The action is in response to Executive Order 14017, America’s Supply Chains, signed by President Biden Feb. 24, 2021. The request for comments is published in the Federal Register and the comment period will close on May 21, 2021.

“USDA plans to tackle this supply chain assessment holistically, looking across a full range of risks and opportunities,” says Secretary Vilsack. “From elevating the importance of local and regional food systems, to addressing the needs of socially disadvantaged and small to mid-size producers, to supporting sustainable practices to advance resilience and competitiveness, this top to bottom assessment will position USDA to make long-term, transformative changes for economic, national, and nutritional security.”

Goals of this transformation include a fairer, more competitive, and transparent system where a greater share of the food dollar goes to those growing, harvesting, and preparing the nation’s food.

“Growing consolidation in food and agriculture, the general health of our population, a growing climate crisis, and the need to ensure racial justice and equity are important factors to take into consideration as USDA looks at strengthening food and agricultural supply chains,” according to the USDA announcement.

Further, USDA is interested in comments about how to target pandemic-related stimulus relief programs and spending authorized by Congress in the Consolidated Appropriations Act (CAA) and American Rescue Plan Act (ARPA) toward long term, systemic change that results in food supply chain resiliency.

The deadline for comments is May 21, 2021. More information about how to submit comments in is available in the Notice.

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

Cattle Current Daily—April 21, 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 prices were at $120/cwt. in the Texas Panhandle, $120-$121 in Kansas, $122-$126 in Nebraska, $122-$123 in Colorado and at $122-$124 in the western Corn Belt. Dressed prices were at $196 in Nebraska and at $194-$196 in the western Corn Belt.

Cattle futures finally found some traction Tuesday, even in the face of surging Corn futures. Besides being oversold, the need for fed cattle prices to rise with long-term higher feed costs could have something to do with the transition.

Live Cattle futures closed an average of $1.04 higher (22¢ to $1.60 higher).

Feeder Cattle futures closed an average of $1.30 higher (30¢ to $1.75 higher), except for 15¢ lower in spot Apr.

Choice boxed beef cutout value was $2.09 higher Tuesday afternoon at $278.26/cwt. Select was $1.34 higher at $270.47.

Grain futures surged higher again Tuesday, helped along by a building weather premium based on dryness in Brazil and in the U.S. Northern Plains.

Although this week’s cold snap likely will stall planting in some parts of the U.S., corn planting was on par with the five-year average of 8%, as of Apr. 18, according to the most recent USDA Crop Progress report. Soybean planting was 1% ahead of average at 3%.

Corn futures closed 8¢ to 14¢ higher through Jly ‘22, and then mostly 5¢ higher.

Soybean futures closed 19¢ to 22¢ higher through the front three contracts, 15¢ higher through the next five and then mostly 10¢ to 13¢ higher. 

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Major U.S. financial indices extended losses Tuesday. Reports from the World Health Organization (WHO) that COVID-19 cases increased the last eight weeks seemed the primary pressure.

“The COVID-19 pandemic shows no signs of easing, with global case and death incidence at a concerning rate since mid-February 2021,” according to the latest WHO update. “A third of the global cumulative COVID-19 cases and deaths have been reported in the last three months alone…”

The Dow Jones Industrial Average closed 256 points lower. The S&P 500 closed 28 points lower. The NASDAQ was down 128 points.

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“Despite the recent declines in futures prices, there remains cautious optimism in cattle markets this year,” says Josh Maples, Extension livestock economist at Mississippi State University. “The expectation of tightening supplies and a strong beef demand profile provide some optimism for stronger markets this year. However, there are still many factors to watch closely.”

For instance, in the latest issue of In the Cattle Markets, Maples says drought and pasture conditions are of primary concern as worsening conditions are forcing herd liquidation decisions for many producers in the Northern Plains.

Related, Maples points to elevated feed prices with little prospect of reprieve if planted acres come in near those suggested by USDA’s Prospective Plantings report. He notes Corn futures are above $5 until the Sep ’22 contract.

Shorter term, Maples says the next monthly Cattle on Feed report—due out Friday—will show significantly more March feedlot placements year over year, since the comparison is to extraordinarily sparse placements in 2020 when pandemic effects were taking hold.

“While placements are nearly certain to be higher than a year ago, just how much higher is the big question,” Maples says. “Very large placement totals in March 2021 could lead to larger than expected totals of market-ready live cattle this summer. The recent declines in summer-month Live Cattle futures may be reacting to this possibility.”

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

Cattle Current Daily—April 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 prices were at $120/cwt. in the Texas Panhandle, $120-$121 in Kansas, $122-$126 in Nebraska, $122-$123 in Colorado and at $122-$124 in the western Corn Belt. Dressed prices were at $196 in Nebraska and at $194-$196 in the western Corn Belt.

Cattle futures closed lower again Monday, especially Feeder Cattle as Corn futures continued to climb higher.

Live Cattle futures closed an average of 45¢ lower.

Feeder Cattle futures closed an average $1.51 lower.

Choice boxed beef cutout value was 12¢ higher Monday afternoon at $276.17/cwt. Select was 3¢ higher at $269.13.

Corn futures closed 6¢ to 8¢ higher through Sep ‘22, and then mostly 3¢ to 4¢ higher.

Soybean futures closed 10¢ to 16¢ higher through the front five contracts, 6¢ to 9¢ higher through the next four contracts and then mostly 1¢ to 3¢ higher. 

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Major U.S. financial indices closed lower Monday, led by big tech stocks.

The Dow Jones Industrial Average closed 123 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 137 points.

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Drought is already forcing cowherd liquidation in Texas and the Dakotas, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. That follows a 14.5% decline in Colorado beef cow numbers—year over year Jan. 1.

“Drought conditions since last fall are the worst since 2013,” Peel says, in his weekly market comments.

The measuring stick is the weekly U.S. Drought Monitor (USDM), which classifies the percentage of the nation that is Abnormally Dry (D0) or experiencing one of four degrees of drought, ranging from Moderate Drought (D1) to Exceptional Drought (D4).

For the week beginning Apr. 13, 62.55% of the Continental United States was classified from Abnormally Dry to Exceptional Drought, compared to 25.58% at the same time last year.

More specifically, Peel shares details about the USDM Drought Severity and Coverage Index (DSCI), which combines the drought categories into a single number.

“The DSCI can range from 0 (zero abnormally dry or drought conditions) to 500 (100% D4, Exceptional Drought),” Peel explains. “The current DSCI for the continental U.S. is 169, compared to 45 one year ago. Since the Drought Monitor began in 2000, the U.S. DSCI has only reached a level of 200 for a total of 22 weeks (all in 2012 and early January 2013), with a maximum of value of 215. Coming summer weather raises the odds of further increases in drought. ” 

“In any specific location, the drought situation right now will set the stage for the next year,” Peel says. “In many parts of the country, the next two months may determine much of the forage production for the next 12 months. Regions such as the Southwest and the southern Rocky Mountains have been in drought for many months and face limited forage prospects this year unless moisture arrives very soon.”

As examples, Peel notes the DSCI in New Mexico is currently 433 and is 301 in Colorado. North Dakota currently has a DSCI of 367, a record level of drought in the state, Peel says. The DSCI is 227 in South Dakota and 236 in Texas.

“These regions may produce little or no forage this year, making drastic management actions likely. Herd liquidation is already occurring and may accelerate quickly in these regions,” Peel says. “Producers in all drought areas need to inventory current forage and hay reserves and carefully evaluate forage production potential at this time. This will provide the basis for a drought action plan that can help guide what and when decisions must be made going forward.”

One source for management considerations can be found in the “Managing Cattle and Forages in a Dry Weather Pattern” section at the OSU beef Extension Ranchers Thursday Lunchtime Webinar series.

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

Cattle Current Daily—April 19, 2021

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

For the week, live prices were steady in the Texas Panhandle at $120/cwt., steady to $1 higher in Nebraska at $123-$124, unevenly steady in Colorado at $122 and $1 lower in the western Corn Belt at $122-$124. Dressed prices were $1 higher in Nebraska at $196; steady to $1 lower at $194-$196 in the western Corn Belt.

Cattle futures closed lower again Friday, although the pace of decline was less than in recent sessions. Besides feed costs and sluggish cash price progress, there’s also concern about the recently slower slaughter pace and the potential to back up some cattle.

Estimated total cattle slaughter the week ending April 16 was 640,000 head, according to USDA. That was 1,000 head fewer than the previous week. Estimated year-to-date total cattle slaughter of 9.64 million head, is 35,000 head fewer (-0.36%). Estimated year-to-date beef production of 8.06 billion lbs. is 74.9 million lbs. more (+0.94%) than the same time last year.

Live Cattle futures closed an average of 61¢ lower, except for 10¢ higher in the back contract.

Feeder Cattle futures closed an average 73¢ lower (30¢ to $1.00 lower).

Choice boxed beef cutout value was 57¢ lower on Friday at $276.05/cwt. Select was 67¢ higher at $269.10.

Corn futures closed 1¢ to 4¢ lower through the front three contracts, and then mostly fractionally higher to 1¢ lower.

Soybean futures closed 8¢ to 15¢ higher through the front four contracts, and then mostly 3¢ to 6¢ higher. 

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Major U.S. financial indices closed higher again Friday, supported by positive economic news and quarterly earnings reports from major banks that beat trader expectations.

The Dow Jones Industrial Average closed 164 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 13 points.

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One in four plant-based substitutes for meats are neither high in protein nor a source of protein, according to a recent safefood research report that examined available meat substitutes in Ireland. Safefood’s role is to promote awareness and knowledge of food safety and nutrition on that island.

The safefood research looked at the nutritional content of 354 plant-based meat-substitute products on sale in supermarkets across Ireland. These products included plant-based alternatives such as mince, burgers and sausages, which are positioned in a category of foods that provide protein such as meat, poultry, eggs, fish, nuts and beans.

“However, one in four of the products we surveyed were not an adequate source of protein,” says Catherine Conlon, MB, Director of Human Health & Nutrition with safefood. “When we asked people about these products, a third of people thought they were healthy or better for them. However, many of these plant-based products are simply highly processed foods…”

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

Cattle Current Daily—April 16, 2021

Negotiated cash fed cattle trade was slow on light demand in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. Live prices were steady with last week at $120/cwt.

Elsewhere, trade was slow with moderate demand.

Live prices were steady to $1 higher in Kansas at $120-$121 and steady to $3 higher in Nebraska at $123-$126. Dressed trade was steady to $1 higher at $196.

Live trade was at $120-$123 in Colorado last week; $123-$125 in the western Corn Belt.

Cattle futures closed lower again Thursday, pressured by feed costs, disappointing early cash fed cattle prices and limit down moves in Lean Hog futures.

Live Cattle futures closed an average of 57¢ lower. 

Feeder Cattle futures closed an average $1.04 lower.

Choice boxed beef cutout value was $3.71 higher Thursday afternoon at $276.62/cwt. Select was $1.12 higher at $268.43.

The average dressed steer weight was 894 lbs., the week ending April 3, according to USDA’s Actual Slaughter Under Federal Inspection report. That was 5 lbs. lighter than the previous week but 5 lbs. heavier than the prior year. The average dressed heifer weight of 832 lbs. was 2 lbs. heavier than the prior week and 7 lbs. heavier than the previous year.

Net U.S. beef export sales of 15,700 metric tons (MT) were 14% less than the prior week and 23% less than the previous four-week average, according to the U.S. Export Sales report for the week ending April 8. Increases were primarily for Japan , China, South Korea and Mexico.

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

Net U.S. corn export sales (2020-21) of 327,700 mt were down 57% from the previous week and 81% from the prior four-week average.

Soybean futures closed 3¢ to 9¢ higher through Aug ‘22, and then mostly fractionally lower to 1¢ lower, except for 8¢ higher in the back three contracts.

Net U.S. soybean export sales (2020-21) of 1,500 mt were a market-year low, down noticeably from the previous week and from the prior four-week average.

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Major U.S. financial indices closed higher Thursday, buoyed by positive economic news, including a 9.8% jump in retail sales last month, according to the U.S. Census Bureau . That was significantly more than the trade anticipated.

The Dow Jones Industrial Average closed 305 points higher. The S&P 500 closed 45 points higher. The NASDAQ was up 180 points.

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USDA’s Economic Research Service (ERS) increased forecast feeder steer prices for the remainder of this year, based on recent price strength. Compared to the previous month, projected feeder steer prices (basis Oklahoma City) increased $6 in the second quarter to $140.00/cwt., $3 in the third and fourth quarters to $143. The annual average feeder steer price was projected $3.50 higher at $140.

ERS also elevated expectation for the five-area direct fed steer price. Projected prices increased $4 in the second quarter to $117/cwt., $1 in the third quarter to $115 and $1 in the fourth quarter to $120. The expected annual fed steer average price rose to $116.

“In March, cow slaughter was higher than anticipated, while steer and heifer slaughter was lower,” say ERS analysts, in the latest Livestock, Dairy and Poultry Outlook. “This change in slaughter proportions—an effect of the February storm—had the additional effect of lowering carcass weights. As a result, expected first-quarter beef production was lowered 35 million lbs. from last month. Fed cattle marketings and carcass weights were lowered for the second quarter on current data. An increase in fed cattle marketings is anticipated in the third and fourth quarters and is expected to expand 2021 beef production in the second half of the year for a full-year increase of 60 million lbs. (compared to the prior month) to 27.640 billion lbs.

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

Cattle Current Daily—April 15, 2021

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

Cattle futures closed lower again Wednesday, but off of session lows. Pressure included the jump in grain prices, lack of cash direction and recently declining open interest. Live Cattle open interest declined 7,303 contracts week to week on Tuesday.

Live Cattle futures closed an average of 48¢ lower (15¢ to 87¢ lower). 

Feeder Cattle futures closed an average $1.32 lower.

Choice boxed beef cutout value was $2.80 higher Wednesday afternoon at $272.91/cwt. Select was 77¢ higher at $267.31.

Grain futures rallied higher Wednesday, fueled by forecast cold weather in the U.S. Corn Belt for the next couple of weeks and continued dryness in South America.

Corn futures closed 10¢ to 14¢ higher through the front three contracts and then mostly 5¢ to 6¢ higher.

Soybean futures closed 10¢ to 20¢ higher through Jly ‘22, and then mostly 8¢ higher.

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Major U.S. financial indices closed mixed Wednesday, with pressure from big tech stocks, but major bank stocks beating quarterly earnings forecasts.

The Dow Jones Industrial Average closed 53 points higher. The S&P 500 16 points lower.The NASDAQ was down 138 points.

CME WTI Crude Oil futures closed $2.65 to $2.97 higher through the front six contracts.

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Consumers view livestock production as a solution to climate change, rather than the problem, according to Cargill’s latest quarterly global Feed4Thought survey.

Specifically, those who indicated climate change as important to them also rated livestock and agriculture lowest in negative impact, compared with other industries generally regarded as significant contributors.

Cargill’s Feed4Thought survey included responses from 2,510 consumers representing the U.S., France, South Korea and Brazil. Overall, survey respondents ranked transportation and deforestation as the greatest contributors to climate change.

 Of those surveyed, 59% said that federal and national governments bear the highest responsibility for addressing climate change. In terms of reducing livestock’s impact on climate change, 57% of respondents cited companies involved in beef production and 50% cited cattle producers.

U.S. cattle producers have a long history of climate-friendly, sustainable beef production. They reduced the carbon footprint of the industry by 40%, while increasing beef production by 66% between the 1960s and 2018, according to the National Cattlemen’s Beef Association (NCBA).

“We already know a growing global population will require and demand high-quality food, which means we need ruminant animals, like beef cattle, to help make more protein with fewer resources,” says Jerry Bohn, a Kansas cattleman and NCBA president. “Cattle generate more protein for the human food supply than would exist without them because their unique digestive system allows them to convert human-inedible plants, like grass, into high-quality protein.”

A recent research paper confirmed U.S. beef production is the most sustainable production system in the world.

The study—Reducing climate impacts of beef production: A synthesis of life cycle assessments across management systems and global regions—examined livestock lifecycle assessments (LCAs) from across the globe to reach its conclusions and pointed out that there is significant room for improvement of global livestock production practices. While it laid out many opportunities for improvement, it also recognized the work already done by the U.S. cattle industry to become the leader in sustainable beef production. Thanks to early adoption of innovative grazing practices, combined with advances in cattle breeding and nutrition, U.S. producers have already employed many of the suggested practices that the study suggests employing around the world.

According to Cargill’s Feed4Thought survey, nearly 80% of consumers around the world, who indicated climate change as important, reported a willingness to make a change in the type of food they purchase. In turn, about half of these consumers said they would be willing to pay a premium for a product that promises a low carbon footprint to curb their impact.

When asked about the most important factors considered at point of purchase, consumers ranked highest: taste; avoidance of antibiotics/growth hormones/steroids use; knowing where products come from.

“Beef and cattle production is a critical part of our country’s identity as a global leader in sustainable beef production, but also in our long-held principle that economic, environmental, and community-based sustainability will result in widespread benefits,” says Bohn. “U.S. farmers and ranchers are the best in the world when it comes to producing safe, wholesome and sustainable high-quality beef for American families, and doing it with the smallest possible footprint and we’re committed to continuing on that path of improvement.”

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

Cattle Current Daily—April 14, 2021

Negotiated cash fed cattle trade in all major cattle feeding regions ranged from a standstill to mostly inactive on very light demand through Tuesday afternoon, according to the Agricultural Marketing Service.

Live prices last week were at $120/cwt. in the Southern Plains, $120-$123 in Colorado, $123 in Nebraska and $123-$125 in the western Corn Belt. Dressed trade was at $195-$196.

Cattle futures closed Lower Tuesday, especially Feeder Cattle, challenged by technical correction and the relentless march higher of corn prices. As well, wholesale beef values stalled the last couple of days.

Live Cattle futures closed an average of 66¢ lower (15¢ to $1.17 lower). 

Feeder Cattle futures closed an average $2.09 lower.

Choice boxed beef cutout value was $1.30 lower Tuesday afternoon at $270.11/cwt. Select was 38¢ higher at $266.54.

Corn futures closed 10¢ to 11¢ higher through the front three contracts and then mostly 4¢ to 7¢ higher.

Soybean futures closed 1¢ to 7¢ higher across the front half of the board, and then fractionally lower.

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Major U.S. financial indices closed mixed Tuesday. Most pressure focused on stocks benefitting more from further reopening the economy. That was tied to the FDA recommending states pause the use of the Johnson & Johnson COVID-19 vaccine, based on reports of adverse health reactions.

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 146 points.

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Amid elevated wholesale beef values, David Anderson, Extension livestock economist at Texas A&M University says it’s worth remembering beef demand strength, heading into the pandemic.

“A growing economy, falling unemployment, and consumer preferences trending towards higher USDA quality grade beef were building demand,” Anderson says, in the latest issue of In the Cattle Markets. “…The retail all fresh beef demand index scored 119 for 2020, the best in 20 years. That index is calculated using per capita consumption, USDA, BLS retail prices, which only reflect grocery store prices. Regardless, it suggests that we exit the pandemic with a strong base of beef demand.”

Moreover, Anderson says the approaching grilling season, further opening of U.S. businesses and pent-up consumer demand promise to boost prices.

“One macroeconomic statistic that I find interesting is Personal Savings as a Percent of Disposable Personal Income,” Anderson says. “Prior to the pandemic, since 2011, savings averaged about 7%. When widespread shutdowns hit in the second quarter of 2020, GDP fell 9%. With no place to go spend, savings skyrocketed to 26%. While savings declined to 13% since then, that is a lot of money for folks to spend to fund some pent-up demand fun. Economic reopening, combined with people spending and tighter beef supplies later in the year, should suggest some optimism.”

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

Cattle Current Daily—April 13, 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.

Live prices last week were $3 higher in the Southern Plains at $120, mostly $5 higher in Nebraska at mostly $123, $5 higher in the western Corn Belt at $123-$125 and at $120-$123 in Colorado, where there was no established market the previous week. Dressed prices were $5 higher in Nebraska at $195 and $6-$7 higher in the western Corn Belt at $195-$196.

Cattle futures closed narrowly mixed on Monday, firming after the profit-taking selloff that ended last week. Lower front-month Corn futures prices added support.

Live Cattle futures closed an average of 31¢ lower, except for an average of 9¢ higher in three contracts.

Feeder Cattle futures closed an average of 32¢ higher, except for 25¢ lower in spot Apr.

Choice boxed beef cutout value was 76¢ lower Monday afternoon at $271.41/cwt. Select was $2.09 higher at $266.16.

Corn futures closed 3¢ to 8¢ lower through the front three contracts and then mostly fractionally higher to 1¢ higher.

Soybean futures closed 12¢ to 21¢ lower through the front six contracts, and then mostly 5¢ to 9¢ lower.

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Major U.S. financial indices closed slightly lower Monday, but basically tread water as investors await key inflation data and the beginning of quarterly corporate earnings reports this week.

The Dow Jones Industrial Average closed 55 points lower. The S&P 500 closed fractionally lower. The NASDAQ was down 50 points.

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Although COVID disruptions continue to hamper U.S. beef exports, in terms of year-over-year performance, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out they were 15.6% more for volume last year, compared to five years earlier.

“Beef exports have evolved significantly in recent years, in a very dynamic environment of global politics and trade policies, direct and indirect impacts of animal disease outbreaks and growing beef preferences and consumption,” Peel explains, in his weekly market comments.

Japan and South Korea continue to be key, growing market destinations.

“Japan has been the largest U.S. beef export market since 2013 (and was for many years prior to 2004), with the 2020 market share at 28% of total exports,” Peel says.  “Beef exports to Japan grew at an average rate of 9.7% annually from 2016 to 2020 with peak exports in 2018 and a decrease in 2019 before rebounding modestly in 2020, despite pandemic disruptions.” 

South Korea became the second largest U.S. beef export market in 2016. It continues to be the fastest, most consistently growing U.S. market, according to Peel.

“Beef exports to South Korea have increased by an average of 17.4% in the last five years, pushing the country to a nearly 23% market share in 2020, just behind Japan,” Peel says. “In fact, in the first two months of 2021, beef exports to South Korea are up 15.1% percent year over year, pushing South Korea just ahead of Japan as the number one beef export market so far this year.”

Consider China and Hong Kong together—essentially a single market—and it represents the third largest U.S. beef export market, accounting for 11.5% of market share last year, Peel says.

Considering countries separately, however, Mexico is currently the third largest export market for U.S. beef. Peel explains U.S. beef exports to Mexico declined 24.7% year over year in 2020, pressured by that nation’s faltering economy and pandemic impacts.

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

Cattle Current Daily—April 12, 2021

Negotiated cash fed cattle trade ranged from a standstill to limited on light demand through Friday afternoon, according to the Agricultural Marketing Service. Although too few to trend there were some trades in the western Corn Belt at $125/cwt. on a live basis and at $196 in the beef.

In established trade for the week, live prices were $3 higher in the Southern Plains at $120, $5-$7 higher in Nebraska at $125, $5 higher in the western Corn Belt at $123-$125 and $4-$7 higher in Colorado (compared to two weeks earlier) at $120-$123. Dressed prices were $5-$7 higher at $195.

Week to week on Thursday, the five-area direct average steer prices was $4.42 higher at $121.87. The average dressed steer price was $195.21, which was $6.53 higher.

Cattle futures closed lower Friday, amid active trade and likely profit taking from the strong week-to-week gains.

Live Cattle futures closed an average of $1.10 lower (22¢ to $2.45 lower), except for 62¢ higher in the back contract.

Feeder Cattle futures closed an average of $1.55 lower (80¢ lower toward the back to $2.37 lower in spot Apr), except for 45¢ higher in the back contract.

Choice boxed beef cutout value was $1.67 higher Friday afternoon at $272.17/cwt. Select was 24¢ higher at $264.07.

Estimated total cattle slaughter the week ending Apr. 10 was 641,000 head, according to USDA, which was 32,000 head more than the previous week. Year-to-date estimated total cattle slaughter of 9.0 million head is 184,000 head fewer (-2.0%) than the same time last year. Estimated year-to-date beef production of 7.54 billion lbs. is 54.2 million lbs. less (-0.7%) than a year earlier.

Grain futures were mixed Friday, reacting to USDA’s monthly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed mostly 1¢ to 3¢ higher, except for 2¢ lower in spot May.

Soybean futures closed 9¢ to 12¢ lower through the front six contracts, and then mostly 2¢ to 7¢ lower.

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Major U.S. financial indices closed higher Friday. Support included optimism about the pace of domestic COVID-19 vaccinations and further reopening of the economy.

The Dow Jones Industrial Average closed 297 points higher. The S&P 500 closed 31 points higher. The NASDAQ was up 70 points.

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Logistical challenges continued to hamper U.S. beef exports in February, but they should increase as the year progresses, according to the U.S. Meat Export Federation (USMEF).

Beef exports in February were 8% less in volume year over year at 103,493 metric tons (mt), according to data released by USDA and compiled by USMEF. Beef export value was 2% less at $669.5 million. The decline was due mainly to variety meat exports.

For the year, through February, U.S. beef exports are 5% less in volume and 2% less in value at $1.32 billion.

U.S. pork export volume in February was 12% less than a year earlier. Value was 13% less at $629.4 million.

“While February exports were in line with expectations, the results don’t fully reflect global demand for U.S. red meat,” says Dan Halstrom, USMEF president and CEO. “Logistical challenges, including congestion at some U.S. ports, are still a significant headwind. Tight labor supplies at the plant level continue to impact export volumes for certain products, including some variety meat items and labor-intensive muscle cuts.”

Halstrom notes that the flow of exports through U.S. ports is showing some gradual improvement as COVID-impacted crews move closer to full strength, but remains a serious concern for the U.S. agricultural sector.

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

Cattle Current Daily—April 9, 2021

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

For the week so far, live prices are $3 higher in the Southern Plains at $120/cwt., $5 higher in Nebraska at $123, $3-$5 higher in the western Corn Belt at $121-$125 and $4-$7 higher in Colorado (compared to two weeks earlier) at $120-$123. Dressed trade is $5-$7 higher at $195.

Feeder Cattle futures closed mostly slightly lower Thursday, pressured by the surge in Corn futures prices.

Feeder Cattle futures closed an average of 52¢ lower (37¢ to $1.07 lower), except for an average of 42¢ higher in the back two contracts.

Live Cattle futures mostly extended gains, with continued support from cash prices and wholesale beef values, as well as expanding open interest. 

Live Cattle futures closed an average of 56¢ higher (35¢ to $1.00 higher), except for an average of 17¢ lower in two nearby contracts.

Choice boxed beef cutout value was $4.19 higher Thursday afternoon at $270.50/cwt. Select was $8.64 higher at $263.83.

The average dressed steer weight the week ending March 27 was 899 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 2 lbs. lighter than the previous week, but 8 lbs. heavier than the same week last year. The average dressed heifer weight of 830 lbs. was 6 lbs. lighter week to week but 5 lbs. heavier than a year earlier.

Front-month grain futures closed sharply higher Thursday amid likely positioning ahead of USDA’s World Agricultural Supply and Demand Estimates due out Wednesday.

Corn futures closed 10¢ to 19¢ higher in the front three contracts, 8¢ to 9¢ higher in the next four and then mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 1¢ to 2¢ higher, except for 6¢ higher in the front two contracts.

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Major U.S. financial indices closed higher Thursday, led by tech stocks.

The Dow Jones Industrial Average closed 57 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 140 points.

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“For the economy and rural industries, there will be no going back to pre-COVID conditions. A transformed policy environment and awakened commodity markets are making way for a whole new operating environment, according to the new Quarterly report from CoBank’s Knowledge Exchange (CBKE).

“The policy focus in Washington is shifting from crisis management to building for the future,” says Dan Kowalski, CBKE vice president. “And the outcome of the president’s infrastructure plan will have substantial implications for rural water, power and broadband providers. Hundreds of billions of dollars in funding would reshape these industries and intensify the current focus on climate resilience and social equity.”

In terms of economic growth, CBKE analysts explain consensus forecasts point to 7% U.S. GDP growth this year, the fastest rate of expansion since 1984. They note the U.S. economy continues to outperform expectations as stimulus funds fuel robust consumer spending.

On the other side of the ledger, those analysts expect inflation to increase.

“Any inflation that results from resurgent demand will be in addition to the base-effect inflation that we are certain to have in coming months,” according to the CBKE report. “Inflation is typically measured in year-over-year terms, and base effects occur when inflation readings are skewed because of price anomalies in the prior year. In 2020, prices for many goods and services dove in the middle months of the year as demand suddenly dropped. Those 2020 price declines will widen year-over-year inflation over the next couple of quarters, and new upward price pressure should push headline inflation above 3%. We expect this burst of inflation to be short-lived as the economy recalibrates, but we could experience inflation over 2% well into 2022.”

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

Cattle Current Daily—April 8, 2021

Negotiated cash fed cattle trade and demand were moderate in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were $3 higher than last week at $120/cwt.

In Nebraska, trade was light on light to moderate demand. Although too few to trend, there were some live sales at $120-$123. Prices there last week were at $118 on a live basis and at $190 in the beef.

Also too few to trend, early live prices in Colorado were at $120-$123. The last established market was two weeks ago at $116.

Last week, in the western Corn Belt, prices were at $118-$120 on a live basis and at $188-$190 dressed.

Cattle feeders offered 4,422 head in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 3,277 head sold, all from Texas and Nebraska and all on a live weight basis. Steer prices ranged from $122.00 to $122.75/cwt. in Nebraska and from $120.00 to $120.75 in Texas. Heifer prices ranged from $122.00 to $122.75 in Nebraska and from $120.50 to $121.00 in Texas.

Cattle futures extended gains Wednesday, supported by higher cash fed cattle prices and the continued increase in wholesale beef values. 

Live Cattle futures closed an average of 49¢ higher.

Feeder Cattle futures closed an average of $1.11 higher (90¢ to $1.60 higher).

Choice boxed beef cutout value was $3.54 higher Wednesday afternoon at $266.31/cwt. Select was $3.89 higher at $255.19.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 3¢ to 10¢ lower through the front four contracts, and then mostly fractionally mixed.

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Major U.S. financial indices closed little changed Wednesday.

The Dow Jones Industrial Average closed 16 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 9 points.

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Agricultural producers are growing more optimistic, according to the latest Purdue University/CME Group Ag Economy Barometer. It rose 12 points month to month in March to 177, the highest level since October 2020.

“Even with a rebound in crop production in 2021, it looks like carryover supplies of corn and soybeans will remain tight, providing producers confidence that crop prices will remain strong this year,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “A rebound in the U.S. economy this summer, combined with expectations for a smaller pork supply, is also providing some optimism in the livestock sector.”

The Index of Future Expectations increased 16 points in March to 164 after declining four consecutive months. The Index of Current Conditions rose 2 points to 202, tying the record high.

Producers’ perspective about their operations’ financial position continues to improve, as well. The Farm Financial Performance Index was 125 in March, up from the record low of 55 in April of last year. In turn, that optimism appears to be fueling short-term optimism for land values.

The Short-Term Farmland Value Expectations Index rose for the fourth consecutive month, up 3 points to 148. The Long-Term Farmland Value Index, matched its previous high, up 4 points to 157.

Producer optimism about U.S.-China trade continued to decline. In March, 31% of survey respondents expected the trade dispute to be resolved in a way that’s beneficial to U.S. agriculture. That’s down 50 points from early last year.

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

Cattle Current Daily—April 7, 2021

Negotiated cash fed cattle trade was at a standstill in Nebraska and the Texas Panhandle through Tuesday afternoon. Elsewhere, trade ranged from limited to mostly inactive on light demand, according to the Agricultural Marketing Service (AMS).

Last week, live prices were at $117/cwt. in the Southern Plains, $118 in Nebraska and $118-$120 in the western Corn Belt. Dressed prices were at $190 in Nebraska and at $188-$190 in the western Corn Belt.

Cattle futures closed mainly higher Tuesday, buoyed by the bullish rise in wholesale beef values. 

Live Cattle futures closed an average of 30¢ higher (5¢ to $1.35 higher), except for 15¢ lower in the back contract

Feeder Cattle futures closed an average of 99¢ higher (2¢ to $1.55 higher), except for unchanged in May.

Choice boxed beef cutout value was $4.10 higher Tuesday afternoon at $262.77/cwt. Select was $1.44 higher at $251.30.

Corn futures closed mostly 4¢ to 5¢ lower, except for 1¢ higher at either end of the board.

Soybean futures closed 1¢ to 6¢ higher.

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Major U.S. financial indices edged lower Tuesday, amid some likely profit taking and rally fatigue.

The Dow Jones Industrial Average closed 96 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 7 points. 

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Economic light continues to shine brighter at the end of the pandemic tunnel.

“Thanks to the ingenuity of the scientific community, hundreds and millions of people are being vaccinated, and this is expected to power recoveries in many countries later this year,” explained Gita Gopinath, Chief Economist and Director of the Research Department at the International Monetary Fund (IMF). “We are now projecting a stronger recovery for the global economy compared with our January forecast.”

Specifically, IMF projects global GDP this year at 6.0% and 4.4% in 2022. That’s from the organization’s latest World Economic Outlook.

“The upgrades in global growth for 2021 and 2022 are mainly due to upgrades for advanced economies, particularly to a sizable upgrade for the United States that is expected to grow at 6.4% this year. This makes the United States the only large economy projected to surpass the level of GDP it was forecast to have in 2022 in the absence of this pandemic,” said Gopinath.

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

Cattle Current Daily—April 6, 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 (AMS).

Last week, live prices were at $117/cwt. in the Southern Plains, $118 in Nebraska and $118-$120 in the western Corn Belt. Dressed prices were at $190 in Nebraska and at $188-$190 in the western Corn Belt.

The five-area direct average steer price was $118.08/cwt. last week on a live basis. That was $2.49 more than the prior week. The average five-area direct steer price in the beef was $189.36, which was $4.89 more.

Cattle futures closed sharply higher Monday, supported by stronger cash prices, increasing wholesale beef values and higher outside markets.

Live Cattle futures closed an average of $1.32 higher.

Feeder Cattle futures closed an average of $2.07 higher, from $1.35 to $2.57 higher.

Choice boxed beef cutout value was $5.82 higher Monday afternoon at $258.67/cwt. Select was $2.89 higher at $249.86.

Corn futures closed mostly 4¢ to 9¢ higher, except for 6¢ lower in the front two contracts.

Soybean futures closed mostly 5¢ to 9¢ higher.

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Major U.S. financial indices closed sharply higher Monday, buoyed by Friday’s positive national employment outlook.

Total nonfarm payroll employment rose by 916,000, month to month, in March, according to the U.S. Bureau of Labor Statistics. That was significantly more than the trade expected. The unemployment rate edged down to 6.0%.

In March, average hourly earnings for all employees on private nonfarm payrolls fell by 4¢ to $29.96.

The Dow Jones Industrial Average closed 373 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 225 points.

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Significantly higher feed costs than last year will encourage feedlots to place cattle at heavier weights, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. In turn, stocker and backgrounders have more incentive to add more weight to cattle.

In his weekly market comments, Peel points out current weekly average cash corn prices are reported at $5.85/bu. in Dodge City, at $5.99/bu. in Garden City and at $6.01/bu. in the Texas Triangle. He explains those prices are 79-82% more than the lows in August.

“Feedlots will also look for opportunities to adjust feedlot rations using cheaper substitute ingredients, if possible,” Peel says. “Wheat may offer some potential in feedlot rations in the coming weeks and months. Winter wheat prices in the Southern Plains have increased in the last eight months but relatively less than corn.”

Peel uses Dodge City prices as an example. The current cash wheat price (hard red winter) is 41% more than in August at $5.37/bu., but it’s cheaper than corn at $5.85/bu.

“In general, a wheat price of 107% of corn price is equivalent on a price per pound basis (60 lbs. of wheat/bu. versus 56 lbs./bu. for corn),” Peel says. “In some circumstances, wheat may have additional feed value compared to corn due to a higher protein content. However, cattle rations typically do not need the additional protein, so wheat value is based primarily on energy content. Feedlots do not change rations quickly or for short periods of time but will adjust if market conditions suggest that an extended period of alternative feeds is likely.” 

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

Cattle Current Daily—April 5, 2021

Negotiated cash fed cattle trade and demand were moderate in Nebraska and the western Corn Belt through Friday afternoon. Elsewhere, trade was mostly inactive on light demand, according to the Agricultural Marketing Service (AMS).

By the end of the week, live prices were $2 higher in the Southern Plains at $117/cwt., $2 higher in Nebraska at mostly $118 (some up to $121) and $3-$4 higher in the western Corn Belt at $119-$120. Dressed trade was $5 higher at $190.

Futures markets were closed Friday, in observance of Good Friday. Feeder Cattle futures closed narrowly mixed, week to week on Thursday. Live Cattle futures closed $1.04 higher, buoyed by escalating wholesale beef values, stronger cash prices and continued strength in Lean Hogs.

Choice was boxed beef cutout value $2.88 higher Friday afternoon at $252.85/cwt. Select was $2.27 higher at $246.97.

Estimated total cattle slaughter the week ending April 3 was 609,000 head, which was 40,000 head fewer than the previous week, according to USDA. Year-to-date estimated total cattle slaughter of 8.36 million head is 295,000 head fewer (-3.4%) than the same period last year. Estimated year-to-date beef production of 7.00 billion lbs. is 152.7 million lbs. less (-2.1%) than last year.

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Equity markets were closed Friday.

The Dow Jones Industrial Average was 533 points higher, week to week on Thursday. The NADASQ closed 502 points higher. The S&P 500 was up 110 points.

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Wholesale beef values continue to climb higher and faster than many expected.

Choice boxed beef cutout value was $15.19 higher week to week on Friday at $252.85/cwt. Select was $19.20 higher at $246.97. That’s $22.86 higher for Choice over the last two weeks; $27.02 higher for Select.

“The two drivers of higher beef prices are likely restaurants increasing dining capacity and consumers continuing to use discretionary spending on their eating experience, since many do not feel comfortable traveling yet. How these factors change as an increasing number of Americans get a coronavirus vaccine will be determined in coming months.” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Consumer willingness to pay (WTP) for ribeye steak and ground beef at retail increased month to month in March, according to the Meat Demand Monitor (MDM), which tracks U.S. consumer preferences, views, and demand for meat with separate analysis for retail and food service channels.

Specifically, WTP for ribeye (retail) increased by $1.42 to $17.21 in March. WTP for ground beef (retail) increased by 76¢ to $8.05. For perspective, WTP also increased for pork chops, bacon and chicken breast. It declined for plant-based patties.

The MDM is a monthly online survey with a sample of over 2,000 respondents reflecting the national population. Agricultural economists Glynn Tonsor at Kansas State University and Jayson Lusk at Purdue University maintain the MDM, which is funded in part by the national beef checkoff and the national pork checkoff.

“The combined beef and pork projected market shares for March are 31% and 21%, respectively, at the grocery store; 38% and 14% at the restaurant,” according to the latest MDM report. “Taste, Freshness, Safety, and Price remain most important when purchasing protein.”

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

Cattle Current Daily—April 2, 2021

Negotiated cash fed cattle prices were $2 higher in Kansas Thursday at $117/cwt., with moderate trade and demand, according to the Agricultural Marketing Service (AMS). For the week, some early live sales traded at $118 in Nebraska and the Texas Panhandle, but too few to trend.

Live prices last week were at $115 in the Texas Panhandle, $116 in Nebraska and $115-$117 in the western Corn Belt. Dressed trade was at $185.

Cattle futures were mixed Thursday amid likely profit taking and repositioning.

Live Cattle futures closed an average of 50¢ lower, except for 35¢ higher in the back contract.

Feeder Cattle futures closed an average of 66¢ higher, except for unchanged and 17¢ lower in the front two contracts. 

Wholesale beef prices continue to climb. Choice boxed beef cutout value was $2.85 higher Thursday afternoon at $249.97/cwt. Select was $6.57 higher at $244.70.

The average dressed steer weight for the week ending Mar. 21 was 901 lbs. according to USDA’s Actual Slaughter Under Federal Inspection repot. That was 3 lbs. lighter than the previous week but 3 lbs. heavier than the same week last year. The average dressed heifer weight of 836 lbs. was 4 lbs. heavier than the previous week but even with the prior year.

Corn futures closed 4¢ to 7¢ higher in the front five new-crop contracts and then fractionally mixed. The two remaining old-crop contracts close 2¢ to 4¢ lower.

Soybean futures closed mixed but mostly 19¢ to 34¢ lower, following the previous session’s limit-up move.

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Major U.S. financial indices closed sharply higher Thursday, buoyed by lower Treasury yield rates and President Biden’s proposed $2 trillion infrastructure plan.

The Dow Jones Industrial Average closed 171 points higher. The S&P 500 closed 46 points higher. The NASDAQ was up 233 points.

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COVID-19 case rates among meat and poultry workers continue to be significantly less than the general population, thanks to safety measures implemented by packers and processors since the pandemic began.

For perspective, the most recent data from the North American Meat Institute (the Meat Institute) indicate the current COVID-19 case rate among meat and poultry workers is 2.67 cases per day per 100,000 workers. That’s more than 85% lower than rates in the general population (18.25 cases per day per 100,000 people) and more than 98% lower than the May 2020 peak in the sector of 98.39 cases per day per 100,000 workers.

“Frontline meat and poultry workers were among the first impacted by the pandemic, but comprehensive protections implemented in the sector since spring 2020 work,” says Julie Anna Potts, president and CEO of the Meat Institute.

For example, the University of Nebraska Medical Center found that the combination of universal masking and physical barriers reduced cases significantly in 62% of meat facilities studied. An analysis published in the Lancet in June 2020 found that distancing of 3 ft. and use of facemasks each reduce transmission by about 80%, and use of eye protection reduces transmission by about 65%.

“The critical next step is to ensure immediate access to vaccines as this dedicated and diverse workforce continues feeding Americans and keeping our farm economy working,” Potts says.

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

Cattle Current Daily—April 1, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska through Wednesday afternoon. Although too few to trend, there were some early live sales at $118/cwt., which was $2 higher than last week. Trade was mostly inactive on light demand in the Southern Plains, according to the Agricultural Marketing Service (AMS). Elsewhere, it was at a standstill.

Buyers of Nebraska cattle in Central Stockyards’ weekly Fed Cattle Exchange auction also paid $118 for 1,725 head. Overall, cattle feeders offered 4,593 head; 2,038 head sold—all via live weight—for a weighted average price of $117.77.

Live Cattle futures gained on the outlook for higher cash prices, as well as ongoing strength in wholesale beef values.

Live Cattle futures closed an average of 82¢ higher, except for unchanged in spot Apr.

Feeder Cattle futures wilted beneath the weight of resurgent grain futures prices, tied to USDA’s Prospective Plantings report (see below).

Feeder Cattle futures closed an average of $2.41 lower. 

Choice boxed beef cutout value was $2.29 higher Wednesday afternoon at $247.12/cwt. Select was $2.21 higher at $238.13.

Grain futures spiked higher Wednesday—especially Corn and Soybeans—based on USDA’s Prospective Plantings report. Producers intend to plant more acres to both crops this year than last, but far fewer than expectations ahead of the report.

Corn futures closed mostly 18¢ higher to limit up 25¢.

Soybean futures closed 44¢ higher to limit up 70¢.

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Major U.S. financial indices closed mixed Wednesday, with the broadest gains in big tech stocks.

The Dow Jones Industrial Average closed 85 points lower. The S&P 500 closed 14 points higher. The NASDAQ was up 201 points.

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Producers surveyed across the United States intend to plant an estimated 91.1 million acres of corn in 2021, according to USDA’s Prospective Plantings report from the National Agricultural Statistics Service (NASS). That’s 325,000 more acres than last year, but about 2 million acres shy of expectations ahead of the report.

Planted acreage intentions for corn are up or unchanged in 24 of the 48 estimating states. The largest increases are expected in the Dakotas, where producers intend to plant a combined 8.90 million acres, an increase of 2.00 million acres from 2020. Producers across most of the Corn Belt intend to plant fewer acres than last year. If realized, the planted area of corn in Idaho and Oregon will be the largest on record.

Corn stocks in all positions on March 1 of 7.70 billion bu. were 3% less than a year earlier, according to USDA’s Grain Stocks report.

Soybean growers intend to plant 87.6 million acres in 2021, up 5% from last year, but about 2.5 million acres shy of pre-report expectations by private analysts. If realized, this will be the third highest planted acreage on record. Compared with last year, planted acreage is expected to be up or unchanged in 23 of the 29 states estimated.

Soybeans stored in all positions on March 1 of 1.56 billion bu. were 31% less year over year.

All wheat planted area for 2021 is estimated at 46.4 million acres, up 5% from 2020. This represents the fourth lowest all wheat planted area since records began in 1919.

All wheat stored in all positions on March 1 of 1.31 billion bu. were 7% less than a year earlier.

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

Cattle Current Daily—March 31, 2021

Negotiated cash fed cattle trade was limited on light demand in the Texas Panhandle through Tuesday afternoon. Although too few to trend, there were some early live sales at $116/cwt. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service (AMS).

Last week, live prices were at $115/cwt. in the Sothern Plains, mostly $116 in the Northern Plains and at $115-$117 in the western Corn Belt. Dressed trade was at mostly $185.

Feeder Cattle futures edged higher Tuesday, helped along by softer Corn futures. Live Cattle were mixed, taking a breather ahead of cash direction.

Live Cattle futures closed narrowly mixed, from 42¢ lower to 15¢ higher.

Feeder Cattle futures closed an average of 48¢ higher, except for 25¢ lower and unchanged in the front two contracts. 

Choice boxed beef cutout value was $5.30 higher Tuesday afternoon at $244.83/cwt. Select was $3.42 higher at $235.90.

Corn futures, and especially Soybean futures, closed lower Tuesday with likely profit taking and positioning ahead of USDA’s Prospective Plantings report due out Wednesday.

Corn futures closed mostly 4¢ to 8¢ lower.

Soybean futures closed 22¢ to 27¢ lower through the front four contracts, and then mostly 11¢ to 18¢ lower.

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Major U.S. financial indices closed lower Tuesday, pressured by rising Treasury yield rates and worries about increasing interest rates.

The Dow Jones Industrial Average closed 104 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 14 points.

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 “Americans feel better than ever about choosing meat as part of healthy, balanced diets. With COVID-19 deepening demand for convenient, affordable food that tastes good and matches Americans’ values, meat fits the bill,” says Julie Anna Potts, president and CEO of the North American Meat Institute (the Meat Institute).

Potts is referring to the recently released annual Power of Meat report conducted by 210 Analytics on behalf of FMI and the Meat Institute’s Foundation for Meat and Poultry Research and Education.

The national analysis shows that three out of every four Americans agree meat belongs in healthy, balanced diets, up by nearly 20% since 2020; 94% say they buy meat because it provides high-quality protein.

Nearly all American households (98.4%) purchased meat in 2020 (IRI data) and 43% of Americans now buy more meat than before the pandemic, primarily because they are preparing more meals at home.

The proportion of meals prepared at home peaked at 89% in April 2020 and remained at 84% in December (IRI), considerably above pre-pandemic levels and particularly impacting Millennials who were previously most likely to eat out.

“Shoppers are cooking more at home due to the COVID-19 pandemic, and their confidence in cooking and preparing meat has increased,” says Rick Stein, FMI vice president of fresh foods. “Further analysis also shows convenient meal solutions are key and that food retailers have opportunities to provide more choices, along with more information and education on consumer priorities like nutrition and meal preparation, building up what we call consumers’ Meat IQ.”

The number of meat shoppers who purchased groceries online grew 40% in 2020, and 59% of online purchasers expect to continue purchasing about the same amount online in this year, suggesting food shopping habits may have changed permanently.

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

Cattle Current Daily—March 30, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Northern Plains through Monday afternoon. Elsewhere, it was mostly inactive on very light demand with too few transactions to trend, according to the Agricultural Marketing Service (AMS).

Last week, live prices were $1 higher in the Southern Plains at $115/cwt., $2 higher in the Northern Plains at mostly $116 and $1-$2 higher in the western Corn Belt at $115-$117. Dressed trade was $3-$5 higher at $185.

The five-area direct average steer price last week was $115.38/cwt. on a live basis, which was $1.14 higher than the previous week. The five-area direct average steer price in the beef was $184.66,which was $2.98 higher.

Cattle futures bounced higher Monday, amid active trade, extending last week’s gains, with ongoing support from higher wholesale beef values, last week’s  stronger cash prices and softer Corn futures.

Live Cattle futures closed an average of 61¢ higher, except for unchanged and 5¢ lower in the back two contracts.

Feeder Cattle futures closed an average of $1.28 higher, from 15¢ higher toward the back to $2.32 higher toward the front. 

The CME Feeder Cattle Index was $2.10 higher at $138.85.

Choice boxed beef cutout value was $1.87 higher Monday afternoon at $239.53/cwt. Select was $4.73 higher at $232.50.

Corn futures closed 2¢ to 5¢ lower.

Soybean futures closed 1¢ to 2¢ lower, except for 5¢ to 7¢ lower in the front three contracts.

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Major U.S. financial indices closed narrowly mixed to lower Monday, following strong pressure early in the session from bank stocks. According to various reports, the pressure stemmed from the forced liquidation of more than $20 billion by a hedge fund that got caught upside down in bad bets and margin calls; ripple effects ensued.

The Dow Jones Industrial Average closed 98 points higher. The S&P 500 closed 3 points lower. The NASDAQ was down 79 points.

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“As April arrives, the current drought situation looms larger and potential impacts on cattle markets are increasing with each passing week,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The latest Drought Monitor shows that 43.55% of the continental U.S. is in some degree of drought (D1-D4), including 18.06% in Extreme and Exceptional drought (D3-D4). Additionally, another 20.66% of the country is abnormally dry (D0), which means that only 35.79% of the U.S. is free of drought conditions. At the beginning of March one year ago, over 76% of the U.S. was drought free.”

The current drought, which began to advance a year ago, has progressed more rapidly than any drought in more than 20 years, Peel says. He adds an aggregate annual index of drought conditions is currently at the highest level (worst drought) since 2014. 

So far, Peel notes the most significant drought impacts appear to be in Colorado, where the beef cow inventory declined by 112,000 head (-14.5%) year over year Jan. 1 and replacement heifers declined by 16.1%.

“Drought conditions plagued much of the desert southwest in 2020 but cow herd liquidation in Nevada, New Mexico and Utah totaled just 34,000 head. As bad as they were, these cowherd losses were not enough to cause significant general cattle market impacts. Significantly higher hay prices were noted in 2020 in the western drought region,” Peel says. “If a drought is severe enough, over a big enough region, and lasts long enough, broader market values may be affected resulting in lower prices for cattle and higher prices for feeds and other inputs. This can result in additional challenges for drought impacted producers, as well as impacts on producers outside the drought region.” 

Moreover, odds favor La Niña conditions into the summer, according to Art Douglas, professor emeritus at Creighton University and long-time CattleFax meteorologist. He forecasts the Southwest U.S. will be warmer than normal, and the western half of the country will be relatively dry. Dry conditions in the Rockies will eventually extend into the central Corn Belt, he says, causing concerns for corn and soybean growers.

“Arguably the most concerning areas now are North and South Dakota and Texas. Persistence or expansion of drought in these areas (which have large beef cattle numbers), in conjunction with ongoing drought in Rocky Mountain and desert southwest regions could result in levels of herd liquidation/movement that broadly impact cattle markets,” Peel says. “If the drought preempts spring forage growth in these regions, market impacts could develop rapidly in the next three to five months. Conditions in the coming weeks may have significant cattle market impacts on producers in drought regions, producers in regions where drought is or could develop, as well as producers outside of drought areas.”

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

Cattle Current Daily—March 29, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains through Friday afternoon. Elsewhere, it was limited on light demand with too few transactions to trend, according to the Agricultural Marketing Service (AMS).

For the week, live prices were $1-$2 higher at $115/cwt. in the Southern Plains and $116 in the Northern Plains. Dressed trade was $2-$3 higher in Nebraska at $185. Trade was yet to be established in the western Corn Belt, according to AMS, but various reports suggested trade in the region at as much as $3 higher than the previous week.

Cattle futures continued to edge higher Friday, buoyed by the week’s stronger cash prices and wholesale beef values.

Live Cattle futures closed an average of 36¢ higher, except for 20¢ lower in the back contract.

Feeder Cattle futures closed an average of 39¢ higher, from 15¢ higher toward the back to 90¢ higher in spot Apr. 

Choice boxed beef value was $1.21 higher Friday afternoon at $237.66/cwt. Select was $1.52 higher at $227.77.

Estimated total cattle slaughter the week ending Mar. 26 was 646,000 head, according to USDA. That was 19,000 head more than the previous week, but 39,000 head fewer (-5.69%) than the same week a year earlier. Estimated total year-to-date cattle slaughter of 7.75 million head was 278,000 head fewer (-3.46%) than the same time last year. Estimated year-to-date beef production of 6.50 billion lbs. was 143.1 million lbs. less (-2.15%).

Corn futures closed mostly 1¢ higher, except for 3¢ and 6¢ higher at either end of the board.

Soybean futures closed 6¢ to 13¢ lower through the front six contracts, and then mostly 2¢ higher.

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Major U.S. financial indices closed sharply higher Friday with a late-session surge tied to the Federal Reserve announcement that banks meeting stress criteria can return to normal levels of dividend disbursement and share repurchases at the end of June. That ability was limited since the beginning of the pandemic.

Investors were likely also encouraged by the latest data from the U.S. Bureau of Economic Analysis, suggesting tame inflation. It showed the personal consumption expenditure price index, excluding food and energy prices, increased just 0.1% month to month in February and just 1.4% year over year.

The Dow Jones Industrial Average closed 453 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 161 points.

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“There was a time in the beef industry when $200/cwt. was the primary resistance point for the weekly Choice boxed beef cutout value. However, the $200 level appears to be the primary support point in that the weekly Choice boxed beef price has not been below this level since the week ending Oct. 20, 2017,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Griffith says Choice boxed beef cutout values exceeded $200 for the first time in May 2013 (looking back as far as 2004). Between May 2013 and October 2017, he explains the Choice prices swung to levels on either side of $200 but exceeded the level since then.

“Choice beef prices have been strong the first quarter of 2021 and they are only expected to get stronger in the second quarter as grilling season hits full stride,” Griffith says. “Many consumers have ample disposable income because they have not been traveling. Thus, they can spend some of that money on their eating experience. There is no reason to attempt to predict how high boxed beef prices will go this spring, but they are likely to test the $250 mark.”

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

Cattle Current Daily—March 26, 2021

Negotiated cash fed cattle trade continued through Thursday afternoon, with limited to slow trade on light to moderate demand. For the week, live prices are $1-$2 higher on a live basis at $115/cwt. in the Southern Plains, $115-$116 in Nebraska and $116 in Colorado. Dressed trade in Nebraska is $3-$5 higher at $185. Trade was yet to be established in the western Corn Belt.

Cattle futures continued mostly higher Thursday, supported by stronger cash prices and wholesale beef values.

Net U.S. beef export sales of 18,900 metric tons for the week ending Mar. 18 were 27% less than the previous week but 3% more than the prior four-week average, according to the weekly U.S. Export Sales report. Increases were primarily for Japan, South Korea, China, Taiwan and Chile.

Live Cattle futures closed an average of 45¢ higher through the front five contracts, and then unchanged to an average of 18¢ lower.

Feeder Cattle futures closed an average of 98¢ higher, from 37¢ to $1.80 higher. 

Choice boxed beef cutout value was $1.61 higher Thursday afternoon at $236.45/cwt. Select was $2.18 higher at $226.25.

The average dressed steer weight of 904 lbs. was 4 lbs. heavier than the prior week and 3 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report for the week ending Mar. 13. The average dressed heifer weight of 832 lbs. was 1 lb. lighter than the previous week and 3 lbs. lighter than the previous year.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed 10¢ to 18¢ lower.

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Major U.S. financial indices closed higher Thursday, in a late-session surge, supported by more positive labor data than the trade expected. Weekly initial unemployment insurance claims the week ending Mar, 20 were 684,000, according to the U.S. Department of Labor. That was 97,000 fewer than the previous week.

The Dow Jones Industrial Average closed 199 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 15 points.

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Persistently and bullishly strong Lean Hog futures continue offering support to beef, tied in part to speculation whether China’s hog herd rebuilding from African Swine Fever is going as well as that government’s reports claim.

“While China’s governmental inventory data as of December 2020 show sow and hog inventory were 92.1% and 93.1% of their respective 2017 levels (MARAC 2021), recent record-high piglet, sow, hog, and pork prices suggest a large persistent supply shortage,” say analysts with the Center for Agricultural Research and Development (CARD) at Iowa State University.

“China’s record pork and live swine imports in 2020 suggest that China’s hog rebuilding might be fast but of low genetic quality. Specifically, it seems likely that the retention of low-quality commercial generation gilts helped rebuild the herd but set back the national breeding system by abandoning purebred grandparents and parent generation propagation (Dim Sums 2021).”

In CARD’s winter Agricultural Policy Review—Is China’s Hog Rebuilding Complete? Reconciling Inventory and Price Data—analysts explain China’s recently launched Live Hog futures also suggest traders expect prices to remain elevated into 2022.

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

Cattle Current Daily—March 25, 2021

Negotiated cash fed cattle trade was light on light to moderate demand in the Southern Plains through Wednesday afternoon, with live price $1 higher than last week at $115/cwt.

Elsewhere, trade was limited on light demand, according the Agricultural Marketing Service. There were a few live trades in Nebraska at $115-$116, but too few to trend. Prices last week were at $114 in the Northern Plains and at $114-$115 in the western Corn Belt. Dressed prices were at $180-$182.

Cattle feeders offered 2,633 head in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 1,550 head sold for an average price of $115.89/cwt., all via live weight. Texas prices were at $115/cwt. and Nebraska prices were at $116, which was $2 higher than last week’s country trade.

Choice steers and heifers sold $1.50-$2.50 higher at the fat auction in Tama Iowa. There were 67 Choice 2-4 steers weighing an average of 1,487 lbs., brining an average price of $117.15/cwt. That was $2-$3 higher than country trade in the region last week.

At Sioux Falls Regional in South Dakota, though, slaughter steers sold steady to $2 lower and slaughter heifers traded steady to $1 lower. There were 152 Choice 2-3 steers weighing an average of 1,468 lbs., bringing an average of $112.72.

Cattle futures closed higher Wednesday, supported by stronger cash prices and softer Corn futures prices.

Live Cattle futures closed an average of 59¢ higher, except for unchanged in spot Apr.

Feeder Cattle futures closed an average of $1.32 higher, from 32¢ higher in waning spot Mar to $2.70 higher.

Choice boxed beef cutout value was 85¢ higher Wednesday afternoon at $234.84/cwt. Select was $1.16 lower at $224.07.

Corn futures closed mostly fractionally lower to 2¢ lower, except for 2¢ and 3¢ higher in the front two contracts.

Soybean futures closed mostly 6¢ to 9¢ higher.

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Major U.S. financial indices extended losses Wednesday, pressured by a selloff in big tech stocks and despite strong gains earlier in the session.

The Dow Jones Industrial Average closed 3 points lower. The S&P 500 closed 21 points lower. The NASDAQ was down 265 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.97 to $3.42 higher through the front six contracts, mostly gaining back the previous session’s decline, and presumably related to reports that a cargo ship ran aground in the Suez Canal, blocking traffic.

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“U.S. agricultural exports are largely expected to continue a faster pace in 2021 with help from weakness in the U.S. dollar,” says Tanner Ehmke, manager of CoBank’s Knowledge Exchange (CBKE).

The U.S. dollar weakened substantially since March 2020 and is expected to experience modest deflation in 2021. CoBank analysts explain a weaker dollar generally makes U.S. agricultural products more competitive on the global export market. However, commodities are affected differently, given the diversity in global export competition and foreign exchange rates. 

CBKE published a recent report—Dollar Divergence: U.S. Dollar Index Does Not Reflect True Dollar Impact on U.S. Ag Exports—examining the impact of currency dynamics on agricultural exports, in addition to fundamental factors such as tariffs and weather conditions.

CBKE utilized the foreign exchange (FX) rates of key agricultural exporting countries that the U.S. competes with, rather than the dollar index (DXY), which those analysts say is heavily weighted toward the euro. The research reveals a more nuanced effect of FX rates on U.S. grain, livestock, dairy, tree nuts, and cotton exports.

“In the final months of 2020, U.S. protein exports started to benefit from the strengthening of the Australian dollar and the euro against the U.S. dollar, helping animal protein exports to end the year on a high note,” according to the report. “The

outlook for a strong Australian dollar and euro in 2021 should make U.S. beef and pork exports the largest beneficiaries of a weaker dollar in the coming year.”

At the same time, CBKE analysts explain the U.S. trade weighted grain and oilseed index strengthened by 14% in 2020 and is expected to gain another 4%-5% this year. The U.S. dollar’s strength, relative to the currencies of major exporters like Brazil, Argentina and Ukraine, is driving the stronger index.

“A casual observer could argue that corn and soybean exports will face headwinds in 2021 since the index strength implies that U.S. exports become less price competitive,” says Kenneth Scott Zuckerberg, lead grain and farm supply economist with CoBank. “But this was not the case in 2020 nor is it expected to be in 2021 due to Chinese demand.”

China has been aggressively buying U.S. grain for feed as it rebuilds its hog herd, leveraging its strong currency relative to the U.S. dollar despite the dollar’s strength in relation to other currencies.

“In addition to currency, a more normal year for U.S. meat processing capacity, the rebound in global foodservice demand, and the trend in China’s meat and poultry imports will be the primary drivers of a good year for U.S. protein exports in 2021,” according to the report.

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

Cattle Current Daily—March 24, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was at a standstill.

Last week, prices were at $114/cwt. on a live basis in the Southern Plains and Northern Plains, and at $114-$115 in the western Corn Belt. Dressed trade was at $180-$182.

Cattle futures continued higher Tuesday, supported by rising wholesale beef prices and strength in Lean Hog futures, amid light trade.

Live Cattle futures closed an average of 66¢ higher, from 10¢ higher at the back to $1.12 higher toward the front.

Feeder Cattle futures closed an average of 39¢ higher.

Choice boxed beef cutout value was $3.04 higher Tuesday afternoon at $233.99/cwt. Select was $2.18 higher at $225.23.

Corn futures closed mostly fractionally higher to 2¢ higher.

Soybean futures closed 5¢ to 8¢ higher.

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Major U.S. financial indices closed lower Tuesday, pressured by increasing domestic and international COVID-19 infections, and the potential for that to create further supply chain disruptions, while further slowing economic recovery.

The Dow Jones Industrial Average closed 308 points lower. The S&P 500 closed 30 points lower. The NASDAQ down 149 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.12 to $3.80 lower through the front six contracts.

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The Creighton University Rural Mainstreet Index (RMI) soared to 71.9 in March—the highest level since the data series began in January of 2006—up from 53.8 the previous month. The index was above growth neutral (50.0) for the fifth time in six months.

“Sharp gains in grain prices, federal farm support, and the Federal Reserve’s record-low interest rates have underpinned the Rural Mainstreet Economy,” says Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

“Only 3.1% of bank CEOs indicated economic conditions worsened from the previous month. Even so, current rural economic activity remains below pre-pandemic levels,” according to Goss.

The RMI is borne by a monthly survey of community bank presidents and CEOs in non-urban agricultural and energy-dependent portions of a 10-state area. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.

Approximately, 68.8% of bank CEOs reported that their local economy was expanding; the remaining 31.2% indicated little or no growth.

Highlights from the March survey include:

The farmland price index climbed to 71.9 in March, up from 60.0 the previous month and the highest level since November 2012. March was the sixth consecutive month the index was above growth neutral. Bankers reported that approximately 12.3% of farmland sales were cash sales, which is down from 17.3% recorded in February 2020.

The March farm equipment sales index rose to 63.5, its highest reading since February 2013, and up from 62.7 in February. After 86 straight months of readings below growth neutral, farm equipment bounced into growth territory for the last four months.

For the first time since September of last year, bankers reported an expansion in loan volumes. The March loan volume index increased to 60.9 from February’s 46.1.

The confidence index, which reflects bank CEO expectations for the economy six months out, rose to 76.7 and up from 64.0.

“Looming federal farm support payments, improving grain prices, and advancing exports have supported confidence, offsetting negatives from pandemic-ravaged retail and leisure and hospitality companies in the rural economy,” Goss says.

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

Cattle Current Daily—March 23, 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, with too few transactions to trend.

Last week, prices were at $114/cwt. on a live basis in the Southern Plains and Northern Plains, and at $114-$115 in the western Corn Belt. Dressed trade was at $180-$182.

The average five-area direct fed steer price last week was $114.23/cwt. on a live basis, which was 61¢ more than the prior week. The average steer price in the beef was $181.33, which was $2.01 higher.

Cattle futures found some traction Monday amid relatively light trade, following the late-week decline. Support included lower Corn futures, higher outside markets, stronger wholesale beef prices and the neutral Cattle on Feed report.

Live Cattle futures closed an average of 40¢ higher.

Feeder Cattle futures closed an average of 28¢ higher, expect for unchanged in Apr.

Choice boxed beef cutout value was 96¢ higher Monday afternoon at $230.95/cwt. Select was $3.10 higher at $223.05.

Corn futures closed 5¢ to 8¢ lower in the front three contracts, and then mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 5¢ lower, after 1¢ higher in the front two contracts.

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Major U.S. financial indices closed higher Monday, buoyed by declining Treasury yield rates and increased demand for big tech stocks.

The Dow Jones Industrial Average closed 103 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 162 points.

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“There is considerable optimism for fed cattle markets going forward, beginning in the second quarter and especially in the second half of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “…Feedlots have been somewhat front-loaded thus far in 2021 which has contributed to the sluggish fed cattle markets in the first quarter of the year. Feedlot supplies should tighten in the second half of the year after working through current inventories.”

For context, Peel says fed steer and heifer slaughter is 0.8% more year over year for the first nine weeks of 2021; steer and heifer carcass weights are 13-14 lbs. heavier year over year. He explains that reality, along with last month’s weather-based packer disruptions, overwhelmed the opportunity for a seasonal rally in cash fed cattle prices.

Market-ready fed cattle supplies will begin to tighten, though, with total feedlot placements for the last six months 2.3% less year over year, according to Peel. Placements in February were 1.86% less than a year earlier, according to the latest USDA Cattle on Feed report.

“Currently Live Cattle futures for April and June are trading at roughly the same level with June; at times, premium to April. This is unusual because June is usually at a significant discount to April Live Cattle futures. In fact, the previous five-year average discount of June to April Live Cattle futures in March is -$8.47/cwt.,” Peel says. “The fact that April and June are at equal levels this year is due to weak April prices relative to June expectations. Live Cattle futures prices for October and December reflect additional optimism for fed cattle markets in late 2021 and heading into 2022.”

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

Cattle Current Daily—March 22, 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, with too few transactions to trend.

Prices last week were steady on a live basis at $114/cwt. in Kansas, steady to $1 higher in Nebraska at $114, $1-$2 higher in the western Corn Belt at $114-$115. Prices were a touch higher than steady in the Texas Panhandle, with the Texas Cattle Feeders Association reporting $114.24 for steers and $114.30 for heifers. Dressed trade was $2 higher in Nebraska and $2-$4 higher in the western Corn Belt at $182.

Cattle futures closed mostly lower Friday with follow-through selling and higher Corn futures prices. That was despite what appears to be fundamental market improvement stemming from higher wholesale beef values and the likelihood for cash fed cattle prices to begin moving higher.

Choice boxed beef cutout value was $1.38 higher Friday afternoon at $229.99/cwt. Select was $1.84 higher at $219.95.

Estimated total cattle slaughter of 624,000 head for the week ending March 20 were 23,000 head fewer (-0.35%) than the previous week and 36,000 head fewer (-5.45%) than the same week a year earlier. Year-to-date estimated total cattle slaughter of 7.1 million head is 244,000 fewer (-3.3%) than the same period a year earlier. Year-to-date estimated total beef production of 5.97 billion lbs. is 110.2 million lbs. less (-1.81%).

Live Cattle futures closed an average of 75¢ lower (17¢ to $1.25 lower), except for 12¢ higher in the back contract.

Feeder Cattle futures closed an average of $1.06 lower (62¢ to $2.00 lower).

Corn futures closed 2¢ to 3¢ higher, except for 11¢ and 8¢ higher in the front two contracts. 

Soybean futures closed 12¢ to 24¢ higher through Jan ‘22, and then mostly 5¢ to 6¢ higher.

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The Dow Jones Industrial Average closed sharply lower Friday, driven by bank stocks. The popular explanation was the Federal Reserve’s decision to allow a rule to elapse at the end of the month, which allowed banks to hold less capital relative to Treasury notes and other holdings. The fear, in part and supposedly, is that making banks set aside more capital could make them less willing lenders.

The Dow Jones Industrial Average closed 234 points lower. The S&P 500 closed 2 points lower. The NASDAQ was up 99 points.

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Cattle feeders placed 1.68 million head in February, according to the monthly Cattle on Feed report from USDA—for feedlots with 1,000 head or more capacity. That was 1.86% less than a year earlier and close to average expectations ahead of the report for a decline of 1.7%.

In terms of weight, 37.4% went on feed weighing 699 lbs. or less. 51,89% weighing 700-899 lbs. and 10.69% weighing 900 lbs. or more.

Marketings in February of 1.73 million head were 43,000 head fewer (-2.42%) year over year. Expectations ahead of the report were for a decline of 2.6%.

Cattle on feed March 1 of 12.0 million head were 189,000 head more (+1.60%), the second highest inventory for the month since the data series began in 1996. Average pre-report expectations were for an increase of 1.5%.

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

Cattle Current Daily—March 19, 2021

Negotiated cash fed cattle trade was $2 higher on a dressed basis in Nebraska Thursday at $182.00/cwt., according to the Agricultural Marketing Service. That was on slow trade and light demand, but might suggest front-end inventory is current enough for prices to finally move beyond the rut of the last seven weeks. Live trade in Nebraska was at $114 on Wednesday.

Trade was limited on light demand in most other regions with too few transactions to trend.

On Wednesday, live prices were $2 higher in the western Corn Belt at $114-$115. Dressed trade in the region last week was at $178-$180.

Cattle futures closed sharply lower amid likely technical correction and positioning ahead of Friday’s Cattle on Feed report, despite wholesale beef values gathering some seasonal steam, sharply lower Corn futures and the likelihood that cash fed cattle prices are on the cusp of moving higher.

Pressure also included sharply lower Lean Hog futures, tied to chatter out of China that it’s close to rebuilding its hog herd to pre-ASF levels. That diverges widely from private sector reports citing further ASF challenges.

Net U.S. beef export sales were 25,900 metric tons (mt) the week ending Mar. 11, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service. That was 24% more than the previous week and 39% more than the prior four-week average. Increases were primarily for Japan, South Korea, China, Taiwan, and Hong Kong.

Live Cattle futures closed an average of $1.92 lower.

Feeder Cattle futures closed an average of $1.78 lower (20¢ lower at the back to $3.55 lower).

Choice boxed beef cutout value was 14¢ higher Thursday afternoon at $228.61/cwt. Select was 52¢ higher at $218.11.

The average dressed steer weight the week ending Mar. 6 was 900 lbs. according to USDA’s weekly Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week but 3 lbs. lighter than the previous year. The average dressed heifer weight of 833 lbs. was 1 lb. lighter than the previous week but 3 lbs. heavier than the prior year.

Corn and soybean futures closed sharply lower Thursday. The most plausible explanations include rainier forecasts for South America and worries about how many acres might show up in USDA’s Prospective Plantings report due out at the end of the month. There’s also likely some queasiness about U.S. and Chinese officials meeting in Alaska this week.

Net U.S. corn export sales for 2020-21 were 985,900 mt the week ending Mar. 11, which was up noticeably from the previous week and from the prior four-week average.

Corn futures closed 10¢ to 12¢ lower through the front three contracts, and then mostly 3¢ to 7¢ lower.

Net U.S. soybean export sales of 202,400 mt for 2020-21 were down 42% from the previous week and 31% from the prior four-week average.

Soybean futures closed 20¢ to 29¢ lower.

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Major U.S. financial indices closed lower Thursday, pressured by surging bond yield rates, just a day after Federal Reserve Chair Jerome Powell expressed little concern that inflation would get out of hand.

 

The Dow Jones Industrial Average closed 153 points lower. The S&P 500 closed 58 points lower. The NASDAQ was down 409 points.

West Texas Intermediate on the CME closed $4.10 to $4.60 lower through the front six contracts. Reasons ranged from increasing inventory to the stronger dollar to the simple fact traders may have leaned too far over the skis of reality.

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Lower government payments and higher farm production costs could outweigh the projected increase in livestock and crop sales in 2021, leading to lower year-over-year farm income, according to the latest analysis of national and global agricultural trends from the University of Missouri (MU).

Even so, analysts at the MU Food and Agricultural Policy Research Institute (FAPRI) project net farm income this year at $112 billion, which would be significantly higher than in 2015-2019. Net farm income increased to $121 billion in 2020, the highest level since 2013, primarily because of $46 billion in government payments.

“The COVID-19 pandemic upended agricultural markets, contributing to a dismal outlook for the farm economy in the spring and summer of 2020,” says Patrick Westhoff, FAPRI director and Howard Cowden Professor of Agricultural and Applied Economics in the MU College of Agriculture, Food and Natural Resources (CAFNR). “A series of emergency support programs provided record government payments to farmers, and prices for many commodities rebounded in the final months of the year, resulting in a large increase in 2020 net farm income. Looking ahead, the outlook is uncertain, but certainly more optimistic than it was a few months ago.”

Economists with FAPRI and the MU Agricultural Markets and Policy (AMAP) team release the annual U.S. Agricultural Market Outlook report each spring. The baseline projections for agricultural and biofuel markets through 2030 were prepared using market information available in January, but do not reflect any subsequent policy changes.

FAPRI projects cattle prices higher, especially after 2021, as beef cow numbers decline from 30.8 million head Jan. 1 this year to a low for the time series of 29.6 million in 2026 and 2027.

FAPRI projects the five-area direct annual fed steer price at $116.61/cwt. this year, $122.48 in 2022 and $127.28 in 2023. From there, price projections peak at $136.55 in 2027.

Projected steer calf prices (basis 600-650 lbs., Oklahoma City) follow a similar path: $149.08/cwt. this year, $162.88 in 2022, $170.63 in 2023; peaking at $184.36 in 2027.

That’s with corn prices projected to be highest this marketing year (2020-21) at $4.20/bu.; $4.06 in 2021-22; $3.99 in 2022-23; $3.93 in 2023-24; and then declining to $3.78 to $3.79 from 2025-26 through 2030-31.

FAPRI projects utility cow prices (basis Sioux Falls) at $60.56/cwt. this year, $64.73 in 2022, $66.34 in 2023; peaking at $71.80 in 2027.

Among other highlights from the latest report:

Consumer food price inflation increased to 3.4% in 2020, in part because of a wider gap between producer prices for livestock and consumer prices for meat. FAPRI projects food inflation at 2.1% this year and then similar to overall inflation in subsequent years.

Margins between farm and wholesale prices remain higher than historical averages, but declined from last spring’s record high levels caused by pandemic disruptions. “The extent to which retailers and processors continue to endure higher pandemic-related costs will affect the producer share of consumer meat expenditures,” say FAPRI analysts.

The outlook for U.S. beef exports to China and other markets remains positive, due to strong demand coupled with limited supplies among other major exporters.

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

Cattle Current Daily—March 18, 2021

Negotiated cash fed cattle trade was slow on light demand in Kansas and Nebraska through Wednesday afternoon. Live trade was steady in Kansas at $114/cwt. and steady to $1 higher in Nebraska at $114.

Elsewhere, trade ranged from limited on light demand, to mostly inactive on very light demand, with too few transactions to trend, according to the Agricultural Marketing Service.

Last week, live prices were at $114/cwt. in the Southern Plains and Colorado and $112-$113 in the western Corn Belt. Dressed prices were at $180 in Nebraska and at $178-$180 in the western Corn Belt.

Cattle feeders sold near 1,000 head in Central Stockyards’ weekly Fed Cattle Exchange auction. Those selling—all from Texas except one lot from Nebraska—traded on a live weight basis at $114.50/cwt.

Cattle futures mostly edged higher Wednesday, supported by softer Corn futures after the front two contracts, as well as resurgent Choice wholesale beef values. Perhaps there was also some early positioning against the monthly Cattle on Feed report (see below).

Live Cattle futures closed an average of 52¢ higher, from 5¢ higher at the back to $1.22 higher in spot Apr. 

Feeder Cattle futures closed an average of 39¢ higher (7¢ to $1.32 higher), except for 10¢ and 47¢ lower in the back two contracts.

Choice boxed beef cutout value was $1.54 higher Wednesday afternoon at $228.47/cwt. Select was $1.18 lower at $217.59.

Corn futures closed fractionally lower to 2¢ lower, except for 3¢ higher and fractionally higher in the front two contracts.

Soybean futures closed mostly 5¢ to 10¢ lower.

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Major U.S. financial indices closed higher Wednesday, buoyed by reiteration from the Federal Reserve that it intends to maintain the dovish, accommodative stance toward interest rates.

“The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%,” according to an FOMC statement. “The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 0.25% and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.”

The Dow Jones Industrial Average closed 189 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 53 points.

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Last month’s severe winter weather likely shifted some feedlot marketings.

“Because of the weather disruption, there is a temporal shift of expected steer and heifer marketings out of the first quarter to be marketed in the second quarter,” say analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook.

Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides some perspective on how the widespread storm affected feedlot performance.

“Steer and heifer slaughter dropped 7.1% year over year in the middle two weeks of February before bouncing back. Steer carcass weights dropped sharply in February, declining by 20 lbs. from 919 lbs. to 899 lbs. in the last two weeks of the month,” Peel says, in is weekly market comments. “The last week of February marks the first time in 71 weeks (since October 2019) that weekly steer carcass weights were lower than the previous year. Heifer carcass weights dropped from 850 to 834 lbs. in the same period.”

That same storm closed sale barns, which may have limited feedlot placements for the month. On the other hand, current and expected wheat prices may elevate feedlot placements in March, as more producers with a dual-purpose winter wheat crop look to put it in the bin.

“…the expectation that relatively high wheat prices may discourage the grazing-out of small grains pastures and move more cattle into feedlots sooner than previously expected is anticipated to shift placements from the second quarter to the first quarter,” ERS analysts say. “As a result, some fed cattle marketings are expected to shift from the fourth quarter to the third quarter.”

USDA’s monthly Cattle on Feed report comes out Friday afternoon. Analysts surveyed by Urner Barry and reported by the Daily Livestock Report expect, on average, February feedlot placements to be 1.7% less than a year earlier, February marketings to be 2.6% less and the Mar. 1 inventory to be 1.5% more.

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

Cattle Current Daily—March 17, 2021

Negotiated cash fed cattle trade was mostly inactive on light demand in the western Corn Belt through Tuesday afternoon, with too few transactions to trend. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.

Last week, live prices were at $114/cwt. in the Southern Plains and Colorado, $113-$114 in Nebraska and $112-$113 in the western Corn Belt. Dressed prices were at $178-$180.

Cattle futures closed mixed Tuesday. There was no cash direction, but Lean Hog futures continue to offer support, as does expanding open interest.

Live Cattle futures closed an average of 22¢ higher, except for an average of 62¢ lower in the front two contracts.

Feeder Cattle futures closed narrowly mixed, from an average of 39¢ lower to an average of 9¢ higher.

Choice boxed beef cutout value was $2.16 higher Tuesday afternoon at $226.93/cwt. Select was 72¢ higher at $218.77.

Corn futures closed 1¢ to 4¢ higher through the front three contracts and then mostly fractionally lower.

Soybean futures closed 3¢ higher through the front three contracts and then fractionally higher to 1¢ higher.

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Major U.S. financial indices closed mainly narrowly mixed Tuesday as investors awaited further direction from the Federal Reserve’s policy meeting statement Wednesday.

The Dow Jones Industrial Average closed 127 points lower. The S&P 500 closed 6 points lower. The NASDAQ was up 11 points.

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Beef imports to the United States in January were 8.1% less than the previous year, driven by the least volume from Australia since 2005.

“Exportable beef supplies in Australia have become limited as more heifers and cows are held back for breeding and expanding the herd,” explain analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “Australia shipped 31 million lbs. less beef year over year…The second-largest reduction of 8.9 million lbs. came from Mexico; imports were at the lowest volume shipped to the United States in January since 2016.”

Overall, ERS reduced its forecast for U.S. beef imports for this year, by 70 million lbs. to 2.94 billion lbs., due to less expected volume from Australia and New Zealand, as well as increased beef demand competition from Asia.

On the other side of the trade ledger, ERS projects U.S. beef exports for this year to be 3.145 billion lbs., just less than the record level in 2018.

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

Cattle Current Daily—March 16, 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 $114/cwt. in the Southern Plains and Colorado, $113-$114 in Nebraska and $112-$113 in the western Corn Belt. Dressed prices were at $180 in Nebraska and at $178-$180 in the western Corn Belt.

Cattle futures closed higher Monday with Live Cattle supported by growing open interest in the previous session, as well as decent cash trade volume last week.

Live Cattle futures closed an average of 76¢ higher (12¢ to $1.35 higher).

Feeder Cattle futures closed an average of 83¢ higher (32¢ to $1.35 higher).

Choice boxed beef cutout value was $1.10 lower Monday afternoon at $224.77/cwt. Select was $2.22 lower at $218.05.

Corn futures closed 2¢ to 10¢ higher through the front three contracts and then mostly 1¢ lower.

Soybean futures closed 3¢ to 7¢ higher through the front four contracts, then mostly unchanged to fractionally lower.  

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Major U.S. financial indices closed higher Monday, buoyed by optimism about the pace of COVID-19 vaccines as it relates to fully reopening the economy.

The Dow Jones Industrial Average closed 174 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 139 points.

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“Live steer prices in the five-area marketing region are nearly flat since the first week of February, hovering around $114/cwt., despite a strong rally in the comprehensive cutout to near-record levels for the month of February,” explain analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “An abundant supply of fed cattle on feed over 150 days Feb. 1 that is greater than the same time last year, along with the inability to process a portion of those cattle due to the winter storm system in February, likely did not support higher prices in line with typical seasonal patterns.”

Although fed cattle prices languish, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University notes the premium for June Live Cattle, compared to April, suggests optimism ahead.

“After the fed cattle market works through ample cattle supplies in the first half of the year, beef production is expected to decrease year over year in the second half of the year. Live Cattle futures for the fall suggest higher fed cattle prices in the last half of the year,” Peel says, in his weekly market comments.

Similarly, Peel points to the premium for fall Feeder Cattle futures, compared to nearby contracts, explaining that summer stocker prospects are promising at this point in time.

“Feeder steer prices for February 2021 averaged $131.82/cwt. for steers weighing 750-800 lbs., sold at Oklahoma National Stockyards, just over $6 above a year ago,” say ERS analysts. “However, prices for the first two weeks of March are almost $8 above the same month last year.”

ERS increased the expected first-quarter average for feeder steers by $1 to $133/cwt. Price projections were unchanged for the remainder of the year: $134 in the second quarter; $139 in the third quarter; $140 in the fourth quarter; $136.50 for the 2021 average.

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

Cattle Current Daily—March 15, 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.

For the week, live prices were steady at $114/cwt. in the Southern Plains, steady to $1 higher at $114 in Colorado, steady in Nebraska at $113-$114 and steady to $1 lower in the western Corn Belt at $112-$113. Dressed trade was steady in Nebraska at $180 and steady to $2 lower in the western Corn Belt at $178-$180.

Lower grain futures helped lift Cattle futures on Friday. Perhaps some traders also are returning to the Live Cattle Market, positioning ahead of what appears to be a solid trend higher after first-quarter supplies are whittled and as the U.S. economy expands.

Live Cattle futures closed an average of 83¢ higher.

Feeder Cattle futures closed an average of $1.52 higher.

Choice boxed beef cutout value was 80¢ lower Friday afternoon at $225.87/cwt. Select was 20¢ higher at $220.27.

Total estimated cattle slaughter for the week ending Mar. 13 was 647,000 head, which was 18,000 head fewer than the prior week. Year-to-date estimated total cattle slaughter of 6.47 million head is 209,000 head fewer (-3.12%). Estimated beef production so far this year is 5.46 billion lbs., which is 74.8 million lbs. less (-1.35%) than the same time last year.

Corn futures closed mostly 4¢ lower.

Soybean futures closed 1¢ to 5¢ higher, after mostly fractionally mixed through Jan ’22. 

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Major U.S. financial indices closed mixed but mostly higher Friday. Primary pressure was rising bond yield rates on big tech stocks.

The Dow Jones Industrial Average closed 293 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 78 points.

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Gradual deployment of effective COVID-19 vaccines is boosting prospects for sustained global economic recovery, according to the Organization for Economic Cooperation and Development (OECD).

OECD increased its expectations for global GDP this year by more than 1%—compared to December projections—to 5.6%, in that organization’s Interim Economic Outlook.

World output is expected to reach pre-pandemic levels by the middle of this year but the pace and duration of the recovery will depend on the race between vaccines and emerging variants of the virus, according to OECD analysts.

“Widespread vaccination of the adult population is the best economic policy available today to get our economies and employment growing again,” says OECD Chief Economist Laurence Boone. “…If we don’t get enough people vaccinated quickly enough to allow restrictions to be lifted, the recovery will be slower and we will undermine the benefits of fiscal stimulus.”

In the OECD’s central scenario, U.S. GDP is projected to be 6.5% this year, which is more than 3% higher than the December projection, partly reflecting the large-scale fiscal stimulus with a sustained pace of vaccination.

Vaccine deployment remains uneven globally, OECD analysts say, noting the pandemic is widening gaps in economic performance between countries and between sectors, increasing social inequalities, particularly affecting vulnerable groups, and risking long-term damage to job prospects and living standards for many people.

Among other highlights from the OECD report summary:

Cost pressures have begun to emerge in commodity markets due to the resurgence of demand and temporary supply disruptions, but underlying inflation remains mild, held back by spare capacity around the world.

The current very accommodative monetary policy stance should be maintained, and allow temporary overshooting of headline inflation provided underlying price pressures remain well contained, with macro-prudential policies deployed where necessary to ensure financial stability.

Continued income support for households and companies is warranted until vaccination allows a significant easing of restraints on face-to-face activities, but should be refocused to support people and help companies with grants and equity rather than debt.

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

Cattle Current Daily—March 12, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Thursday afternoon, with too few transactions to trend. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.

For the week, live prices are steady at $114/cwt. in the Southern Plains, steady to $1 higher at $114 in Colorado, steady in Nebraska at $113-$114 and steady to $1 lower in the western Corn Belt at $112-$113. Dressed trade is steady in Nebraska at $180 and steady to $2 lower in the western Corn Belt at $178-$180.

Net U.S. beef export sales for the week ending Mar. 4 were 20,900 metric tons, according to USDA’s weekly U.S. Export Sales report. That was 8% less than the previous week but 17% more than the previous four-week average. Increases were primarily for South Korea, Japan, Mexico, China and Taiwan.

Cattle futures closed mixed Thursday. Live Cattle closed mostly higher, supported by a strong rally in front-month Lean Hog futures. Feeder Cattle futures edged mostly lower with higher Corn futures and the sluggish recovery in cash prices.

Live Cattle futures closed an average of 48¢ higher, except for 5¢ to 30¢ lower in three contracts.

Feeder Cattle futures closed an average of 43¢ lower, except for unchanged to 7¢ higher in three contracts.

Choice boxed beef cutout value was 62¢ lower at $226.67/cwt. Thursday afternoon. Select was 25¢ higher at $220.07.

The average dressed steer weight the week ending Feb. 27 was 899 lbs., which was 10 lbs. lighter than the previous week and 2 lbs. heavier year over year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 834 lbs. was 7 lbs. lighter than the previous week and 1 lb. heavier year over year.

Corn futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed mostly 5¢ to 9¢ higher though May ‘22, and then mostly 11¢ to 16¢ higher.

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Major U.S. financial indices closed higher Thursday, supported by President Biden singing the COVID-19 relief bill and a more positive labor outlook than the trade expected.

Initial unemployment insurance claims for the week ending Mar. 6 were 712,000, according to the U.S. Department of Labor. That was 42,000 fewer than the previous week.

The Dow Jones Industrial Average closed 188 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 329 points.

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“U.S. corn market prices continue to rise, largely driven by strong export demand and tight global supplies,” say analysts with USDA’s Economic Research Service (ERS), in the latest USDA Feed Outlook. “The average cash-spot corn-market prices for Central Illinois and the Gulf for February 2021 were $5.56/bu. and $6.24/bu., respectively. By comparison, the same prices in February 2020 were $3.75 and $4.29.”

Through the first five months of the 2020-21 marketing year, U.S. corn exports totaled 857 million bu., significantly higher than the same time a year earlier. For the year, corn exports are projected at 2,600 million bu., according to ERS.

“The Foreign Agricultural Service’s (FAS) Export Sales Report system shows record amounts of total commitments and outstanding sales for U.S. corn—mostly driven by large purchases for China’s market,” ERS analysts explain. “In order to meet these outstanding sales, the U. S. export program would have to operate at a very high pace, consistently, for the remainder of the marketing year. Inspections data indicate a high export level for February—potentially a February export record—with strong demand to China, Mexico, and Japan. While the strong pace may be logistically feasible, the United States is also likely to face increased competition from Southern Hemisphere corn exporters in the second half of the marketing year.”

Ethanol is another key wild card for corn prices going forward.

With demand for ethanol this year—and the derived demand for corn—primarily driven by trends in gasoline consumption, ERS analysts say how and when U.S. consumers return to the roads will be the most important factor relative to that aspect of the corn market.

“Overall, gasoline prices through the end of 2020 remained lower than pre-COVID-19 levels, indicating that demand was still relatively weak. The RBOB spot price averaged $1.43/gal. in December 2020, which was up 204% from the April 2020 average of $0.47/gal., but was still lower than $1.66/gal. in December 2019,” say ERS analysts. “Through early 2021, however, prices have been steadily climbing back to pre-COVID-19 market levels, indicating that supply is continuing to adjust to current levels of demand, as well as higher crude oil prices. The USDA’s 2020-21 corn used for ethanol forecast is currently 4,950 million bu., which assumes higher corn use for ethanol from March to August relative to 2019-20.

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

Cattle Current Daily—March 11, 2021

Negotiated cash fed cattle trade continued steady with last week in the Southern Plains on Wednesday at $114/cwt., with limited trade and light demand in the Texas Panhandle; limited trade on light to moderate demand in Kansas.

Live trade in Nebraska was light on light to moderate demand at $113 to $114, which was steady with last week, but steady to $1 lower than the previous day. Dressed trade on Tuesday was mainly steady at $180.

In Colorado, live trade was steady with the prior day and week at $114, with slow trade and light demand.

Trade was limited on light demand in the western Corn Belt with too few transactions to trend. Live prices there last week were at $112 to $114; dressed trade at $180.

Cattle feeders offered 1,296 head (9 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. All were from the Southern Plains, except for one lot in Nebraska. The reserve price was $114/cwt. on all but one lot. None sold. The highest bids were at $113.75.

Cattle futures softened Wednesday, challenged by steady rather than higher cash prices and dwindling wholesale beef values.

Live Cattle futures closed an average of 49¢ lower, except for 30¢ higher in the back contract.

Feeder Cattle futures closed an average of 27¢ lower, except for unchanged in Nov.

Choice boxed beef cutout value was $1.74 lower Wednesday afternoon at $227.29/cwt. Select was $3.98 lower at $219.82.

Grain futures closed lower on Wednesday, amid likely profit taking and with the static to slightly bearish World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 10¢ to 14¢ lower through the front three contracts, and then mostly 2¢ to 4¢ lower. 

Soybean futures closed 22¢ to 30¢ lower through Jan ‘22, and then mostly 10¢ to 15¢ lower.

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Except for a slight decline in the tech-heavy NASDAQ, major U.S. financial indices closed higher Wednesday, buoyed by a decline in Treasury yield rates and House passage of the Covid-19 relief bill.

The Dow Jones Industrial Average closed 464 points higher. The S&P 500 closed 23 points higher. The NASDAQ was down 4 points.

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Severe winter weather last month stalled the slow progress restaurants were making in recovering business from the pandemic.

Year-over-year major restaurant chain customer transactions declined by 13% in February, compared to a 9% decline in January, according to the NPD Group (NPD) CREST®Performance Alerts which provides a rapid weekly view of chain-specific transactions and share trends for 75 quick service, fast casual, midscale, and casual dining chains representing 53% of the commercial restaurant traffic in U.S.

Customer transactions at major restaurant chains in Texas for the month of February declined by 46% compared to year ago, as record low cold temperatures, snow and ice disrupted travel and rocked the state’s power grid.

Overall, customer transactions at major full-service restaurant chains, which have been challenged throughout the pandemic by mandated dine-in restrictions and shutdowns, decreased by 33% in February versus a year earlier. Major quick service restaurant chains, which represent the bulk of the restaurant industry transactions, were 12% less than the same time last year.

“Aside from any unforeseen events or severe weather in major parts of the country, we should see customer transaction declines improving in the months to come,” says David Portalatin, NPD food industry advisor. “The next several months will help us plot the course for the U.S. restaurant industry’s recovery.”

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

Cattle Current Daily—March 10, 2021

Negotiated cash fed cattle trade was slow on light demand in the Northern Plains through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few early live sales at $114/cwt., which was steady to $1 higher.

Last week, live prices were at $114 in the Southern Plains, $113-$114/cwt. in the Northern Plains and at $112-$114 in the western Corn Belt. Dressed trade was at $180.

Cattle futures closed mostly higher Tuesday, buoyed in part by softer Corn futures and increasing chatter that the bottom may finally be in or at least near for cattle prices.

Live Cattle futures closed an average of 33¢ higher, except for an average of 16¢ lower in the back two contracts.

Feeder Cattle futures closed an average of $2.03 higher through the front three contracts, and then from 30¢ lower to 60¢ higher.

Choice boxed beef cutout value was $2.05 lower Tuesday afternoon at $229.03/cwt. Select was 67¢ higher at $223.80.

Corn futures closed mostly 1¢ to 3¢ higher, except for 1¢ to 3¢ lower in the front three contracts.

Soybean futures closed mostly 4¢ to 7¢ higher.

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Major U.S. financial indices closed higher Tuesday, led by recently beleaguered big tech stocks, as Treasury yield rates declined.

The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 464 points.

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USDA’s Economic Research Service (ERS) increased estimated beef production for this year by 40 million lbs. to 27.58 billion lbs., in the latest World Agricultural Supply and Demand Estimates (WASDE).

“First-half beef production is raised from last month as lower expected fed cattle slaughter in the first quarter is more than offset by higher first-half non-fed cattle slaughter,” according to ERS analysts. “Second-half production is adjusted to reflect a more rapid pace of first-quarter feedlot placements.”

Fed steer price forecasts were unchanged at $113/cwt. in the first and second quarters, $114 in the third quarter and $119 in the fourth quarter for an annual average of $115.

Total red meat and poultry production was reduced 127 million lbs. to 107.47 billion lbs., with expected reductions in pork, broiler and turkey production.

Among other WASDE highlights:

Corn

The 2020-21 U.S. corn supply and use outlook was unchanged from the previous month. However, international corn production was forecast higher with increases for India, South Africa, and Bangladesh. Global corn ending stocks, at 287.7 million tons, were up 1.1 million from the previous month.

The projected season-average farm price was unchanged at $4.30/bu. 

Soybeans

U.S. soybean supply and use projections for 2020-21 were mostly unchanged. Global 2020-21 oilseed supply and demand forecasts include higher production, exports, and ending stocks.

The U.S. season-average soybean price was projected at $11.15/bu., unchanged from the prior month. Although current cash prices are significantly higher, ERS analysts explain prices received through January averaged just over $10/bu., reflecting forward pricing at lower prices. Soybean meal prices were also unchanged at $400/ton. Soybean oil price was forecast at 41.0¢/lb., up 1¢ from the prior month.

Wheat

The supply and demand outlook for 2020-21 U.S. wheat was mostly unchanged. The 2020-21 global wheat outlook is for larger supplies, increased consumption, higher exports, and reduced stocks. Supplies were raised 3.5 million tons to 1,077.1 million.

The season-average farm price for wheat was unchanged at $5.00/bu. 

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

Cattle Current Daily—March 9, 2021

Negotiated cash fed cattle trade was at a standstill through Monday afternoon, except for mostly inactive on very light demand in the western Corn Belt, according to the Agricultural Marketing Service.

Prices last week ended up steady on a live basis in the Southern Plains at $114/cwt., steady to $1 lower in the Northern Plains at $113-$114 and steady to $2 lower in the western Corn Belt at $112-$114. Dressed trade was $2 lower at $180.

The five-area average direct steer price last week was 43¢ lower on a live basis at $113.64/cwt. and $1.84 lower in the beef at $179.79.

Cattle futures closed higher Monday, supported by increasing optimism about further reopening the domestic economy and more positive fundamentals on the horizon.

Live Cattle futures closed an average of 59¢ higher.

Feeder Cattle futures closed an average of 61¢ higher, except for 7¢ lower in May.

Choice boxed beef cutout value was 25¢ lower Monday afternoon at $231.08/cwt. Select was $2.28 higher at $223.13.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed mostly 3¢ to 8¢ higher.

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Major U.S. financial indices closed mixed Monday. Key support included the Senate passing the $1.9 trillion pandemic relief legislation over the weekend, with expectations the House of Representatives will follow suit. Pressure included the outlook for higher inflation and interest rates.

The Dow Jones Industrial Average closed 306 points higher. The S&P 500 closed 20 points lower.The NASDAQ was down 310 points.

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“Although the global foodservice sector still has a long recovery ahead, international demand for U.S. red meat remains impressive and resilient, but a range of logistical challenges must be overcome in order to fully satisfy this demand,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF).

For instance, Halstrom explains transportation challenges are currently a dominant concern, especially congestion and container shortages at West Coast ports where shorthanded crews are handling record-large cargo volumes.

“Labor is also at a premium in processing plants, which affects the industry’s ability to fully capitalize on demand for certain labor-intensive cuts and variety meat items,” Halstrom says.

Such challenges helped pressure U.S. beef and pork exports to start the year.

U.S. Beef exports were 2% less year over year in January at 105,047 metric tons (mt), according to data released by USDA and compiled by USMEF. Value was 3% less at $653 million. Lower beef variety meat shipments drove the decline as muscle cut exports were steady with a year earlier.

January beef exports to South Korea were strong and continued to gain momentum in China.

U.S pork exports in January of 248,656 mt, were 9% less than a year earlier. Export value was 13% less at $642.8 million.

Although exports still face the aforementioned transportation and labor challenges, as well as COVID-related obstacles, Halstrom says, “As key destinations for U.S. red meat roll out COVID vaccination programs, the outlook for 2021 is optimistic, with retail meat demand remaining strong and the expectation that foodservice will rebound in more and more regions.”

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

Cattle Current Daily—March 8, 2021

Negotiated cash fed cattle trade was limited on light to moderate demand in Colorado and the western Corn Belt through Friday afternoon. Elsewhere, trade ranged from a standstill to mostly inactive on very light demand, according to the Agricultural Marketing Service.

For the week, established trade was steady on a live basis at $114/cwt. in the Southern Plains and Northern Plains. Dressed trade in Nebraska was $2 lower at $180. The previous week, live sales in the western Corn Belt were at $114, with dressed trade at $182.

Total estimated cattle slaughter the week ending March 6 was 665,000 head, which was 1,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 5.83 million head is 213,000 head fewer (-3.52%) than the same period last year. Estimated beef production so far this year is 4.93 billion lbs., which is 73.8 million lbs. less (-1.48%) year over year.

Cattle futures closed higher Friday, supported by higher outside markets and despite the increase in grain futures. Perhaps support also included expectations that cash fed cattle prices next week will likely edge higher, given the dearth of cash purchases by packers the past two weeks.

Live Cattle futures closed an average of 59¢ higher.

Feeder Cattle futures closed an average of $1.48 higher (5¢ to $2.50 higher), except for 50¢ lower in spot Mar.

Choice boxed beef cutout value was $2.55 lower Friday afternoon at $231.33/cwt. Select was 83¢ lower at $220.85.

Grain futures closed higher Friday, likely supported by positioning ahead of the next World Agricultural Supply and Demand Estimates due out Tuesday.

Corn futures closed 11¢ to 15¢ higher in the front three contracts, and then mostly 3¢ to 5¢ higher.

Soybean futures closed mostly 10¢ to 19¢ higher.

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Major U.S. financial indices closed higher at the end of a volatile trading session Friday. Primary support seemed to stem from easing Treasury yield rates and significantly more new jobs than the trade expected.

Total non-farm payroll employment rose by 379,000 in February, according to the U.S. Bureau of Labor Statistics. The nation’s unemployment rate was little changed at 6.2%. Average hourly earnings for all employees on private non-farm payrolls increased by 7¢ to $30.01.

West Texas Intermediate Crude Oil Futures on the CME were an average of $4.63 higher week to week on Friday.

The Dow Jones Industrial Average closed 572 points higher on Friday. The S&P 500 closed 73 points higher. The NASDAQ was up 196 points. 

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Total beef cows in Canada and the U.S. totaled 34.69 million head  Jan. 1, which was 194,300 head fewer (-0.56%) than the previous year, according to the United States and Canadian Cattle and Sheep report. Beef cows in the U.S. were 31.16 million head, which were 181,100 fewer (-0.58%). Beef cows in Canada of 3.53 million head were 13,200 head fewer (-0.37%).

The inventory of all cattle and calves in the U.S. and Canada Jan. 1 was 104.74 million head, which was  313,800 head fewer year over year (-0.30%). Inventory in the U.S. of 93.59 million head were 198,800 head fewer (-0.21%). Canadian inventory of all cattle and calves was 11.15 million head, down 115,000 head (-1.02%); the least since 1989, according to the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor.

Between a smaller calf crop (-0.8%) north of the border and 4.1% more heifers retained for replacement, LMIC analysts say there will likely be a smaller number of cattle available in Canada for feedlots in 2021.

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

Cattle Current Daily—March 5, 2021

Negotiated cash fed cattle trade was at a standstill in Colorado and the Texas Panhandle through Thursday afternoon. Elsewhere, trade was limited on light demand with too few transactions to trend.

For the week so far, trade is steady with last week on a live basis in the Southern Plains and Northern Plains at $114/cwt. Dressed trade in Nebraska is $2 lower at $180. Live sales in the western Corn Belt last week were at $114, with dressed trade at $182.

Cattle futures closed lower Thursday, pressured by the slog for higher cash prices and faltering outside markets. That was despite net U.S. export beef sales for the week ending Feb. 25 up noticeably from the previous week and up 15% from the prior four-week average at 22,600 metric tons (mt), according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service.

Live Cattle futures closed an average of 41¢ lower, from 2¢ lower at the back to 85¢ lower in spot Apr.

Feeder Cattle futures closed an average of $1.34 lower, from 75¢ lower at the back to $2.32 lower toward the front.

Choice boxed beef cutout value was 85¢ higher Thursday afternoon at $233.88/cwt. Select was $2.56 lower at $221.68.

The average dressed slaughter weight of 909 lbs. the week ending Feb. 20 was 10 lbs. less than the previous week, helped along by the recent winter storm. That was still 9 lbs. heavier year over year, according to the USDA Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 841 lbs. was 9 lbs. lighter than the previous week, but 10 lbs. heavier year over year. Fed cattle slaughter of 439,124 head was 49,097 head fewer (-10.05%) than the same week a year earlier.

Corn futures encountered some pressure in the front months, perhaps tied in part to the previously mentioned weekly U.S. Export Sales report.

Weekly net U.S. corn export sales of 115,900 mt for 2020-21 were a market-year low, down 74% from the previous week and down 96% from the previous four-week average. U.S. net soybean export sales of 334,000 mt were up noticeably from the previous week but 33% less than the previous four-week average.

Corn futures closed mostly 1¢ to 2¢ higher, except for 1¢ to 4¢ lower in the front three contracts.

Soybean futures closed 6¢ to 15¢ higher, except for 3¢ to 4¢ higher in the front five contracts.

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Major U.S. financial indices closed sharply lower Thursday, with traders apparently rattled by Federal Reserve Chair Jerome Powell’s dovish remarks concerning recent inflation, which helped lift Treasury yield rates and depress bond prices.

On the other hand, crude oil futures continued to surge higher, tied to the OPEC announcement that it would maintain reduced production levels. West Texas Intermediate on the CME closed $2.13 to $2.55 higher through the front six contracts.

The Dow Jones Industrial Average closed 345 points lower. The S&P 500 closed 51 points lower. The NASDAQ was down 274 points.

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Recent data continues to paint a bleak picture for U.S. restaurant recovery, the nation’s second largest private sector employer.

“While many other industries have moved into a recovery phase, the restaurant industry ended last year in a double-dip recession and with 2.5 million fewer jobs. Between March 2020 and January 2021, restaurant and foodservice sales were down $255 billion from expected levels,” according to a letter to Congress from Sean Kennedy, Executive Vice President of the National Restaurant Association (NRA). The letter supported passage of the American Rescue Plan.

Kennedy shared highlights from a February NRA survey of 3,000 restaurant operators.

Among the survey findings:

The restaurant industry lost nearly 450,000 jobs between November of last year and January 2021, representing about 10% of the total jobs recovered during the first six months after the spring shutdowns. Eighty percent of operators say their current staffing level is lower than what it would normally be in the absence of COVID-19.

Consumer spending in restaurants remained well below pre-pandemic levels in January. Overall, 77% of restaurant operators say their total dollar sales volume in January was lower than in January 2020.

32% of restaurant operators think it will be 7 to 12 months before business conditions return to normal for their restaurant, while 29% think it will be more than a year. An additional 10% of operators say business conditions will never return to normal for their restaurant.

14% of restaurant operators say they will ‘probably’ or ‘definitely’ be closed within three months if there are no additional relief packages from the federal government.

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

Cattle Current Daily—March 4, 2021

Negotiated cash fed cattle trade and demand were light to moderate in the Southern Plains through Wednesday afternoon at $114/cwt., according to the Agricultural Marketing Service; steady with the previous week. Trade was light on moderate demand in Nebraska with dressed prices $2 lower at $180. Elsewhere, trade was limited on light demand, with too few transactions to trend.

Cattle feeders offered 1,592 head (10 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. All were from Texas, except for one lot from Nebraska. Of those offered, 757 head sold (four lots), with 167 heifers bringing an average price of $114.08/cwt. and 590 steers bringing an average of $114.00. All sales were by live weight.

Similarly, Choice steers and heifers sold steady to $1 lower at the fat auction in Tama, IA. There were 150 Choice 2-4 steers weighing an average of 1,473 lbs., bringing an average of $114.19/cwt., which was steady with the prior week’s negotiated trade.

Cattle futures closed mainly higher Wednesday, supported by lower Corn futures and oversold conditions.

Live Cattle futures closed an average of 59¢ higher, except for an average of 5¢ lower in the front two contracts.

Feeder Cattle futures closed an average of $1.28 higher, from 47¢ higher in spot Mar to $1.97 higher toward the back.

Choice boxed beef cutout value was $1.65 lower Wednesday afternoon at $233.03/cwt. Select was $1.93 lower at $224.24.

Corn futures closed 2¢ to 10¢ lower through May ‘22 and then mostly fractionally mixed.

Soybean futures closed 3¢ to 7¢ lower through Mar ‘22, and then mostly fractionally higher to 1¢ lower.

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Major U.S. financial indices closed lower Wednesday. Positive news included private sector employment increasing by 117,000 jobs from January to February according to the February ADP® National Employment ReportTM

Pressure included a higher Treasury yield rate, though not spiking as it did last week.

The Dow Jones Industrial Average closed 121 points lower. The S&P 500 closed 50 points lower. The NASDAQ was down 361 points.

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Agricultural producers surveyed for the monthly Purdue University/CME Group Ag Economy Barometer believe plant-based meat alternatives will make inroads in the total protein marketplace during the next five years.

According to the February Ag Economy Barometer report, 55% of respondents said they expect alternative protein sources to capture up to 10% of the combined market for animal and plant-based protein, while approximately 15% said they expect plant-based alternatives to capture 10% or more of the total protein market.

Respondents also believe alternative proteins gaining too much market share would impact farm income negatively.

When asked what impact they would expect to see on farm income if plant-based alternatives to animal protein capture a relatively large market share (25%) of the total protein market, a majority  said they think the impact on farm income would be negative. Approximately four out of 10 producers would expect to see farm income decline by 10% or more.

“That a majority of farmers perceive negative effects of alt-meats on the agricultural economy is consistent with: 1) the fact that some respondents are likely livestock producers, and 2) a recognition that the amount of corn and soy needed to produce alt-meats is lower than the amount needed to produce an equivalent amount of beef, pork, or chicken,” says Jayson Lusk, Purdue University agricultural economist, in his March 2 blog. 

When asked if they would be interested in pursuing a contract offered to grow a crop used in the production of plant-based meat, 62% of survey respondents said no, 16% said maybe and 23% said yes.

“That strikes me as high and may include a bit of cheap talk,” Lusk explains. “It may also be that the question was worded too vaguely. What are the conditions of the contract? What are the price premiums? Farmers would want to know answers to these questions (and more) before switching to a new crop.”

February’s Ag Economy Barometer reading of 165 was little changed compared to January when the index stood at 167.

The Current Conditions Index of 200 in February was near the all-time high. The Future Expectations Index, though, declined by 3 points to 148, marking the third decline in four months.

“Ongoing strength in ag commodity prices and farm income continue to support producers’ perspective on current conditions while concerns about possible policy changes affecting agriculture and eroding confidence in future growth in ag trade continue to weigh on producers’ future expectations,” according to the report.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses.

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

Cattle Current Daily—March 3, 2021

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service. Live prices last week were at $114/cwt. and dressed trade was at $182.

Cattle futures closed mixed Tuesday, with continued pressure from Corn futures and uncertainty about the week’s cash direction.

Live Cattle futures closed an average of 33¢ higher, except for 25¢ lower in the back contract.

Feeder Cattle futures closed mixed, from an average of 42¢ lower to an average of 18¢ higher.

Choice boxed beef cutout value was $4.35 lower Tuesday afternoon at $234.68/cwt. Select was $1.47 lower at $226.17.

Corn futures closed mostly 4¢ to 7¢ higher; 13¢ higher in spot Mar.

Soybean futures closed 10¢ to 11¢ higher through Jan ‘22, and then mostly 3¢ higher.

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Major U.S. financial indices closed lower Tuesday, with likely profit taking from the previous day’s sharp rebound.

The Dow Jones Industrial Average closed 143 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 230 points.

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Bipartisan U.S. Senators—Deb Fischer (R-Neb.) and Ron Wyden (D-Ore.)— introduced a bill on Tuesday aimed at increasing transparency and price discovery in cash fed cattle markets.

The Cattle Market Transparency Act of 2021, according to the Senators, will:

Establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades to enable price discovery in cattle marketing regions. It will require the Secretary of Agriculture, in consultation with the Chief Economist, to establish regionally sufficient levels of negotiated cash and negotiated grid trade, seek public comment on those levels, then implement.

Require USDA to create and maintain a publicly available library of marketing contracts between packers and producers in a manner that ensures confidentiality.

Prohibit the USDA from using confidentiality as a justification for not reporting and make clear that USDA must report all Livestock Mandatory Reporting (LMR) information, and they must do so in a manner that ensures confidentiality.

Senator Fischer, a member of the Senate Agriculture Committee first introduced the bill last September.

“I am pleased to reintroduce this bill with bipartisan support,” says Senator Fischer. “It will help facilitate price discovery and provide cattle producers with the information they need to make informed marketing decisions. I am committed to working across the aisle to advance the bill forward this Congress.”

The need for increased market transparency and cash price discovery is recognized widely. Choosing a voluntary or mandatory approach is where opinions diverge just as widely.

“Cattle producers continue to face serious obstacles when it comes to increasing profitability and gaining leverage in the marketplace,” explains Ethan Lane, Vice President of Government Affairs for the National Cattlemen’s Beef Association (NCBA). “Leveling the playing field and putting more of the beef dollar in producer pockets remains the top priority of this association. NCBA shares Senator Fischer’s objectives, as do its affiliates and indeed the entire industry. The best way to achieve those objectives, however, continues to be hotly debated by the very cattle producers this legislation would directly impact. We have worked and will continue to work alongside our affiliates, Congress, and USDA toward regionally robust negotiated trade, the establishment of a cattle contract library, and commonsense in USDA’s rules of confidentiality by taking direction from our membership through the grassroots policy process.”

NCBA is two months into the implementation phase of a voluntary approach, which established a series of triggers to evaluate negotiated trade volumes in each region and benchmarks for improvement.

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

Cattle Current Daily—March 2, 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. Live prices last week were at $114/cwt. and dressed trade was at $182.

The weekly five-area direct average fed steer price last week was $114.07/cwt., which was even with the previous week but 78¢ less than the previous year. The average five-area dressed steer price was $181.63, which was $1.06 more than the previous week but $3.15 less than the previous year.

Cattle futures extended losses Monday, with pressure including last week’s steady cash prices, the outlook for steady money this week and expectations for declining wholesale beef values.

Live Cattle futures closed an average of 47¢ lower, except for unchanged to an average of 8¢ higher in three contracts.

Feeder Cattle futures closed an average of 70¢ lower (10¢ lower toward the back to $1.47 lower in spot Mar), except for 50¢ higher in the back contract.

Boxed beef cutout value: Choice boxed beef cutout value was $1.50 lower Monday afternoon at $239.03/cwt. Select was $2.09 lower at $227.64.

Grain Futures softened Monday, pressured by the stronger U.S. Dollar and recently weaker export sales.

Corn futures closed 8¢ to 9¢ lower through the front three contracts, 1¢ to 5¢ lower through the next five and then 1¢ higher.

Soybean futures closed 9¢ to 13¢ lower through Aug’21, and then mostly 1¢ to 4¢ higher

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Major U.S. financial indices roared back Monday, helped along by a lower Treasury yield rate and U.S. approval of a third COVID-19 vaccine—this one a single-shot version from Johnson & Johnson.

The Dow Jones Industrial Average closed 603 points higher. The S&P 500 closed 90 points higher. The NASDAQ was up 396 points.

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Although the La Niña weather pattern leveled off recently, it will return with warm and dry conditions over most of the United States into the summer, according to Dr. Art Douglas, professor emeritus at Creighton University.

“The Pacific jet stream is positioned far north from normal preventing moisture from reaching the continent,” Douglas explained at last week’s CattleFax Outlook, held during the virtual 2021 Cattle Industry Convention Winter Reboot. “The only significant moisture will be in the Ohio Valley and along the Canadian border from northeast North Dakota into Minnesota.”

Douglas forecasts the Southwest U.S. will be warmer than normal, and the western half of the country will be relatively dry. Dry conditions in the Rockies will eventually extend into the central Corn Belt, he said, causing concerns for corn and soybean growers.

With crops and feed costs in mind, Mike Murphy, CattleFax vice president of research and risk management services, estimated that there will be 181 million planted acres of corn and soybeans in 2021, the most ever combined acres for those two commodities.

“That number is likely to be even higher, and in some regards it needs to be larger to balance the demand and build back supply,” said Murphy. He explained corn should be able to balance supply and demand, but soybean supplies will be snugger globally, with a smaller crop expected from South America.

On the demand side of the ledger, Murphy explained China is looking for higher quality feed ingredients, such as corn and soybeans, as that nation rebuilds its pork industry in the wake of African Swine Fever. That includes the estimated 700 million bu. of corn China purchased from the U.S. this year.

“As soybean prices drive higher, soybeans will have a greater influence on the value of corn, bringing corn prices with it,” said Murphy.

Spot soybean prices are expected to be $13.50-$16.50/bu. for the remainder of 2021, according to Murphy.

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

Cattle Current Daily—March 1, 2021

Negotiated cash fed cattle trade continued sluggish on Friday. Live trade last week was steady in Nebraska and the Southern Plains at $114/cwt.; steady to $1 lower at $114 in the western Corn Belt. Dressed trade was steady to $2 higher at $182.

Sluggish cattle trade, near-term heavy fed cattle supplies and month-end position squaring all helped pressure Cattle futures Friday.

Live Cattle futures closed an average of $1.50 lower, from 95¢ lower toward the back to $3.90 lower in expiring Feb.

Feeder Cattle futures closed an average of $2.27 lower.

Choice boxed beef cutout value was 14¢ higher Friday afternoon at $240.53/cwt. Select was 94¢ higher at $229.73.

Estimated total cattle slaughter last week of 666,000 head was 114,000 head more than the previous week and 38,000 more than the prior year. Year-to-date estimated cattle slaughter of 5.17 million head is 227,000 head fewer than the same time last year. Beef production of 4.37 billion lbs. is 87.9 million lbs. less (-1.97%) year over year.

Corn futures closed mostly 3¢ to 4¢ lower.

Soybean futures closed mostly 7¢ to 9¢ lower.

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Major U.S. financial indices closed mixed Friday, from the sharply lower Dow to higher tech stocks. Primary pressure continued to be investor fears about rapidly rising inflation and interest rates.

The Dow Jones Industrial Average closed 469 points lower. The S&P 500 closed 18 points lower. The NASDAQ was up 72 points.

CME WTI Crude Oil futures closed $1.93 to $2.03 lower through the front six contracts.

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“Beef in cold storage followed a fairly typical seasonal pattern in 2020 despite the coronavirus pandemic,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, beef in cold storage accelerated more than normal the last quarter of 2020. This resulted in beef in cold storage at the end of January 2021 totaling 519 million lbs., which is the largest quantity of beef in cold storage at the end of January since 2017. This is not an unmanageable quantity of beef, but it could indicate that beef is slowly backing up in the supply chain.” He adds that recently higher wholesale beef values may suggest supplies will be easily cleared.

Total pounds of beef in freezers Jan. 31 were down 3% from the previous month, but up 6% from last year, according to the latest USDA Cold Storage report.

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

Cattle Current Daily—Feb. 26, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live trades at $114/cwt., and a few in the beef at $182, but too few to trend.

There were also a few dressed trades in the western Corn Belt at $182, but too few to trend.

Last week, live sales were at $114 in the Southern Plains and Nebraska; $114-$115 in the western Corn Belt. Dressed trade was at $180-$182.

Cattle feeders offered 790 head (6 lots) in Central Stockyards’ special Fed Cattle Exchange auction Thursday, all from the Southern Plains. None sold. Reserve prices were $115-$116 and bids were $114.25 to $114.50.

Cattle futures closed mixed Thursday. Weaker Corn futures, tied to lower export sales and profit taking, helped Feeder Cattle.

Feeder Cattle futures closed an average of 35¢ higher.

Sharply lower outside markets, the continued lack of cash direction and weaker export sales helped to mostly pressure Live Cattle.

Net U.S. beef export sales of 8,500 metric tons for 2021 were 63% less than the previous week and 66% less than the prior four-week average, according to the U.S. Export Sales report for the week ending Feb. 18. Increases were primarily for South Korea, Japan, Mexico, Canada, and Taiwan.

Live Cattle futures closed an average of 33¢ lower, except for an average of 17¢ higher in three contracts.

Choice boxed beef cutout value was 36¢ lower Thursday afternoon at $240.39/cwt. Select was $1.00 lower at $228.79.

The average dressed steer weight the week ending Feb. 13 was 919 lbs., the same as a week earlier, but 14 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 850 lbs. was 2 lbs. heavier than the prior week and 17 lbs. heavier than the previous year. Fed cattle slaughter of 468,241 head was 40,812 head less than the previous week; 20,542 head less than the prior year.

Corn futures closed 3¢ to 7¢ lower through Sep ‘21, and then mostly 1¢ to 2¢ lower.

Soybean futures closed 5¢ to 18¢ lower through Jan ‘22, and then mostly fractionally higher to 1¢ higher.

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Major U.S. financial indices closed sharply lower Thursday with investors apparently rattled by a surge in Treasury bond yield rates. That came in the face of a more positive unemployment report than the trade expected.

Weekly initial unemployment insurance claims were 730,000 the week ending Feb. 20, down 111,000 from the previous week, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 559 points lower. The S&P 500 closed 96 points lower. The NASDAQ was down 478 points. 

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Beef byproduct values continue to gain after sinking to a pandemic low of $6.57/cwt. the latter part of last April. Prices mostly gradually increased since then to $9.78 by Feb. 24; about 7% more than a year earlier.

“Beef and beef byproducts are typically produced in nearly fixed proportions; however, when packers experienced line disruption in 2020, many plants changed fabrication methods to keep more whole muscles/primals intact and keep less offal to maximize line speed,” explains Brenda Boetel, livestock economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “The decrease in beef and offal provided less opportunities for exports and byproduct values decreased…When these edible offal products are not exported, they will often go into rendering or into pet food and ultimately decrease the overall value of the finished steer.”

Total offal value plus hides accounted for 20.7% of U.S. beef export value in 2020, down from 22% in 2019, according to Boetel.

For perspective, basis a steer at 1,400 lbs., byproduct value increased $44.94 per head to $136.92 at the end of February, compared to the pandemic low.

“With the continued recovery from COVID disruptions, byproduct production has mostly returned to pre-COVID levels. Given the relatively fixed pounds of byproducts per 1,400 lb. steer, the byproduct drop value contributions have been increasing due primarily to changes in demand,” Boetel says.

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

Cattle Current Daily—Feb. 25, 2021

Negotiated cash fed cattle tradewas limited on light demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service. There were a few live trades in the Southern Plains steady with last week at $114/cwt., but too few to trend.

Cattle feeders offered 1,145 head (9 lots) in Central Stockyards’ (CS) Fed Cattle Exchange auction Wednesday, all from the Southern Plains. Of those, 409 head sold (250 heifers and 159 steers) for a weighted average price of $114.25/cwt. CS will host a special sale Thursday.

On the other hand, slaughter steers sold steady to $3 lower, with instances of $4 lower at Sioux Falls Regional in South Dakota. There were 534 head of Choice 3-4 steers weighing an average of 1,654 lbs., bringing an average of $112.06, which was $2-$3 lower than cash trade in the region last week.

Cattle futures closed higher Wednesday, helped along by sharply higher outside markets, broad commodity support and recent strength in Lean Hog futures.

 Live Cattle futures closed an average of 91¢ higher.

Feeder Cattle futures closed an average of $1.23 higher, from 67¢ higher at the back to $2.15 higher toward the front.

Choice boxed beef cutout value was 46¢ higher Wednesday afternoon at $240.75/cwt. Select was 74¢lower at $229.79. 

Corn futures closed mostly 3¢ to 7¢ higher.

Soybean futures closed 14¢ to 18¢ higher through Jan ‘22, and then mostly 5¢ to 10¢ higher.

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Major U.S. financial indices closed higher Wednesday, amid another volatile session. Support seemed to center around optimism for the economy picking up steam. Remarks from Federal Reserve Vice Chair, Richard Clarida also helped quell inflation worries, with remarks to the U.S. Chamber of Commerce, mirroring the dovish tone of Chair Jerome Powell a day earlier.

The Down Jones Industrial Average closed 424 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 132 points.

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Cattle markets continue to underperform, beneath the weight of record high beef production since the middle of June. But, Randy Blach, CattleFax CEO, expects cattle prices to increase from now through 2024, especially after the first half of this year. Profitability will increase significantly for cow-calf producers and margin operators, he says.

CattleFax shared its Market Outlook Wednesday, as part of the National Cattlemen’s Beef Association Winter Reboot.

Part of the price optimism has to do with declining cattle numbers, after working through current front-end supplies.

CattleFax projects modest herd liquidation of 200,000 beef cows this year and 350,000 head next year, due in part to the likelihood of expanding La Niña drought this spring and summer.

Leverage will also swing back in producers’ favor as packing plant capacity utilization declines, according to Kevin Good, CattleFax vice president of industry relations and analysis.

At the same time, CattleFax expects consumer beef demand to continue strong.

Blach explained domestic consumer beef demand last year was the strongest in more than 30 years, based on the U.S. Consumer Beef Demand Index. That was helped by consumer incomes being replaced almost entirely by government stimulus.

Internationally, CattleFax expects U.S. beef exports to increase at least 5% this year.

In terms of cattle prices, these are the CattleFax projections for this year.

 

                                                Annual Av.                Range

 

Fed steer                               $119/cwt.                  $108 to $128

 

800 lbs. steer                       $145/cwt.                  $135 to $160

 

550 lbs. steer                       $170/cwt.                  $160 to $180

 

Utility cows                          $64/cwt.                     $52 to $74

 

Bred cows                            $1,600/hd                 $1,200 to $1,900

There are headwinds, of course.

Even before considering the drought, Mike Murphy, CattleFax vice president of research and risk management services, said both supply and demand mean feed costs will likely remain elevated into the next crop marketing year.

As well, the folks at CattleFax expect inflation and interest rates to begin rising.

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

Cattle Current Daily—Feb. 24, 2021

Negotiated cash fed cattle trade was at a standstill in Kansas through Tuesday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand, with too few transactions to trend.

Cattle futures softened Tuesday, with spot Live Cattle soon to expire, the lack of cash direction and bearish outside markets early in the session.

Live Cattle futures closed an average of 85¢ lower, from 10¢ to $1.85 lower.

Feeder Cattle futures closed an average of $1.01 lower, from 67¢ to $1.35 lower.

Choice boxed beef cutout value was 31¢ higher Tuesday afternoon at $240.29/cwt. Select was 55¢ higher at $230.53.

Corn futures closed 1¢ to 2¢ higher through Jly ‘21, and then mostly fractionally mixed.

Soybean futures closed 10¢ to 22¢ higher through Sep ‘22, and then mostly 8¢ higher.

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Major U.S. financial indices closed mixed Tuesday, following steep early losses. Part of the turnaround stemmed from comments made by Federal Reserve Chair, Jerome Powell, which seemed to quell some inflation fears, at least for the day.

“Following large declines in the spring, consumer prices partially rebounded over the rest of last year. However, for some of the sectors that have been most adversely affected by the pandemic, prices remain particularly soft. Overall, on a 12-month basis, inflation remains below our 2% longer-run objective,” explained Powell, in his Semiannual Monetary Policy Report to the Congress. “As noted in our January policy statement, we expect that it will be appropriate to maintain the current accommodative target range of the federal funds rate until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.”

The Dow Jones Industrial Average closed 15 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 67 points.

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“It’s likely that you’ve heard individuals like Bill Gates claim that U.S. livestock’s contribution to climate change is immense. However, these claims are flat out wrong,” says Jerry Bohn, president of the National Cattlemen’s Beef Association, in an op-ed released yesterday. “Some activists and others like Gates often cite old claims made in the United Nation’s debunked report titled Livestock’s Long Shadow. They also use global numbers to back their claims about U.S. cattle production to back their marketing claims and sell their products.

“It’s critical that Americans understand that global GHG emissions are skewed higher because they include emissions from nations whose cattle and beef management systems are far less efficient than those in the United States. Global numbers also include countries like India, which have large bovine populations but where harvest is very low or non-existent because of cultural or religious practices. In global terms, U.S. beef cattle production counts for just 0.5% of global GHG emissions, so even if every American stopped eating beef in favor of fake meat substitutes, there would be virtually no discernible impact on our changing climate.”

In the op-ed—Beef Is, and Always Will Be Sustainable—Bohn emphasizes continued progress of the U.S. beef production system, which is already among the most productive and efficient in the world.

“Between 1975 and 2017, beef cattle emissions declined 30%. At the same time, the U.S. now produces even more beef from fewer animals and a smaller land base. Today, the U.S. produces 18% of the world’s beef with just 6% of the world’s cattle numbers,” Bohn explains. “This is possible through commitments to animal welfare, better animal nutrition and advancements in genetics. Those statistics are often overlooked or ignored by individuals like Bill Gates, the writers at OZY and others who are working to advance an agenda that drives people away from eating meat using scare tactics and unsound science to advance their cause and line their pockets with grocery money from well-meaning, concerned consumers who have been sold something they don’t want and never needed in the first place.”

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

Cattle Current Daily—Feb. 23, 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.

Live sales last week were at $114/cwt. in the Southern Plains and Nebraska; at $114-$115 in the western Corn Belt. Dressed trade was at $180-$181 in Nebraska and at $180-$182 in the western Corn Belt.

Last week’s five-area direct average steer price was 39¢ higher on a live basis at $113.99/cwt. The average five-area dressed steer price was 47¢ higher at $180.57.

Despite rising Corn futures prices and higher feedlot placements than expected (Friday’s Cattle on Feed report), Feeder Cattle futures shook off early pressure to mostly extend gains. Live Cattle futures closed narrowly mixed, though, amid plentiful fed cattle supplies and short-term uncertainty.

Live Cattle futures closed narrowly mixed, from an average of 28¢ lower across the front half of the board to an average of 16¢ higher.

Feeder Cattle futures closed an average of 27¢ higher, except for an average of 32¢ lower in the back two contracts.

Choice boxed beef cutout value was 75¢ higher Monday afternoon at $239.98/cwt. Select was $2.08 higher at $229.98.

Grain Futures rebounded with last week’s USDA forecast during the Agricultural Outlook Forum.

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed mostly 5¢ to 15¢ higher.

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Major U.S. financial indices closed mixed Monday. Primary pressure stemmed from a selloff in big tech stocks, as well as continued nervousness over rising Treasury yield rates—potential implications for higher interest rates and economic recovery. 

The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed 30 points lower. The NASDAQ was down 341 points.

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“The feedlot situation in early 2021 is a carryover from the disruptions and unusual dynamics last year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “For the entire year in 2020, feedlot placements were down 4.0%. In the last half of the year feedlot placements were almost unchanged year over year, up 0.3%.  However, this average belies dramatic dynamics as feedlot placements in the third quarter were up 8.5% year over year, while placements in the fourth quarter were down 7.0% from the prior year.”

Peel points out total estimated feeder supplies outside of feedlots Jan. 1 were 25.66 million head, down 0.2% year over year. Even when adjusted for decreased veal slaughter and increased feeder cattle imports, he says the 1.3% year-over-year decrease in the 2020 calf crop would have suggested a bigger decrease in the feeder supply to start the year.

“It appears that some feeder cattle were carried over into 2021 and likely is reflected in the relatively large January placements,” Peel says. “Feeder supplies are somewhat front-loaded early in 2021 but should tighten up in the second half of the year.”

As reported in Cattle Current Monday, feedlot placements in January were 2.017 million head, according to the latest Cattle on Feed (COF) report. That was about 3% more year over year and about 3% more than pre-report expectations.

Peel shares one other note about the COF.

“January marketings were 1.822 million head, down 5.6% from one year ago and about as expected. However, January 2021 had two less slaughter days than the year before meaning that daily average marketings this year were 3.8% higher than last year,” Peel explains.

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

Cattle Current Daily—Feb. 22, 2021

Negotiated cash fed cattle trade last week ended up steady in the Southern Plains at $114/cwt., according to the Agricultural Marketing Service. Live trades were steady to $1 higher in Nebraska at $114; dressed trade steady to $1 higher at $180-$181. In the western Corn Belt, prices were steady to $2 higher on a live basis at $114-$115 and steady to $2 higher in the beef at $180-$182.

Through Thursday, the five-area direct average steer price was $114.11/cwt. on a live basis, which was 33¢ more than the previous week but $5.66 lower than the same week last year. The average five-area dressed steer price was 64¢ higher week to week at $180.71, which was $9.39 less year over year.

Cattle futures closed higher Friday with steady cash prices, lower Corn futures, the week’s strong wholesale beef values and expectations for packers to pick up production following storm disruptions.

Live Cattle futures closed an average of 71¢ higher.

Feeder Cattle futures closed an average of 90¢ higher.

Choice boxed beef cutout value was 38¢ higher Friday afternoon at $239.23/cwt. Select was 43¢ higher at $227.90.

Estimated cattle slaughter for the week of 552,000 head was 56,000 head fewer than the previous week and 74,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 4.50 million head is 263,000 head fewer (-5.52%) than last year. Estimated year-to-date beef production of 3.81 billion lbs. is 124.8 million lbs. less (-3.17%) than the same time last year.

Corn futures closed 6¢ to 7¢ lower through the front three contracts, mostly fractionally higher to 1¢ higher through Jly ’23 and then mostly 3¢ lower.

Soybean futures closed mostly 3¢ to 9¢ higher.

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Major U.S. financial indices closed narrowly mixed Friday. Likely profit taking and inflation jitters counterbalanced positive economic news.

Existing-home sales of 6.69 million rose 0.6% in January, marking two consecutive months of growth, according to the National Association of Realtors® (NAR). Sales were 23.7% more year over year.

“Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market,” says Lawrence Yun, NAR’s chief economist. “Sales easily could have been even 20% higher if there had been more inventory and more choices.”

The Dow Jones Industrial Average closed fractionally higher. The S&P 500 closed 7 points lower. The NASDAQ was up 9 points. 

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Feedlots with 1,000 head or more capacity placed 2.017 million head in January, according to Friday’s monthly Cattle on Feed report. That was about 3% more year over year and about 3% more than pre-report expectations. The report accounts for feedlots with 1,000 head or more capacity.

In terms of weight, 42.14% went on feed weighing 699 lbs. or less; 49.18% weighed 700-899 lbs.; 8.68% weighed 900 lbs. or more.

“With higher placements in January, rising feed costs are likely to become more of a focus and concern,” say analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor. “The weekly Omaha corn price for January averaged $5.04/bu., which is a 15.2% ($0.67 per bushel) rise over December 2020 and 32.0% ($1.23 per bushel) higher than last year. High feed costs may incentivize cow-calf operators to add more weight to calves before placing into feedlots. This may be a challenge as much of the western U.S. remains in drought, potentially limiting available pasture and feed supplies. The harsh winter weather in mid-February likely depleted hay stocks in some areas.”

Marketings in January of 1.822 million head were 5.6% less year over year and slightly fewer than expected.

Total cattle on feed Feb. 1 of 12.106 million head were 1.5% more than a year earlier and about 0.5% more than expectations. That’s the second most for the month since the data series began in 1996.

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

Cattle Current Daily—Feb. 19, 2021

Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service. Live sales were steady with the prior week at $114/cwt. in the Southern Plains. There were a few live sales at $114 in Nebraska and a few in the western Corn Belt at $115, but too few to trend.

Prices last week were $113-$114 in Nebraska on a live basis and at $112-$115 in the western Corn Belt. Dressed trade was at $180.

Cattle feeders offered 1,518 head of Southern Plains steers and heifers in Central Stockyards’ special Fed Cattle Exchange auction on Thursday. Of those, 737 head sold (5 lots), via live weight and Bid-the-Grid for $114/cwt. The exception was 41 head bringing $113.75.

Cattle futures closed mixed but mostly lower Thursday, pressured again by supply chain disruptions and uncertainty about post-storm impacts. Positioning ahead of Friday’s monthly Cattle on Feed report also could have been in play.

Live Cattle futures closed an average of 70¢ lower (17¢ to $1.22 lower), except for an average of 32¢ higher in the back three contracts.

Feeder Cattle futures closed an average of 48¢ lower, except from unchanged to an average of 8¢ higher in three contracts.

Choice boxed beef cutout value was $1.34 higher Thursday afternoon at $238.85/cwt. Select was $1.83 higher at $227.47.

The average dressed steer weight the week ending Feb. 6 was 919 lbs., which was 1 lb. lighter than the previous week but 16 lbs. heavier than the same time a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 848 lbs. was 5 lbs. lighter week to week but 14 lbs. heavier year over year. Total fed cattle slaughter for the week of 509,053 head was 16,884 head more than the same week last year.

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

Soybean futures closed 6¢ to 8¢ lower through the front four contracts, then 2¢ lower to mostly 2¢ to 4¢ higher.

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Major U.S. financial indices closed lower Thursday, pressured in part by discouraging jobs data.

Initial weekly unemployment insurance claims for the week ending Feb. 13 increased by 13,000 to 861,000, according to the U.S. Department of Labor. That was more than the trade expected.

The Dow Jones Industrial Average closed 119 points lower. The S&P 500 closed 17 point lower. The NASDAQ was down 100 points.

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U.S. beef and veal exports for fiscal year (FY) 2021 are projected to be $7.4 billion, according to the latest quarterly Outlook for U.S. Trade report from USDA’s Economic Research Service (ERS) and Foreign Agricultural Service (FAS). The forecast is $300 million more than the November estimate, mostly on increased unit values. The total would be $756 million more than FY 2020.

Total FY 2021 U.S. livestock, dairy, and poultry exports are forecast $300 million more than the November projection at $32.6 billion.

Total FY 2021 U.S. agricultural exports are forecast $5 billion more than the November projection at $157.0 billion, driven by higher oilseed and grain export forecasts.

“The global COVID-19 pandemic remains the defining variable impacting economic growth for countries around the globe,” say ERS-FAS analysts. “The success of both economic relief programs and vaccination deployments is expected to shape the growth rates and extent of recovery in FY 2021. Several new variants of the virus pose concerns for prolonged economic setbacks, but widespread distribution of vaccines has the potential to provide a buffer against further economic disruption. Global gross domestic product (GDP) is projected to grow 5.5% in FY 2021. Containing the pandemic, restoring consumer confidence, and boosting consumption levels are essential to advancing growth.”

For perspective, those analysts note global GDP last year declined by about 3.5%.

“The impact of wide-ranging adaptations in monetary policy and shifts in international trade flows due to the pandemic have had notable impacts on foreign exchange rates over the last 14 months,” says ERS-FAS analysts. “The initial outbreak of COVID-19 caused a flight of currency toward the U.S. dollar, leading to its dramatic appreciation in early 2020. As the outbreak steadied, and interest rates on U.S. Treasuries remained low relative to government debt from other currency safe havens, particularly the European Union’s Euro, the dollar has depreciated steadily since April…The recent currency trend of a weakening U.S. dollar relative to the Japanese yen, Euro, and Chinese renminbi yuan is expected to continue into 2021 but moderate as the year progresses.”

U.S. agricultural imports in FY 2021 are forecast at $137.5 billion, up $500 million from the November forecast, led by increases in livestock, dairy, and poultry imports.

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

Cattle Current Daily—Feb. 18, 2021

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service. There was some trade in the Texas Panhandle on Tuesday at $114/cwt., which was steady with last week.

Impacts from the severe weather, including reports of reduced slaughter at some packing plants in the Southern Plains, due to rolling power outages, might help explain what appears to be a tough road to maintaining steady fed cattle prices this week. Reduced production also helps account for the atypical rise in wholesale beef values.

Cattle feeders offered 1,444 head (9 lots) in Central Stockyards’ (CS) weekly Fed Cattle Exchange auction, all from Kansas and Texas. None sold. The reserve price for most was $114.50/cwt. CS will host another sale Thursday.

Choice steers and heifers sold 75¢ to $1.00/cwt. higher amid a light offering at the fat auction in Tama, IA. The deepest test was 198 head of Choice 2-4 heifers weighing an average of 1,362 lbs., bringing an average of $114.92. That was at the upper end of last week’s country trade in the region.

At Sioux Falls Regional, though, slaughter steers sold steady, while heifers traded $2-$3 lower. There were 171 Choice 2-3 steers weighing an average of 1,457 lbs. and bringing an average of $113.37.

Cattle futures closed lower Wednesday, pressured by supply chain disruptions, as well as uncertainty about post-storm impacts.

Live Cattle futures closed an average of 58¢ lower, from 2¢ lower toward the back to $1.65 lower toward the front.

Feeder Cattle futures closed an average of $1.26 lower, from 85¢ lower to $2.35 lower in spot Mar.

Choice boxed beef cutout value was $2.74 higher Wednesday afternoon at $237.51/cwt. Select was $3.61 higher at $225.64.

Corn futures closed mostly 1¢ to 3¢ higher through Sep ‘22, and then mostly unchanged to fractionally higher.

Soybean futures closed mostly 1¢ to 3¢ lower, except for 3¢ higher in near Nov and Jan.

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Major U.S. financial indices closed narrowly mixed amid volatile trade Wednesday, despite domestic retail sales last month shattering expectations to the upside.

U.S. retail and food services sales in January were 5.3% more than the previous month at $586.2 billion, according to the U.S. Census Bureau.

Apparently, the sharp increase fueled investor concerns about inflation, as did the monthly Producer Price Index (PPI) from the U.S. Bureau of Labor Statistics. It increased 1.3% in January, the steepest rise since the index began in 2009.

The Dow Jones Industrial Average closed 90 points higher. The S&P 500 was down 1 point to 3,931. The NASDAQ was down 82 points.

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Creighton University’s Rural Mainstreet Index (RMI) increased to 52.0 in January, from 51.6 in December. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the index increased to its second highest level since January 2020. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Recent sharp improvements in agriculture commodity prices, federal farm support payments, and the Federal Reserve’s record-low short-term interest rates have underpinned the Rural Mainstreet Economy in a solid and positive growth range. However, the rural economy remains well below pre-pandemic levels,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The confidence index, which reflects bank CEO expectations for the economy six months out, declined slightly to a still healthy 60.0 from December’s 62.9.

“Federal farm support payments, improving grain prices, and advancing exports have supported confidence, offsetting negatives from pandemic ravaged retail and leisure and hospitality companies in rural areas,” Goss explains.

For a fourth straight month, the farmland price index advanced above growth neutral. The January level of 56.3 was the highest level since July 2013, and up from 55.0 in December. This is first time since 2013 that Creighton’s survey has recorded four straight months of above growth-neutral farmland prices.

Similarly, the farm equipment-sales index the past two months rose above growth neutral for the first time in 86 months. It was 50.2 in December and then rose to 54.5 in January, the highest level since April 2013.

According to Goss, bankers reported that their primary economic concerns for this year are excessive inflation and higher long-term interest rates.

“I feel the economy is moving in a positive direction that can be rattled by a combination of higher taxes, higher inflation, and a return of stricter regulation,” explained Jim Levick, president of Nebraska State Bank in Oshkosh, NE.

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

Cattle Current Daily—Feb. 17, 2021

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

Trade last week was steady in the Southern Plains at $114/cwt. on a live basis, $1-$2 higher in Nebraska at $113-$114 and steady to $1 higher in the western Corn Belt at $112-$115. Dressed trade was steady to $2 higher at $180.

Futures markets closed mixed but mainly higher Tuesday, with Feeder Cattle fading pressure from surging grain futures and Live Cattle helped by higher wholesale beef values and recently increasing open interest.

Live Cattle futures closed mixed, from an average of 41¢ lower in four contracts (5¢ lower at the back to $1.05 lower in spot Feb) to an average of 31¢ higher.  

Feeder Cattle futures closed an average of 78¢ higher, except for an average of 10¢ lower in the front three contracts.

Choice boxed beef cutout value was $2.33 higher Tuesday afternoon at $234.77/cwt. Select was 62¢ higher at $222.03.

Grain futures surged, led by wheat and concerns about winter kill from the severe weather.

Corn futures closed 11¢ to 13¢ higher through Sep ‘21, 7¢ to 9¢ higher through the next four contracts and then mostly 3¢ to 4¢ higher. 

Soybean futures closed 11¢ to 17¢ higher. 

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Major U.S. financial indices closed narrowly mixed Tuesday. Pressure included investors fretting over escalating Treasury yield rates pointing toward higher interest rates and the potential impact on the speed of economic recovery.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 2 points lower. The NASDAQ closed 47 points lower.

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“Heavier anticipated carcass weights and greater fed cattle marketings are expected to lift 2021 beef production to record levels at 27.540 billion lbs.,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook (LDPO).

Based on January’s Actual Slaughter Under Federal Inspection report, ERS analysts say average carcass weights were more than 18 lbs. heavier than the same time a year earlier at 844.1 lbs. They add that the same data suggests cattle slaughter is 3.7% more than last year.

“Although the number of cattle outside feedlots Jan. 1 was less than a year ago, a larger proportion of cattle on small grains pastures, and dry conditions in parts of the Plains States, raised prospects for higher anticipated placements in first-half 2021. As a result, marketings in second-half 2021 were increased, which also contributed to a raised production forecast,” say ERS analysts.

Those projections helped lead to the lower month-to-month forecast for an average five-area direct fed steer price of $115/cwt.

ERS also lowered expectations for feeder steer prices.

“Feeder steer prices for January 2021 averaged $133.94/cwt. for steers weighing 750-800 lbs. sold at Oklahoma City National Stockyards, about 7% below the average for January 2020. With prices for the first two weeks of February almost $7 below the same month last year, the first-quarter 2021 forecast was lowered $2 to $132/cwt.,” say ERS analysts. “Revisions to the 2020 calf crop tightened anticipated feeder cattle supplies in second-half 2021. However, higher expected feed costs offset expectations for stronger prices the rest of the year; as a result, the second-half 2021 feeder steer price forecasts are unchanged from last month.”

ERS forecasts the feeder steer price at $134/cwt. in the second quarter, $139 in the third and $140 in the fourth quarter for an annual average of $136.25. That would be only 80¢ more than the 2020 average.

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

Cattle Current Daily—Feb. 16, 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.

Trade last week was steady in the Southern Plains at $114/cwt. on a live basis, $1-$2 higher in Nebraska at $113-$114 and steady to $1 higher in the western Corn Belt at $112-$115. Dressed trade was steady to $2 higher at $180.

The five-area direct average steer price last week was about even with the prior week at $113.83/cwt. on a live basis and at $180.10 in the beef. Confirmed trade volume was 19,328 head fewer at 62,079.

Futures markets were closed Monday in observance of President’s Day. Week to week on Friday, Live Cattle futures closed an average of 79¢ higher (45¢ to $1.40 higher). Feeder Cattle futures closed an average of $1.29 higher, from 17¢ higher at the back to $2.57 higher at the front.

Choice boxed beef cutout value was 7¢ higher Monday afternoon at $232.44/cwt. Select was 48¢ higher at $221.41.

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Equity markets were closed Monday in observance of President’s Day. Week to week on Friday, the DJIA closed 310 points higher, the NADASQ closed 239 points higher and the S&P 500 was up 48 points.

Crude Oil futures (WTI-CME) closed an average of $2.57 higher last week, through the front six contracts. The severe weather will likely boost energy markets this week.

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Frigid, prolonged temperatures in the Southern Plains, along with ice and snow are being described as once in a generation or downright history making.

“An unprecedented and expansive area of hazardous winter weather continues into President’s Day as disruptive snow and ice accumulations transpire across the South Central U.S.,” according to the National Weather Service on Monday. “This impressive onslaught of wicked wintry weather across much of the Lower 48 is due to the combination of strong Arctic high pressure supplying sub-freezing temperatures and an active storm track escorting waves of precipitation from coast to coast.”

Sub-zero temperatures and wind chills were expected to last several more days, as the storm system tracked from the Southern Plains toward the northeast. It was preceded by last week’s Arctic blast across the Northern and Central Plains.

“Wheat pasture cattle and other stockers are no doubt experiencing reduced gains or even weight loss in these conditions. Many cattle grazing dual-purpose wheat will need to be removed and marketed in the next two to three weeks, very likely a bit lighter in weight than expected,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel notes feeder cattle prices in the state were 3-10% lower last week as decreased demand overwhelmed the significant decline in auction volume. Some markets in the region closed last week and will this week.

“Feedlot cattle are no doubt impacted as well and the market effects will be apparent over time,” Peel says. “Reduced performance will show up as lower carcass weights in the coming weeks. The residual impacts of this historic weather event will likely effect cattle markets for several weeks.”

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

Cattle Current Daily—Feb. 15, 2021

Negotiated cash fed cattle trade ranged from slow to limited trade on light demand up north, to mostly inactive in the Southern Plains, through Friday afternoon, according to the Agricultural Marketing Service.

For the week:

Live prices in the Southern Plains were steady at $114/cwt.

Live prices in Nebraska were $1-$2 higher at $113-$114. Dressed trade was steady to $2 higher at $180.

Live prices in the western Corn Belt were steady to $3 higher at $114-$115. Dressed trade was steady to $2 higher at $180.

The five-area direct average steer price through Thursday was $113.78/cwt. on a live basis, which was 50¢ lower than the previous week and $5.10 less than the prior year. The average steer price in the beef of $180.07 was 75¢ less than the prior week and $10.19 less than the previous year.

Estimated total cattle slaughter last week was 611,000 head, which was 42,000 head fewer than the previous week. Estimated year-to-date cattle slaughter of 3.95 million head is 185,000 head fewer (-4.47%) than the same period last year. Estimated year-to-date beef production of 3.35 billion lbs. is 68.2 million lbs. less (-2.0%) than a year earlier.

Cattle futures closed higher Friday with support from consolidating grain futures prices, as well as the outlook for higher cash prices next week, given the frigid weather and what appeared to be sluggish fed cattle trade for the week.

Live Cattle futures closed an average of 98¢ higher, from 22¢ lower toward the back to $2.05 higher toward the front.

Feeder Cattle futures closed an average of 98¢ higher (60¢ to $1.70 higher).

Choice boxed beef cutout value was 59¢ lower Friday afternoon at $232.37/cwt. Select was 64¢ higher at $220.93.

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

Soybean futures closed 4¢ to 5¢ higher through Aug ‘21, and then mostly fractionally higher to 2¢ higher. 

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Major U.S. financial indices edged higher Friday, supported by higher oil prices and prospects for additional federal economic stimulus.

The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 69 points.

Crude Oil futures (WTI-CME) closed an average of $2.57 higher through the front six contracts, week to week on Friday. That’s an average of $6.98 higher over the last two weeks.

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As might be suspected, the novelty of the pandemic overwhelmed conventional logic and expectations in many areas.

For instance, as COVID-19 began upending economies and supply chains last April, the Food and Agricultural Policy Institute (FAPRI) at the University of Missouri provided projected impacts. At the time, analysts there expected the pandemic would lead to lower prices for livestock producers. That happened, but not to the degree or for the reasons anticipated.

“In hindsight they note that they incorrectly assumed that supply chain concerns would play only a minor part in the story, and that the main cause of lower producer prices would be weaker consumer demand. They expected a contracting U.S. economy to reduce disposable income, and that consumers with less money in their pockets would choose to buy less meat and other high-value food products,” according to a recent FAPRI draft document—Expected and Unexpected Impacts of COVID-19 on U.S. Markets for Animal Products. That’s part of an investigation into the impacts of the COVID-19 pandemic on agriculture, food, and related supply chains, conducted by FAPRI and Texas A&M University’s Cross-Border Threat Screening and Supply Chain Defense (CBTS) DHS Center of Excellence.

Instead, real disposable income in the U.S. increased significantly, even as real GDP plunged, due to government stimulus programs. Domestic meat consumption increased slightly year over year, in the face of higher prices.

For context, FAPRI researchers note the average price paid to livestock producers declined 20% in April. At the same time, consumer prices began to increase sharply for meat, poultry, fish and eggs. By June, consumer prices were 10% more than in March. Both matched expectations as costs increased for meat processing and delivery.

“As packing plants were able to return to more normal levels of capacity utilization and as other supply chain problems were resolved or at least mitigated, these trends reversed,” say FAPRI researchers. “Consumer prices for meat and other animal products declined by more than 5% between June and November, while farm-level prices for animal products increased by 20% between April and November. It would be a mistake to say things are back to normal in the sector, but the situation has improved dramatically since the depths of the crisis last spring.”

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

Cattle Current Daily—Feb. 12, 2021

Negotiated cash fed cattle trade was slow on light demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live trades in Nebraska, but too few to trend.

For the week so far, live trade in the Southern Plains is steady at $114/cwt. Dressed trade is steady to $2 higher at $180 in Nebraska and the western Corn Belt. Live trade in the latter two regions last week was at $112-$114.

Cattle futures closed narrowly mixed on Thursday.

Live Cattle futures closed an average of 52¢ higher, except for 80¢ lower in spot Feb. 

Feeder Cattle futures closed an average of 20¢ lower, except for unchanged to an average of 9¢ higher in three contracts.

Choice boxed beef cutout value was 6¢ lower through Thursday afternoon at $232.96/cwt. Select was 67¢ lower at $220.29.

The average dressed steer weight the week ending Jan. 30 was 920 lbs., which was 6 lbs. lighter than the previous week but 23 lbs. heavier than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 853 lbs. was 2 lbs. heavier than the prior week and 20 lbs. heavier than the previous year.

Grain futures recovered some gains from the previous session’s steep decline as markets continue carving out a trading range.

Corn futures closed 6¢ to 7¢ higher through the front three contracts, and then 1¢ to 4¢ higher. 

Soybean futures closed 10¢ to 15¢ higher through Nov ‘21, and then mostly 3¢ to 5¢ higher. 

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Major U.S. financial indices closed narrowly mixed Thursday. Pressure included softer energy prices and more jobless claims than the trade expected.

Initial unemployment insurance claims for the week ending Feb. 6 were 793,000, which was 19,000 fewer than the previous week, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 7 points lower. The S&P 500 was up 6 points. The NASDAQ was up 53 points.

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USDA’s latest Feed Outlook provides perspective on the global demand fueling higher grain prices.

For instance, the latest estimate for 2020-21 U.S. corn exports of 2,600 million bu. would be the most ever and 162 million bu. more than the previous record set in 2017-18.

“Export prospects improved due to increased shipments to China this year, culminating in 38.8 million bu. in December to that country, as reported by the Census Bureau,” according to analysts with USDA’s Economic Research Service (ERS). “September through December shipments to China reached 124 million bu., compared with less than a million during the same period in 2019-20. Total U.S. exports through December are 628 million bu., compared with 371 million during the same period in 2019-20. USDA Agriculture Marketing Service Export Inspections through Feb. 4 indicate a strong pace of exports since the New Year.”

ERS projects China will import 40.3 million tons of corn, barley, oats, and sorghum in 2020-21, more than double what that nation imported in 2019-20. Analysts cite high domestic prices and strong demand from that nation’s livestock sector as drivers to the increase.

“This change—coupled with lower coarse grain production and exports in the Black Sea region of Europe, due to hot and dry growing conditions in several key production regions—has substantially impacted 2020-21 feed grain trade,” say ERS analysts. “Price levels across the world are substantially higher than they were a year ago. China has increased its market share of trade for nearly every feed-grain commodity in 2020-21. Other significant import markets have seen their import outlooks reduced due to higher prices and increased competition.”

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

Cattle Current Daily—Feb. 11, 2021

Negotiated cash fed cattle trade was slow on light demand in Kansas through Wednesday afternoon at $114/cwt. on a live basis, which was steady with last week.

Trade was also slow on light demand in the western Corn Belt with early dressed sales steady to $2 higher at $180. Live prices there last week were at $112-$114.

Elsewhere, trade was limited on light demand, with too few transactions to trend, according to the Agricultural Marketing Service.

Last week: live prices in the Texas Panhandle and Nebraska were at mostly $114; dressed trade in Nebraska was at $178-$180.

Cattle feeders offered 1,251 head (10 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 518 head (four lots) from the Southern Plains sold for a weighted average price of $114/cwt., via live weight and Bid-the-Grid. That was steady with the previous week’s country trade in the region.

Slaughter steers and heifers sold $3-$5 higher at Sioux Falls Regional in South Dakota. There were 147 head of Choice 3-4 steers weighing an average of 1,548 lbs., bringing an average of $113.79. That was at the upper end of last week’s country price for the region.

Cattle futures closed mixed on Wednesday. Sharply lower Corn futures helped boost Feeder Cattle, while softer Choice wholesale beef values and demand uncertainty pressured Live Cattle.

Live Cattle futures closed an average of 87¢ lower, from 55¢ lower to $1.32 lower.

Feeder Cattle futures closed an average of 39¢ higher, from 10¢ to 85¢ higher

Choice boxed beef cutout value was $1.27 lower Wednesday afternoon at $233.02/cwt. Select was 23¢ higher at $220.96.

Grain futures fell hard on Wednesday, with likely profit taking following the WASDE report leaving South American production unchanged, whereas the trade expected a reduction.

Corn futures closed 11¢ to 21¢ lower through the front four contracts, 5¢ to 8¢ lower through the next five contracts and then mostly 1¢ to 2¢ lower.

Soybean futures closed 24¢ to 47¢ lower through Jan ‘22, 12¢ to 18¢ lower through the next five contracts and then mostly 8¢ lower.

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Major U.S. financial indices closed narrowly mixed Wednesday, as positive quarterly corporate earnings competed with a gloomy labor outlook.

In a speech to the Economic Club of New York on Wednesday, Federal Reserve Chair, Jerome Powell, painted a dour picture of the current labor market, in the pandemic’s wake, illustrating the daunting challenge to achieving maximum employment.

“After rising to 14.8% in April of last year, the published unemployment rate has fallen relatively swiftly, reaching 6.3% in January. But published unemployment rates during COVID have dramatically understated the deterioration in the labor market. Most importantly, the pandemic has led to the largest 12-month decline in labor force participation since at least 1948,” Powell explained. “… In addition, the Bureau of Labor Statistics reports that many unemployed individuals have been misclassified as employed. Correcting this misclassification and counting those who have left the labor force since last February as unemployed would boost the unemployment rate to close to 10% in January.”

The Dow Jones Industrial Average closed 69 points higher. The S&P 500 was down 1 point. The NASDQ was down 35 points. 

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“On-feed numbers are currently high but will moderate through the remainder of the year with smaller placements and smaller calf numbers. Further, the currently very large carcass weights will shrink into the spring as winter weather has its impact,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets.

USDA’s recent Cattle report estimates the 2020 calf crop 1% less year over year at 35.1 million head. Analysts with the Livestock Marketing Information Center (LMIC) also point out estimates of the previous year’s calf crop were revised lower by about 500,000 head.

“The inventory report was decidedly bullish for cattle prices over the next three years. Tighter supplies of cattle will move through the system, lowering beef production,” say LMIC analysts, in the latest Livestock Monitor.

While declining cattle numbers will support cattle prices overall, Koontz sees more potential for fed cattle prices than those for calves and feeder cattle, due to the run up in feed prices.

“Even with the substantial increases in corn and soybean futures prices for nearby contracts, the current corn basis across the Central and Southern Plains remains strong – cash activity and price levels have followed the futures rally,” Koontz explains. “In this setting, these increases are not temporary but rather permanent. And permanent for cattle feeding cost-of-gains.”

LMIC analysts say drought and feed costs could impact cow-calf returns significantly. However, they believe higher year-over-year calf prices will support positive returns.

“I believe cow-calf producers should look hard at Livestock Revenue Protection (LRP) insurance,” Koontz says. “My outlook communications discussed the potential for returning to normal seasonal patterns and opportunities this year. For cow-calf producers that involves diversifying and making some sales in the spring and early summer, with fed cattle and beef price rallies. I am concerned that this year may play out more like last year. In 2020, selling opportunities evaporated through March. If the current changes to feed costs persists then we may be in for a repeat.”

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

Cattle Current Daily—Feb. 10, 2021

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

Pressure in Corn futures helped boost Cattle futures Tuesday, especially Feeder Cattle.

Live Cattle futures closed an average of 32¢ higher (15¢ to 87¢ higher) except for an average of 25¢ lower in two contracts.

Feeder Cattle futures closed an average of $1.32 higher.

Choice boxed beef cutout value was $1.91 lower Tuesday afternoon at $234.29/cwt. Select was 12¢ higher at $220.73.

Corn futures closed 7¢ to 8¢ lower through the front three contracts and then mostly 1¢ to 2¢ lower. Estimated U.S. and world ending stocks were more than the average of expectations.

Soybean futures closed mostly 10¢ to 14¢ higher through Jan ‘22 and then mostly 8¢ to 9¢ higher.

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

The Dow Jones Industrial Average closed 9 points lower. The S&P 500 closed 4 points lower. The NASDAQ was up 20 points.

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USDA’s Economic Research Service (ERS) increased projected beef production for 2021 and lowered expected fed steer prices slightly, in the latest monthly World Agricultural Supply and Demand Estimates (WASDE).

Beef production was estimated at 27.54 billion lbs., which was 350 million lbs. more (+1.29%) than the previous month. That would be 388 million lbs. more (+1.43%) than last year. Estimated beef production increased mostly on higher cattle slaughter and heavier than expected early-year cattle weights.

The average five-area direct fed steer price was projected 50¢ lower for the annual average at $115/cwt. Average prices are forecast at $113 in the first and second quarters, $114 in the third quarter and $119 in the fourth quarter.

Total red meat and poultry production for this year was projected at 107.60 billion lbs., which was 500 million lbs. more (+0.47%) than the previous month. That would be 1.08 billion lbs. more (+1.01%) than last year.

Among other WASDE highlights:

Corn—The outlook is for higher exports and lower ending stocks, which were projected 50 million bu. less than the previous month. The expected 2020-21 season-average corn price received by producers was raised 10¢ to $4.30/bu. 

Soybeans—The outlook is for increased exports and lower ending stocks. The U.S. season-average soybean price for 2020-21 is forecast at $11.15/bu., unchanged from the previous month. Soybean meal price is forecast $10 more per short ton at $400. The soybean oil price forecast was raised 1.5¢ to 40.0¢/lb. 

Wheat—The supply and demand outlook for 2020-21 U.S. was largely unchanged. The season-average farm price was raised 15¢/bu. to $5.00, based on NASS prices reported to date and expectations for futures and cash prices for the remainder of the marketing year.

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

Cattle Current Daily—Feb. 9, 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, trade was at a standstill.

Regionally, prices last week were mainly $1-$2 higher on a live basis at $114/cwt. in the Southern Plains, mostly $114 in Nebraska and at $112-$114 in the western Corn Belt. Dressed trade was steady to $2 higher at $178-$180.

The five-area direct steer price was $113.64/cwt. last week on a live basis, which was $1.00 more than the previous week. The average steer price in the beef of $179.26 was $1.70 higher.

Live Cattle futures mostly edged higher Monday, helped along by the higher cash prices and prospects of higher money this week as the coldest temperatures of the year erode cattle performance.

Live Cattle futures closed an average of 18¢ higher, except for 15¢ lower and 10¢ lower at either end of the board.

Feeder Cattle futures closed lower beneath the weight of grain futures, which likely got a boost from positioning ahead of Tuesday’s World Agricultural Supply and Demand Estimates.

Feeder Cattle futures closed an average of $1.29 lower, from 72¢ lower toward the front to $2.15 lower at the back.

Choice boxed beef cutout value was $1.62 higher Monday afternoon at $236.20/cwt. Select was 18¢ lower at $220.61.

Corn futures closed 11¢ to 15¢ higher through the front three contracts and then mostly 1¢ to 6¢ higher.

Soybean futures closed mostly 14¢ to 21¢ higher.

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Major U.S. financial indices closed higher Monday, with support from resurgent energy prices and optimism about the vaccination rollout getting the economy reopened sooner than later.

West Texas Intermediate Crude Oil futures on the CME were $1.08 to $1.15 higher through the front six contracts on Monday. That’s a little more than $5 higher week to week.

The Dow Jones Industrial Average closed 237 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 131 points.

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Although U.S. beef exports were 5% lower last year, in volume (1.25 million metric tons—mt) and value ($7.65 billion), they finished 2020 with a near record December, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

December beef exports totaled 119,892 mt, up 8% from December 2019 and the largest in nearly 10 years. Export value in December was $744 million, up 9% from a year ago and the second highest total on record. Fourth-quarter volume was 4.5% more year over year. Beef exports to China were record-large in 2020. A new volume record was also achieved in Taiwan.

Foodservice restrictions in many major markets impacted beef exports significantly, but they trended higher late in the year, bolstered by very strong retail and holiday demand.

“Consumers across the world responded to the COVID-19 pandemic by seeking high-quality products they could enjoy at home, and U.S. beef and pork definitely met this need,” Says Dan Halstrom, USMEF president and CEO. “We expect these retail and home-delivery demand trends to continue even as sit-down restaurant dining recovers, creating robust opportunities for U.S. red meat export growth.”

Beef export value per head of fed slaughter was $349.19 in December, up 9% year over year and the highest level since April. For the year, beef export value per head of fed slaughter was down 2% at $302.31.

U.S. pork exports reached nearly 3 million mt in 2020, topping the 2019 record by 11%. Pork export value climbed 11% to a record $7.71 billion. Exports set new annual records in China/Hong Kong, Central America, Vietnam and Chile, and achieved strong fourth quarter growth in Japan and Mexico.

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

Cattle Current Daily—Feb. 8, 2021

Negotiated cash fed cattle trade and prices were mostly $1 higher in the Southern Plains at $114/cwt. on a live basis, with moderate trade and demand, according to the Agricultural Marketing Service.

In Nebraska, trade was slow to moderate with moderate demand through Friday afternoon. Live prices were steady to $1 higher at $112-$114, but mostly $114. Dressed trade there on Thursday was steady to $2 higher at $178-$180.

Live prices in the western Corn Belt on Thursday were at $112-$114, which was generally $1.50-$2.00 higher. Dressed prices were mainly steady to $2 higher at $178-$180.

The average dressed steer weight the week ending Jan. 23 was 926 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week and 25 lbs. heavier than the prior year. The average dressed heifer weight of 851 lbs. was 1 lb. heavier than the previous week and 19 lbs. heavier than the prior year.

Total estimated cattle slaughter last week was 653,000 head, the same as the previous week; 22,000 head more than the same week last year. Year-to-date estimated cattle slaughter of 3.34 million head is 178,000 fewer (-5.0%) than the same time last year.

Cattle futures edged lower Friday, with recently softer wholesale beef values, some likely week-end profit taking, and in the face of higher cash prices.

Live Cattle futures closed an average of 21¢ lower, except for an average of 15¢ higher in the front two contracts.

Feeder Cattle futures closed an average of 48¢ lower, from 25¢ lower at the back to $1.22 lower in spot Mar.

Corn futures closed fractionally mixed to 1¢ lower through Jly ’22 and then 3¢ to 9¢ higher.

Soybean futures closed 1¢ to 3¢ higher, except for 1¢ to 5¢ lower in the front three contracts.

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Major U.S. financial indices continued higher Friday.

Month-to-month non-farm payroll increased by 49,000 in January, according to the U.S. Bureau of Labor Statistics. That was a touch softer than expectations. The unemployment rate fell by 0.4% to 6.3%. Average hourly earnings for all employees on private non-farm payrolls increased by 6¢ to $29.96.

The Dow Jones Industrial Average closed 92 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 78 points.

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Plant-based alternatives to traditional meats remain a tiny percentage of domestic consumption, but deserve attention in understanding the marketplace.

In recent survey-based research funded by the beef checkoff, given a choice between selecting beef or a plant-based alternative, approximately 25% would choose the latter. However, authors of the report—The Impacts of New Plant-Based Protein Alternatives on U.S. Beef Demand—say that comes with some caveats.

“Some of the individuals who choose the plant-based alternative are unlikely to consume much, if any, beef. In this sense, growth in the market share of plant-based alternatives is not entirely coming at the cost of reduced beef demand, and indeed if a plant-based alternative simply replaces a substitute competitor (like a chicken sandwich) or reflects overall growth in protein demand, the impacts on beef demand are likely to be negligible,” explain the agricultural economists behind the study: Jayson Lusk at Purdue University, Glynn Tonsor and Ted Schroeder at Kansas State University.

“Nonetheless, the fact that roughly a quarter of consumers indicate they’d choose a plant-based alternative suggests there is ample room for this market to grow, relative to its current position of under 1% market share,” they say. “Stated differently, our estimates suggest we will likely continue to witness significant growth in the plant-based alternative market even if all that changes is increased availability; and prices remain fixed at the status quo and consumer preferences and beliefs remain unchanged.”

Among the main findings:

  • Cattle-based beef is currently chosen in the marketplace about three times more often than plant-based protein alternatives.
  • Beef has a good image. Consumers’ perceptions of Taste, Appearance, Price, and Naturalness of beef greatly exceeds that for plant-based proteins. Average response scores for 15 meat/protein attributes indicate more consumers favor beef over plant-based protein. Overall consumer perceptions of nutrients accurately reflect information posted on nutrient contents panels of both beef and plant-based retail items.
  • Regular meat consumers (68% of the study’s full sample) are much less likely to select a plant-based item when a beef item is available. The typical regular meat consumer is willing to pay $1.87 more at a restaurant for a beef burger meal than a Beyond Meat burger meal. Conversely, those declaring an alternative diet (Vegan, Vegetarian, Flexitarian, or other) are willing to pay $1.48 more for a Beyond Meat than beef burger meal. Likewise, in retail settings the typical regular meat consumer is willing to pay $0.29/lb. more for store-brand, 80% lean ground beef than Beyond Meat, while those with an alternative diet would pay $2.32/lb. more for Beyond Meat than beef.
  • Characteristics of consumers most likely to select plant-based proteins include younger, those with children under the age of 12, having higher household income, residing in a Western state, and affiliating with the Democratic party. Consumers who select plant-based proteins place greater importance on environmental and animal welfare concerns when making food choices than consumers predicted to choose traditional animal proteins.

“Perhaps now more than ever it is essential for the industry collectively to accurately identify its comparative advantage and leverage that in subsequent strategic efforts,” say the researchers. “In many ways we do not believe existence of plant-based proteins alters the industry’s global comparative advantage as a major, grain-finished beef industry. Nonetheless, this and other foundations of the industry’ comparative advantage must underpin future industry efforts.”

Last week, Impossible Foods, maker of the Impossible Burger, cut suggested retail prices by 20% for grocery stores throughout the United States. The company is introducing similar price cuts at retail stores in Canada, Singapore and Hong Kong.

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

Cattle Current Daily—Feb. 5, 2021

Negotiated cash fed cattle trade was slow with light to moderate demand in Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service.

Although there were too few to trend, early dressed sales in Nebraska were at $180/cwt., which was $2 more than last week. Live sales there last week were at $112-$113.

In the western Corn Belt, early dressed sales were steady to $2 higher than last week at $178-$180, but too few to trend. Early live sales were 50¢ to $3 higher at $113, but too few to trend.

Trade was mostly inactive on very light demand in the Southern Plains. Live prices there last week were at $113.

Cattle futures closed higher Thursday, extending gains from the previous session, with moderating grain futures prices and the outlook for higher cash fed cattle prices.

Live Cattle futures closed an average of 50¢ higher, from 12¢ higher to $1.30 higher.

Feeder Cattle futures closed an average of 63¢ higher.

Choice boxed beef cutout value was $1.03 lower Thursday afternoon at $234.25/cwt. Select was $2.95 lower at $220.44.

Corn futures closed fractionally mixed to 2¢ lower through Sep ’21 and then mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 1¢ to 4¢ higher through Sep ‘21, and then mostly 7¢ to 8¢ higher.

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Major U.S. financial indices closed higher Thursday, buoyed by positive quarterly corporate earnings reports and more optimism about the labor situation.

Initial unemployment insurance claims for the week ending Jan. 30 were 779,000, which was 33,000 fewer than the previous week and less than the trade expected.

The Dow Jones Industrial Average closed 332 points higher. The S&P 500 was up 41 points.  The NASDAQ was up 167 points.

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Potentially, moisture chances could improve this spring and summer for some of the nation’s driest areas. That’s due to early indications that the current La Niña is weakening and could become neutral by summer.

That was one of the key messages from Allen Dutcher, Extension agricultural climatologist at the University of Nebraska-Lincoln, during Thursday’s Virtual BEEF Experience.

Likewise, according to the latest update from NOAA’s Climate Prediction Center, “La Niña is expected to continue through the Northern Hemisphere winter with a potential transition to ENSO-neutral conditions during the spring.

Even if more moisture returns more quickly than originally anticipated, Dutcher explained the 2020 drought left no moisture for most of the High Plains, meaning that it will take a least a year for native pastures in the region to recover.

Snowpack will drive drought risk in the High Plains, Dutcher said, adding that so far this year it’s significantly more than the same time in 2020.

Finally, with the way weather conditions are shaping up, Dutcher Expects late winter storms followed by an active severe weather season. Shorter term, he says conditions for the next 30 days are conducive to some powerful storms.

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

Cattle Current Daily—Feb. 4, 2021

Negotiated cash fed cattle trade was at a standstill in Kansas and Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on very light demand.

Cattle feeders offered 1,362 head (eight lots) in Central Stockyard’s weekly Fed Cattle Exchange Auction, all from the Southern Plains. Of those, 699 head sold (four lots of heifers) for a weighted average price of $113.71/cwt., via live weight and Bid-the-Grid. That was a bit higher than country trade in the region last week.

At Sioux Falls Regional fat auction, though, slaughter steers and heifers sold steady to $2 lower. There were 436 head of Choice 3-4 steers weighing an average of 1,554 lbs. bringing an average of $110.66/cwt. That was at the low end of the last week’s country price.

Cattle futures closed narrowly mixed, but mostly edged higher after the front months on Wednesday. Pressure included resurgent grain futures prices and softer wholesale beef values.

Live Cattle futures closed an average of 38¢ higher, except for an average of 28¢ lower in the front two contracts.

Feeder Cattle futures closed an average of 29¢ higher, except for an average of 36¢ lower in the front three contracts.

Choice boxed beef cutout value was $1.48 lower Wednesday afternoon at $235.28/cwt. Select was $1.65 lower at $223.39.

Corn futures closed 4¢ to 9¢ higher through May ‘22 and then mostly unchanged to fractionally lower.

Soybean futures closed 9¢ to 16¢ higher through Sep ‘21, and then mostly 1¢ to 4¢ higher.

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Major U.S. financial indices closed little changed Wednesday.

The Dow Jones Industrial Average closed 36 points higher. The S&P 500 closedp 3 points higher. The NASDAQ was up 2 points.

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Fundamentally speaking, numbers are beginning to shift back into the producer’s favor. Last year’s cattle prices should be the lowest for several years.

“The number of steers and heifers going through our packing plants over the course of the next several years is going to shrink. As it declines, so will our beef production, and prices are going to get higher. We’ll see a transition to a higher trending, more profitable cow-calf operator, feedstock operator and cattle feeder,” said Randy Blach, CattleFax CEO, at last week’s annual International Livestock Forum hosted by Colorado State University and the National Western Stock Show

Blach used fed cattle slaughter capacity utilization to illustrate how leverage should swing back toward producers. It ranged from 102% in 2016 to 110% last year as cattle numbers ran ahead of hook space. As fed cattle supplies decline, capacity utilization will drift back toward 100%, mostly after this year.

At the same time, Blach expects consumer beef demand to continue near last year’s extraordinary pace. It was the most in 30 years, according to Blach, based on the Annual U.S. Consumer Beef Demand Index, which was near 180 in 2020, compared to just over 160 the previous year. That was with record beef, pork and poultry production.

“That speaks to the quality of the product that we’re producing in this country,” Blach says. He explained Prime and Choice beef production increased from approximately 11 to 12 billion lbs. in the early 2000s to around 18 billion lbs. last year.

Along the way, the Choice-Select spread maintained its strong pace, while the spread between Choice and the upper two-thirds of Choice grew. The Prime-Choice spread sagged this year due to the dearth of restaurant business.

“We produce more high-quality beef and consumers continue to say they want more,” Blach said. Since 2000, he noted that beef gained 7% share of total meat spending, away from pork and poultry.

Note: the above is from an upcoming article that will be published in F&R Livestock Resource.

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

Cattle Current Daily—Feb. 3, 2021

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

Last week, cash fed cattle prices ended up $2-$3 higher in the Southern Plains at $113/cwt., $3 higher in the Northern Plains at $113 and $2.50-$5.00 higher in the western Corn Belt at $110.00-$112.50. Dressed trade was $5-$8 higher at $178.

Cattle futures gained again on Tuesday, supported by softer Corn futures, last week’s stronger cash prices and higher Lean Hog futures.

Live Cattle futures closed an average of 64¢ higher (40¢ higher at the back to $1.10 higher in spot Feb).

Feeder Cattle futures closed an average of $1.21 higher.

Choice boxed beef cutout value was $1.08 higher Tuesday afternoon at $236.76/cwt. Select was 55¢ lower at $225.04.

Corn futures closed 5¢ to 6¢ lower through the front three contracts and then mostly fractionally higher.

Soybean futures closed 10¢ to 11¢ lower through the front four contracts, and then mostly 2¢ lower to fractionally higher.

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Major U.S. financial indices closed sharply higher again Tuesday. Reportedly, much of the optimism had to do with growing investor confidence the recent barrage against short sellers of stocks like GameStop is in check.

Another day higher in energy markets added support—the front six contracts of West Texas Intermediate crude oil futures on the CME were up an average of $2.41 in the last two sessions.

The Dow Jones Industrial Average closed 475 points higher. The S&P 500 closed 52 points higher. The NASDAQ was up 209 points.

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Agricultural producer sentiment declined in January, driven by weaker expectations about the future, according to the Purdue University/CME Group Ag Economy Barometer.

The Index of Current Conditions declined 3 points to 199, while the Index of Future Expectations dropped 10 points to 151. The overall Ag Economy Barometer was 7 points less month to month in January, at 167. From October to January, the Index of Future Expectations dropped 19%. The Index of Current Conditions increased 12% over the same period.

“The ongoing strength in the Current Conditions Index appears to be driven by the ongoing rally in crop prices, while the deterioration in the Future Expectations Index seems to be motivated by longer-run concerns about policies that could impact U.S. agriculture in the future,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The Ag Economy Barometer includes a survey of 400 U.S. agricultural producers. The latest was conducted Jan. 18-22.

Weakening agricultural producer expectations for the future appear to be motivated by concerns about several policy issues. For instance, confidence that the ongoing trade dispute with China will ultimately be resolved in a way that favors U.S. agriculture declined 12 points in January to 38%.

Producers are also significantly more concerned about potentially restrictive environmental policies: 83% of respondents in January expect to see more restrictive regulations from the new presidential administration, up 42 points from October. Significantly more also expect higher estate taxes and income taxes over the next five years.

Shorter term, nearly one-third of survey respondents expect improved financial performance this year than in 2020. When asked about the size of their operating loan, 17% of respondents expect their loan to increase this year. Of those, 20% said the increased loan is due to carrying over unpaid operating debt from the previous year. This implies that 3 to 4% of those surveyed are suffering financial stress. However, that’s down from 5-6% of farms identified as suffering financial stress a year earlier.

Farmers also remained bullish about short-term farmland values and cash rental rates. In January, 43% of respondents said they expect farmland values to rise over the next year (up 8 points from December) and 27% said they expect cash rental rates to rise in 2021 (up 9 points from the previous month).

Also of note, more respondents expressed interest in following specified production practices in order to capture carbon and market the sequestration.

Overall, 30% of respondents to the January survey said they are aware of opportunities to receive a payment for capturing carbon. Among that group, 22% said they have actively engaged in discussions about receiving a carbon capture payment. This implies that 6 to 7% of the producers in the January survey have given consideration to contractually sequestering carbon.

Finally, interest in receiving the COVID-19 vaccine quickly is trending higher. Respondents were asked if they planned to get vaccinated. Response choices were: Yes, as soon as possible; Yes, but not right away; No.

In January, 58% said they plan to get vaccinated as soon as possible, up from 39% in December, 36% in November, and 24% in October.

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

Cattle Current Daily—Feb. 2, 2021

The average five-area direct fed steer price was $3.21 higher on a live basis last week at $112.44/cwt. The average steer price in the beef was $4.98 higher at $177.56.

Monday’s negotiated cash fed cattle trade summary was unavailable from AMS at press time.

Through Friday afternoon, prices were $3-$4 higher on a live basis in the Northern Plains at mostly $113/cwt. Dressed sales in Nebraska were $5 higher at $178.

On Friday, the Texas Cattle Feeders Association reported its members trading cattle at just over $2 more week to week: $112.80 for steers and $112.91 for heifers.

Softer Corn futures early on Monday, along with last week’s stronger cash prices, helped Cattle futures mostly gain.

Live Cattle futures closed an average of 76¢ higher, except for an average of 16¢ lower in the front two contracts.

Feeder Cattle futures closed an average of $1.08 higher (20¢ higher in spot Mar to $2.55 higher toward the back).

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed mostly 9¢ to 12¢ higher through Sep ‘22, except for 3¢ to 4¢ lower in the front three contracts.

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Major U.S. financial indices closed sharply higher Monday, likely helped along by new-month positioning, and ahead of more corporate earnings reports this week.

The Dow Jones Industrial Average closed 229 points higher. The S&P 500 closed 59 points higher. The NASDAQ was up 332 points.

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“Both the inventory of beef replacement heifers, at 18.7% of the beef cow herd, and the number of heifers calving are at a level that does not indicate either herd liquidation or expansion, though the levels could support limited herd expansion in the coming year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, reflecting on Friday’s semi-annual USDA Cattle report.

Likewise, in the latest issue of In the Cattle Markets, Matthew Diersen, a risk and business management specialist at South Dakota State University says, “The main takeaways were the stabilization of inventories, the smaller calf crop and fewer cattle outside of feedlots. The inventory levels have increased or consolidated in the Plains states, stretching from North Dakota to Texas, with levels generally lower elsewhere.”

Peel points to the drought-induced 14.5% year-over-year decline in Colorado beef cows and the 16.1% decrease in Colorado beef replacement heifers as perhaps the most notable headline from the Jan. 1 inventory numbers.

For those keeping score, Peel also notes the number of cattle grazing small grains pasture in Kansas, Oklahoma and Texas were 7.5% more year over year at 1.73 million head. He adds that the total estimated feeder supply of 7.245 million head in those same states was 1% more.

“In general, U.S. cattle inventories show little direction and are more stable than anything,” Peel says. “Market conditions, and perhaps drought in the coming months will determine the direction of cattle numbers in 2021 and beyond.”   

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

Cattle Current—Feb. 1, 2021

Negotiated cash fed cattle prices were $3-$4 higher on a live basis in the Northern Plains on Friday at mostly $113/cwt., according to the Agricultural Marketing Service. That was with slow trade and light demand. Dressed sales in Nebraska were $5 higher at $178.

There were a few live sales in the Southern Plains at $113 and a few dressed trades in the western Corn Belt at $178, but too few to trend.

On Thursday, live sales in the western Corn Belt were $2-$7 higher at $112. Dressed trade the previous week was at $170-$173.

The prior week, live sales were at $110-$111 in the Texas Panhandle and at $110 in Kansas. On Friday, the Texas Cattle Feeders Association reported its members trading cattle at just over $2 more week to week: $112.80 for steers and $112.91 for heifers.

Despite higher cash cattle prices and increasing wholesale beef values, Cattle futures closed lower Friday, as grain futures continued to climb. Month-end position squaring likely played a role, too.

Live Cattle futures closed an average of $1.23 lower.

Feeder Cattle futures closed an average of $1.96 lower.

Corn futures closed mostly 3¢ to 6¢ higher mixed, except for 9¢ to 12¢ higher in the front three contracts.

Soybean futures closed 10¢ to 16¢ higher through Sep ‘22, and then 7¢ to 9¢ higher.

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Major U.S. financial indices closed sharply lower Friday, pressured by more investor worries about the potential impact from short sellers being challenged by buyers in stocks like GameStop.

The Dow Jones Industrial Average closed 620 points lower. The S&P 500 closed 73 points lower. The NASDAQ was down 266 points.

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The nation’s beef cow herd began this year with 31.16 million head, according to the semi-annul Cattle report from USDA on Friday. That’s 181,000 head fewer or 0.58% less than the previous year.

The number of beef heifers retained for replacement of 5.81 million head was 3,200 head more than the previous year, just 0.06% more.

As of Jan. 1, the calculated number of calves outside feedlots was 25.66 million head, which were 62,000 head fewer (-0.24%) than a year earlier. That’s 3.35% less than 2 years earlier.

Milk cows Jan. 1 of 9.44 million head were 97,400 (+1.04%) more than the previous year.

The inventory of all cattle and calves was estimated at 93.59 million head, down 198,000 (-0.21%) from a year earlier.

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

Cattle Current Daily—Jan. 29, 2021

Negotiated cash fed cattle trade was limited on light demand in Kansas through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live trades at $112/cwt., which was $2 higher than last week.

Trade was mostly inactive on light demand in Nebraska and the western Corn Belt with too few transactions to trend. It was at a standstill in the Texas Panhandle and Colorado.

The average dressed steer weight the week ending Jan. 16 was 925 lbs., which was 2 lbs. heavier than the previous week and 18 lbs. heavier than the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 850 lbs. was 1 lb. lighter than the prior week but 16 lbs. heavier than the previous year.

Cattle futures edged lower Thursday amid light trade. 

Live Cattle futures closed an average of 38¢ lower, except for 7¢ higher in near Apr.

Feeder Cattle futures closed an average of 41¢ lower, other than 7¢ and 10¢ higher at either end of the board.

Choice boxed beef cutout value was $2.33 higher Thursday afternoon at $231.99/cwt. Select was $1.89 higher at $220.88.

Corn futures closed fractionally mixed to 1¢ higher through the front three contracts, 3¢ lower through Jly ‘22, and then mostly fractionally lower.

Soybean futures closed mostly 14¢ to 21¢ lower.

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Major U.S. financial indices rebounded Thursday, paring some of the steep losses from the previous session. Support included estimate-beating quarterly corporate earnings from the likes of American Airlines and Apple.

Although a bit less than traders expected, fourth-quarter GDP came in at 4.0%, according to the U.S. Bureau of Economic Analysis.

Also, weekly initial unemployment insurance claims came in less than expected at 847,000, according to the U.S. Department of Labor. That was 67,000 fewer than the previous week.

The Dow Jones Industrial Average closed 300 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 66 points.

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“As the U.S. foodservice sector climbs out of the hole left by 2020, the animal protein sector will not only need to realign itself with the survivors of the last year, but also remain flexible,” says Will Sawyer, lead animal protein economist with CoBank.

In the new Great Grocery Grab report from CoBank’s Knowledge Exchange Division, Sawyer explains the importance of individual foodservice channels varies significantly by animal protein species and by producer.

For instance, ground beef makes up a majority of beef volume through foodservice, but it represents only about one-third of the value due to its low price point. Conversely, the high-value steaks and roasts that are primarily sold in full-service restaurants and hotels comprise a quarter of the volume of beef sold through foodservice but nearly half of beef sales.

Some foodservice channels rebounded through the pandemic to achieve sales growth, as evidenced by the positive comparable-store sales at quick-service and fast casual restaurant concepts since the summer.

Full-service restaurants, however, continue to face double-digit declines in sales. In November, full-service restaurant sales were down 36% compared to last year while total foodservice sales were down 17%. Sawyer adds that in-restaurant dining will be vulnerable as long as consumers remain wary of dining indoors and COVID-19 cases remain elevated.

Although foodservice sales continue to improve, the report suggests sales may not return to pre-pandemic levels until the second half of 2022.

Relative to the realignment and flexibility mentioned earlier, according to the report, “In many cases that includes the large, publicly traded, franchise and multi-location limited-service restaurants. For beef, that could very well mean a long-term shift in high-value steak consumption to retail as the upscale restaurants have been especially hard hit and seen a significant number of closures.”

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

Cattle Current Daily—Jan. 28, 2021

Negotiated cash fed cattle trade was at a standstill in Kansas and the Northern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on light demand, with too few transactions to trend. With that said, early indications point toward higher prices.

Cattle feeders offered 1,570 head (11 lots) in Central Stockyard’s weekly Fed Cattle Exchange Auction, all from the Southern Plains. Of those, 1,128 head (seven lots) sold for a weighted average price of $112.97/cwt. ($112.95 for steers and $113.00 for heifers). The marketing method included both live weight and Bid-the-Grid™. Country trade in the region last week was at $110-$111.

Also, slaughter steers and heifers traded $3-$4 higher in the fat auction at Sioux Falls Regional, where 128 head of Choice 3-4 steers brought an average price of $110.06. That’s at the top end of the $105-$110 paid in country trade last week.

Cattle futures closed lower Wednesday with Live Cattle pressured by the lack of cash direction and lower outside markets, while Feeder Cattle continued to adjust to the rebound in Corn futures.

Live Cattle futures closed an average of 54¢ lower.

Feeder Cattle futures closed an average of 92¢ lower, from 2¢ lower in the spot contract to $1.67 lower at the back.

Choice boxed beef cutout value was 66¢ higher Wednesday afternoon at $229.66/cwt. Select was $1.66 higher at $218.99.

Corn futures closed 1¢ to 2¢ lower, except for fractionally higher to 1¢ higher in the front three contracts.

Soybean futures closed 2¢ to 4¢ higher through Sep ‘21 and then mostly 3¢ to 5¢ lower.

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Major U.S. financial indices closed sharply lower Wednesday. Various analysts placed the most blame on disappointing corporate quarterly earnings. There were also growing concerns that the short-seller scourge in stocks like GameStop and AMC was inflicting enough damage on particular hedge funds to fuel negative ripples in other parts of the market.

The Dow Jones Industrial Average closed 633 points lower. The S&P 500 was down 98 points. The NASDAQ was down 355 points. 

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Recent data from the NPD Group (NPD) underscores how far the U.S. restaurant industry rebounded so far from the economic devastation wrought by dine-in closures and other pandemic disruptions.

Although mandated dine-in restrictions held back all restaurant segments, particularly full service, NPD researchers say consumer demand for restaurant meals, and the ability to serve the demand with a host of off-premises services enable the industry to persevere.

For instance, restaurant digital orders, were already increasing before the pandemic (+19% year over year in January 2020), but exploded through the pandemic, up 145% year over year in December, according to NPD’s daily tracking of consumers’ use of restaurants and other foodservice outlets.

Similarly, carry-out, delivery, and drive-thru were also growing before the pandemic.

Carry-out, which represents the largest share of off-premises modes, increased orders by 3% in January 2020 and by 10% in December, compared to a year earlier. Carry-out ended 2020 holding 46% of off-premises order share.

Delivery orders were 1% higher year over year in January and ended the year up 137%. Even with the triple-digit gain in orders, delivery still holds the smallest off-premises order share at 11%.

Drive-thru orders in 2020 increased from +4% year over year in January to +22% in December, ending the year with a 44% share of off-premises orders.       

“Digital orders for pick-up and all off-premises modes will be a growth engine for the U.S. restaurant industry moving forward,” says David Portalatin, NPD food industry advisor. “Consumers, both new and former users, have now experienced the convenience of digital ordering, especially for carry-out and delivery, and will continue using these services long after the pandemic is over.”  

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

Cattle Current Daily—Jan. 27, 2021

Negotiated cash fed cattle trade was at a standstill in the Northern Plains and the Southern Plains through Tuesday afternoon, according to the Agricultural Marketing Service. Trade in the western Corn Belt was inactive on very light demand.

Heavy snow in parts of Nebraska and Kansas could help push trade to later in the week.

Live Cattle futures closed an average of 44¢ higher Tuesday, supported by rising wholesale beef values.

Choice boxed beef cutout value was $2.33 higher Tuesday afternoon at $229.06/cwt. Select was $1.12 higher at $217.33.

Feeder Cattle futures, however, closed an average of $1.80 lower, pressured by another day of sharply higher grain futures.

Corn futures closed 11¢ to 20¢ higher through Sep ‘21, 2¢ to 4¢ higher through Jly ’22 and then mostly 2¢ higher.

Soybean futures closed 17¢ to 26¢ higher through Jan ‘22 and then 11¢ to 16¢ higher.

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Major U.S. financial indices closed marginally lower Tuesday.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 9 points.

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If recent data is any indication, the U.S. likely started 2021 with fewer beef cows than last year.

“On Thursday, the monthly Livestock Slaughter report revealed what many industry analysts have been watching all year,” say analysts with the Agricultural Marketing Service (AMS). “The 2020 preliminary Federally Inspected (FI) steer slaughter was near 3% below the previous year and over 4% below the three-year average. Heifer slaughter was nearly 4% below a year ago and nearly 3% larger than the three-year average.”

Further, AMS analysts explain 2020 FI beef cow slaughter was 2% more than the previous year and 9% more than the three-year average.

“The estimates for the feedlot mix Jan. 1, 2021 were 61.85% steers and 38.15% heifers. This is up slightly from these same estimates in October 2020 and very near the feedlot mix reported in January 2020,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest issue of In the Cattle Markets. “The percentage of heifers in the feedlot mix trended up from 2015-2019 as a result of the cattle cycle, but 2020 quarterly totals were slightly lower than 2019, due in part to the feedlot disruptions in the spring and summer.”

Depending on the economist, estimates are for the beef cow herd to be 0.5-1.0% less year over year.

USDA’s Cattle report, providing Jan. 1 estimates of the U.S. cattle inventory will be published Friday afternoon.

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

Cattle Current Daily—Jan. 26, 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 sales were mostly steady to $1 on either side of steady at $110-$111/cwt. in the Southern Plains, $109-$110 in the Northern Plains and at $105-$110 in the western Corn Belt. Dressed trade was steady to $3 lower at $170-$173.

The average five-area direct fed steer price last week was $109.23/cwt. on a live basis, which was 29¢ less than the prior week. The average steer price in the beef of $172.58 was 48¢ less.

Cattle futures shrugged off Friday’s monthly Cattle on Feed report and resurgent grain futures on Monday. They were pressured at the outset, but closed mostly higher by the end of the day, retaining strong gains from the previous session.

Live Cattle futures closed an average of 37¢ higher (2¢ to $1.07 higher), except for 20¢ lower in the spot contract.

Feeder Cattle futures closed an average of $1.11 higher (12¢ to $1.87 higher), except for 70¢ and 30¢ lower in the front two contracts.

Choice boxed beef value was $3.91 higher at $226.73/cwt. Select was $2.87 higher at $216.21.

Grain futures bounced back Monday from the previous session’s selloff as markets carve out a new trading range.

Corn futures closed 11¢ higher through the front three contracts and then mostly 2¢ to 4¢ higher.

Soybean futures closed 21¢ to 31¢ higher through Sep ‘22 and then mostly 14¢ to 19¢ higher.

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Major U.S. financial indices closed mixed Monday with some investors apparently wary of the barrage of corporate earnings reports due this week.

The Dow Jones Industrial Average closed 36 points lower. The S&P 500 closed 13 points higher. The NASDAQ was up 92 points. 

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Drought and dryness likely helped push December feedlot placements higher than expected, say analysts with the Livestock Marketing Information Center (LMIC).

As noted in Monday’s Cattle Current, December placements were 0.77% more than the previous year, according to the monthly Cattle on Feed report. Estimates ahead of the report expected a decrease of about 3%.

“Hay supplies are tighter and the whole feed complex has moved up significantly,” explain LMIC analysts, in the latest Livestock Monitor. “LMIC has feedlots break-evens for cattle placed in December around $109 in the Southern Plains.”

“Drought persisted across much of the west in 2020 and has extended into much of the Great Plains at the current time. Several states reveal the impact of the drought on hay production, supplies and the challenges for cattle producers in those regions,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

For instance, Peel notes Dec. 1 hay stocks were 15% less in Colorado year over year and 36.4% less in New Mexico (the least since 1973). Alfalfa and other hay production for 2020 is also significantly less in those states.

“While overall U.S. hay supplies appear to be adequate, it is clear that some drought regions are experiencing severe challenges to get through the winter,” Peel says.  “The 16 Western and Plains states (not including Texas) had Dec. 1 hay stocks down 5.8% year over year.”

Although feed costs increased significantly since December, LMIC analysts point out, “In the last week, boxed beef cutout values have climbed on better demand, which has helped support cattle prices. If these prices hold, they will offset the higher feed costs, and help stabilize cattle feeding margins.”

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

Cattle Current Daily—Jan. 25, 2021

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

Live sales for the week were mostly steady to $1 on either side of steady at $110-$111/cwt. in the Southern Plains, $109-$110 in the Northern Plains and $108-$110 in the western Corn Belt. Dressed trade was steady to $3 lower at $170-$173.

Through Thursday, the five-area direct average steer price was $109.23/cwt. on a live basis, which was 29¢ less than the previous week and $15.05 less than the same time last year. The average steer price in the beef was $172.59, which was 47¢ less than the previous week and $26.27 less year over year.

Sharply lower grain futures Friday helped fuel strong gains in Cattle futures. Higher wholesale beef prices added support, as did loftier Lean Hog futures, tied in part to reports of new African Swine Fever cases in China.

Live Cattle futures closed an average of $2.02 higher through the front four contracts, and then an average of 55¢ higher, except for 35¢ lower in the back contract.

Feeder Cattle futures closed an average of $2.81 higher, from $1.95 to $5.00 higher.

Choice boxed beef value was $1.62 higher Friday afternoon at $222.82/cwt. Select was $3.06 higher at $213.34.

Estimated total cattle slaughter for the week of 657,000 head was 6,000 more than the previous week and 13,000 head more than the same week last year. Estimated beef production for the week of 550.2 million lbs. was 5.4 million lbs. more than the previous week and 19.3 million lbs. more than the previous year.

Grain futures tumbled hard Friday, pressured by factors including profit taking and rains in South America.

Corn futures closed 17¢ to 23¢ lower through Jly ‘22 and then mostly 6¢ to 7¢ lower.

Soybean futures closed 44¢ to 58¢ lower through Aug ‘22 and then 31¢ to 38¢ lower.

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Major U.S. financial indices closed mixed Friday.

The Dow Jones Industrial Average closed 179 points lower. The S&P 500 closed 11 points lower. The NASDAQ was up 12 points.

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Markets could view Friday’s Cattle on Feed report (feedlots with 1,000 head or more capacity) as a bit bearish with December placements 0.77% more than the previous year, while estimates ahead of the report expected a decrease of about 3%. The 1.84 million head placements were the second most for the month since the data series began in 1996, according to the National Agricultural Statistics Service.

Marketings in December of 1.85 million head were 1% more than the prior year, slightly more than expectations ahead of the report.

The on-feed inventory Jan. 1 of 11.96 million head was slightly more than the previous year, whereas average of expectations was for a decline of about 0.5%.

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

Cattle Current Daily—Jan. 22, 2021

Negotiated cash fed cattle trade was slow to moderate on light demand in Nebraska through Thursday afternoon. Dressed trade was unevenly steady with the previous week at $173/cwt. There were a few live sales at $109, but too few to trend; $109-$110 last week.

Trade was limited on light demand in Kansas with a few live trades at $110, which was steady with the previous day and week.

Elsewhere, trade was mostly inactive on light demand, according to the Agricultural Marketing Service. Live trade in the Texas Panhandle on Wednesday was at $110, steady to $1 lower than last week. Trade in Colorado on Wednesday was steady to $1 higher at $109-$110.

Last week, live sales in the western Corn Belt were at $108-$109; dressed trade at $173.

Although steady to weak cash prices are a disappointment this week, Live Cattle futures stabilized and gained Thursday, likely helped along by rising wholesale beef values. Feeder Cattle also continued to extend gains. Positioning ahead of Friday’s Cattle on Feed report likely played a role, too.

Live Cattle futures closed an average of 46¢ higher, from 2¢ higher at the back to $1.07 higher toward the front.

Feeder Cattle futures closed an average of 72¢ higher, from 2¢ to $1.62 higher, except for unchanged in the back contract.

Choice boxed beef cutout value was $2.29 higher Thursday afternoon at $221.20/cwt. Select was $3.00 higher at $210.28.

The average dressed steer weight the week ending Jan. 9 was 923 lbs., which was 3 lbs. heavier than the prior week and 19 lbs. heavier than the prior year, according to the USDA Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 851 lbs. was the same as a week earlier but 17 lbs. heavier than the same week a year earlier. Total cattle slaughter for the week of 652,330 head was 9,420 head more year over year. Beef production for the week of 549.1 million lbs. was 19.6 million lbs. more than the previous year.

Corn futures closed 1¢ to 3¢ higher through the front three contracts and then mostly unchanged to fractionally mixed.

Soybean futures closed 1¢ to 3¢ lower, except for fractionally higher to 2¢ higher in the front three contracts.

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Major U.S. financial indices closed narrowly mixed Thursday. Positive news included slightly fewer initial unemployment insurance claims than investors expected.

Initial unemployment insurance claims for the week of Jan. 16 were 900,000, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 12 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 73 points.

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U.S. beef exports to China were record high from July through November of last year, suggesting progress and promise, but still represented less than 1% of the beef imported by that nation, according to USDA’s Economic Research Service (ERS). U.S. beef competitors accounted for 94% of China beef imports during that period.

“In part, this may be because the U.S. value per pound of total (bone-in and boneless) beef shipped to China is higher than that of most of its competitors in the China beef market,” ERS analysts explain, in the latest monthly Livestock, Dairy and Poultry Outlook.

ERS compared the unit values of China’s frozen boneless beef imports to help assess U.S. competitiveness. For January through November, U.S. unit value was $3.23/lb., compared to $1.90 to $2.79/lb. for Argentina, Uruguay, Brazil, New Zealand, and Australia. Those latter countries comprise most of China’s beef imports. Incidentally, the unit cost of Canadian imports to China was $4.01/lb.

“…A higher U.S. beef price reflects a better quality, grain-fed fresh/chilled product, which is different from what China typically imports from other countries,” ERS analysts explain.

For context, total U.S. beef exports in November of 277 million lbs. were 32 million lbs. (+13%) more year over year, driven mainly by moderate global economic recovery, according to ERS.

“China’s demand for animal proteins will continue to grow as its economy and population expand,” say ERS analysts. “Despite a higher unit price of U.S. beef and certain barriers that limit trade, China’s commitment to purchase an additional $200 billion of American-made goods and services over 2020 and 2021, under the U.S. China Phase 1 trade deal, could lead to continued growth of U.S. beef exports.”

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

Cattle Current Daily—Jan, 21. 2021

Negotiated cash fed cattle trade was slow on light to moderate demand in Kansas through Wednesday afternoon. Live trades were unevenly steady with last week at $110/cwt. Trade was limited on light demand in the Texas Panhandle, where there were a few live sales at $110, but too few to trend. Elsewhere, trade was inactive with very light demand, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.42 higher Wednesday afternoon at $218.91/cwt. Select was 84¢ higher at $207.28.

Live Cattle futures edged lower again Wednesday as the week’s cash outlook appears either side of steady, despite continued strength in wholesale beef prices. They closed an average of 39¢ lower, except for from 2¢ higher in spot Feb.

Feeder Cattle futures extended gains Wednesday, helped along by another day of retreat in grain futures. They closed an average of 79¢ higher, from 40¢ to $1.12 higher.

Corn futures closed 4¢ to 6¢ lower through Jly ‘22 and then mostly 1¢ to 2¢ lower.

Soybean futures closed 16¢ to 21¢ lower.

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Major U.S. financial indices closed higher Wednesday, amid stronger than expected quarterly earnings reports from the likes of Netflix and Disney. President Biden’s inauguration likely removed a layer of investor uncertainty, as well.

The Dow Jones Industrial Average closed 257 points higher. The S&P 500 closed 52 points higher. The NASDAQ was up 260 points.

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Retail beef prices for 2020 were 9.7% more than the prior year, the steepest increase since 2014, when prices climbed 13.4% year over year, according to David Anderson, Extension livestock economist at Texas A&M University.

Anderson explains price increases in 2014 stemmed from tight supplies fostered by the drought. This year, much of it had to do with disruptions caused by the pandemic.

“Most of the increase in beef prices in 2020 occurred in the second quarter of the year, with price increasing 18% year over year. Beef prices also increased by 11% in the third quarter over the prior year,” Anderson says, in the latest issue of In the Cattle Markets. “In the aftermath of the drought, beef prices registered five consecutive quarters of year over year increases as supplies continued to decline and demand grew. In case anyone wondered, 2016 and 2017 were the last years that average all fresh retail beef prices declined compared to the prior year.”

Anderson notes All Fresh retail beef prices last year were above 2019 the entire year. The pre-pandemic price in March averaged $5.96/lb. and finished the year at $6.23. It peaked in June at $7.38.

“Several factors may be contributing to higher reported retail prices when wholesale and live cattle prices have been at or below last year’s levels,” Anderson says. “The data reflects only grocery store prices. Grocery stores have sold more beef, in volume and value, compared to the year before, due to restaurant shutdowns. It’s also likely that costs have increased between wholesale and retail levels due to compliance with coronavirus restrictions and constraints in processing. It may be difficult to get average retail prices below pandemic levels in coming months as beef production is expected to decline cyclically this year and, hopefully, the economy is able to fully open expanding restaurant demand.

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

Cattle Current Daily—Jan. 20, 2021

Negotiated cash fed cattle trade was at a standstill in Kansas and the Northern Plains through Tuesday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was very limited with very light demand; too few transactions to trend.

Feeder Cattle futures extended gains Tuesday, helped along by softer Corn and Soybean futures. Live Cattle mostly edged lower.

Live Cattle futures closed an average of 26¢ lower, except for from 45¢ to $1.15 higher in the front three contracts.

Feeder Cattle futures closed an average of $1.44 higher, except for 17¢ lower in spot Jan. That’s mainly an average of $3.46 higher in the last two trading sessions.

Choice boxed beef cutout value was $2.45 higher through Tuesday afternoon at $217.49/cwt. Select was 60¢ higher at $206.44.

Corn futures closed 4¢ to 7¢ lower through the front six contracts, and then mostly 2¢ to 4¢ higher toward the back.

Soybean futures closed 23¢ to 31¢ lower through the front four contracts, mostly 7¢ to 8¢ lower through the next five contracts and then mostly 1¢ lower.

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Major U.S. financial indices closed higher Tuesday, amid chatter from the pending new Administration about another round of economic stimulus.

The Dow Jones Industrial Average closed 116 points higher. The S&P 500 closed 30 points higher. The NASDAQ was up 198 points.

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Although forecasts indicate increased year-over-year domestic red meat and poultry production, analysts with USDA’s Economic Research Service (ERS) expect per capita meat disappearance to decline about 1%, due to increased exports and reduced beef imports.

“Availability is the disappearance on the domestic market of what remains after exports and ending stocks are subtracted from the sum of production, beginning stocks, and imports. Dividing this amount by the U.S. population yields per capita disappearance,” explain ERS analysts, in the latest monthly Livestock, Dairy and Poultry Outlook (LDPO).

Beef production for this year was projected lower than the previous month at 27.2 billion lbs. but still would be more than in 2020.

“This adjustment was based in part on fewer fed cattle to be slaughtered in second-quarter 2021 as a result of lower expected placements in fourth-quarter 2020,” say ERS analysts. “Further, higher feed costs in 2021 are expected to negatively impact cattle carcass weights.”

According to USDA, from January through November of last year, total cattle slaughter was about 3% less than the previous year. Average carcass weights were about 3% heavier, though, which mostly offset decreased slaughter, in terms of beef production.

“Live steer prices in the five-area marketing region for the first week of January were reported at $111.27/cwt., more than $13 below last year for the same week and the lowest January starting price since 2011,” say ERS analysts. “However, the annual price forecast for 2021 was raised $0.50 to $115.50/cwt. on lower expected production and expected improved packer demand in 2021.”

USDA projects the average five-area direct fed steer price at $113 in the first and second quarters, at $115 in the third quarter and at $120 in the fourth quarter.

On the other end of the trade, ERS analysts say the average feeder steer price last year was about 5% less than the previous year at $135.45/cwt. That’s basis a 750-800 lb. steer selling at Oklahoma National Stockyards.

“Prices in the first two weeks of January 2021 averaged $134.81, about 7% below the monthly average for January 2020,” ERS analysts say. “To the extent that prices at the beginning of 2021 were higher than expected, the first-quarter 2021 forecast was raised $1 to $134/cwt. However, higher expected feed costs lowered expectations for prices the rest of the year, and as a result the annual price forecast for feeder steers was lowered $1 to $137.”

Specifically, the average feeder steer price is projected at $134/cwt. in the first and second quarters, $139 in the third quarter and $140 in the fourth quarter for an annual average of $136.75.

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

Cattle Current Daily—Jan. 19, 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.

Live prices were generally $1-$3 lower last week at $108-$111/cwt. Dressed prices were $1-$4 lower at $172-$174.

The average five-area direct fed steer price last week was $109.52/cwt. on a live basis, which was $1.75 less than the previous week and $14.51 less than the same week last year. The average dressed steer price of $173.06 was $2.73 less than the prior week and $25.98 less than the prior year.

Futures and equity markets were closed Monday in observance of Martin Luther King Day.

Choice boxed beef cutout value was $2.12 higher Monday afternoon at $215.04/cwt. Select was $2.76 higher at $205.84.

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“As high feed prices push feedlot cost of gain up, feedlots have an incentive to buy more pounds and place heavier feeder cattle,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.  “Thus, the cattle industry responds to corn market signals to use less corn by placing cattle at heavier weights and using other (i.e. forage) feeds to add additional weight to cattle prior to feedlot placement. This is the advantage (and necessity!) of the cattle industry to use the ruminant capabilities of cattle to respond to the corn market situation. If all the cattle finished in feedlots in 2021 (that would have been fed anyway) are placed, say, an average of 100 lbs. heavier, the amount of reduction in total concentrate feed use is significant.”

Peel provides context for the extraordinary climb in feed costs—demand rationing—using cash corn prices in Dodge City, which averaged $3.41/bu. from January through September of last year. The price was more than $4 by mid-October and at $5.44 in mid-January.

“When feedlots demand heavier cattle, prices for lighter weight feeder cattle will decline relative to heavier cattle,” Peel explains. “For example, the price of 825 lb. steers in Oklahoma is currently about $131/cwt. When corn is, say, $3.65/bu., feedlots would be willing to pay roughly $155/cwt. for a 575 lb. steer, based on the cost of gain to put on the 250 lbs. from 575 to 825 lbs. When corn price increases to, say, $5.35/bu., the increased cost of gain means that the feedlot would only be willing to pay roughly $146/cwt. for a 575 lb. steer, even though the price of the 825 lb. steer has not changed.  Of course, higher feed prices likely also means that the overall feeder cattle price level will decline as well. 

“The change in feedlot demand for light versus heavy weight feeder cattle simultaneously provides incentives for stocker producers to add the needed additional weight to feeder cattle. In the example above, the value of stocker gain is roughly $0.75/lb. when corn is $3.65/bu. but increases to $0.97/lb. when corn price increases to $5.35/bu.

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

Cattle Current Daily—Jan. 18, 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, it was mostly inactive on very light demand.

Live prices were generally $1-$3 lower last week at $108-$111/cwt. Dressed prices were $1-$4 lower at $172-$174.

For the week:

Texas Panhandle: $110-$111/cwt.  1-2 lower

Kansas: $109-$111  1-3 lower

Nebraska: $109-$110 on a live basis; $172 dressed. Steady to 1 lower and $4 lower

Colorado: $109 1-2 lower

Western Corn Belt: $108-$109 on a live basis; $173-$174 dressed.

Through Thursday, the average five-area direct fed steer price was $109.52/cwt. on a live basis, which was $1.96 less than the previous week and $14.48 less than the same week a year earlier. The average steer price in the beef was $173.06, which was $2.96 less than the previous week and $26.01 less than a year earlier.

Choice boxed beef cutout value was 45¢ lower Friday afternoon at $212.92/cwt. Select was $2.01 higher at $203.08. 

Total estimated cattle slaughter for the week of 651,000 head was the same as a week earlier and 18,000 head more than the same week a year earlier. Estimated beef production for the week of 544.8 million lbs. was 22.3 million lbs. more than the previous year.

The average dressed steer weight the week of Jan. 2 of 920 lbs. was 7 lbs. heavier than the previous week and 8 lbs. heavier than the same week a year earlier, according to the USDA Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 851 lbs. was 12 lbs. heavier than the previous week and 19 lbs. heavier than the prior year.

Cattle futures closed higher Friday. Bottom feeding might be one of the drivers, as was stronger wholesale beef values, rising open interest and a pause to increasing Corn futures.

Live Cattle futures closed an average of 93¢ higher, from 45¢ to $1.32 higher.

Feeder Cattle futures closed an average of $2.02 higher.

Corn futures closed 2¢ to 3¢ lower through the front three contracts, and then mostly 1¢ to 3¢ higher.

Soybean futures closed 12¢ to 13¢ lower through the front three contracts, and then mostly 1¢ to 5¢ higher.

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Major U.S. financial indices closed lower Friday. Pressure included a more negative outlook of consumer retail sales than the trade expected. Also, increasing global movement restrictions, due to escalating COVID-19 cases, weighed on the energy sector.

Advance estimates of U.S. retail and food services sales for December were 0.7% less than the previous month, but 2.9% more than the previous year, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 177 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 114 points.

CME WTI Crude Oil futures closed $1.05 to $1.21 lower through the front six contracts.

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“Much uncertainty continues but assuming no major new global health or economic disruptions, U.S. beef trade is expected to be supportive in 2021,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments (Jan. 11).

As reported in Cattle Current, U.S. beef exports stormed back in November, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

November beef exports totaled 115,337 metric tons (mt), up 6% from a year earlier and the most since July 2019. Export value climbed 8% year-over-year to $707.5 million.

“Demand for U.S. beef in the global retail sector has been outstanding and we expect this to continue in 2021,” says USMEF President and CEO Dan Halstrom. “Unfortunately, foodservice continues to face COVID-related challenges. We expect a broader foodservice recovery this year, especially from mid-2021, but will likely still see interruptions in some markets.”

Through November, beef exports were 6% lower year-over-year in volume (1.13 million mt) and down 7% in value ($6.9 billion). January-November muscle cut exports were 3% below 2019 in volume (883,012 mt) and 6% lower in value ($6.11 billion).

“Beef exports are forecast to be modestly higher year over year, returning roughly to 2019 levels. Beef imports are currently forecast to decrease from the 2020 spike to pre-COVID levels or perhaps a bit lower,” Peel says. “Numerous factors will affect U.S. and global beef trade in 2021 including exchange rates, continuing demand for beef in China, the rebuilding of the Australian beef industry, continuing trade tensions between China and Australia/New Zealand and Mexico’s economic situation.”

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

Cattle Current Daily—Jan. 15, 2021

Negotiated cash fed cattle trade was at a standstill in Colorado through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand with too few transactions to trend.

For the week so far:

Texas Panhandle: $110-$111/cwt.

Kansas: $109-$110

Nebraska: $109-$110 on a live basis; $172 dressed.

Colorado: $109

Western Corn Belt: $108-$109 on a live basis; $173-$174 dressed.

Cattle futures were mixed Thursday, with Feeder Cattle losing ground beneath the weight of another surge higher in grain prices, while more positive supply fundamentals in the second quarter helped bolster deferred Live Cattle.

Live Cattle futures closed an average of 68¢ higher, except for an average of 19¢ lower in the front three.

Feeder Cattle futures closed an average of 64¢ lower except for 15¢ higher in the back contract.

Choice boxed beef cutout value was $2.37 higher Thursday afternoon at $213.37/cwt. Select was $2.01 higher at $201.07.

Strong exports continue to support corn and soybean prices, according to the latest USDA U.S. Export Sales report for the week ending Jan. 7.

Net U.S. corn export sales of 1.44 million metric tons (mt) for 2020-21 were 92% more than the previous week and 34% more than the prior four-week average.

Net U.S. soybean export sales of 908,000 mt for 2020-21 were up noticeably from the previous week and up 93% from the prior four-week average.

Corn futures closed 9¢ to 10¢ higher through the front three contracts, and then 1¢ to 5¢ higher.

Soybean futures closed 20¢ to 25¢ higher through Jan ‘22, and then mostly 10¢ to 16¢ higher.

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Major U.S. financial indices closed a touch lower Thursday, ahead of incoming President Biden’s announcement about plans for another round of federal stimulus.

Initial unemployment insurance claims for the week ending Jan. 9 were 965,000, according to the U.S. Department of Labor. That was 181,000 more than the previous week.

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 14 points lower. The NASDAQ was down 16 points.

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“Improving the traceability and sustainability of our supply chain is one of Wendy’s® key priorities. When it comes to beef, the first step is reaching further back into our supply chain to create visibility into the animals we source for our food, and to verify how they were raised and treated,” says Liliana Esposito, Chief Communications Officer for The Wendy’s  Company.

Wendy’s is accomplishing that in partnership with the Progressive Beef program, which increases transparency and provides third-party verification that the cattle were raised in accordance with strict animal welfare and sustainability standards. The Progressive Beef program is built around three core pillars including animal welfare, food safety and sustainability; and transparency and traceability are critical to achieving progress in these areas.

Wendy’s announced Thursday that 40% of its U.S. fresh, never frozen beef supply was sourced from Progressive Beef™-certified feedlots at the end of last year, which was 15% more than the previous year. The company’s goal is to source  more than 50% of its supply from cattle raised under the Progressive Beef program in 2021.

“Over time, we believe this transparency and record- keeping will enable us to measure and improve our impact on a variety of sustainability metrics, including medical treatment and antibiotic use, and water and land use,” Esposito says.

“Wendy’s is a longtime leader in the restaurant industry, and we were delighted to have them as our first restaurant chain partner,” says John Butler, Chief Executive Officer of Progressive Beef, LLC. “Today’s consumers want to know where their food comes from and that the cattle were ethically and sustainably raised. We are proud to offer Wendy’s a solution to meet the company’s goal of a more transparent and traceable fresh beef supply chain; a program that we believe to be the industry gold standard and way of the future.”

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

Cattle Current Daily—Jan. 14, 2021

Negotiated cash fed cattle prices for the week, through Wednesday afternoon, were $1-$3 less than the previous week on a live basis and $2-$3 lower in the beef, according to data from the Agricultural Marketing Service.

Live prices were $1 lower than the previous day and $2 less than the previous week in the Texas Panhandle at $110/cwt. Prices in Kansas were $1-$3 lower at $109-$111. Live prices in Nebraska the previous day were at $109-$111, which was steady to $1 lower than the previous week; dressed trade was $2-$3 lower at $173-$174. Live prices were $3 lower in Colorado at $109. Live prices in the western Corn Belt on Tuesday were at $108-$109, which was $1-$2 lower than the previous week; dressed trade was $3 lower at $174-$177.

Feeder Cattle futures mostly edged higher Wednesday, with Feeder Cattle recovering some of the previous session’s steep losses. Higher wholesale beef values also helped Live Cattle to firm after the front months.

Live Cattle futures closed mainly narrowly mixed but mostly higher, from an average of 22¢ lower in the front two contracts to an average of 35¢ higher.

Feeder Cattle futures closed an average of 61¢ higher.

Choice boxed beef cutout value was $1.86 higher Wednesday afternoon at $211.00/cwt. Select was 97¢ higher at $199.06.

Corn futures closed 7¢ to 8¢ higher through the front three contracts, and then mostly 3¢ to 4¢ lower.

Soybean futures closed 6¢ to 12¢ lower through Sep ‘21, and then mostly 1¢ to 4¢ higher.

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Major U.S. financial indices closed narrowly mixed Wednesday amid news including the rise in COVID-19 cases and the political fiasco in the nation’s capitol. 

The Dow Jones Industrial Average closed 8 points lower. The S&P 500 closed 8 points higher. The NASDAQ was up 56 points.

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Last year, the U.S. restaurant industry experienced its steepest decline since the Great Depression , according to the NPD Group (NPD). But, restaurant transactions continued to show improvement in December.

Customer transaction declines at major restaurant chains in December were down 10% compared to the same period a year ago. That was a 27-point improvement from April, the height of the shelter-at-home and restaurant dine-in closure mandates, when transactions declined by 37% from a year earlier, according to NPD’s CREST®Performance Alerts.

Full service restaurant chains, which primarily rely on dine-in customers and had few if any off-premises services when the dine-in restrictions went into effect, bore the brunt of the transaction declines throughout the pandemic. In April, the segment’s customer transactions declined by 70% year over year; transactions improved to 30% less year over year in December.

Many full service restaurant chains quickly pivoted to offer more off-premises services by turning parking lots into drive-thru stations, offering curbside pick-up, and enhancing delivery options. For full service restaurants now, it’s about government restrictions. In more restrictive states, full service restaurant chain transactions are down 60% to 70%. In less restrictive states, there isn’t as much of a gap between quick service and full service restaurants.

Major quick service restaurant chains, which represent the bulk of restaurant industry transactions, learned to expand their already high capacity for off-premises volumes. The chains’ carry-out, drive-thru, and delivery orders soared throughout the pandemic as consumers looked for relief from preparing most of their meals at home. At their ebb in April, quick service customer transaction declines were 35% less year over year. They quickly improved as shelter-at-home orders were lifted. In December, quick service restaurant chain customer transaction declines were down  8% versus the same month a year earlier.

“The struggles of the restaurant industry are well documented and we acknowledge that some operators have not survived the pandemic,” says David Portalatin, NPD food industry advisor. “But history has shown that consumers will always value the convenience, quality, and experience of restaurant meals, and the operators that deliver against these expectations have proven it’s a winning formula in good or bad times. Our industry is resilient and consumer demand for restaurants remains strong.”

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

Cattle Current Daily—Jan. 13 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, with too few transactions to trend. Elsewhere, trade was at a standstill.

Feeder Cattle futures closed sharply lower Tuesday, pressured by more friendly World Agricultural Supply and Demand Estimates for corn and soybeans (see below). Firmer wholesale beef values and hopes for a recovering domestic economy later in the year helped Live Cattle close mainly higher. The recent and continued increase in open interest helped, as did strength in Lean Hog futures.

Live Cattle futures closed an average of 89¢ higher, except for 55¢ lower in the front three contracts.

Feeder Cattle futures closed an average of $1.98 lower from 90¢ lower at the back to $2.92 lower toward the front.

Choice boxed beef cutout value was $1.45 higher Tuesday afternoon at $209.14/cwt. Select was $2.35 higher at $198.09.

Grain futures surged higher Tuesday, fueled by the friendly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed 23¢ to 25¢ higher through the front four contracts, 12¢ to 16¢ higher through the next four and then mostly 5¢ higher.

Soybean futures closed 41¢ to 47¢ higher through the front four contracts, 19¢ to 33¢ higher through the next four and then mostly 10¢ to 16¢ lower.

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Major U.S. financial indices edged higher Tuesday, with trader expectations for additional economic stimulus apparently trumping escalating COVID-19 cases.

The Dow Jones Industrial Average closed 60 points higher. The S&P 500 closed 1 point higher. The NASDAQ was up 36 points.

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USDA lowered its forecast for total red meat and poultry production for 2021, compared to the previous month’s estimate, according to the latest World Agricultural Supply and Demand Estimates (WASDE). That’s based on expectations of lower beef, broiler, and turkey production more than offsetting higher pork production.

However, total estimated red meat and poultry production for 2021 is forecast 634 million lbs. more than in 2020 (+0.60%) at 107.10 billion lbs.

Beef production for 2021 is forecast at 27.19 billion lbs., which would be 32 million lbs. more (+0.11%) than in 2020, with higher non-fed cattle slaughter more than offsetting lighter expected cattle carcass weights.

WASDE estimated the average five-area direct fed steer price for last year at $108.51/cwt. Fed steer prices for 2021 are projected to be $113 in the first and second quarters, $115 in the third quarter and $120 in the fourth quarter for an annual average of $115.50, which was 50¢ more than the previous month’s forecast.

Among other WASDE highlights:

Corn: Outlook for the 2020-21 U.S. corn crop is for lower production, reduced corn used for ethanol, smaller feed and residual use and exports, and decreased ending stocks. Corn production is estimated at 14.182 billion bu., down 324 million on a lower yield and slight reduction in harvested area. With supply falling more than use, corn stocks were lowered 150 million bu. to 1.552 billion. The season-average corn price received by producers was raised 20¢ to $4.20/bu.

Soybeans: Soybean production was estimated at 4.135 billion bu., down 35 million bu., led by reductions for Minnesota, Iowa, and Kansas. Harvested area was estimated at 82.3 million acres, up slightly from the previous report. Yield was estimated at 50.2 bu./acre, down 0.5 bu. With higher imports and slightly higher beginning stocks, soybean supplies were down 14 million bu. from last month. The soybean crush forecast was raised 5 million bu. to 2.2 billion, reflecting improved prospects for soybean meal exports with a lower export forecast for Argentina. The soybean export forecast was raised 30 million to a record 2.23 billion bu. With lower supplies and increased use, ending stocks were projected at 140 million bu., down 35 million from the previous forecast.

The U.S. season-average soybean price for 2020-21 was projected 60¢ higher at $11.15/bu. The soybean meal price was projected $20 higher at $390/short ton. The soybean oil price was forecast 2.5¢ higher at 38.5¢/lb. 

Wheat: Outlook for 2020-21 U.S. wheat is for slightly smaller supplies, unchanged domestic use, higher exports, and lower ending stocks. Supplies were reduced on lower imports, which were decreased 5 million bu. to 120 million on a slower than expected pace. Exports were raised 10 million bu. to 985 million as higher white wheat exports were partially offset by lower Hard Red Winter (HRW) exports. Projected 2020-21 ending stocks were reduced 15 million bu. to 862 million, down 16% from last year. The season-average farm price for wheat was unchanged at $4.70/bu.   

Winter wheat: Planted area for harvest in 2021 was estimated at 32.0 million acres, up 5% from 2020 and up 2% from 2019, according to the Winter Wheat and Canola Seedings report. This represents the fourth lowest United States acreage on record. Seeding of the 2021 acreage was underway in early-September and was ahead of the five-year average pace. Throughout the season, planting and emergence progress remained ahead of the five-year average pace. Seeding was mostly complete by Nov. 15.

Hay Stocks: Stocks on farms Dec. 1 were 84.02 million tons, according to the latest USDA Crop Production report. That was 468,000 tons less (-0.55%) than the previous year.

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

Cattle Current Daily—Jan. 12, 2021

Negotiated cash fed cattle trade was at a standstill through Monday afternoon, except for the western Corn Belt, where trade was mostly inactive on very light demand, according to the Agricultural Marketing Service.

Live prices last week were at $112/cwt. in the Southern Plains and Colorado, $110-$111 in Nebraska and $110 in the western Corn Belt. Dressed trade was at $176 in Nebraska and at $174-$177 in the western Corn Belt.

The average five-area direct fed steer price last week was $111.27/cwt. on a live basis, which was 24¢ less than the previous week. The average steer price in the beef was $175.79, which was 12¢ more than the previous week.

Cattle futures closed mostly lower Monday, with most of the declines in Live Cattle. Pressure included the inability to spark cash prices higher last week, as well as uneasiness ahead of the monthly World Agricultural Supply and Demand Estimates scheduled to be published Tuesday (see below). There was also likely pressure in the nearby contracts from the monthly Goldman roll, as that firm rolls forward underlying futures contracts in its excess return index portfolio, contracts set to expire in the next month.

Live Cattle futures closed an average of 49¢ lower, except for 7¢ higher in three contracts.

Feeder Cattle futures closed an average of 15¢ lower except for an average of 12¢ higher in the front two contracts.

Choice boxed beef cutout value was 89¢ higher Monday afternoon at $207.69/cwt. Select was 95¢ lower at $195.74.

Corn futures closed 3¢ to 4¢ lower through the front three contracts and then mostly 1¢ to 2¢ higher.

Soybean futures closed 1¢ to 2¢ lower through Aug ‘21 and then mostly 12¢ to 14¢ lower.

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Major U.S. financial indices closed lower Monday, with little momentum one direction or the other.

The Dow Jones Industrial Average closed 89 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 165 points. t

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“The corn futures rally is following soybeans higher, and cash has struggled to keep pace, widening the basis for this time of year. Although exports have been strong, the fundamentals are not currently holding ending stocks tight enough to justify $5 corn,” say analysts with the Livestock Marketing Information Center (LMIC). “Still, there seems little to move the futures lower ahead of U.S. plantings and harvest in South America.”

In the latest Livestock Monitor, LMIC analysts explain the last time nearby Corn futures prices were closing in on $5/bu. was in May of 2014.

“Corn prices at the farm, as reported by USDA-NASS during the 2013-14 crop year ending on Aug. 31, 2014 averaged $4.46/bu. Nearby corn futures finished August 2014 at $3.59, a $1.50 decline in about three months. A record large corn crop of 14.2 billion bu. was about to be harvested, followed by 1.9 billion bu. of the crop being marketed in export markets and 6.6 billion bu. being used domestically for food, industrial and seed purposes. These figures compare to the current situation where production is pegged at 14.5 billion bu. by USDA-NASS,” say LMIC analysts. 

Soybean futures are providing plenty of fuel, with nearby contracts surging by about $1/bu. in the last 10 days to the highest level since June of 2014, according to LMIC.

“The impetus for surging prices (soybeans) has come from adverse crop development conditions in Argentina, the third largest soybean producing country and the leading exporter of soybean meal in the world,” LMIC analysts explain. “Reduced availability of soybeans and soybean products from Argentina is forcing the world to focus on U.S. soybean supplies. Projected exports of U.S. soybeans is expected to be a record at 2.2 billion bu. and soybean meal exports should be close to the record set last year at 14 million tons. As a result, inventories of soybeans at the end of this crop year (Aug. 31, 2021) will be close to 200-220 million bu., down from 909 million bu. two years earlier. 

“Tightening supplies support a rising price trend in order to bid more plantings of the crop in the U.S. this spring versus corn and cotton. The average price for soybeans this crop year is currently expected to be $11.50 but the risks to this forecast are all to the high side, depending on weather and the global economy in coming months. The potential for record high soybean prices in the $15-$20 area exists based on possible market conditions.”

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

Cattle Current Daily—Jan. 11, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle and Colorado through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand with too few transactions to trend.

For the week, despite hopes for gains, prices through Friday afternoon were generally unevenly steady.

Southern Plains: steady at $112/cwt.

Nebraska: steady to $1 lower on a live basis at $110-$111; steady to $1 higher in the beef at $176.

Colorado: Steady to $1 higher on a live basis at $112.

Western Corn Belt: steady to $2 lower on a live basis at $110; steady to $1 higher in the beef at $175-$177.

Through Thursday, the average five-area direct fed steer price was 1¢ higher on a live basis at $111.49/cwt. The average steer price in the beef was 47¢ higher at $176.02.

Cattle futures closed lower Friday. Pressure included demand uncertainty and continued grain market strength.

Live Cattle futures closed an average of 17¢ lower, except for 5¢ higher in Oct.

Feeder Cattle futures closed an average of 52¢ lower.

Choice boxed beef cutout value was 99¢ higher Friday afternoon at $206.80/cwt. Select was 10¢ higher at $196.69.

Corn futures closed 1¢ to 2¢ higher through the front four contracts and then mostly 1¢ lower.

Soybean futures closed 11¢ to 19¢ higher through Sep ‘21 and then mostly 4¢ to 8¢ higher.

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Major U.S. financial indices edged higher Friday, despite a disappointing national employment report.

Total nonfarm payroll employment declined by 140,000 month to month in December, according to the U.S. Bureau of Labor Statistics. The trade expected a slight gain. Average hourly earnings for all employees on private nonfarm payrolls increased 23¢ to $29.81.

The Dow Jones Industrial Average closed 56 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 134 points.

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Although U.S. beef exports for January through November remained lower year over year, they stormed back in November, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

November beef exports totaled 115,337 metric tons (mt), up 6% from a year earlier and the most since July 2019. Export value climbed 8% year-over-year to $707.5 million. November beef muscle cut exports were the third largest on record at 91,338 mt (up 13%, trailing only July and August 2019), valued at $630.4 million (up 11%).

“Demand for U.S. beef in the global retail sector has been outstanding and we expect this to continue in 2021,” says USMEF President and CEO Dan Halstrom. “Unfortunately, foodservice continues to face COVID-related challenges. We expect a broader foodservice recovery this year, especially from mid-2021, but will likely still see interruptions in some markets.”

Among highlights for the month, November exports to China and Guatemala set new monthly records, while shipments to Mexico were the largest since 2016.

Through November, beef exports were 6% lower year-over-year in volume (1.13 million mt) and down 7% in value ($6.9 billion). January-November muscle cut exports were 3% below 2019 in volume (883,012 mt) and 6% lower in value ($6.11 billion).

As for pork, November export volume was steady year over year at 258,801 mt, with value down 2% to $697.5 million. Although China/Hong Kong remained the largest destination for U.S. pork in November, momentum continued to build in other markets including Japan, Mexico and Central America.

January-November pork exports set new annual records for both volume (2.72 million mt, up 14% from the previous year’s pace) and value ($7.03 billion, up 13%). Pork muscle cut exports also shattered previous annual records, increasing 18% year-over-year to 2.29 million mt, valued at $6.08 billion (up 15%).

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

Cattle Current Daily—Jan. 8, 2021

Negotiated cash fed cattle trade was limited on light demand in Kansas, the Northern Plains and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few dressed trades in Nebraska at $177/cwt., which was $1-$2 higher than last week, when live prices were $112 in the Southern Plains and $110-$112 up north.

Firmer Cattle futures and higher outside markets are helping foster optimism for higher cash prices.

The five-area weighted average steer price in December was $109.05/cwt., on a live basis (FOB), which was 20¢ higher than the previous month but $10.95 less than the previous year, according to USDA. The average steer price in the beef (delivered) was $170.94, which was 60¢ higher than the previous month but $20.24 less than the prior year.

Cattle futures closed mostly higher Thursday. Support included the likely need for packers to get cattle bought, in order to maintain the brisk processing pace. Feeder Cattle also benefitted from a pause in escalating Corn futures.

Live Cattle futures closed an average of 26¢ higher, except for 2¢ lower and 25¢ lower on either end of the board.

Feeder Cattle futures closed an average of $1.11 higher.

Choice boxed beef cutout value was 54¢ higher Thursday afternoon at $205.81/cwt. Select was 51¢ higher at $196.59.

The average dressed steer weight the week ending Dec. 25 was 913 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 8 lbs. less than the previous week but 8 lbs. heavier than the same week a year earlier. The average dressed heifer weight of 839 lbs. was 8 lbs. less than the previous week but 2 lbs. heavier than the prior year.

Corn futures closed unchanged to 1¢ lower.

Soybean futures closed 3¢ to 6¢ lower through Sep ‘21 and then mostly 1¢ to 2¢ higher.

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Major U.S. financial indices surged higher Thursday, buoyed in part by clarity surrounding the presidential election and fewer initial unemployment insurance claims than the trade expected.

For the week ending Jan. 2, initial unemployment insurance claims of 787,000 were 3,000 few than the previous week, according to the U.S, Department of Labor. The four-week moving average was 818,750, which was 18,750 fewer than the previous week’s revised average.

The Dow Jones Industrial Average closed 211 points higher. The S&P 500 closed 55 points higher. The NASDAQ up 326 points.

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Digital recipes play a pivotal role in the path to purchase for grocery and consumer packaged goods (CPG), a pathway the Beef Checkoff is using to accelerate ecommerce growth of beef products.

First, some context.

Last summer, Chicory, the leading contextual commerce provider for CPG and grocery brands, released results from the first annual digital recipe usage survey, quantifying the role of digital recipes in the path to purchase. It demonstrated that recipes represent the number one reason a shopper purchases a new product, proving that recipes are a top strategy for getting new and lapsed shoppers to consider trying a brand that they haven’t recently considered.

“This survey confirmed that digital recipes play a pivotal role in the path to purchase for grocery and CPG products,” said Yuni Sameshima, Chicory’s CEO and co-Founder. “This validates the idea that recipes drive consumer behavior. Consumers use recipes to plan ahead for shopping trips, reference recipes in store and re-reference recipes after the shop as they cook. So, a contextual commerce strategy for grocery and CPG brands should integrate commerce-enabled ads within recipes to directly connect recipe and food inspiration to retailers’ sites for purchase.”

More specifically, according to the Chicory survey:

  • 81% of respondents confirmed that they use digital recipes.
  • Recipes are 19% more likely to inspire a shopper to try a new product than a recommendation of a family member or friend; 61% more likely than the item being featured or on sale at the retailer, and 78% more likely than an influencer recommendation.
  • 82% of Americans responded that they reference digital recipes on their mobile devices while they are physically in the store.
  • Baby boomers (18%) were least likely to use recipes. Millennials/Gen Z (48%) and Gen X (34%) were most likely to use recipes.

With all of that in mind, Chicory and the National Cattlemen’s Beef Association (NCBA) announced this week a partnership to raise the profile of beef to American consumers and accelerate ecommerce growth of beef products at Kroger and Kroger banners, Walmart Grocery and Albertson/Safeway banners.

NCBA is a contractor to the Beef Checkoff program and manager of the brand: Beef. It’s What’s for Dinner (BIWD). The Beef Checkoff is leveraging Chicory’s Digital Shopping Aisle experience for two media campaigns, as well as shoppable recipes on BeefItsWhatsforDinner.com.

“At a time when more people are shopping online than ever before, this partnership has allowed us to jump into the world of ecommerce and encourage consumers to enjoy delicious beef for dinner,” says Bridget Wasser, NCBA Senior Executive Director of Product Quality. “Beyond the media campaigns, the shoppable recipes take the work out of dinner from beefy meal ideas, to shopping and grocery delivery with the click of the mouse.”

Chicory’s first-to-market Digital Shopping Aisle solution enables commodity-focused groups to equitably represent beef manufacturers, while executing an effective shopper marketing and contextual commerce campaign. BIWD is utilizing Chicory Premium in recipe ad units to ‘own’ ingredients via in-line units and ‘pairings’ ads to feature products within related content in order to promote beef products in contextually relevant recipes on over 1,500 recipe sites, including Taste of Home, Creme de la Crumb and Fork in the Kitchen.

Consumers see ads that are shoppable at either Kroger and Kroger banners, Walmart Grocery or Albertson/Safeway banners based on retailer geography. Consumers who click on the Walmart Grocery or Albertson/Safeway banners shoppable ads are driven to Chicory’s unique Digital Shopping Aisle, showcasing the available beef products needed for the recipe, such as ground beef, steak and roasts, at a retailer. The Digital Shopping Aisle randomizes the available products that the consumer sees, ensuring a truly equitable experience for each brand and product. Here, shoppers may choose their preferred brand and add the product to their digital shopping cart for a seamless checkout experience. Consumers who click on the Kroger or Kroger banners shoppable ads are driven to customized Kroger landing pages with the various available cuts of beef to make their choice.

The partnership also provides a seamless way for BeefItsWhatsForDinner.com to lead users from inspiration to purchase through Recipe Activation, a commerce-enabled recipe checkout experience. Using Chicory’s shoppable recipe technology, users can purchase instantly all ingredients needed for any of the recipes on BeefItsWhatsForDinner.com.

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

Cattle Current Daily—Jan. 7, 2021

Negotiated cash fed cattle trade was at a standstill in the Northern Plains through Wednesday afternoon. Elsewhere, it was mostly inactive on very light demand, according to the Agricultural Marketing Service.

Cattle feeders offered 1,142 head (mostly from the Southern Plains) in Central Stockyards weekly Fed Cattle Exchange auction on Wednesday. One lot of Southern Plains heifers (42 head) sold for a weighted average price of $112/cwt., via Bid-The-Grid™, which was steady with last week’s country trade in the region.

Likewise, fed steers and heifers traded mostly steady at Sioux Falls Regional’s fat auction. There were 301 head of Choice 3-4 steers weighing an average of 1,559 lbs., bringing an average price of $110.76. Country trade in the region last week was at $110-$112.

Cattle futures closed mixed Wednesday, with Live Cattle firming, while Feeder Cattle were pressured by higher grain prices.

Live Cattle futures closed an average of 40¢ higher, except for 5¢ lower and 60¢ lower on either end of the board.

Feeder Cattle futures closed an average of 68¢ lower.

Choice boxed beef cutout value was 63¢ lower Wednesday afternoon at $205.27/cwt. Select was 41¢ lower at $196.08.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 11¢ to 14¢ higher.

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Except for tech stocks, major U.S. financial indices closed higher Wednesday with investors apparently expecting more economic stimulus and government spending under a Biden administration.

As for known reality, private sector employment decreased by 123,000 jobs from November to December according to the December ADP National Employment Report®. The trade was expecting a month-to-month gain.

The Dow Jones Industrial Average closed 437 points higher. The S&P 500 closed 21 points higher. The NASDAQ was down 78 points.

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Typical beef export seasonality, further potential pandemic disruptions and plentiful fed cattle supplies could test domestic consumer beef demand in the first quarter.

In the latest issue of In the Cattle Markets, Elliott Dennis, livestock economist at the University of Nebraska-Lincoln explains, historically, first-quarter beef export quantities are seasonally lower and more inconsistent than in other quarters; they’re highest and most consistent in the second quarter.

“Local, domestic, and international changes in slaughter rates, supplies of substitute meat products, and consumer beef preferences all influence the domestic wholesale beef price and eventually each country’s desire to import U.S. beef,” Dennis explains.

Production and demand disruptions wrought by the pandemic weighed on U.S. beef exports for much of last year but appeared to be regaining momentum in the fourth quarter.

Through October, U.S. beef exports were 7% less in volume (1.02 million metric tons), compared to the same period a year earlier, according to data released by USDA and compiled by the U.S. Meat Export Federation. Value of January-October beef exports was 8% less than the prior year at $6.2 billion.

“The domestic market likely needs to be the driver of working through wholesale meat supplies in the first quarter,” Dennis says. “Drawing from 2020, the market’s ability to do so could be hindered by meatpacking plant shutdowns (recent example in Guelph, Canada) and government restrictions on social gatherings (increased restrictions in New York State). A positive is that the U.S.-Japan, U.S.-Korea, U.S.-China, and USMCA trade deals are still in place for the time being. Whether we enter round 2 of the U.S.-China trade deal and whether China imports already-committed U.S. beef is more uncertain, given the anticipated change in the presidency.”

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

Cattle Current Daily—Jan. 6, 2020

Negotiated cash fed cattle trade was mostly inactive on very light demand in the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was at a standstill.

Prices on a live basis last week were at $112/cwt. in the Southern Plains, at $111-$112 in Colorado and at $110-$112 in Nebraska and the western Corn Belt. Dressed prices were at $175-$176.

Cattle futures rebounded Tuesday, with Live Cattle gaining back most of what was lost in the previous session, while Feeder Cattle regained about half, on an average basis. That was despite another surge in grain futures prices.

Live Cattle futures closed an average of $1.62 higher, except for $1.40 lower in the back contract.

Feeder Cattle futures closed an average of $1.35 higher, from 75¢ to $2.02 higher.

Choice boxed beef cutout value was $3.97 lower Tuesday afternoon at $205.90/cwt. Select was 4¢ lower at $196.49.

Corn futures closed 8¢ higher through the front three contracts and then mostly 3¢ higher.

Soybean futures closed 26¢ to 33¢ higher through the front six contracts and then mostly 18¢-21¢ higher.

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Major U.S. financial indices closed higher Tuesday amid positive economic news.

Support included the latest Manufacturing ISM®Report On Business®from the Institute for Supply Management (ISM) indicating the Purchasing Managers Index (PMI®) increased 3.2% month to month in December to 60.7%.

“This figure indicates expansion in the overall economy for the eighth month in a row after contracting in March, April, and May, which ended a period of 131 consecutive months of growth,” says ISM Chair Timothy R. Fiore. He adds, “Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories, but absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are causing strains that are limiting manufacturing growth potential.”

As well, West Texas Intermediate Crude Oil futures (CME) surged on the day with a surprise announcement that Saudi Arabia is cutting production by 1 million barrels per day in February and March.

The Dow Jones Industrial Average closed 167 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 120 points.

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Agricultural producer sentiment rose with income prospects in December, according to the latest Purdue University/CME Group Ag Economy Barometer.

The barometer increased 7 points from November to a reading of 174. Both of the barometer’s sub-indices, the Index of Current Conditions and the Index of Future Expectations, were also higher month to month. The Index of Current Conditions climbed 15 points to 202 and the Index of Future Expectations increased by 5 points to a reading of 161.

“The rise in the Ag Economy Barometer was primarily driven by farmers’ perception that the current situation on their farms really improved. The sharp rise in the Index of Current Conditions is correlated with the farm income boost provided by the ongoing rally in crop prices. That appears to be the driving force behind producers’ optimism,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

In December, the percentage of ranchers and farmers expecting farmland values to rise over the next year increased 9 points from November to a reading of 35. The percentage expecting farmland values to rise over the next five years increased 11 points from November to a life-of-survey high 65%.

Likewise, more producers said they expect farmland cash rental rates to rise in 2021 when compared to survey results from late summer. In December, 18% of respondents said they expect cash rental rates to rise in 2021, double the percentage who felt that way in August and September. Moreover, it’s clear that any downward pressure on cash rental rates evident earlier in the year has nearly disappeared, as just 5% of farmers said they expect to see cash rental rates decline in 2021 compared to 17% who felt that way in August.

Agricultural producers were less optimistic when asked about the on-going trade dispute between the U.S. and China. In the first quarter of 2020, an average of 76% of respondents thought the trade dispute’s ultimate resolution would favor U.S. agriculture. By spring, that average declined to 62%, and by December it dropped to an all-time survey low of 47%. When asked whether they expect U.S. agricultural exports to increase over the next five years, only 51% of respondents in December said they expect to see export growth.

To learn more about what factors might be motivating the shift in producers’ sentiment before and after the November election, the surveys for November-December included a series of questions focused on producers’ future expectations for environmental regulations, taxes and other key aspects of the agricultural economy.

In December, more than 80% of ranchers and farmers said they expect environmental regulations to become more restrictive, compared to 41% who felt that way in October. More than 70% of producers expect to see higher income and estate taxes compared to 35% and 40%, respectively, in October and November.

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 from Dec. 7-11, 2020.

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

Cattle Current Daily—Jan. 5, 2020

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Nebraska through Monday afternoon. Elsewhere, it was mostly inactive on very light demand.

Prices on a live basis last week were at $112/cwt. in the Southern Plains, at $111-$112 in Colorado and at $110-$112 in Nebraska and the western Corn Belt. Dressed prices were at $175-$176.

The five-area average direct fed steer price last week was $2.32 higher than the previous week on a live basis at $111.51/cwt. The average steer price in the beef was $3.87 higher at $175.67.

Cattle futures fell hard Monday, beneath the weight of sharply lower outside markets and the unrelenting rise in feed costs.

Live Cattle futures closed an average of $1.83 lower.

Feeder Cattle futures closed an average of $2.72 lower, from $1.15 lower toward the back to $4.20 lower toward the front.

Choice Boxed beef cutout value was 8¢ lower Monday afternoon at $209.87/cwt. Select was 88¢ higher at $196.53.

Corn futures closed mostly fractionally lower.

Soybean futures closed mostly 4¢ to 6¢ higher.

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Equities sold off at a brisk pace Monday, with most of the fuel appearing to be investor fears that a win by Democrats in Tuesday’s Georgia runoff election—giving that party control of both houses—could lead to an adverse business environment: higher taxes, more regulations, etc. Major U.S. financial indices closed off of session lows, though.

The Dow Jones Industrial Average closed 382 points lower. The S&P 500 closed 55 points lower. The NASDAQ was down 189 points.

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“Strong beef demand and tightening cattle supplies provide cautious optimism for cattle markets in 2021,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Higher feed prices and continuing drought conditions are threats to individual producers and perhaps to overall market conditions in the coming year. Consumer demand will be supported by additional federal stimulus for a time but continuing macroeconomic challenges will persist through the year. The continuing pandemic and the time needed for vaccine implementation suggest that much of the promise of 2021 may be pushed into the second half of the year. In the meantime, uncertainty and volatility are likely to remain elevated and risk management continues to be a key management and marketing consideration.”

Peel points out cash corn prices in December, on average, were about 22% higher year over year, while sorghum prices up more than 50%, wheat prices were about 30% higher and soybean prices were up 35%.

“Cattle production will be affected by higher feed prices, not so much in terms of how much production will occur, but more in terms of how production will change,” Peel says. “For example, higher ration costs will change feedlot demand for the type and size of feeder cattle preferred in feedlots.”

On the plus side, Peel explains current hay supplies appear to be adequate with late- 2020 hay prices slightly less year over year for both alfalfa and other hay. Prices are projected lower for this year.

However, he also explains 41% of the U.S. was experiencing some degree of drought at the end of last year, mostly in the western half of the country. That was 31% more than a year earlier.

“The current level of drought is concerning and, should it persist into the coming growing season, may have significant impacts rather quickly in 2021,” Peel says.

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

Cattle Current Daily—Jan. 1-4, 2021

Negotiated cash fed cattle prices for the week were generally steady to mostly $2 higher on a live basis through Thursday afternoon, according to the Agricultural Marketing Service: $112/cwt. in the Southern Plains, mostly $112 in Nebraska, mostly $111 with a few up to $112 in Colorado. They were steady to $6 higher week to week in the western Corn Belt at $110-$112. Dressed trade was $3-$4 higher at $175-$176.

Cattle futures closed mostly higher Thursday, helped along by stronger front-month Lean Hog futures.

Live Cattle futures closed an average of 62¢ higher.

Feeder Cattle futures closed an average of 26¢ higher, except for an average of 17¢ lower in three contracts.

Choice boxed beef cutout value was 58¢ lower Thursday afternoon at $209.95/cwt. Select was $4.21 lower at $195.65.

The average dressed steer weight of 921 lbs. the week ending Dec. 19 was 1 lb. lighter than the previous week, but 17 lbs. heavier than the same time a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 847 lbs. was 1 lbs. lighter than the previous week, but 14 lbs. heavier year over year.

Net U.S. beef export sales of 14,900 metric tons reported for 2020 were up noticeably from the previous week and up 82% from the prior four-week average, according to the U.S. weekly Export Sales report for the week ending Dec. 24. Increases were primarily for Japan, China, South Korea, Mexico and Canada.

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Strong exports combined with iffy South American production continued to fuel grain futures. According to USDA’s Weekly Export Sales report, net U.S. corn export sales of 964,500 metric tons (MT) for 2020/2021 were up 48% from the previous week, but down 27% from the prior four-week average.

Net U.S. soybean export sales of 695,400 MT for 2020/2021 were up 97% from the previous week and 25% percent from the prior four-week average.

Net U.S. wheat export sales of 520,600 metric tons (MT) for 2020/2021 were up 32% from the previous week and up 4% from the prior four-week average.

On Thursday, Corn futures closed 8¢ to 9¢ higher through Jly ‘21 and then mostly 1¢ higher.

Soybean futures closed 9¢ to 11¢ higher through May ‘21. And then mostly 5¢ to 8¢ higher.

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Major U.S. financial indices closed higher. Support included weekly initial unemployment insurance claims of 787,000, according to the U.S. Department of Labor. That was 19,000 fewer than the previous week and more positive than the trade expected.

The Dow Jones Industrial Average closed 196 points higher. The S&P 500 closed 24 points higher. The NASDAQ was up 18 points.

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When you consider the unprecedented market disruptions spawned by the pandemic in 2020, perhaps the most extraordinary realization is how well markets work, though we don’t always understand the finer points or like the outcome.

Among cattle market lessons and reminders gleaned:

“If packers cannot run or cannot run at typical throughput levels—especially if animal supplies are abundant—then the marginal value of that last group of animals that is not sold is close to zero. And the last pen or truckload or group of animals is a perfect substitute for the first. It is the marginal value of the last product that sets the market. This point is critical. In fact, that is what is communicated by economists when supply and demand curves are drawn. The equilibrium quantity and price are what is traded at the lowest marginal value to buyers and the highest marginal value to sellers.”—from Economic Reasons for What was Observed in Fed Cattle and Beef Markets During the Spring of 2020 by Stephen Koontz, agricultural economist at Colorado State University.

“‘We heard a lot of questions about how it was possible that farm prices could decline while wholesale prices increased, if the market was even halfway functioning,” explained Ted Schroeder, agricultural economist at Kansas State University. “It’s a market phenomenon. The direction of price change and the magnitude of change is exactly what our demand models suggested. We’re surprised by the veracity of the event every day, but we’re not surprised by what the market responses have been.’”

He was explaining the difference between primary and derived demand—from Beef Demand is Everything, BEEF magazine, by Wes Ishmael.

“Much attention has been paid to the increase in apparent gross margins for beef packers, which was the impetus of the USDA investigation. However, this spread is a metric of just two factors, live cattle prices and wholesale beef prices. It does not reflect all costs incurred in harvesting and processing cattle into beef. The cattle-to-beef margin excludes other operating costs, such as labor costs. Because of the impact of COVID, including procuring personal protective equipment, redesigning plant operations, and other necessary adjustments, labor and other operating costs increased.

“More importantly, the cattle-to-beef margin does not reflect fixed costs. Fixed costs constitute the largest percentage of overhead for meat packers. Overall, per head margins on processing cattle rise dramatically as slaughter throughput is decreased. Fixed costs must be spread out across the volume of cattle processed. Reducing the number of cattle processed by up to one-third, or idling a plant for several days, adds significantly to the per head cost of slaughter and processing.”—from Analysis of USDA’s Boxed Beef and Fed Cattle Price Spread Investigation Report, by Dave Juday of The Juday Group.

“The U.S. has fewer FI (federally inspected) cattle slaughter plants than it had 20 years ago. But, the current number of FI plants is the highest since 2004. In 1998, the U.S. had 795 FI cattle slaughter plants. Plant numbers bottomed at 626 in 2007 and 627 in 2012, before reaching 670 in 2019. In 2019, 71.6% of FI slaughter plants each slaughtered between 1 and 999 head annually, 16.0% slaughtered between 1,000 and 9,999 head, and 10.6% slaughtered between 10,000 and 999,999. This compares to 71.7%, 14.8% and 11.7%, respectively, in 1998. Plants that each slaughtered over one million head only comprised 1.8% of the total number of U.S. FI cattle slaughter facilities in both 1998 and 2019. Nonetheless, it remains the case that roughly 60% of total beef‐and pork‐processing capacity is provided by the 10 largest beef and the 15 largest pork packing plants (National Pork Board 2019)”—from Beef and Pork Marketing Margins and Price Spreads during COVID-19, by agricultural economists, Jayson Lusk at Purdue University, Lee Shultz at Iowa State University and Glynn Tonsor at Kansas State University.

By | December 31st, 2020|Daily Market Highlights|

Cattle Current—Dec. 31, 2020

Negotiated cash fed cattle prices edged higher Wednesday amid light trade. Although there were too few transactions to trend in any region, there were some live trades $1 higher in the Southern Plains at $111/cwt., some at steady money in Nebraska at $110 and a few $2-$6 higher in the western Corn Belt at $112. There were also a few dressed sales $4 higher in Nebraska at $176.

Cattle feeders offered 1,015 head (six lots) in the Central Stockyards weekly Fed Cattle Exchange auction Wednesday. One lot of heifers—194 head—from the Southern Plains sold for a weighted average price of $111/cwt. on a live basis.

Cattle futures closed mostly lower Wednesday, especially Feeder Cattle, as grain futures continued surging higher.

Live Cattle futures closed an average of 19¢ lower, except for 7¢ and 27¢ higher at either end of the board.

Feeder Cattle futures closed an average of $1.14 lower.

Choice boxed beef cutout value was 23¢ higher Wednesday afternoon at $210.53/cwt. Select was $4.38 higher at $199.86.

Corn futures closed 5¢ to 8¢ higher through Sep ‘21 and then mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 5¢ to 7¢ higher.

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Major U.S. financial indices edged higher Wednesday with some support from a third COVID-19 vaccine approved for emergency use in the United Kingdom.

The Dow Jones Industrial Average closed 73 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 19 points.

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Economic destruction continues across the restaurant sector and will likely get worse before it improves, according to a recent survey conducted by the National Restaurant Association (NRA).

“What these findings make clear is that more than 500,000 restaurants of every business type—franchise, chain, and independent—are in an economic free fall. And for every month that passes without a solution from Congress, thousands more restaurants will close their doors for good.” That’s from the letter penned by Sean Kennedy, NRA executive vice president for Public Affairs. It was sent to Congress earlier this month, explaining the dire need for more government assistance to restaurants, which are the nation’s second largest private sector employer.

The NRA Research Group surveyed 6,000 restaurant operators and 250 supply chain businesses Nov. 17-30, 2020.

Among the stark survey findings:

**87% of full-service restaurants (independent, chain, and franchise) reported an average 36% drop in sales revenue. “For an industry with an average profit margin of 5%-6%, this is simply unsustainable,” Kennedy explained.

**83% of full-service operators expect sales to be even worse over the next three months.

**59% of operators say their total labor costs (as a percentage of sales) are higher than they were pre-pandemic.

**58% of chain and independent full-service operators expect continued furloughs and layoffs for at least the next three months.

**17% of restaurants—more than 110,000 establishments—were closed permanently or long-term.

            “The vast majority of permanently closed restaurants were well-established businesses, and fixtures in their communities. On average these restaurants had been in business for 16 years, and 16% had been open for at least 30 years,” according to the NRA letter. “Only 48% of these former restaurant owners say it is likely they will remain in the industry in any form in the months or years ahead. Our nation is losing a generation of industry talent, knowledge and entrepreneurial spirit.”

By | December 30th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 30, 2020

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Tuesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. Elsewhere, it was at a standstill.

Last week, prices in the Southern Plains were $2 higher on a live basis at $110/cwt., $5 higher in Nebraska at $110 and $1-$5 higher in the western Corn Belt at $106-$110. Dressed trade was $7 higher at $172.

Cattle futures closed lower Tuesday with pressure from surging grain futures and despite the prospect of higher cash prices this week as packers reload and retailers restock.

Live Cattle futures closed an average of 63¢ lower, except for an average of 5¢ higher in two contracts toward the back.

Feeder Cattle futures closed an average of 99¢ lower from 52¢ lower at the back to $1.37 lower in spot Jan.

Choice boxed beef cutout value was $2.48 higher Tuesday afternoon at $210.30/cwt. Select was $1.17 lower at $195.48.

Corn futures closed mostly 5¢ to 9¢ higher through Jly ‘22 and then mostly fractionally higher.

Soybean futures closed 35¢ to 40¢ higher through Aug ’21, and then mostly 6¢ to 13¢ higher.

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Major U.S. financial indices edged lower Tuesday on some likely profit taking and pressure from further COVID-19 stimulus wrangling in Congress.

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 49 points. 

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“Our livestock producers need all the tools in the toolbox to help protect against animal diseases and continue to meet the challenge of feeding everyone now and into the future. If we do not put these safe biotechnology advances to work here at home, our competitors in other nations will,” said U.S. Secretary of Agriculture Sonny Perdue last week, in announcing a significant step in modernizing regulations of agricultural animals modified or produced by genetic engineering.

USDA will move forward with an Advanced Notice of Proposed Rulemaking (ANPR) to solicit public input and feedback on a contemplated regulatory framework that would modernize the current system into a scientifically-sound, risk-based, and predictable process that facilitates the development and use of these technologies for U.S. farmers and ranchers under USDA’s authorities.

“Science-based advances in biotechnology have great promise to continue to enhance rural prosperity and improve the quality of life across America’s heartland and around the globe,” Secretary Perdue explained. “With this effort, we are outlining a pragmatic, science-based, and risk-based approach that focuses on potential risk to animal and livestock health, the environment, and food safety in order to provide our farmers and ranchers the tools they need to continue to feed, clothe and fuel the world.”

Last year, President Trump directed federal agencies to modernize the regulatory framework for agricultural biotechnology products by establishing regulatory approaches proportionate to the product’s risks, avoid unjustified distinctions across similar products, and promote future innovation and competitiveness.

The ANPR will transition portions of the U.S. Food and Drug Administration’s (FDA) pre-existing animal biotechnology regulatory oversight to USDA.

As mentioned previously in Cattle Current, the FDA last month approved the first intentional genomic alteration (IGA) in an animal for both human food consumption and as a source for potential therapeutic uses. It’s for a line of domestic pigs referred to as GalSafe pigs. The IGA is intended to eliminate alpha-gal sugar on the surface of the pigs’ cells. People with Alpha-gal syndrome (AGS) may have mild to severe allergic reactions to alpha-gal sugar found in red meat (e.g., beef, pork, and lamb).

By | December 29th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 29, 2020

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, prices in the Southern Plains were $2 higher on a live basis at $110/cwt., $5 higher in Nebraska at $110 and $1-$5 higher in the western Corn Belt at $106-$110. Dressed trade was $7 higher at $172.

The five-area direct weighted average steer price last week was $109.19/cwt. on a live basis, which was $3.07 more than the previous week. The average steer price in the beef was $6.51 more at $171.80, according to USDA’s weekly report.

The five-area direct weighted average fed heifer price was $109.68/cwt. on a live basis, which was $3.25 more week to week. The average dressed heifer price was $6.74 more at $171.91.

Choice boxed beef cutout value was 21¢ higher Monday afternoon at $207.82/cwt. Select was $1.28 lower at $196.65.

Estimated total cattle slaughter for the week ending Dec. 26 was 419,000 head, which was 56,000 head fewer (-11.8%) than the same time a year earlier. Year-to-date estimated total cattle slaughter of 31.7 million head was 1.1 million head fewer (-3.5%) than in 2019.

Total estimated beef production for the week of 352.5 million lbs. was 40.2 million lbs. less (-10.2%) than the same time last year. Estimated year-to-date beef production of 26.37 billion lbs. was 264.3 million lbs. less (-1%) than a year earlier.

Cattle futures closed mostly higher Monday, but off of session highs, supported by stronger cash prices late last week, higher outside markets and a winter storm aiming for the Corn Belt.

Live Cattle futures closed an average of 46¢ higher.

Feeder Cattle futures closed narrowly mixed from an average of 9¢ lower to an average of 14¢ higher.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed 7¢ to 8¢ lower through Aug ’21, and then 1¢ to 4¢ higher.

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Major U.S. financial indices bounced higher Monday, supported by President Trump’s signature on the government-spending bill, which includes an additional $900 billion in COVID-19 relief. 

The Dow Jones Industrial Average closed 204 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 94 points.

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Although signals are mixed, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says it’s likely the beef cowherd Jan. 1 will be unchanged from the prior year to 1% less.

In his weekly market comments, Peel explains cowherd expansion or liquidation depends on both heifer retention and cow culling.

At the beginning of this year, beef replacement heifers were 18.4% of the beef cow inventory.

“This was down from the peak retention in 2016 of 21.0%, when herd expansion was in full force,” Peel says. “Historically, the replacement heifer percentage drops below 18% during herd liquidation. Of course, producer plans can change during the year. The July inventory estimate for beef replacement heifers was unchanged from last year but is a low enough level to potentially suggest some herd liquidation.”

Concurrently, Peel explains heifers in feedlots in 2020, on average, were 1.1% less year over year, with an Oct. 1 estimate about equal to a year earlier. Heifer slaughter this year is projected to be down about 3.6% compared to last year. 

“Heifer slaughter as a percent of the cow inventory is not low enough to suggest herd expansion nor large enough to suggest significant liquidation,” Peel says.  “Taken together, the various heifer data seem to suggest mostly steady heifer retention, which could support a 2021 herd inventory either side of unchanged from 2020 levels.”

As for cow culling, estimated beef cow slaughter in 2020 is 2.6% higher year over year, implying a net beef cow culling rate (beef cow slaughter as a percent of herd inventory) of 10.5%, according to Peel.

“Beef cow culling has increased from the record low level of 7.6% in 2015, when herd expansion was accelerated. Herd culling above 10% is consistent with modest levels of herd liquidation, though the current level is below the culling rates (typically above 11%) that indicate significant herd liquidation. The mid-year cattle report pegged the beef cow inventory down 0.8% year over year, generally consistent with the cow slaughter data this year,” Peel says.

If beef cow numbers are the same to 1% less than the previous year, in the next Cattle report (due out Jan. 29), then Peel says it would continue the slow tightening of beef cattle numbers and beef production in 2021.

“Total 2021 cattle slaughter is forecast to be down about 1%, leading to a year-over-year decrease in beef production of 1% to 2%,” Peel says. “Herd dynamics in 2021 could affect these forecasts. If herd liquidation should accelerate, the short-term impacts would be an increase in cattle slaughter due to more heifers and cows in the slaughter totals. Conversely, should the industry move to expand cattle inventories, cattle slaughter would be reduced with fewer heifers in feedlots and fewer cows culled. There is potential for either scenario. The cattle inventory trajectory in 2021 will depend on numerous factors including control of the pandemic, U.S. macroeconomic conditions, global protein markets, drought conditions, and feed prices, among others.”

By | December 28th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 28, 2020

Negotiated cash fed cattle was not reported Thursday or Friday. On Wednesday, prices were $2 higher in the Southern Plains at $110/cwt., according to the Agricultural Marketing Service. There were some early dressed sales in Nebraska and the western Corn Belt at $172; a few live sales in the western Corn Belt at $110. Trade in those regions the previous week was at mostly $105 on a live basis and mostly $165 in the beef.

Choice Boxed beef cutout value was $3.13 lower on Wednesday at $207.54/cwt. Select was $1.66 lower at $197.93.

The average dressed steer weight the week ending Dec. 12 was 922 lbs., which was the same as the prior week but 18 lbs. heavier than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 848 lbs. was 2 lbs. lighter week to week but 7 lbs. heavier year over year.

Cattle futures closed narrowly mixed but mostly slightly higher in Thursday’s short session, amid extremely light holiday trade. Heading into the new week, support from stronger cash prices and the outlook for higher wholesale beef values will likely compete with year-end position squaring.

Live Cattle futures closed an average of 21¢ higher except for 7¢ lower in the back contract.

Feeder Cattle futures closed an average of 25¢ higher except for unchanged to 40¢ lower in three contracts.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed 4¢ to 5¢ higher through Aug ’21, and then fractionally lower to 1¢ lower.

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Major U.S. financial indices edged higher Thursday amid light holiday trade.

The Dow Jones Industrial Average closed 70 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 33 points.

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Total cattle slaughter under federal inspection (FI) in November of 2.66 million head was 80,100 fewer (-2.93%) than the same time last year, according to USDA’s monthly Livestock Slaughter report. For January through November total FI cattle slaughter of 29.42 million head was 939,000 head fewer (-3.09%) than the same period last year.

FI fed steer and heifer slaughter in November of 2.09 million head was 49,400 (-2.31%) less year over year. For January through November, total FI fed cattle slaughter was 23.17 million head, which was 823,200 head fewer (-3.43%) than the same time last year.

Commercial beef production in November of 2.26 billion lbs. was 34 million lbs. less (-1.48%) than a year earlier. For January through November, commercial beef production of 24.82 billion lbs. was 62.4 million lbs. less (-0.25%) than the same period last year.

However, total commercial red meat production through the first 11 months of the year was 50.80 billion lbs., which was 513.2 million lbs. more (+1.02%) year over year. Pork production drove the increase.

By | December 27th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 24-25, 2020

Negotiated cash fed cattle prices were $2 higher in the Southern Plains Wednesday at $110/cwt., with moderate trade and demand, according to the Agricultural Marketing Service. Elsewhere, trade was slow on light to moderate demand. Although too few to trend, there were some early dressed sales in Nebraska and the western Corn Belt at $172; a few live sales in the western Corn Belt at $110. Trade in those regions last week was at mostly $105 on a live basis and mostly $165 in the beef.

Also on Wednesday, Central Stockyards hosted its weekly Fed Cattle Exchange auction with a new bidding platform. Cattle feeders offered 803 head. Of those, 545 head (four lots) sold for an average of $110/cwt. Cattle sold were all heifers and all from the Southern Plains. Three lots sold via Bid-the-GridTM; the other on a live basis.

Stronger week-to-week prices were also seen at the fat auction in Tama, IA where Choice steers and heifers traded $1.75 to $2.25 higher. There were 136 Choice 2-4 steers bringing an average price of $107.22/cwt.

Choice boxed beef cutout value was $3.13 lower at $207.54/cwt. Wednesday afternoon. Select was $1.66 lower at $197.93.

Net U.S. beef export sales of 6,000 metric tons for the week ending Dec. 17 were 40% less than the previous week, but up noticeably from the prior four-week average, according to USDA’s weekly U.S. Export Sales report. Increases were primarily for Japan, South Korea, Mexico, Canada and Hong Kong.

Cattle futures closed higher Wednesday, supported by stronger cash prices and a surge in Lean Hog futures, likely tied in part to the previous day’s friendly Cold Storage report. As well, the Quarterly Hogs and Pigs reporthat came out later in the day indicates the inventory of all hogs and pigs as of Dec. 1 was 1% less year over year; 3% lower for the breeding inventory.

Live Cattle futures closed an average of 97¢ higher from 65¢ higher toward the back to $1.60 higher in waning spot Dec.

Feeder Cattle futures closed an average of 35¢ higher except for 15¢ lower in Oct.

Corn futures closed mostly 3¢ higher through Jly ‘22 and then mostly fractionally higher.

Soybean futures closed 5¢ to 11¢ higher through Aug ’21, and then mostly 3¢ to 7¢ lower.

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Major U.S. financial indices closed mixed Wednesday. Primary uneasiness seemed tied to President Trump vetoing the Defense Bill and waiting to sign the Spending Bill, demanding more COVID-19 relief.

The Dow Jones Industrial Average closed 114 points higher. The S&P 500 closed 2 points higher. The NASDAQ was down 38 points.

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Higher feed costs are pressuring projected feedlot returns for the majority of the next nine months, according to the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University (KSU).

Keep in mind that the following projections assume no price risk management.

From December through August of next year, KSU projected positive returns in four months for fed steers: December, March, May and June. Projected returns range from +$14.99 per head in December to +$91.11 in May, with estimated feedlot cost of gain (FCOG) ranging from $84.67/cwt. (Dec.) to $91.11 in May.

Conversely, KSU projects losses in five of those nine months, ranging from -$6.28 per head in August to -$47.92 in July, with FCOG in those months ranging from $86.14/cwt. in January to $92.38 in April.

Projected fed steer return in November was $35.83 per head with an FCOG of $78.92/cwt.

Projected returns for fed heifers follow a similar path, with positive returns expected in December, March and May, ranging from +$11.90 per head in March to +$60.83 in May, with FCOG at $92.17 (Dec.) to $98.00 (May).

Negative fed heifer returns are projected in six of the nine months, from -$21.71 per head in June to -$100.99 in July, with FCOG from $94.59/cwt. in January to $100.48 in July.

Projected fed heifer return in November was $42.42 per head with FCOG of $85.41/cwt.

By | December 23rd, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 23, 2020

Negotiated cash fed cattle trade was at a standstill in the Southern Plains through Tuesday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited to mostly inactive on very light demand. Although too few transactions to trend, there were a few live sales in the western Corn Belt at $103.00 to $106.25/cwt. Last week, live sales were at $108/cwt. in the Southern Plains and at mostly $105 in Nebraska and the western Corn Belt. Dressed trade was at mostly $165.

Cattle futures closed lower Tuesday, likely pressured in part by some pre-holiday position squaring, technical correction and the lack of cash direction.

Live Cattle futures closed an average of 70¢ lower from 27¢ lower in spot Dec to $1.20 lower.

Feeder Cattle futures closed an average of 81¢ lower except for unchanged in the back two contracts.

Choice boxed beef cutout value was 25¢ lower at $210.67/cwt. Select was $2.33 higher at $199.59.

Corn futures closed 1¢ to 3¢ higher through Sep ‘21 and then mostly fractionally lower to 1¢ lower.

Soybean futures closed 2¢ to 4¢ higher through Aug ’21, and then mostly 1¢ to 3¢ lower.

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Major U.S. financial indices closed mixed again Tuesday. Despite Congress passing a federal spending bill for next year, including another round of pandemic economic stimulus, investors seemed to focus more on escalating COVID-19 cases.

The Dow Jones Industrial Average closed 200 points lower. The S&P 500 closed 7 points lower. The NASDAQ closed 65 points higher.

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Overall, total red meat and poultry supplies in freezers as of Nov. 30 were lower year over year, according to USDA’s monthly Cold Storage report.

Total red meat supplies in freezers were down 2% from the previous month and down 12% percent from last year.

Total pounds of beef in freezers were 2% more than the previous month and 7% more year over year.

Frozen pork supplies were down 7% from the previous month and down 28% from last year. Stocks of pork bellies were up 21% from the prior month but down 58% from a year earlier. Bone-in hams for the month were the least since the data series began in 1995.

Total frozen poultry supplies were down 16% from the previous month and down 10% from a year earlier.

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“Placements below a year ago in October and November helped greatly reduce inventories on feed. October placements were down by more than 10%, and November settled in at 9% below 2019,” say analysts with the Livestock Marketing Information Center (LMIC), reflecting on last week’s monthly Cattle on Feed report.

At the same time, LMIC analysts explain the number of cattle on feed more than 120 days increased back above year-ago levels, driven by higher placement numbers in the third quarter and lower marketings in November.

“From a placement perspective, December auction volumes of feeder cattle receipts appear to have increased from December of last year, but border crossings of feeder cattle from Mexico continue to be below a year ago,” LMIC analysts explain, in the latest Livestock Monitor. “The five-year average indicates December placements drop about 15% from November levels. Given November’s already low placements, expect December 2020 placements to have a restrained seasonal move compared to the five-year average.”

By | December 22nd, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 22, 2020

Negotiated cash fed cattle trade was at a standstill in the five-area feeding region through Monday afternoon, according to the Agricultural Marketing Service. Live sales last week were at $108/cwt. in the Southern Plains and at mostly $105 in Nebraska and the western Corn Belt. Dressed trade was at mostly $165.

Cattle futures closed mainly higher Monday, supported by the nascent reversal in wholesale beef values and Friday’s friendly Cattle on Feed report.

Live Cattle futures closed an average of 28¢ higher except for 22¢ lower in near Feb.

Feeder Cattle futures closed an average of 73¢ higher from 17¢ higher in spot Jan to $1.02 higher at the back.

Wholesale beef prices continued to firm. Choice boxed beef cutout value was $2.29 higher at $210.92/cwt. Monday afternoon. Select was $2.99 higher at $197.26.

Corn futures closed 1¢ to 2¢ higher through Jly ‘22 and then mostly unchanged to fractionally lower.

Soybean futures closed 17¢ to 23¢ higher through Aug ’21, and then mostly 7¢ to 10¢ higher.

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Major U.S. financial indices closed narrowly mixed Monday amid widely volatile trade that began with a steep selloff based on concerns about the new COVID-19 strain discovered in the United Kingdom. By session’s end, though, cooler heads prevailed with optimism Congress would pass the new federal spending bill—including another round of pandemic stimulus.

The Dow Jones Industrial Average closed 37 points higher. The S&P 500 closed 14 points lower. The NASDAQ was down 13 points.

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Volatile feedlot flows stemming from pandemic disruptions made it more difficult than usual to assess the fed cattle market, but that should change going forward, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel explains the extent of the volatility.

Monthly feedlot placements varied from 23% lower year over year in March to 11% higher in July, to 11% lower in October. “For the January to November period, total placements are down 4.4% year over year. In the last six months, which would include the majority of current feedlot inventories, placements are 0.5% above the same period last year,” Peel says.

Monthly feedlot marketings varied from 13% higher year over year in March to 27% lower in May to 6% higher in September. “For the year to date through November, total marketings are down 3.1% year over year. In the last six months, feedlot marketings are just fractionally higher than the same period last year,” according to Peel.

As of Dec. 1, there were 12.04 million head of cattle on feed (yards with 1,000 head or more capacity), according to the monthly Cattle on Feed report. That  was about even with the same time last year. Those numbers should continue a cyclical decline.

“Flows of cattle through feedlots should begin to show more consistent tightening in 2021,” Peel says. “The beef cowherd was at a peak in January 2019 and led to a 2019 calf crop that was down 0.7% from the 2018 peak calf crop. The estimated feeder cattle supply on Jan. 1, 2020 was down 0.4% from 2019 levels. The estimated 2020 calf crop in the July Cattle report is down another 0.7% from 2019. The July estimate of feeder cattle supplies was up slightly but was likely pushed higher due to the intra-year dynamics of feedlot placements. Current estimates suggest that the total calf crop in 2020 is 513,000 head less than the peak in 2018.”

So far this year, Peel explains total cattle slaughter is 2.8% less year over year. It should decline again next year.

“With herd inventories continuing to drift lower, total cattle numbers should be generally supportive of cattle prices in 2021,” Peel says.

By | December 21st, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 21, 2020

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 very light demand. Although too few to trend, there were a few live sales in Nebraska at $107/cwt.

For the week, live sales were steady in the Southern Plains at $108/cwt., $1-$2 lower in Nebraska at $105 and $1 lower in the western Corn Belt at $105. Dressed trade was $3 lower at $165.

Choice boxed beef cutout value was 88¢ lower at $208.63/cwt. Select was 57¢ higher at $194.27.

Estimated total cattle slaughter last week of 659,000 head was 6,000 head fewer than the previous week and 9,000 head fewer than the same week last year.

Year-to-date estimated total cattle slaughter of 31.29 million head is 1.08 million fewer (-3.3%) than last year. Estimated year-to-date beef production of 26.02 billion lbs. is 223.6 million lbs. less (-0.85%) than the same time last year.

Net U.S. beef export sales for the week ending Dec. 10 were up noticeably from the prior week and 15% more than the previous four-week average, according to USDA’s weekly U.S. Export Sales report. Increases were primarily for Japan, South Korea, Canada, Mexico and China.

Cattle futures closed narrowly mixed Friday, as traders awaited the monthly Cattle on Feed report (see below), and in the face of rising grain futures prices.

Live Cattle futures closed an average of 36¢ higher except for unchanged to an average of 3¢ lower in three contracts.

Feeder Cattle futures closed narrowly mixed from an average of 33¢ lower to an average of 15¢ higher.

Corn futures closed 3¢ to 5¢ higher through Jly ‘22 and then unchanged to fractionally higher.

Soybean futures closed 12¢ to 18¢ higher through Aug ’21, 7¢ to 9¢ higher through Sep ’22 and then mostly fractionally lower.

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Major U.S. financial indices closed lower Friday as Congress tried to reach agreement for additional federal stimulus, tied to next year’s government spending bill. A spending bill stopgap was set to expire Saturday, risking government shutdown. Lawmakers wrangled a two-day extension set to expire first thing Monday morning.

The Dow Jones Industrial Average closed 124 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 9 points.

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Markets will likely view Friday’s monthly Cattle on Feed report as at least neutral, with slightly fewer November placements and slightly more marketings than expected.

Placements in November of 1.91 million head were 187,000 head fewer (-8.9%) than the prior year, compared to average expectations of 8.2% less, according to the Urner Barry Survey shared by the Daily Livestock Report.

In terms of weight, 51.41% went on feed weighing less than 600 lbs., 37.04% weighing 700-899 lbs. and 11.54% weighing 900 lbs. or more.

Marketings in November of 1.78 million head were 31,000 head fewer (-1.7%); pre-report expectations were for a decline of 2.1%.

Total cattle on feed in yards with 1,000 or more capacity, as of Dec. 1, were 12.04 million head, just 5,000 head more (+0.04%) than the previous year. Expectations ahead of the report were for no change.

By | December 19th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 18, 2020

Negotiated cash fed cattle prices were steady in the Southern Plains through Thursday afternoon at $108/cwt., according to the Agricultural Marketing Service, but there were too few transactions for a market trend.

There were also some live trades in Nebraska at $105, steady with the previous day but $1-$2 lower than the previous week. Dressed trades there on Wednesday were $3 lower at $165.

So far this week live trades are steady to $1 lower in the western Corn Belt at $105 on a lived basis and $3 lower in the beef at $165.

Cattle futures closed higher Thursday, supported by early signs that wholesale beef prices may be at or near the seasonal ebb. Firmness could also stem from expectations that Friday’s monthly Cattle on Feed report will be market friendly, with significantly lower year-over-year placements in November.

Live Cattle futures closed an average of 50¢ higher.

Feeder Cattle futures closed an average of 82¢ higher from 12¢ higher in spot Jan to $1.22 higher.

Corn futures closed 3¢ to 5¢ higher through Sep ‘21 and then mostly 1¢ higher.

Soybean futures closed 14¢ to 17¢ higher through Aug ’21 and then mostly 7¢ to 9¢ higher.

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Major U.S. financial indices closed higher Thursday, buoyed by increasing optimism for more federal economic stimulus, as well as a second COVID-19 vaccine receiving a key nod off approval from FDA.

The Dow Jones Industrial Average closed 148 points higher. The S&P 500 closed 21 points higher. The NASDAQ was up 106 points.

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This week, the U.S. Food and Drug Administration (FDA) approved the first intentional genomic alteration (IGA) in an animal for both human food consumption and as a source for potential therapeutic uses. It’s for a line of domestic pigs referred to as GalSafe pigs. The IGA is intended to eliminate alpha-gal sugar on the surface of the pigs’ cells. People with Alpha-gal syndrome (AGS) may have mild to severe allergic reactions to alpha-gal sugar found in red meat (e.g., beef, pork, and lamb).

“Today’s first ever approval of an animal biotechnology product for both food and as a potential source for biomedical use represents a tremendous milestone for scientific innovation,” says FDA Commissioner Stephen M. Hahn, M.D. “As part of our public health mission, the FDA strongly supports advancing innovative animal biotechnology products that are safe for animals, safe for people, and achieve their intended results. Today’s action underscores the success of the FDA in modernizing our scientific processes to optimize a risk-based approach that advances cutting-edge innovations in which consumers can have confidence.”

As part of its review, the FDA evaluated the safety of the IGA for the animals and people eating meat from them, as well as the product developer’s intention to market the IGA for its ability to eliminate alpha-gal sugar on pigs’ cells. The FDA  determined that food from GalSafe pigs is safe for the general population to eat. The FDA’s review also focused on ensuring the effectiveness of the IGA through the evaluation of data demonstrating that there is no detectable level of alpha-gal sugar across multiple generations of GalSafe pigs.

Potentially, GalSafe pigs may provide a source of porcine-based materials to produce human medical products that are free of detectable alpha-gal sugar, according to FDA. For example, GalSafe pigs could potentially be used as a source of medical products, such as the blood-thinning drug heparin, free of detectable alpha-gal sugar. Tissues and organs from GalSafe pigs could potentially address the issue of immune rejection in patients receiving xenotransplants, as alpha-gal sugar is believed to be a cause of rejection in patients.

By | December 17th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 17, 2020

Negotiated cash fed cattle trade was slow to moderate on moderate demand in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service (AMS). Live prices were $1-$2 lower than last week at $105/cwt. Dressed prices were $3 lower at $165.

There were a few early sales in the western Corn Belt at $105 live and at $165 in the beef, but too few to trend. Prices last week were at $104-$105 and $168, respectively.

Trade was at a standstill in the Southern Plains. Prices there last week were at $108.

However, slaughter steers at the Sioux Falls Regional auction in South Dakota sold $3-$5 higher; $2-$4 higher for fat heifers. There were 185 Choice 2-3 steers weighing an average of 1,469 lbs. bringing an average of $107.13.

Cattle futures closed higher Wednesday, perhaps helped along by positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 61¢ higher, from 17¢ higher in spot Dec to 90¢ higher.

Feeder Cattle futures closed an average of 84¢ higher.

Choice Boxed beef cutout value was $1.60 lower Wednesday afternoon at $207.22/cwt. Select was 11¢ lower at $192.09.

Corn futures closed mostly 1¢ higher. ,

Soybean futures closed fractionally lower through Aug ‘21 and then mostly 4¢ to 5¢ lower.

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Major U.S. financial indices closed mixed Wednesday. Support included apparent progress toward another round of federal economic stimulus. On the negative side, U.S. retail and food services sales in November were 1.1% less than the previous month, according to the U.S. Commerce Department. That was a steeper decline than the trade expected.

The Dow Jones Industrial Average closed 44 points lower. The S&P 500 closed 6 points higher. The NASDAQ was up 63 points. 

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Although feeder steer prices (750-800 lbs.) improved month to month in November, analysts with USDA’s Economic Research Service point out they were $8 less year over year at $138.22/cwt.

“The first prices reported in December were almost $13 below the same week last year at $136.67,” ERS analysts say, in the latest Livestock, Dairy and Poultry Outlook. “The feeder steer price forecast for fourth-quarter 2020 was unchanged at $137/cwt.”

ERS also left forecast feeder prices (basis Oklahoma City) unchanged for next year at $133 in the first quarter, $136 in the second quarter, $141 in the third quarter and $138 for the annual average.

On the other side of the equation, the average five-area direct fed steer price the first week of December was 8% less than the same week a year earlier at $109.75/cwt. on a live basis, according to ERS—the lowest December starting price since 2010.

Consequently, ERS projected the average fourth-quarter price $1 lower at $108. However, they forecast next year’s average price $1 higher at $115. ERS forecast the second-quarter price $3 higher based on expectations of fewer cattle available for slaughter.

Specifically, fed steer prices are forecast to be $113 in the first and second quarters and $114 in the third quarter.

ERS also notes higher anticipated feed costs in 2021.

“The corn price estimate for the 2019-20 marketing year is $3.56/bu.; the 2020-21 forecast is $4.00, unchanged from last month’s forecast,” ERS analysts explain. “The soybean meal price estimate for the 2019-20 marketing year is $299.50/short ton. The 2020-21 forecast for soybean meal has been raised to $370/short ton, $15 higher than the last forecast. The alfalfa hay price in October was $171/ short ton, unchanged from September but $6 lower than October 2019. The five-state weighted average price for premium alfalfa hay in October was $194/ short ton, $2 higher than September but $11 lower than October 2019.”

By | December 16th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 16, 2020

Negotiated cash fed cattle trade was a standstill in the Southern Plains through Tuesday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was very limited on very light demand. Live sales last week were at $108/cwt. in the Southern Plains, $106-$107 in Nebraska and at $104-$105 in the western Corn Belt. Dressed trade was at mostly $168.

Live Cattle futures closed narrowly mixed Tuesday, pressured by sluggish trade, as well as cash and wholesale beef weakness. Feeder Cattle edged mostly higher, perhaps helped along by brighter supply fundamentals down the road.

Live Cattle futures closed narrowly mixed, from an average of 32¢ lower to an average of 12¢ higher, except for unchanged in away-Feb.

Feeder Cattle futures closed an average of 26¢ higher, except for 5¢ lower toward the back of the board.

Choice boxed beef cutout value was 87¢ lower Tuesday afternoon at $208.82/cwt. Select was 10¢ lower at $192.20.

Corn futures closed fractionally higher to 1¢ higher except for 5¢ lower in spot Dec.

Soybean futures closed mostly 10¢ to 14¢ higher through Aug ‘21 and then mostly fractionally higher to 1¢ higher.

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Major U.S. financial indices closed higher Tuesday, with support from more optimism that Congress might be able to hash out another round of economic stimulus before the end of the year.

The Dow Jones Industrial Average closed 337 points higher. The S&P 500 closed 47 points higher. The NASDAQ was up 155 points.

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Even with surging domestic COVID cases and some states reducing restaurant capacity, customer transaction declines at major restaurant chains improved in November, according to the NPD Group (NPD).

Specifically, customer transactions improved from -9% year over year in October to -8% in November. Transactions at major quick service restaurant chains—which represent the bulk of industry transactions—were slightly more robust at -7% year over year in November, according to NPD’s CREST® Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 75 quick service, fast casual, midscale, and casual dining chains representing 53% of the commercial restaurant traffic in U.S.

“Major quick service restaurant chains have learned to expand their already high capacity for off-premises volumes,” says David Portalatin, NPD food industry advisor. “We should continue to expect drive-thru and delivery to be performance drivers for the best performing restaurant operators as consumers continue to shift meal occasions to the home.”

While dine-in restaurant traffic for the total industry, chains and independents, declined by 53% in October compared to year ago, off-premises visits increased by 21%. Total restaurant carry-out, which holds the largest traffic share of off-premises services at 46%, increased by 6%; drive-thru, which represents 43% share of traffic, grew by 24%; and delivery, which represents 11% share, realized a gain of 125% in October over year ago, according to NPD’s foodservice market research, which daily tracks how U.S. consumers use restaurants and foodservice outlets.

By | December 15th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 15, 2020

Negotiated cash fed cattle trade was a standstill in the five-area marketing region through Monday afternoon, according to the Agricultural Marketing Service. Live sales last week were at $108/cwt. in the Southern Plains, $106-$107 in Nebraska and at $104-$105 in the western Corn Belt. Dressed trade was at mostly $168.

The five-area direct weighted average steer price last week was $106.75 on a live basis, which was $3 less than the previous week. The average steer price in the beef of $167.77 was $4.52 lower.

Cattle futures closed narrowly mixed Monday, amid sluggish activity and awaiting cash direction, especially given last week’s disappointing trade in terms of both price and volume. However, they retained the lion’s share of gains made in the previous session.

Live Cattle futures closed narrowly mixed, from an average of 17¢ lower to unchanged to an average of 17¢ higher.

Feeder Cattle futures closed narrowly mixed, from an average of 17¢ lower to an average of 19¢ higher.

Choice boxed beef cutout value was $4.19 lower Monday at $209.69/cwt. Select was $3.41 lower at $192.30.

Corn futures closed mostly unchanged to fractionally mixed, except for 5¢ lower in spot Dec.

Soybean futures closed mostly 4¢ to 9¢ higher.

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Major U.S. financial indices closed mixed Monday. Apparently, optimism about the rollout of a COVID-19 vaccine was overshadowed by concerns that increasing coronavirus infections will foster stricter pandemic restrictions in the meantime, which will weigh on economic recovery.

The Dow Jones Industrial Average closed 184 points lower. The S&P 500 closed 15 points lower, but The NASDAQ was up 62 points.

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“China has been a rapidly growing market for global beef imports in recent years and is the largest beef importing country since 2018. This reflects underlying growth in beef demand in China, accentuated by the protein shortages due to ASF (African Swine Fever). China has been a minor market for U.S. beef but is growing rapidly,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “The China share of U.S. beef exports exceeded 1% for the first time in 2019 and is the number seven beef export market at 2.9% of total beef exports thus far in 2020. Beef consumption in China is expected to continue growing and, assuming no additional political disruptions, China could be one of the top exports markets for U.S. beef in the next couple of years.”

Peel details the evolution of global animal protein markets in his latest weekly market comments. This year, he says evolution is driven by ongoing trends as well as COVID-19 impacts.

“Mexico is arguably the market most impacted by COVID-19 from a U.S., and specifically, a beef, perspective,” Peel says. “Exports of beef to Mexico are down 37.9% year over year, with declines from last year for every month in 2020. Mexico is suffering a devastating recession, the result of current federal policies aggravated by the pandemic.”

For overall perspective, Peel explains U.S. beef exports were 5.3% less year over year through October, while U.S. pork exports were 19.9% more, mostly due to Chinese demand. He adds that U.S. broiler exports were 4.2% more year over year.

Further back in the supply chain and closer to home, analysts with the Livestock Marketing Information Center (LMIC) point out North American cattle trade is generally higher year over year, despite pandemic disruptions.

Through October, total cattle imports to the U.S. from Mexico and Canada of nearly 1.73 million head were 6.4% more year over year.

“Shipments from Mexico account for the majority of the increase with a 14.6% rise year-to-date to almost 1.17 million head,” say LMIC analysts, in the latest Livestock Monitor. “Cattle shipments from Canada are down 7.4% through October totaling 561,654 head. Mexico primarily supplies feeder cattle destined for backgrounding operations or placement while Canadian cattle are typically market-ready cattle for slaughter.”

On the other end of the trade, year-over-year U.S. cattle exports to Canada and Mexico of 242,892 head were 2.7% more; 0.6% less to Canada but 21.2% more to Mexico.

“Most of the cattle exported to Mexico this year have been classified as cattle other than purebred breeding animals which means they are likely slaughter-ready cattle,” say LMIC analysts.

By | December 14th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 14, 2020

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.

Last week, live prices were generally $2 lower in the Southern Plains at $108/cwt., and $4-$5 lower in the western Corn Belt at $104-$105. Dressed trade was $4 lower in the western Corn Belt at $168. The previous week, prices in Nebraska were at $110 on a live basis and at $172-$174 in the beef.

Through Thursday, the weighted average five-area direct fed steer price was $106.86/cwt., which was $2.91 less than the previous week and $11.95 less than the previous year. The average steer price in the beef was $167.80, which was $4.49 less than the previous week and $20.31 less than the same time last year.  

Estimated total cattle slaughter last week of 665,000 head was 2,000 head less than the previous week and 11,000 head fewer than the same week last year. Total estimated year-to-date cattle slaughter of 30.63 million head is 1.07 million less (-3.38%) than a year earlier.

Estimated beef production last week of 559 million lbs. was 800,000 less than the previous week. Estimated year-to-date beef production of 25.46 billion lbs. was 227 million lbs. less (-0.88 %) than the same time last year.

Choice was 71¢ lower at $213.88/cwt. Select was $2.76 lower at $195.71.

Cattle futures closed higher Friday, extending gains from the previous session as open interest creeps higher, perhaps emboldened by an apparent top in year-over year carcass weights and demand promise with FDA issuing emergency use authorization for the first COVID-19 vaccine (see below).

Live Cattle futures closed an average of 95¢ higher, from 42¢ to $1.40 higher.

Feeder Cattle futures closed an average of $1.01 higher, from 45¢ higher toward the back to $2.12 higher in spot Jan.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 5¢ to 7¢ higher.

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Major U.S. financial indices closed narrowly mixed again Friday, amid continued uncertainty regarding economic stimulus talks.

Positive news came with the U.S. Food and Drug Administration (FDA) issuing the first emergency use authorization for a vaccine for the prevention of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) in individuals 16 years of age and older. The emergency use authorization allows the Pfizer-BioNTech COVID-19 Vaccine to be distributed in the U.S.

“While not an FDA approval, today’s emergency use authorization of the Pfizer-BioNTech COVID-19 Vaccine holds the promise to alter the course of this pandemic in the United States,” says Peter Marks, M.D., Ph.D., Director of the FDA’s Center for Biologics Evaluation and Research. “With science guiding our decision-making, the available safety and effectiveness data support the authorization of the Pfizer-BioNTech COVID-19 Vaccine because the vaccine’s known and potential benefits clearly outweigh its known and potential risks. The data provided by the sponsor have met the FDA’s expectations as conveyed in our June and October guidance documents.”

The Dow Jones Industrial Average closed 47 points higher. The S&P 500 closed 4 points lower. The NASDAQ was down 27 points.

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“The virus calls the shots. The current resurgence means we’re probably in for a tough winter, with a slowdown in economic growth. If the virus is under control by the end of the summer, we’ll have brisk growth with falling unemployment by the fall,” says Larry DeBoer, an agricultural economist at Purdue University.

In his general economic outlook, part of the Purdue Ag Econ Report (PAER) Annual Outlook, DeBoer details pandemic-driven economic impacts thus far and expectations for the next 12 months. Among the highlights:

**Real GDP was $670 billion smaller in the third quarter 2020 compared to the fourth quarter 2019.

“Two-thirds of this decline was consumption spending, and all of that was due to services,” DeBoer explains. “Consumption spending is the driver of this recession.  Concern about social consumption is the driver of that drop. And the virus is the driver of that concern. The economy cannot fully recover until the virus is controlled.”

**“Investment spending is down just 2.9% since the fourth quarter. It was down 29% in the depths of the Great Recession,” DeBoer says. “Investment has held up this time. Investment in business structures has fallen by 15%, but business equipment is down only 2%. Perhaps businesses are retooling to enable social distancing. Home construction is up 5%.”

**“Even though private income fell at an annual rate of 12% from February to April, CARES Act benefits increased total personal income by 10%. This helped support consumer spending,” DeBoer explains. “Expect the inflation rate to rebound to 1.8% during the 12-months of 2021.”

**“As the vaccine rolls out and confidence rises, the accumulated savings, low interest rates, modest gas prices and added government aid should allow consumers to act. Fourth quarter consumer spending growth is likely to be high,” DeBoer says.

**“Add up consumers, business investment, government purchases and trade, and real GDP should grow about 4.3% in 2021. That would be the highest growth rate since 1999,” DeBoer explains. “Expect the unemployment rate to be around 5.6% by this time next year.”

In the meantime, DeBoer says, “The resurgence of the virus and the expiration of many CARES Act provisions at the end of the year may stall our recovery in this quarter and the next.”

By | December 13th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 11, 2020

Negotiated cash fed cattle trade was limited on light demand in Nebraska and in the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live sales in Nebraska at $107/cwt. and a few dressed trades at $168, but too few to trend. Last week, live sales there were at $110 and dressed sales were at $172-$174.

In other regions this week:

Southern Plains—$108, which is $2 less than last week.

Western Corn Belt—$104-$105 on a live basis, which is $5 less than last week; $168 in the beef, which is $6 lower.

Cattle futures closed higher Thursday, with more activity, perhaps by bottom picking funds looking ahead to stronger demand once COVID-19 vaccinations take root.

Live Cattle futures closed an average of 67¢ higher.

Feeder Cattle futures closed an average of 58¢ higher.

Choice boxed beef cutout value was $3.67 lower Thursday afternoon at $214.59/cwt. Select was $3.18 lower at $198.47.

The average dressed steer weight the week ending Nov. 28 was 921 lbs., which was 2 lbs. lighter than the previous week but 10 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 850 lbs., which was 3 lbs. heavier than the prior week and 10 lbs. heavier than the prior year.

Net U.S. beef export sales for 2020 of 3,000 metric tons (mt) were 78% less than the previous week and 80% less than the prior four-week average, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service. Increases were primarily for Japan, Canada, China, and Indonesia.

Corn futures closed mostly 1¢ to 2¢ lower, except for 1¢ to 2¢ higher in the back four contracts.

Soybean futures closed mostly 3¢ to 5¢ lower through Sep ’21 and then mostly fractionally lower to 1¢ lower. That was despite a bullish WASDE report (see below).

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Major U.S. financial indices closed narrowly mixed Thursday. Pressure came from unresolved economic stimulus talks, as well as disappointing labor news.

Initial unemployment insurance claims the week ending Dec. 5 of 853,000 were 137,000 more than the previous week, according to the U.S. Department of Labor. That was more than the trade expected.

The Dow Jones Industrial Average closed 69 points lower. The S&P 500 closed 4 points lower. The NASDAQ closed 66 points higher.

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USDA’s Economic Research Service (ERS) forecast U.S. beef production for this year 15 million lbs. more than in the previous month’s projection at 27.4 billion lbs., based on increased non-fed cattle slaughter more than offsetting lighter expected cattle carcass weights. That’s according to the latest monthly World Agricultural Supply and Demand Estimates (WASDE).

Beef production for next year was estimated at 27.26 billion lbs., which was 105 million lbs. less than the previous month’s estimate, on lower expected fed and non-fed cattle slaughter in the first half of 2021. If realized, beef production next year would be just 22 million lbs. more than this year.

ERS projected the annual average five-area direct steer price for 2021 $1 higher than the previous month at $115/cwt. That would be $6.54 more than this year’s estimated average of $108.46. For next year, prices are forecast at $113 in the first and second quarters; $114 in the third.

For 2021, projected total red meat and poultry production of 107.33 billion lbs. was reduced 145 million lbs. from the prior month’s forecast, with lower projected beef and poultry production more that offsetting slightly higher pork production. If realized, total red meat and poultry production next year would be 721 million lbs. more (+0.68%) than this year.

Among other WASDE highlights…

Corn—The U.S. corn supply and use outlook for 2020-21 was unchanged from last month. The projected season-average farm price was unchanged at $4.00/bu.

Soybeans—Ending stocks for 2020-21 were projected 175 million bu. less than the previous month, which would be the least since 2013-14. 

The U.S. season-average soybean price for 2020-21 was projected 15¢ higher at $10.55 bu. The soybean meal price was projected $15 higher at $370 per short ton. The soybean oil price was forecast 1.5¢ higher at 36¢/lb., with cash prices reaching the highest level in the past six years.

Wheat—Projected 2020-21 ending stocks were reduced 15 million bu. to 862 million, down 16% from last year. The season-average farm price was unchanged at $4.70/bu.

By | December 10th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 10, 2020

Negotiated cash fed cattle trade was mostly inactive on very light demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices there on Tuesday were $2 lower than last week at $108/cwt.

Elsewhere, trade was slow on light demand. There were a few live trades in Nebraska at $107 and a few in the western Corn Belt at $104.50-$105.00, but too few to trend. There was some early dressed trade in both regions at $168, but also too few to trend. Last week, live prices were at $110 in Nebraska and at $109-$110 in the western Corn Belt; dressed trade at $172-$174.

Cattle futures mostly edged higher by the close Wednesday, helped by firming Lean Hog futures.

Live Cattle futures closed an average of 25¢ higher except for 47¢ lower in spot Dec.

Feeder Cattle futures closed an average of 41¢ higher except for 55¢ lower in spot Jan.

Choice boxed beef cutout value was $6.76 lower Wednesday afternoon at $218.26/cwt. Select was $3.77 lower at $201.65.

Corn futures closed mostly 3¢ to 5¢ higher through Sep ’21 and then mostly fractionally higher to 1¢ higher.

Soybean futures closed mostly 11¢ to 12¢ higher through Jly ’21 and then mostly 5¢ to 7¢ higher.

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Major U.S. financial indices closed lower Wednesday, pressured by big tech stocks and stalled federal stimulus talks.

The Dow Jones Industrial Average closed 105 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 243 points.

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“While many of the food prices have come back down off the spikes in late spring and early summer, it remains the case that retail food prices are significantly higher now than at the same time last year,” says Jayson Lusk, agricultural economist at Purdue University, in his Food Price Outlook. “In October (the last data available), prices of food at grocery were 4% higher than the same time last year. It’s been almost a decade, since 2011, that we observed this rate of annual food price inflation. Despite the restrictions on eating out, the price of food away from home was 3.9% higher in October 2020 than in October 2019; this year-over-year change is higher than has been observed in at least a decade.”

He notes meat, dairy, and egg prices are the primary drivers of higher retail food prices.

“In June 2020, prices of these products at grocery were 12.8% higher than the same time in 2019; as of October 2020, prices of these products were still running 6.1% higher than in 2019. However, the price increases are not just limited to meat and animal products. Cereal and bakery product prices were 3% higher in October 2020 compared to October 2019; Fruit and vegetable prices were 2.6% higher in October 2020 than in 2019,” Lusk says.

Closer to home, according to the Livestock Marketing Information Center (LMIC), stronger ribeye prices are supporting higher carcass cutout values.

“Wholesale ribeye (roll, 2-in lip-on) prices accelerated to new weekly record highs during the weeks of Nov. 28 and Dec. 5, reaching $1,256/cwt. This price series dates back to 1995, and the previous record high was set earlier in 2020, due to pandemic-driven supply limitations during slaughter plant closures,” say LMIC analysts, in the latest Livestock Monitor. “These new record highs are thought to be supported by better than expected demand this holiday season. It is likely retailers were under-stocked for the demand seen late in the year. The rib primal cuts have become a feature in recent years. The wider availability of Prime graded beef and the inclusion of it at certain major retailers across the country has made a difference and elevated home meal use.”

Moreover, the LMIC folks point out that through last week the Chuck gained an average of 3.4% for the last five weeks, while the Round increased an average of 2.5%.

“Usually, Chuck primal values decline heading into the end of the year before increasing in the first quarter,” LMIC analysts explain. “Similarly, Rounds and Loins also do not typically have high points around this time of year but all are above a year ago and showing strength. Demand for beef seems to be what is helping these products, but other beef cuts have faded into the background. Lean beef trimmings have declined significantly since summer and have not recovered, even though total cow slaughter is down. It seems demand for ground product has eroded significantly as the pandemic has persisted.”

Looking ahead, Lusk says USDA’s Economic Research Service projects food inflation to moderate in 2021—1-2% for food at home compared to the 20-year historic average of 2.8% and 2-3% for food away from home, compared to 2.3% for the 20-year historic average.

“Even if food price inflation reverts to historical norms, this just means that prices have stopped increasing as fast as in 2020. Price levels remain higher than they were previously. As such, it will be important to keep an eye on food affordability and measures of food insecurity in 2021,” Lusk says.

By | December 9th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 9, 2020

Negotiated cash fed cattle trade started the week at lower money Tuesday. Live prices were $2-$4 lower in the Texas Panhandle at $108/cwt. and $2 lower in Nebraska at $108, according to the Agricultural Marketing Service. That was on slow trade and light demand. There were a few dressed sales in the western Corn Belt at $168, but too few to trend. Last week, dressed trade was at $172.

The five-area direct November weighted average fed steer price was $108.85/cwt. on  a live basis, which was $2.20 more than the previous month, but $6.50 less than the previous year. The weighted average steer price in the beef was $170.34, which was $2.87 more than the prior month but $12.20 less than the prior year.

Cattle futures closed narrowly mixed on Tuesday, finding some stability following the strong retreat in the previous session, perhaps helped along by softer grain futures.

Live Cattle futures closed an average of 14¢ lower except for unchanged to 17¢ higher in three contracts.

Feeder Cattle futures closed an average of 45¢ higher except for 22¢ lower in spot Jan.

Choice boxed beef cutout value was $5.78 lower Tuesday afternoon at $225.02/cwt. Select was $4.06 lower at $205.42.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed mostly 6¢ to 12¢ lower through Sep ’21 and then mostly unchanged to 2¢ lower.

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Major U.S. financial indices closed higher Tuesday, apparently buoyed in part by the rollout of COVID-19 vaccinations in the United Kingdom and optimism regarding a federal stimulus package.

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 62 points.

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“Beef production is forecast to decrease in 2021 with cyclically smaller cattle numbers and carcass weights retreating from record 2020 levels,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Beef trade is expected to improve with smaller beef imports and increased beef exports in the coming year. These will combine with decreased production to reduce per capita beef consumption in 2021.”

For this year, David Anderson, Extension livestock economist at Texas A&M University explains total beef production is on par with the same time last year.

“Steer and heifer slaughter is a little over 3% behind 2019 at this point. Total cow slaughter is 1.5% below 2019, but the source of the cows is interesting. Beef cow slaughter is up 2.5% while dairy cow slaughter is down 5.5% from a year ago,” Anderson explains, in the latest issue of In the Cattle Markets. “Low calf prices and drought conditions are acting to increase cow slaughter while higher milk prices have reduced dairy cow culling.”

Anderson adds that heavier fed steer and heifer carcasses continue to support beef production despite less slaughter.

“Steer dressed weights have averaged 906 lbs. this year compared to 876 lbs. last year. Heifer weights have averaged 833 lbs. this year, up 22 lbs. from 2019. Cow and bull dressed weights are within a pound of last year’s average,” Anderson says.

Although beef production is projected lower next year, Peel says total red meat and poultry production is projected to increase to another new record level of 107.2 billion lbs. with increased pork and poultry production offsetting decreased beef production. 

“However, with strong meat exports offsetting increased production, domestic total meat consumption is projected to decrease to 222.1 lbs. per capita, down from 225.3 lbs. in 2020,” Peel says. “Many factors may cause revisions to these forecasts including the speed and effectiveness of controlling the ongoing pandemic; macroeconomic uncertainties in the U.S. and global economies; changing feed market conditions; currency exchange rates; and evolving trade policy, among others. Conditions remain very dynamic and uncertain at the end of 2020 but there is potential for more stability in the second half of 2021.”

By | December 8th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 8, 2020

Negotiated cash fed cattle trade was mostly inactive on 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 prices were at $110-$112/cwt. in the Texas Panhandle, $110 in Kansas and Nebraska and at $109-$110 in the western Corn Belt. Dressed trade was at $172.

The average five-area direct steer price last week was $109.75 on a live basis, which was 52¢ less than the previous week. The average steer price in the beef was $172.29, which was $1.08 lower.

Cattle futures closed lower on Monday, pressured by fast-falling wholesale beef values and sluggish trade.

Live Cattle futures closed an average of 93¢ lower except for an average of 12¢ higher in the back two contracts.

Feeder Cattle futures closed an average of $1.33 lower.

Choice boxed beef cutout value was $4.22 lower Monday afternoon at $230.80/cwt. Select was $8.03 lower at $209.48.

Corn futures closed 1¢ to 3¢ higher.

Soybean futures closed mostly 5¢ to 7¢ higher except for fractionally lower to 4¢ lower in the front three contracts.

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Major U.S. financial indices closed mixed Monday, pressured by the continued increase in COVID-19 cases and lack of resolution for additional federal economic stimulus.

The Dow Jones Industrial Average closed 148 points lower. The S&P 500 closed 7 points lower. The NASDAQ was up 55 points. 

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Exports of U.S. beef muscle cuts in October were higher year over year, however, reduced variety meat volumes pushed total beef exports slightly lower, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Specifically, beef muscle cut exports in October were 5% more in volume at 85,445 metric tons (mt) and 1% more in value at $573.8 million. For January-October, muscle cut exports were 5% below last year in volume (791,694 mt) and 8% lower in value ($5.48 billion).

Overall beef exports in October were slightly lower than a year ago at 107,591 mt (down 0.4%), valued at $646 million (down 0.5%). For January through October, total beef exports trailed last year’s pace by 7% in volume (1.02 million mt) and 8% in value ($6.2 billion).

There were signs of promise, though. Beef exports to China set another new record and volumes were above year-ago levels to Japan, Taiwan, Central America and Africa. While still below last year, beef exports to Mexico were the most since March.

U.S. pork exports posted broad-based gains in October, solidifying 2020’s record pace. They were up 8% year-over-year to 242,536 mt. Value was also 8% higher at $641.1 million. Through the first 10 months of the year, pork exports were 15% ahead of last year’s record pace at 2.46 million mt, with value up 16% to $6.33 billion.

“While the tight labor situation continues to limit the cut and variety meat specifications available for export, red meat demand is strengthening in many critical markets,” says USMEF President and CEO Dan Halstrom. “October exports of bone-in hams, for example, were near the July record and up 50% from a year ago. This has been a volatile year, filled with shifts in consumer preferences and a lot of uncertainty for international buyers. But the U.S. industry has responded positively to these challenges and the demand dynamics for red meat are quite strong as we approach year’s end. When the gains made at retail over the past several months are combined with a stronger food service recovery, the prospects for export growth are very promising.”

By | December 7th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 7, 2020

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, live prices were $1 lower to $1 higher in the Texas Panhandle at $110-$112/cwt. They were $1 lower in Kansas at $110. Live prices were steady to $1 lower in Nebraska at $109-$110 and steady to $1 lower in the western Corn Belt at $109. Dressed trade was steady to $2 lower at $172-$174.

Through Thursday, the five-area direct weighted average steer price was $109.77 on a live basis, which was 40¢ lower than the previous week and $9.18 less than the same week last year. The average steer price in the beef was $1.10 lower week to week at $172.29; $15.45 lower year over year.

Cattle futures mostly closed lower on Friday, but found some footing in the wake of the previous session’s strong decline.

Live Cattle futures closed an average of 24¢ lower except for an average of 12¢ higher in the back two contracts.

Feeder Cattle futures closed narrowly mixed from an average of 14¢ lower to an average of 8¢ higher.

Choice boxed beef cutout value was $4.17 lower Friday afternoon at $235.02/cwt. Select was $2.42 lower at $217.51.

Corn futures closed 2¢ to 6¢ lower through Sep ’21 and then mostly fractionally lower.

Soybean futures closed 1¢ to 5¢ lower through Jan ’22 and then fractionally higher.

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Major U.S. financial indices closed higher Friday, despite a less robust national employment report than the trade expected.

Total non-farm payroll employment rose by 245,000 in November, according to the U.S. Bureau of Labor Statistics. The national unemployment rate edged lower to 6.7%.

There was some speculation the optimistic trade for the day was based on the weaker employment numbers increasing odds for the government to come up with a more robust stimulus package.

The Dow Jones Industrial Average closed 248 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 87 points.

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Despite and because of the pandemic, USDA’s Economic Research Service estimated net farm income and net cash farm income to be significantly higher this year. Reasons for the shift higher include reduced cost, increased crop receipts and the sharp increase in government payments.

Specifically, in its Highlights from the Farm Sector Income Forecast, ERS forecasts net farm income to increase by $36.0 billion (+43.1%) in 2020 to $119.6 billion. In inflation-adjusted 2020 dollars, net farm income is forecast to increase $35.0 billion (+41.3%) from 2019, increasing for the fourth consecutive year. If realized, net farm income in 2020 in inflation-adjusted terms would be at its highest level since 2013: 32.0% above the 2000-19 average of $90.6 billion.

ERS projects net cash farm income to be $24.7 billion higher (+22.6%) year over year in 2020 to $134.1 billion. Inflation-adjusted net cash farm income is forecast to increase $23.4 billion (+21.1%) from 2019, which would put it at its highest level since 2014: 22.5% above the 2000-19 average ($109.5 billion).

By way of definition, ERS analysts explain net cash farm income encompasses cash receipts from farming as well as farm-related income, including government payments, minus cash expenses. It does not include noncash items, such as inventory changes and economic depreciation, which are included in net farm income.

Cash receipts in 2020, for all commodities, are forecast to decrease $3.2 billion (-0.9%) to $366.5 billion, in nominal terms. Total animal/animal product receipts are expected to decrease $9.7 billion (-5.5%) with declines in receipts for broilers, cattle/calves, and hogs. On the other hand, total crop receipts are expected to increase $6.5 billion (+3.3%) from 2019 levels.

Direct Government farm payments are forecast at $46.5 billion in 2020, an increase of $24.0 billion in nominal terms (+107.1%), fueled by supplemental and ad hoc disaster assistance for COVID-19 relief.

By | December 6th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 4,2020

Negotiated cash fed cattle prices continued steady to lower on Thursday with live trade in Kansas $1 lower at $110, steady to $1 lower in Nebraska at $109-$110. Dressed trade in Nebraska was steady to $2 lower at $172-$174.

Cattle futures closed lower on Thursday, pressured by softer cash prices, lower wholesale beef values and another day of higher front-month corn futures.

Live Cattle futures closed an average of 82¢ lower.

Feeder Cattle futures closed an average of $1.36 lower from 95¢ lower to $2.00 lower in spot Jan.

Choice boxed beef cutout value was $1.70 lower Thursday afternoon at $239.19/cwt. Select was $3.02 lower at $219.93.

Corn futures closed 2¢ to 3¢ higher.

Soybean futures closed 10¢ to 16¢ higher through Sep ’21 and then mostly 7¢ to 8¢ higher.

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Major U.S. financial indices closed narrowly mixed Thursday. Positive news on the day included fewer unemployment claims than traders were expecting.

Initial weekly unemployment insurance claims the week ending Nov. 26 totaled 712,000, which was 75,000 fewer than the previous week, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 85 points higher. The S&P 500 closed 2 points lower. The NASDAQ was up 27 points.

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Ranchers and farmers scored high marks with consumers in trust and sustainability efforts, according to a recent national public opinion poll from the American Farm Bureau Federation (AFBF).

Nearly nine in 10 adults (88%) trust agricultural producers, a 4% increase from AFBF’s June 2020 polling, pointing toward public recognition that food supply chain challenges brought on by the pandemic were not within the control of farmers and ranchers.

The survey of 2,200 U.S. adults found that more than half (58%) rate the sustainability practices of U.S. farmers positively, with broad agreement from a majority of adults across demographic groups. 

The survey also explored public attitudes about the environmental sustainability achievements of farmers and ranchers, as well as future direction to advance climate-smart farming. Overall, the public agrees farmers shouldn’t be expected to bear the financial burden alone. More than four in five adults (84%) say environmental sustainability and economic sustainability are both important for farmers, and most adults say both are very important. More than four in five adults also say feeding the world (84%) and farmers passing farms on to future generations (83%) are important. 

“Americans have a high level of trust in farmers, and they understand that we’re committed to protecting the soil, air and water,” said AFBF President Zippy Duvall. “We want to leave the land better than we found it for our children and grandchildren, as well as our nation. Our survey demonstrates that Americans are impressed by advancements in climate-smart farming and we look forward to building on that success.”

Looking to the future, the survey explores how Americans think sustainability efforts on farms and ranches should be funded. Seventy percent of adults say government incentives to encourage farmers to adopt additional sustainable agricultural practices would be effective. More than three-quarters of adults believe it is important for the government to fund science-based research (76%) and improve infrastructure (78%) to support agriculture.

At a time when some corporations are making sustainability commitments that include or impact agricultural production, a bipartisan majority of adults (62%) say corporations should compensate agricultural producers for the additional cost of implementing environmental practices to help achieve sustainability goals.

By | December 4th, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 3, 2020

Negotiated cash fed cattle prices started the week’s trade on a mixed basis Wednesday. Live trades were unevenly steady in Texas at $110-$112/cwt. on moderate trade and light to moderate demand, according to the Agricultural Marketing Service. There were a few early trades in Kansas at $110, but too few to trend. Prices in the Southern Plains last week were at $111.

Live trade in Nebraska was steady to $1 lower at $110 on light to moderate trade and demand. There were a few dressed trades at $172-$174, but too few to trend; $174 last week. Trade in the western Corn Belt last week was at $109-$110 on a live basis and at $172-$174 in the beef.

Cattle futures mostly eked out gains on Wednesday, despite a pullback in Choice boxed beef value and stronger front-month Corn futures.

Live Cattle futures closed an average of 22¢ higher.

Feeder Cattle futures closed an average of 18¢ higher except for 5¢ lower in the back two contracts.

Choice boxed beef cutout value was $2.51 lower Wednesday afternoon at $240.89/cwt. Select was 13¢ lower at $222.95.

Corn futures closed 2¢ to 4¢ higher through Sep ’21 and then mostly fractionally higher to 1¢ higher.

Soybean futures closed 7¢ to 9¢ lower through Sep ’21 and then 3¢ to 5¢ lower.

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Major U.S. financial indices closed narrowly mixed Wednesday as investors awaited more clarity about the next round of federal economic stimulus and approval of COVID-19 vaccines.

The Dow Jones Industrial Average closed 59 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 5 points. 

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In October, the National Cattlemen’s Beef Association (NCBA) introduced what’s being termed the 75-percent rule in order to voluntarily ensure cash fed cattle trade is adequate for robust cash price discovery each week. That was in response to several bills introduced to Congress that would mandate minimum levels of weekly cash trade.

A Voluntary Framework to Achieve Robust Price Discovery in the Fed Cattle Market relies on what is termed robust cash trade volume for each of four regions, utilizing price discovery research from Stephen Koontz, agricultural economist at Colorado State University.

In order to comply with the framework, at least 75% of these robust trade levels must be achieved in each of four regions no fewer than 75% of the weeks in each quarter. The framework also outlines minimum levels of weekly regional participation from the four major packers. The framework is supposed to go into effect Jan. 1, 2021.

You can find details outlined in the Oct. 21 Cattle Current here.

“The question is whether this policy meets the objective to increase the level of negotiated trade and cattle price transparency,” says Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln, in the latest issue of In the Cattle Markets. “In other words, if this policy were historically in place, how likely would have minor (major) triggers occurred?”

Dennis used public data published weekly and available through USDA-AMS from 2013-2020, in order to find an answer.

“The industry’s 75 percent-rule was developed in response to proposed legislation to solve potential concerns about thinness in negotiated trade across different regions,” Dennis explains. “The current concern surrounding thinness in negotiated trade has more to do with lower cash prices received by producers due to the Holcomb Fire and COVID-19 pandemic. Changes to the federal law or industry policy would not have effectively raised producer prices received for cattle. Further, if this policy would have been implemented before either the Holcomb Fire or COVID-19 it would not have changed packing plants’ ability to process cattle (supply from feedlots) or lack of foodservice’s demand for beef.”

There are lots more to Dennis’ findings than space allows for here. You can find complete details here.

“This policy, in its current form and from the four cattle feeding regions perspective, is not likely to significantly improve the level of negotiated trade nor cattle market transparency. Since it does not change the supply of fed cattle nor the demand for wholesale beef, it is also not likely to increase the cash price received by producers,” Dennis emphasizes. “Anytime a policy is implemented, whether industry prompted or legislatively enacted, there is a potential for creating increased costs and reducing profitability for the entire beef complex. For example, to avert potential legislation, packers and feedlots could change cattle marketing behavior from profit-maximizing to negative policy aversion, creating inefficiencies in the beef complex. Consistent with the economic theory of derived demand, these additional costs, spurred on by potential policies, are likely to predominately be carried by the cow-calf industry.”

By | December 2nd, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 2, 2020

Negotiated cash fed cattle trade was mostly inactive on very light demand in Nebraska and the western Corn Belt through Tuesday afternoon. Elsewhere, it was at a standstill, according to the Agricultural Marketing Service. Last week, live prices were at $111/cwt. in the Southern Plains, $110-$111 in Nebraska and $109-$110 in the western Corn Belt. Dressed trade was at $172-$174.

Cattle futures closed higher on Tuesday, supported by ongoing strength in wholesale beef values and the outlook for steady to higher cash prices this week.

Live Cattle futures closed an average of 47¢ higher.

Feeder Cattle futures closed an average of 81¢ higher.

By the way, winter wheat condition improved week to week, according to the USDA Crop Progress report for the week ending Nov. 29. 46% was rated as Good (40%) or Excellent (6%) versus 43% the previous week and 52% the previous year. 18% was rated as Poor (13%) or Very Poor (5%) compared to 21% the prior week and 14% the prior year.

Choice boxed beef cutout value was 28¢ lower Tuesday afternoon at $243.40/cwt. Select was 65¢ higher at $223.08.

Corn futures closed mostly 3¢ to 5¢ lower through Sep ’21 and then mostly 1¢ to 2¢ lower.

Soybean futures closed 4¢ to 6¢ lower.

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Major U.S. financial indices closed higher Tuesday. Support included news of a new proposed economic stimulus plan and hawkish comments from Janet Yellen, President-elect Biden’s choice for Treasury Secretary, who stressed urgency in the nation taking more strides in addressing the economic fallout borne by the pandemic.  

The Dow Jones Industrial Average closed 185 points higher. The S&P 500 up closed 40 points higher. The NASDAQ was up 156 points.

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Agricultural producer sentiment declined in November, according to the Purdue University/CME Group Ag Economy Barometer. It dropped 16 points to a reading of 167 after setting a record high in October.

“This is the opposite of what happened following the November 2016 election. That year producers became much more optimistic about the future following the election and, in turn, that optimism about the future helped drive the Ag Economy Barometer up sharply in late 2016 and early 2017,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The Index of Future Expectations fell 30 points to a reading of 156 in November. However, the on-going rally in commodity prices and CFAP-2 payments continued to support producers’ view of current economic conditions with the Index of Current Conditions rising 9 points in November to 187, an all-time high for the index.

To learn more about what factors might be motivating the shift in producers’ sentiment before and after the November election, a series of questions focused on producers’ future expectations for environmental regulations, taxes and other key aspects of the agricultural economy were included in both the October and November surveys.

Comparing results from October to November, far more producers in November said they expect to see: 1) environmental regulations impacting agriculture to tighten over the next five years; 2) higher income tax rates for farms and ranches; 3) higher estate tax rates for farms and ranches; 4) less government support for the U.S. ethanol industry and 5) a weaker farm income safety net provided by U.S. government program policies.

Also of note, since the summer of 2019, Purdue researchers have been tracing producers’ perceptions regarding the ongoing trade dispute between the U.S. and China. Specifically, the survey asks whether respondents think the dispute will be resolved soon and if the outcome will ultimately benefit U.S. agriculture. In January and February of this year, 80% of survey respondents said they expected to see the trade dispute with China be resolved in a way that benefits U.S. agriculture. In November, though, only 50% had the same expectation. Only 44% of respondents in November think it’s likely that China will fulfill the Phase One Trade Agreement requirements, down from 59% a month earlier.

By | December 1st, 2020|Daily Market Highlights|

Cattle Current Daily—Dec. 1, 2020

Negotiated cash fed cattle trade was at a standstill through Monday afternoon, according to the Agricultural Marketing Service. Last week, live prices were at $111/cwt. in the Southern Plains, $110-$111 in Nebraska and $109-$110 in the western Corn Belt. Dressed trade was at $172-$174.

More narrowly, last week’s five-area direct average steer price was $110.27/cwt. on a live basis, which was 70¢ higher than the previous week, according to USDA data. The average steer price in the beef was $1.67 higher at $173.37.

Cattle futures closed mixed on Monday, amid month-end position squaring and some support from weaker grain futures.

Live Cattle futures closed an average of 31¢ lower except for an average of 7¢ higher in the back two contracts.

Feeder Cattle futures closed an average of 75¢ higher, from 55¢ higher at the back to $1.22 higher in spot Jan.

Choice boxed beef cutout value was 83¢ higher Monday afternoon at $243.68/cwt. Select was $1.75 higher at $222.43.

Corn futures closed mostly 5¢ to 7¢ lower.

Soybean futures closed 14¢ to 23¢ lower.

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Major U.S. financial indices closed lower Monday, likely with some month-end positioning and profit taking.

The Dow Jones Industrial Average closed 271 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 7 points.

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“Exactly what to expect in fed cattle markets in the coming months depends on numerous factors including: the demographics of the feedlot population (both size and gender), feed costs, the time of the year, weather conditions and regional impacts,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Starting with gender of feedlot placements, Peel points out the latest quarterly inventory report indicated steers represented 62.4% of the feedlot inventory and heifers comprised 37.6%. At the same time a year earlier, the inventory was 60.8% steers and 39.2% heifers.

As for weights, Peel says 22% of the cattle placed on feed over the last six months weighed less than 600 lbs., 18% weighed 600-700 lbs., 22% weighed 700-800 lbs., 23% were 800-900 lbs. and 15% weighed more than 900 lbs.

“Feedlot placement weight is related to finished weight of fed cattle. However, the relationship is not one to one,” Peel explains. “For both steers and heifers in the typical range of placement weights, a 1 lb. increase in placement weight results in 0.5 lb. of additional finished weight.” 

Based on data from Kansas State University’s Focus on Feedlots, Peel says average daily gain (ADG) each month so far this year is higher year over year for steers and heifers. Steer ADG averaged 3.53 lbs. the last six months; 3.11 lbs. for heifers. Feed efficiency improved year over year, too.

“Feedlots will manage and balance these and many other factors as they deal with coming winter weather, rising feed costs, the mix of steers and heifers and the availability of feeder cattle of various sizes,” Peel says.

By | November 30th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 30, 2020

Negotiated cash fed cattle prices ended the week generally steady to $1 higher on a live basis and $2 higher in the beef, according to the Agricultural Marketing Service.

Live prices were at $111/cwt. in the Southern Plains, $110-$111 in Nebraska and $109-$110 in the western Corn Belt. Dressed trade was at $174.

Cattle futures mostly drifted lower on Friday, amid extremely light holiday trade.

Live Cattle futures closed an average of 47¢ lower (32¢ to 92¢ lower).

Feeder Cattle futures closed an average of 24¢ lower except for an average of 26¢ higher in two contracts.

Choice boxed beef cutout value was $2.21 lower Friday afternoon at $242.85/cwt. Select was 22¢ lower at $220.68.

Corn futures closed mostly 3¢ to 5¢ higher.

Soybean futures closed mostly 6¢ to 7¢ higher.

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Major U.S. financial indices closed higher Friday, buoyed by the week’s mostly positive news surrounding apparent progress with COVID-19 vaccines.

The Dow Jones Industrial Average closed 37 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 111 points.

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Total pounds of beef in freezers were up 8% from the previous month and up 7% from the previous year, as of Oct. 31, according to USDA’s latest monthly Cold Storage report.

Frozen pork supplies were down 4% from the previous month and down 27% from last year.

Total red meat supplies in freezers were up 1% from the previous month but down 12% from last year.  

Total frozen poultry supplies were 7% less than the previous month and down 4% from a year earlier.

By | November 28th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 26-27-2020

Negotiated cash fed cattle prices were generally steady to $1 higher on a live basis and $2 higher in the beef, through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices were at $111/cwt. in the Southern Plains on moderate demand and trade. Live prices were at $110 in the western Corn Belt on slow trade and moderate demand. There were a few in Nebraska at $110. Dressed trade was at $174.

Cattle futures mostly continued gains on Wednesday, buoyed by stronger cash markets, weaker grain futures, stronger wholesale beef values and light pre-holiday trade.

Live Cattle futures closed an average of 27¢ higher.

Feeder Cattle futures closed an average of 92¢ higher (25¢ to $1.57 higher) except for 7¢ lower and 32¢ lower in the back two contracts.

Choice boxed beef cutout value was 76¢ higher Wednesday afternoon at $245.06/cwt. Select was $1.19 higher at $220.90.

Corn futures closed 5¢ lower through Jly ’21 and then mostly unchanged to 1¢ lower.

Soybean futures closed mostly 5¢ to 7¢ lower.

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Major U.S. financial indices closed mixed Wednesday. Pressure included more jobless claims than traders expected.

Initial unemployment insurance claims last week were 778,000, which was 30,000 more than the previous week, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 173 points lower. The S&P 500 closed 5 points lower. The NASDAQ was 57 points higher.

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When Jan. 1 cattle inventory numbers come out toward the end of January, analysts with the Livestock Marketing Information Center (LMIC) expect to see more year- over-year contraction of the beef cow herd.

“The beef herd is expected to be down 0.5 to 1.0% based on year-to-date slaughter numbers that are above a year ago by about 2%, and heifer numbers in feedlots,” say LMIC analysts, in the latest Livestock Monitor. “It appears beef cows held for replacement are likely steady to below a year ago, given the uncertainty of 2020. Other heifers, those in the feedlot, are also expected to have pulled back. Those on feed are slightly lower than a year ago, while heifer slaughter is about 4% below last year.”

This year began with 31.31 million head, which was 1.18% less (-374,000 head) than the previous year.

“Bull slaughter is well below a year ago, a reflection of lower volumes of male cattle kept for breeding purposes. This is primarily driven by the cattle cycle and the smaller needs for bulls. LMIC estimates bull inventory Jan. 1 is likely slightly less than last year,” say LMIC analysts. “Steers over 500 lbs. are expected to fall, in line with July 1 calf crop expectations, as well as cattle weighing less than 500 lbs. Both are expected to be down over half a percent.”

Even with expectations for there to be slightly more dairy cows at the beginning of 2021, LMIC expects the total of all cattle and calves to be slightly less year over year. Total inventory at the beginning of this year was 0.41% less than the prior year.

By | November 25th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 25, 2020

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon, but the recent surge in Cattle futures and wholesale beef values bolstered hope for higher prices.

Cattle futures extended gains on Tuesday, supported by the previous session’s optimism and the brighter outlook for cash prices.

Live Cattle futures closed an average of 50¢ higher (10¢ to $1.17 higher) except for 55¢ lower in the back contract.

Feeder Cattle futures closed an average of 50¢ higher except for 2¢ lower in May.

Choice boxed beef cutout value was $2.70 higher Tuesday afternoon at $244.30/cwt. Select was $2.23 higher at $219.71.

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

Soybean futures closed mostly fractionally higher to 1¢ higher.

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Major U.S. financial indices closed higher again Tuesday with follow-through support from the previous session, tied to positive news about COVID-19 vaccines and the outlook toward a bounce in economic recovery in 2021.

The Dow Jones Industrial Average closed 454 points higher. The S&P 500 closed 57 points higher. The NASDAQ was up 156 points.

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U.S. beef exports for 2021 are projected to be $7.1 billion, according to the latest quarterly Outlook for U.S. Agricultural Trade, from USDA’s Economic Research Service (ERS). The projection is $200 million more than the previous report in August, based on increased volume offsetting a decline in unit values.

Overall, ERS projects U.S. agricultural exports in Fiscal Year (FY) 2021 at $152.0 billion, up $11.5 billion from the August forecast, fueled by increased soybean and corn export values.

“The projection for soybean exports is up $5.9 billion to a record $26.3 billion due to higher unit values, strong demand from China, and record volumes,” according to the report. “Corn exports are forecast up $4.2 billion to $13.2 billion as a result of reduced competition, higher unit values and record volumes…Wheat exports are projected at $6.2 billion, up $200 million, on higher unit values and slightly larger volumes.”

The forecast suggests China will become the largest market for U.S. agricultural products next year for the first time since 2017. Exports to that nation are projected at a record high $27.0 billion.

All of that is shrouded by the global economic contraction and ongoing uncertainty borne by the pandemic.

“Expectations of real gross domestic product (GDP) numbers have improved from the initial lockdown contractions, but recovery forecasts are still marked by uncertainty and prone to future setbacks,” say ERS analysts. “Overall, global real GDP growth is expected to fall by about 4.4% in 2020. This is slightly less severe than was previously feared back in June. Global trade volume, which declined 9.2% in FY 2020, is expected to increase 7.2% in FY 2021. The expected economic recovery in 2021 will be shaped by both regional and overall global success in containing the COVID-19 pandemic, in addition to boosting consumer spending.”

By | November 24th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 24, 2020

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 data from the Agricultural Marketing Service (AMS). Last week, live prices were at $110/cwt. in the Southern Plains and Nebraska and at $109-$110 in the western Corn Belt. Dressed prices are steady at $172.

Cattle futures closed sharply higher on Monday, shaking off last week’s blues with the help of higher outside markets and an apparently bullish view of Friday’s Cattle on Feed report.

Live Cattle futures closed an average of $1.99 higher.

Feeder Cattle futures closed an average of $2.83 higher.

Choice boxed beef cutout value was $3.25 higher Monday afternoon at $241.60/cwt. Select was $2.50 higher at $217.48.

Corn futures closed mostly 3¢ to 5¢ higher

Soybean futures closed 10¢ to 12¢ higher through Aug ’21 and then mostly 4¢-7¢ higher.

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Major U.S. financial indices closed higher Monday, buoyed by the third COVID-19 vaccine candidate that proved at least 90% effective in trials. Traders also seemed optimistic about Janet Yellen, former Federal Reserve Chair, being named Treasury secretary by president-elect Biden.

The Dow Jones Industrial Average closed 327 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 25 points.

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“Feeder markets are reflecting a mix of influences including seasonal supplies of calves, wheat pasture forage conditions, higher corn prices and volatility in futures markets,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Feeder markets have been very dynamic and it means that both cow-calf and stocker producers must constantly evaluate changing market conditions.”

By way of illustration, Peel graphed (see chart below) Oklahoma calf and feeder steer prices by weight from August through Nov. 20.

After posting lows during the winter storm in late October, he explains prices for steer calves and stockers weighing less than 600 lbs. increased sharply; little change at heavier weights.

“The result is a sharper bend in the price-weight line, with an even steeper price rollback for steers up to 600 pounds,” Peel says. “Using a stocker gain of 250 lbs. from 500 to 750 lbs., the value of gain in August was $1.02/lb. In October, the value of gain was slightly higher at $1.05/lb. based on lower prices for both 500 and 750-lb. steers. In November, the higher prices for the lightweight animals resulted in a lower value of gain of $0.74/lb. Of course, a 500-lb. stocker purchased now will not reach 750 lbs. for some time. However, March Feeder futures price was $134.48 recently. That with an expected early March basis of $1.69/cwt. for 750-lb. steers in Oklahoma suggests a final price of $136.17/cwt., close to the current cash price of $136.03/cwt.”

For cow-calf producers selling calves at weaning, he explains recent prices mean the value of adding 50 lbs. to a 500-lb. steer is about 50¢/lb.

“For producers holding calves after weaning, the low value of gain must be balanced against the value of preconditioning programs and extra weaning time before sale,” Peel says. “The implications of current market conditions depend on the current weight of animals and the amount of additional weight added to animals prior to sale.”

By | November 23rd, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 23, 2020

Negotiated cash fed cattle prices ended last week steady, according to data from the Agricultural Marketing Service (AMS). Live prices were at $110/cwt. in the Southern Plains and Nebraska and at $109-$110 in the western Corn Belt. Dressed prices are steady at $172.

Estimated cattle slaughter for the week ending Nov. 21 was 665,000 head, according to USDA. That would be 12,000 head more than the prior week, but 3,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 28.73 million head would be 1.07 million fewer (-3.59%) than same period last year.

Estimated beef production for the week of 559.1 million lbs. would be 9.3 million lbs. more than the previous week and 5.4 million lbs. more than the same week last year. Year-to-date estimated beef production of 23.87 billion lbs. would be 245.8 million lbs. less (-1.02%) than the same period last year.

Cattle futures closed mixed on Friday with higher Lean Hog futures helping reverse some early pressure and firm following the previous session’s pullback.

Live Cattle futures closed narrowly mixed, from an average of 33¢ lower to an average of 14¢ higher.

Feeder Cattle futures closed mixed, from an average of 55¢ lower across the front half of the board to an average of 27¢ higher.

Choice boxed beef cutout value was 65¢ higher Friday afternoon at $238.35/cwt. Select was $1.09 higher at $214.98.

Corn futures closed mostly fractionally mixed.

Soybean futures closed 2¢ to 6¢ higher through Sep and then mostly 1¢ lower.

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Major U.S. financial indices closed lower Friday, pressured by the continued rise in COVID-19 infections.

The Dow Jones Industrial Average closed 219 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 49 points.

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USDA’s monthly Cattle on Feed report issued Friday—for feedlots with 1,000 head or more capacity—will likely be viewed as neutral to slightly friendly.

There were 2.19 million head placed in October which was 270,000 head fewer (-10.97%) than a year earlier. Estimates ahead of the report suggested placements to be about 1.5% more.

In terms of weights, 49% went on feed weighing less than 600 lbs.; 39% weighing 700-899 lbs.; 12% weighing 900 lbs. or more.

Marketings of 1.87 million head in October were just 2,000 fewer (-0.11%) than a year earlier, about in line with pre-report estimates.

Cattle on feed Nov. 1 were 11.97 million head, which was 157,000 head more (+1.33%) than a year earlier. That was slightly less than expectations. The number is the most for the month since the data series began in 1996.

By | November 21st, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 20, 2020

Negotiated cash fed cattle trade was limited on moderate demand in Kansas, Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live trades at $110/cwt. and a few in the beef at $172, but too few to trend. Established prices for the week are mainly steady with live trade at $110 in the Southern Plains and Nebraska and at $109-$110 in the western Corn Belt. Dressed prices are steady at $172.

Cattle futures closed sharply lower Thursday. Lingering pressures include persistently higher grain prices and languishing cash fed cattle prices. Chatter about fears of more pandemic-driven packing disruptions contributed to the day’s decline.

Live Cattle futures closed an average of $1.85 lower, from 92¢ lower at the back to $2.62 lower.

Feeder Cattle futures closed an average of $2.10 lower, except for 25¢ lower in expiring Nov.

Choice boxed beef cutout value was $1.86 higher Thursday afternoon at $237.70/cwt. Select was 27¢ higher at $213.89.

Net U.S. beef export sales (2020) for the week ending Nov. 12 totaled 46,400 metric tons, up noticeably from the previous week and the prior four-week average, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service. Increases were primarily for South Korea, Mexico, Japan, Hong Kong and Taiwan.

Corn futures closed 1¢ to 3¢ lower.

Soybean futures closed fractionally mixed to 4¢ higher.

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U.S. financial indices closed slightly higher Thursday, amid a volatile session, with pressure from the continued surge in COVID-19 cases and increasing unemployment claims.

Initial unemployment insurance claims were 742,000 for the week ending Nov. 14, according to the U.S. Department of Labor. That was 31,000 more than the previous week and more than traders expected.

The Dow Jones Industrial Average closed 44 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 103 points.

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The Creighton University Rural Mainstreet Index (RMI) declined in November for the first time since April. The RMI represents a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

The overall index was down significantly to 46.8 from the previous month’s 53.2. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Recent improvements in agriculture commodity prices, federal farm support payments, and the Federal Reserve’s record low interest rates have underpinned the Rural Mainstreet Economy. Still, only 6.5% of bankers reported economic improvements from October, while 12.9% detailed economic pullbacks for the month,” says Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

However, the farmland-price index advanced above growth neutral for the second consecutive month. The November reading jumped to 55.0 from October’s 50.6. This is first time since 2013 that Creighton’s survey has recorded back-to-back above growth neutral readings in farmland prices.

Also, the November farm equipment-sales index increased to 42.9, its highest level since December 2013, and up from 37.9 in October. But, the reading has been below growth neutral for 86 consecutive months.

By | November 19th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 19, 2020

Negotiated cash fed cattle trade and demand were moderate in the Southern Plains through Wednesday afternoon. Live prices were steady with last week at $110/cwt., according to the Agricultural Marketing Service. There were also a few live trades at $110 in Nebraska and a few at $106 in the western Corn Belt but too few to trend in either region. Last week, live prices were at $110 in Nebraska and at $108-$110 in the western Corn Belt. Dressed prices were at $172.

Cattle feeders offered 930 head in the weekly Fed Cattle Exchange Auction—all from Texas. They sold 543 head for a weighted average price of $110.25 for delivery at both 1-9 days and 1-17 days. That price was steady with country trade in the region last week and so far this week.

Cattle futures closed lower Wednesday, pressured by higher grain prices and the steady rather than higher cash prices so far this week. Perhaps there was also some positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 80¢ lower, from 42¢ to $1.15 lower.

Feeder Cattle futures closed an average of $1.60 lower, from 35¢ lower in spot Nov to $2.42 lower.

Choice boxed beef cutout value was $2.12 higher Wednesday afternoon at $235.84/cwt. Select was 34¢ lower at $213.62.

Corn futures closed 3¢ to 5¢ higher through Sep ’21 and then mostly 1¢ higher.

Soybean futures closed mostly 5¢ to 7¢ higher through Sep ‘22 and then mostly 3¢ higher.

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U.S. financial indices closed lower Wednesday, pressured by the growing renewal of pandemic restrictions as COVID-19 cases continue to surge.

The Dow Jones Industrial Average closed 344 points lower. The S&P 500 closed 41 points lower. The NASDAQ was down 97 points.

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“With the higher grain prices and forage prices, we will see persistent pressure on feeder cattle and calf prices into 2021,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “One dollar higher corn costs translate into about $6-$7/cwt. lower feeder cattle prices. This cattle price impact is being exacerbated by dry conditions in the western U.S. and hay prices that are creeping higher. The impact on calf prices will be greater.”

Koontz points out Corn futures (2020-21 crop) are about $1 higher than in August and Soybean futures are about $2 higher, including deferred contracts. He adds that prices for both appear to be at a premium to what underlying fundamentals suggest.

“Stock-to-use ratios imply more reasonably mid-to-high-$3 corn and mid-to-high-$9 soybeans. That is unless the long-term demand picture is also changing. And there is some evidence that is the case,” Koontz says. “Corn export demand has been strong but that for soybeans is considerably more so. Consumption of corn is also picking up from ethanol production. The crop market fundamentals are looking more like they did in the years prior to the trade war. Soybean demand may pull considerable acres to that crop and buoy both soybean and corn prices.”

Along with export strength and iffy production in other parts of the world, some folks suggest speculation about a domestic drought next growing season is adding support.

By | November 18th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 18, 2020

Negotiated cash fed cattle trade was steady in the Texas Panhandle through Tuesday afternoon with live prices at $110/cwt. That was on limited trade and light demand, according to the Agricultural Marketing Service. Trade in other regions ranged from a standstill to mostly inactive on light demand with too few transactions to trend. Last week, live prices were at $110/cwt. in the Southern Plains and Nebraska and at $108-$110 in the western Corn Belt. Dressed prices were at $172.

Cattle futures closed higher Tuesday, apparently fueled by the surge in wholesale beef values, tied in part to chatter about consumers stockpiling again, due to resurgent COVID-19 cases. The lower U.S. dollar is also offering added support to commodities.

Live Cattle futures closed an average of 98¢ higher, from 37¢ to $1.55 higher.

Feeder Cattle futures closed an average of $1.36 higher, from 10¢ higher in

Choice boxed beef cutout value was $6.77 higher Tuesday afternoon at $233.72/cwt., the highest level since June. Select was $1.61 higher at $213.96.

Corn futures closed mostly 1¢ to 4¢ higher through Jly ’21 and then mostly fractionally mixed.

Soybean futures closed 8¢ to 16¢ higher through Sep ‘21 and then fractionally higher to 2¢ higher.

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U.S. financial indices closed lower Tuesday on likely profit taking and mixed economic news.

On one hand, U.S. retail and food services sales for October were 0.3% higher month to month, according to the U.S. Commerce Department. That’s less than the trade expected.

On the other hand, builder confidence in the market for newly-built single-family homes increased five points to 90 in November, shattering the previous all-time high of 85 recorded in October, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index. Builder confidence levels hit successive all-time highs over the past three months.

“Historically low mortgage rates, favorable demographics and an ongoing suburban shift for home buyer preferences have spurred demand and increased new home sales by nearly 17% in 2020 on a year-to-date basis,” says NAHB Chairman Chuck Fowke, a custom home builder from Tampa, FL. “Though builders continue to sign sales contracts at a solid pace, lot and material availability is holding back some building activity. Looking ahead to next year, regulatory policy risk will be a key concern given these supply-side constraints.”

The Dow Jones Industrial Average closed 167 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 24 points.

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USDA’s Economic Research Service (ERS) lowered the expected fourth-quarter feeder steer price by $6 from the previous month to $137/cwt., in the latest Livestock, Dairy and Poultry Outlook. That’s basis Oklahoma City for Medium #1. The lower revision is based on seasonal price weakness and cash prices in October down more than $9 year over year at $137.55. ERS reduced expected feeder steer prices for next year by $1, based on higher projected feed prices.

Specifically, ERS forecasts feeder steer prices next year at $133 in the first quarter, $136 in the second, $141 in the third; annual average price of $138.

ERS left the expected five-area direct fed steer price unchanged for the fourth quarter ($109) and for next year: $113 in the first quarter, $110 in the second quarter, $114 in the third quarter; annual average price of $114.

“Despite the rising number of cattle on feed, front-end supplies—the number of cattle on feed over 150 days—decreased for the third consecutive month as a percentage and in volume,” say ERS analysts. “This is the result of an improving pace of fed cattle slaughter, which was faster than a year ago for the last three months and above the five-year average. The quickening slaughter pace, combined with an ample supply of fed cattle at heavier weights, led to higher expected beef production in fourth-quarter 2020 relative to 2019. Nevertheless, tighter front-end supplies will likely support continued seasonal movement in fed steer prices.”

ERS increased annual forecast 2020 beef production by 90 million lbs. to 27.2 billion lbs. Forecast beef production increased slightly for 2021, as well (27.4 billion lbs.), on higher expected fed cattle marketings.

“Despite the challenges facing the industry at the beginning of the third quarter, the beef industry processed more fed cattle in third-quarter 2020 than last year. As a result, the industry appears to have worked through the backlog of cattle that resulted from the plant disruptions in the second quarter,” ERS analysts explain. “The combination of delayed cattle marketings and good feeding conditions this year raised average cattle carcass weights nearly 3% for the third quarter, also increasing third-quarter 2020 production nearly 3% year over year. As a result, beef production set a record for the quarter at 7.1 billion lbs.”

By | November 17th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 17, 2020

Negotiated cash fed cattle trade ranged from a standstill to mostly inactive on very light demand with too few transactions to trend, according to the Agricultural Marketing Service. Last week, live prices were at $110/cwt. in the Southern Plains and Nebraska and at $108-$110 in the western Corn Belt. Dressed prices were at $172.

The five-area direct average fed steer price last week was $109.62/cwt. on a live basis, which was $3.29 more than the previous week, but $5.57 less than the previous year. The average steer price in the beef was $171.87, which was $6.52 more than the previous week, but $9.85 less than the same week last year.

Cattle futures firmed Monday, after early pressure on Feeder Cattle, closing mostly higher amid relatively light trade after the previous session’s selloff. Presumably, technical support and higher outside markets helped pave the way.

Live Cattle futures closed an average of 29¢ higher, except for 20¢ lower in near Feb.

Feeder Cattle futures closed an average of 47¢ higher, except for 20¢ lower in spot Nov and unchanged in Sep.

Choice boxed beef cutout value was 97¢ higher Monday afternoon at $226.95/cwt. Select was $2.89 higher at $212.35.

Corn futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed mostly 4¢ to 6¢ higher. 

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U.S. financial indices closed higher Monday, on news that another Covid vaccine candidate, this one from Moderna, proved more than 94% effective in a preliminary, late-stage trial.

The Dow Jones Industrial Average closed 470 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 94 points.

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By most measures, domestic consumer beef demand remained resilient in the face of multifold challenges posed by the pandemic. Heading into winter, though, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University expects challenges to increase.

“Loss of outdoor dining in cold weather will further aggravate restaurant challenges.  Food service demand is likely to be additionally affected with worsening public health challenges. Macroeconomic concerns will grow as consumers go forward with less unemployment support,” Peel explains, in his weekly market comments.  “Ample supplies of beef, pork and poultry increase market price pressure, though disruptions in supply are a threat as well.”  

By way of review, Peel points out unparalleled beef supply and demand disruptions characterized the first half of 2020. By the end of June, cattle slaughter—packing capacity—was mostly recovered.

“Beef demand, however, continues to be challenged with restricted food service.  Restaurants have recovered somewhat from the initial lockdown with more emphasis on takeout and delivery. Retail grocery demand remains robust and numerous adjustments have helped to shift some food service supply chains to support retail grocery supply chains,” Peel explains. “There are indications that retail grocery demand is being boosted again by consumers stocking up in the face of increased uncertainty. The shift from summer beef demand to winter raises additional concerns. Food service is typically more emphasized in winter months, which may be an additional challenge. The pandemic is resurging and additional restrictions on food service are a growing risk.”

Currently, domestic beef demand is difficult to assess, according to Peel. Although Choice boxed beef cutout values increased sharply the past two weeks, they remain 9.2% less than the same time last year.

“Ribeyes are a key market this time of year with strong demand for Christmas and New Year’s holiday. So far, Ribeyes are following close to a typical seasonal increase with current Ribeye prices close to year-ago levels and up over 9% the last two weeks,” Peel says. “Other food service-dependent beef products are less encouraging. Beef tenderloins are currently averaging 25.6% below year-ago levels and were down 1.5% in the last two weeks. Sirloin Top Butt is up 6.0% the last two weeks but down 18.4% year over year. Other beef products heavily dependent on food service demand include brisket, down 13.9% from one year ago and the Petite Tender, down 20.7% year over year. Strip Loin, more frequently used in retail grocery, is up 7.8% year over year.”

As well, Peel says prices for most chuck and round products are down 5% to 10% compared to last year. Exceptions include Chucks (2-piece), which are up 7.0% the past two weeks and up 13.7% year over year, which may indicate more demand for grinding for retail grocery ground beef.

“In contrast, 50% trimmings are down 55.7% and 90% trimming are down 15.8% year over year, although both are up the past two weeks. 50s and 90s are more commonly used for food service ground beef,” Peel explains.

By | November 16th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 16, 2020

Negotiated cash fed cattle trade ended the week with live prices $3 higher at $110/cwt. in Nebraska and the Southern Plains; $3-$4 higher in the western Corn Belt at $108-$110, according to USDA’s Agricultural Marketing Service (AMS). Dressed prices were at $172, which was $4 higher in Nebraska and $5-$8 higher in the western Corn Belt. Although prices were higher, some thought the market was poised to reap steeper gains.

Through Thursday, the five-area direct weighted negotiated fed steer price was $109.46/cwt. on a live basis, which was $3.11 more than the previous week but $5.69 less than the same week in 2019. The average steer price in the beef was $171.88, which was $6.58 more week to week but $10.07 less year over year.

Cattle futures closed sharply lower Friday, with much of the pressure seemingly tied to overbought conditions, week-end positioning and fears that escalating COVID-19 cases will take another whack at packer production.

Live Cattle futures closed an average of $1.61 lower, from $1.10 lower toward the back to $2.57 lower toward the front.

Feeder Cattle futures closed an average of $2.38 lower.

Choice boxed beef cutout value was 52¢ lower Friday afternoon at $225.98/cwt. Select was $1.22 higher at $209.46.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 4¢ to 9¢ higher through Nov ‘22 and then mostly unchanged. 

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U.S. financial indices closed higher Friday, as investors seemed less worried about the surge in COVID-19 cases and more comfortable that the recently announced vaccine will enable the nation to get back to business, ultimately.

The Dow Jones Industrial Average closed 399 points higher. The S&P 500 closed 48 points higher. The NASDAQ was up 119 points.

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“Agriculture will need to speak up with the new administration on its priorities, and we need to strengthen the bipartisan nature of American agriculture,” explained former assistant U.S. trade representative Sharon Bomer Lauritsen at last week’s virtual U.S. Meat Export Federation (USMEF) Strategic Planning Conference.

“There has never been a more important time to maintain a strong and unified agriculture and agribusiness voice at the state level, and in Washington, D.C., to balance the industrial voices,” Bomer Lauritsen said. “U.S. agriculture will need to defend and advance its interests, make sure they are heard over the non-ag voices, and keep the rules of trade strong and enforced to ensure that American agricultural exports continue to thrive.”

Bomer Lauritsen, who recently retired from the U.S. government after 29 years of service and is now a trade policy consultant at Ag Trade Strategies, LLC, recapped many key trade breakthroughs for U.S. red meat over the years. She noted that while the Trump administration’s approach to tariffs and trade sometimes put agricultural exports in a negative position, it also helped bring key trading partners such as Japan and China to the negotiating table on longstanding market access obstacles for U.S. beef and pork. She also offered a preview of what to expect from a new administration.

“President-elect Biden has stated his priority will be fixing domestic issues first, but that doesn’t mean that the new administration at lower levels can’t lay the groundwork to build constructive relationships and a foundation for trade negotiation,” she said. “Biden also hasn’t rejected engaging on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), but has stated the U.S. would need to see changes. I think it’s possible to move forward with a Japan negotiation, although automotive issues will be difficult and could have ramifications for agriculture.”

Further, Pat Binger, new USMEF chair, explained that despite facing trade barriers and an uncertain economic climate in many key regions of the world, there are excellent prospects to further expansion of U.S. red meat’s global footprint.

“From a carcass utilization standpoint, we need to continue to find ways to expand our export product mix—that’s a big opportunity going forward,” Binger said. “Additionally, there are items today that our industry is not getting boxed, either due to lack of labor or a combination of labor and complexity, and that’s another opportunity that we need to manage through. But all in all, I am very optimistic about the U.S. red meat industry’s ability to take on challenges and seize the opportunities that lie ahead. I remain excited and highly encouraged about the future of our industry.”

By | November 14th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 13, 2020

Negotiated cash fed cattle trade got off to a strong start in the north Thursday with live prices $3 higher in Nebraska at $110/cwt. and $3-$4  higher in the western Corn Belt at $108-$110. Dressed prices were $4 higher in Nebraska at $172 and $5-$8 higher in the western Corn Belt at $172.

Cattle futures closed narrowly mixed again Thursday with Feeder Cattle receiving some support from softer grain futures.

Live Cattle futures closed an average of 30¢ lower except for 5¢ higher in Aug.

Feeder Cattle futures closed an average of 47¢ higher, except for 52¢ lower in spot Nov.

Choice boxed beef cutout value was $3.66 higher Thursday afternoon at $226.50/cwt. Select was 22¢ lower at $208.24.

Corn futures closed mostly 4¢ to 9¢ lower through Sep ‘21, and then mostly 1¢ lower.

Soybean futures closed mostly 6¢ to 8¢ lower through Aug ‘21 and then mostly fractionally mixed. 

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U.S. financial indices closed lower Thursday, amid the resurgence in COVID-19 cases and renewal of stricter safety precautions that will delay economic recovery. 

The Dow Jones Industrial Average closed 317 points lower. The S&P 500 down 35 points lower. The NASDAQ was down 76 points.

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“Globally, though some recovery has occurred, demand for beef in international destinations continues to be influenced by pandemic responses and safety measures,” says Josh Maples, Extension livestock economist at Mississippi State University. “Beef demand at seated restaurants continues to be impacted, and demand in areas reliant on tourism still faces obstacles. The pace of recovery in international destinations will be key for beef exports moving forward and for the value that beef exports add to cattle production.”

In the latest issue of In the Cattle Markets, Maples explains September U.S. beef exports were stronger year over year to South Korea, Hong Kong, Taiwan and Canada. As well, he points out beef exports to China were the most on record for September, accounting for 5.3% of total U.S. beef export, vastly more than the 1% of exports China accounted for in all of 2019.

But, U.S. beef exports were 5.6% less overall in September, Maples says; down about 6% year to date through September.

“Beef exports to Mexico continued to lag behind the 2019 pace. During September, beef exports to Mexico were about 38% lower than in September 2019 and were 40% lower for the first nine months of 2020 compared to the first 9 months of 2019,” Maples explains. “Exports to Mexico were 14% of total January-September beef exports in 2019; in 2020, that share has dropped to about 9%.”

By | November 12th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 12, 2020

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service (AMS). Elsewhere, it was mostly inactive on very light demand.

If the weekly Fed Cattle Exchange Auction is any indication, prices could end up significantly higher this week. There were 1,119 head offered (six lots) and none sold. However, three lots from the Southern Plains were passed on at $110/cwt., which was $3 higher than last week’s country trade in the region.

As well, slaughter steers sold $3-$6 higher and fat heifers traded $2 higher at Sioux Falls Regional in South Dakota. There were 502 head of Choice 3-4 steers weighing an average of 1,627 lbs. that brought an average of $107.23, which was $1-$2 higher than the previous week’s country trade.

Cattle futures closed narrowly mixed Wednesday.

Live Cattle futures closed an average of 35¢ higher, from 12¢ to 80¢ higher, except for 2¢ lower toward the back.

Feeder Cattle futures closed narrowly mixed, from an average of 22¢ lower to an average of 38¢ higher.

Choice boxed beef cutout value was 59¢ higher Wednesday afternoon at $222.84/cwt. Select was 9¢ lower at $208.46.

Corn futures closed mostly 2¢ to 5¢ lower through Sept ‘21, and then fractionally lower to 1¢ lower.

Soybean futures closed mostly 6¢ to 10¢ higher.

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U.S. financial indices closed narrowly mixed Wednesday, as investors appeared to take a breather, although major tech stocks bounced back from the previous session’s selloff.

The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 27 points higher. The NASDAQ closed 232 points higher.

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Customer transactions at major U.S. restaurant chains continue lower year over year but stabilized in October, according to The NPD Group (NPD).

Specifically, overall transactions held steady each week in October at 9% less year over year, according to NPD’s CREST® Performance Alerts. Quick service restaurant chains, able to leverage off-premises operations during the pandemic, also stabilized at -9% throughout the month.

On the other hand, transactions fluctuated from -16% in the first week of October to  -14% in the last full week of the month at full service restaurant chains, which depend more on dine-in services.

Digital and off-premises orders underpinned gains in stability.

With dine-in operations limited and consumers in search of contactless foodservice, the NPD folks say digital restaurant orders from mobile apps, text messages, and the internet grew by 138% in the July, August, and September quarter compared to a year earlier. Off-premises orders from carry-out, delivery, and drive-thru increased by 22% year over year in the quarter, while on-premises/dine-in declined by 62% year over year. 

“While some of the steep transaction and traffic declines experienced at the height of the mandated shelter-at-home and dine-in closures have been recovered, many uncertainties lie ahead for the industry,” says David Portalatin, NPD food industry advisor. “The continuing pandemic, governmental restrictions, and relief funding are just a few of the uncertainties. But, what we do know for certain is that consumers continue to rely on restaurants and other foodservice outlets to prepare their meals, and there is pent-up demand while we wait for a return to normalcy.”

By | November 11th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 11, 2020

Negotiated cash fed cattle trade was at a standstill in the five-area direct regions through Tuesday afternoon, according to the Agricultural Marketing Service (AMS). However, the recent bounce in Cattle futures and spiking wholesale beef prices have plenty of folks optimistic cash prices will rise when trade finally gets underway this week.

Cattle futures closed narrowly mixed Tuesday. Despite a massive rally in Corn and Soybean futures, surging wholesale beef values helped Live Cattle maintain ground, but pressured Feeder Cattle.

Live Cattle futures closed an average of 33¢ higher, from 2¢ to 95¢ higher, except for 10¢ lower in near Apr.

Feeder Cattle futures closed an average of 37¢ lower, except for an average of 10¢ higher in two contracts.

Choice boxed beef cutout value was $4.86 higher Tuesday afternoon at $222.25/cwt. Select was $6.18 higher at $208.55.

Corn and soybean futures spiked higher Tuesday with the crop-friendly WASDE report (see below).

Corn futures closed mostly 11¢ to 15¢ higher through Sept ‘21, and then 3¢ to 8¢ higher.

Soybean futures closed 21¢ to 33¢ higher through Sep ‘21, and then mostly from 11¢ to 17¢ higher.

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U.S. financial indices closed mixed Tuesday, with it appearing investors were trading some stay-at-home stocks for those that could benefit from further reopening of the domestic economy, given the previous day’s announcement of a vaccine candidate from Pfizer and BioNTech proving to be more than 90% effective in preventing COVID-19.

The Dow Jones Industrial Average closed 262 points higher. The S&P 500 down 5 points lower. The NASDAQ was down 159 points.

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In the latest World Agricultural Supply and Demand Estimates (WASDE), USDA’s Economic Research Service (ERS) left the forecast five-area direct fed steer price unchanged from the previous month at $109/cwt. in the fourth quarter, $113 in the first quarter next year and at $114 for the average annual price in 2021.

Compared to the previous month, projected beef production for this year increased by 85 million lbs. to 27.22 billion lbs. Estimated beef production next year of 27.36 billion lbs. would be 142 million lbs. more than this year (+0.50%).

Estimated total red meat and poultry production this year increased by 216 million lbs. from the previous month’s projection to 106.61 billion lbs. Projected total red meat and poultry production next year of 107.47 billion lbs. would be 865 million lbs. more than this year (+0.81%).

Among other WASDE highlights:

Corn Corn production was forecast at 14.51 billion bu., down 215 million with a reduction in yield to 175.8 bu./acre. Corn exports were raised by 325 million bu. to 2.65 billion, which would be record high. Projected feed and residual use was lowered by 75 million bu. based on a smaller crop and higher expected prices.

With supply falling and use increasing, corn ending stocks for 2020-21 were projected 465 million bu. less at 1.7 billion. If realized, that would be the lowest ending stocks level since 2013-14. The season-average corn price was raised by 40¢ to $4.00/bu.

Soybeans The U.S. soybean outlook for 2020-21 is for lower production and ending stocks. Soybean production is forecast at 4.17 billion bu., down 98 million on lower yields. With reduced production, soybean ending stocks were projected at 190 million bu., down 100 million from last month. If realized, soybean ending stocks would be at the lowest level in the past seven years.

The U.S. season-average soybean price for 2020-21 was forecast 60¢ higher at $10.40/bu. The soybean meal price was forecast $20 higher at $355/short ton. The soybean oil price was forecast 2¢ higher at 34.5¢/lb.

Wheat The outlook for 2020-21 U.S. wheat this month is for stable supplies, higher domestic use, unchanged exports, and reduced ending stocks.

Projected 2020-21 ending stocks were reduced 6 million bu. to 877 million, down 15% from last year. The season-average farm price was unchanged at $4.70/bu.

By | November 10th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 10, 2020

Negotiated cash fed cattle prices last week were $1 higher than the previous week in the Southern Plains at $107/cwt. on a live basis, $4-$6 higher in Nebraska at $107/cwt., and $3-$4 higher in the western Corn Belt at $105-$106. Dressed trade was $2-$9 higher at mostly $167, according to the Agricultural Marketing Service.

Last week’s five-area weighted average fed steer price was $106.33/cwt. on a live basis, which was $1.26 higher than the previous week, but $8.27 less than the same time a year earlier. The average steer price in the beef was $165.35, which was $1.40 more than the prior week, but $15.69 less than the previous year.

Cattle futures roared higher Monday, buoyed by significant gains in wholesale beef prices and last week’s stronger cash fed cattle prices. There was also likely plenty of help from surging outside markets, tied to the reported efficacy of a coronavirus vaccine (more below).

Live Cattle futures closed an average of $2.19 higher, from $1.20 higher toward the back to $3.17 higher in spot Dec.

Feeder Cattle futures closed an average of $3.71 higher, from $1.90 higher at the back to $4.80 higher.

Choice boxed beef cutout value was $3.07 higher Monday afternoon at $217.39/cwt. Select was $3.88 higher at $202.37. Week to week, Choice was $8.74 higher and Select was up $9.75. 

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 6¢ to 9¢ higher through Aug ‘21, and then mostly from 1¢ lower to 1¢ higher.

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Except for tech stocks, major U.S. financial indices rallied Monday on news that a vaccine candidate from Pfizer and BioNTech proved to be more than 90% effective in preventing COVID-19.

Specifically, according to those companies, the vaccine candidate,  “…was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis.”

The companies continue accumulating safety data and currently estimate that a median of two months of safety data following the second (and final) dose of the vaccine candidate—the amount of safety data specified by the FDA in its guidance for potential Emergency Use Authorization—will be available by the third week of November. Based on current projections those companies expect to produce globally up to 50 million vaccine doses this year and up to 1.3 billion doses in 2021.

The Dow Jones Industrial closed 834 points higher. The S&P 500 closed 41 points higher. The NASDAQ down 181 points.

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Calf and feeder markets appear to be moving higher in the Southern Plains with wheat pasture prospects improved by recent moisture.

For instance, in Oklahoma, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says prices last week for steers weighing 450-600 lbs. were the highest since late August and early September. As an example, he notes the combined state auction price for Medium and Large #1 steers at 450-500 lbs. last week was $166.89/cwt. compared to $147.34 a week earlier, when storm severity helped damper markets.

Peel provided a price chart (below) in his weekly market comments published Monday.

“For animals below 600 lbs., the price drops sharply with additional weight (i.e. a bigger price rollback). Above 600 lbs., the price changes little with additional weight. A bigger price rollback reduces the value of gain. For example, the value of gain for 200 lbs. of gain from 450 to 650 lbs. is $0.62/lb. but for 650 to 850 lbs., the value of gain is $1.36/lb.,” Peel explains. 

Consequently, Peel says stocker producers should consider several factors, including beginning weight, how long the animals will be owned and how much gain will be added to the animals.

“With a possibly shortened winter grazing period, a heavier beginning weight currently offers a higher value of gain and may make sense,” Peel says. “The next few weeks may result in additional demand for stockers but will likely also see larger supplies of feeder cattle in Oklahoma auctions. Combined Oklahoma auction volume the past six weeks was down nearly 33%, in part due to the impacts of the winter storm. It appears there are significant numbers of calves and feeders yet to be marketed this fall. Stocker and feeder prices could move either higher or lower in the next month depending on the balance of increased demand and increased supply in auctions.”

Peel adds that the recent surge in Feeder Cattle futures is adding support to calf and feeder cattle prices.

“Winter grazing typically keys off the March Feeder futures contract,” he says. “March contract prices increased to over $135/cwt. at the end of last week, up from lows below $126/cwt. less than two weeks ago. Feeder markets are also closely watching feed grain markets as strong export demand has pushed grain prices higher.”

By | November 9th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 9, 2020

Negotiated cash fed cattle prices for the week were $1 higher than the previous week in the Southern Plains at $107/cwt. on a live basis, $4-$6 higher in Nebraska at $107/cwt., and $3-$4 higher in the western Corn Belt at $105-$106. Dressed trade was $2-$9 higher at $167, according to the Agricultural Marketing Service.

Through Thursday, the five-area weighted average fed steer price was $106.35/cwt., $2.19 higher than the previous week, but $7.81 less than the same time a year earlier. The average steer price in the beef was $165.30, which was $5.60 less than the prior week and $16.11 less than the previous year.

Estimated total cattle slaughter for the week ending Nov. 7 of 647,000 would be 9,000 more than the previous week, but 10,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 27.4 million head is 1.06 million head fewer (-3.73%) than the same period last year. Year-to-date estimated beef production of 22.76 billion lbs. is 252.7 million lbs. less (-1.11%) than a year earlier.

Cattle futures closed mixed Friday, with Live Cattle edging higher and Feeder Cattle trading narrowly mixed. Support included the week’s higher cash prices and stronger wholesale beef values.

Cattle futures closed mixed Friday, with Live Cattle edging higher and Feeder Cattle trading narrowly mixed. Support included the week’s higher cash prices and stronger wholesale beef values.

Live Cattle futures closed an average of 41¢ higher.

Feeder Cattle futures closed mixed, from an average of 52¢ lower in the back three contracts to an average of 31¢ higher, except for unchanged in May.

Choice boxed beef cutout value was $1.77 higher Friday afternoon at $214.32/cwt. Select was 48¢ lower at $198.49.

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed mostly 2¢ to 3¢ higher, except for 2¢ to 3¢ lower in the front two contracts.

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Major U.S. financial indices tread water Friday with likely profit taking from the week’s broad step higher, as well as a national jobs report that was more positive than the trade expected.

Total non-farm payroll employment rose by 638,000 in October, and the unemployment rate declined to 6.9%, according to the U.S. Bureau of Labor Statistics. Average hourly earnings for all employees on private non-farm payrolls increased by 4¢ in October to $29.50.

The Dow Jones Industrial Average down 66 points lower. The S&P 500 closed 1 point lower. The NASDAQ closed 4 points lower.

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“Daily Choice boxed beef started climbing again in the first week of November. Rib, chuck, and round all inched higher throughout the week, giving hope to some seasonal demand for cuts born from those primals,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest issue of Livestock Monitor. “Last year, Choice boxed beef was setting a new record and at that time was the highest value for the cutout. This year, that cutout value was eclipsed in April, but values have been unable to climb over a year ago since about mid-October.”

The decline in the cutout is about 10% below a year ago, ribs down about 4%, chuck down 9%, loins down 12%, and flanks down 10% year-over-year in Friday’s data, according to LMIC.

Similarly, those analysts explain, thus far in the fourth quarter, brisket value is down about 22-30% compared to the same time last year; short plates down 5-20%; round down 5-9%.

“Beef demand in the fourth quarter in recent years has been supportive for cattle prices,” say LMIC analysts. “This number is one we will have to continue to watch this year for signs the U.S. economy is recovering, though all primals are not considered equal in this timeframe. Rib primal values have been the primary benefactor of increased consumer demand in other years, while chuck and rounds seem to have more staying power through the first quarter.”

By | November 7th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 6, 2020

Negotiated cash fed cattle prices were $4-$6 higher than last week on a live basis in Nebraska through Thursday afternoon at $107/cwt., and $3-$4 higher in the western Corn Belt at $105-$106. Dressed trade was $2-$9 higher at $167, according to the Agricultural Marketing Service. Trade in the Southern Plains earlier in the week was $1 higher at $106.

Cattle futures closed mixed though, with Live Cattle edging higher and Feeder Cattle trading narrowly mixed, under continued pressure from higher grain prices.

Live Cattle futures closed an average of 46¢ higher, except for unchanged in the back contract.

Feeder Cattle futures closed mixed, from an average of 26¢ lower to an average of 43¢ higher.

Choice boxed beef cutout value was $2.36 higher Thursday afternoon at $215.55/cwt. Select was $1.92 higher at $198.97.

The average dressed steer weight of 931 lbs. for the week ending Oct. 24 was 2 lbs. heavier than the previous week and 25 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 847 lbs. was 3 lbs. lighter than the previous week but 12 lbs. heavier year over year.

Grain futures, especially soybeans continued higher on mainly positive exports and adverse weather in South America.

Corn futures closed mostly 3¢ to 4¢ higher through Jly ‘21 and then mostly 1¢ to 2¢ higher.

Soybean futures closed 17¢ to 22¢ higher through Aug ‘21 and then mostly 10¢ to 13¢ higher. The spot month breeched the $11 mark for the first time in recent memory.

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Major U.S. financial indices extended the post-election rally Thursday. Although widely expected, support included the Fed’s decision to maintain interest rates at current levels.

“The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” (the Committee). “The Committee decided to keep the target range for the federal funds rate at 0 to 0.25% and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.”

The Dow Jones Industrial Average closed 542 points higher. The S&P 500 closed 67 points higher. The NASDAQ was up 300 points.

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U.S. Beef exports to major Asian markets were about steady with the prior year in September but trended lower overall, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

September beef exports were down 6% from a year ago to 103,277 metric tons (mt), valued at $600.9 million (down 9%). Coming off record performances in August, exports to South Korea and Taiwan remained strong, while setting another new record in China. However, COVID-19 related obstacles continued to negatively impact demand for U.S. beef in several key markets, especially Mexico, Central America and the Caribbean.

“Although restaurant traffic and foodservice activity are not back to normal in most Asian markets, USMEF is very encouraged by the recovery in Asia and this was especially evident in the strong August and September exports of U.S. beef to Korea, Taiwan and China,” according to Dan Halstrom, USMEF president and CEO. “As we close out the year, U.S. beef has a great opportunity to capture greater market share in Asia due to tightening supplies from Australia. While it will require more time, we also expect U.S. beef to regain momentum in regions where beef demand depends more heavily on travel and tourism, and where e-commerce channels are not as well-developed.”

For January through September, beef exports trailed last year’s pace by 8% in volume (911,936 mt) and 9% in value ($5.55 billion).

U.S. pork exports remained on a record pace, however. They were 10% more in September year over year in volume at 222,475 mt and 6% more in value at $563.2 million.

Through the first three quarters of this year, pork exports were 16% more than last year’s record pace in both volume (2.22 million mt) and value ($5.69 billion).

“Exporting countries are watching the hog production recovery in China very closely, because we know its demand for imported pork is moderating,” Halstrom explains. “While USMEF is pleased to see U.S. pork exports to China/Hong Kong maintaining a strong pace, it is vitally important that our export destinations remain diversified. The U.S. industry continues to pursue this goal aggressively, both in the Asia Pacific region and the Western Hemisphere.”

You can find a detailed summary of U.S. beef and pork exports at the USMEF website.

By | November 5th, 2020|Daily Market Highlights|

Cattle Current—Nov. 5, 2020

Negotiated cash fed cattle prices were $1 higher on a live basis in the Southern Plains Wednesday at $107/cwt., with moderate demand, according to the Agricultural Marketing Service.

That matched the price paid for Southern Plains cattle in the weekly Fed Cattle Exchange auction. Cattle feeders offered 634 head and sold 296 head with delivery of 1-17 days.

Similarly, slaughter steers sold steady to $1 higher in the slaughter auction at Sioux Falls Regional in South Dakota: $105.34 for 281 Choice 2-3 steers weighing an average of 1,454 lbs.; $103.80 for 679 Choice 2-4 steers weighing an average of 1,556 lbs.

Cattle futures closed higher Wednesday, with support from recently stronger wholesale beef values, the brighter seasonal price outlook and the prospect for higher weekly cash trade.

Live Cattle futures closed an average of 72¢ higher, from 5¢ higher in spot Dec to $1.10 higher at the back.

Feeder Cattle futures closed average of $1.40 higher, from 82¢ higher at the back to $1.97 higher toward the front

Choice boxed beef cutout value was 75¢ higher Wednesday afternoon at $210.19/cwt. Select was $1.60 higher at $197.05.

Corn futures closed mostly 2¢ to 5¢ higher.

Soybean futures closed 17¢ to 22¢ higher through Aug ‘21 and then mostly 13¢ higher.

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Major U.S. financial indices continued to rally Wednesday, led by tech stocks and despite the undecided U.S. presidential election.

The Dow Jones Industrial Average closed 367 points higher. The S&P 500 closed 74 points higher. The NASDAQ was up 430 points.

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The International Monetary Fund (IMF) is more optimistic about global economic recovery than it was in June, although improvement is likely to continue on the sluggish side, according to the most recent quarterly World Economic Outlook (WEO).

“We are projecting a somewhat less severe, though still deep recession in 2020, relative to our June forecast,” according to IMF analysts. “The revision is driven by second quarter GDP outturns in large advanced economies, which were not as negative as we had projected; China’s return to growth, which was stronger than expected; and signs of a more rapid recovery in the third quarter. Outturns would have been much weaker if it weren’t for sizable, swift, and unprecedented fiscal, monetary, and regulatory responses that maintained disposable income for households, protected cash flow for firms, and supported credit provision. Collectively these actions have so far prevented a recurrence of the financial catastrophe of 2008-09.”

Currently, IMF projects real global GDP this year to be 4.4% less than last year, when year-to-year GDP grew by 2.8%. Projected GDP for advanced economies this year is -5.8% compared to -3.3% for emerging and developing economies. IMF forecasts U.S. GDP this year at -4.3%.

Looking ahead, IMF projects global GDP at 5.2% next year; 3.0% for advanced economies, 6.0% for emerging economies and 3.1% for the United States.

“After the rebound in 2021, global growth is expected to gradually slow to about 3.5% into the medium term,” say IMF analysts. “This implies only limited progress toward catching up to the path of economic activity for 2020–25 projected before the pandemic for both advanced and emerging market and developing economies. It is also a severe setback to the projected improvement in average living standards across all country groups. The pandemic will reverse the progress made since the 1990s in reducing global poverty and will increase inequality.”

By | November 4th, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 4, 2020

Negotiated cash fed cattle trade was mostly inactive on light demand in the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was at a standstill.

Cattle futures closed mostly lower in light trade Tuesday, despite higher boxed beef prices and thoughts that last week’s shallower packer buy may elevate cash prices this week. Higher grain futures and election uncertainty likely provided some of the pressure.

Live Cattle futures closed an average of 26¢ lower, except for an average of 27¢ higher in the back three contracts.

Feeder Cattle futures closed an average of 57¢ lower.

Choice boxed beef cutout value was 79¢ higher Tuesday afternoon at $209.44/cwt. Select was $2.83 higher at $195.45.

Corn futures closed 3¢ to 4¢ higher through Sep ‘21 and then mostly 1¢ higher.

Soybean futures closed 8¢ to 12¢ higher through Sep ‘21 and then 4¢ to 6¢ higher.

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Major U.S. financial indices closed higher Tuesday, apparently buoyed by thoughts that economic stimulus talks will gain traction after the election, no matter who wins. 

The Dow Jones Industrial Average closed 554 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 202 points.

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The Purdue University/CME Group Ag Economy Barometer rose 27 points in October to 183, the highest level in the history of the barometer. The Current Conditions Index rose 36 points to a reading of 178 and the Future Expectations Index rose 23 points to a reading of 186.

The Ag Economy Barometer is based on survey responses from 400 U.S. agricultural producers and was conducted Oct. 19-23.

“The combination of good yields, a rally in crop prices and Coronavirus Food Assistance Program payments (CFAP 2) set the stage for an all-time high in the barometer and farmer sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Since bottoming out this summer, the ag economy has rebounded sharply, and the dramatic improvement in sentiment reflects the turnaround in the farm income picture.”

Mintert refers to a late summer/early fall rally in commodity prices combined with government program payments arising from the second round of the Coronavirus Food Assistance Program, which provided a boost to many producers’ farm income. Corn and soybean prices continued to rally, even though U.S. corn yields are expected to set a record high and USDA projects soybean yields to be the fourth highest on record.

Comparing their farm’s current financial condition to a year earlier, 25% of survey respondents said their operation was better off. That was the most positive response from producers to the question in the history of the barometer survey.

The Farm Capital Investment Index also hit an all-time high in October, up 9 points from September to a reading of 82. The percentage of producers expecting to increase their purchases of machinery in the upcoming year rose to 14% from 11% a month earlier, up from 4% in May. The percentage of respondents who plan to reduce their purchases in the next year was 33%, down from 40% in September.

Meanwhile, 4% more producers (27%) than in September expect land values to increase over the next 12 months. Similarly, 38% said they expect cash rental rates to increase in 2021, compared to 8% a month earlier.

Producer optimism about trade with China also increased, with 59% of respondents expecting China to fulfill the food and agricultural import requirements outlined in the Phase One trade agreement with the U.S.; 12% more than a month earlier.

By | November 3rd, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 3, 2020

Negotiated cash fed cattle trade was mostly inactive 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 $106/cwt. in the Southern Plains, $103-$105 in Nebraska and $101-$103 in the western Corn Belt. Dressed prices, in a light test, were at $158-$163 in Nebraska and at $158-$165 in the western Corn Belt.

Cattle futures managed to close mostly higher Monday after early pressure and skittishness surrounding Tuesday’s election. 

Live Cattle futures closed an average of 26¢ higher.

Feeder Cattle futures closed narrowly mixed from an average of 25¢ lower in the front two contracts to an average of 70¢ higher.

Choice boxed beef cutout value was 55¢ higher Monday afternoon at $208.65/cwt. Select was $1.38 higher at $192.62.

Corn futures closed 1¢ lower in the front four contracts and then mostly fractionally higher

Soybean futures closed 1¢ to 5¢ lower through the front five contracts and then 1¢ to 3¢ higher.

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Major U.S. financial indices closed higher Monday, buoyed by positive economic news and despite election uneasiness.

Economic activity in the manufacturing sector grew in October, with the overall economy notching a sixth consecutive month of growth, according to the latest Manufacturing ISM® Report On Business®. The October Purchasing Managers Index was 3.9 points higher to 59.3%, the highest since September 2018.

The Dow Jones Industrial Average closed 423 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 46 points.

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“Improved stocker prospects, combined with a sharp recovery in the Feeder Cattle futures markets last week, may mean that the seasonal low in calf and stocker prices is past,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “March Feeder futures, the reference for winter grazing programs, increased by roughly $8/cwt. last week, making stocker budgets look more attractive again.”

Besides the rally in futures prices, Peel points out last week’s winter storms and widespread moisture across the Southern Plains, could increase the odds for wheat pasture. Hopes for grazing wheat continued to dwindle amid expanding drought ahead of the storms.

“The wheat crop is generally poised to respond quickly to the timely precipitation. Stocker demand may pick back up somewhat in the coming weeks with improvement in the wheat crop. Seasonally large runs of feeder cattle are expected in the coming weeks and numerous value-added preconditioned calf sales are scheduled in the next five weeks (Oklahoma),” Peel says.

As well, logic suggests last week’s storms depressed feedlot performance in the region, which should also support the market.

By | November 2nd, 2020|Daily Market Highlights|

Cattle Current Daily—Nov. 2, 2020

Negotiated cash fed cattle prices looked more promising through Friday afternoon, but remained mainly steady to lower than the previous week, according to the Agricultural Marketing Service.

There were a few live trades in Nebraska at $106/cwt., but too few to trend. On Thursday, the market was established at $103, which was $2 less than the previous week. Dressed trade the prior week was at $162-$166.

In the western Corn Belt, live sales for the week were at $101-$103, which was steady to $4 lower than the previous week. Dressed prices the pervious week were at $162-$165.

Live trade in the Southern Plains was steady week to week at $106.

The average five-area direct steer price through Thursday was $104.16/cwt. on a live basis, which was 14¢ more than the previous week, but $7.75 less than the same week last year. The average dressed steer price of $159.70 was $4.27 less than the prior week and $17.89 less than the previous year.

Choice boxed beef cutout value was 78¢ higher Friday afternoon at $208.10/cwt. Select was 1¢ higher at $191.24.

Total estimated cattle slaughter for the week of 638,000 head was 5,000 head fewer than the previous week and 21,000 head fewer (-3.2%) than the same time last year. Year-to-date estimated total cattle slaughter of 26.7 million head is 1.1 million head fewer (-3.8%) than a year earlier. Beef production of 537.3 million lbs. for the week was 4.1 million lbs. less than the previous week and 4.7 million lbs. less than a year earlier. Year-to-date estimated beef production of 22.2 billion pounds is 256.7 million lbs. less (-1.1%) than a year earlier.

Cattle futures continued higher Friday, especially Feeder Cattle with support from seasonal expectations for higher cash fed cattle prices and wholesale beef values. 

Live Cattle futures closed an average of 32¢ higher, from 2¢ higher to 70¢ higher, except for 30¢ lower in expiring spot Oct.

Feeder Cattle futures closed an average of $2.08 higher, from $1.67 higher to $2.77 higher.

Corn futures closed unchanged to 3¢ higher.

Soybean futures closed 5¢ to 8¢ higher.

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Major U.S. financial indices closed lower Friday, ending a volatile and bearish week. Pressure on the day included record high domestic coronavirus cases for the week, renewed pandemic restrictions in Europe and positioning ahead of next week’s elections.

The Dow Jones Industrial Average closed 157 points lower. The S&P 500 closed 40 points lower. The NASDAQ was down 274 points.

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Even before the pandemic, the 49 rural U.S. counties dependent on meatpacking faced a comparatively high prevalence of poverty, according to USDA’s Economic Research Service (ERS).

“Just over 500,000 people work in the meatpacking industry in the United States. Many plants are in cities such as Sioux Falls, SD, where meatpacking is just one of many major employers. However, several other plants are in much smaller municipalities such as Dakota City, NE, and Worthington, MN, where meatpacking is the primary employer in the county,” according to ERS analysts, in The Meatpacking Industry in Rural America During the COVID-19 Pandemic. “There are 56 counties in the United States—49 in rural (non-metro) counties and seven in urban (metro) counties—where meatpacking is estimated to account for more than 20% of all county employment. While these counties make up 2.5% of all rural counties and 0.6% of urban counties, they represent 19.0% and 2.9%, respectively, of all meatpacking employment in the United States.”

By ERS definition, high-poverty counties have poverty rates of 20% or higher, using the 2014–18 five-year estimates of the American Community Survey. By that measure, 34.7% of meatpacking-dependent counties were defined as high-poverty counties, compared with 26.2% in all other rural counties.

Then came COVID-19.

Starting in the middle of April, the two-week moving average of new coronavirus cases in meatpacking-dependent counties were significantly higher than in other rural counties, according to ERS.

“Meatpacking-dependent counties are currently maintaining around 1.25 times the two-week moving average number of new daily cases per 100,000 compared to other rural counties for a third straight month,” explain ERS analysts.

By | October 31st, 2020|Daily Market Highlights|

Cattle Current Daily—Oct. 30, 2020

Negotiated cash fed cattle trade got off to a sluggish start for the week on Thursday with a few live trades in the Southern Plains steady with last week at $106/cwt. There were a few live trades in Nebraska at $103. However, there were too few transactions to trend in any region, according to the Agricultural Marketing Service.

The average dressed steer weight for the week ending Oct. 17 was 929 lbs., which was 1 lb. heavier than the prior week and 29 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 850 lbs. was 4 lbs. heavier than the prior week and 19 lbs. heavier than the previous year.

Cattle futures continued higher Thursday, with the outlook for seasonally higher cash prices, as well as technical support.

Live Cattle futures closed an average of $1.64 higher, from 42¢ higher in almost spent spot Oct. to $3.30 higher.

Feeder Cattle futures closed an average of $1.32 higher, from 27¢ higher at the back to $1.82 higher toward the front.

Choice boxed beef cutout value was $1.53 higher Thursday afternoon at $207.32/cwt. Select was $1.65 higher at $191.23.

Net U.S. beef export sales for 2020 totaled 18,900 metric tons for the week ending Oct. 22, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service. That was 13% less than the previous week and 6% less than the prior four-week average. Increases were primarily for China, Japan, South Korea, Mexico and Taiwan.

Nearby Corn and Soybean futures contracts softened a bit more, while the remainder of the board firmed after the previous session’s steep selloff.

Corn futures closed 1¢ to 3¢ lower through Jly ’21 and then mostly fractionally higher to 1¢ higher.

Soybean futures closed 1¢ to 5¢ lower through Mar ’21 and then mainly fractionally mixed.

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Major U.S. financial indices rebounded Thursday from the previous session’s selloff, buoyed by positive economic news.

Real gross domestic product (GDP) increased at an annual rate of 33.1% in the third quarter, according to the U.S. Bureau of Economic Analysis. It decreased 31.4% in the second quarter.

As well, weekly initial unemployment insurance claims of 751,000 were 40,000 fewer than the prior week, according to the U.S. Department of Labor. That was more positive than the trade expected.

The Dow Jones Industrial Average closed 139 points higher. The S&P 500 closed 39 points higher. The NASDAQ was up 180 points. 

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Each year, for more than three decades, the NPD Group publishes the Eating Patterns in America report—top-line trends based on a year’s worth of data from its daily tracking. As you’d expect, the pandemic shoved this year’s numbers and trends around.

“With mandated shelter-at-home and restaurant dine-in restrictions across most of the country during the pandemic, we have had few options other than to prepare most of our meals at home,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “Working from home, schooling at home, and preparing more meals means more of our meal times are a departure from the norm, with most consumers describing their meals as atypical.”

Examples of how America’s eating patterns changed as a result of the pandemic include:

For several years, 80% of meals have been sourced from home and 20% from restaurants and other foodservice outlets. During the pandemic, the gap widened to as much as 87% of meals sourced from home.

The use of online and digital orders for groceries and restaurant foods leapt years ahead in their growth trend trajectory. By May 2020, 40% of shoppers ordered edible groceries online compared to 28% a year earlier. Consumers more than tripled their share of restaurant meals ordered digitally during the April-May-June 2020 quarter. Digital restaurant carryout made up the larger share of restaurant digital orders.

Visits to full service restaurants, which are primarily on-premises operations, declined nearly 80% during the height of the mandated dine-in closures. Quick service restaurants, already set up for drive-thru, carryout, and delivery, realized double-digit declines as well but not as steep as full service restaurants.

“What a year it will be moving forward as we evolve our perspective and the effects of a global pandemic that has caused such tumultuous change,” Portalatin says. “It is my profound hope that next year when we’re compiling the 36th annual Eating Patterns in America, we’re telling the story of recovery.”

By | October 29th, 2020|Daily Market Highlights|

Cattle Current Daily—Oct. 29, 2020

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

Live prices last week were at $106/cwt. in the Southern Plains, $105 in Nebraska and $103-$105 in the western Corn Belt. Dressed prices were $162-$166 in Nebraska and $163-$165 in the western Corn Belt.

Cattle feeders offered 2,012 head in the weekly Fed Cattle Exchange. Of those, 1,257 head sold: 766 head at an average of $106.04/cwt. for delivery at 1-9 days; 630 head for an average of $105.80 for delivery at 1-17 days.

Choice steers and heifers sold $2.50-$2.75 lower at the fat auction in Tama, IA. There were 219 Choice 2-4 steers weighing an average of 1,488 lbs. bringing an average price of $102.97.

At Sioux Falls Regional in South Dakota, slaughter steers and heifers sold steady to $1 higher. There were 171 Choice 2-3 steers weighing an average of 1,464 lbs. bringing an average of $103.62.

Cattle futures, especially Feeder Cattle, continued to gain Wednesday, helped along by lower grain futures.

Live Cattle futures closed an average of 47¢ higher, from 10¢ higher to $1.00 higher in spot Oct.

Feeder Cattle futures closed an average of $1.06 higher, from 45¢ higher toward the back to $1.65 higher toward the front.

Choice boxed beef cutout value was 91¢ lower Wednesday afternoon at $205.79/cwt. Select was 91¢ higher at $189.58.

Grain futures closed sharply lower Wednesday, likely pressured by anemic outside markets, profit taking, positioning ahead of next week’s election and improved growing conditions and Russia and South America.

Corn futures closed 10¢ to 14¢ lower through Sep ’21 and then mostly 5¢ to 7¢ lower.

Soybean futures closed 15¢ to 25¢ lower through Aug ’21 and then mostly 10¢ to 13¢ lower.

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Major U.S. financial indices crumbled Wednesday as daily domestic coronavirus cases continued to set records and as Germany and France renewed strict pandemic restrictions amid increasing cases in those countries.

The Dow Jones Industrial Average closed 943 points lower. The S&P 500 closed 119 points lower. The NASDAQ was down 426 points.

WTI Crude Oil futures on the CME closed $1.90 to $2.18 lower through the front six contracts.

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Even as the pandemic threatens to further hamstring the economy, recent economic data suggests improvement before the latest upswing in cases was sluggish.

“Throughout the pandemic we have looked at the advanced estimates of monthly retail sales for clues as to the depth of the recession as well as the recovery.  September data was released last week and showed that improvements are slow,” according to analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “The retail sector continues to be one of the hardest hit sectors of the economy. Clothing and accessory stores are down 32.6% in the first nine months of 2020 compared to a year ago. Department stores are still off 17.8%, and electric and appliance stores are still down 15.8%. Gas stations are off 16.4% and food service and bars are down 20.1%.”

More specifically, with food in mind, the LMIC folks explain sales at food service and drinking establishments were 14% less year over year, while grocery store sales were 10% higher. Although total retail and food service sales were 10% higher in September year over year, they are 0.8% less for the year to date.

“With the holiday season upon us, there is considerable question as to what this year’s spending will look like, and how much another round of stimulus could affect it,” say LMIC analysts. “December is the highest total retail sales month in every single year back to 1992, with the only exception being 2008. The fourth quarter of the year is routinely more than 25% of where total annual retail sales are spent. Last year the fourth quarter represented 26.6% of the annual figure, up from 26.4% the prior year. The 7% year-over-year increase in September looks promising and is easily the highest September on record.” 

By | October 28th, 2020|Daily Market Highlights|

Cattle Current Daily—Oct. 28, 2020

Negotiated cash fed cattle trade was mostly inactive on very light demand in Nebraska and the Texas Panhandle through Tuesday afternoon. Elsewhere, it was at a standstill, according to the Agricultural Marketing Service. There were too few transactions to trend in any region.

Cattle futures rallied Tuesday, likely helped along by the performance-depressing winter storm, as well as apparent fund positioning.

Live Cattle futures closed an average of $1.01 higher, from 65¢ higher toward the front of the board to $1.30 higher toward the back.

Feeder Cattle futures closed an average of $1.41 higher, from 60¢ higher in spot Oct to $1.72 higher.

Choice was $1.13 lower at $206.70. Select was 18¢ higher at $188.67.

Corn futures closed 1¢ to 2¢ lower across the front half of the board and then fractionally higher to 1¢ higher.

Soybean futures closed 4¢ to 8¢ lower through Jan ’22 and then fractionally lower to 3¢ lower.

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Except for the tech sector, Major U.S. financial indices closed lower again Tuesday as COVID cases continued to spike higher.

The Dow Jones Industrial Average 222 points lower. The S&P 500 closed 10 points lower. The NASDAQ was up 72 points.

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“Drought conditions will likely play an important part of placements this year,” says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets.

Reflecting on the recent Cattle on Feed report, Anderson explains “Difficult wheat pasture establishment and development may force more to feedlots. Drought in the West and Texas may force some more placements. More feeder cattle continue to come from Mexico adding to available supplies for placement.”

As it is, in his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says total feedlot placements during the third quarter (July-September) were 8.5% more year over year. More specifically, during that same period, he explains year-over-year feedlot placements were 17.0% higher in Kansas, 14.5% more in Nebraska, 13.4% higher in Oklahoma, up 9.3% in Colorado, 2% higher in Texas and 1.9% higher in Iowa.

“The Kansas Focus on Feedlots data shows that feedlot average daily gains have been above year-ago levels all year with improved feed conversions, as well,” Peel says. “Improved gains and feed efficiency have pulled feedlot cost of gain below year-ago levels. Excellent feedlot performance has contributed to heavy cattle weights thus far this year.” He expects steer carcass weights to average more than 900 lbs. this year for the first time in history.

On a related note, analysts with the Livestock Marketing Information Center (LMIC) point out that heifers as a percentage of cattle on feed climbed last year but remained steady so far this year.

“Evidence of the slaughter plant disruptions were evident in quarter-three figures, where heifers on feed climbed to 38.5%, up from 37.3% in the prior quarter. Heifers, because of smaller carcass weights, were likely held longer to allow for very heavy steers to have slaughter priority,” say LMIC analysts, in the latest Livestock Monitor. “The heifer count as of Oct. 1 moved a full percent lower, even as cattle numbers on feed increased significantly. The fourth quarter proportion is 37.6% of steers and heifers on feed.”

The LMIC folks also point out beef cow slaughter since July 1 is higher year over year in the Pacific Northwest, West Coast and Southern Plains.

By | October 27th, 2020|Daily Market Highlights|

Cattle Current Daily—Oct. 27, 2020

Negotiated cash fed cattle trade was at a standstill in the Southern Plains through Monday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was mostly inactive on very light demand.

In regional negotiated cash trade last week, live prices were at $106/cwt. in the Southern Plains; $105 in Nebraska and at $103-$105 in the western Corn Belt. Dressed prices were at $162-$166 in Nebraska and at $163-$165 in the western Corn Belt.

The five-area direct average steer price last week was $2.45 less than the previous week on a live basis at $105.07/cwt., with the average weight 14 lbs. lighter at 1,467 lbs. The average steer price in the beef was $163.95, which was $4.40 less week to week. The average carcass weight was 7 lbs. lighter at 977 lbs.

Cattle futures rebounded Monday, despite sharply lower outside markets and the bearish nature of Friday’s Cattle on Feed report. Potential rationale includes oversold conditions, adequate positioning ahead of the report and thoughts that a near-term bottom is in the books.

Live Cattle futures closed an average of 69¢ higher, from an average of 22¢ to $1.12 higher, except for an average of 20¢ lower in two nearby contracts.

Feeder Cattle futures closed an average of 76¢ higher, from 17¢ higher in spot Oct to $1.22 higher.

Choice boxed beef cutout value was 34¢ higher Monday afternoon at $207.83/cwt. Select was $1.91 lower at $188.49.

Corn futures closed 1¢ to 2¢ lower.

Soybean futures closed 1¢ to 4¢ higher through Mar ’21 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed sharply lower on Monday, with spiking coronavirus cases and a more bearish tone to economic stimulus talks.

The Dow Jones Industrial Average closed 650 points lower. The S&P 500 closed 64 points lower. The NASDAQ was down 189 points.

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So far, China purchased more than $23 billion worth of agricultural products, approximately 71% of its target under the Phase One Agreement, according to a recent progress report from the U.S. Trade Representative (USTR) and USDA.

“Since the Agreement entered into force eight months ago, we have seen remarkable improvements in our agricultural trade relationship with China, which will benefit our farmers and ranchers for years to come,” says U.S. Trade Representative Robert Lighthizer.

Highlights of the report include:

Beef: U.S. beef and beef product exports to China through August 2020 were more than triple the total for 2017.

Pork: U.S. pork exports to China hit an all-time record in the first five months of 2020.

Corn: Outstanding sales of U.S. corn to China are at an all-time high of 8.7 million tons.

Soybeans: U.S. soybeans sales for marketing year 2021 are off to the strongest start in history, with outstanding sales to China double 2017 levels.

Sorghum: U.S. exports of sorghum to China from January to August 2020 totaled $617 million, up from $561 million for the same period in 2017.

Additionally, USDA expects 2020 sales to China to hit record or near-record levels for numerous other U.S. agricultural products including pet food, alfalfa hay, pecans, peanuts, and prepared foods.

“This agreement finally levels the playing field for U.S. agriculture and is a bonanza for America’s farmers, ranchers, and producers,” says U.S. Secretary of Agriculture Sonny Perdue. “Being able to participate in this market in a more fair and equitable way has generated more sales that are supporting higher prices and strengthening the rural economy.”

By | October 26th, 2020|Daily Market Highlights|

Cattle Current Daily—Oct. 26, 2020

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

For the week live prices were $2 lower in the Southern Plains at $106/cwt.; $3-$4 lower in Nebraska at $104-$105 and $2 lower in the western Corn Belt at $103-$105. Dressed prices were $4-$7 lower in Nebraska at $162-$165 and $3-$4 lower in the western Corn Belt at $163-$165.

Through Thursday, the five-area direct weighted average steer price was $105.11/cwt. on a live basis, which was $2.50 less than the same period last week and $4.74 less than a year earlier. The average dressed steer price of $163.97 was $4.43 less than the previous week and $10.91 less than last year.

Cattle futures continued mostly lower on Friday beneath the weight of the week’s gloom and higher grain prices. Friday’s Cattle on Feed report will likely offer no support on Monday (see below).

Live Cattle futures closed narrowly mixed, from an average of 37¢ lower to an average of 7¢ higher.

Feeder Cattle futures closed an average of 49¢ lower, except for 7¢ higher in the back contract.

Choice boxed beef cutout value was $1.37 lower Friday afternoon at $207.49/cwt. Select was 32¢ higher at $191.40.

Estimated cattle slaughter of 643,000 head for the week was 11,000 few than the previous week but 3,000 head more than the previous year. Year-to-date total cattle slaughter of 26.11 million head is 1.04 million head fewer (-3.82%) than last year. Estimated year-to-date beef production of 21.67 billion lbs. is 257.6 million lbs. less (-1.18%) than the same period last year.

Corn futures closed 1¢ to 3¢ higher through Jly ’21 and then 1¢ to 2¢ lower.

Soybean futures closed 3¢ to 10¢ higher through Aug ’21 and then mostly fractionally mixed.

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Major U.S. financial indices closed narrowly mixed on Friday, amid surging coronavirus cases and wonderments about economic stimulus.

The Dow Jones Industrial Average closed 28 points lower. The S&P 500 closed 11 points higher. The NASDAQ was up 42 points. 

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Unless the trade already counted on the bearishness of the monthly Cattle on Feed report issued Friday, there will likely be more pressure on futures and cash prices to start the week. Keep in mind the report accounts for feedlots with 1,000 head or more capacity.

Placements of 2.23 million head in September were 124,000 head more (+5.9%) than the same time last year. That was about 3% more than expectations ahead of the report. In terms of weights 36% went on feed weighing 699 lbs. or less, 46% weighing 700-899 lbs. and 18% weighing 900 lbs. or more.

Marketings of 1.85 million head in September were 108,000 head more (+6.2%) year over year, a touch more positive than expectations.

Cattle on feed Oct. 1 of 11.72 million head were 429,000 head more (+3.8%) than the previous year. That’s the most for the date since the data series began in 1996 and a little more than what the trade anticipated.

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The 461.99 million lbs. of beef in cold storage Sept. 30, was 3% more than the previous month but 6.99 million lbs. less (-1.5%) than the same time last year, according to USDA’s latest Cold Storage report.

Frozen pork supplies were up slightly from the previous month but down 22% from last year.

Total red meat supplies in freezers were up 1% from the previous month but down 13% from last year.

Total frozen poultry supplies were down 2% from the previous month and down 3% from a year ago.

By | October 24th, 2020|Daily Market Highlights|

Cattle Current Daily—Oct. 23, 2020

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

For the week so far live prices are $2 lower in the Southern Plains at $106/cwt.; $3-$4 lower in Nebraska at $104-$105 and $2 lower in the western Corn Belt at $103-$105. Dressed prices are $4-$7 lower in Nebraska at $162-$165 and $3-$4 lower in the western Corn Belt at $163-$165.

Total cattle slaughter the week ending Oct. 10 was 637,073 head, according to USDA’s Actual Slaughter Under Federal Inspection report. That was 26,074 head fewer (-4.02%) than the previous week and 11,205 head fewer (-1.73%) than the previous year. Total fed cattle slaughter of 502,345 head was 22,199 head fewer than the prior week (-4.23%) and 7,117 head fewer (-1.40%)than the same week last year.

The average dressed steer weight for that week of 928 lbs. was 4 lbs. more than the previous week and 27 lbs. more than the prior year. The average dressed heifer weight of 846 lbs. was 3 lbs. more than the previous week and 18 lbs. more than a year earlier.

Cattle futures continued to erode amid light trade on Thursday as grain prices hold their ground and cash fed cattle prices soften. As well, there was likely skittishness over the monthly Cattle on Feed report due to be published Friday afternoon.

Live Cattle futures closed an average of 70¢ lower, 30¢ to $1.30 lower

Feeder Cattle futures closed an average of 82¢ lower, from 57¢ lower in spot Oct to $1.05 lower.

On a positive note, wholesale beef values edged higher. Choice boxed beef up 39¢ at 208.86. Select up 17¢ at 191.08.

As well, U.S. net 2020 beef export sales of 21,700 metric tons (mt) for the week ending Oct. 15 were 62% more than the previous week and 13% more than the prior four-week average, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service. Increases were primarily for South Korea, China, Japan, Mexico, and Hong Kong.

Corn futures closed 1¢ to 2¢ higher through Sep ’21 and then fractionally lower to 3¢ lower.

Net export sales of 2020-21 corn for the week ending Oct. 15 was 1.83 million metric tons, up noticeably from the previous week and 21% more than the prior four-week average.

Soybean futures closed mostly unchanged to fractionally mixed.

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Major U.S. financial indices closed higher on Thursday, supported by increased optimism surrounding economic stimulus talks and FDA approval of a drug for treating coronavirus.

The Dow Jones Industrial Average closed 152 points higher. The S&P 500 closed 17 points higher and the NASDAQ was up 21 points.

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The Creighton University Rural Mainstreet Index (RMI) rose for the sixth consecutive month in October to its highest level since January, before the onset of the pandemic. The RMI is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

The overall index for October climbed above growth neutral (50.0) to 53.2 from  46.9 in September. The farmland price index advanced above growth neutral to 50.6 in October; only the third time in the last 82 months.

“Recent improvements in agriculture commodity prices, federal farm support, and the Federal Reserve’s record low interest rates have underpinned the Rural Mainstreet Economy. Still, 35.5%, of bank CEOs reported their local economies were experiencing recessionary economic conditions,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Bankers were asked in the latest survey to identify the industry in their area most harmed by the pandemic. More than eight of 10 (80.6%) named restaurants/bars as experiencing the greatest negative impacts. Others areas identified by bankers as economically impacted were: farmers (3%), medical care (3.4%), retailers (6.3%) and hourly workers (6.7%).

“Our worst problem right now is that so much anti-COVID-19 vaccine information has been spread for political reasons that about half the people I talk to say they won’t take the vaccine when it is available. That will hurt our hopes for an economic recovery looking forward,” says Lonnie Clark, president of the State Bank of Chandler, in Chandler, MN.

“It will take many months of above growth neutral readings to get back to pre-COVID-19 employment levels for the region,” Goss says.

By | October 22nd, 2020|Daily Market Highlights|

Cattle Current—Oct. 22, 2020

Negotiated cash fed cattle trade and demand were moderate in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Live sales were $3 lower than last week at $104-$105/cwt. Dressed sales were $4-$7 lower at $162-$165. Earlier in the week, live sales in the Southern Plains were $2 lower at $106.

Cattle feeders offered 1,096 head in the weekly Fed Cattle Exchange auction. Of those, 702 head—four lots from the Southern Plains—sold: 558 head for a weighted average price of $106.50/cwt. on delivery at 1-9 days; 144 head for a weighted average price of $106.25 on delivery of 1-17 days.

Choice steers and heifers sold $1.00-$1.50 lower at the fat auction in Tama, IA. There were 159 Choice 2-4 steers weighing an average of 1,410 lbs. selling for an average price of $105.23. That was steady to $2 lower than country trade in the region last week.

Cattle futures continued to stabilize Wednesday, closing narrowly mixed, with continued pressure from grain prices, as well as demand uncertainty and wonderments about the monthly Cattle on Feed report due out on Friday.

Live Cattle futures closed an average of 40¢ lower, except for unchanged and 30¢ higher in the back two contracts.

Feeder Cattle futures closed from an average of 27¢ higher in five contracts to an average of 33¢ lower.

Choice boxed beef cutout value was $2.13 lower Wednesday afternoon at $208.47/cwt. Select was 76¢ lower at $190.91.

Corn futures closed 1¢ to 5¢ higher through Sep ’21 and then mostly 1¢ to 3¢ lower.

Soybean futures closed 4¢ to 8¢ higher through Sep ’21 and then mostly 2¢ higher.

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Major U.S. financial indices closed lower Wednesday, with pressure from unresolved economic stimulus talks and election uncertainty.

The Dow Jones Industrial Average closed 97 points lower. The S&P 500 7 points lower. The NASDAQ down 31 points.

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Current markets offer promising value of gain across a wide range of weights, according to Brenda Boetel, agricultural marketing specialist at the University of Wisconsin-River Falls.

“Relative weights are the largest driving factor for the relationship between feeder cattle prices,” Boetel explains, in the latest issue of In the Cattle Markets. “The normal relationship between different cattle prices is for prices per hundredweight to decline when cattle weights increase. This price slide is because the prices reflect what it costs to add weight to the animal. The price slide is a big indicator for gross margin, or value of gain, for stocker production.

“Currently, the value of gain is a bit stronger for gains towards the heavy end of feeder weights. A 650-lb. beginning weight has a value of gain of $1.19/lb. for 300 lbs. of gain up to 950 lbs., whereas a 450-lb. beginning weight has a value of gain of $1.11/lb. for 300 lbs. of gain up to 750 lbs. These values suggest that stocker producers have considerable flexibility about what weight to buy and how much weight to put on stocker cattle at this time.”

She notes the above analysis does not indicate profit potential. It assumes the same prices for all weights at completion of the stocker period as when purchased. So, the question is what prices levels could be early next year.

“June to September 2020 saw larger feedlot placements compared to 2019, indicating larger fed cattle supply for early 2021 than previously anticipated. Feedlots looking to fill lots in early 2021, coupled with two consecutive years of declining calf crops provides the potential for heavyweight feeder cattle prices to remain steady to slightly higher than fall 2020 prices,” Boetel says. “Given the drought in the West, the forage availability is the biggest challenge for southern and western stocker cattle. Many of these operations will likely not have adequate forage this winter, indicating that heavyweight feeder cattle supply for spring may be tighter than anticipated as lightweight animals are placed directly on feed this winter. If heavyweight feeder cattle prices remain stable and if the producer has adequate forage available, there is some potential for profit from stocker cattle this winter.”

Boetel emphasizes producers need to analyze their own costs and revenue potential. Wisconsin Extension has some decision tools available here.

By | October 21st, 2020|Daily Market Highlights|

Cattle Current Daily—Oct. 21, 2020

Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service (AMS). There were a few live trades in the Southern Plains at $106/cwt., which was steady with the previous day and $2 lower than last week.

Cattle futures firmed Tuesday, regaining a portion of what was lost in the previous session’s selloff. Other than being oversold, there was no compelling explanation.

Live Cattle futures closed an average of 74¢ higher, from 12¢ higher in spot Oct to $1.07 higher toward the back.

Feeder Cattle futures closed an average of $1.87 higher, (70¢ to $2.40 higher) except for 10¢ lower in spot Oct.

Choice boxed beef cutout value was 86¢ higher Tuesday afternoon at $210.60/cwt. Select was 17¢ lower at $191.67.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 8¢ to 11¢ higher through Sep ’21 and then 5¢ to 6¢ higher.

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Major U.S. financial indices closed higher Tuesday, buoyed by promising chatter about Congress getting closer to agreement concerning an economic stimulus deal.

The Dow Jones Industrial Average 113 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 37 points. 

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Late last week, the National Cattlemen’s Beef Association (NCBA) released its widely anticipated framework for voluntarily enhancing negotiated cash fed cattle trade volume. In broad terms, it calls for minimum levels of cash trade in each of four designated cattle feeding regions, as well as weekly participation by the four largest beef packers.

“The framework explains in detail what we are calling the 75% Plan, which is designed to provide negotiated trade and packer participation benchmarks for the industry to strive toward,” explains, Marty Smith, NCBA president, in a letter to that organization’s members.

To avoid tripping triggers, in any given quarter, each region will have to:

  • Achieve no less than 75% of the weekly negotiated trade volume that current academic literature indicates is necessary for robust price discovery in that specific region.
  • Achieve this negotiated trade threshold no less than 75% of the reporting weeks in a quarter.
  • Achieve no less than 75% of the weekly packer participation requirements, to be determined in short order, and assigned to each specific region (more later).
  • Achieve this packer participation threshold no less than 75% of the reporting weeks in a quarter.

That’s outlined in A Voluntary Framework to Achieve Robust Price Discovery in the Fed Cattle Market. It was developed by NCBA’s Regional Triggers Subgroup. The NCBA Live Cattle Marketing Work Group tasked that group to develop a voluntary framework, including triggers, to increase frequent and transparent regional trade to a regionally sufficient level.

Levels of weekly trade volume are based on previous and ongoing cash price discovery research conducted by Stephen Koontz, agricultural economist at Colorado State University.

“For instance, in Kansas, the robust number that Dr. Koontz identified was 21,000 head of negotiated trade on a weekly basis, so 75% of that is 15,750 head per week,” explained Jerry Bohn, chairman of the Regional Triggers Subgroup, during last Friday’s Beltway Beef podcast. “We did that for every region of the country. From there, we put together this trigger plan of 75% of the required volume each week, 75% of the time.”

The framework defines four cattle feeding regions: 1) Texas, Oklahoma and New Mexico; 2) Kansas; 3) Nebraska and Colorado; 4) Iowa and Minnesota. Weekly robust cash trade levels for the regions range from 5,000 head (Colorado) to 31,000 head (Nebraska).

As for the packer side of the equation, according to the framework:

“Each of the four major packers shall be responsible to participate in negotiated trade, at appropriate and adequate levels, within each of the regions from which they predominantly procure fed cattle. At this time, there is insufficient data published under LMR (Livestock Mandatory Reporting) to measure the participation of the major packers in negotiated trade within each region. NCBA is currently involved in conversations with U.S. Department of Agriculture’s Agricultural Marketing Service (USDA-AMS) to determine what packer participation information can be shared under the current LMR statutes and USDA’s rules of confidentiality. The subgroup has drafted a potential framework for the packer participation silo, but will await additional information from USDA-AMS before finalizing.”

Trigger Tripping

The framework defines eight minor triggers, each having to do with whether or not threshold-level negotiated trade volume and threshold-level packer participation were achieved in various regions.

The subgroup will evaluate, on a quarterly basis in arrears, the weekly negotiated trade volume and packer participation information for each reporting region, using LMR data from USDA-AMS.

To avoid tripping a minor trigger, each region must:

  • Weekly trade 75% or more of its “robust” price discovery threshold via negotiated means, no less than 75% of the reporting weeks, and
  • Weekly fulfill its packer participation obligations (to be determined as outlined above) no less than 75% of the reporting weeks.

In any given quarter, the tripping of three or more minor triggers equals a major trigger.

“In the event that a major trigger is tripped during any two out of four rolling quarters, the subgroup shall recommend NCBA pursue legislative or regulatory measures to compel adequate negotiated trade for robust price discovery,” according to the report.

“While certainly not a silver-bullet solution, I truly believe that this approach provides the industry a goal to strive towards and, perhaps more importantly, a path forward if progress is not demonstrated toward that goal,” wrote Smith.

“It’s not intended to be the ultimate fix to the marketplace, but ultimately what we wanted is to have the industry in the driver’s seat until such a time that it was determined that we can’t achieve what we need to on a voluntary basis,” explained Tanner Beymer, NCBA director of government affairs and market regulatory policy, during the podcast.

By | October 20th, 2020|Daily Market Highlights|

Cattle Current Daily—Oct. 20, 2020

Negotiated cash fed cattle trade was $2 lower at $106/cwt. on a live basis in the Southern Plains through Monday afternoon on light demand, according to the Agricultural Marketing Service (AMS). There were a few live sales in Nebraska $3 lower at $105, but too few to trend.

Prices last week:

Southern Plains: $108 on a live basis.

Nebraska: mostly $108 live and at $169 in the beef.

Western Corn Belt: $105-$107 on a live basis and $167-$168 dressed.

Last week’s five-area direct fed steer prices was 74¢ less than the previous week at $107.52/cwt. on a live basis, according to AMS. The average price in the beef of $168.35 was $1.32 lower.

Cattle futures closed sharply lower Monday, with follow-through pressure from the last session, softer outside markets, declining open interest and what appeared to be algorithmic piling on. Recently expanded CME limits offered extra rein.

Live Cattle futures closed an average of $2.90 lower.

Feeder Cattle futures closed an average of $3.67 lower.

Choice boxed beef cutout value was 29¢ lower Monday afternoon at $209.74/cwt. Select was $1.68 lower at $191.84.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed mostly 3¢ to 4¢ higher across the front half of the board and then mostly fractionally higher to 1¢ higher.

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Major U.S. financial indices dropped Monday, beneath the weight of increasing coronavirus cases and continued uncertainty about the government’s ability to come to terms on another round of economic stimulus.

The Dow Jones Industrial Average closed 410 points lower. The S&P 500 closed 56 points lower. The NASDAQ was down 192 points.

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“Despite the rising number of cattle on feed, front-end supplies—the number of cattle on feed over 150 days—diminished for the third consecutive month,” according to analysts with USDA’s Economic Research Service, in the monthly Livestock, Dairy and Poultry Outlook. “This is the result of an improving pace of fed cattle slaughter, which was faster than a year ago for the last two months and above the five-year average. The improving pace, combined with an ample supply of fed cattle at heavier weights, has led to higher expected beef production in third-quarter 2020, relative to 2019. Nonetheless, firm demand and higher than year-ago wholesale prices are likely supporting packer margins, as the recent uptick in steer prices remains in line with year-ago prices.”

ERS increased the expected five-area direct fed steer price for the fourth quarter by $5 to $109/cwt. Projections for the first quarter next year increased by $6 to $113; by $3 to $110 in the fourth quarter.

As for feeder steers (basis Oklahoma City), ERS increased expectations for the fourth quarter by $3 to $143. The annual average price for next year increased by $2 to $139.

By | October 19th, 2020|Daily Market Highlights|

Cattle Current Daily—Oct. 19, 2020

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

For the week, prices were $1 lower on a live basis in the Southern Plains at $108/cwt.; steady to $1 lower in Nebraska at $107-$108/cwt.; steady to $3 lower in the western Corn Belt at $105-$107. Dressed prices were $1 lower in Nebraska at $169 and $1-$3 lower in the western Corn Belt at $167-$168.

The five-area direct weighted average steer price through Thursday was $107.61/cwt., which was 2¢ more than the previous week, but $3.35 less than the same week last year. The average steer price in the beef of $168.40 was 89¢ less than the prior week and $8.86 less than the same time last year.

Cattle futures took another step lower on Friday, pressured by lower cash prices, weaker wholesale beef values and increasing demand uncertainty.

Live Cattle futures closed an average of 93¢ lower.

Feeder Cattle futures closed an average of $2.25 lower (82¢ lower at the front to $2.77 lower).

Choice boxed beef cutout value was 45¢ lower Friday afternoon at $210.03/cwt. Select was $2.98 lower at $193.52.

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

Soybean futures closed 6¢ to 12¢ lower through May ’21 and then mostly 1¢ to 5¢ lower.

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Major U.S. financial indices closed mixed Friday. Pressure included resurgent COVID cases. Support included stronger retail sales than expected in September.

U.S. retail sales were up 1.9% more than the previous month and 8.2% more year over year, according to the U.S. Census Bureau. Sales by non-store retailers were up 23.8% year over year.

The Dow Jones Industrial Average closed 112 points higher. The S&P 500 closed fractionally higher. The NASDAQ was up 42 points.

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A recent Cargill study found consumer recognition of the challenges and expectations farmers face grew amid the COVID-19 pandemic, as processing and transportation bottlenecks, especially in the protein industry, stretched the global food supply.

More specifically, the latest Feed4Thought survey conducted by Cargill found nearly one-third of consumers in the U.S., Brazil, Vietnam and Norway have a renewed appreciation for animal agriculture.

“Farmers and ranchers have faced tremendous pressures caused by COVID-19 supply chain disruptions. And those pressures came on top of the multitude of challenges farmers already faced as they worked to feed the world in a safe, responsible and sustainable way,” says David Webster, president of Cargill Animal Nutrition & Health. “When consumers experienced bare shelves at grocery stores, they were reminded of the critical role livestock and aquaculture farmers play in global food security.”

In the study, 71% of consumers express concern about the pandemic’s disruption of the food system; two in three consumers acknowledge increased pressure on animal farmers to supply safe, affordable protein since COVID-19’s onset.

These new challenges have not, however, deterred consumers’ faith in farmers: an overwhelming majority of consumers (84%) indicated they were generally confident in farmers to meet demand and feed growing populations. More than half of consumers indicate they feel positively toward/appreciative of farmers, with one-third saying that their perceptions have improved as compared to pre-pandemic. This high confidence and increased appreciation toward farmers suggest that COVID-19 may be acting as a catalyst in strengthening the relationship between consumers and farmers.

By | October 17th, 2020|Daily Market Highlights|

Cattle Current Daily—Oct. 16, 2020

So far this week, negotiated cash fed cattle trade is steady to $1 lower on a live basis in Nebraska and the western Corn Belt at $107-$108/cwt., according to the Agricultural Marketing Service. Dressed sales are $1 lower in Nebraska at $169. Live sales in the Southern Plains are $1 lower at $108.

Cattle futures continued to weaken on Thursday, especially Feeder Cattle, as grain prices continued to strengthen.

Live Cattle futures closed an average of 58¢ lower.

Feeder Cattle futures closed an average of $1.17 lower (82¢ to $1.52 lower), except for 55¢ and 15¢ higher in the front two contracts.

Choice boxed beef cutout value was 60¢ lower Thursday afternoon at $210.54/cwt. Select was $2.38 lower at $196.89.

Corn futures closed 3¢ to 7¢ higher through the front four contracts and then mostly fractionally higher to 1¢ higher.

Soybean futures closed 3¢ to 6¢ higher through Mar ’21 and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices softened Thursday. Pressure included resurgent COVID cases in Europe prompting renewed pandemic restrictions in some countries.

Also, weekly initial unemployment insurance claims of 898,000 reported by the U.S. Department of Labor was 53,000 more than the previous week and less robust than the trade expected.

The Dow Jones Industrial Average closed 19 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 54 points.

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“The current concern surrounding Alternative Marketing Arrangements (AMA e.g. formula/grid pricing) has more to do with lower cash prices received by producers due to market reactions to major market disruptions than the role of AMA’s role in thinly traded markets,” says Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln, in the latest issue of In the Cattle Markets.

Dennis discusses the motivation behind recent legislative proposals that would mandate minimum levels of weekly cash trade.

“While both bills would bring increased negotiated cash price discovery and transparency in the feedlot-packer market interface, neither are likely to increase the cash price received by producers since they do not fundamentally change the supply of fed cattle nor the demand for wholesale beef,” Dennis explains. “Further, it is unlikely that if these bills were implemented prior to either the Holcomb Fire or COVID-19 it would have prevented the backlog in cattle, nor affected the demand for wholesale beef. If implemented, these policies would create additional transparency but potentially create increased costs and reduce profitability for the entire beef complex. Consistent with the economic theory of derived demand, the additional costs of these policies are likely to predominately be carried by the cow-calf industry.”

Although there are regional differences and periods when bid-the-grid selling increased, Dennis says there has been little overall average change in the percentage of negotiated cash sales since the beginning of the year.

By | October 15th, 2020|Daily Market Hig