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

Daily Market Highlights

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Cattle Current Daily—June 17, 2019

Negotiated cash fed cattle trade appeared steady to either side of even in two regions through Friday afternoon.

Live sales in the western Corn Belt, was mainly steady at $114-$115/cwt., while dressed sales were steady to $2 higher at $184-$186.

The Texas Cattle Feeders Association reported its members trading at $112, which was $1 less than the previous week.

Cattle futures continued to soften Friday with continued pressure from rising grain prices.

Live Cattle futures closed an average of 56¢ lower.

Feeder Cattle futures closed an average of 88¢ lower amid extremely light trade.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 13¢ higher Friday afternoon at $222.23/cwt. Select was $1.95 lower at $202.76.

Corn futures closed 4¢ to 11¢ higher through Jul ‘20 and then mostly fractionally lower to 3¢ lower.

Soybean futures closed 5¢ to 8¢ higher through May ‘20 (mostly 8¢) and then mostly 1¢ to 3¢ higher.

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Major U.S. financial indices closed lower Friday. Pressure included a decline in chipmakers, tied to U.S. sanctions against China’s Huawei.

The Dow Jones Industrial Average closed 17 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 40 points.

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With the weather and flooding continuing to wreak havoc across the Northern Plains and Midwest, the Livestock Marketing Information Center (LMIC) reduced  its outlook for hay yield and increased the expected price.

Keep in mind, hay prices were already sharply higher year over year, in the latest USDA Agricultural Prices published at the end of last month. At $199/ton in April, alfalfa was $16 more than the previous year and $15 more than the previous month. At $151/ton, other hay was $27 more than last year and $4 more than in March of this year.

In the latest Livestock Monitor, LMIC notes new seedings of alfalfa in those aforementioned areas—about half of all new seedings—are likely struggling.

“Winterkill was also potentially an issue in these areas, as this winter was not the kindest either,” say LMIC analysts. “It is unknown how many of those fields face irrecoverable situations, but for now, we assume that, should the fields dry out, those acres will still be harvested, but may lose a cutting.”

By | June 16th, 2019|Daily Market Highlights|

Cattle Current Daily—June 14, 2019

Although too few transactions to trend, negotiated cash fed cattle trade for the week wobbled from the blocks at steady to lower prices. There were some early sales in the Texas Panhandle at $112/cwt., a few in Kansas at $110, as well as some early dressed sales at $185 in Nebraska and the western Corn Belt.

Feeder Cattle futures closed sharply lower Thursday but off of session lows, under continued pressure from rising grain prices. Live Cattle closed lower, to a lesser degree.

Live Cattle futures closed an average of 67¢ lower (22¢ to $1.10 lower).

Feeder Cattle futures closed an average of $1.68 lower.

Wholesale beef values were steady on Choice and sharply lower on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 5¢ lower Thursday afternoon at $222.10/cwt. Select was $2.02 lower at $204.71.

Corn futures closed 7¢ to 12¢ higher in the front three contracts and then mostly 1¢ to 4¢ higher.

Soybean futures closed mostly 5¢ to 10¢ higher through Sep ‘20 and then mostly 2¢ to 4¢ higher.

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Major U.S. financial indices closed higher Thursday, buoyed in part by a bounce to recently struggling oil prices.

The Dow Jones Industrial Average closed 101 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 44 points.

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Carcass weights continue to suggest currentness of feedlot marketing.

Average dressed steer weighing of 842 lbs. (week ending June 1) was even with the previous week and 9 lbs. less than the previous year, according to the most recent Actual Slaughter Under Federal Inspection report from USDA. Average dressed heifer weight was 6 lbs. lighter than the previous week at 779 lbs. and 7 lbs. lighter than the previous year. With 3,413 head more total cattle slaughter for the week than the previous year (1,810 head more fed slaughter), beef production for the week was 900,000 lbs. less at 463.8 million lbs.

Although 0.89% more carcasses graded Prime for the week ending May 31, carcasses grading Choice and Prime were 0.12% less with 0.80% fewer grading in the upper two-thirds of Choice.

By | June 13th, 2019|Daily Market Highlights|

Cattle Current Daily—June 13, 2019

Choice steers and heifers sold $2.00-$2.25 higher at the fat auction in Tama, IA: $120.52/cwt. for steers at 1,396 lbs.

There were 663 head offered in the weekly Fed Cattle Exchange auction, with 340 head (two Kansas lots) selling for a weighted average price of $113/cwt.; delivery at 1-9 days.

Live Cattle futures closed an average of $1.26 lower (75¢ lower at the back to $1.65 lower).

Feeder Cattle futures closed an average of 96¢ lower (32¢ lower in spot Aug to $1.30 lower).

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 24¢ lower Wednesday afternoon at $222.15/cwt. Select was $1.52 lower at $206.73.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed 18¢ higher in the front four contracts and then mostly 10¢ to 17¢ higher.

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Major U.S. financial indices edged lower Wednesday, amid lingering worries about trade issues. Crude oil prices (WTI-CME) were also about $2 lower for 2019 contracts with wonderments about demand, tied to wonderments about global economic growth.

The Dow Jones Industrial Average closed 43 points lower. The S&P 500 closed 5 points lower. The NASDAQ closed 29 points lower.

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“Steer and heifer calf prices are now expected to fall by about 3% in 2019 relative to last year, equivalent to taking between $4-$7/cwt. out of 500-600 lb. calf prices in the Southern Plains,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

LMIC adjusted expected calf and feeder prices lower based on the dramatic run up in corn prices.

As mentioned in yesterday’s Cattle Current, USDA increased the expected season-average corn price 50¢ higher to $3.80/bu. in the latest World Agricultural Supply and Demand Estimates. LMIC is more bearish.

“LMIC is expecting total corn plantings this spring will be 87.4 million acres, the lowest area since 2009,” according to analysts there. “The lateness in planting also has negative implications for crop yield potential, since the crop will have less time to develop before harvest. Therefore the average yield per acre for the coming harvest is expected to fall to 162.5 bu.  Total corn harvest this fall is pegged at 13.0 billion bu., down from 14.4 billion bu. harvested last year. Corn prices will have to go up to ration the smaller supply and LMIC is calling for a crop year average price of $4.50 at the farm for the 2019-2020 corn crop.”

By way of comparison, WASDE projects corn planted area of 89.8 million acres with a yield of 166 bu./acre for total production of 13.7 billion bu.

Between the dramatic increase in expected corn prices and the adjustment lower in calf prices LMIC lowered projected cow-calf returns for this year from +$27 per head to -$14, similar to 2018. Anticipated returns for 2020 remain positive.

Moreover, LMIC anticipates higher cull  cow prices.

“Cull cow prices are still expected to move higher in 2019 by about 8.6%, averaging under $60/cwt. in the southern plains,” say LMIC analysts. “LMIC is expecting a substantial rebound in the cull cow price as both beef and dairy cow slaughter is expected to pull back by 2020.”

By | June 12th, 2019|Daily Market Highlights|

Cattle Current Daily—June 12, 2019

Live Cattle futures and Feeder Cattle ran in opposite directions Tuesday as Corn futures strengthened on the monthly World Agricultural Supply and Demand Estimates (see below).

Live Cattle futures closed an average of 67¢ higher (40¢ to $1.02 higher).

Feeder Cattle futures closed an average of 68¢ lower (10¢ lower at the back to $1.70 lower in spot Aug).

Wholesale beef values were firm on Choice and weak on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 73¢ higher Tuesday afternoon at $222.39/cwt. Select was 54¢ lower at $208.25.

Corn futures closed 10¢ to 12¢ higher through May ‘20 and then mostly 4¢ to 6¢ higher.

Soybean futures closed 1¢ to 3¢ higher.

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Major U.S. financial indices edged lower Tuesday.

The Dow Jones Industrial Average closed 14 points lower. The S&P 500 closed 1 point lower. The NASDAQ closed fractionally lower.

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Analysts with USDA’s Economic Research Service (ERS) reduced estimated beef production for this year by 65 million lbs. to 27.20 billion lbs., in the latest World Agricultural Supply and Demand Estimates (WASDE).

“The decline in beef production largely reflects lower steer and heifer slaughter in the second half of the year…as incentives to add weight on pasture slows the pace of feedlot placements,” say ERS analysts.

If realized, estimated total production would still be 332 million lbs. more than last year.

Estimated fed steer price for the year (5-area Direct) was lowered $1.50 from the previous month to $117/cwt. Prices are forecast to average $118 in the second quarter, $110 in the third quarter and $114 in the fourth.

Corn

Despite an increase to projected beginning corn stocks, based on reduced exports, WASDE estimates ending stocks 810 million bu. lower to 1.7 billion bu.—the lowest since 2013-14—with lower production.

“Corn production for 2019-20 is forecast to decline 1.4 billion bu. to 13.7 billion, which if realized would be the lowest since 2015-16,” say ERS analysts. “Unprecedented planting delays observed through early June are expected to prevent some plantings and reduce yield prospects. USDA will release its Acreage report June 28, which will provide survey-based indications of planted and harvested area.” USDA slashed expected yield per acre by 10 bu. to 166 bu./acre, compared to the prior month’s estimate. That would be 6.4 bu. less than the projection for 2018-19. USDA reduced projections for planted corn acreage by 3 million acres to 89.8 million acres.

The season-average farm price for corn was raised 50¢ to $3.80/bu. 

Soybeans

WASDE increased beginning soybean stocks on reduced exports.

“Although adverse weather has significantly slowed soybean planting progress this year, area and production forecasts are unchanged with several weeks remaining in the planting season,” explain ERS analysts.

The 2019-20 season-average price for soybeans is forecast at $8.25/bu., up 15¢ reflecting the impact of higher corn prices. Soybean meal prices are forecast at $295 per short ton, up $5. The soybean oil price forecast is unchanged at 29.5¢/lb. 

Wheat

WASDE projects U.S. 2019-20 wheat supplies lower, with reduced beginning stocks partly offset by slightly higher production.

U.S. beginning wheat stocks were estimated to be 25 million bu. less based on increased 2018-19 exports. Ending stocks were lowered 69 million bu. to 1,072 million.

“Winter wheat production is forecast up 6 million bu. to 1,274 million with an increase to Hard Red Winter more than offsetting decreases for Soft Red Winter and White Winter,” say ERS analysts. “Total wheat production is forecast at 1,903 million bu., up 5.8 million bu. from the May forecast.”

The season-average farm price for wheat was raised 40¢/bu. to $5.10, reflecting  sharply higher Wheat futures prices and reduced 2019-20 corn supplies.

By | June 11th, 2019|Daily Market Highlights|

Cattle Current Daily—June 11, 2019

Cattle futures surged higher Monday, recovering most of the losses from the previous session, even more for Live Cattle. Some attributed the reversal to the after-hours announcement on Friday that threatened U.S. tariffs on Mexican imports were suspended indefinitely.

Live Cattle futures closed an average of $2.15 higher ($1.57 to $3.00 higher).

Feeder Cattle futures closed an average of $2.31 higher.

Wholesale beef values were weak on Choice and higher on Select with moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 65¢ lower Monday afternoon at $221.66/cwt. Select was $1.87 higher at $208.79.

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

Soybean futures closed 2¢ to 4¢ higher, except for 7¢ higher in the back three contracts.

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Major U.S. financial indices closed higher Monday with apparent support from the aforementioned agreement between the U.S. and Mexico regarding illegal immigration that staved off U.S. tariffs.

The Dow Jones Industrial Average closed 95 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 82 points.

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“While good moisture conditions bodes well for forage growth in general, ongoing flooding and excessively wet conditions is limiting grazing and hay production in some regions,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Sloppy feedlot conditions continue to hamper feedlot production in some areas. Additionally, the record late planting of corn and soybeans this year is adding uncertainty about corn acreage and yield and is beginning to push corn prices higher. There is little doubt that the corn crop will be smaller than anticipated just a few weeks ago but carryover levels are still expected to be adequate. While significantly higher feed prices are not anticipated at this time, the uncertainty remains.”

Peel outlined the variety of quandaries adding pressure to cattle markets, including ongoing trade issues. So far this year, he says weaker year-to-year exports of beef, pork and poultry suggest the meat complex is struggling internationally.

“Weaker beef demand may be the biggest threat to cattle and beef markets for the remainder of the year,” Peel says. “Strong beef demand supported cattle and beef markets in 2017 and 2018, but there are signs that some weakness may be developing in beef demand in both domestic and international markets. While unemployment remains very low, other indications of weakness in the macro-economy are concerning and have led to reduced forecasts for U.S. economic growth in 2019; largely due to ongoing impacts of tariffs and trade disruptions. Relatively slow domestic income growth and higher prices for major consumer items, such as gasoline, combined with record large supplies of beef, pork and poultry may be limiting domestic beef demand going forward in 2019. Relatively wet and cold weather thus far has likely stifled summer beef demand somewhat and probably contributed to an early seasonal peak in boxed beef prices and recent weakness in wholesale beef values.”

By | June 10th, 2019|Daily Market Highlights|

Cattle Current—June 10, 2019

Negotiated cash fed cattle trade ended up generally $2-$3 lower on a live basis last week at $112-$113/cwt. in the Southern Plains and at $114-$115 in Nebraska and the western Corn Belt. Dressed trade was also $2-$3 lower at $183-$184.

Cattle futures, especially Feeder Cattle, closed sharply lower on Friday. Along with sharp pressure on Lean Hogs, there was likely plenty of trepidation related to the tariffs scheduled to begin on Mexican imports Monday unless negotiators reached a resolution on the illegal immigration issue. Friday night, those tariffs were suspended, according to various reports; no details given.

Live Cattle futures closed an average of $1.16 lower (67¢ to $1.50 lower).

Feeder Cattle futures closed an average of $2.35 lower.

Wholesale beef values were steady on moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 6¢ higher Friday afternoon at $222.31/cwt. Select was 24¢ lower at $206.92. Week to week, Choice was 90¢ lower and Select was down 77¢.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed mostly 9¢ to 12 ¢lower. 

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Major U.S. financial indices closed sharply higher Friday. Apparently, much of the support came from significantly fewer new jobs than expected. Although counterintuitive, the notion is the anemic numbers will help encourage the Fed to cut interest rates.

Total non-farm employment increased by 75,000 in May, compared to the previous month, according to the Employment Situation Summary from the U.S. Bureau of Labor Statistics.

Average hourly earnings for all employees on private nonfarm

payrolls in May increased by 6¢ to $27.83. Over the year, average hourly

earnings are up 3.1%.

The Dow Jones Industrial Average closed 263 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 126 points.

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Although U.S. beef exports continued at a strong pace in April, they faltered from year-earlier levels beneath the weight of ongoing trade issues.

For instance, Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF) explained, “U.S. beef is holding its own in Japan, but the April numbers are telling. With the April 1 rate cut, Australian, Canadian, New Zealand and Mexican beef are now subject to a 26.6% duty while the rate for U.S. beef remains at 38.5%. It is absolutely essential that the U.S. secures an agreement that will level this playing field. U.S. beef’s exceptional growth in Korea is a great example of what’s possible when tariffs are less of an obstacle.”

April U.S. beef exports to Japan were 6% less than the previous year in both volume (24,149 mt) and value; 24,149 metric tons (mt) and $156.8 million, respectively.

Overall, U.S. beef exports totaled 105,241 mt in April, down 5% year over year and export value was down only slightly at $674.2 million, according to data released by USDA and compiled by the USMEF. For January through April, exports were 4% below last year’s record pace in volume (412,547 mt) and 1% lower in value ($2.58 billion).

Beef export value per head of fed slaughter in April averaged $305.61 (down 7% from April 2018). The January-April average was $308.34 per head, down 3% from a year ago.

U.S. pork exports totaled 216,757 mt in April, down 6% from a year earlier. Pork export value of $535.2 million was 8% less. For January-April, pork exports were 6% below last year’s pace in volume (817,025 mt) and were down 12% in value to just over $2 billion.

By | June 8th, 2019|Daily Market Highlights|

Cattle Current Daily—June 7, 2019

Cattle futures, especially Feeder Cattle, recovered from sharp losses early to close from narrowly mixed to a touch higher. Early pressure came from rising front-month Corn futures. Presumably part of the relief came with chatter that talks between the U.S. and Mexico continue on a positive note (see below).

Early negotiated cash fed cattle sales were $2 lower on a live basis at $114-$115/cwt. in Nebraska and the western Corn Belt. Dressed sales were $2-$3 lower at $183-$184.

Except for 25¢ lower in spot Jun, Live Cattle futures closed an average of 31¢ higher.

Feeder Cattle futures closed narrowly mixed, but mostly lower (an average of 12¢ lower to an average of 5¢ higher).

Wholesale beef values were steady on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 14¢ higher Thursday afternoon at $222.25/cwt. Select was 2¢ lower at $207.16.

Corn futures closed 5¢ higher through Jul ’20 and then mostly 1¢ to 2¢ higher.

Soybean futures closed fractionally lower to 1¢ lower. 

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Major U.S. financial indices closed higher Thursday. Key support was attributed to news that talks are progressing between the U.S. and Mexico, regarding illegal immigration from that country, and that threatened tariffs by the U.S. may be postponed.

The Dow Jones Industrial Average closed 181 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 40 points.

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Grading percentages and carcass weights continue to suggest market currentness.

Carcass quality in May was higher year over year with an average of 78.36% grading Choice and Prime, which was 1.13% more than the previous year. However, the average was 1.86% less month to month—compared to a decline of 0.84% the previous year.

As for carcass weights, after catching up and surpassing year over year levels for several weeks, average dressed steer weights sunk to 842 lbs. the week ending May 25, the lightest of the year. Though a seasonal decrease is unsurprising, dropping 7 lbs. from the previous week and 6 lbs. from the previous year speaks to heavy, timely marketing.

Also positive, as reported previously, beef in freezers as of  Apr. 30 totaled 430.35 million lbs. That was 5% less (-40.8 million lbs.) than the previous month and 9% less than the previous year, according to the monthly USDA Cold Storage report.

“This is the lowest cold storage number since June of 2017,” according to analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Seasonally, beef in cold storage typically declines in the first five months of the year and remains there through the summer quarter before inventories build again in September through the end of the year. Another decline in May might take inventories back to the lowest levels since 2014. These smaller levels in cold storage point to several positive signs for the beef industry.”

For one thing, LMIC analysts point to the fact that the inventory of beef in cold storage is declining more aggressively than last year, despite increased beef production and reduced beef exports.

By | June 6th, 2019|Daily Market Highlights|

Cattle Current Daily—June 6, 2019

Cattle futures crawled higher Wednesday, building on the previous session as lower grain futures provided some support, despite lower cash fed cattle prices and languishing wholesale beef values.

Established country trade so far this week is $2-$3 lower on a live basis at $113/cwt. in the Texas Panhandle and $112-$113 in Kansas.

Similarly, there were 412 head (three lots from Kansas) offered in the weekly Fed Cattle Exchange Auction. One lot (heifers) sold for a weighted average price of $113, with delivery at 1-9 days.

Live Cattle futures closed an average of 87¢ higher (30¢ to $1.22 higher).

Feeder Cattle futures closed an average of $1.87 higher.

Wholesale beef values were lower on Choice and steady on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 89¢ lower Wednesday afternoon at $222.11/cwt. Select was 3¢ lower at $207.18.

Grain futures dove lower amid heightened volatility as traders weigh domestic planting prospects against what looks to be bumper crops in South America. That’s besides the potential impact of threatened U.S. tariffs on Mexican imports.

Corn futures closed mostly 10¢ lower through Jul ’20 and then 2¢ to 8¢ lower.

Soybean futures closed mostly 9¢ to 12¢ lower. 

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Major U.S. financial indices closed strongly higher again Wednesday. Follow-though support seemed tied to the previous day’s notion that the Fed is willing to cut interest rates in an effort to sustain economic growth.

Perhaps that’s why markets faded the ADP National Employment Report that indicated a month-to-month increase in private-sector non-farm employment of just 27,000, which was significantly less than the trade expected.

Optimism also came in the face of further erosion in oil prices, with pressure including more inventory than anticipated and wonderments about economic growth and demand. Crude Oil futures (WTI-CME) closed at their lowest levels since January, about $7 lower week to week through the front six contracts.

The Dow Jones Industrial Average closed 207 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 48 points.

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Assuming other costs remain constant, last month’s increase in corn prices equates to an additional $5/cwt. for feedlot cost of gain, according to Brenda Boetel, Extension agricultural economist at the University of Wisconsin-River Falls.

“Using regression results obtained by Michael Langemeier from Purdue University that found each $0.10/bu. increase in corn prices increases feeding cost of gain by $0.87/cwt. and each $5/ton increase in alfalfa prices increases feeding cost of gain by $0.55/cwt., one can estimate that even if hay price and all other costs remain constant, cost of gain will increase by $5/cwt., given the May increase in price of corn,” Boetel, explains. “This calculation assumes price remains at this level and feeders haven’t conducted any hedging activities, but it highlights the increased costs of feeding producers should expect.”

In the latest issue of In the Cattle Markets, as of the first part of June, Boetel points out CME Corn futures for the front three months were up 59¢, which was 48¢ more than the 5-year average for the same period of time.

“If one assumes corn planting will be down 6 million acres to 86.8 million acres and we see a decrease of 2 bu./acre to 174.6 bu./acre yield we would see a decrease in corn production of 554 million bu.,” Boetel says. “Although the market may focus on the news concerning Mexico and trade, the long-term impact (and in my opinion the more likely scenario) of lower acres and yield will eventually have the greater impact on prices.”

By | June 5th, 2019|Daily Market Highlights|

Cattle Current Podcast—June 5, 2019

Cattle futures burst higher on Tuesday, supported by higher outside markets, what some would call obscenely oversold conditions and likely short covering. There was also chatter about support coming from news that Brazil halted beef exports to China after confirming a case of atypical BSE. The ball will likely be in China’s hands because it seem doubtful the discovery will change Brazil’s OIE BSE risk status.

The rally came despite negotiated cash fed cattle sales opening in the Southern Plains a day earlier at $113/cwt., which was $2 less than the previous week.

Live Cattle futures closed an average of $1.35 higher (77¢ to $1.70 higher).

Feeder Cattle futures closed an average of $3.42 higher.

Wholesale beef values were steady to firm on moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 20¢ lower Tuesday afternoon at $223.00/cwt. Select was 34¢ higher at $207.21.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 3¢ to 4¢ higher. 

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Major U.S. financial indices closed sharply higher Tuesday with hints that the Fed is willing to cut interest rates in an effort to sustain economic growth. At least that’s what the trade seemed to interpret from opening remarks made by Federal Reserve Chair, Jerome Powell at the Conference on Monetary Policy Strategy, Tools, and Communications Practices:

“I’d like first to say a word about recent developments involving trade negotiations and other matters,” Powell said. “We do not know how or when these issues will be resolved. We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective.”

The Dow Jones Industrial Average closed 512 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 194 points.

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The Purdue University/CME Group Ag Economy Barometer—a measure of producer sentiment—dropped 14 points in May to 101, the lowest level since October 2016.

“Ag producers are telling us the agricultural economy weakened considerably this spring as the barometer has fallen 42 points (29%) since the start of this year,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Farmers are facing tough decisions in the midst of a wet planting season and a lot of uncertainty surrounding trade discussions.”

Month to month, producer perspectives weakened considerably, relative to both current and future economic conditions. The Index of Current Conditions declined 15 points to 84. The Index of Future Expectations also declined 15 points to 108.

Unsurprisingly, producers continue to be concerned about agricultural trade issues. For instance, only 65% of respondents expect U.S. agriculture to see a favorable outcome to the U.S.-China trade dispute. That’s down from 77% in March and 71% in April.

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The political football that was the supplementary disaster aid bill finally made it through the uprights Monday night. If signed by President Trump, as expected, it will start the ball rolling on $19.1 billion in aid for natural disasters going back a few years.

According to a statement from Iowa Secretary of Agriculture, Mike Naig, these are some of the highlights:

Approximately $3 billion is provided to the USDA Office of the Secretary to cover producers’ agricultural losses due to natural disasters.

$435 million will be provided to the Emergency Watershed Protection Program (EWPP) for rural watershed recovery.  

$558 million will be provided to the Emergency Conservation Program (ECP) for repairs to damaged farm land.   

$150 million will be allocated to repair Rural Development Community Facilities in towns affected by natural disasters. 

By | June 4th, 2019|Daily Market Highlights|

Cattle Current Daily—June 4, 2019

Cattle futures tried for gains early once again Monday, but succumbed to sluggish trade and overall bearishness by the close.

Live Cattle futures closed an average of 55¢ lower (10¢ lower to $1.70 lower in spot Jun).

Feeder Cattle futures closed an average of $1.05 lower, except for an average of 15¢ higher in three contracts.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 1¢ lower Monday afternoon at $223.20/cwt. Select was 82¢ lower at $206.87.

Corn futures closed 2¢ lower in the front months, but mostly 1¢ to 2¢ higher overall.

Soybean futures closed mostly 1¢ to 3¢ higher. 

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Major U.S. financial indices closed mixed on Monday. Much of the pressure was on tech companies, fueled by reports that the U.S. Department of Justice plans to investigate some of the giants, relative to potential antitrust practices.

The Dow Jones Industrial Average closed 4 points higher. The S&P 500 closed 7 points lower. The NASDAQ was down 120 points.

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Crop planting and development continued to lose ground last week, according to the most recent Crop Progress report.

67% of corn was planted as of June 2, which was 29% less than last year and the 5-year average. 46% is emerged, which is 38% less than last year and the average. Progress lost more ground week to week in some key states, compared to average: Illinois (-59%); Indiana (-62%); Iowa (-33%); Minnesota (-39%); Nebraska (-11%).

39% of soybeans are in the ground, compared to 86% for the previous year and 79% for the average. 19% are emerged, which was 46% less than last year and 37% less than average.

Pasture and range conditions continue at a stellar pace, though eroding conditions are showing up in parts of the Southeast.

67% of the nation’s pasture and range is rated in Good (54%) or Excellent (13%) condition, compared to 50% last year. 7% is rated as Poor (6%) or Very Poor (1%), compared to 18% a year earlier. States with 15% or more rated as Poor or Very Poor include: FL (19%); GA (28%); ME (18%); NM (37%), OH (16%); SC (19%); WI (16%).

By | June 3rd, 2019|Daily Market Highlights|

Cattle Current Daily—June 3, 2019

Negotiated cash fed cattle trade ended the week mainly steady with the previous week on a live basis at $115 in the Southern Plains, $116 in Nebraska and mostly $116-$117 in the western Corn Belt. Dressed trade was steady to $3 higher at $186 in Nebraska and at $185-$187 in the western Corn Belt.

Live Cattle futures tried to firm early in Friday’s session but gave way to further losses as sharp follow-through pressure continued in Feeder Cattle, despite sharply lower Corn futures on the day.

Added pressure on commodities came from news that President Trump plans to impose 5% tariffs on Mexican imports, beginning June 10, unless that country makes significant progress toward stemming the flow of illegal immigrants across its northern border into the U.S. Should that come to pass, the move also casts a shadow over ratification of the U.S.-Mexico-Canada trade agreement.

Live Cattle futures closed an average of $1.47 lower. That’s an average of $3.79 lower in the previous two sessions.

Feeder Cattle futures closed an average of $3.52 lower ($1.77 lower to $5.10 lower in spot Aug), in the heaviest trade volume since early April. That made for an average of $7.62 lower in the last two session.

Wholesale beef values were weak to lower on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 37¢ lower Friday afternoon at $223.21/cwt. Select was $1.18 lower at $207.69.

Corn futures on Thursday closed 4¢ to 9¢ lower, presumably on profit taking, month-end position squaring and worries about tariffs on Mexico.

Soybean futures closed 9¢ to 11¢ lower. 

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Major U.S. financial indices dove lower Friday on the aforementioned threat of U.S. tariffs on Mexican imports.

Crude oil futures (WTI-CME) closed another $2.98 to $3.10 lower through the front six contracts. That’s $5.11 to $5.32 lower in the last two sessions.

The Dow Jones Industrial Average closed 354 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 114 points.

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African Swine Fever (ASF) continues to spread geographically and numerically.

According to analysts with CoBank’s Knowledge Exchange Division, it has already caused the loss of hundreds of millions of pigs across China and Southeast Asia, creating a massive shortfall in animal protein supply for those regions through 2020, and possibly for years to come. They add that the shortfall will have significant implications for the U.S. animal protein and feed sectors.”

Assuming the U.S. remains free of AFS, it stands to gain via more exports of pork and other animal proteins.

“The U.S. continues to remain a low-cost exporter of protein products and is in strong position to be a major beneficiary as China and other Asian markets ramp up their imports,” says Will Sawyer, CoBank lead economist for animal protein. “But if the trade dispute with China remains unresolved, the upside trade potential for the U.S. meat sectors may not be fully realized.”

At the same time, the U.S. looks to continue losing feed grain exports. The reduction of feed demand due to ASF will be especially painful for elevators, crushers, and feed mills focused on Chinese markets, according to CoBank.

In a new report from CoBank, African Swine Fever Implications for U.S. Ag, analysts project a 30% decline in the Chinese hog herd for 2019-20, compared to 2017-18, would reduce soybean meal consumption by 9 million metric tons (mmt) and corn consumption by 28 mmt.

Reduced feed grain demand will likely linger as China begins to rebuild its herd.

As of May 23, the World Organization for Animal Health (OIE) AFS situation report indicated a total of 3,835 ongoing outbreaks and 2,607 new outbreaks. For perspective, the previous report (Apr. 26-May 9) indicated 1,322 ongoing outbreaks and 157 new ones. Countries and territories reporting on new or ongoing ASF outbreaks included: Europe (Belgium, Hungary, Latvia, Poland, Romania, Russia and Ukraine); Asia (China, Hong Kong and Vietnam) and Africa (South Africa). 

In an effort to prevent a global ASF pandemic, OIE launched a global initiative for the control of ASF at its 87th General Session last week.

“Given the global socioeconomic repercussions of ASF, controlling the disease is a high priority for both affected countries and those free of the disease,” according to an OIE statement. “Although ASF poses no risk to human health, it is devastating for the economy of pig farms and for international trade, with repercussions for the livelihoods of farmers and for food safety.”

By | June 1st, 2019|Daily Market Highlights|

Cattle Current daily—May 31, 2019

Cattle futures collapsed late in Thursday’s session with Feeder Cattle limit down in the front months and Live Cattle sharply lower.

Feeder Cattle futures closed an average of $4.10 lower.

No doubt, surging grain prices had plenty to do with the pressure in Feeder Cattle.

Corn futures on Thursday closed 11¢ to 17¢ higher through Jul ‘20 and then mostly 1¢ higher. Week to week, that’s an average of 41¢ higher through the front six contracts.

Soybean futures closed 16¢ to 17¢ higher through Mar ‘20 and then mostly 8¢ to 14¢ higher. Week to week, that’s an average of 66¢ higher through the front six contracts.

Other than spillover pressure, it was harder to explain the hard decline in Live Cattle, especially from a fundamental standpoint.

Live sales so far this week are mainly steady at $115/cwt. in the Southern Plains and at $116 in Nebraska. Though too few to trend, early dressed sales on Thursday were steady to $4 higher at $186-$187 in Nebraska and the western Corn Belt.

Wholesale beef values are higher, too. Week to week on Thursday, Choice boxed beef cutout value was $2.79 higher at $223.58/cwt. Select was $2.34 higher at $208.87.

But, Live Cattle futures closed an average of $2.32 lower.

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Major U.S. financial indices edged higher Thursday. Though worries about economic growth continue, the second estimate for first-quarter GDP growth of 3.1%, from the U.S. Bureau of Economic Analysis, provided some support.

Crude oil futures (WTI-CME) tumbled $2.13 to $2.22 lower through the front six contracts.

The Dow Jones Industrial Average closed 43 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 20 points.

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Slowing global economic growth is one factor behind expectations for reduced year-over-year U.S. agricultural exports, according to the most recent Outlook for U.S. Agricultural Trade, From USDA’s Economic Research Service (ERS).

“Per capita world GDP growth is expected to decrease from 2.1% in 2018 to 1.8% in 2019,” say ERS analysts. “Global trade tensions and the fading impact of fiscal stimulus in the United States, and monetary stimulus elsewhere, will lead to slowed growth for the remainder of 2019.”

Projected livestock, dairy and poultry exports were reduced $500 million to $29.9 billion.

Beef exports are forecast $300 million lower to $7.4 billion on softer prices and volumes. However, ERS analysts point out Australia’s weather-related struggles (lower exportable supplies) provide the U.S. opportunity to expand Asian market share.

“Overall, U.S. agricultural exports for fiscal year 2019 are projected at $137.0 billion, down $4.5 billion from the February forecast, due to reductions in grains, oilseeds, and livestock and products,” say ERS analysts. “Export forecasts for commodities published in the May 10 WASDE (grains, oilseeds, cotton, and livestock and products) include Chinese tariffs in place as of that date. The impact of additional retaliatory tariffs announced by China May 13 on exports of other commodities have been determined to be minimal for fiscal 2019.”

By | May 30th, 2019|Daily Market Highlights|

Cattle Current Daily—May 30, 2019

So far, signs point to at least steady prices for negotiated cash fed cattle trade this week.

Although there were too few transactions for a trend, early live sales were mainly steady on Wednesday at $115/cwt. in the Southern Plains and at $116 in Nebraska.

Early in the day, 137 head sold out of the 483 head offered in the weekly Fed Cattle Exchange auction. Two lots from Kansas sold for a weighted average price of $115/cwt.

The outlook for steady cash and recently stronger wholesale beef values helped Cattle futures recover some early ground, following early pressure.

Live Cattle futures closed an average of 44¢ higher, (7¢ to 80¢ higher). Perhaps traders are also starting to account for the higher production cost in the deferred contracts.

Feeder Cattle futures closed narrowly mixed, from an average of 26¢ lower to an average of 24¢ higher.

Wholesale beef values were steady on Choice and weak on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 24¢ higher Wednesday afternoon at $223.53/cwt. Select was 46¢ lower at $209.99.

Corn futures closed 1¢ to 2¢ lower through Jul ‘20 and then mostly 1¢ higher.

Soybean futures closed 10¢ to 16¢ higher through Aug ‘20 and then mostly 4¢ to 9¢ higher.

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Major U.S. financial indices closed lower again Wednesday, with continued pressure from declining bond yields and bank stocks, tied to signs of slowing economic growth here and abroad.

The Dow Jones Industrial Average closed 221 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 60 points.

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The Livestock Marketing Information Center (LMIC) projects second-quarter cattle prices to average slightly higher year over year: about 2% higher for fed cattle and 1% more for steer calves (500-600 lbs.) and feeders (700-800 lbs.).

That follows a first-quarter decline of 0.1% for fed steers (5-Area Direct). Basis the Southern Plains, feeder steer prices were 3.9% less (-$5.76/cwt.), while steer calves averaged 4.8% less (-$8.60/cwt.).

“U.S. cattle slaughter for the first quarter of 2019 was slightly above a year ago (up 0.7%), while tonnage produced was 0.8% below 2018’s,” say LMIC analysts, in the latest Livestock Monitor. “The year-over-year increase was due to larger heifer and cow (beef and dairy) harvests. Production declined because of lower dressed weights for steers, heifers, and cows.”

LMIC forecasts fed steer prices in the third quarter (July-September) to average $112-$115/ cwt., about 3% more year over year. Feeder steers are expected to be 3% to 4% below the previous year’s average of $155.99. Steer calf prices for the quarter are pegged flat to 1% higher.

In the fourth quarter, LMIC analysts say, “Compared to 2018, fed cattle prices may be higher (up 1% to 3%), 700-800-pound steers flat, and calves unchanged to 4% stronger.”

By | May 29th, 2019|Daily Market Highlights|

Cattle Current Daily—May 29, 2018

Surging grain futures prices helped pressure Feeder Cattle futures to start the week. That helped cap early support in Live Cattle. Lower outside markets, a sharp decline in Lean Hog futures and more cool, wet weather that could continue to dampen summer grilling demand also weighed.

Live Cattle futures closed narrowly mixed, from an average of 25¢ lower to an average of 21¢ higher.

Feeder Cattle futures closed an average of $1.17 lower.

Wholesale beef values were higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.65 higher Tuesday afternoon at $223.29/cwt. Select was $1.98 higher at $210.45.

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Grain futures closed sharply higher Tuesday, buoyed by ongoing planting and development delays, as illustrated in the most recent USDA Crop Progress report.

For instance, 58% of corn was planted as of May 26, which was 32% less than last year and 32% less than the 5-year average. 32% is emerged, which is 37% less than last year and 37% less than average.

Progress is even more bearish in some key states, compared to average: Planting is 60% behind average in Illinois; 63% behind in Indiana; 20% behind in Iowa; 27% off the pace in Minnesota and 13% less than average in Nebraska.

Likewise, 29% of soybeans are in the ground, compared to 74% for the previous year and 66% for the average. 11% are emerged, which was 33% less than last year and 24% less than average.

Progress is even more bearish in some key states, compared to average: Illinois (-60%);  Indiana (-63%); Iowa (-20%); Minnesota (-27%); Nebraska (-13%).

Corn futures closed mostly 17¢ higher through Jul ‘20 and then 2¢ to 6¢ higher.

Soybean futures closed 23¢ to 26¢ higher through Sep ‘20 and then mostly 17¢ to 22¢ higher.

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Major U.S. financial indices closed lower Tuesday, pressured by declining yield on the 10-year Treasury note and bank stocks.

The Dow Jones Industrial Average closed 237 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 29 points.

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“Both Live and Feeder cattle are likely due to a correction (technical) following the rapid move at the end of April and the stalling of that move in May. The recent Cattle on Feed report may be the catalyst to start the correction,” says Stephen Koontz, agricultural economist at Colorado State University, in the most recent issue of In the Cattle Markets. “Feedlots marketing aggressively and did not place as strongly as expected during April.”

Along with April placements being less than the trade anticipated, Koontz points out, “Cattle on feed over 90 days declined very slightly and cattle on feed over 120 days are down sharply—over 200,000 head. Cattle on feed over 120 days start to decline seasonally during May; this was seen, but more sharply than typical.”

By | May 28th, 2019|Daily Market Highlights|

Cattle Current Daily—May 27-28, 2019

By way of recap, negotiated cash fed cattle trade ended the week generally $1-$2 lower on a live basis at $114-$115/cwt. in the Southern Plains and $116 in Nebraska. It was steady in the western Corn Belt at $116-$118. Dressed trade was steady to $2 lower in Nebraska at $183-$186; steady to $4 lower in the western Corn Belt at $185-$186.

Limit-down Lean Hog futures, and perhaps defensive positioning ahead of the monthly Cattle on Feed report (see below), helped pressure Cattle futures on Friday. That report ended up more favorable than expected with fewer feedlot placements than anticipated.

Except for 37¢ higher in spot Jun, Live Cattle futures closed an average of 35¢ lower.

Except for 20¢ higher in spot Aug, Feeder Cattle futures closed an average of 45¢ lower.

Wholesale beef values were higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 85¢ higher Friday afternoon at $221.64/cwt. Select was $1.94 higher at $208.47.

Corn futures closed 7¢ to 14¢ higher through Jul ‘20 and then mostly 2¢ lower to 1¢ higher.

Soybean futures closed 6¢ to 8¢ higher through May ‘20 and then mostly 2¢ to 5¢ higher.

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Major U.S. financial indices stabilized Friday, but remained under pressure from trade worries and related signs of slowing economic growth.

The Dow Jones Industrial Average closed 95 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 8 points.

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If anything, markets ought to judge Friday’s monthly Cattle on Feed report as neutral to cautiously bullish, with significantly fewer April placements than most analysts expected.

There were 1.84 million head placed in feedlots (capacity of 1,000 head or more) in April, which was 8.67% more (+147,000 head) year over year. Most analyst expectations ahead of the report were for placements to be up 13% or so. In terms of weights, 19.27% weighed less than 600 lbs., 37.84% weighed 600-799 lbs. and 42.88% weighed 800 lbs. or more.

The 1.93 million head marketed in April were 6.93% more (+125,000 head) than the previous year, which was slightly more than pre-report projections.

Likewise, cattle on feed May 1 were slightly less than expected with 11.82 million head, which was 2.25% more (+260,000 head) than a year earlier. Still, that’s the most inventory for the date since the data series began in 1996, according to USDA’s Agricultural Marketing Service.

By | May 25th, 2019|Daily Market Highlights|

Cattle Current Daily—May 24, 2019

Negotiated cash fed cattle trade continued in Nebraska through Thursday afternoon at $116/cwt., which was $1 lower than last week, but steady to $1 higher than on Wednesday. Dressed sales were at $183-$186, which was steady to $2 lower than the previous week.

Cattle futures mostly edged higher Thursday, helped along by the previous day’s bullish Cold Storage report, oversold conditions and continued sluggishness.

Except for 2¢ lower in Feb, Live Cattle futures closed an average of 21¢ higher.

Except for 2¢ lower at the back of the board, Feeder Cattle futures closed an average of 21¢ higher.

Wholesale beef values were firm to higher on moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.04 higher Thursday afternoon at $220.79/cwt. Select was 72¢ higher at $206.53.

Corn futures closed 2¢ to 5¢ lower through May ‘20 and then mostly fractionally lower to 1¢ lower.

Soybean futures closed 7¢ lower in the front five contracts and then mostly fractionally lower to 3¢ lower.

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Major U.S. financial indices closed lower again Thursday, under continued pressure from uncertainty about domestic and global economic growth, related to the U.S. trade impasse with China.

Crude Oil futures (WTI-CME) fell an average of $3.47 through the front six contracts, closing at their lowest levels since March.

The Dow Jones Industrial Average closed 286 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 122 points.

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“The United States holds all the cards here, and if the U.S. is willing to walk away from the game board and kick it over, it won’t be the one feeling the pain,” said Peter Zeihan, a global trade expert and best-selling author, offering his perspective, at the U.S. Meat Export Federation (USMEF) spring conference, on how the current trade environment impacts U.S. agriculture and the red meat industry specifically.

“What you’re seeing right now with the trade deficit is a transitional period,” Zeihan explained. “In this moment, it looks like the United States doesn’t have as much leverage as it actually does. You feel that more than any other sector, because agriculture is the only thing that foreign governments can target. But this moment of transition isn’t going to last long.”

In the meantime, U.S. Secretary of Agriculture Sonny Perdue announced yesterday that President Trump directed him to craft a relief strategy to support American agricultural producers while the Administration continues to work on free, fair, and reciprocal trade deals to open more markets in the long run to help American farmers compete globally.

Specifically, the President authorized USDA to provide up to $16 billion in programs, which is in line with the estimated impacts of unjustified retaliatory tariffs on U.S. agricultural goods and other trade disruptions.

“The plan we are announcing today ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners,” says Secretary Perdue. “Our team at USDA reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers. Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them.”

At the USMEF meeting, Zeihan pointed out, “The Greater Midwest is the single largest chunk of arable land in a temperate zone in the world, and it out-produces the next two largest agricultural zones put together. The Greater Mississippi, by itself, has more miles of naturally navigable waterway than the combined internal systems of the rest of the world. This chunk of North America is both the richest territory on the planet and the most securable. Decades of bipartisan effort have yet to screw this up, and this will not be the administration that cracks the code.”

By | May 23rd, 2019|Daily Market Highlights|

Cattle Current Daily—May 23, 2019

Negotiated cash fed cattle trade was steady to $2 lower on a live basis through Wednesday afternoon at $115/cwt. in the Texas Panhandle and at $114-$115 in Kansas. Dressed sales in Nebraska were mainly steady with last week at $185-$186.

Only 309 head (three lots) were offered in the weekly Fed Cattle Exchange auction; none sold.

Cattle futures continued to leak lower amid sluggish trade.

Live Cattle futures closed an average of 36¢ lower.

Except for $1.07 higher in expiring May, Feeder Cattle futures closed an average of 24¢ lower.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 17¢ higher Wednesday afternoon at $219.75/cwt. Select was 77¢ lower at $205.81.

Corn futures closed mostly 1¢ to 2¢ higher toward the front of the board and then mostly fractionally higher.

Soybean futures closed 5¢ to 6¢ higher.

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Major U.S. financial indices closed lower Wednesday, pressured mostly by retail stocks and tech shares.

The Dow Jones Industrial Average closed 100 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 34 points.

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Total pounds of beef in freezers Apr. 30 totaled 430.35 million lbs. That was 5% less (-40.8 million lbs.) than the previous month and 9% less than the previous year, according to the monthly USDA Cold Storage report published Wednesday. That’s also well below the five-year average of 457 million lbs., according to Allendale, Inc.

Frozen pork supplies of 621.86 million lbs. were 2% more than the previous month but 2% less than a year earlier. 

Total red meat supplies in freezers of 1.099 billion lbs. were up slightly from the previous month but down 5% from last year.

Total frozen poultry supplies were up 2% from the previous month and up slightly from a year ago.

By | May 22nd, 2019|Daily Market Highlights|

Cattle Current Daily—May 22, 2019

Sluggish trade and rising grain prices helped pressure Cattle futures Tuesday. Arguably, most of the pressure on the grain side comes from the uncertainty about ultimate planting reality and potential production, which makes it tough to project breakevens with much confidence.

Live Cattle futures closed an average of 34¢ lower.

Except for 22¢ higher in spot May, Feeder Cattle futures closed an average of $1.59 lower.

Wholesale beef values were lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.87 lower Tuesday afternoon at $219.58/cwt. Select was $1.45 lower at $206.58.

Corn futures closed 4¢ to 6¢ higher through Jul ’20, and then mostly 1¢ to 2¢ higher.

Soybean futures closed 8¢ to 10¢ lower through Nov ’20 and then 5¢ to 7¢ lower.

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Major U.S. financial indices closed higher Tuesday, apparently bolstered by reports that the U.S. would ease, temporarily, restrictions imposed a day earlier on China’s tech giant, Huawei. Those restrictions—including prohibiting U.S. chipmakers from selling to the company—stem from an ongoing legal dispute between the company and the U.S. revolving around allegations that the Chinese company stole U.S. trade secrets.

The Dow Jones Industrial Average closed 197 points higher. The S&P 500 closed 24 points higher. The NASDAQ was up 83 points.

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“Going forward, the (African Swine Fever) ASF-related impacts on the Chinese hog inventory are expected to lead to significant increases in demand for imported pork. A probable scenario is for Chinese excess demand for imported pork to progressively drive world pork trade dynamics. High Chinese pork prices can be expected to draw large volumes of imports from pork-exporting countries,” according to analysts with USDA’s Economic Research Service (ERS), in the most recent Livestock, Dairy and Poultry Outlook.

“For the United States, this could mean that significant shares of increased U.S. pork exports may back-fill pork diverted to China by other pork-exporting countries,” ERS analysts say. “However, to the extent that increased demand is reflected in higher prices, U.S. pork may find itself under competitive pressure in a number of price-sensitive markets. In addition, higher pork prices may also affect exports to countries where U.S. pork faces ad-valorum tariffs.”

China, for example, has targeted more than 1,000 agricultural and related products valued at approximately $22.6 billion (2017)—including recent supplementary tariffs—with added tariffs since April of last year, according to the Foreign Agricultural Service.

Moreover, the world can only speculate if and when China will gnaw through its frozen pork stocks and how much Chinese pork demand will remain. As it is, Joel Haggard, senior vice president in charge of the Asia Pacific region for the U.S. Meat Export Federation explained during a media call Tuesday that there is no shortage of pork in Chinese grocery stores and no run-up in prices.

By | May 21st, 2019|Daily Market Highlights|

Cattle Current Daily—May 21, 2019

Cattle futures recovered from early pressure to pare losses Monday. Higher grain prices continue to weigh on Feeder Cattle.

Live Cattle futures closed narrowly mixed but mostly lower (from an average of 18¢ higher in three contracts to an average of 41¢ lower).

Feeder Cattle futures close an average of 58¢ lower.

Wholesale beef values were higher on Choice and steady on Select with moderate to fairly good demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.14 higher Monday afternoon at $221.45/cwt. Select was 25¢ lower at $208.03.

Corn futures closed 4¢ to 6¢ higher through Jul ’20, and then mostly 2¢ higher.

Soybean futures closed mostly 8¢ to 10¢ higher.

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Crop planting and development continues to lag the average, due to all of the weather preceding the season.

For instance, 49% of corn was planted as of May 19, according to the most recent USDA Crop Progress report. That’s 29% less than last year and 31% less than the 5-year average. 19% is emerged, which is 28% less than last year and 30% less than average.

Similarly, 19% of soybeans are in the ground, compared to 53% for the previous year and 47% for the average. 5% are emerged, which was 19% less than last year and 12% less than average.

Corn futures closed 4¢ to 6¢ higher through Jul ’20, and then mostly 2¢ higher.

Soybean futures closed mostly 8¢ to 10¢ higher.

The same wet conditions hampering crops continues to improve already-bullish pasture and range conditions.

66% of the nation’s pasture and range is rated in Good or Excellent condition, compared to 46% last year. 6% is rated as Poor or Very Poor, compared to 19% a year earlier.

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Major U.S. financial indices closed lower Monday, led by tech stocks, which were pressured by the trade impasse with China.

The Dow Jones Industrial Average closed 84 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 113 points.

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Cattle feeding economics continue getting tougher, at least on a cash to cash basis, not counting price risk management.

Consider the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University.

Net return for steers closed out in May is projected at -$101.23 per head with a feedlot cost of gain (FCOG) of $89.45/cwt. For the remainder of the year, estimates range from -$95.93 per head in December (FCOG of $95.93) to -$233.33 in September (FCOG of $90.91).

That’s with corn prices for the 2018-19 crop year projected at $3.50/bu., according to USDA’s most recent Feed Outlook. Price forecast for the 2019-20 crop year is $3.30.

By | May 20th, 2019|Daily Market Highlights|

Cattle Current Daily—May 20, 2019

Negotiated cash fed cattle trade was $3-$5 lower last week on a live basis at $115-$117/cwt. in the Southern Plains, $117 in Nebraska and $116-$118 in the western Corn Belt. Dressed prices were $2-$5 lower in the western Corn Belt at $185-$190 and $3-$10 lower in Nebraska at $185-$186.

Oversold conditions and follow-through technical support helped Cattle futures close higher Friday, especially Feeder Cattle.

Live Cattle futures close an average of $1.31 higher (80¢ to $1.80 higher).

Except for 30¢ higher in spot May, Feeder Cattle futures close an average of $2.35 higher.

Wholesale beef values were firm to higher on moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 75¢ higher Friday afternoon at $220.31/cwt. Select was 40¢ higher at $208.28.

Corn futures closed 1¢ to 4¢ higher through May ’20, and then mostly fractionally lower to 1¢ lower.

Soybean futures closed 14¢ to 18¢ lower, mostly 16¢-17¢ lower.

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Major U.S. financial indices closed lower Friday in a late-session sell-off attributed to reports that trade talks between the U.S. and China are at a standstill.

The Dow Jones Industrial Average closed 98 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 81 points.

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Cattle producers received positive trade news at the end of the week.

U.S. Agriculture Secretary Sonny Perdue announced on Friday that Japan agreed to eliminate longstanding restrictions on U.S. beef exports, including the 30-month cattle age limit.

The U.S. Meat Export Federation (USMEF) estimates removal of the cattle age restriction will increase exports to Japan 7% to 10%, or by $150 million to $200 million per year.

“The ability to use beef from over-30-month cattle will also lower costs for companies exporting processed beef products to Japan,” says Dan Halstrom, USMEF president and CEO. “But for the U.S. industry to fully capitalize on this growth opportunity, U.S. beef needs to be on a level playing field in Japan. So, USMEF is also anxious to see progress in the U.S.-Japan trade negotiations.”

Also on Friday, according to the Office of the United States Trade Representative,

“The United States announced an agreement with Canada and Mexico to remove the Section 232 tariffs for steel and aluminum imports from those countries and for the removal of all retaliatory tariffs imposed on American goods by those countries.”

Those tariffs were a sticking point in completing the U.S.-Mexico-Canada (USMCA) trade agreement.

“Today’s announcement is a big win for American agriculture and the economy as a whole,” says Secretary Perdue. “Canada and Mexico are two of our top three trading partners, and it is my expectation that they will immediately pull back their retaliatory tariffs against our agricultural products. Congress should move swiftly to ratify the USMCA so American farmers can begin to benefit from the agreement.”

By | May 18th, 2019|Daily Market Highlights|

Cattle Current Daily—May 17, 2019

Cash fed cattle trade continued Thursday with live sales in Nebraska $3-$4 lower than last week at $117/cwt. A day earlier, live trade in the Southern Plains was $3-$5 lower than last week at $115-$117.

Even so, oversold conditions helped Live Cattle futures close an average of $1.17 higher, except for 7¢ higher in the back contract

Despite early pressure and higher grain prices, firming Live Cattle helped Feeder Cattle futures close an average of $1.03 higher (7¢ to 60¢ higher), except for $1.70 lower in spot May.

Wholesale beef values were steady on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 1¢ lower Thursday afternoon at $219.56/cwt. Select was 16¢ lower at $207.88.

Corn futures closed 3¢ to 9¢ higher through Jul ’20, and then mostly 1¢ higher. That’s an average of 25¢ higher week to week through the front three contracts; an average of 21¢ higher through the front six.

Soybean futures closed 4¢ higher through May ’20 and then mostly 1¢ to 3¢ higher. That’s an average of 36¢ higher through the front six contracts since Monday.

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Major U.S. financial indices closed higher again Thursday, buoyed by banks and quarterly earnings from Walmart that beat expectations.

The Dow Jones Industrial Average closed 214 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 75 points.

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“Based on recent price data and the number of fed cattle that will likely be available for marketing this year, the forecasts for second and third-quarter 2019 fed steers were lowered $3 and $2 to $121/cwt. and $113, respectively,” say analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook released Thursday.

Both cattle numbers and carcass weights are increasing.

Average steer dressed weight was 3 lbs. heavier than a year earlier at 852 lbs. for the week ending May 4, according to USDA’s Actual Slaughter Under Federal Inspection report. Average dressed heifer weight was 9 lbs. heavier at 795 lbs. Fed steer and heifer slaughter of 541,532 head was 17,743 head more than the same week a year earlier. Total cattle slaughter of 672,540 head was 20,203 head more. Beef production of 535.9 million lbs. was 16.3 million lbs. more.

“Based on recent price data and expectations of feedlots being less likely to bid up the price, the second-quarter 2019 feeder steer price was lowered by $2 to $145/cwt.,” say ERS analysts. “The fourth-quarter 2019 price was raised $1 to $147 based on expected fall demand. As a result, this month’s annual price forecast for 2019 was $145.50, close to last month’s forecast.”

For year-to-year perspective, 2018 feeder steers pries were $143.05 in the second quarter, $150.46 in the third and $147.90 in the fourth.

USDA’s initial projections for 2020 estimate an annual average feeder steer price of $150/cwt.

By | May 16th, 2019|Daily Market Highlights|

Cattle Current Daily—May 16, 2019

Negotiated cash fed cattle trade got underway in the Southern Plains Wednesday, with early live sales $3-$5 lower than last week at $115-$117/cwt.

Similarly, slaughter steers and heifers sold $2-$4 lower at Sioux Falls Regional in South Dakota: $117.95/cwt. for Ch 2-3 steers.

Of the 376 head offered in the weekly Fed Cattle exchange Auction, 280 head sold for a weighted average price of $117/cwt. for delivery at 1-9 days.

Stronger Lean Hog futures helped lift Live Cattle futures Wednesday, while Feeder Cattle futures continued to be pressured by higher grain prices.

Except for 2¢ lower in the back contract, Live Cattle futures closed an average of 19¢ higher.

Feeder Cattle futures closed an average of 44¢ lower (7¢ to 60¢ lower).

Wholesale beef values were weak to lower on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 55¢ lower Wednesday afternoon at $219.57/cwt. Select was 93¢ lower at $208.04.

Corn futures closed mostly 1¢ higher through Jul ’20, and then mostly 2¢ to 3¢ lower. 

Soybean futures closed 2¢ to 4¢ higher through Mar ’20 and then mostly fractionally mixed.

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Major U.S. financial indices closed higher Wednesday, on reports that President Trump will delay imposing higher tariffs on Chinese auto imports. Until that chatter began, markets were pressured by weaker economic data, which included a 0.2% decline in April U.S. retail sales, according to the U.S. Commerce Department.

The Dow Jones Industrial Average closed 115 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 87 points.

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“High prices rationed hay disappearance between Dec. 1 to May 1 to the lowest level since 2013-14 at 64 million tons. However, that still was not enough to prevent a year-over-year drop in the year-ending hay inventory,” say analysts with the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor.

There were 14.91 million tons of hay on farms May 1, according to the most recent USDA Crop Production report. That was 442,000 fewer (-2.88%) than a year earlier, the second lowest inventory on record, according to LMIC.

There were 79.06 million tons of hay on farms Dec. 1 last winter, which was 5.37 million fewer tons (-6.36%)  than the year before.

“Several states are experiencing the cumulative effects of two consecutive years of tighter inventories, with a handful reaching the lowest levels in the past decade,” LMIC analysts say. “Using the 10-year yield average of 2.4 tons per acre, the total U.S. supply this marketing year (May 2019 – April 2020) is expected to increase 3% to 4%. All hay prices, even with that increase, are still expected to be above a year ago.”

All told, year-to-year hay stocks May 1 declined by more than 25% in 17 states.

“Texas and Oklahoma inventories are down more than 50% from two years ago,” explain LMIC analysts. “Surrounding states such as Louisiana, Arkansas, Kansas, and Missouri are also in tight inventory situations. Hay stocks are down more than 50% from 2017 in those states as well.”

LMIC is currently forecasting other hay national prices to be 5% higher this marketing year.

By | May 15th, 2019|Daily Market Highlights|

Cattle Current Daily—May 15, 2019

Stronger outside markets and a sharp reversal higher in Lean Hog futures provided support to Cattle futures early Tuesday, but surging grain prices took away gains by the close.

Live Cattle futures closed an average of 46¢ lower.

Other than 95¢ higher in spot May, Feeder Cattle futures closed an average of 93¢ lower.

Wholesale beef values were lower on Choice and firm on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.46 lower Tuesday afternoon at $220.12/cwt. Select was 8¢ higher at $208.97.

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Grain futures bounced higher on Tuesday, getting a boost from the most recent USDA Crop Progress report confirming the degree of late planting.

For instance, just 30% of corn was planted, which was 36% less than the 5-year average. Only 9% of soybeans are in the ground, compared to 29% for the average.

Corn futures closed 11¢ to 13¢ higher through Dec ’20, 6¢ to 9¢ higher in the next three contracts and then mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 23¢ to 29¢ higher.

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Major U.S. financial indices rebounded Tuesday, gaining back about a third of the sizable losses from the previous session, which was tied to China’s retaliation to additional tariffs levied by the U.S. late last week. Nothing changed on that front.

The Dow Jones Industrial Average closed 207 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 87 points.

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“Calf and stocker prices have dropped significantly after peaking in April. While good moisture conditions imply good forage prospects this summer, cooler than normal weather has delayed pasture growth,” says Derrell Peel, extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Calf prices generally decline from first-quarter peaks to seasonal lows in the fall. Heavy feeder cattle prices, which seasonally grind higher from now until late summer, have also dropped recently. I suspect this is largely due to delayed feedlot marketings resulting from earlier winter weather combined with continuing wet, sloppy feedlot conditions. Heavy feeder prices will likely get back on seasonal track as feedlots catch up from earlier delays and feedlot pen conditions improve in the next few weeks.”

Likewise, Peel suggests fed cattle prices are likely past the seasonal peak of $128/cwt. in March and April. He notes last week’s price of about $120 is the lowest since last December, with delayed support from summer grilling demand, due to the protracted cold, damp weather.

 

“Boxed beef cutout values will likely strengthen again with July 4 buying commencing in middle to late May. Warmer summer weather should also boost beef demand seasonally in the coming weeks,” Peel says. “While end meat prices are typically weaker in the summer, current weakness, especially for chuck products may additionally reflect weaker export demand so far in 2019.” 

By | May 14th, 2019|Daily Market Highlights|

Cattle Current Daily—May 14, 2019

So much for Friday’s reprieve in the futures market, Cattle futures sank on Monday, along with other commodities and equities as traders digested news that China was increasing tariffs on U.S. products in retaliation for the added levies imposed by the U.S. last week.

Live Cattle futures closed an average of $1.81 lower (85¢ lower at the back to $2.70 lower in spot Jun).

Feeder Cattle futures closed an average of $3.11 lower.

Wholesale beef values were firm to higher on moderate to good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 47¢ higher Monday afternoon at $221.58/cwt. Select was $1.43 higher at $208.89.

Corn futures closed mostly 2¢ to 5¢ higher through Jul ’20 and then mostly fractionally mixed.

Soybean futures closed 3¢ to 6¢ lower through Sep ’20 and then mostly 1¢ lower.

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Major U.S. financial indices closed sharply lower Monday on China’s retaliation to additional tariffs levied by the U.S. late last week.

The Dow Jones Industrial Average closed 617 points lower. The S&P 500 closed 69 points lower. The NASDAQ was down 269 points.

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Although U.S. pork exports continue to bear the brunt of ongoing trade issues between the U.S. and other countries, those issues are impacting U.S. beef exports, too.

Beef exports in March of 107,655 metric tons (mt) were 4% less year-over-year, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Value was 2% less at $678 million.

For the first quarter, exports were down 3% at 307,306 mt valued at $1.9 billion (down 0.8%).

For perspective, U.S. pork exports of 211,688 mt were 7% less year over year in March and export value was 15% less at $520.7 million. For the first quarter, pork exports were 6% less than last year for volume and 14% less in value at $1.47 billion.

U.S. beef export value per head of fed slaughter for the first quarter was $309.32, which was 2% less than the same quarter last year.

South Korea continues to be the growth leader for U.S. beef exports, according to USMEF. First-quarter exports to South Korea were 8% more year over year at 56,173 mt. Export value of $414.2 million was 13% above last year’s record-shattering pace.

First-quarter exports to Japan were higher year over year for both tonnage and value, but were less in March.

“U.S. beef cuts are still subject to a 38.5% tariff in Japan while our competitors’ rate is nearly one-third lower at 26.6%,” explained Dan Halstrom, USMEF president and CEO. “This really underscores the urgency of the U.S.-Japan trade negotiations, which must progress quickly if we are going to continue to have success in the leading value market for U.S. beef and pork.”

Japan’s tariffs on beef variety meat are lower, but U.S. shipments are subject to a duty of 12.8% while competitors pay less than half that rate.

By | May 13th, 2019|Daily Market Highlights|

Cattle Current Daily—May 13, 2019

Maybe Cattle futures finally found a bottom to the recent selloff as short covering and positioning helped spur a rally late Friday.

Other than 50¢ higher in spot Jun, Live Cattle futures closed an average of $1.87 higher.

Feeder Cattle futures closed an average of $2.45 higher.

Wholesale beef values were lower on Choice and firm on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.36 lower Friday afternoon at $221.11/cwt. Select was 38¢ higher at $207.46.

Apparently, much of the bearish news in the monthly World Agricultural Supply and Demand Estimates (see below) was already priced into the market, given the muted reaction in futures markets.

Other than 1¢ to 2¢ lower in the front three contracts, Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed 1¢ to 3¢ lower through May ’20 and then mostly 1¢ higher.

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So much for fundamentals; chatter about on-again, off-again trade talks with China continued to whipsaw equity markets Friday, to the upside this time. Major U.S. financial indices closed higher on reports that talks with China were constructive.

The Dow Jones Industrial Average closed 114 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 6 points.

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Although cash fed cattle prices continue to soften, analysts with USDA’s Economic Research Service project slightly higher prices year over year— $118.50/cwt.—compared to $117.12 last year. In the latest World Agricultural Supply and Demand Estimates (WASDE), prices are forecast at $121 in the second quarter, $113 in the third quarter and $114 in the fourth quarter.

That’s with an estimated 27.27 billion lbs. of beef production, which would be 397 million lbs. more than last year.

Estimates for grain prices were significantly less bullish.

Corn

ERS projects the 2019-20 season-average farm price for corn 20¢ lower at $3.30/bu., the lowest since 2006-07.

Even with current planting wonderments, ERS forecasts this year’s corn crop at 15.0 billion bu. (yield of 176.0 bu./acre), which would be the second largest on record. Ending corn stocks for 2019-20 are projected to be 390 million bu. more than last year, with a stocks-to-use ratio of 16.9%, which would be the highest since 2005-06.

Soybeans

WASDE projects the 2019-20 U.S. season-average soybean price at $8.10/bu., down 45¢ from the previous year. Soybean meal prices are projected $15 less than the previous year at $290/short ton. Soybean oil prices are projected 1.5¢ higher at 29.5¢/lb.

“With sharply higher beginning stocks, soybean supplies are projected at 5,165 million bu., up 3% from 2018-19,” say ERS analysts.

Wheat

“The projected season-average farm price for wheat is $4.70/bu., down from last year’s estimated $5.20 on the expectation of greater export competition and lower U.S. corn prices.”

By | May 12th, 2019|Daily Market Highlights|

Cattle Current Daily—May 10, 2019

The growing likelihood that the U.S. would impose increased and expanded tariffs on Chinese imports Friday morning cast a pall over equity and futures markets Thursday. However, late session buying capped losses in Cattle futures.

Other than 87¢ and 20¢ higher in the front two contracts, Live Cattle futures closed an average of 15¢ lower.

Feeder Cattle futures closed an average of 37¢ higher.

Wholesale beef values were weak on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 54¢ lower Thursday afternoon at $222.47/cwt. Select was 41¢ lower at $207.08.

Grain futures fell hard, presumably pressured by the aforementioned trade news, as well as defensiveness ahead of Friday’s monthly World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 8¢ to 11¢ lower through the front five contracts and then mostly 4¢ to 5¢ lower.

Soybean futures closed 11¢ to 14¢ lower through Aug ’20 and then mostly 6¢ to 9¢ lower.

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Major U.S. financial indices closed lower Thursday, with the White House apparently ready to increase tariffs on Chinese imports Friday morning. 

The Dow Jones Industrial Average closed 138 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 32 points.

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It’s no secret that the average age of agricultural producers continues to increase.

For instance, the average age of all U.S. farm producers in 2017 was 57.5 years, according to the 2017 Census of Agriculture. That was up 1.2 years from 2012. Only 8% of producers were younger than 35 years old; 34% were more than 65 years old.

Often missed in the conversation, though, is the fact that the average age of farm laborers is increasing, too, according to USDA’s Economic Research Service (ERS).

“Over the past decade, the average age of hired farm laborers (excluding managers, supervisors, and other supporting occupations) has risen steadily, from age 35.8 years in 2006 to 38.8 years in 2017, an increase of 8%,” according to a recent Amber Waves article by ERS economist, Thomas Hertz. “This increase has been entirely driven by the aging of foreign-born farm laborers, who comprised between 54% and 58% of the workforce over this period. Their average age rose from 35.7 in 2006 to 41.6 in 2017, an increase of 16%. In contrast, the average age of farm laborers born in the United States (including Puerto Rico) has remained roughly constant.”

Hertz explains the reduced flow of new immigrants since 2008 is the main reason age is increasing for the foreign-born farm laborer population.

“This diminishing flow is reflected in an increase in the average number of years since these workers’ original immigration, from 12.4 years in 2007 to 18.6 years in 2017,” Hertz says. “It is also reflected in a decline in the estimated numbers of unauthorized immigrants from Mexico who are in the country (counting all such people, not just farmworkers), which fell by about 22% between 2007 and 2016, according to the latest estimates from the Pew Research Center.

Incidentally, between 2006 and 2017, the share of female farm laborers increased  from 19.5% to 25.0%, according to Hertz.

By | May 9th, 2019|Daily Market Highlights|

Cattle Current Daily—May 8, 2019

Negotiated cash fed cattle prices were $2-$3 lower in the Southern Plains Tuesday at $120/cwt., with slow trade and light to moderate demand.

Apparently, prices finally fell enough and conditions were oversold enough for buyers to get back on the long side of Cattle futures. That was despite sharply negative outside markets, tied to the lack of a trade resolution with China.

Except for unchanged in spot Jun, Live Cattle futures closed an average of 48¢ higher.

Feeder Cattle futures closed an average of 93¢ higher.

Wholesale beef values were sharply lower on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $3.13 lower Tuesday afternoon at $223.87/cwt. Select was $2.15 lower at $211.83.

Corn futures closed mostly 1¢ to 2¢ higher.

Except for a few cents higher in the back contracts, Soybean futures closed mostly fractionally mixed to 2¢ lower.

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Major U.S. financial indices plunged on Tuesday, with reports attributed to the U.S. Trade Representative that the U.S. will increase tariffs on Chinese imports this Friday, as suggested by President Trump over the weekend. Whether gamesmanship or reality, traders ran for cover. 

The Dow Jones Industrial Average closed 473 points lower. The S&P 500 closed 48 points lower. The NASDAQ was down 159 points.

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Producer sentiment plunged last month, with the Purdue University-CME Group Ag Economy Barometer diving 18 points to 115 points, month to month in April. That’s the fourth largest one-month drop since data collection began in October 2015.

Worsening perceptions of both current economic conditions and weaker expectations for the future drove the decline. The Index of Current Conditions fell 21 points to a reading of 99, and the Index of Future Expectations declined 16 points to a reading of 123.

“Farmers are becoming increasingly anxious over their future financial performance,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Producers have taken stock of their financial position and prospects for 2019 as they head into planting season and are concerned about the uncertainty arising from the ongoing trade disputes with key ag trading partners. Right now it seems that producers are being cautious.”

For instance, only 22% of respondents to the April survey believed now was a good time to make large farm investments.

Producers also expressed less optimism for resolution to the ongoing soybean trade dispute with China: only 28% of respondents felt that the dispute would be resolved before July 1, down from 45% in March. However, 71% still feel the dispute will ultimately be resolved in a way that benefits U.S. agriculture.

The Ag Economy Barometer is a sentiment index based on a monthly survey of 400 agricultural producers across the U.S.

By | May 7th, 2019|Daily Market Highlights|

Cattle Current—May 7, 2019

Already bearish Cattle futures received added fuel to the downside from Trump’s weekend tweet that he would increase tariffs on $200 billion worth of Chinese imports from 10% to 25% this Friday, if a trade deal remains unsigned. The president also threatened 25% tariffs on another $325 billion worth of Chinese imports. Lean Hog futures plunged, adding pressure to Cattle futures.

Live Cattle futures closed an average of $1.05 lower.

Feeder Cattle futures closed an average of $1.30 lower.

Wholesale beef values were weak on Choice and firm on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 36¢ lower Monday afternoon at $227.00/cwt. Select was 69¢ higher at $213.98.

Corn futures closed 4¢ to 7¢ lower through May ’20 and then mostly 1¢ to 2¢ lower.

Soybean futures closed 7¢ to 12¢ lower through Aug ‘20, and then mostly 2¢ lower.

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Major U.S. financial indices closed lower on Monday, but well off of session lows, pressured by President Trump’s aforementioned comments concerning Chinese trade. 

The Dow Jones Industrial Average closed 66 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 40 points.

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“Beef markets are getting ever more complex, a trend that is likely to continue, if not accelerate,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University (OSU), in is weekly market comments. “When the vast array of horizontal beef product markets is considered, along with the complex set of vertical cattle and beef production sectors, all of which operate in complicated dimensions of time and space, there can be little doubt that the U.S. cattle and beef industry is one of, if not the most complex set of markets on the planet.”

Indeed.

“The total carcass value that drives beef and cattle markets is the net effect of several hundred products that result from slaughter and fabrication and ultimately become thousands of different products that are part of retail grocery; hotel, restaurant and institutional (HRI) markets and exports, along with markets for edible offals and other byproducts of cattle slaughter,” Peel explains.

OSU researchers recently conducted interviews with companies representing a cross-section of the beef product industry, including multiple firms at all beef market levels. The research identified issues and trends associated with the evolution of beef markets. Among them, according to Peel:

  • Increasing exports and impacts in specific beef markets.
  • Increasing demand for additional fabrication of beef products.
  • The impact of increasing carcass size.
  • Demand for bone-in versus boneless beef products.
  • Fresh versus frozen products and the use of deep chill technology.
  • Increased demand for value-added products, including more beef products resulting from additional fabrication, as well as added-ingredient products.
  • The blending of beef marketing channels with growing popularity of home food delivery resulting from increased demand for restaurant take-out along with meal kits for home delivery or in-store purchase.
By | May 6th, 2019|Daily Market Highlights|

Cattle Current Daily—May 6, 2019

Negotiated cash fed cattle prices were sharply lower last week. Live trade was $3-$4 lower at $122-$123/cwt. in the Southern Plains; mostly $124 in Nebraska and $123-$127 in the western Corn Belt. Dressed trade was mainly $4-$6 lower at mostly $200.

Feeder Cattle futures continued to lead Live Cattle lower on Friday. Declining wholesale values at a time seasonality suggests a boost from grilling demand, as well as the continued unwinding of long-held long positions continue to weigh.

Except for 25¢ and 42¢ lower at either end of the board, Live Cattle futures closed an average of $1.10 lower. From the previous Friday through Thursday, open interest declined by 14,124 contracts.

Feeder Cattle futures closed an average of $1.30 lower.

Wholesale beef values were lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.44 lower Friday afternoon at $227.36/cwt. Select was $1.79 lower at $213.29.

Except for 1¢ higher in spot May, Corn futures closed mainly fractionally mixed.

Soybean futures closed 1¢ lower to 1¢ higher, except for 4¢ higher in the back three contracts.

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Major U.S. financial indices bounced back Friday, fueled by the monthly national employment report.

Total non-farm payroll employment increased 263,000 in April, compared to the previous month, according to the U.S. Department of Labor’s Bureau of Labor Statistics. The unemployment rate declined 0.2% to 3.6%, the lowest rate since 1969.

In April, average hourly earnings for all employees on private non-farm payrolls rose by 6¢ cents to $27.77. Over the year, average hourly earnings have increased by 3.2%.

The Dow Jones Industrial Average closed 197 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 127 points.

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The clock is ticking, but there’s still time for producers to get corn in the ground without impairing yield.

For instance, Bill Wiebold, agronomist with the University of Missouri (MU) Extension Service explains, “Our data provide some optimism that reasonably high yield can be obtained when corn is planted in mid-to-late May. However, yield potential is very strongly dependent on weather conditions in summer. For this reason, it is difficult to predict in any specific year what will happen to corn yield if planting is delayed.”

According to a 5-year MU study, yield potential in the state declines when corn planting is delayed through the first three weeks of May: -5% by the first week of May; -20% by the end of the month; -40% by the end of June.

Likewise, University of Minnesota studies show that corn yield is typically maximized when planting occurs from late April through mid-May.

“Minnesota corn growers have achieved good yields in the past several years even when the average corn planting date (50% of the corn planted in the state) has been April 29 for the years 2014-2016 and May 7 in 2017,” according to Minnesota Crop News.

“…in central Iowa from 2014-2016, the highest yield potential was attained with early May planting dates. Planting in mid-April resulted in 95% yield potential and planting in early June resulted in 81% yield potential,” according to Iowa State University.

By the way, according to the Iowa Farm Bureau, farmers in that state can plant up to 1.4 million acres in a day; more than 60% of the crop in a week.

USDA’s monthly World Agricultural Supply and Demand Estimates are due out Thursday.

By | May 4th, 2019|Daily Market Highlights|

Cattle Current Daily—May 3, 2019

“Lower cash sales of fed cattle combined with the downward trending futures is causing much uncertainty among cattle feeders,” noted the AMS reporter on hand for Thursday’s sale at Mitchell Livestock Auction in South Dakota.

Apparently, technical pressure, borne by recent bearishness was behind the hard drop in Feeder Cattle futures, which pressured Live Cattle in turn. It didn’t help that early support in Lean Hog futures faded through the session.

Net U.S. pork sales for Apr. 19-25 of 16,100 metric tons (mt) were 4% less than the previous week and 59% less than the prior four-week average, according to the Weekly Export Sales report from USDA’s Foreign Agricultural Service.

Beef exports continued softer, as well. Net export sales of U.S. beef (10,600 mt) were down 54% from the previous week and 50% lower than the prior four-week average.

Except for 20¢ lower in spot Jun, Live Cattle futures closed an average of 96¢ lower.

Feeder Cattle futures closed an average of $1.99 lower.

Wholesale beef values were lower on Choice and sharply lower on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.42 lower Thursday afternoon at $228.80/cwt. Select was $2.42 lower at $215.08.

Corn futures closed fractionally higher to 2¢ higher through near Dec and then fractionally lower to 3¢ lower.

Soybean futures closed mostly 7¢-8¢ lower.

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Major U.S. financial indices closed lower again on Thursday, with follow-through pressure from the Fed’s decision to leave the federal funds rate unchanged on Wednesday.

The Dow Jones Industrial Average closed 122 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 12 points.

Incidentally, Beyond Meat, Inc. (NASDAQ:BYND)—a plant-based fake meat company—went public, launching its IPO Thursday at $25 per share. The price soared to $65.75 by the close of the day.

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Demand for speed and convenience continue to shift consumer eating patterns, according to two recent reports from the NPD Group (NPD).

For instance, consumers are including frozen foods in 2% more at-home meals than a decade ago—9.8 billion at-home eating occasions last year.

“Demographic shifts, like Millennials moving into the busiest times of their lives juggling spouses, kids, and a career, are fueling a greater need for the convenience that frozen foods offer,” says David Portalatin, NPD Food Industry Advisor and author of Eating Patterns in America. “Manufacturers are also doing their part in increasing interest in frozen foods by innovating around contemporary food values and emerging flavor trends to provide convenience.”

Likewise, the fast casual restaurant category continues to grow. The definition of fast casual varies, but tends to include restaurants such as Five Guys, Shake Shack and even Starbucks.

Specifically, the number of fast casual chain restaurants rose by 1% to 25,312 total units, based on NPD’s Fall 2018 ReCount® restaurant census, which includes restaurants open as of September 30, 2018. In the year ending February 2019, compared to a year earlier, fast casual customers increased their visits by 3%, while the total quick service restaurant category, under which the fast casual category falls, were up 1%; total U.S.  foodservice traffic remained flat.

The fast casual category is still a relatively small part of the total foodservice industry, according to NPD. Fast casual restaurants represent 8% of total quick service visits, whereas traditional quick service restaurants, represent 75% of traffic.

By | May 2nd, 2019|Daily Market Highlights|

Cattle Current Daily—May 2, 2019

Through Wednesday afternoon, negotiated cash fed cattle prices were mostly $1-$4 lower than last week on a live basis at: $124/cwt. in Nebraska; $122 in Kansas; $125-$126 in the western Corn Belt. Dressed trade was $4-$6 lower at mostly $200.

There were 837 head offered in the weekly Fed Cattle Exchange auction; 479 head (four lots) sold for a weighted average price of $122.15/cwt., for delivery at 1-9 days.

A rally in Lean Hog futures helped stem the degree of bleeding in Cattle futures Wednesday.

Except for $1.82 higher in the back contract, Live Cattle futures closed an average of 42¢ lower.

Except for 7¢ higher in Aug, Feeder Cattle futures closed an average of 37¢ lower.

Wholesale beef values were weak to lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.62 lower Wednesday afternoon at $230.22/cwt. Select was 71¢ lower at $217.50.

Corn futures closed 3¢-6¢ higher through May ’20 and then mostly 2¢ higher. Presumably, some of the bounce came from weather-delayed planting.

Soybean futures closed 1¢-3¢ lower, extending losses as traders look for wet conditions to ultimately bring in more corn acres.

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Major U.S. financial indices closed lower on Wednesday. Much of the pressure was attributed to the Fed standing pat on interest rates. Apparently, traders were looking for a rate cut, given ongoing sub-2% inflation.

“Information received since the Federal Open Market Committee met in March indicates that the labor market remains strong and that economic activity rose at a solid rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low,” according to an FOMC statement. “Growth of household spending and business fixed investment slowed in the first quarter. On a 12-month basis, overall inflation and inflation for items other than food and energy have declined and are running below 2%. On balance, market-based measures of inflation compensation have remained low in recent months, and survey-based measures of longer-term inflation expectations are little changed.”

Pressure came despite the closely watched ADP Employment Report shattering expectations to the upside. That report indicates non-farm, private sector employment increased by 275,000 in April.

The Dow Jones Industrial Average closed 162 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 45 points.

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Dairy cattle continue to be a significant contributor to the commercial U.S. beef supply, say Brenda Boetel, Extension economist and Jared Geiser, research assistant from the University of Wisconsin-River Falls.

“Despite growing beef cattle inventories since 2014, dairy animals have been a stable source of beef and continue to play a key role in filling U.S. beef demand,” explain Boetel and Geiser, in the latest issue of In the Cattle Markets. “In 2018 the dairy sector contributed 5.6 billion lbs. (21.0 %) of beef to the U.S.”

For perspective, they point out total U.S. commercial beef production last year was 26.9 billion lbs., the most since 2002. Beef production between 2002 and 2018 ranged from 23.7 billion lbs. in 2014 to 27.0 billion lbs. in 2002, with dairy animals contributing 22% in 2014 and 18% in 2002.

“The contribution from dairy cattle varies based on the size of the native cattle herd and its contribution to the beef supply, as well as the number of cull dairy cows,” Geiser and Boetel explain. “Finished dairy steers are the largest beef contributor from the dairy industry followed by cull cows and finished heifers.”

By | May 1st, 2019|Daily Market Highlights|

Cattle Current Daily—May 1, 2019

There were too few transactions to trend, but early negotiated cash fed cattle prices were sharply lower at $123/cwt. in Kansas on a live basis at $200 dressed in Nebraska.

Cattle futures continued to slide as traders closed out the books for the month and open interest continued to erode.

Live Cattle futures closed an average of 82¢ lower.

Feeder Cattle futures closed an average of $1.77 lower.

Wholesale beef values were lower on Choice and firm on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.30 lower Tuesday afternoon at $231.84/cwt. Select was 49¢ higher at $218.21.

Corn futures closed mainly fractionally mixed.

Soybean futures continued to slide, closing 4¢-6¢ lower.

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Major U.S. financial indices closed mixed on Tuesday. Pressure included less earnings than expected from Google’s owner, Alphabet. Support included chatter about headway in trade talks with China.

The Dow Jones Industrial Average closed 38 points higher. The S&P 500 closed 2 points higher. The NASDAQ was down 54 points.

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Stronger same-store sales and customer traffic levels pushed the National Restaurant Association’s Restaurant Performance Index (RPI) 0.9% higher in March, compared to the previous month. The monthly composite index was 101.9 in March. It tracks the health and outlook for the U.S. restaurant industry. 

Sub-indices of the RPI were higher, as well. The Current Situation Index increased 1.5% to 101.8. It declined the previous three months.

The Expectations Index increased 0.3% to 102.1. “March represented the fourth consecutive increase in the Expectations Index, which propelled the forward-looking component to its highest level in 11 months,” according to the RPI report.

Index values above 100 signal a period of expansion. Values below 100 signal a period of contraction.

By | April 30th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 30, 2019

Early two-sided trading in Cattle futures gave way to continued pressure from last week, tied to volatility in Lean Hog futures, technicals and growing pessimism about increasing fed cattle supplies during a time that domestic demand appears static, while international demand is a bit softer year over year.

Except for 22¢ higher in spot Apr, Live Cattle futures closed an average of 39¢ lower.

Except for 55¢ higher in spot May, Feeder Cattle futures closed an average of $1.48 lower.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 15¢ higher Monday afternoon at $233.14/cwt. Select was $1.69 lower at $217.72.

Corn futures closed mostly fractionally higher.

Soybean futures closed 6¢ to 7¢ lower.

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Major U.S. financial indices edged higher on Monday.

The Dow Jones Industrial Average closed 11 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 15 points.

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“With the exception of the cull cow market, cattle and beef markets are behaving seasonally with little underlying trend in most markets,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “All and all, we are seeing the most stable cattle and beef markets in many years. Until or unless outside shocks rise up to impact supply or demand conditions, expect cattle and beef markets to remain pretty calm in the coming months.”

Peel points out strong demand for grazing cattle kept calf and stocker prices near a seasonal peak through April. He believes prices are currently at or just past the seasonal peak.

“From a forage perspective, excellent moisture conditions suggest tremendous pasture and hay potential,” Peel says. “The latest Drought Monitor shows the least amount of dry conditions across the country since the Drought Monitor began in 2000. The upcoming May Crop Production report from USDA-NASS will likely show that May 1 hay stocks are low following reduced December 1 hay stocks and cold, wet conditions affecting cattle production this past winter. However, good hay production prospects for 2019 alleviate much of the concern about end of crop year stock levels as the 2019 hay crop year begins.”

By | April 29th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 29, 2019

When all was said done last week, negotiated cash fed cattle prices were steady in the Southern Plains at $126/cwt., but $2-$3 less in the north at $125-$127 in Nebraska and $128 in the western Corn Belt. Dressed trade was $2-$3 lower at mostly $205 in Nebraska and mostly $205-$206 in the western Corn Belt.

Cattle futures edged mostly lower Friday, but apparent short covering and positioning helped staunch the downward momentum of the previous two sessions.

Except for 50¢ higher in spot Apr, Live Cattle futures closed an average of 32¢ lower.

Except for 40¢ higher in spot May and an average of 7¢ higher in the back two contracts, Feeder Cattle futures closed an average of 41¢ lower.

Wholesale beef values were steady on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 6¢ higher Friday afternoon at $232.99/cwt. Select was 34¢ lower at $219.41.

Corn futures closed 1¢ to 4¢ higher.

Soybean futures closed 4¢ to 5¢ lower.

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Major U.S. financial indices closed higher on Friday, buoyed by estimated GDP growth in the first quarter, which was more than expected.

Real Gross Domestic Product (GDP) increased 3.2% in the first quarter of this year, according to the advance estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2018, real GDP increased 2.2%.

The Dow Jones Industrial Average closed 81 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 27 points.

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“I am optimistic that live and feeder markets will offer some correction to the sharp moves down, possibly if we see strong seasonal cattle and beef movements. But, the stronger than expected cattle market story might be over,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets.

Although carcass weights continue lower than last year, at least for a while yet, and wholesale beef values appear ready for a seasonal surge, increasing cattle supplies will continue to weigh on prices through the summer.

“The inventory of market-ready cattle, as proxied by the calculated cattle on feed over 120 days, are nothing short of enormous,” Koontz says. “Orderly and aggressive marketings through the remainder of April, May, and June are essential.”

By | April 27th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 26, 2019

Negotiated cash fed cattle trade was mostly $3 lower in Nebraska Thursday at mostly $127/cwt. Dressed trade was mostly $3 lower at mostly $205. Dressed sales were $2-$3 lower in the western Corn Belt at mostly $205-$206.

Pessimism began to build about looming cattle supplies as some funds began to unwind long positions. Technical pressure that began in Cattle futures the previous session found a new gear on Thursday, getting more fuel from limit-down moves in Lean Hog futures, which was tied to the lack of exports to China.

Live Cattle futures closed an average of $2.54 lower, for an average of about $4.50 lower in the last two sessions. 

Feeder Cattle futures closed an average of $3.27 lower, for an average of about $6 lower in the last two sessions.

Wholesale beef values were steady to weak on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 3¢ lower Thursday afternoon at $232.93/cwt. Select was 53¢ lower at $219.75.

Corn futures closed 1¢ higher.

Soybean futures bounced back and closed 3¢ to 4¢ higher.

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Major U.S. financial indices closed mixed on Thursday. Despite mostly positive quarterly earnings reports, the main pressure was attributed to significantly lower 3M earnings than expected.

The Dow Jones Industrial Average closed 134 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 16 points.

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The latest monthly Livestock Slaughter report from USDA provides further overall perspective regarding the weather impact on carcass weights. 

Average dressed steer weight in March was 11 lbs. less year over year at 867 lbs.  For January-March it was 8 lbs. less at 878 lbs. Average dressed heifer weight was 13 lbs. less year over year at 807 lbs. It was 11 lbs. less for January to March at 817 lbs.

Keeping in mind one less business day in March this year, there were 1.22 million steers harvested under federal inspection in March, which was 105,900 head fewer (-7.9%) than the previous year. There were 42,900 more heifers slaughtered (+5.69%) at 797,300 head. Combined steer and heifer slaughter of 2.02 million head was 63,000 head fewer (-3.03%) than the previous March.

Total cattle slaughter under federal inspection of 2.61 million head in March were 51,100 fewer (-1.92%) than the prior year.

Total commercial beef production in March of 2.12 billion lbs. was 85.8 million lbs. less (-3.89%) year over year.

Total commercial red meat production was 86.8 million lbs. less (-1.92%) at 4.43 billion lbs.

By | April 25th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 25, 2019

Cattle futures headed south Wednesday, amid presumable profit taking, technical pressure and chatter that the seasonal top in cash fed cattle prices is on the books.

Live Cattle futures closed an average of $1.99 lower ($1.50 to $2.77 lower), with the heaviest trade in a month. 

Feeder Cattle futures closed an average of $2.66 lower ($1.72 lower at the back to $3.10 lower in spot May).

Despite futures negativity, negotiated cash fed cattle trade was at steady money in the Southern Plains at $126/cwt. on moderate trade and demand. There were too few transactions to trend in other regions, but the tone of early sales was decidedly lower in Nebraska and the western Corn Belt.

There were 461 head offered in the weekly Fed Cattle Exchange Auction: 124 head (one lot of Kansas steers) sold for a weighted average price of $127, for delivery at 1-9 days.

Wholesale beef values were lower on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.15 lower Wednesday afternoon at $232.96/cwt. Select was 98¢ lower at $220.28.

Corn futures closed 2¢ to 4¢ lower.

Soybean futures continued lower, closing down mostly 6¢ to 7¢.

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Major U.S. financial indices closed lower on Wednesday amid mixed quarterly earnings reports and more fretting about the trade impasse with China.

The Dow Jones Industrial Average closed 59 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 18 points.

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Nearly 150,000 growers in Iowa, Nebraska, Missouri and Kansas are affected by flooding, according to Farm Market iD (FMID), a provider of farm and grower data.

According to FMID, there are nearly 90,000 grain bins located in the flooded areas, which are valued at $4 billion for the structures. The 1.24 billion bu. of storage capacity in the affected area equates to 31% of on-farm grain storage.

“The amount and cost of lost grain and the construction costs to rebuild will impact farmers for years, and some may have a hard time recovering,” says Steve Rao, CEO of FMID. “That said, the majority of on-farm grain storage has not been affected.”

FMID estimates there are 16 million acres in the affected areas intended for planting to corn, wheat or soybeans.

By | April 24th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 24, 2019

Cattle futures found some stability on Tuesday although Live Cattle edged lower, pressured in part by volatility in Lean Hog futures.

Live Cattle futures closed an average of 19¢ lower.

Except for $1.17 lower in spot May and 12¢ lower in Mar, Feeder Cattle futures closed an average of 18¢ higher.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed mostly 10¢ to 15¢ lower through Nov ’20 and then 3¢ to 9¢ lower. Apparently funds are taking advantage of the anemic fundamentals tied to bountiful supplies here and reports of a strong harvest in South America thus far.

Wholesale beef values were weak to lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 37¢ lower Tuesday afternoon at $234.11/cwt. Select was $1.38 lower at $221.26.

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Major U.S. financial indices closed strongly higher on Tuesday, buoyed by better than expected quarterly earnings from a wide array of companies, including Coca-Cola, Twitter and United Technologies.

The Dow Jones Industrial Average closed 145 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 105 points.

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Total pounds of beef in freezers Mar. 31 were 5% less than the previous month and 3% less than a year earlier, according to USDA’s monthly Cold Storage report.

Similarly, frozen pork supplies were down 1% from the previous month and down slightly from last year.

Total red meat supplies in freezers were 3% less than the previous month and 2% less than a year earlier.

Total frozen poultry supplies were also lower—1% less than the previous month and 2% less than a year ago.

By | April 23rd, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 23, 2019

Feeder Cattle futures closed sharply lower Monday, in response to the higher than expected placements in last week’s Cattle on Feed report (see below). That, lower commodity markets overall and a pullback in Lean Hog futures helped drag down Live Cattle futures, despite last week’s firmer cash trade.

Except for 2¢ lower in spot Apr, Live Cattle futures closed an average of 97¢ lower.

Except for 65¢ higher in newly minted away Apr, Feeder Cattle futures closed an average of $1.23 lower.

Corn futures closed mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 2¢ to 3¢ lower.

Wholesale beef values were higher on Choice and sharply higher on Select with moderate to good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 83¢ higher Monday afternoon at $234.48/cwt. Select was $2.15 higher at $222.64.

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Major U.S. financial indices mostly hovered in place Monday, with a bump in crude oil prices and energy stocks tempered by angst over the heart of quarterly earnings reporting this week.

The Dow Jones Industrial Average closed 48 points lower. The S&P 500 closed 2 points higher. The NASDAQ was up 17 points.

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Feedlot inventories are underscoring the dynamics of herd expansion, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“As of Apr. 1, Peel explains that In the five years of herd expansion from 2014 to 2018, heifers in feedlots averaged 34.4% of feedlot inventories. On Jan. 1 and Apr. 1 (this year), heifers accounted for 37.7% of feedlot inventories, indicating that heifer retention slowed significantly through 2018 coming into 2019.”

The data comes from the quarterly snapshot provided in Cattle on Feed reports.

Referring to the most recent one, Peel notes, besides cattle on feed Apr. 1 being record high for the month at 11.96 million head, the 12-month moving average of feedlot inventories is just shy of the record.

“Regional differences in on-feed inventories were pronounced and likely reflect the impacts of winter weather,” Peel says. “Feedlot inventories were up year over year in Texas (+6%); Colorado (+12%), Kansas (+2%) and Oklahoma (+2%). Feedlot totals were down year over year in Nebraska (-4%), Iowa (-4%) and South Dakota (-4%).

By | April 22nd, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 22, 2019

When all was said and done last week, negotiated cash fed cattle trade ended up $2 higher in the Southern Plains at $126/cwt. on a live basis, and steady to $4 higher in Nebraska and the western Corn Belt at mostly $130. Dressed trade was $2-$4 higher at $208.

Futures and equity markets were closed Friday in observance of Good Friday.

Wholesale beef values were firm to higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 59¢ higher Friday afternoon at $233.65/cwt. Select was $1.03 higher at $220.49.

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Although U.S. beef exports to most countries remained higher year over in February, they declined 6% overall on a volume basis to 94,855 metric tons and 3% on a value basis to $581.6 million, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

January-February exports were 3% below last year’s record pace in volume (199,651 mt) but steady in value at $1.22 billion. The volume decline was mainly due to lower exports to Hong Kong and Canada, according to USMEF. Exports to Hong Kong were 40% less for volume and 35% less in terms of value. Exports to Canada were down 15% in volume and 13% in value.

Beef export value per head of fed slaughter averaged $309.39 in February, down 4% from a year earlier. The January-February average was down 3% to $296.19.

Although progress is reportedly being made in resolving a bevy of U.S.-international trade issues, USMEF President and CEO Dan Halstrom says missed opportunities for export growth are mounting.

“On the beef side there is still much to be excited about, especially with the launch of U.S.-Japan trade agreement talks,” Halstrom says. “A great deal is at stake for both U.S. beef and U.S. pork in those negotiations, as exports to Japan deliver remarkable returns for the entire U.S. supply chain and it is essential that we get back on a level playing field with our competitors.”

Beef exports to leading market Japan remained strong in February, pushing January-February exports 8% above last year’s pace in volume (47,695 mt) and 10% higher in value ($309.3 million).

U.S. pork exports continue to bear most of the losses from trade issues.

Pork export volume was down 9% in February year over year, to 186,745 metric tons (mt), while export value dropped 17% to $455.9 million — the lowest monthly value total since February 2016. For January through February, pork exports were 5% below last year’s pace in volume (388,580 mt) and 13% lower in value ($950 million).

Although demand for imported pork may be increasing in China/Hong Kong due to African Swine Fever, USMEF notes that China’s retaliatory duties make it difficult for the U.S. industry to capitalize. The duty rate on U.S. pork is 62%, compared to 12% for other suppliers. Through February, exports to China/Hong Kong were down 22% from a year ago and value was 34% less.

By | April 21st, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 19, 2019

Negotiated cash fed cattle trade broke out in the north yesterday. Live sales were as much as $4 higher in Nebraska and the western Corn Belt at $130/cwt. Dressed trade was $2-$3 higher at $207-$208.

Lighter carcass weights continue to provide support. The average dressed steer weight for the week ending Apr. 6 was 865 lbs., which was 7 lbs. less than a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 5 lbs. less at 804 lbs.

Except bouncing higher in the front month, Live Cattle futures closed mixed Thursday, while Feeder Cattle edged higher as traders positioned ahead of the holiday weekend and ahead of the monthly Cattle on Feed report (see below). More on that report momentarily.

Other than $1.60 higher in spot Apr, Live Cattle futures closed narrowly mixed, from 15¢ lower to 30¢ higher.

Feeder Cattle futures closed an average of 49¢ higher (22¢ to 95¢ higher).

Corn futures closed mostly fractionally mixed.

Soybean futures closed mostly 1¢ higher.

Wholesale beef values were firm on Choice and weak on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 30¢ higher Thursday afternoon at $233.06/cwt. Select was 70¢ lower at $219.46. At $13.60, the Choice-Select spread was the widest since December.

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Major U.S. financial indices strengthened Thursday, buoyed by positive quarterly earnings reports and an uptick in retail sales. The U.S. Census Bureau estimated March retail sales to be 1.6% more than the previous month, significantly higher than trade expectations.

The Dow Jones Industrial Average closed 110 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 1 point.

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The monthly Cattle on Feed report will likely be viewed as neutral to a touch bearish, with slightly more March placements and total cattle on feed than most pre-report estimates. The report is for feedlots with a one-time capacity of 1,000 head or more.

There were 2.01 million head placed on feed in March, which was 4.84% more (+93,000 head) than the previous year. In terms of placement weights: 16.14% (325,000) head went on feed weighing 600 lbs. or less; 14.89% (300,000 head) weighing 600-699 lbs.; 29.54% (595,000) weighing 700-799 lbs.; 26.76% (539,000 head) weighing 800-899 lbs.; 9.19% (185,000 head) weighing 900-999 lbs.; 3.48% (70,000 head) weighing 1,000 lbs. or more.

Marketings in March of 1.78 million head were 3.42% fewer (-63,000 head) than last year.

All told, there were 11.96 million head on feed Apr. 1, which was 2.00% more (+235,000 head) than a year earlier. That’s the largest inventory since the data series began in 1996. The inventory included 4.51 million heifers and heifer calves, which was 320,000 head more (+7.62%) than the same time a year earlier.

By | April 18th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 18, 2019

Negotiated cash fed cattle trade got underway in the Southern Plains on Wednesday at $126/cwt. on a live basis, which was $2 higher than the previous week.

Out of the 1,578 head offered in the weekly Fed Cattle Exchange auction, 1,269 head sold—all from Nebraska—for a weighted average price of $127.08/cwt.; all for delivery at 1-17 days.

Choice 2-3 steers brought $126-$128/cwt. at Sioux Falls Regional in South Dakota.

Cattle futures closed mixed but mostly higher Wednesday as traders positioned for the holiday-shortened trading week.

Except for 22¢ and 7¢ lower in the front two contracts, Live Cattle futures closed an average of 46¢ higher.

Other than an average of 47¢ lower in the front two contracts and 5¢ lower at the back, Feeder Cattle futures closed an average of 58¢ higher. Popular estimates suggest tomorrow’s monthly Cattle on Feed report to show March placement about 4% more than a year earlier.

Corn futures closed fractionally lower.

Soybean futures closed 6¢ to 9¢ lower as global production and stocks continue to weigh on prices.

Wholesale beef values were higher on Choice and steady on Select with moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 71¢ higher Wednesday afternoon at $232.76/cwt. Select was 99¢ lower at $220.16.

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Major U.S. financial indices wobbled on Wednesday. Despite strong quarterly earnings reports, traders reportedly fretted over the political uncertainly surrounding health care companies.

The Dow Jones Industrial Average closed 3 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 4 points.

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Life continues to be tougher for agricultural producers in the middle, according to the recently released 2017 Census of Agriculture from USDA’s National Agricultural Statistics Service (NASS).

For instance, the total number of farms declined between 2012 and 2017, from 2.11 million to 2.04 million.

There were 77,000 farms with sales of $1 million or more, which was 2,000 fewer than in 2012, but 1,000 more farms with sales of $5 million or more.

There were 792,000 farms with sales of less than $2,500, which were 4,000 more (+0.51%) more than 2012.

In between, were farms with sales of $2,500 to $999,999, which totaled 1.17 million. That was 69,000 fewer (-5.56%) than 2012. There were 39,000 fewer farms (-4.85%) with sales of $2,500 to $4,999 and 30,000 fewer farms (-6.85%) with sales of $50,000 to $999,999.

Farms with sales of $5 million or more accounted for fewer than 1% of all farms but 35% of all sales. On the other end of the scale, farms with sales of $50,000 or less accounted for 76% of the farms and 3% of the sales.

By | April 17th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 17, 2019

Cattle futures gained more ground Tuesday, buoyed by continued strength in Lean Hog futures and firm wholesale beef prices. Feeder Cattle likely received some benefit from lower grain futures.

Live Cattle futures closed an average of 68¢ higher (20¢ to $1 higher).

Except for unchanged and 17¢ higher in the front two contracts, Feeder Cattle futures closed an average of 94¢ higher .

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed mostly 8¢ to 10¢ lower.

Wholesale beef values were higher on Choice and steady on Select with moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.07 higher Tuesday afternoon at $232.05/cwt. Select was 7¢ lower at $221.15.

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Major U.S. financial indices edged higher Tuesday, regaining the minimal losses from the previous session. Support included stronger quarterly earnings than expected.

The Dow Jones Industrial Average closed 67 points higher. The S&P 500 closed 1 point higher. The NASDAQ was up 24 points.

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Between recent prices and expectations for stronger feedlot demand, USDA increased projected feeder cattle prices for the second quarter by 2$ at the midpoint to $144-$150/cwt., according to the monthly Livestock, Dairy and Poultry Outlook. Prices for the fourth quarter increased $2 at the midpoint, as well, to $140-$152. The annual price forecast increased to $143-$150.

Analysts with USDA’s Economic Research Service (ERS) note the inventory of cattle on feed more than 150 days continued to build in March; 23% more than a year earlier. They expect feedlot placements and marketings in the coming quarters to bring the supply of long-fed cattle more in line with the 5-year average.

“These large supplies of market-ready cattle in feedlots have experienced a tough winter, and the performance of steers and heifers in the feedlot has suffered. Given how long feedlot operations have had to feed these animals, the feedlots may be more inclined to take prices offered than to feed their cattle longer to recover the lost weight,” ERS analysts explain. “As a result, the momentum of the weekly 5-area steer price may have limited upward support, particularly given the strong number of market-ready cattle in early 2019. However, based on expected strength of beef demand as the year progresses, the 2019 annual price forecast was left unchanged at $117-$122/cwt.

By | April 16th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 16, 2019

Negotiated cash fed cattle prices were steady in the Southern Plains last week at $124/cwt. In late-week trade, live prices were steady to $2 higher in the north at $126-$128 in Nebraska, $127.00-$127.50 in Colorado and at $127-$130 in the western Corn Belt. Dressed trade was steady to unevenly steady at $204-$206.

Sluggish, directionless trade had Cattle futures hovering in mixed action early in Monday’s session. They ended the day grinding a touch higher.

Live Cattle futures closed an average of 18¢ higher, except for 25¢ lower in spot Apr and unchanged in Dec.

Feeder Cattle futures closed an average of 45¢ higher.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed 1¢ to 3¢ higher.

Wholesale beef values were sharply higher on Choice and steady on Select with moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.23 higher Monday afternoon at $230.98/cwt., the highest since last May. Select was 20¢ higher at $221.22.

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Major U.S. financial indices leaked lower Monday, presumably on mixed quarterly earnings reports.

The Dow Jones Industrial Average closed 27 points lower. The S&P 500 closed 1 point lower. The NASDAQ was down 8 points.

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“With generally good summer forage prospects, stocker cattle demand remains strong with spring calf price peaks continuing into mid-April,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Lightweight feeder cattle prices have yet to confirm a seasonal price peak and may hold steady or even push slightly higher in the next two to three weeks. In Oklahoma, 5-weight steer prices typically drop roughly 7% between the spring peak into July and another 4% to fall lows in October. Large frame, #1 steers (500 lbs.) are currently priced about $186/cwt., suggesting an October low price of roughly $166.”

As for feeder steers (7-weight to 8-weight), Peel says they typically increase to a peak in July before declining in the second half of the year.

“Current steer prices are roughly $148/cwt. (750 lbs., Large #1), suggesting a peak July price of roughly $153 and an October price near $148,” Peel says. “Futures markets are more optimistic than that for feeder markets with current Feeder Cattle futures prices for the summer and fall well above these levels. This may provide a pricing opportunity for summer or fall feeder sales.”

Although cash cattle prices may have peaked in late March at nearly $129/cwt., Peel believes lingering weather impacts could fuel one more price surge in the next few weeks.

“Beef production thus far this year is down 0.7% year over year but weekly beef production the last four weeks has averaged 1.8% higher year over year,” Peel says. “Beef production typically increases from the first quarter to the third quarter of the year. The seasonal increase in beef production may be tempered somewhat in the coming weeks by lower carcass weights and other lingering impacts of severe weather this winter and spring. Normal seasonality of fed prices indicates that fed prices will likely drop to +/- $120/cwt. for fall lows.”

By | April 15th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 15

Based on USDA reports through late Friday afternoon, the only trendable negotiated cash fed cattle trade for the week was steady money in the Southern Plains at $124/cwt.

Week-end positioning, reduced tonnage from another storm and the promise of grilling-season demand helped lift Cattle futures on Friday.

Live Cattle futures closed an average of 66¢ higher. 

Except for unchanged in spot Apr and an average of 29¢ lower in the back two contracts, Feeder Cattle futures closed an average of 62¢ higher. 

Corn futures closed fractionally higher through Sep ’20 and then mostly fractionally lower.

Soybean futures closed mostly fractionally lower. 

Wholesale beef values were steady on Choice and higher on Select with moderate to fairly good demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 1¢ higher Friday afternoon at $228.84/cwt. Select was $1.07 higher at $221.02. 

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Major U.S. financial indices closed higher Friday. Support included quarterly earnings from J.P. Morgan Chase and surging Disney shares, tied to its new streaming service. 

The Dow Jones Industrial Average closed 269 points higher. The S&P 500 closed 19 points higher. The NASDAQ was up 36 points.

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Measured against history, analysts with the Livestock Marketing Information Center (LMIC) say the expansion phase of the current cattle cycle is typical. It may be the liquidation phase that runs against the grain.

In the latest Livestock Monitor, LMIC analysts explain cyclical herd growth since the 1970’s lasts 5-7 years, with peak numbers usually fewer than the apex of the previous cycle. The liquidation phases usually takes 5-8 years. Currently, they estimate beef cow numbers at the beginning of next year to be about the same as this year; then a negligible reduction.

“Even though cow-calf returns are dramatically below a few years ago, most producers are not faced with financial stress to force substantial breeding herd reductions,” LMIC analysts say. “That is a contrast to most recent cattle cycles. In several areas of the U.S. drought, floods, and/or brutal winter weather has impacted and could continue to ratchet down cowherd numbers. But the economics suggest the most modest cyclical herd downturn since the 1958-67 inventory cycle.”

By | April 13th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 12, 2019

Cattle futures worked their way higher Thursday, helped along by Lean Hog futures once again (see below). Lean Hogs were buoyed by data from USDA’s Foreign Agricultural Service indicating 77,700 metric tons of U.S. pork sold to China last week. 

Live Cattle futures closed an average of 30¢ higher. 

Feeder Cattle futures closed an average of 63¢ higher (25¢ higher to $1.17 higher in the back contract).

Corn futures closed fractionally lower to 2¢ lower. 

Soybean futures closed mostly 5¢ to 7¢ lower. 

Wholesale beef values were steady on Choice and firm on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 22¢ lower Thursday afternoon at $228.83/cwt. Select was 33¢ higher at $219.95. 

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Major U.S. financial indices closed little changed on Thursday. 

The Dow Jones Industrial Average closed 14 points lower. The S&P 500 closed unchanged. The NASDAQ was down 16 points.

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“African Swine Fever has spread to every province in mainland China and is now affecting an estimated 150-200 million pigs,” says Christine McCracken, RaboResearch animal protein analyst. “The expected 30% loss in pork production is unprecedented. These losses cannot easily be replaced by other proteins like chicken, duck and seafood, nor will larger pork imports be able to fully offset the loss.” McCracken authored the recent Rabobank article, Rising African Swine Fever Losses to Lift All Protein Boats.

According to a media advisory from Rabobank Thursday:

In 2019, Rabobank expects Chinese pork production losses of 25% to 35%. This loss is at least 30% larger than annual U.S. pork production and nearly as large as Europe’s annual pork supply.

Rabobank expects production losses to exceed 10% in Vietnam, the world’s fifth largest pork-producing country and a significant supplier to China.Rabobank believes there will be a net supply gap of almost 10 million metric tons in the total 2019 animal protein supply, which will increase farmgate and consumer prices.

By | April 11th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 11, 2019

Negotiated cash fed cattle trade got underway in the Southern Plains Wednesday at $124/cwt. on a live basis, which was steady with last week.

Likewise, there were 510 head—four five lots of Oklahoma heifers—offered in the weekly Fed Cattle Exchange auction. Four lots (416 head) sold for 1-17 day delivery at a weighted average price of $124/cwt. 

Continued sluggish trade and lack of direction pressured Cattle futures Wednesday, despite strong renewed buying in Lean Hog futures.

Live Cattle futures closed an average of 51¢ lower (2¢ lower in spot Apr to 72¢ lower). 

Feeder Cattle futures closed an average of 53¢ lower (2¢ lower to 97¢ lower in spot Apr).

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed 2¢ to 3¢ higher. 

Wholesale beef values were firm to higher on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 73¢ higher Wednesday afternoon at $229.05/cwt. Select was 82¢ higher at $219.62. 

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Major U.S. financial indices edged higher Wednesday. Support included release of minutes from the most recent FOMC meeting, underscoring the likelihood of static interest rates for the remainder of the year.

“…a majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year,” according to the FOMC minutes. “Several of these participants noted that the current target range for the federal funds rate was close to their estimates of its longer-run neutral level and foresaw economic growth continuing near its longer-run trend rate over the fore-cast period.”

The Dow Jones Industrial Average closed 6 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 54 points.

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Cattle prices will meander lower next year and then increase steadily through 2028, according to the 2019 Baseline Outlookreport from the University of Missouri’s Food and Agricultural Policy Institute (FAPRI) and Agricultural Markets and Policy team. The outlook through 2028 is based on market information available in February.

FAPRI pegs the 5-area fed steer price in 2020 at $112.38/cwt., compared to a projection of $114.17 this year. The price is projected at $114.78 in 2021, rising from there to $130.29 in 2028.

Prices for steers weighing 600-650 lbs. (basis Oklahoma City) are projected to ebb at $143.92/cwt. in 2020, compared to a projection of $153.30 for this year. The estimated price in 2021 is $149.47 and then increases to $181.35 in 2028.

Overall, however, FAPRI suggests pressure on farm finances likely will continue. Although the analysis shows a projected increase for net farm income this year, it remains below the average of 2014-17. Longer-term projections suggest little change in real net farm income over the next decade, resulting in continued increases in the farm sector’s debt-to-asset ratio.“Although it remains well below the levels of the 1980s, the ratio of U.S. farm debts to assets has increased from 11.3% in 2012 to 13.5% in 2018,” according to the report. “The outlook is for continued stress on farm finances, with the debt-to-asset ratio averaging 14.8% between 2020 and 2028.”

By | April 10th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 10, 2019

Sluggish trade, pressure in Lean Hog futures and softer outside markets weighed on Cattle futures Tuesday.

Other than 10¢ and 90¢ higher at either end of the board, Live Cattle futures closed an average of 20¢ lower. 

Feeder Cattle futures closed mixed, from and average of 23¢ lower to an average of 42¢ higher.

Corn futures closed unchanged to 1¢ higher. 

Soybean futures closed unchanged to fractionally mixed. 

Wholesale beef values were weak to lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 35¢ lower Tuesday afternoon at $228.32/cwt. Select was $2.08 lower at $218.80. 

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Major U.S. financial indices closed lower Tuesday, with investors apparently fretting over protracted trade negotiations with China and an expected rough patch for quarterly earnings. 

The Dow Jones Industrial Average closed 190 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 44 points.

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“The beef production forecast is reduced from the previous month, primarily on lower carcass weights, but higher total cattle slaughter for 2019 is expected to partially offset declines in carcass weights,” say analysts with USDA’s Economic Research Service (ERS), in the latest 

World Agricultural Supply and Demand Estimates (WASDE).

Estimated beef production for this year of 27.280 billion lbs. is 20 million lbs. less than the previous month’s projection.

Projected fed steer prices (5-area Direct) were lowered slightly based on a lower price in the first quarter. The 5-area Direct fed steer price is projected at $122-$126/cwt. in the second quarter; $111-$119 in the third and $109-$119 in the fourth.

 Incidentally, total red meat and poultry production for this year was reduced by 212 million lbs. to 104.245 billion lbs.

“Pork production is lowered on a slower pace of slaughter throughout the

year, but is partially offset by slightly higher hog weights,” say ERS analysts. “Broiler production was reduced based on recent hatchery data and slowing weight growth, while turkey production was raised slightly.”

By | April 9th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 9, 2019

Cattle futures edged higher Monday, after early follow-through pressure from end of the week profit taking and positioning. Firm wholesale beef prices provided some of the support.

There’s plenty of market uncertainty for the week ahead.

Another massive winter-like storm is forecast to hit the North Central Plains and upper Midwest this week, with some forecasts suggesting a bomb cyclone similar to the one just a few weeks ago, and impacting some of the same areas.

“A potentially dangerous storm will unfold across the nation’s mid-section April 10-11,” according to USDA Agricultural Weather Highlights. “The storm, which bears a resemblance to the mid-March ‘bomb cyclone,’ will undergo rapid intensification across the central Plains on Wednesday and cross the Great Lakes region on Friday. Heavy snow will fall across the northern Rockies on Tuesday, followed by a major precipitation event (1 to 3 inches or more) on Wednesday and Thursday from Nebraska and South Dakota eastward into Michigan. Flooding is already occurring in parts of the upper Midwest, and this week’s storm will likely aggravate the situation, especially from South Dakota to Wisconsin. In addition, wind-driven snow will fall along an axis from Wyoming to upper Michigan. Farther south, locally severe thunderstorms may sweep across the southeastern Plains, mid-South, and lower Midwest. In the storm’s wake, late-week freezes may occur as far south as northern Texas. The NWS 6-10-day outlook for April 13-17 calls for below-normal temperatures and above-normal precipitation across most of the country.”

Other than 25¢ lower in spot Apr, Live Cattle futures closed an average of 59¢ higher (22¢ to 90¢ higher).

Feeder Cattle futures closed an average of 79¢ higher (35¢ to $1.82 higher).

Grain markets on Monday may have reflected some defensive positioning ahead of Tuesday’s monthly World Agricultural Supply and Demand Estimates.

Corn futures closed mostly fractionally lower to 2¢ lower.

Soybean futures closed fractionally lower to 1¢ lower.

Wholesale beef values were firm to higher on moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.74 higher Monday afternoon at $228.67/cwt. Select was 60¢ higher at $220.88.

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Major U.S. financial indices closed mixed Monday. The Dow was down on mid-term queasiness over blue chip stocks like Boeing and General Electric.

The Dow Jones Industrial Average closed 83 points lower. The S&P 500 closed 3 points higher. The NASDAQ was up 15 points.

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Although total cattle slaughter so far this year is 0.7% more than in 2018, beef production is about 1% less as weather and herd dynamics slow cattle finishing, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

As for herd dynamics, Peel notes steer slaughter is 3.9% less year over year, while heifer slaughter is up 7.6%. Beef cow slaughter is 1.1% more, while dairy cow slaughter is up 5.0%.

Then, there’s the long winter. Feedlot performance is worse year over year and carcass weights are lighter. So far this year, Peel says steer carcass weights averaged 866 lbs., which is 7.3 lbs. lighter. Heifer carcasses are 11.7 lbs. lighter at 804 lbs.

“Reduced beef production appears to have supported boxed beef prices, reducing supplies somewhat so far this year compared to earlier expectations,” Peel explains. “Fed cattle prices have likely been supported as well, though the weather impacts have not been as obvious as some had expected. Fed cattle prices may have peaked seasonally but continued weather impacts and the onset of summer beef demand should provide continued support for a few more weeks and possibly another chance for a spring price peak.”

By | April 8th, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 8, 2019

For the week, through Friday afternoon, negotiated cash fed cattle prices were steady to a touch softer in the Northern Plains at $126/cwt. in Nebraska and at $127-$128 in the western Corn Belt. Dressed trade was reported at $204-$206, compared to $206 the previous week. Prices in the Southern Plains were $1-$2 lower at $124.

Despite early pressure stemming from volatile Lean Hog futures, Cattle futures ended the day mostly narrowly mixed, with most of the pressure ascribed to week-end positioning.

Live Cattle futures closed an average of $1.19 lower in the front three contracts, and then 37¢ lower to 50¢ higher.

Feeder Cattle futures closed narrowly mixed (47¢ lower to 32¢ higher).

Corn futures closed 2¢ to 3¢ lower through Jul ’20 and then mostly 1¢ lower.

Soybean futures closed 5¢ to 7¢ lower through May ’20 and then mostly 4¢ lower.

Wholesale beef values were steady on Choice and higher on Select, with moderate to good demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 19¢ higher Friday afternoon at $226.93/cwt. Select was $1.92 higher at $220.28.

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Major U.S. financial indices closed higher Friday, buoyed by a strong employment report and continued optimism about a U.S.-China trade deal sooner rather than later.

Non-farm payroll employment increased 196,000 in March, according to the U.S. Bureau of Labor Statistics. The unemployment rate remained unchanged at 3.8%.

Average hourly earning for all employees on private non-farm payrolls increased 4¢ in March to $27.70.

The Dow Jones Industrial Average closed 40 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 46 points.

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Demand for turnout cattle continued to boost calf prices. Overall, steers and heifers traded steady to $3/cwt. higher, according to the Agricultural Marketing Service (AMS).

“Buyers were very critical of excessive flesh, especially on heifers as market activity slowed substantially if they were over-conditioned,” AMS analysts explained. “After the previous week’s downward trend in the futures contracts, early-week sales had cattle buyers more cautious when procuring heavier cattle.”

Feeder Cattle futures closed an average of 81¢ higher week to week on Friday, thanks in large part to a bounce higher Thursday, as traders continue to push Lean Hog futures.

By | April 7th, 2019|Daily Market Highlights|

Cattle Current—Apr. 5, 2019

Negotiated cash fed cattle trade remained undeveloped in the Northern Plains and western Corn Belt through Thursday afternoon. So far in the Southern Plains this week, live sales are $1-$2 lower at $124/cwt.

Even so, Cattle futures rallied sharply higher. Along with presumed technical support, the most plausible explanation is chatter about the U.S. and China nearing a trade deal and the notion that once-done, domestic commodities will reap significant benefit. There are lots of assumptions throughout the scenario, and plenty betting on them.

Except for 50¢ higher in the back contract, Live Cattle futures closed an average of $1.94 higher.

Feeder Cattle futures closed an average of $1.85 higher (85¢ to $2.85 higher).

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed 6¢ to 7¢ higher.

Wholesale beef values were firm on Choice and weak on Select, with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 60¢ higher Thursday afternoon at $226.74/cwt. Select was 61¢ lower at $218.36.

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Other than higher for the Dow, major U.S. financial indices closed narrowly mixed Thursday. Primary support seemed to be the aforementioned chatter that the U.S. and China are getting close to announcing a trade deal.

The Dow Jones Industrial Average closed 166 points higher. The S&P 500 closed 5 points higher. The NASDAQ was down 3 points.

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“While restaurant operators continued to report positive same-store sales in February, customer traffic turned negative for the first time in five months,” according to the latest Restaurant Performance Index (RPI) report from the National Restaurant Association (NRA). “Although 50% of operators expect their sales to be higher in six months–the highest level in over a year–their outlook for the overall economy remains uncertain.”

Specifically, 37% of restaurant operators reported year-over-year increased customer traffic in February; 44% reported a decline.

The RPI declined slightly month to month in February to 101.1. The index measures the health of the restaurant industry relative to a neutral level of 100. According to NRA, “Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for key industry indicators.”

The RPI consists of the Current Situation Index and the Expectations Index. The former was lower for the third consecutive month.

By | April 4th, 2019|Daily Market Highlights|

Cattle Current—Apr. 4, 2019

Negotiated cash fed cattle trade and demand were moderate in Kansas through Wednesday afternoon with live prices $1-$2 less than the previous week at $124/cwt.

There were 513 head offered in the weekly Fed Cattle Exchange auction and no takers.

Up north, Choice 2-4 steers brought $128.90/cwt. at the fat auction in Tama, IA. They were $125.50-$127.25 at Sioux Falls.

Growing odds for lower cash prices this week, softer wholesale beef values and the lack or packer urgency to increase harvest levels helped pressure Cattle futures Wednesday.

Except for an average of 20¢ higher in two contracts toward the back, Live Cattle futures closed an average of 36¢ lower.

Feeder Cattle futures closed an average of 54¢ lower (10¢ to 90¢ lower).

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed mixed, fractionally higher to 1¢ lower.

Wholesale beef values were firm on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 41¢ higher Wednesday afternoon at $226.14/cwt. Select was 48¢ higher at $218.97.

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Major U.S. financial indices edged higher Wednesday. Support from news about China and the U.S. nearing a trade deal was tempered by indications of slowing domestic economic growth.

Private sector employment increased by 129,000 from February through March, according to the most recent ADP Employment report. That was less than the trade expected.

Month to month, the Non-Manufacturing Index (NMI®) from the Institute for Supply Management® (ISM®) declined 3.6% in March to 56.1%.

“The non-manufacturing sector’s growth cooled off in March after strong growth in February. Respondents remain mostly optimistic about overall business conditions and the economy. They still have underlying concerns about employment resources and capacity constraints,” according to Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee

The Dow Jones Industrial Average closed 39 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 46 points.

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Southern Plains cull cow prices increased 32% from the end of January through the end of March, increasing from about $40/cwt. to $53, according to David Anderson, Extension livestock economist at Texas A&M University. Along the way, he says 90%-lean beef prices increased 10% to $218/cwt., while the cow-beef cutout climbed by 7.7%.

“The rally in cow prices has come in the face of historically large slaughter,” Anderson explains, in the latest issue of In the Cattle Markets. “Dairy cow slaughter has exceeded 70,000 per week for that last 5 weeks. The 72,700 head sent to market the first week of March was the largest weekly dairy cow slaughter since 1986. Some readers might remember the Dairy Herd Buyout program that contributed to large dairy cow slaughter in 1986. Beef cow slaughter dropped below last year’s levels by mid-March; 53,000 head compared to 56,000 head this time last year. Total beef and dairy cow slaughter is the most since drought-forced movement in 2012-2013.”

Anderson points out new cow packing capacity in the Northwest is helping boost cull cow prices higher further north than in the Southern Plains, where packing capacity eroded amid the 2010-2012 drought.

“Presumably, dairy cow marketings will decline later in the year as increased culling has an effect on milk production and prices,” Anderson says. “Some milk market recovery should lead to higher milk prices and slower culling rates. The slowing rate of growth of the beef cow herd should slow beef cow marketings. The combination of slowing culling, limiting the growth in supplies, should provide some price support.”

By | April 3rd, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 3, 2019

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon, but there were a few live sales reported in Kansas at $124/cwt., but too few to trend. Country trade there last week was at $126.

That might be one reason for softer Cattle futures, especially Feeder Cattle, although Live Cattle got some early support from another run up in Lean Hog futures.

Other than an average of 9¢ higher in four contracts, Live Cattle futures closed an average of 60¢ lower.

Feeder Cattle futures closed an average of $1.20 lower (60¢ to $1.45 lower).

After fractionally mixed in the front four contracts, Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed mostly 4¢ to 6¢ higher.

Wholesale beef values were lower on light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.11 lower Tuesday afternoon at $225.73/cwt. Select was 84¢ lower at $218.49.

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Major U.S. financial indices closed narrowly mixed Tuesday, with investors apparently content to take a breather from the recent rally.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed unchanged. The NASDAQ was up 19 points.

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Producer sentiment weakened slightly in late winter, according to the March Purdue University/CME Group Ag Economy Barometer, which is based on a survey of 400 U.S. agricultural producers. Month to month, the barometer declined 3 points in March to 133.

“This month’s drop is largely due to producers’ weaker outlook regarding future economic conditions in agriculture and, in some cases, stress regarding their farm’s future financial performance,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The Index of Future Expectations dropped 6 points to 139, while the Index of Current Conditions remained relatively unchanged at 120.

To learn more about financial conditions on U.S. farms, Purdue researchers asked producers about their operating debt, both in the January and March surveys this year. Using the need to carry over unpaid operating debt as an indicator of financial stress, results suggest that 5% to as much as 7% of U.S. farms are suffering from some financial stress. However, of the 22% of farms (March survey) that expect to have a larger operating loan in 2019, slightly more than one in five said it was the result of carrying over a previous year’s unpaid operating debt.

When asked about their financial performance expectations for 2019 compared to last year, 59% of producers expect their farm’s performance to be “about the same,” and 21% expect “better,” financial performance; 20% expect their farm’s performance to be “worse than” last year.

By | April 2nd, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 2, 2019

Cattle futures bounced back on Monday as traders retrenched for the new quarter. There was chatter that optimism about spring consumer beef demand provided the lift. Could be, but nothing changed on that fundamental front since Friday. For Feeder Cattle, the bearish crops reports on Friday likely provided some support.

Live Cattle futures closed an average of 46¢ higher. Since setting a new record Mar. 22, open interest declined 15,515 contracts to 439,234 on Friday.

Feeder Cattle futures closed an average of $1.27 higher across the back half of the board; an average of 33¢ higher through the front.

Corn futures closed 4¢ to 5¢ higher through Sep ’20, and then mostly 1¢ to 2¢ higher, rebounding from the hard dive Friday.

Soybean futures closed 8¢ to 11¢ higher, helped by late-week reports of a buy from China

Wholesale beef values were firm to higher on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 80¢ higher Monday afternoon at $226.84/cwt. Select was 44¢ higher at $219.33.

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Major U.S. financial indices closed sharply higher Monday, with popular analysis attributing the gains to positive manufacturing data from both the U.S. and China, damping concerns about economic growth in those countries, at least for the day.

The closely watched Institute for Supply Management® (ISM) Purchasing Managers Index (PMI®) was 55.3% for March, increasing 1.1% month to month.

“Comments from the panel reflect continued expanding business strength, supported by gains in new orders and employment,” says Timothy R. Fiore, CPSM, C.P.M., Chair of the ISM Manufacturing Business Survey Committee.

The Dow Jones Industrial Average closed 329 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 99 points.

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“Total 2019 meat production in the U.S. is currently projected to reach another record level of 103.3 billion lbs., up 1.3% year over year. However, per capita meat consumption may decrease slightly to 217.3 lbs. from the 2018 level of 218.6 lbs.,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The decrease in per capita meat consumption reflects improved meat trade, with projected decreases in meat imports and increased meat exports, along with normal population growth.”

Peel points out 2004 was the record year for per capita meat consumption at 221.9 lbs. He explains lower population, higher meat imports, and meat exports that were less than half of current levels increased per capita consumption, despite lower total meat production of 85.1 billion lbs., which was 17.6% less than today.

Beef production this year is projected at 27.2 billion lbs., about 1.1% more than last year. 

“Weather impacts are holding carcass weights well below year-ago levels so far this year and annual average carcass weights are projected to only increase slightly year over year,” Peel says. “Cattle slaughter is projected to increase about 1% year over year. With beef imports projected to decrease and beef exports expected to increase again in 2019, per capita beef consumption is expected to decrease to 56.8 lbs. (retail basis), down from 57.1 lbs. one year ago.”

These projections reflect estimates and analysis by Peel and the Livestock Marketing Information Center.

By | April 1st, 2019|Daily Market Highlights|

Cattle Current Daily—Apr. 1, 2019

Through late Friday afternoon, negotiated cash fed cattle prices for the week were mostly $2-$3 less on a live basis at $125-$126/cwt. in the Southern Plains, mostly $126 in Nebraska and mostly $128 in the western Corn Belt. Dressed trade was also $2-$3 lower at $206 in Nebraska and at $205 in the western Corn Belt.

Cattle futures softened Friday with pressure from Lean Hog futures, lower cash prices and positioning for the end of the month and quarter.

Except for 62¢ higher in the back contract, Live Cattle futures closed an average of 57¢ lower.

Except for 85¢ and $1.70 higher in the back two contracts, Feeder Cattle futures closed an average of 47¢ lower.

Corn futures closed 8¢ to 17¢ lower through Jul ’20, and then 3¢ to 5¢ lower. Planting intentions and grain stocks (see below) applied heavy pressure to the front contracts.    

Soybean futures closed 3¢ to 5¢ lower.

Wholesale beef values were weak to lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.40 lower Friday afternoon at $226.04/cwt. Select was 63¢ lower at $218.89.

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Major U.S. financial indices closed higher Friday, with support including optimism regarding trade talks between the U.S. and China.

The Dow Jones Industrial Average closed 211 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 60 points.

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Corn stocks Mar. 1 were 3% less year over year at 8.60 billion bu., according to USDA’s Grain Stocks report issued Friday. That was significantly more than the trade expected. Likewise, the 92.8 million acres farmers intend to plant, in the Prospective Plantings report, is 4% more than last year (+3.66 million acres) and more than expected.

Keep in mind, the Prospective Plantings report is based on surveys conducted before or mostly before the bomb cyclone and subsequent flooding. No doubt, intentions and possibilities changed since then. Still, Corn futures dropped hard Friday in response to the reports.

Soybeans stored in all positions on Mar. 1 totaled 2.72 billion bu., up 29% from the previous year, reflecting the relative dearth of exports so far this year.

Soybean planted area for this year is estimated at 84.6 million acres, down 5% from last year.

All wheat stored in all positions on Mar. 1 totaled 1.59 billion bu., which was 6% more than a year earlier.

All wheat planted area for 2019 is estimated at 45.8 million acres, down 4% from last year and the least since records began in 1919. The 2019 winter wheat planted area of 31.5 million acres is 3% less than last year but 1% more than the previous estimate.

By | March 31st, 2019|Daily Market Highlights|

Cattle Current Daily—March 29-2019

Despite lower cash fed cattle prices the previous day and heavy pressure in Lean Hog futures, Live Cattle futures traded mostly sideways Thursday. Feeder Cattle inched higher, amid continued light trade.

Live Cattle futures closed narrowly mixed (20¢ lower to 35¢ higher).

Except for 15¢ lower and unchanged at either end of the board, Feeder Cattle futures closed an average of 43¢ higher.

Corn futures closed mostly fractionally higher through Mar ’21, and then 3¢ to 5¢ higher    

After 1¢ to 2¢ higher in the front four contracts, Soybean futures closed mostly fractionally lower to 1¢ lower.

Wholesale beef values were lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.55 lower Thursday afternoon at $227.44/cwt. Select was $1.01 lower at $219.52.

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Major U.S. financial indices bounced higher Thursday, with many crediting various reports of progress in trade talks between the U.S. and China.

The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 25 points.

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U.S. beef exports remained robust in January, but the lack of progress in trade talks with various countries—the growing tariff disadvantage with competitors—started to show.

U.S. beef exports declined by 1% in January to 4,766 metric tons (mt), compared to the previous year, but beef export value increased 3% to $642.3 million. That’s according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Export value per head of fed slaughter pulled back from last year’s record pace, averaging $284.86, down 3% from a year ago.

Japan and South Korea set the pace for U.S. beef exports.

Japan imported 8% more U.S. beef year-over-year (25,925 mt), valued at $167 million, which was 12% more than the same time a year earlier.

January was the first full month U.S. beef competitors received tariff relief in Japan under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the import duty rate dropping from 38.5% to 27.5% on Dec. 30, 2018. This gap will widen further on April 1, when the rate for CPTPP countries drops to 26.6%.

“It’s great to see Japan’s demand for U.S. beef increase in January despite these tariff rate changes for our major competitors,” says Dan Halstrom, USMEF president and CEO. “But this disadvantage will become more and more pronounced over time, so negotiations toward a U.S.-Japan trade agreement cannot come soon enough. The playing field needs to be leveled as quickly as possible so that the U.S. industry can continue to capitalize on booming meat demand in Japan.”

South Korea imported 4% more U.S. beef in January (17,900 mt), on the heels of its record imports last year. Export value was 10% more at $134.3 million.

By | March 28th, 2019|Daily Market Highlights|

Cattle Current Daily—March 28, 2019

Although there were too few transactions for a full trend in any region, negotiated cash fed cattle trade got underway Wednesday with a decidedly bearish tone.

Live sales were $2-$3 lower in the Southern Plains at $125-$126/cwt.; $126-$127 in Nebraska. Live trade was $3 less in Colorado at $126; $1-$2 lower in the western Corn Belt at $128-$129. Dressed sales were $2-$3 lower at $206 in Nebraska and $205 in the western Corn Belt.

Early capitulation by some cattle feeders, and at those prices, surprised plenty of traders.

Live Cattle futures closed an average 87¢ lower through the front five contracts and then an average of 22¢ lower.

The notion is growing for some that last week was the seasonal top for fed cattle. If so, next comes a downward trek for prices through the summer months, with the pitch and speed depending on lots of factors; everything from marketing currentness associated with long-fed cattle and increasing cattle numbers, to beef demand, to feed prices impacted by protracted flooding to packer capacity utilization.

Feeder Cattle futures closed an average of 29¢ lower, except for an average of 8¢ higher for Aug-Oct. Trade was light.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed 10¢ to 13¢ lower through May ’20 and then 7¢ to 9¢ lower. Presumably, pressure is building with thoughts that weather will force more acres from corn to beans.

Wholesale beef values were weak on Choice and higher on Select with moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 52¢ lower Wednesday afternoon at $228.99/cwt. Select was $1.54 higher at $220.53.

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Major U.S. financial indices closed lower, Wednesday, giving back gains from the previous session. Once again, pressure included a decline in the 10-year Treasury yield and lingering worries about slowing global economic growth.

The Dow Jones Industrial Average closed 32 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 48 points.

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Although devastating to individual producers and localities, cattle losses associated with the bomb cyclone are unlikely to impact overall short-term cattle markets, according to Don Close, senior protein analyst for Rabobank AgriFinance and Jim Robb, senior agricultural economist at the Livestock Marketing Information Center.

They were featured presenters at BEEF magazine’s Market Outlook webinar on Wednesday, which included perspective on markets for the remainder of this year and for 2020.

Longer term, they explained impacts could show up in this year’s calf crop, due both to direct loss and potential troubles settling cows this summer.

In the meantime, Robb noted that impact on crops, similar to 1993, could increase feed prices and pressures calf prices later in the year.

By | March 27th, 2019|Daily Market Highlights|

Cattle Current Daily—March 27, 2019

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Live Cattle futures closed an average 48¢ lower (12¢ to 77¢ lower).

Except for 57¢ and 2¢ higher in the front two contracts, Feeder Cattle futures closed an average of 89¢ lower.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed 3¢ to 5¢ lower.

Wholesale beef values were firm on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 51¢ higher Tuesday afternoon at $229.51/cwt. Select was 26¢ higher at $218.99.

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Major U.S. financial indices closed higher, Tuesday. Early on, the rising 10-year Treasury yield offered support.

The Dow Jones Industrial Average closed 140 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 53 points.

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Plenty of folks are eager to see the Prospective Plantings report from USDA on Friday, but it will likely spawn more questions than answers, as surveys for the report occurred before the bomb cyclone and subsequent flooding, which is projected to continue for the next couple of months.

“Taking a brief look at intended national plantings, versus actual acreage seeded in the past two primary flood years—2011 and 1993—1993 was significantly worse with spring flooding, plus devastating growing season flooding,” say analysts with the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor. “However, note that the balance of this year Midwest crops could be different than those years due to relative crop prices, etc. In 2011, the corn area planted was about 240,000 acres below the prospective indication (down 0.3%), while soybean acreage was down 1.6 million acres (dropped 2.0%). In 1993, the difference (actual plantings minus prospective survey) was a corn drop of about 3.25 million acres (-4.3%), and a soybean increase of 785,000 acres (up 1.3%).”

Markets will focus on three areas in order to assess corn and soybean prices, according to LMIC.

First is plantings. Next is the portion of planted acres harvested for grain; LMC analysts note Midwest flooding could increase planting area abandoned as the growing season unfolds. Finally, is the yield per acre.

By | March 26th, 2019|Daily Market Highlights|

Cattle Current Daily—March 26, 2019

Negotiated cash fed cattle trade ended up mostly $1-$2 higher on a live basis last week at $128/cwt. in the South and $129 in the North (up to $131 in the western Corn Belt). Dressed trade was mainly $4 higher at mostly $208.

The 5-area weighted average for fed steers last week was $1.82 higher at $128.96/cwt. Heifers were $1.66 higher on a live basis at $128.61. In the beef, steers were $3.39 higher at $207.64. Heifers were $3.50 higher at $207.59.

Cattle futures closed sharply lower, though, pressured by more feedlot placements than expected in Friday’s Cattle on Feed report. Placements in February were 2.20% more than the previous year. The average of estimates ahead of the report projected a decline of about 4%.

“The February placement total is the largest for the month since 2000,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Over the last 12 months, the average feedlot inventory was 11.529 million head, the largest 12-month moving average since January 2000.” See more comments from Peel below.

Live Cattle futures closed an average $1.25 lower (40¢ lower at the back to $2.37 lower in near Jun).

Feeder Cattle futures closed an average of $1.56 lower (40¢ to $3.35 lower).

Corn futures closed mostly 1¢ higher.

Soybean futures closed 1¢ to 2¢ higher.

Wholesale beef values were steady on moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 9¢ lower Monday afternoon at $229.00/cwt. Select was 9¢ higher at $218.73.

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Major U.S. financial indices basically hovered in place Monday. Support included the weekend announcement that investigators found no collusion between Russia and President Trump’s 2016 presidential campaign. Pressure included ongoing worries about slowing global economic growth.

The Dow Jones Industrial Average closed 14 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 5 points.

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The long, cold, wet winter, and now flooding, will likely reverberate throughout crop and livestock markets for months to come, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“On the crop side, losses of stored grain, hay and other products will have immediate impacts on the producers affected and perhaps on broader markets,” Peel explains. “Disruptions to transportation may be the biggest impact with truck, rail and river transportation all impacted by the floods and associated damage, and likely to be affected for weeks ahead.”

As for cattle, in addition to weather-depressed carcass weights and less beef production than originally anticipated, Peel says the recent floods most assuredly increased cattle morbidity and mortality.

“The timing of the floods are particularly insidious given that it is calving season for many cow-calf operations. This is likely to result in cattle losses even greater than would be expected during floods,” Peel says. “It will take many weeks to fully assess the cattle losses due to winter weather and the floods…Calf losses this spring will not really become apparent until fall and may possibly be big enough to affect the overall 2019 calf crop.”

By | March 25th, 2019|Daily Market Highlights|

Cattle Current Daily—March 25, 2019

Negotiated cash fed cattle trade was yet to be fully developed by late Friday afternoon. Live sales in the Southern Plains were reported $1 higher at $128/cwt., on light to moderate demand and trade. Though too few to trend, there were some early dressed sales reported in the Western Corn Belt at $208, which was $2-$5 more than the previous week.

Traders got skittish in front-month Lean Hog futures. Volatility there weighed on Cattle futures, though they closed mostly higher for another session.

Except for 17¢ and 40¢ lower in the front two contracts, Live Cattle futures closed an average 21¢ higher.

Except for 12¢ lower in Apr, Feeder Cattle futures closed an average of 84¢ higher (5¢ to $1.42 higher).

Corn futures closed fractionally higher to 2¢ higher.

Soybean futures closed mostly 7¢ to 9¢ lower.

Wholesale beef values were steady on Choice and firm on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 22¢ lower Friday afternoon at $229.09/cwt. Select was 27¢ higher at $218.64.

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Major U.S. financial indices closed sharply lower on Friday. Investor angst included inversion of what’s known as the yield curve, considered by some to be a signal of looming recession. The curve turns negative when short-term rates (3-month Treasury bill) move higher than long-term rates (10-year Treasury bill).

The Dow Jones Industrial Average closed 460 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 196 points.

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USDA’s monthly Cattle on Feed report will likely be viewed as at least a touch bearish.

Placements in feedlots with 1,000 head or more capacity were 1.86 million head in February, which was 2.20% more than a year earlier. Most estimates ahead of the report projected a decline.

Marketings in February of 1.68 million head were 0.48% more than a year earlier, slightly less than pre-report expectations.

Cattle on feed March 1 of 11.80 million head were 0.69% more than the previous year. Average estimates ahead of the report suggested a slight decline.

By | March 24th, 2019|Daily Market Highlights|

Cattle Current Daily—March 22, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon, though hopes increased for higher money, given futures strength.

Cattle futures, especially Feeder Cattle, continued higher, once again supported by rallying Lean Hogs, as well as anticipated weather impacts.

Except for unchanged in the back contract, Live Cattle futures closed an average 86¢ higher.

Feeder Cattle futures closed an average of $1.20 higher (52¢ higher to $1.87 higher). That’s an average of about $3 higher in the last two sessions.

Corn futures closed 2¢ to 4¢ higher through Jul ’20 and then fractionally higher.

Soybean futures closed mostly 2¢ to 4¢ higher.

Wholesale beef values were firm on Choice and weak on Select with moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 64¢ higher Thursday afternoon at $229.31/cwt. Select was 26¢ lower at $218.37.

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Major U.S. financial indices closed sharply higher on Thursday. Tech stocks and the previous day’s assurance from the Fed regarding interest rates underpinned gains.

The Dow Jones Industrial Average closed 216 points higher. The S&P 500 closed 30 points higher. The NASDAQ was up 109 points.

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Winter weather continues to take tonnage from the market.

Average dressed steer weights for the week ending March 9 were 10 lbs. lighter than the same week a year earlier at 871 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. Average heifer dressed weights were 9 lbs. lighter at 814 lbs. Total beef production for the week of 488.0 million lbs. was 3.4 million lbs. less than a year earlier but total cattle slaughter was 7,889 head more.

For February, federally inspected slaughter of 2.45 million head was 1.56% more year aver year, according to the monthly Livestock Slaughter report. Average dressed steer weights were 6 lbs. less than a year earlier at 879 lbs. Average dressed heifer weights were 11 lbs. less at 819 lbs. Beef production for the month of 1.99 billion lbs. was 4.2 million more (+0.21%) than the previous year.

By | March 21st, 2019|Daily Market Highlights|

Cattle Current Daily—March 21, 2019

Lean Hog futures continued their recent and aggressive rally Wednesday, providing lift to Cattle futures, especially Feeder Cattle.

Live Cattle futures closed an average 69¢ higher.

Except for unchanged and 52¢ higher in the front two contracts, Feeder Cattle futures closed an average of $1.74 higher.

Stronger futures, continued strength in wholesale beef values and the latest winter storm offer hopes of higher cash fed cattle prices this week; surely no worse than steady.

There were 596 head offered in the weekly Fed Cattle Exchange auction Wednesday; no takers.

Choice 2-4 steers sold mainly steady at the fat auction in Tama, IA: $127.28/cwt. for 150 head weighing an average of 1,406 lbs. At Sioux Falls Regional in South Dakota, Ch 2-4 steers brought $126.00-$127.75.

Corn futures closed mostly fractionally higher.

Soybean futures closed unchanged to 2¢ higher.

Wholesale beef values were weak to lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 66¢ lower Wednesday afternoon at $228.67/cwt. Select was 83¢ lower at $218.63.

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Major U.S. financial indices closed mostly lower on Wednesday. Support and pressure (bank stocks) came from the Fed statement, indicating no change for interest rates and emphasizing patience going forward.

“Recent indicators point to slower growth of household spending and business fixed investment in the first quarter,” according to the FOMC statement. “On a 12-month basis, overall inflation has declined, largely as a result of lower energy prices; inflation for items other than food and energy remains near 2%. On balance, market-based measures of inflation compensation have remained low in recent months, and survey-based measures of longer-term inflation expectations are little changed.”

The Dow Jones Industrial Average closed 141 points lower. The S&P 500 closed 8 points lower. The NASDAQ was up 5 points.

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“Clearly, the cold wet winter has slowed marketings, extended days on feed, decreased feed conversion, held down slaughter weights, and increased costs of gain,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “Information provided by Kansas State University (KSU) and other sources indicates costs of gain are 5¢-7¢/lb. higher than the same month this time last year with very similar feed input costs.”

KSU’s latest estimates—Historical and Projected Kansas Feedlot Net Returns—peg feedlot cost of gain for steers in February at $86.44/cwt.; $91.97 for heifers. For March, it’s $85.80 and $93.39, respectively.

Apparently, slower-paced fed cattle marketing is also building the supply of long-fed cattle.

“April marketings will be an important indicator of the potential strength of the cattle markets through the summer. Weak marketings will suggest a backlog of animals,” Koontz says. As of Feb. 1, he explains the calculated inventory of cattle on feed more than 120 days of 3.99 million head is 12.2% more than the same time last year and 14.1% more than the five-year average.

Of course, carcass weights continue to be lighter year over year, too.

The average dressed steer weight for the week ending Mar. 2 was 9 lbs. less than a year earlier at 874 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. Dressed heifer weights were 15 lbs. lighter at 813 lbs.

By | March 20th, 2019|Daily Market Highlights|

Cattle Current Daily—March 20, 2019

Cattle futures, especially Feeder Cattle continued to gain on Tuesday. Some of the support likely stems from positioning ahead of the potential market impact of last week’s storm, which wrought massive flooding in Nebraska and adjoining states.

Live Cattle futures closed an average 59¢ higher.

Feeder Cattle futures closed an average of $1.43 higher.

Corn futures closed fractionally mixed to 1¢ lower.

Soybean futures closed mostly fractionally mixed to 1¢ lower.

Wholesale beef values were higher on good to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.00 higher Tuesday afternoon at $229.33/cwt. Select was $1.25 higher at $219.46.

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Major U.S. financial indices closed little changed and narrowly mixed on Tuesday. Pressure included conflicting news regarding progress in U.S.-China trade talks.

The Dow Jones Industrial Average closed 26 points lower. The S&P 500 closed fractionally lower. The NASDAQ was up 9 points.

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China’s total swine inventory will be down 13% to 374 million head by the end of this year—due to African Swine Fever (ASF)—according to a recent assessment by USDA’s Foreign Agricultural Service (FAS).

“Pork production will decrease by 5% to 51.4 million metric tons (mt), with the reduced supply only slightly offset by weakened demand,” according to FAS analysts, in the People’s Republic of China Livestock and Products Semi-annual. “To cover the domestic supply gap, China will increase pork imports by 33% to 2 million mt. While U.S. pork products still face retaliatory Chinese tariffs of up to 62% and process verification requirements, if these are removed, U.S. producers could significantly increase exports to China.”

As long as the U.S. remains ASF-free.

Last week, thanks in part to USDA-trained detector dogs, roughly 1 million lbs. of pork allegedly smuggled from China was seized at the Newark Point of Entry.

“While China’s Ministry of Agriculture and Rural Affairs (MARA) has reported 115 outbreaks to the World Organization for Animal Health (OIE), with roughly 1 million swine culled (as of Mar. 11), it is likely that this vastly underestimates the total number of outbreaks and animals culled across China,” say FAS analysts. “In a country where half of the world’s pigs reside and half of the world’s pork is consumed, ASF has brought significant changes and will continue to affect swine and pork production for the foreseeable future.”

By | March 19th, 2019|Daily Market Highlights|

Cattle Current Daily—March 19, 2019

Last week’s 5-Area direct price for steers and heifers ended up right at $1/cwt. lower on a live basis, according to USDA data. Steers averaged $1.01 lower at $127.14. Heifers were $1.06 lower at $126.95. In the beef, steers were 82¢ lower at $204.25; heifers were 69¢ lower at $204.09.

Cattle futures meandered mostly higher Monday with continuing support from Lean Hog futures and a major question mark regarding the impact of last week’s bomb cyclone that hit a wide swath of the Plains.

Other than 77¢ lower in spot Apr and 35¢ lower in away Jun, Live Cattle futures closed an average 30¢ higher.

Except for 62¢ and 12¢ lower in Apr and May, respectively, Feeder Cattle futures closed an average of 32¢ higher.

Corn futures closed mostly 1¢ lower through Sep ’20 and then fractionally higher.

Soybean futures closed mostly 2¢ to 3¢ lower.

Wholesale beef values were higher on good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.34 higher Monday afternoon at $228.33/cwt. Select was 87¢ higher at $218.21.

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Major U.S. financial indices extended the previous session’s gains on Monday. There was nothing fundamental pointing strongly in either direction.

The Dow Jones Industrial Average closed 65 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 25 points.

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“For the near term, several factors support expectations that feedlot placements in 2019 will be above 2018 levels,” say analysts with USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook. “The number of cattle outside feedlots Jan. 1 is up nearly 1% from a year ago. Included in the cattle outside feedlots are the cattle on small grains pastures. The Cattle report also indicated 1.9 million head were on small grains pastures in the Southern Plains (Kansas, Oklahoma, and Texas). This is 27% more cattle than the same time last year. Although the increase seems large, the number of cattle on small grains pastures last year was low as producers reduced winter wheat planted area in 2017-18.”

Although last year’s calf crop was estimated a touch lower than the mid-year estimate, ERS analysts say the pool of cattle that might be expected to be placed in feedlots this year still represented 1.8% more calves than the previous year (36.4 million head), according to the most recent Cattle report.

By | March 18th, 2019|Daily Market Highlights|

Cattle Current Daily-March 18, 2019

Negotiated cash fed cattle trade for last week, through Friday afternoon was mainly $127/cwt. on a live basis in the Northern Plains and the Southern Plains. That was mostly $1 less than the previous week. Dressed trade on the western Corn belt was steady at $204-$205.

Cattle futures gained with support from the continued rally in Lean Hog futures and likely near-term support from the latest round of winter. Presumably, the former is tied to the week’s export data from USDA, which indicates pork exports to China. If so, such optimism seems a stretch.

Live Cattle futures closed an average $1.19 higher (75¢ higher at the back to $1.70 higher in spot Apr).

Feeder Cattle futures closed an average of $1.21 higher (22¢ higher to $2.27 higher).

Corn futures closed 1¢ to 3¢ higher.

Soybean futures closed mostly 5¢ to 10¢ higher.

Wholesale beef values were lower on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 71¢ lower Friday afternoon at $226.99/cwt. Select was $1.42 lower at $217.34.

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Major U.S. financial indices closed higher Friday, buoyed by tech stocks and apparent growing optimism over a U.S.-China trade deal.

The Dow Jones Industrial Average closed 138 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 57 points.

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“Robust demand provides incentives for continued growth of the U.S. livestock sector over the next 10 years,” say analysts, in the USDA Projections to 2028, released last week. “In the beef cattle industry, the feed price ratio (cattle price/feed price) is expected to decline over the projection period, reflecting both lower cattle prices and higher feed prices, suggesting lower returns to production.”

USDA’s annual projections provide a starting point for discussion of alternative outcomes, according to report authors. They emphasize, “The scenario presented in this report is not a USDA forecast about the future. Instead, it is a conditional, long-run scenario about what would be expected to happen under a continuation of current farm legislation and other specific assumptions.”

With that said, these are some report highlights.

  • “Global real economic growth is projected to average roughly 2.8% annually over the next decade. The United States is expected to have among the highest growth of the developed countries, averaging approximately 2.0% annually, while developed countries as a group are expected to experience an average of 1.6%.”

 

  • “Rising corn prices early in the period contribute to a decreasing beef cattle feed price ratio. As cattle prices decline, the ratio also drops, reducing production (expansion) incentives for cattle producers. Despite cattle numbers, which are expected to decline over the middle part of the forecast horizon, increased slaughter weights support gains in beef production. Overall, beef production levels are expected to rise at less than 1% per year.”

 

  • “Prices for most crops continue to remain low relative to the recent past as U.S. and global production responded to the earlier high prices. Prices are expected to rise over the first half of the projection period and thereafter decline moderately, reflecting long-term growth in global demand for agricultural products and continued biofuel feedstock demand.”

 

By | March 17th, 2019|Daily Market Highlights|

Cattle Current Daily-March 15, 2019

Cattle movement was stymied across a broad section of the country on Thursday, courtesy of blizzard conditions and flooding.

Negotiated cash fed cattle trade continued to trickle along at mostly $127 on a live basis in Nebraska.

Cattle futures gained, with support from the continued rally in Lean Hog futures and likely near-term support from the latest round of winter.

Live Cattle futures closed an average 84¢ higher through the front four contracts and then an average of 41¢ higher.

Except for 45¢ lower in spot Mar, Feeder Cattle futures closed an average of 60¢ higher.

Corn futures closed 1¢ to 4¢ higher through Mar ’20 and then mostly fractionally mixed.

Soybean futures closed 2¢ to 3¢ lower through Nov ’20 and then fractionally lower.

Wholesale beef values were weak on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 54¢ lower Thursday afternoon at $227.70/cwt. Select was 52¢ lower at $218.76.

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Major U.S. financial indices closed mixed but little changed Thursday. Pressure included weaker new home sales than expected.

Sales of new single-family houses in January 2019 were at a seasonally adjusted annual rate of 607,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. That was 6.9% below the revised December rate and 4.1% less than the January 2018 estimate.

The Dow Jones Industrial Average closed 7 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 12 points.

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“The number of fed cattle marketed in 2019 is anticipated to be lower than in 2018 as feedlots continue to slow the pace of marketings,” say analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook. “Since the February Outlook report, fed cattle prices have continued their seasonal trend upward; prices typically peak in the spring. This reflects a period when fewer fed cattle are slaughtered, carcass weights are lighter, and demand picks up in anticipation of the grilling season. The current pace of slaughter combined with lower carcass weights could help support higher boxed-beef prices.” Based on current price data and expected lower marketings and lighter carcass weights this year, those analysts note the fed steer price forecast was raised to $116-$123/cwt.

Likewise, USDA bumped up their expectation for feeder steer prices to $141-$149, with a midpoint price of $145/cwt.

Although noting the 1% year-to-year increase in cattle outside feedlots Jan. 1, ERS analysts explain, “With continued large supplies of cattle in feedlots and a slower expected pace of placements in early 2019, feeder steer prices in first-half 2019 were little changed, but prices in second-half 2019 were raised as calf supplies are expected to be tighter.”

By | March 14th, 2019|Daily Market Highlights|

Cattle Current—March 14, 2019

Negotiated cash fed cattle trade was light to moderate in the Southern Plains through Wednesday afternoon at $127/cwt. on a live basis, which was $1 lower than last week.

Although too few to trend, there were some live sales in Nebraska at $126-$127, which was $1.50-$2.00 lower than the previous week.

The deepest test at Tama, IA for Ch 2-4 steers was $128.56/cwt. on 132 head weighing an average of 1,420 lbs. That’s at the upper end of last week’s country trade for the region. At Sioux Falls Regional in South Dakota, though, Ch 2-4 steers brought $125.25 to $128.00.

There were 755 head offered in the weekly Fed Cattle Exchange auction, and no takers. Two lots of Oklahoma heifers were passed out at $126.50/cwt.

Cattle futures firmed Wednesday, following early-week losses suggesting the top may be in for Live Cattle.

Live Cattle futures closed an average 27¢ higher across a wide range (2¢ to 87¢ higher).

Feeder Cattle futures closed narrowly mixed (27¢ lower to 25¢ higher).

Corn futures closed fractionally higher to 1¢ lower.

Soybean futures closed 3¢ to 6¢ higher.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 2¢ higher Wednesday afternoon at $228.24/cwt. Select was $1.07 lower at $219.28.

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Major U.S. financial indices closed higher Wednesday. Support included a heftier increase in durable goods orders than many expected.

New orders increased 0.4% in January, compared to December, according to the U.S. Commerce Department. Excluding defense and aircraft, new orders were up 0.8%.

The Dow Jones Industrial Average closed 148 points higher. The S&P 500 closed 19 points higher. The NASDAQ was up 52 points.

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The total number of feedlots declined by 19 to 28,160 last year, according to the Cattle on Feed report issued last Friday, while total one-time feedlot capacity declined by 100,000 head to 17.1 million head.

Year to year, there were 30 fewer feedlots with capacity of 1,000-3,999 head. Conversely, there were 10 more feedlots with capacity of 4,000-7,999 head and one more yard with capacity of 50,000 head or more; there are 74 feedlots in that category.

“Feedlots in that capacity range (+50,000 head) had 4.6 million head on feed on Jan. 1, or 32% of total inventory on feed,” says Matthew Diersen, Extension livestock economist at South Dakota State University, in the most recent issue of In the Cattle Markets. “Those feedlots also marketed 8.8 million head during 2018, or 34% of total marketings across all feedlots.”

The number of feedlots with less than 1,000 head capacity—26,000 feedlots—was the same year over year. The Jan. 1 inventory in those feedlots was 2.7 million head, or 19% of total inventory, according to Diersen. “Their marketings during 2018 were 3.3 million head, or 13% of total marketings,” he says.

By | March 13th, 2019|Daily Market Highlights|

Cattle Current Daily—March 13, 2019

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon, but futures prices and a few trades in the western Corn Belt hint at steady to softer prices.

Although too few to trend, there were a few live sales in the western Corn Belt at $126-$128/cwt., and a few in the beef at $204-$205.

Live Cattle futures closed an average of $1.14 lower (47¢ lower in the back contract to $2.35 lower in spot Apr). Trade volume was the heaviest since the first part of January.

Feeder Cattle futures closed an average of $1.19 lower.

Bears, no doubt, will likely make the case that the decline in Cattle futures signals the seasonal top is in the books.

Corn futures closed 3¢ to 5¢ higher.

Soybean futures closed 6¢ to 7¢ higher.

Wholesale beef values were firm to higher on moderate to fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 86¢ higher Tuesday afternoon at $228.22/cwt. Select was 72¢ higher at $220.35.

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Major U.S. financial indices closed mixed Tuesday.

Primary pressure came from Boeing stocks, beaten lower following the Ethiopian Airlines crash involving one of that company’s popular models; the EU and Indonesia grounded the plane from use by their airlines.

Support included continued inflation sloth, revealed by the monthly Consumer Price Index (CPI). It increased by 0.2% in February, after no change the prior month, according to the Bureau of Labor Statistics. Before seasonal adjustment the CPI for the last year increased 1.5%. Leave out food and energy expenditures and the February CPI increased by 0.1%.

The Dow Jones Industrial Average closed 96 points lower. The S&P 500 closed 8 points higher. The NASDAQ was up 32 points.

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Total pounds of beef in freezers Jan. 31 totaled 502.15 million lbs., according to the latest USDA Cold Storage report. That was 8.32 million lbs. (+1.66%) than a year earlier. Month to month, frozen beef supplies increased 14.44 million lbs. (+2.91%).

Frozen pork supplies were up 11% from the previous month, but down 3% from last year.

Total red meat supplies in freezers of 1.12 billion lbs. were 9.4 million lbs. fewer (-0.80%) than a year earlier.

Total frozen poultry supplies were up 4% from the previous month, but down 2% from a year earlier.

By | March 12th, 2019|Daily Market Highlights|

Cattle Current Daily—March 12, 2019

Short covering and profit taking seemed to be the order of the day in Cattle futures to start the week as follow-through buying to the previous session’s gains failed to materialize.

Live Cattle futures closed an average of 46¢ lower, except for unchanged to 17¢ higher in the back three contracts.

Feeder Cattle futures closed an average of $1.49 lower through the front three contracts and then an average of 28¢ lower.

Grain futures turned lower Monday, presumably on continued response to last weeks World Agricultural Supply and Demand Estimates indicating increased ending stocks for wheat and corn.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed 3¢ to 6¢ lower, with chatter that delayed planting conditions this year could force more acres into soybeans.

Wholesale beef values were higher on good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.23 higher Monday afternoon at $227.36/cwt. Select was 85¢ higher at $219.63.

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Major U.S. financial indices closed higher Monday, boosted by tech stocks, including Apple.

The Dow Jones Industrial Average closed 200 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 149 points.

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National Beef Packing Company, LLC (National Beef), announced on Monday that it has approved a transaction that will result in 100% ownership interest in Iowa Premium, LLC, (IP) at Tama, IA.

IP began operations in November 2016. It employs more than 800 people and processes approximately 1,100 head of Black Angus fed cattle per day.

“I am excited to expand our beef operations with a processing facility in Iowa and we look forward to strengthening IP’s relationships with the family farmers who produce the highest quality Black Angus cattle in the U.S.,” says Tim Klein, National Beef president and CEO. “Iowa Premium fits perfectly with our value-based marketing strategy as we continue to provide our customers with the very best beef products and programs.”

The transaction is subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in the second quarter of 2019.

By | March 11th, 2019|Daily Market Highlights|

Cattle Current Daily—March 11, 2019

There were a few negotiated cash fed cattle trades in Nebraska and the western Corn Belt on Friday at $127-$128/cwt. on a live basis, and a few in the beef at $205; too few to trend.

For the week, trade was generally steady at $128 in the Southern Plains and Nebraska. Dressed trade was also steady at $205.

A rally in Lean Hogs and expectations for fewer feedlot placements helped underpin Cattle futures on Friday.

Live Cattle futures closed an average of 52¢ higher (15¢ higher in the back contract to 75¢ higher).

Feeder Cattle futures closed an average of $1.03 higher (72¢ to $1.70 higher).

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed 5¢ to 7¢ lower through Jan. ’20 and then mostly 3¢ to 4¢ lower.

Wholesale beef values were steady on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 9¢ higher Friday afternoon at $226.13/cwt. Select was 24¢ higher at $218.78.

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Major U.S. financial indices closed lower Friday, but well off of session lows. Pressure came early with the monthly jobs report, indicating significantly few new jobs last month than expected. That and the bleaker outlook from the European Central Bank a day earlier bolstered angst about an economic slowdown.

Total non-farm employment grew by only 20,000 in February, according to the Bureau of Labor Statistics.

Average hourly earnings for all employees on private nonfarm payrolls rose by 11¢ in February to $27.66. Hourly earnings increased by 3.4% over the past year.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 13 points.

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Feedlot placements continued lower month to month in January, according to Friday’s Cattle on Feed report. Placements of 1.96 million head were 5.27% less (-109,000 head) than a year earlier. Keep in mind the report reflects feedlots with 1,000 head or more capacity. Most analysts expected the decline to be a touch steeper, but the report likely will be gauged as neutral.

As for placement weights: 41.61% went on feed weighing up to 699 lbs.; 49.72% weighed 700-899 lbs.; 8.67% weighed 900 lbs.  

Marketings in January of 1.91 million head were 2.80% more (+52,000 head) than the previous January.

Cattle on feed Feb. 1 were 11.68 million head, which was 0.41% more (+48,000 head) than a year earlier.

By | March 10th, 2019|Daily Market Highlights|

Cattle Current Daily—March 8, 2019

Weekly negotiated cash fed cattle got underway Thursday with moderate trade and demand in the Southern Plains. Prices were steady with the previous week at $128/cwt. Though too few transactions to trend, there was also light to moderate trade in Nebraska at $128, which was steady with the bulk of the previous week’s sales in the region.

Steady cash prices helped lift Live Cattle futures.

Live Cattle futures closed an average of 53¢ higher (5¢ higher in spot Apr to 92¢ higher).

Short covering, apparently, and perhaps positioning ahead of Friday’s Cattle on Feed report helped Feeder Cattle futures gain back a fair portion of what was lost in the previous two sessions.

Feeder Cattle futures closed an average of $1.52 higher (45¢ in the back contract to $2.35 higher).

Corn futures closed mostly 3¢ to 6¢ lower.

Soybean futures closed mixed from 3¢ lower to 1¢ higher.

Wholesale beef values were higher on Choice and steady on Select with moderate to fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.11 higher Thursday afternoon at $226.04/cwt. Select was 17¢ higher at $218.54.

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Major U.S. financial indices sunk lower Thursday, as investors fretted over a bleaker economic outlook for European Union (EU) countries.

In a prepared press statement yesterday, Mario Draghi, president of the European Central Bank (ECB) explained real GDP for the Euro area increased by only 0.2% in the fourth quarter last year, following growth of 0.1% in the third quarter.

“Real GDP growth remained unexpectedly sluggish in the fourth quarter of 2018, and recent indicators point to substantially weaker than previously expected activity also in the first half of 2019,” according to ECB staff macroeconomic projections for the euro area released yesterday. “While some temporary factors are likely to have contributed to the slowdown in activity in late 2018, the broad-based worsening of economic sentiment indicators across countries and sectors in recent months suggests that more persistent adverse factors have also been at play and that the underlying cyclical momentum is somewhat weaker than previously assessed.”

The ECB projects GDP growth at 1.1% this year, down from 1.7% in their previous forecast.

The Dow Jones Industrial Average closed 200 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 84 points.

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U.S. beef exports blasted through previous records for value last year, according to year-end 2018 statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Exports also achieved a new high for volume.

Beef export value last year was $8.33 billion, which was $1.06 billion more—15% more—than the previous record set a year earlier. The volume of 1.35 million metric tons (mt) was 7% more than the previous year and 5% more than the previous record set in 2011.

Beef export value per head of fed slaughter last year was also record high at $323.14, which was 13% more than the previous year and 8% more than the previous record set in 2014.

South Korea accounted for half of the $1 billion surge in beef exports. Japan, Taiwan and the ASEAN region also fueled demand growth.

By | March 7th, 2019|Daily Market Highlights|

Cattle Current Daily—March 7, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, but a variety of indicators suggested at least steady prices this week.

At Sioux Falls Regional in South Dakota, Ch 2-4 steers brought $125.50 to $129.75/cwt. on Wednesday. The deepest test of Ch 2-4 steers at Tama, IA brought an average price of $130.81.

Through Tuesday, the 5-area direct live steer price was $128.50 on a smattering of trades, about even with the previous week.

There were only 300 head offered in the weekly Fed Cattle Exchange auction, and no takers.

Live Cattle futures puttered in place Wednesday, drifting a touch lower, while Feeder Cattle continued to soften amid light trade.

Other than 7¢ higher in spot Apr, Live Cattle futures closed an average of 26¢ lower.

Feeder Cattle futures closed an average of 79¢ lower (22¢ to $1.02 lower).That’s an average of about $1.50 lower in the last two sessions.

Corn futures closed 2¢ to 3¢ lower through Jul ’20 and then mostly fractionally lower.

Soybean futures closed 10¢ to 11¢ lower through Aug ’20 and then 7¢ to 9¢ lower.

Wholesale beef values were firm to higher on good to moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 89¢ higher Wednesday afternoon at $224.93/cwt. Select was 58¢ higher at $218.37.

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Major U.S. financial indices closed lower Wednesday, without much fundamental direction, but apparent rally fatigue as investors wait for a resolution to U.S.-China trade talks.

The Dow Jones Industrial Average closed 133 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 70 points.

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Despite lighter year-to-year carcass weights, beef production continued to climb in January, according to the most recent USDA Livestock Slaughter report.

Total beef production in January of 2.31 billion lbs. was 30.8 million lbs. more than the previous year (+1.35%).

Fed steer and heifer slaughter under federal inspection of 2.19 million head was 61,200 head more (+2.87%) than the previous year.

Total cattle slaughter of 2.79 million head was 72,100 head (+2.66%) than a year earlier.

Average steer dressed weight in January was 886 lbs., which was 7 lbs. lighter than a year earlier. Average dressed heifer weight was 12 lbs. lighter at 824 lbs.

Total red meat production in January of 4.70 billion lbs. was 114.1 million lbs. more (+2.49%) than the same month a year earlier.

By | March 6th, 2019|Daily Market Highlights|

Cattle Current—March 6, 2019

Front-month Live Cattle futures firmed Tuesday, following pressure in the previous session, perhaps suggesting traders took a harder look at currently favorable fundamentals; open interest continues to grow. Feeder Cattle gave back the previous day’s gains amid light trade.

Except for 47¢ higher in spot Apr, Live Cattle futures closed narrowly mixed (20¢ lower to 5¢ higher).

Feeder Cattle futures closed an average of 70¢ lower.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed 1¢ to 2¢ lower through Mar ’20 and then mostly fractionally higher.

Wholesale beef values were firm on fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 49¢ higher Tuesday afternoon at $224.04/cwt. Select was 58¢ higher at $217.79.

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Major U.S. financial indices leaked lower Tuesday. Support included strong quarterly earnings from retailers such as Target and Kohl’s. Drag included the lack of resolution to trade talks between the U.S. and China.

The Dow Jones Industrial Average closed 13 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 1 point.

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Farmer sentiment weakened last month amid increasing concerns about marketing risk and continued uncertainty around tariffs, according to the latest  Purdue-CME Group Ag Economy Barometer.

The February barometer—based on a survey of 400 U.S. agricultural producers—declined 7 points from the previous month to 136.

“Last month we saw a significant boost in optimism among agricultural producers after the announcement of the second round of MFP payments; however, it appears the positive impact eroded quickly,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Compared to responses from a year ago, fewer farms said they expect their operation to grow in the future, which could be a sign of increasing financial stress. We’re also seeing a growing number of farms concerned about marketing risk, ranking it as the biggest risk facing their operations.”

The monthly survey includes measures of producer sentiment toward current conditions and future expectations. In February, both indexes declined. The Index of Current Conditions saw the biggest drop, down from 132 to 119, whereas the Index of Future Expectations weakened slightly, down from 148 to 145.

When producers were asked whether they have plans to grow or increase the size of their current operation in 2019, 50% of respondents said that they either “have no plans to grow” or “plan to reduce in size,” compared to 39% in 2018. Last month, when 25% of farmers surveyed indicated they expected to take out a larger operating loan in 2018 versus 2019, a follow-up question found that 27% of those farms were taking out larger loans due to unpaid operating debt carryover, suggesting they were experiencing financial stress.

By | March 5th, 2019|Daily Market Highlights|

Cattle Current Daily—Mar. 5, 2019

Live Cattle futures softened Monday, perhaps on profit taking, given stronger cash prices and higher wholesale beef values. Feeder Cattle gained, though, with some chatter crediting support to the potential impact of the recent arctic blast.

Other than 30¢ and 2¢ higher in the back two contracts, Live Cattle futures closed an average of 44¢ lower.

Other than 2¢ lower in the front two contracts, Feeder Cattle futures closed an average of 86¢ higher.

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed 4¢ to 5¢ higher.

Wholesale beef values were sharply higher on Choice and firm on Select with fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.26 higher Monday afternoon at $223.55/cwt. Select was 42¢ higher at $217.21.

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Major U.S. financial indices closed lower Monday, with more data pointing toward slowing domestic economic growth. In this case, it was less construction spending than expected for December, according to the latest report from the U.S. Department of Commerce.

The Dow Jones Industrial Average closed 206 points lower. The S&P 500 closed 10 points lower. The NASDAQ was down 17 points.

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“It appears that herd expansion is nearly over, although the level of beef replacement heifers is large enough to support a minimal level of additional herd expansion in 2019,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel is referring to last week’s Cattle report. Although there were more beef cows Jan 1—299,500 more than a year earlier—significantly fewer beef heifers were retained as replacements.

Specifically, there were 5.92 million beef replacement heifers Jan. 1, according to the Cattle report. That was 183,300 head fewer than a year earlier or 3.0% less.

“Beef replacement heifers as a percent of the beef cow herd on Jan. 1 of 2019 was 18.7%. This ratio is down from 19.4% one year ago as heifer retention moves closer to levels consistent with zero herd growth,” Peel explains. “A record heifer retention level occurred in 2016 with beef replacement heifers at 21.0% of the beef cow herd. Over the past 30 years this ratio has averaged 17.8%.”

That doesn’t mean the herd will necessarily shrink much after hitting the cyclical peak.

 “While cyclical expansion may be mostly complete, there is no indication of herd liquidation at this time. Average cattle prices are expected to continue at current levels and seem likely to hold cattle numbers steady in 2019,” Peel says. “Future market conditions, good or bad, could prompt additional expansion or liquidation in 2020 and beyond. Producers should continue to monitor domestic and international market conditions to see what new cattle market direction emerges in the coming months.”

By | March 4th, 2019|Daily Market Highlights|

Cattle Current Daily—March 4, 2019

Negotiated cash fed cattle trade was $1.50-$3.50 higher on a live basis Friday at $128-$130/cwt. in the western Corn Belt, $128-$129 in Nebraska and, according to the Texas Cattle Feeders Association, at $128 in the Texas Panhandle. In the beef, prices were $3 more than the previous week at $205 with a few up to $206 in the western Corn Belt.

Live Cattle futures mostly edged higher on fundamental strength Friday, while nearby Feeder Cattle dropped, perhaps with queasiness about increased numbers waiting to go on feed, plus the slower pace of fed cattle marketing.

Other than 30¢ and 7¢ lower at either end of the board, Live Cattle futures closed an average of 16¢ higher.

Feeder Cattle futures closed an average of 92¢ lower across the front half of the board (20¢ lower to $1.65 lower in spot Mar) and then an average of 38¢ higher (5¢ higher to $1.30 higher in the back contract).

Corn futures closed 1¢ to 2¢ higher.

Soybean futures closed mostly 1¢ to 2¢ higher.

Wholesale beef values were higher on good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.34 higher Friday afternoon at $221.29/cwt. Select was $1.52 higher at $216.79.

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Major U.S. financial indices closed higher Friday, with growing optimism regarding a U.S.-China trade deal. That was tempered by economic news, such as that from the Institute for Supply Management (ISM)—Manufacturing Report on Business—pointing to slowing domestic economic growth.

“Comments from the panel reflect continued expanding business strength, supported by notable demand and output, although both were softer than the prior month,” said Timothy R. Fiore, CPSM, C.P.M., Chair of ISM’s Manufacturing Business Survey Committee. “Demand expansion continued, with the New Orders Index reaching the mid-50s, the Customers’ Inventories Index scoring lower and remaining too low, and the Backlog of Orders returning to a low-50s expansion level. Consumption (production and employment) continued to expand but fell a combined 8.9 points from the previous month’s levels. Inputs — expressed as supplier deliveries, inventories and imports — stabilized at a mid-50s level and had a slight negative impact on the PMI®. Inputs continue to reflect an easing business environment, confirmed by Prices Index contraction.”

The Dow Jones Industrial Average closed 110 points higher. The S&P 500 closed 19 points higher. The NASDAQ was up 62 points.

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“The April live cattle contract is running more than a $9 premium to the June contract and more than a $13 premium to the August contract. At the same time, the finished cattle market is trading between a negative $1 to negative $2 basis compared to the April contract,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Considering this scenario, there is a large price gap to fill between now and the June contract. As likely or as unlikely as it may seem that finished cattle prices will decline $9 between April and June, the market could actually have more swing than what is being represented by futures. Steer slaughter the first couple of months of 2019 has been below previous year levels, which likely means there are more animals waiting in the balance the next few months.”

Fed cattle slaughter in December of 2.01 million head was 0.67% less (-13,500 head) than the previous December, according to the latest USDA Livestock Slaughter report. December beef production of 2.12 billion lbs. was 1.52% less (-32.6 million lbs.) than the same month in 2017.

By | March 3rd, 2019|Daily Market Highlights|

Cattle Current Daily—March 1, 2019

Negotiated cash fed cattle trade, undeveloped through Thursday afternoon, is setting up to be another late or after-hour affair again this week.

Live Cattle futures mostly tread water, while continued anemic trade, likely month-end position squaring and pessimism about growing fed cattle supplies later in the year helped pressure Feeder Cattle.

Other than 55¢ higher in spot Feb and unchanged in Jun, Live Cattle futures closed an average of 19¢ lower.

Feeder Cattle futures closed an average of $1.03 lower through the front three contracts and then an average of 27¢ lower, except for 12¢ higher in Nov.

Corn futures closed mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 3¢ to 6¢ lower.

Wholesale beef values were firm on Choice and sharply higher on Select with moderate to fairly good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 49¢ higher Thursday afternoon at $219.95/cwt. Select was $2.48 higher at $215.27.

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Major U.S. financial indices closed lower Thursday, presumably on failed talks between the U.S. and North Korea, regarding the latter’s nuclear weapons.

Pessimism came despite stronger domestic economic growth in the fourth quarter than many expected. Real gross domestic product (GDP) increased at an annual rate of 2.6% in the fourth quarter of 2018, according to the initial estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.4%.

The Dow Jones Industrial Average closed 69 points lower. The S&P 500 closed 7 points lower. The NASDAQ was down 22 points.

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Cow-Calf producers continued to expand the nation’s beef cowherd last year by close to 1%, according to the delayed Cattle report issued by USDA on Thursday.

Specifically, 31.77 million beef cows Jan. 1 were 299,500 more than a year earlier or 0.95% more.

Of the eight states with more than 1 million beef cows, five began this year with more numbers: 135,000 head more in Texas (+2.99%); 67,000 head more in South Dakota (+3.83%); 62,000 head more in Oklahoma (+2.97%); 31,000 head more in Nebraska (+1.62%); 25,000 head more in Kansas (+1.67%).

As expected at this stage of the cattle cycle—expansion nearing the plateau—producers are retaining fewer replacements: 5.92 million beef replacement heifers Jan. 1 were 183,300 head fewer than a year earlier or 3.0% less.

States with the most year-to-year growth in beef replacement retention included: Florida, Michigan, North Dakota, Oregon, South Carolina, Tennessee and Washington.

The total inventory of all cattle and calves Jan. 1 of 94.76 million head were 461,700 more than a year earlier or 0.49% more

Estimated feeder cattle supply (cattle outside feedlots) of 26.38 million head was 0.98% more (+255,400 head) than Jan. 1 a year earlier.

By and large, estimates ahead of the report were in line with USDA estimates or a touch more conservative.

One more thing, despite tough, wet conditions for planting winter wheat, the 1.9 million head grazing small grain pastures in Kansas, Oklahoma and Texas is 400,000 head more (+26.67%) than a year earlier.

By | February 28th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 28, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon.

Trends at fat cattle auctions were mixed. For instance, Choice 2-4 steers brought $129.23 to $129.83/cwt. at Tama, IA. On the other hand, significantly more Ch 2-4 steers (higher dressing) at Sioux Falls, SD brought $125.50-$126.75.

Only three lots of heifers (287 head) were offered in the weekly Fed Cattle Exchange auction on Wednesday, and no takers.

Even so, overall chatter continued to suggest higher prices when trade finally breaks loose this week, supported by strong beef fundamentals and the notion that packers appear to be even mort short-bought than last week.

Cattle futures basically paddled in place Wednesday, scooting forward a touch as traders awaited further cash direction.

Other than 17¢ lower in almost spent spot Feb, Live Cattle futures closed an average of 11¢ higher.

Feeder Cattle futures closed an average of 26¢ higher.

Corn futures closed 1¢ to 2¢ lower through Jul ‘20 and then mostly fractionally lower. 

Soybean futures closed fractionally mixed. 

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 21¢ lower Wednesday afternoon at $219.46/cwt. Select was 94¢ lower at $212.79.

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Major U.S. financial indices continued to soften Wednesday, with many analysts attributing the decline to comments made by U.S. Trade Representative, Robert Lighthizer, which highlighted the distance left between the U.S. and China in trade talks.

Testifying before the House Ways and Means Committee, Lighthizer explained, “…we have engaged in a very intense, extremely serious, and very specific negotiation with China on crucial structural issues for several months now. We are making real progress. If we can complete this effort–and again I say ‘if’–and can reach a satisfactory solution to the all-important outstanding issue of enforceability, as well as some other concerns, we might be able to have an agreement that helps us turn the corner in our economic relationship with China. Let me be clear: much still needs to be done both before an agreement is reached and, more importantly, after it is reached, if one is reached.”

Support for the day included higher crude oil prices, supported by a decline in U.S. crude oil stockpiles last week, as well as indications OPEC is standing pat against President Trump’s request for that organization to loosen its restrictions on production.

The Dow Jones Industrial Average closed 72 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 5 points.

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USDA’s latest Livestock Slaughter report offers some perspective on the beef and red meat production growth last year, as well as underscoring the impact winter weather had on beef production in December.

Fed cattle slaughter in December of 2.01 million head was 0.67% less (-13,500 head) than the previous December. December beef production of 2.12 billion lbs. was 1.52% less (-32.6 million lbs.) than the same month in 2017.

For all of 2018, fed cattle slaughter of 25.8 million head was 1.66% more (+421,800 head) than the previous year.

Year to year, fed heifer slaughter was 6.45% more at 9.12 million head, while fed steer slaughter was 0.80% less at 16.64 million head.

Dressed steer weights in December of 894 lbs. were 9 lbs. less than the same time a year earlier. Dressed heifer weights of 843 lbs. were 11 pounds less. For all of 2018, however, dressed steer weights were 3 lbs. more than the previous year at 880 lbs. Dressed heifer weights were 5 lbs. more at 817 lbs.

Total cattle slaughter last year of 32.52 million head was 2.57% more (+813,800 head) than the previous year.

Total beef production of 26.87 billion lbs. last year was 2.59% more (+679.6 million lbs.) than in 2017.

Total red meat production last year of 53.41 billion lbs. was 2.73% (+1.42 billion lbs.) more than the previous year.

By | February 27th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 27, 2019

Cash trade was undeveloped through Tuesday afternoon, but expectations grew for higher prices based on the paltry volume of trade last week and the continued decline in carcass weights. Dressed steer weights for the week ending Feb. 9 were 4 lbs. lighter year over year at 885 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. Dressed heifer weights were 11 lbs. lighter at 822 lbs.

Cattle futures continued higher Tuesday, led by Live Cattle, which received support from the notion of higher cash prices, as well as continued strength in wholesale beef values. Lower grain prices also helped underpin Feeder Cattle support.

Live Cattle futures closed an average of 45¢ higher (25¢ higher to $1.02 higher in spot Feb).

Feeder Cattle futures closed an average of 70¢ higher.

Corn futures closed mostly 2¢ to 4¢ lower through near Dec and then mostly 1¢ lower. 

Soybean futures closed 5¢ to 8¢ lower through Mar ‘20 and then mostly 3¢ lower. 

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 12¢ higher Tuesday afternoon at $219.67/cwt. Select was 84¢ lower at $213.73.

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Major U.S. financial indices edged lower in choppy trade Tuesday, amid mixed economic news.

For instance, in a report delayed due to the government shutdown, privately owned housing starts in December were 11.2% less than in November and 10.9% less year to year, according to the U.S. Commerce Department.

On the other hand, in testimony to Congress yesterday, FOMC Chairman, Jerome Powell described strong domestic economic growth with estimated GDP last year of just less than 3%; strong employment numbers; inflation near the target of 2%.

“While we view current economic conditions as healthy and the economic outlook as favorable, over the past few months we have seen some crosscurrents and conflicting signals,” Powell explained. “Financial markets became more volatile toward year-end, and financial conditions are now less supportive of growth than they were earlier last year. Growth has slowed in some major foreign economies, particularly China and Europe. And uncertainty is elevated around several unresolved government policy issues, including Brexit and ongoing trade negotiations.”

The Dow Jones Industrial Average closed 33 points lower. The S&P 500 closed 2 points lower. The NASDAQ was down 5 points.

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When the Cattle inventory report finally comes out—scheduled for this Thursday—David Anderson, Extension livestock economist at Texas A&M University expects to see a slight increase in beef cow numbers.

“We are likely about to the end of the growth part of the cattle cycle, as heifers on feed in the Cattle on Feed report, and cow and heifer slaughter data indicate,” says Anderson, in the latest issue of In the Cattle Markets

In his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University explains the estimated 7.28 million head of steers on feed at the beginning of the year were 0.7% less than a year earlier.

“This is the first year-over-year decrease in quarterly steer feedlot inventories since April 2017,” Peel says. “Heifer feedlot inventory was 4.41 million head, up 6.2% from last year. This is the 12th consecutive quarter of year-over-year increases in heifers on feed since January, 2016.”

Likewise, Anderson explains through early February heifer slaughter was up 8.5% and steer slaughter was down about 0.6%.

“There are several other numbers in the report (Cattle) worth looking at beyond the headline all cattle and calves number,” Anderson says. “Watch for the number of heifers held back for replacement. That should show another decline as the cycle peaks. Also watch for the calf crop estimate, in particular for revisions to past years’ data based on placement patterns. The number of cattle on small grains pasture will be interesting, gauging supplies of feeder cattle to come from wheat pasture country.”

By | February 26th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 26, 2019

Cattle feeders ended up being rewarded for their marketing patience last week. Late-week trade was mostly $1-$2 higher on a live basis at $126/cwt. in Kansas, $126.50 in Nebraska and $124.50-$128.00 in the western Corn Belt. Dressed sales were $2 higher at $202. There was no trend reported for the Texas Panhandle.

Higher cash trade, stronger wholesale beef values and Friday’s friendly Cattle on Feed report offered support to Cattle futures Monday, but that was tempered by more erosion in Lean Hog futures.

Live Cattle futures closed from an average of 9¢ lower to an average of 13¢ higher.

Except for an average of 40¢ lower in spot Mar, Feeder Cattle futures closed an average of 24¢ higher.

Corn futures closed mostly 3¢ to 4¢ lower.

Soybean futures closed mostly fractionally lower to 1¢ higher.

Wholesale beef values were steady on Choice and sharply higher on Select with moderate to fairly good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 16¢ higher Monday afternoon at $219.55/cwt. Select was $2.22 higher at $214.57.

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Major U.S. financial indices closed higher Monday, buoyed by merger and acquisition news, as well as President Trump indicating he would extend the Mar. 1 deadline for imposing more tariffs on Chinese imports, in light of current trade talk progress.

The Dow Jones Industrial Average closed 60 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 26 points.

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There are no simple answers or strategies to address it, but Robert Johansson, USDA Chief economist, provided insight to the perennial dilemma of producing more than demanded.

“Our general expectation is for continued declines in real agricultural commodity prices over the next 10 years,” Johansson explained, at last week’s USDA Agricultural Outlook Forum. “Falling commodity prices are the result of continued production growth, which continues to outpace global demand. The remarkable increases in food production have resulted in large part from productivity growth, and have resulted in falling prices for agricultural commodities over the past half century.”

For instances, beef production today is 87% more than in 1960, according to Johansson, while the average steer prices is 44% less; 2005 is the economic base year.

During the same time, pork production increased by 143%, while hog prices declined 68%. Milk production increased 77%, while milk price declined 52%. Chicken production increased by 1,050%, while prices declined 56% (since 1964).

Obviously, the same trend applies to crops.

“Since 1960, soybean production has increased nearly 1,200%, while real soybean prices have fallen by 52%,” Johansson explained. “Corn production has grown by more than 400%, and prices have fallen by nearly 60%.” During the same time period, wheat production increased 215% and prices declined by 65%.

Overall, Johansson says the dramatic fall in net farm income in 2015 and 2016 seems to be leveling out, but at a lower level

“The current expectation of farm income at $66 billion in 2018 is a long way from the heights we saw when real net farm income peaked at $134 billion in 2013,” Johansson says. “Relative to the 10-year average, real net farm income is down 28%. Looking forward, net farm income is expected to rise slightly, remaining below $80 billion annually over the next 10 years.”

By | February 25th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 25, 2019

Negotiated cash fed cattle trade remained mostly undeveloped through Friday afternoon, based on USDA reports, but indications were for steady to higher prices.

For instance, although too few to trend, a few early trades were reported in the Western Corn Belt at $124.50-$128.00/cwt. on a live basis and at $202 in the beef. That’s 50¢ to $2 higher on a live basis and $2-$3 more dressed.

Through Thursday, the 5-area direct price was averaging steady with the previous week at $125.

Live Cattle futures inched higher Friday, while Feeder Cattle were narrowly mixed.

After $1.05 higher in spot Feb, Live Cattle futures closed an average of 20¢ higher.

Except for an average of 26¢ higher in the back three contracts, Feeder Cattle futures closed an average of 17¢ lower.

Corn futures closed unchanged to fractionally mixed.

Soybean futures closed fractionally mixed to 1¢ lower.

Wholesale beef values were higher on good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.32 higher Friday afternoon at $219.39/cwt. Select was 94¢ higher at $212.35.

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Major U.S. financial indices closed higher Friday. More than anything, the driver seemed to be increased optimism regarding trade talks between the U.S. and China.

The Dow Jones Industrial Average closed 181 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 67 points.

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Feedlot placements (feedlots with 1,000 head or more capacity) were fewer than many expected, in Friday’s Cattle on Feed (COF) report. Keep in mind, this was the delayed January COF, so placements are for December.

Placements in December of 1.77 million head were 1.78% less than a year earlier. Ahead of the report’s original publication date, most analysts expected placements to be about 2% more year to year. In terms of weights, 51.21% went on feed weighing 699 lbs. or less; 38.88% weighing 700-899 lbs.; 9.91% weighing 900 lbs. or more.

Marketings in December of 1.74 million head were 0.63% less than the previous year, in line with pre-report expectations.

Fewer marketings and placements month to month likely speaks to, at least in part, this winter’s challenging pen conditions and decreased performance.

Cattle on feed Jan. 1 of 11.69 million head were 1.75% more than a year earlier (+201,000 head), on the low side of expectations.

By | February 24th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 22, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Cattle futures closed mainly narrowly mixed with pressure in the front months,

likely on positioning and perhaps some defensiveness ahead of tomorrow’s Cattle on Feed (COF) report. That will be the Jan. 25 report, due to the government shutdown. The COF originally slotted for Feb. 22 is scheduled to be released Mar. 8. In between, the Cattle inventory report, which should have been published Jan. 31 is scheduled for release Feb. 28.

Amid growing open interest, Live Cattle futures closed an average of 46¢ lower through the front three contracts (7¢ to 70¢ lower) and then an average of 11¢ higher.

Feeder Cattle futures closed an average of 44¢ lower through the front three contracts (12¢ to 65¢ lower) and then an average of 17¢ higher.

Corn futures closed 3¢ to 4¢ higher across the front half of the board, and then mostly 1¢ to 2¢ higher, amid chatter that China is poised to buy more U.S. corn and soybeans than previously thought. 

Soybean futures closed 4¢ to 8¢ higher across the front half, and then mostly 3¢ higher. 

Wholesale beef values were higher on Choice and steady on Select with moderate to good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.58 higher Thursday afternoon at $218.07/cwt. Select was 9¢ lower at $211.41. 

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Major U.S. financial indices closed lower Thursday, pressured by various closely watched economic indicators pointing to slower economic growth, building on caution expressed in the Federal Reserve minutes released Wednesday.

For instance, the IHS Markit Flash U.S. Manufacturing Purchasing Manager Index dropped to a 17-month low for February at 53.7. It was 54.9 in January.

Likewise, the Conference Board Leading Economic Index® (LEI) for the U.S. declined 0.1% in January to 111.3

“In January, the strengths in the financial components were offset by the weaknesses in the labor market components,” says Ataman Ozyildirim, Director of Economic Research at The Conference Board. “The US LEI has now been flat essentially since October 2018. The Conference Board forecasts that U.S. GDP growth will likely decelerate to about 2% by the end of 2019.”

The Dow Jones Industrial Average closed 103 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 29 points.

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Expectations for U.S. beef imports this year increased by $100 million to $7.7 billion, in the latest Outlook for U.S. Agricultural Trade from USDA’s Economic Research Service (ERS).

“Livestock, dairy, and poultry export forecasts are raised $300 million to $30.4 billion, largely as gains in beef, pork, poultry, dairy, and other products offset declines for hides, skins, and furs,” ERS analysts say. “The beef forecast is raised on sustained demand despite stronger prices.”

On the other side of the ledger, forecast beef import value was also increased by $100 million, based on stronger than expected prices.

For context, ERS analysts explain, per capita world GDP growth of 1.9% last year was the heftiest since the post-financial crisis rebound in 2010-11. 

“World GDP growth is expected to slow slightly to 1.6% in 2019, due in part to global trade tensions, but there is some optimism regarding future dialogue between China and the United States,” say ERS analysts. “There is more uncertainty than normal regarding U.S. economic conditions due to a lag in the release of economic indicators after the Government shutdown, such as U.S. Gross Domestic Product for the fourth quarter and U.S. International Trade in Goods and Services for December 2018. However, U.S. per capita GDP was estimated to have grown at above trend at 2.2% in 2018 and is forecast to remain the same in 2019, with continued optimism regarding the current economic landscape, especially given the strong labor market and low inflation.”

By | February 21st, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 21, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, but there were several suggestions for steady to higher trade. 

For instance, Ch 2-4 steers traded at mostly $125-$128/cwt. at Sioux Falls in South Dakota.

As well, there were no takers, but three Kansas lots passed out at $125—steady with last week’s country trade—in the weekly Fed Cattle Exchange auction (785 head). 

Cattle futures edged higher, too, especially Live Cattle, which closed an average of 46¢ higher, except for unchanged in the back two contracts.

Except for an average of 17¢ lower in the back two contracts, Feeder Cattle futures closed an average of 11¢ higher. 

Corn futures closed mostly 1¢ to 2¢ higher. 

Soybean futures closed 1¢ to mostly 2¢ higher.

Wholesale beef values were lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 78¢ lower Wednesday afternoon at $216.49/cwt. Select was $2.04 lower at $211.50. 

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Major U.S. financial indices continued to leak higher Wednesday, supported by release of last month’s minutes from the Federal Open Market Committee, which underscored patience relative to future increases in interest rates.

“Participants noted that some risks to the downside had increased, including the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe, a rapid waning of fiscal policy stimulus, or a further tightening of financial market conditions,” according to the minutes. “…a few participants expressed concern that longer-run inflation expectations may be lower than levels consistent with the Committee’s 2% inflation objective… Participants pointed to a variety of considerations that supported a patient approach to monetary policy at this juncture…”

The Dow Jones Industrial Average closed 63 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 2 points.

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U.S. consumers paid higher year-to-year prices for beef last year, but less for pork and poultry, underscoring consumer demand.

According to USDA’s Economic Research Service (ERS), the retail Choice beef value last year was 0.25% more than the previous year at $5.92/lb. Pork retail value was 1% less than a year earlier at $3.74/lb. Composite broiler retail value was 0.15% less at an average of $1.87.

Between less cattle slaughter and lighter carcass weights, ERS’s latest projection for beef production last year is 26.9 billion lbs. For this year, it’s projected at 27.6 billion lbs.

By | February 20th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 20, 2019

Steady cash prices last week, and declining carcass weights pointing to the potential for higher fed cattle prices this week, helped lift Cattle futures Tuesday. Some also attributed part of the support to traders fleeing the meltdown in Lean Hog futures.

Live Cattle futures closed an average of $1.26 higher in the front two contracts and then an average of 33¢ higher.

Feeder Cattle futures closed an average of 58¢ higher (42¢ higher to $1.15 higher in spot Mar).

Corn futures closed 1¢ to 5¢ lower through Sep ’20 and then fractionally lower. 

Soybean futures closed 6¢ to 7¢ lower through Jan ‘20, then 3¢ to 5¢ lower.

Wholesale beef values were steady to firm on moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 12¢ lower Tuesday afternoon at $217.27/cwt. Select was 54¢ higher at $213.54. 

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Major U.S. financial indices recovered from early pressure to close slightly higher Tuesday. Support included strong quarterly earnings from Walmart, as well as further indications that trade talks with China continue to be positive.

The Dow Jones Industrial Average closed 8 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 14 points.

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“With continued large supplies of cattle in feedlots and a slower expected pace of placements in early 2019, feeder steer prices in first-half 2019 were lowered, bringing the annual price forecast down to $140-$149/cwt, with a midpoint price of $144.50/cwt.,” say analysts with USDA’s Economic Research Service (ERS), in the February Livestock, Dairy and Poultry Outlook (LDPO)—the first since December, due to the government shutdown.

At least part of the pressure stems from unrealized expectations for improved Southern Plains winter wheat pasture last fall to absorb increased seasonal supplies of cattle. Instead, wet weather since last fall delayed and restricted planting. Winter wheat planted area for harvest this year is 4% less than last year and second lowest on record (31.3 million acres), according to the Winter Wheat and Canola Seedings report. 

“Based on weekly data from the National Feeder and Stocker Cattle Summary, there were about 1% more calves sold in 2018 than in 2017. This was particularly true in fourth-quarter 2018, where about 7% more calves were sold than for the same period in 2017,” ERS analysts say. “However, in late 2018, feedlots’ pace of marketings slowed more than expected. The large numbers of cattle in feedlots may have stymied feeder calf prices.”

The fourth-quarter 2018 feeder steer price was $147.90/cwt. for an annual price of $146.93. 

For this year, the recent LDPO pegs feeder steers prices (basis Oklahoma City) at $140-$144/cwt. in the first quarter; $141-$149 in the second; $144-$154 in the third quarter; $138-$148 in the fourth.

By | February 19th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 19, 2019

Negotiated cash fed cattle trade ended up mainly steady on a live basis last week at $125/cwt. in the Southern Plains and Nebraska; unevenly steady in the western Corn Belt at $124-$126. Dressed trade was steady in Nebraska at $200 and steady to $1 lower in the western Corn Belt at $199-200.

Futures and equity markets were closed Monday, in observance of President’s Day. As well, many AMS reports were not issued. 

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Estimated net returns for feedlot steer closeouts were slightly negative for January, but increase or remain near breakeven for the next several months, according to the Historical and Projected Kansas Feedlot Net Returns from Kansas State University (KSU).

January closeouts for steers were estimated at -$2.34 per head. Estimated returns are +$74.69 per head this month and +$117.39 in March, with estimated feeding cost of gain (FCOG) of $86.03 and $85.14, respectively. 

Keep in mind, estimates are on a cash-to-cash basis and assume no price risk management.

“The main change in January estimates from last month’s projections is a nearly $5 lower fed cattle basis,” explains Glynn Tonsor, KSU agricultural economist.

For April through August, estimated steer closeouts range from -$41.02 to +$39.09. Estimated FCOG is $83.50 to $86.27/cwt.

Similarly, projected closeouts for heifers in January was -$26.63 per head. Heifer returns are projected at +$47.43 this month and at +$71.49 in March with FCOG of $91.55 and $92.73/cwt. Through August, projected net heifer returns range from -$97.17 in April to +$14.15 in May. Estimated FCOG is $91.36 to $95.33/cwt.

By | February 18th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 18, 2019

Negotiated cash fed cattle trade remained undeveloped through Friday afternoon. A few live trades were reported in the western Corn Belt at $124-$127/cwt., but too few to trend.

Cattle futures softened, especially front-month Feeder Cattle. According to various chatter, part of the pressure for Feeder Cattle was attributed to thoughts that grain prices will pop, at least in the short term, when the U.S. and China resolve trade issues. 

Except for 50¢ higher in spot Feb, Live Cattle futures closed an average of 21¢ lower. 

Feeder Cattle futures closed an average of $1.28 lower through the front three contracts and then an average of 64¢ lower.

Corn futures closed fractionally mixed. 

Soybean futures closed 3¢ to 4¢ higher, following the steep declines in the previous session.

Wholesale beef values were firm to higher on fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 78¢ higher Friday afternoon at $216.85/cwt. Select was 58¢ higher at $210.99. 

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Major U.S. financial indices closed sharply higher Friday. Support included Congress passing and President Trump signing legislation to fund the government and avoid another shutdown. There was also growing optimism that the U.S. and China were close to striking a trade deal.

The Dow Jones Industrial Average closed 443 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 45 points.

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“The big story in cattle markets the past few weeks has been the increase in slaughter cow prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Cow-calf producers have been concerned about low slaughter cow prices since the middle of October when prices in Tennessee dipped into the mid $40s and proceeded to the low $40 level for November and December. In the past four weeks, Tennessee slaughter cow prices have increased $10/cwt. and are now at their highest level since the first week of August. The $10 increase the past month is essentially $120 to $140 more per head. The seasonal tendency would say there is still room for slaughter cow prices to increase, which means they could reach $60/cwt., resulting in $60 to $70 more per head than the current week’s value.”

At the organization’s recent Outlook Seminar, CattleFax projected additional downside price risk to cull cow prices this year.

“Years of expansion and poor operating margins in the dairy sector are generating more cull cows, which weighs on the markets,” explained CattleFax analyst, Kevin Good. “The additional supply and the limited packing capacity for non-fed cattle will result in a market which averages approximately $55/cwt. during 2019, with a spring high near $60/cwt. and a fall low in the lower $40s.”

By | February 17th, 2019|Daily Market Highlights|

Cattle Current Daily-Feb. 15, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. A few live trades were reported in the western Corn Belt at $124/cwt., but too few to trend.

Cattle futures leaked mostly slightly higher, apparently tied to expectations of further cash support for fed cattle. Lower grain prices also provided support to Feeder Cattle.

Except for 5¢ and 17¢ lower in Dec and away Feb, respectively, Live Cattle futures closed an average of 29¢ higher. 

Feeder Cattle futures closed an average of 39¢ higher (5¢ to 60¢ higher).

Corn futures closed 2¢ to 4¢ lower through Sep ’20 and then mostly 1¢ lower. 

Soybean futures closed 10¢ to 13¢ lower through Jul ‘20, and then 8¢ to 9¢ lower, amid chatter about fewer year-over-year exports to China and early expectations for the next domestic crop weighing on stocks. 

Wholesale beef values were weak to lower on light demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 37¢ lower Thursday afternoon at $216.07/cwt. Select was $1.60 lower at $210.41. 

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Major U.S. financial indices closed mixed Thursday. Pressure included a month-to-month decline in retail sales of 1.2% in December, according to the U.S. Commerce Department. 

The Dow Jones Industrial Average closed 103 points lower. The S&P 500 closed 7 points lower. The NASDAQ was up 6 points.

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Despite expectations of falling land values over the past few surveys, quality farmland values rose 3.4% in the fourth quarter from a year earlier, according to the latest Agricultural Finance Monitor published by the Federal Reserve Bank of St. Louis.

Ranchland or pastureland values increased by 6.5% in the fourth quarter after increasing 1.5% in the third quarter. Cash rents for quality farmland rose 2.9% in the fourth quarter, following a 2% gain in the third quarter. Cash rents for ranchland or pastureland rose by 1.3%, after increasing by 0.8% in the third quarter.

At the same time, lenders continue to report declines in farm income relative to a year earlier. The current index value marks the 20th consecutive quarter with a value below 100. Results above 100 indicate proportionately more bankers report higher income compared with the same quarter a year ago, while results lower than 100 indicate proportionately more bankers report lower income from a year earlier.

The fourth-quarter index value for farm income was 41. Expectations for farm income in the first quarter of 2019 were slightly more optimistic with an index value of 48. 

The survey was conducted from Dec. 15-31 last year. The results are based on responses from 22 agricultural banks within the boundaries of the Eighth Federal Reserve District, which includes all or parts of: Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

By | February 14th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 14, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, but packer interest seemed to pick up, at least on a token basis. Although too few transactions to trend, a few western Corn Belt trades were reported at $123-$124/cwt. on a live basis and at $199-$200 in the beef.

There were 785 head offered in the weekly Fed Cattle Exchange auction. There were no sales, but three lots passed out at $125/cwt.

Cattle futures closed lower, amid likely overall position squaring and beneath the umbrella of uncertainty regarding if and when a trade deal will be completed with China. Aside from light trade, recently firmer grain prices added drag to Feeder Cattle.

Live Cattle futures closed an average of 47¢ lower. 

Feeder Cattle futures closed an average of 74¢ lower. 

Corn futures closed mostly fractionally mixed. 

Soybean futures closed mostly 1¢ lower, following the previous session’s strong gains. 

Wholesale beef values were weak to lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 72¢ lower Wednesday afternoon at $216.44/cwt. Select was 99¢ lower at $212.01. 

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Major U.S. financial indices closed higher Wednesday, with optimism over a tentative plan that would avoid another government shutdown, as well as reports that the U.S. may be flexible in its Mar. 1 deadline with China as the two nations toward a trade deal.

The Dow Jones Industrial Average closed 117 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 5 points.

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Aggressive herd expansion for the past five years—and expectations of continued minimal expansion for another year or two—will continue to provide cyclical price risk, explained Kevin Good, CattleFax analyst, at that organization’s recent Outlook Seminar.

Along the way, Good noted that growing supplies of cattle will shift leverage to the feeding sector from cow-calf producers and stocker operators.

“Cattle producers, on average, will receive a smaller percentage of the retail beef dollar as larger cattle supplies increase price pressure across all segments of the industry,” Good said. “Retail beef prices will likely see some inflation in 2019, but larger beef, pork and poultry production will be price limiting.”

CattleFax projects the all-fresh retail beef price to average $5.73/lb. this year, up 6¢ from last year, with the composite carcass cutout value increasing $4 to average $216/cwt.

By | February 13th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 13, 2019

There was no cash fed cattle trade to speak of through Tuesday afternoon, as expected.

Cattle futures closed mainly narrowly mixed, amid likely profit taking and position squaring, buoyed by sharply higher outside markets.

After $1.00 lower in spot Feb, Live Cattle futures an average of 19¢ lower to an average of 11¢ higher. 

Feeder Cattle futures closed from 27¢ lower to 30¢ higher. 

Grain futures closed mainly higher on speculation that the U.S. and China will reach a resolution on trade sooner rather than later.

Corn futures closed 4¢ to 5¢ higher through Jul ’20 and then mostly 1¢ to 2¢ higher. 

Soybean futures closed mostly 10¢ to 12¢ higher. 

Wholesale beef values were firm on Choice and lower on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 28¢ higher Tuesday afternoon at $217.16/cwt. Select was 86¢ lower at $213.00. 

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Major U.S. financial indices closed sharply higher Tuesday, with investors cheering a tentative plan that would avoid another government shutdown.

The Dow Jones Industrial Average closed 372 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 106 points.

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Hay stocks Dec. 1 were 5.4 million tons less than the previous year (-6.4%) according to USDA’s February Crop Production report issued last week. The decline is accentuated in areas like the Southern Plains, where stocks are down a combined 16.0% in Arkansas, Kansas, Missouri, Oklahoma and Texas, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

Since then, Peel says there’s little doubt winter storms chewed further into stocks.

“Around Oklahoma, anecdotal reports suggest that some producers are concerned about having adequate hay supplies for the winter and are finding, in many cases, that hay is in tight hands and, if available to purchase at all, is increasingly expensive,” Peel explains, in his most recent market comments. 

If Art Douglas, professor emeritus at Creighton University is correct, El Niño conditions should provide above-normal precipitation to these areas through the summer.

“La Niña conditions are unlikely in the next eight months as the equatorial current shows only slow cooling,” Douglas explained during the recent 2019 CattleFax Outlook Seminar. “The residual warmth along the equator will lead to a wetter summer in the southern half of the U.S., while warm waters off the coast of Mexico will favor an active monsoon season in the Southwest.”

By | February 12th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 12, 2019

Negotiated cash fed cattle trade ended up last week $1 higher on a live basis at $125/cwt. in the Southern Plains and $1.00-$1.50 higher in the north at $124.50-$126.00. Dressed sales were up to $3 higher at $200. 

Cattle futures trickled higher Monday, after narrow mixed trade early, supported by last week’s cash trade and stronger wholesale beef values.

Live Cattle futures closed 42¢ higher. 

Except for 50¢ lower in the back contract, Feeder Cattle futures closed an average of 64¢ higher. 

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed 6¢ to 9¢ lower. 

Wholesale beef values were higher to sharply higher on moderate to good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.53 higher Monday afternoon at $216.88/cwt. Select was $2.69 higher at $213.86. 

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Major U.S. financial indices closed narrowly mixed again on Monday, with lingering worries about the lack of resolution to trade issues between the U.S. and China.

The Dow Jones Industrial Average closed 53 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 9 points.

Indices are sharply higher in early trade today on signs the government may have a plan in place to avoid another shutdown.

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“The wet winter weather in entre cattle feeding region, from the upper Midwest and all the way south through the Southern Plains will hold weights down and likely create some variability in finishing times,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “Regardless, beef and slaughter prices are holding strong through this first two-month window into the year.”

On the other side of the fence, Koontz points out steer calves (500-600 lbs.) are trading $5-$15/cwt. lower than a year earlier while feeder weights (700-800 lbs.) are selling for about $10 less.

“The current feeder cattle cash and futures prices and the deferred Live Cattle futures prices suggest strong concerns about the coming summer,” Koontz says. “We are starting the year expecting big supplies of beef through the summer and it will take surprise good news for optimism. The solid domestic demand and demand due to international trade in protein is, for me, much less of a given this year.” 

By | February 12th, 2019|Daily Market Highlights|

Cattle Current Daily—Feb. 11, 2019

Negotiated cash fed cattle trade remained undeveloped through late Friday afternoon, based on USDA reports, which cited a few trades in Nebraska and the western Corn Belt at $124-$125/cwt. on a live basis. The Agricultural Marketing Service reported dressed sales $2 higher in Nebraska at $200. Chatter increased that trade was headed higher by the end of the day.

Expectations of steady to higher cash and firm fundamentals helped lift Cattle futures Friday. Those fundamentals include winter-depressed cattle weights.

Dressed steers weights for the week ending Jan. 5 were 6 lbs. lighter year over year at 896 lbs., according to the Actual Slaughter Under Federal Inspection report from USDA. Dressed heifer weights were 8 lbs. lighter at 892 lbs. A week earlier, year over year, dressed steer weights were 9 lbs. lighter and dressed heifer weights were 13 lbs. lighter.

As well, the slug of USDA reports released Friday—offering the year’s first grain supply and usage estimates—proved to be market neutral.

Live Cattle futures closed 61¢ higher (10¢ to $1.10 higher).

Feeder Cattle futures closed an average of 74¢ higher (50¢ to $1.02 higher).  

Corn futures closed mostly fractionally lower to 2¢ lower.

Soybean futures closed mostly 1¢ higher. 

Wholesale beef values were weak to lower on light demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.36 lower Friday afternoon at $215.35/cwt. Select was 36¢ lower at $211.17. 

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Major U.S. financial indices closed narrowly mixed Friday, recovering from strong pressure early in the session, tied to lingering worries about the lack of resolution to trade issues between the U.S. and China.

The Dow Jones Industrial Average closed 63 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 9 points.

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“Beef production (2018) is reduced on lower cattle slaughter and lighter carcass weights through late December,” say ERS analysts, in the latest World Agricultural Supply and Demand Estimates (WASDE). “The 2019 beef production forecast is reduced on lower projected slaughter as smaller anticipated placements in late 2018 and early 2019 are expected to result in lower fed cattle marketings and slaughter in the first half of the year.”

The annual average fed steer price (5-area Direct) for last year was estimated at $117.12/cwt., which was 21¢ higher than the December projection.

Fed steer prices for this year are estimated at $122-$126 in the first quarter, $119-$127 in the second, $109-$119 in the third and at $108-$118 in the fourth.

Total beef production for last year was revised down 75 million lbs. from the December estimate to 26.86 billion lbs. Likewise, estimated beef production for this year was revised down by 175 million lbs. to 27.61 billion lbs.

“Total red meat and poultry production for 2018 was lowered from December as beef and broiler production more than offsets slightly higher pork production,” say ERS analysts. “For 2019, the total red meat and poultry production forecast is lowered from December on lower expected beef, pork, and broiler production.”

By | February 9th, 2019|Daily Market Highlights|

Cattle Current Daily-Feb. 8, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. 

Cattle futures mostly tread water, pressured early by sharply lower Lean Hog futures, but recovering as trade picked up.

Live Cattle futures closed narrowly mixed (17¢ lower to 11¢ higher). 

Except for unchanged in the back contract, Feeder Cattle futures closed an average of 26¢ higher. 

Corn and soybean futures came under pressure Thursday, perhaps in part to negative rhetoric regarding a trade resolution with China, as well as defensive positioning ahead of USDA reports Friday that will provide the first glimpse at grain stocks and usage estimates in more than a month.

Corn futures closed 2¢ to 3¢ lower through Sep ’20 and then fractionally lower to 1¢ lower.

Soybean futures closed 3¢ to 8¢ lower. 

Wholesale beef values were lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 86¢ lower Thursday afternoon at $216.71/cwt. Select was 84¢ lower at $211.53. 

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Major U.S. financial indices closed lower Thursday, pressured mostly by renewed concerns about global economic growth. Worries were spurred by reports that the U.S. and China are still wide apart in trade negotiations. Pressure also came from the European Commission (EU) lowering its projections for economic growth to 1.5% for this year.

“Our forecast is revised downwards, in particular for the largest euro area economies,” says Valdis Dombrovskis, in charge of Financial Stability, Financial Services and Capital Markets Union. “This reflects external factors, such as trade tensions and the slowdown in emerging markets, notably in China. Concerns about the sovereign-bank loop and debt sustainability are resurfacing in some euro area countries. The possibility of a disruptive Brexit creates additional uncertainty…”

The Dow Jones Industrial Average closed 220 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 86 points.

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U.S. beef exports continued on a record pace in November according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Note that these are the latest statistics, about a month late, due to the government shutdown.

Beef exports totaled 112,842 metric tons (mt) in November, up 1% from a year earlier, while value climbed 6% to $709.2 million. For January through November of last year, exports reached 1.24 million mt, up 8% year-over-year and 6% above the record pace of 2011. At $7.63 billion, beef export value was up 16% and broke the full-year record set in 2017 ($7.27 billion).

Beef export value per head of fed slaughter is also on a record pace, averaging $322.97 in November, which was 5% more than a year earlier. Value per head of fed slaughter through the first 11 months of 2018 was $320.72, which was 14% more than the same period a year earlier.

By | February 7th, 2019|Daily Market Highlights|

Cattle Current Daily-Feb. 7, 2019

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon, but early sings pointed to at least steady trade.

For instance, although too few to trend, there was some live trade in Nebraska at $124/cwt., steady with last week. 

Likewise, two lots of steers from Kansas brought a weighted average price of $124.11 in the weekly Fed Cattle Exchange auction. That was steady with the region’s country price a week earlier. There were only 294 head offered, but 161 head sold. Another lot was passed out at $124.

Cattle futures edged lower Wednesday with the lack of cash direction and light trade, especially light in Feeder Cattle.

Other than unchanged to an average of 3¢ higher in the back three contracts, Live Cattle futures closed an average of 19¢ lower.

Feeder Cattle futures closed an average of 48¢ lower.  

Corn futures closed mostly unchanged to fractionally lower.

Soybean futures closed mostly 2¢ to 4¢ higher. 

Wholesale beef values were firm on Choice and weak on Select with light to moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 55¢ higher Wednesday afternoon at $217.57/cwt. Select was 73¢ lower at $212.37. 

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Major U.S. financial indices leaked lower Wednesday, pressured by mixed quarterly earnings results and little betting direction from the State of the Union address. 

The Dow Jones Industrial Average closed 21 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 26 points.

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“Plant-based proteins are no longer just a meat replacement, it’s now its own category,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “It’s possible that protein overall is evolving into a category, whether animal meat, beans, nuts, soy, wild game or other proteins, in forms ranging from beverage to center-of-plate.”  

Case shipments of plant-based protein from broadline foodservice distributors to foodservice operators increased 20% year to year in November, according to The NPD Group.

Burgers represent the largest plant-based foodservice category and have year-over-year double-digit growth in pounds shipped to foodservice operators, and plant-based burgers are showing up the most on many restaurant menus.  Although plant-based burgers are popular across demographics, an analysis done with NPD’s receipt mining service, Checkout, shows that smaller, more affluent ($100,000 and up) households are the top buyers of plant-based burgers.   

About a quarter of the U.S. population, many of whom aren’t vegan or vegetarian, say that they eat and drink plant-based beverages and foods as well as animal protein on a regular basis, according to NPD.

By | February 6th, 2019|Daily Market Highlights|

Cattle Current Daily-Feb. 6, 2019

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon.

Live Cattle futures edged higher with the firm fundamental outlook—at least static demand levels and weather-dampened beef production—for the near term. Feeder Cattle softened, likely due most to positioning after the previous session’s strong gain.

Live Cattle futures closed an average of 30¢ higher (5¢ higher to 97¢ higher in spot Feb).

Other than an average of 12¢ higher in Sep and Oct, Feeder Cattle futures closed an average of 32¢ lower. 

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed 1¢ to 2¢ higher. 

Wholesale beef values were weak on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 63¢ lower Tuesday afternoon at $217.02/cwt. Select was 31¢ lower at $213.10. 

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Major U.S. financial indices closed higher again Tuesday, buoyed by positive quarterly earnings reports. Also, there may have been some betting on the President’s State of The Union address scheduled for Tuesday night.

The Dow Jones Industrial Average closed 172 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 54 points.

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Agricultural producers were more optimistic about the agricultural economy in January, but they remain concerned about farmland values, according to results from the January Purdue University/CME Group Ag Economy Barometer

The barometer rebounded 16 points from December, to 143 in January. It’s based on 400 survey responses from agricultural producers across the country.

“This survey provided us with the first opportunity to measure farmers’ sentiment following the announcement of USDA’s second round of Market Facilitation Program (MFP) payments and the passage of the 2018 Farm Bill,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “It appears that these two announcements provided a significant boost to producer sentiment regarding both current and future economic conditions.”

In January, both of the barometer’s two sub-indices increased month to month. The Index of Current Conditions rose 3 points to 132. The Index of Future Expectations increased 13 points to 148. Pessimism about farmland values increased, though. According to the January survey, the percentage expecting higher farmland values over the next 12 months declined 4 points to 13%. Those expecting higher values in the next five years declined 2 points to 48%.

By | February 5th, 2019|Daily Market Highlights|

Cattle Current daily-Feb. 5, 2019

Negotiated cash fed cattle prices ended up last week at steady money to a little higher with moderate trade and demand on Friday. Live prices were $1 higher at $124/cwt., except for steady in the western Corn Belt at $123-$126. Dressed sales were steady to $3 higher at $197-$200.

Cattle futures closed higher Monday, led by Feeder Cattle and supported by higher cash prices and resurgent wholesale beef values.

Live Cattle futures closed an average of 67¢ higher.

Feeder Cattle futures closed an average of $1.46 higher ($1.12 to $1.82 higher).

Corn futures closed mostly unchanged to fractionally mixed.

Soybean futures closed mostly fractionally higher to 1¢ higher.

Wholesale beef values were sharply higher on Choice and firm on Select, with moderate to fairly good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $3.39 higher Monday afternoon at $217.65/cwt. Select was 26¢ higher at $213.41.

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Major U.S. financial indices closed higher Monday, supported by tech stocks and positive quarterly earnings reports.

The Dow Jones Industrial Average closed 175 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 87 points.

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“Total commercial beef production for 2018 is projected at 26.9 billion lbs., up 2.6% from one year ago and just fractionally smaller than the record U.S. beef production of 27.1 billion lbs. in 2002,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Beef production in 2019 is forecast at a record 27.4 billion lbs, up 1.8% year over year. Total beef production is likely to grow through 2020 at least.”

Along the way, Peel says total cattle slaughter last year was 2.5% more, with steer slaughter 0.7% less than in 2017 and heifer slaughter 6.5% more. Total cow slaughter was 6.5% more year over year, including 8.6% more beef cows.

By | February 4th, 2019|Daily Market Highlights|

Cattle Current Daily-Feb. 4, 2019

Negotiated cash fed cattle trade was undeveloped through Friday afternoon, based on USDA reports, though expectations were for steady to higher prices.

Cattle futures closed narrowly mixed, following the previous session’s correction.

Except for 2¢ lower in near Apr, Live Cattle futures closed an average of 32¢ higher.

Except for $1.35 lower in the back contract and 15¢ higher in Nov, Feeder Cattle futures closed an average of 19¢ lower.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 1¢ to 2¢ higher.

Wholesale beef values were lower on Choice and steady on Select, with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.13 lower Friday afternoon at $214.26/cwt. Select was 27¢ higher at $213.15.

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Major U.S. financial indices closed mostly higher Friday, supported by energy stocks and the positive employment outlook.

Total nonfarm payroll employment increased by 304,000 in January, according to the U.S. Bureau of Labor Statistics. The unemployment rate edged up to 4.0%.

Hourly earnings for all employees on private non-farm payrolls in January rose by 3¢ to $27.56, following a 10¢ gain in December. Over the year, average hourly earnings have increased by 85¢, or 3.2%.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 2 points higher. The NASDAQ was down 17 points.

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Between 1979 and 1998, U.S. consumer beef demand declined by 50%, reminded Randy Blach, CattleFax CEO, at that organization’s annual Outlook Seminar last week.

Since then, demand increased, in part, because the industry increased product quality and consistency. For instance, Blach pointed out the percentage of Choice and Prime cattle increased 50% since 2004 to 79% last year.

“We finally started listening to the consumer and they rewarded us,” Blach says. He explains if beef demand hadn’t grown for the last two decades, fed steer prices today would be $20/cwt. less and steer calf prices would be $50 less.

“We have a changing consumer today. Are we willing to make the next changes to assure we’re providing consumer with what is important to them?” Blach asked. Among growing consumer demands, he cites things such as traceability and verification.

By | February 3rd, 2019|Daily Market Highlights|

Cattle Current Daily-Feb 1, 2109

Negotiated cash fed cattle trade was undeveloped through Thursday afternoon.

Month-end positioning appeared to be the primary pressure on cattle futures Thursday. For the short term, there was also chatter about this week’s extreme cold dampening consumer demand across impacted areas.

Live Cattle futures closed an average of $1.36 lower.

After 27¢ lower in expiring Jan, Feeder Cattle futures closed an average of $1.38 lower.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed 3¢ to 5¢ lower through Jul ’20 and then 1¢ to 2¢ lower. 

Wholesale beef values were lower on Choice and steady on Select, with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.66 lower Thursday afternoon at $215.39/cwt. Select was 12¢ lower at $212.88.

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Major U.S. financial indices closed mostly higher Thursday, buoyed by strong quarterly earnings reports and spillover support from the steep increases in the previous session.

The Dow Jones Industrial Average closed 15 points lower. The S&P 500 closed 23 points higher. The NASDAQ was up 98 points.

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Although increasing cattle supplies will likely pressure cattle prices across all sectors this year, Kevin Good, CattleFax analyst says robust economic demand, U.S. job growth and higher wages will remain supportive.

“The relatively strong calf market we saw in 2018 will be under pressure this year,” explained Good, at Thursday’s CattleFax Outlook Seminar in New Orleans. “However, values in the spring should have the potential to reach the mid-$180s. On the other hand, a larger calf crop and softer demand have the potential to erode prices to the $140-level next fall, so there is certainly more price risk in feeder cattle and calves than in the fed cattle markets in 2019.”

CattleFax projects 750 lb. steer prices at $130-$160/cwt., with an average at $147/cwt.

Fed cattle prices are expected to be steady this year, averaging $117/cwt., with market resistance at the $130-level and downside risk to $100/cwt. at the low end of the trading range, according to Good.

As for cull cows, Good says, “Years of expansion and poor operating margins in the dairy sector are generating more cull cows, which weighs on the markets. The additional supply and the limited packing capacity for non-fed cattle will result in a market which averages approximately $55/cwt. during 2019, with a spring high near $60/cwt. and a fall low in the lower $40s.”

Look for more insights from the CattleFax Outlook in Monday’s Cattle Current

By | January 31st, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 31, 2019

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon. There were 1,684 head offered in the weekly Fed Cattle exchange auction and no takers.

Limited trading interest held Cattle futures to a narrow, though mostly slightly higher trading range.

Except for 32¢ lower in spot Feb, Live Cattle futures closed an average of 17¢ higher.

Other than 27¢ and 2¢ lower at either end of the board, Feeder Cattle futures closed an average of 15¢ higher, except for unchanged in Oct.

Corn futures closed mostly 2¢ to 3¢ higher through Jul ’20 and then mostly 1¢ higher.

Soybean futures closed 1¢ to 2¢ higher through Aug ’20 and then unchanged to fractionally lower. 

Wholesale beef values were steady to firm on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 8¢ lower Wednesday afternoon at $218.05/cwt. Select was 43¢ higher at $213.00.

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Major U.S. financial indices closed sharply higher Wednesday. Along with strong quarterly earnings from the likes of Boeing and Apple, support included the Fed standing pat on interest rates.

“The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective as the most likely outcomes,” according to a statement from the FOMC. “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”

The Dow Jones Industrial Average closed 434 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 154 points.

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“While the need for increasing exports is clear, it’s frequently met with concern or skepticism among some producers and others in the supply chain,” says Will Sawyer, animal protein economist with CoBank’s Knowledge Exchange Division. He explains “Concerns lie primarily in the fear that themore exports play a role in supply and demand, themore exposure producers and industry participants have to increased market volatility and lower margins.”

Look to other protein sectors and other countries, however, and the reward of growing export markets outweighs the risk.

Greater reliance on export markets has resulted in higher prices for the animal protein sectors in other exporting nations, including Australia, Brazil and Canada, according to C0Bank. Analysis shows that greater profitability has offset price volatility for beef, pork and poultry producers in each of those countries, despite declining domestic consumption in both Australia and Canada.

“Profitable growth has always been at the core of the industry, and has enabled producers and processors to recover from the historic volatility and costs from 2007 through 2012,” Sawyer says. He adds, “The groundwork has already been laid from the supply chain, to industry representation, to let trade drive the industry forward over the next decade. Long-term, he says exports will be the key driver for further expansion across the animal protein sector.”

A video synopsis, and the full report, “Protein Passport: Exporting Your Way to Growth,” are available at cobank.com.

By | January 30th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 30, 2019

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon.

Higher wholesale beef values and likely less beef production than anticipated so far this year, due to weather helped Cattle futures mostly edge higher.

Live Cattle futures closed an average of 17¢ higher (7¢ to 42¢ higher).

After 82¢ and 10¢ lower in the front two contracts, Feeder Cattle futures closed an average of 15¢ higher.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 3¢ to 4¢ lower. 

Wholesale beef values were firm to higher on moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 73¢ higher Tuesday afternoon at $218.13/cwt. Select was 96¢ higher at $212.57.

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Major U.S. financial indices closed mixed Tuesday as investors fretted about looming Apple quarterly earnings and the Fed meeting on Wednesday.

The Dow Jones Industrial Average closed 51 points higher. The S&P 500 closed 3 points lower. The NASDAQ was down 57 points.

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Heading into Wednesday’s Fed meeting, few analysts expect another increase in interest rates, given recent market volatility and the apparent drag lingering trade issues are having on global and domestic GDP.

In the recent 2019 outlook report from CoBank’s Knowledge Exchange Division, analysts say, “The FOMC is no longer locked into a tightening cycle aimed at returning to ‘neutral’ conditions. Instead, we expect the Fed to lean dovish as it

attempts to take its foot off the gas and coast safely through 2019. The greatest threat to this approach will be the risk of stagflation–a slowing economy and

a resurgence in inflation. Under such circumstances, the Fed may allow inflation to move higher than 2% if longer run inflation expectations remain anchored and their economic projections indicate that inflation is likely to normalize back to 2% over the intermediate term.”

By | January 29th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 29, 2019

Recently firm wholesale beef values, near-steady cash prices and continued performance-dampening weather helped Cattle futures gain some ground Monday, led by Feeder Cattle.

Live Cattle futures closed an average of 33¢ higher.

After 10¢ higher in spot Jan, Feeder Cattle futures closed an average of 70¢ higher.

Corn futures closed unchanged to fractionally mixed.

Soybean futures closed 1¢ to 2¢ lower. 

Wholesale beef values were firm on Choice and weak on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 39¢ higher Monday afternoon at $217.40/cwt. Select was 42¢ lower at $211.61.

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Major U.S. financial indices closed lower Monday, basically retracing upward steps taken in the previous session. Pressure included the likes of Caterpillar and chipmaker Nvidia attributing part of their weaker forecasts to softer Chinese trade.

The Dow Jones Industrial Average closed 208 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 79 points.

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The federal government is open for business again, at least temporarily, meaning USDA agencies can begin providing market data. The exception during the shutdown was price data that continued to flow from the Agricultural Marketing Service. That information is why some livestock economists attribute little market impact to the missing data up to this point.

But, in his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says, “Among many repercussions of the federal government shutdown, agricultural data has been severely disrupted. Some reports will resume after a delay and some may be completely skipped. Numerous crop, livestock and trade reports were missed in January, which are important for cattle and beef markets.

“Missing from delayed or skipped January reports are the monthly crop production (including the December 1 hay stocks by state) and the annual crop production report that will confirm 2018 production of corn and other feed grains, soybeans and hay. The grain stocks report provides information about crop market conditions for the current marketing year. The winter wheat/canola seedings report will provide information about winter wheat pasture.”

During the shutdown, the World Agricultural Supply and Demand Estimates for January, actual daily slaughter data and the January Cattle on Feed report went missing. The Jan 1 Cattle inventory report was originally scheduled to go out the end of this week; presumably it will be delayed, at the least.

“As well, the January livestock trade data (for November) was not reported and will be important to close out 2018 livestock and meat import and export totals,” Peel says. “Detailed weekly cattle slaughter data has not been reported since early December, along with carcass weights by slaughter class. These are important to finalize 2018 beef production totals and also to assess the current status of cattle markets, including weather impacts.”

By | January 28th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 28, 2019

Negotiated cash fed cattle sold steady in the beef on Friday at $197/cwt. Live sales were steady to mostly $1 lower at $123 in Kansas and Nebraska and at $123.00 to $125.50 in the western Corn Belt. The Texas Cattle Feeders Association reported its members selling steers at $123, which was $1 less than the previous week.

Softer cash trade and pressure in Lean Hog futures helped pressure Cattle futures on Friday.

Other than 70¢ and 37¢ higher in the front two contracts, Live Cattle futures closed an average of 37¢ lower.

Feeder Cattle futures closed an average of 45¢ lower.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 5¢ to 9¢ higher. 

Wholesale beef values were weak on Choice and steady on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 74¢ lower Friday afternoon at $217.01/cwt. Select was 11¢ lower at $212.02.

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Major U.S. financial indices closed higher Friday with the announcement that Congress and President Trump reached a resolution to reopen the government, at least temporarily—until Feb. 15—with hopes all sides can come to agreement on a national budget and border security.

The Dow Jones Industrial Average closed 183 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 91 points.

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USDA’s monthly Cattle on Feed report was due to be published Friday, but went missing due to the partial government shutdown. Even when government reopens for business, the report may go unpublished.

According to various pre-report estimates, December feedlot placements—feedlots with 1,000 head or more capacity—were likely about 2% more year over year.

For instance, David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets, says “December saw an increase in cattle imports from Mexico and larger calf and feeder sales. Placements in December are typically much lower than in November, as much as 500,000 fewer in some years.”

The Livestock Marketing Information Center (LMIC) is more conservative, though, expecting placements to be 0.6% more.

“Feeder cattle imports from Mexico and Canada were about 25,000 head higher year-over-year. Auction receipts showed strong volumes relative to a year ago, both pointing to more placements,” LMIC analysts say in the latest Livestock Monitor. “The headwind to placements has been extremely muddy conditions in feedlots, especially in Kansas and Nebraska.

All of the sources mentioned here expect December marketings to be about on par with the previous year.

“Actual weekly slaughter has not been released since Dec. 8, so this estimate relies on estimated daily slaughter,” LMIC analysts explain. “While the estimated slaughter data is better than no data, there is a large difference in precision. Estimated daily slaughter for steers and heifers are rounded to the nearest 1,000 head, while actual slaughter is down to the number of head. Over the course of an entire month, estimated versus actual can vary.”

For Anderson, and the majority of analysts in the Urner Barry Survey—reported by the Daily Livestock Report—that leaves estimated inventory of cattle on feed Jan. 1 about 2% higher than a year earlier.

“That represents a relatively large number of cattle on feed, as have the last several reports,” Anderson says. “It also continues to represent a narrowing of the growth in on-feed numbers compared to months earlier in the year.”

By | January 26th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 25, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Pressure in Lean Hog futures, undeveloped cash trade and light interest held Cattle futures to minimal gains.

Other than 20¢ and 2¢ lower in the front two contracts, Live Cattle futures closed an average of 28¢ higher.

Feeder Cattle futures closed an average of 50¢ higher.

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed mostly unchanged to fractionally mixed. 

Wholesale beef values were steady to firm on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 54¢ higher Thursday afternoon at $217.75/cwt. Select was 10¢ higher at $212.14.

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Major U.S. financial indices closed narrowly mixed Thursday, with strong quarterly earnings reports tempered by continued fretting over the ongoing trade dispute between China and the U.S.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 3 points higher. The NASDAQ was up 47 points.

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“Wholesale beef markets are starting 2019 with a continuation of generally strong prices seen last year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his recent market comments. “For the first three weeks of the year, boxed beef cutout prices are up 2.9% for Choice and 3.4% for Select compared to the same period last year.” 

Week to week on Thursday, Choice boxed beef cutout value was $5.25 higher at $217.75/cwt. Select was at $4.50 higher at $212.14.

“In 2018, weekly boxed beef prices averaged 2.2% higher year over year compared to 2017,” Peel explains. “Wholesale beef prices were higher in 2018 despite a projected 2.8% increase in beef production and larger pork and poultry supplies.”

Middle meats provided the most support to cutout values in recent months, according to Peel. He explains, “Current Choice rib primal price is $344.79/cwt., up 9.8% year over year. Last year, rib primal prices averaged 6.2% higher compared to 2017. Choice loin primal price is currently $280.80/cwt., up 4.7% compared to the same week last year. In 2018, Choice loin primal prices averaged 1.5% higher year over year.”

By | January 24th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 24, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. Although too few to trend, there were a few live trades in the western Corn Belt at $122-$125.

Prices were higher at some fat cattle auctions. For instance, Ch 2-4 steers brought $127.29 to $128.87/cwt. at Tama, IA, which was $2-$3 higher than last week’s negotiated trade in the region. On the other hand, Ch 2-3 steers brought $120.00 to $123.25 at Sioux Falls.

There were 4,139 head offered in the weekly Fed Cattle Exchange Auction. One lot of Texas steers (63 head) sold for 1-9 day delivery at $123/cwt. One lot of Kansas heifers (116 head) were passed out at $123 for 1-9 day delivery.

Feeder Cattle futures led Live Cattle higher Wednesday. Support included firmer outside markets and resurgent wholesale beef values.

Live Cattle futures closed an average of 53¢ higher.

Feeder Cattle futures closed an average of $1.60 higher ($1.37 to $2.15 higher).

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed mostly 2¢ to 5¢ higher. 

Wholesale beef values were firm to higher on moderate to fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 87¢ higher Wednesday afternoon at $217.21/cwt. Select was 32¢ higher at $212.04.

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Major U.S. financial indices closed higher Wednesday, gathering back some of the previous session’s losses. Support included strong quarterly earnings reports from the likes of IBM and Procter and Gamble.

The Dow Jones Industrial Average closed 171 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 5 points.

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“Trade uncertainty, rising debt levels and market volatility are threatening to derail the global economy and creating difficult operating environments for U.S. agriculture,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division (KED). “Trade is the outsized risk. Unresolved disputes with Mexico, Canada, Europe and China are the greatest collective threat to the U.S. economy in 2019.”

Although the U.S. economy is still performing well by most key measures, global and U.S. economic prospects are weakening and the agricultural economy shows few signs of an imminent comeback, according to a comprehensive 2019 outlook report from CoBank’s KED.

The CoBank report examines 10 key factors that will shape agriculture and markets sectors that serve rural communities throughout the U.S. Among them:

Global Economy—World economic output hit an 8-year high in 2018, powered by both advanced economies and emerging markets. Challenges mounted in late 2018 and risks are decisively weighted to the downside for the coming year… Trade policy between the U.S. and China will remain the leading risk to the global economy. Increasing debt levels is another undercurrent that threatens to derail the global economy. Total global debt levels (all public and private debt) are now more than three times greater than in 2001.

U.S. Economy—The U.S. economic expansion is set to become the lengthiest in history this summer, but clouds forming on the horizon suggest more modest growth in 2019 and greater concerns for 2020.

Dairy and Animal Protein—In 2018, the U.S. animal protein sector began suffering from the same oversupply and weak margins that have plagued U.S. dairy producers since 2015. Despite the less favorable profitability environment, the protein and dairy sectors will continue to expand production in 2019, prolonging the margin squeeze.

Of the three major animal protein species, beef appears to be weathering the animal protein oversupply situation best, with favorable fed cattle prices and historically high packer margins resulting from tight processing capacity.

By | January 23rd, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 23, 2019

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon. Although too few to trend, there was a limited number of sales in Kansas at $122/cwt. on a live basis and at $123 in Nebraska.

Despite stronger wholesale beef values and recent firmness in cash fed cattle prices, Cattle Futures closed lower Tuesday, led by Feeder Cattle. Pressure included sharply lower outside markets, perhaps less weather impact from the weekend than anticipated and concerns about longer term demand strength (see “financial indices” below).

Live Cattle futures closed an average of $1.24 lower through the front three contracts and then an average of 61¢ lower.

After 40¢ lower in spot Jan, Feeder Cattle futures closed an average of $1.35 lower.

Corn futures closed mostly 2¢ lower through Sep ’20 and then fractionally lower to 1¢ lower.

Soybean futures closed 5¢ to 7¢ lower through Sep ’20 and then 2¢ to 3¢ lower.

Wholesale beef values were higher on moderate to fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.08 higher Tuesday afternoon at $216.34/cwt. Select was 86¢ higher at $211.72.

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Major U.S. financial indices closed sharply lower Tuesday, erasing gains from the previous session. Pressure included news from the International Monetary Fund the previous day, suggesting that global economic growth is slowing. Investors also seemed to be rattled by reports of slowing economic growth in China, specifically.

The Dow Jones Industrial Average closed 301 points lower. The S&P 500 closed 37 points lower. The NASDAQ was down 136 points.

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“Interest in purchasing breeding stock has been cautious, relative to current spot and futures market pricing for calves and yearlings…Bred cow prices at auctions during the last quarter of 2018 were down 10-20% from a year earlier in key cattle production regions,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

Based on average prices reported by the Agricultural Marketing Service (AMS), LMIC analysts say prices in Georgia were 19% less for cows weighing 1,200-1,300 lbs. and bred 4-6 months. They brought $912.30/head in December, versus $1,119.89 a year earlier.

For the same month, mid-age cows in Montana weighing 1,200-1,300 lbs. sold 6% less year over year.

“Not surprisingly, Midwest auction cow price changes from late 2017 to late 2018 posted a drop between that of Montana and Georgia; prices at Saint Joseph, MO were down 15%,” say LMIC analysts.

Keep in mind, breeding stock markets in some areas, like Missouri, were pressured by drought.

As for calf prices, LMIC projects Southern Plains steer calf prices (500-600 lbs.) to average $167-$174/cwt. this year, compared to the 2018 calf price average of $171.39 last year. LMIC forecasts yearling steer prices (700-800 lbs.) at $145-$150/cwt., compared to $150 last year. LMIC analysts point out that in mid-January, the November Feeder Cattle futures contract closed at $149.85, versus $144.93 a year earlier.

By | January 22nd, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 22, 2019

When all was said and done, negotiated cash fed cattle trade was mostly steady last week at $124/cwt. on a live basis in the Southern Plains and Nebraska, but $1 higher in the western Corn Belt at $123-$125. Dressed trade was steady at $197.

Futures and equity markets were closed Monday in honor of Martin Luther King Day.

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Global economic growth continues to weaken, according to the latest World Economic Outlook Update from the International Monetary Fund (IMF).

IMF projects global economic growth at 3.5% this year and 3.6% next year; 0.2% and 0.1% less than October’s estimate.

“Even as the world economy continues to move ahead, it is facing significantly higher risks, some of them related to policy,” explained Christine Lagarde, IMF chair and managing director, at press conference for the update. “These risks are now increasingly intertwined: think of how higher tariffs and rising uncertainty over future trade policy fed into lower asset prices and higher market volatility. This in turn contributed to tightening financial conditions, including for advanced economies, which is a major risk factor in a world of high debt burdens.”

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Even if the partial government shutdown—the longest in history—ended this week, odds are against the monthly Cattle on Feed report going out Jan. 25, as originally planned.

To their credit, and understanding the limitations of available data, the Livestock Marketing Information Center (LMIC) provided its estimates on Friday.

“Placements (feedlots with a capacity of 1,000 head or more) are expected to be slightly larger than a year ago. Feeder cattle imports from Mexico and Canada were about 25,000 head higher year-over-year. Auction receipts showed strong volumes relative to a year ago, both pointing to more placements,” say LMIC analysts, in the latest Livestock Monitor. “The headwind to placements has been extremely muddy conditions in feedlots, especially in Kansas and Nebraska. LMIC estimates that placements during December were 0.6% more than a year ago. This would be the highest December placement number since 2010.”

LMIC projects December marketings at 0.5% less than a year ago. Analysts emphasize this is the most difficult projection, based on missing data.

“Actual weekly slaughter has not been released since Dec. 8, so this estimate relies on estimated daily slaughter,” LMIC analysts explain. “While the estimated slaughter data is better than no data, there is a large difference in precision. Estimated daily slaughter for steers and heifers are rounded to the nearest 1,000 head, while actual slaughter is down to the number of head. Over the course of an entire month, estimated versus actual can vary.”

Between placement and marketing estimates, LMIC projects the inventory of cattle on feed Jan. 1 to be 2.1% more than a year earlier.

By | January 21st, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 21, 2019

Negotiated cash fed cattle trade remained undeveloped through Friday afternoon, with prices for the week looking to be steady to higher.

Lower feedlot performance tied to winter weather, and apparent short covering ahead of the holiday weekend, helped boost Live Cattle futures Friday; Feeder Cattle tagged along to a lesser degree. Strong gains in Lean Hog futures also provided support.

Except for 57¢ lower in spot Feb, Live Cattle futures closed an average of 45¢ higher.

Except for 10¢ lower in March, Feeder Cattle futures closed an average of 20¢ higher.

Soybean futures moved higher Friday, presumably on adverse South American weather and hopes for trade talks; corn followed along.

Corn futures closed fractionally higher to 2¢ higher through Sep ’20 and then mostly fractionally lower.

Soybean futures closed 7¢ to 9¢ higher through Sep ’20 and then 4¢ to 5¢ higher.

Wholesale beef values were firm to higher on moderate to good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 65¢ higher Friday afternoon at $213.15/cwt. Select was $1.81 higher at $209.45.

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Major U.S. financial indices closed sharply higher Friday on reports that China pledged to boost U.S. imports for the next six years.

The Dow Jones Industrial Average closed 336 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 72 points.

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Choice wholesale beef value never ran as high as some anticipated heading into the holidays, but they remain higher year over year.

Through the front half of January, Choice boxed beef cutout value ranged from $212.02 to $216.64/cwt. compared to $205.14 to $210.49 a year earlier.

“The higher cutout (Choice) value stems from higher middle meat prices and remains higher despite lower end meat prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “As an example, the wholesale beef ribeye price is $53/cwt. higher (+7.7%) than the same time one year ago. Similarly, the wholesale beef full tender price is $62 higher (+6.4%) than January one year ago. Despite the support provided by middle meats, end meat prices such as the bottom round are $18/cwt. lower (-8.6%) than last year. Despite the struggles in the round and chuck, the brisket and short plate are also providing support to overall value.”

Griffith reminds that beef cutout values—composite values—are calculated by multiplying the prices of individual beef cuts by the percentage of the carcass that comprises them.

 For perspective, Griffith share this breakdown of primals and the percentage of the carcass they represent: rib (11.40%), chuck (29.62%), round (22.32%), loin (21.26%), brisket (4.95%), short plate (7.10%), and flank (3.35%).

By | January 19th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 18, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Spot Feeder Cattle futures pressured the entire cattle complex. Factors included stronger grain prices and the continued erosion in cash calf and feeder cattle prices, tied to weather.

Live Cattle futures closed an average of 65¢ lower.

Feeder Cattle futures closed an average of $1.25 lower (72¢ lower to $2.35 lower in spot Jan).

Corn futures closed 3¢ to 6¢ higher through Sep ’20 and then 1¢ to 2¢ higher.

Soybean futures closed 10¢ to 13¢ higher through Jan ’20 and then mostly 6¢ to 7¢ higher.

Wholesale beef values were firm on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 57¢ higher Thursday afternoon at $212.50/cwt. Select was 70¢ higher at $207.64.

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Major U.S. financial indices closed higher again Thursday, reportedly mostly due to disputed news that the White House might ease tariffs on China during current trade negotiations.

The Dow Jones Industrial Average closed 162 points higher. The S&P 500 closed 19 points higher. The NASDAQ was up 49 points.

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Beef is healthier and more sustainable today than at any point in time, according to a recent study conducted by the USDA’s Agricultural Research Service and The Beef Checkoff, published in the journal Agricultural Systems.

For instance, the study found that data commonly used to depict beef cattle’s environmental impact in the U.S. is often overestimated. The study, which is the most comprehensive beef lifecycle assessment to date, evaluated greenhouse gas emissions, feed consumption, water use and fossil fuel inputs. In all these areas, beef’s environmental impacts were found to be less than previously reported.

Among the findings:

Beef production, including the production of animal feed, is responsible for only 3.3% of greenhouse gas emissions in the U.S.

Per pound of beef carcass weight, cattle only consume 2.6 lbs. of grain, which is similar to pork and poultry.

Corn used to feed beef cattle only represents approximately 9% of harvested corn grain in the U.S., or 8 million acres. By way of contrast, 37.5% of corn acreage in the U.S. is used for producing fuel ethanol.

On average, it takes 308 gallons of water, which is recycled, to produce a pound of boneless beef. In total, water use by beef is only around 5% of U.S. water withdrawals.

“Cattle are natural upcyclers, which means most of what cattle eat can’t be consumed by humans and would otherwise end up in the landfill,” says Sara Place, Ph.D., senior director of sustainable beef production research for the National Cattlemen’s Beef Association, a contractor to the Beef Checkoff. “At the end of the day, 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 into high-quality protein.”

Moreover, beef continues to become more sustainable in the U.S. thanks to innovation and production efficiencies. In the U.S. today, the same amount of beef is produced with one-third fewer cattle as compared to the mid-1970s, according to USDA’s National Agricultural Statistics Service. If the rest of the world were as efficient as the U.S., global beef production could double while cutting the global cattle herd by 25%. 

You can find the report—Environmental Footprints of Beef Cattle Production in the United States—HERE.

By | January 17th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 17, 2019

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon.

There were 542 head offered in the weekly Fed Cattle Exchange auction, and no takers.

Except for spot Feeder Cattle, Cattle futures ended up little changed, despite a fair bit of pressure for much of the session.

Other than an average of 21¢ lower in the back two contracts, Live Cattle futures closed an average of 25¢ higher.

Except for 97¢ lower in spot Jan and 5¢ lower in Mar, Feeder Cattle futures closed an average of 27¢ higher.

Corn futures closed 1¢ to 2¢ higher.

Except for 1¢ higher in the front three contracts, Soybean futures closed mostly unchanged to fractionally lower.

Wholesale beef values were weak on Choice and higher on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 28¢ lower Wednesday afternoon at $211.93/cwt. Select was $1.07 higher at $206.94.

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Major U.S. financial indices closed higher again Wednesday, helped along by strong quarterly earnings from banks, including Goldman Sachs.

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 10 points.

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The market for alternative proteins—fake meat—is growing but still miniscule.

For instance, in a late 2017 CoBank report, Euromonitor International projected U.S. sales of meat substitutes would rise steadily to $863 million in 2021, about 17% more than estimated sales in 2017. At the time, the retail market size was $49 billion is sales for the U.S. meat and poultry category.

Similarly, a study released by Research and Markets last summer, valued the global meat substitute market size at $4,175 million in 2017, and projected it to reach $7,549 million by 2025

Fake meat products built with plant protein dominate the market currently. Fake meat products cultured from animal cells remain unavailable for a host of reasons, including the lack of regulatory framework.

For perspective, according to NPD research, 14% of U.S. consumers—more than 43 million consumers—regularly use plant-based alternatives such as almond milk, tofu, and veggie burgers, and 86% of these consumers do not consider themselves vegan or vegetarian.

By | January 16th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 16, 2019

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon. Last week’s stronger cash trade and another winter storm looming for the Plains and Midwest later this week suggest steady to higher prices.

Those factors supported nearby Live Cattle futures, while lower grain prices boosted Feeder Cattle.

After $1.52 higher in spot Feb, Live Cattle futures closed narrowly mixed (an average of 36¢ lower to an average of 36¢ higher).

Except for 10¢ lower in spot Jan, Feeder Cattle futures closed an average of 45¢ higher.

Grain pressure on Tuesday included, reportedly, more promising weather in South America and the dearth of public data.

Corn futures closed 5¢ to 7¢ lower through Jul ’20 and then mostly 2¢ lower.

Soybean futures closed 9¢ to 10¢ lower through Mar ‘20 and then mostly 4¢ to 7¢ lower.

Wholesale beef values were steady to firm on moderate to fairly good demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 19¢ higher Tuesday afternoon at $212.21/cwt. Select was 41¢ higher at $205.87.

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Major U.S. financial indices closed higher Tuesday, led by tech stocks and supported by early quarterly earnings that were mostly stronger than expected.

The Dow Jones Industrial Average closed 155 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 117 points.

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“Recent weather may delay fed cattle marketing enough to help support fed cattle prices or push prices higher,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Whether or not weather impacts are widespread enough to noticeably impact overall market conditions, cattle producers in many areas face significant management headaches due to the weather.”

Peel says the weekend storm dealt heavy snow to some cattle feeding regions in eastern Colorado, Kansas, southeastern Nebraska, southern Iowa and the eastern Corn Belt.

“Feedlots typically post the lowest seasonal average daily gains (ADG) for cattle marketed in March to May, which reflects cattle fed over the previous four to six months. This likely includes the negative impacts of winter weather on feedlot performance but also partly reflects the fact that feedlots place the highest proportion of lightweight cattle (which have lower ADG) in the fall and feed them through the winter,” Peel explains. “Feedlots also experience poorer feeding efficiency in the winter with the highest feed-to-gain ratios of the year posted for cattle marketed in February and March. This occurs despite the fact that lightweight cattle placed in the fall have lower feed-to-gain ratios relative to heavier feedlot placements. This again indicates the impact of winter weather on cattle feeding. Not surprisingly, feedlots post the highest animal morbidity and mortality rates for cattle fed through the winter.”

By | January 15th, 2019|Daily Market Highlights|

Cattle Current Daily-01-15-19

Negotiated cash fed cattle traded ended up mostly $1 higher on a live basis last week at $124/cwt. in Nebraska and the Southern Plains; $1-$2 higher in the western Corn Belt at $122-$124. Dressed trade was $2-$3 higher at $197.

Early support in grain futures helped pressure Feeder Cattle, while stronger cash prices and the weather helped cap losses in Live Cattle.

Except for an average of 37¢ higher in the front two contracts, Live Cattle futures closed an average of 22¢ lower. 

Except for $1.27 lower in spot Jan, Feeder Cattle futures closed an average of 59¢ lower.

Corn futures closed mostly fractionally higher.

Soybean futures closed mostly 5¢ to 6¢ lower (8¢ lower in spot Jan).

Wholesale beef values were weak to lower on light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 44¢ lower Monday afternoon at $212.02/cwt. Select was 81¢ lower at $205.46.

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Major U.S. financial indices closed lower Monday, led by tech stocks. Depending on the analysts you listen to, pressure included lingering uncertainty about trade issues and the government shutdown, as well as queasiness about the next round of corporate earnings.

The Dow Jones Industrial Average closed 86 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 65 points.

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In lieu of USDA market reports derailed by the partial government shutdown, markets will make assumptions about the missing data, says Brenda Boetel, Extension agricultural economist at the University of Wisconsin-River Falls.

“The longer the lack of information prevails, the greater the market correction may be when the reports resume, especially if the reports say something different than the market assumed,” Boetel explains, in the latest issue of In the Cattle Markets. “The cattle markets care about last week’s missing reports, because they gave the final information on the size of the 2018 corn harvest, the speed in which corn is being used, and the first hint of information regarding how many acres of each crop will be planted in 2019. The market is trading on old information, a less than desirable situation.”

Specifically, she’s referring to the monthly World Agricultural Supply and Demand Estimates (WASDE) that were supposed to be issued last week, along with Quarterly Grain Stocks, Winter Wheat and Canola Seedings and weekly export sales.

“The WASDE report likely would have shown a decrease in 2018 corn yield,” Boetel says. “Additionally, poor harvest conditions affected acreage as well as yield. The USDA would likely have lowered 2018 corn production from 14.626 billion bu. to around 14.545 billion bu. The February report will begin to adjust the demand side of the equation and examine more closely whether usage estimates for ethanol or exports needs to be adjusted.”

By | January 14th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 14, 2019

Cattle feeders and packers continued their standoff through late Friday afternoon, with negotiated cash fed cattle trade undeveloped, according to USDA reports. However, according to AMS, there was a smattering of dressed sales in the Northern Plains at $197/cwt., which was $2 more than the previous week. 

Adverse pen conditions and another winter storm over the weekend point to continued erosion in feedlot performance and more price leverage for cattle feeders.

Cattle futures closed near steady Friday, maintaining week-to-week gains as traders waited cash direction.

Except for 17¢ lower in June, Live Cattle futures closed an average of 15¢ higher. 

Except for 7¢ and 12¢ higher in April and May, Feeder Cattle futures closed an average of 33¢ lower.

Corn futures closed mostly 2¢ higher.

Soybean futures closed 3¢ to 4¢ higher.

Wholesale beef values were lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.50 lower Friday afternoon at $212.46/cwt. Select was $1.50 lower at $206.27.

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Major U.S. financial indices edged slightly lower Friday amid persistent concerns about the partial government shutdown and the lack of trade resolution with China.

The Dow Jones Industrial Average closed 5 points lower. The S&P 500 closed fractionally lower. The NASDAQ was down 14 points.

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Impacts from muddy feedlot pens and winter weather continue to cut both ways in the market.

“Heavy rain and snow has most of the trade area in very muddy conditions and these conditions are discouraging calf buyers from buying at this time,” according to the Agricultural Marketing Service (AMS) reporter on hand for Monday’s auction at Oklahoma National Stockyards.

Between demand pressure and heavy post-holiday volume, steers and heifers sold from $4/cwt. lower to $1 higher last week, according to the Agricultural Marketing service (AMS).

Heading into the weekend, a wide swath of the nation was gearing up for Winter Storm Gia

“Feedyards that were already wet will see more moisture fall from the sky, dashing any hopes that they will dry out anytime soon. Said AMS analysts on Friday. “Muddy feedyards in Kansas, Nebraska and Iowa want to get cattle moved out of the poor pen conditions, as cattle performance has been seriously impeded due to above average moisture recently.”  

Lost pounds to weather are supporting Cattle futures and the uptick in cash fed cattle prices. On the other hand, costs are increasing.

Feeder Cattle futures closed an average of $1.60 higher week to week on Friday. Live Cattle futures closed an average of $1.70 higher.

By | January 12th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 11, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. Current indications continue to suggest steady to higher prices when it does occur.  Wet, muddy condition in major cattle feeding areas continue to hinder cattle performance and add support to the market.

Cattle futures traded mainly sideways.

Except for 25¢ lower in the back contract, Live Cattle futures closed an average of 11¢ higher. 

Feeder Cattle futures closed 10¢ lower to 20¢ higher.

Grains closed lower on the day, presumably on a less bearish outlook than traders expected to see for soybeans in South America. Chatter also picked up a notch regarding the growing dearth of publicly available market data, due to the ongoing partial government shutdown.

Corn futures closed 4¢ to 5¢ lower through Jul ’20 and then mostly 2¢ lower.

Soybean futures closed 11¢ to 17¢ lower.

Wholesale beef values were steady on Choice and higher on Select with moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 12¢ higher Thursday afternoon at $213.96/cwt. Select was $1.30 higher at $207.77.

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Major U.S. financial indices edged higher again on Thursday, with follow-through support regarding the potential pause for interest rate increases, along with lingering hopes of a trade resolution with China. Pressure on retail stocks helped cap gains.

The Dow Jones Industrial Average closed 122 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 28 points.

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Despite the fact that there are fewer farms and ranches today, and a growing generational gap between the general population and agriculture, the children of Baby Boomers are more likely than their parents to know much about agriculture. That’s according to the latest Feed4Thought survey from Cargill.

Specifically, Cargill found that twice as many Generation Y respondents (ages 18–34) in the U.S. and China reported knowing a livestock or seafood farmer, compared to those over 55 years old. Trends were similar in Mexico and France. While 81% of 18-to-34-year-old Chinese participants said they have visited a livestock or seafood farm during their lifetime, only 50% of their older compatriots had. Young respondents in every country surveyed were more likely to have visited a farm than those over 55.

Generation Y (born between the early 1980s and about 2000) is also acting on what they learn about farming practices, according to the survey. Almost three times as many Gen Y participants (52%) said they had changed their eating habits for sustainability reasons in the past year versus older U.S. respondents (19%). Mexico, France and China showed a similar age correlation, with 80% of young Chinese reporting changes. Having kids at home made participants in all four sample countries more likely to make values-based changes.

“We know people increasingly care about animal welfare, the healthfulness of foods and sustainability,” says Marina Crocker, head of Cargill Animal Nutrition market insights. “By pairing Cargill’s understanding of what our customers need with state-of-the-art analytics about what people want, we can anticipate and serve emerging consumer expectations in the solutions we provide our customers.”

More than 80% of survey respondents said the way an animal is raised is important, and almost half of them were willing to pay more as a result. Chinese survey participants (59%) were the most open to paying a premium based on factors such as animal feed and housing; Americans (31%) the least.

By | January 10th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 10, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. There were only 571 head offered in the weekly Fed Cattle Exchange auction, with none sold.

Cattle futures softened some, likely on profit taking and awaiting the week’s cash direction.

Live Cattle futures closed an average of 26¢ lower through the front six contracts and then an average of 27¢ higher.

Except for 10¢ higher in the back contract, Feeder Cattle futures closed an average of 58¢ lower.

Corn futures closed mostly unchanged to 1¢ higher.

Soybean futures closed 5¢ higher across the board. 

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 14¢ lower Wednesday afternoon at $213.84/cwt. Select was 79¢ lower at $206.47.

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Major U.S. financial indices closed higher for the fourth session in a row, buoyed by confirmation the FOMC plans to be patient with future interest rate increases.

According to the FOMC minutes, “… many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming. A number of participants noted that, before making further changes to the stance of policy, it was important for the Committee to assess factors such as how the risks that had become more pronounced in recent months might unfold and to what extent they would affect economic activity, and the effects of past actions to remove policy accommodation, which were likely still working their way through the economy.”

Crude oil prices continued to climb as well, with West Texas Intermediate Crude on the CME closing $2.36 to $2.58 higher for the next 12 months.

The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 60 points.

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Lots went right and little went wrong for cattle markets last year or the year before, according to Stephen Koontz, agricultural economist at Colorado State University. He notes strong wholesale margins, efficient movement of increased production through the supply chain and exceptional U.S. beef export levels, particularly to Japan and Korea.

“But forecasts for 2019 suggest a further 1.8% increase in beef production, a further 2.4% increase in pork production, a 1.3% increase in broiler production, and 0.5% increase in milk production,” Koontz explains, in the most recent issue of In the Cattle Markets.  “There will be plenty of protein and fats. While the stock market has been volatile, the underlying indicators of the macro economy have largely remained strong. That is not the case for the rest of the world. There are clear weaknesses in the world economy. There is plenty of protein. And, there appears to be plenty of downside price risk.”

By | January 9th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 9, 2019

Negotiated fed cattle trade was undeveloped through Tuesday afternoon, but Cattle futures suggest steady to higher prices for the week. They closed sharply higher, especially Feeder Cattle, buoyed by increasing open interest and trade activity.

Live Cattle futures closed an average of 84¢ higher (40¢ higher to $2.10 higher in spot Feb), with the most active trade since September.

Feeder Cattle futures closed an average of $1.30 higher, with the most active trade since October.

Corn futures closed mostly 1¢ lower.

Soybean futures closed 3¢ to 6¢ lower through Jan ’20 and then mostly 1¢ lower.

Wholesale beef values were weak to lower on light demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 30¢ lower Tuesday afternoon at $213.98/cwt. Select was 95¢ lower at $207.26.

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Major U.S. financial indices close higher for the third consecutive day as investors seemed to grow more optimistic that ongoing trade talks with China may bear fruit. Resurgent tech stocks added support, as did the recent rebound in oil prices. Crude Oil futures (CME-WTI) are about $3 higher since last Wednesday.

The Dow Jones Industrial Average closed 256 points higher. The S&P 500 closed 24 points higher. The NASDAQ was up 73 points.

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Agricultural producer sentiment declined in December as farmers’ perception of both current and future economic conditions weakened, according to results from the Purdue University-CME Group Ag Economy Barometer. The December barometer reading of 127 was 7 points lower than November. The barometer is based on 400 survey responses from agricultural producers across the country.

Both of the barometer’s two sub-indices declined in December. The Index of Current Conditions fell 6 points to 109, which was 30 points less than a year earlier. The Index of Future Expectations fell 8 points in December to 135, but was 15 points higher than a year earlier.

“Over the course of the last year, producers’ impression of current economic conditions on their farms has declined markedly,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “But at the same time, their expectations for future economic conditions have held steady. As a result of this mixed view, farmers appear to be cautious about making large investments in their farming operations.”

Mintert points to December’s Large Farm Investment Index as an example. That index measures whether producers feel this is a good time to make large farm investments. It dropped 5 points month to month at 51 and was 29 points lower than a year earlier.

Similarly, 42% said now was a good time to bring a new generation of family into the business, versus about 50% during the past two years. Looking ahead five years, 65% expect conditions to be more favorable for bringing in a new generation.

By | January 8th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 8, 2019

There were a few early negotiated fed cattle sales in Nebraska Monday at $122.50/cwt., but too few to trend. Live sales there last week were at mostly $123.

Cattle futures closed higher, buoyed by firmer outside markets and oversold conditions. There’s also the most open interest in Live Cattle for at least nine months.

Live Cattle futures closed an average of 76¢ higher (37¢ higher at the back to $1.27 higher in spot Feb).

Feeder Cattle futures closed an average of 98¢ higher.

Corn futures closed fractionally mixed.

Soybean futures closed mostly 1¢ to 2¢ higher.

Wholesale beef values were steady to firm on moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 23¢ lower Monday afternoon at $214.28/cwt. Select was 55¢ higher at $208.21.

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Follow-through support helped major U.S. financial indices close higher Monday, maintaining robust gains from the previous session. Optimism included Friday’s employment report and hopes concerning trade talks with China.

The Dow Jones Industrial Average closed 98 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 84 points.

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“Evolving market dynamics make it easy to underestimate how the impacts and costs of trade issues will continue to grow in 2019,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. 

Direct impacts from tariffs are the most visible. In particular, Peel mentions the impact on U.S. pork and soybeans, resulting from reciprocal tariffs with China. There’s also the impact on U.S. pork and dairy products from tariffs imposed by some countries in retaliation for U.S. tariffs on steel and aluminum imports.

“Economic impacts of tariffs may be initially limited mostly to changes in margins if the disruptions are perceived to be short-lived,” Peel explains. “Later, the impacts will evolve from the initial market shock to larger and more permanent adjustments. With more time and ongoing uncertainty about trade issues, more and more of the cost of tariffs are passed on to buyers; alternative product flows develop; lost market shares become much more difficult to undo. The direct costs of tariffs are difficult to measure but certainly grow over time.”

Less visible is lost opportunity.

For instance Peel says, “The U.S. withdrew from the Trans-Pacific Partnership (TPP) two years ago. The remaining 11 countries continued and launched the revised TPP (CPTPP) in January 2019. Not only does the U.S. not have the benefit of tariff adjustments and increased market access with TPP; going forward the U.S. will be increasingly less competitive and likely lose ground relative to TPP participants. The stated U.S. intention to negotiate bilateral trade deals with Japan and others has so far not resulted in new agreements or even serious discussions.”

All of that is before considering the toll tariffs levy on the overall U.S. economy.

“It is nearly impossible to know how much trade and investment has been postponed or abandoned as a result of trade uncertainty the past two years,” Peel says. “The combined direct impacts, lost trade opportunities and ongoing uncertainty are reducing growth potential for U.S. and global economies, and those impacts are likely to grow in 2019, barring improvement in trade issues.”

By | January 7th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 7, 2019

Negotiated cash fed cattle trade for the week was generally steady in Nebraska and the Southern Plains at $123/cwt. ($122.00-$122.50 in Nebraska). Live sales were $1-$2 higher in the western Corn Belt at $121-$122. Dressed trade was steady in Nebraska at $195; steady to $4 higher in the western Corn Belt at $194-$195.

Higher grain prices helped pressure Feeder Cattle, while softer wholesale beef values and volatile outside markets weighed on Live Cattle.

Live Cattle futures closed an average of 98¢ lower (67¢ to $1.40 lower).

Feeder Cattle futures closed an average of $1.40 lower.

Corn futures closed 2¢ to 3¢ higher through Sep ‘20 and then 1¢ to 2¢ higher.

Soybean futures closed 7¢ to 10¢ higher through Sep ’20 and then mostly 4¢ higher.

Wholesale beef values were lower on light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.98 lower Friday afternoon at $214.51/cwt. Select was $1.72 lower at $207.66.

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Major U.S. financial indices rocketed higher Friday, buoyed by a monthly jobs report that shattered expectations to the upside, as well as comments from the Fed, suggesting they may be more patient in making further increases to interest rates.

Total non-farm payroll employment increased by 312,000 in December, according to the U.S. Bureau of Labor Statistics. That left the unemployment rate at 3.9%, which was 0.2% more than the previous month.

In December, average hourly earnings for all employees on private non-farm payrolls rose 11¢ to $27.48. Over the year, average hourly earnings increased by 84¢, or 3.2%.

The Dow Jones Industrial Average closed 746 points higher. The S&P 500 closed 84 points higher. The NASDAQ was up 275 points.

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With the partial government shutdown dragging into the third week, analysts with the Livestock Marketing Information Center (LMIC) note the absence of some market reports and the risk of delayed key pending reports are adding to uncertainty.

“Actual slaughter data has been among the most missed weekly market data. That data is compiled by the National Agricultural Statistics Service (NASS) but is released by the Agricultural Marketing Service. It provides valuable information on weights, production, and the number of head slaughtered,” LMIC analysts explain. “The next couple of weeks hold several vital reports that could affect the tone of the entire year. For example, the annual Cattle Inventory is scheduled to be published at the end of this month. That report provides one of only two point estimates in the size of the beef herd, and the number of replacement animals producers are holding. The monthly Cattle on Feed report also is at risk. Without that type of information, cattle markets will be flying blind.”

Other reports scheduled soon include November trade data from the Foreign Agricultural Service, as well as the monthly World Agricultural Supply and Demand Estimates from USDA’s Economic Research Service.

“The most extended government shutdown occurred in 1995 to 1996 and lasted three weeks,” say LMIC analysts. “In the past, some data has been recovered and released at a later date. However, in cases where the data is done by survey, as with many of the USDA NASS reports, that data is usually not recoverable because the survey was not sent or collected.”

By | January 6th, 2019|Daily Market Highlights|

Cattle Current Daily-Jan. 4, 2019

Negotiated cash fed cattle trade was steady at $123/cwt. in the Southern Plains through Thursday afternoon, with moderate demand and slow trade in the Texas Panhandle; moderate trade and demand in Kansas. There were a few live sales in Nebraska at the same price and steady with the prior week, but too few to trend.

Sharply lower outside markets and higher grain prices pressured Feeder Cattle futures on Thursday. Live Cattle softened some, but received support from steady cash fed cattle and wholesale beef values.

Except for 5¢ higher in away Feb, Live Cattle futures closed an average of 25¢ lower.

Feeder Cattle futures closed an average of $1.24 lower.

Corn futures closed mostly 3¢ to 4¢ higher through Sep ‘20 and then fractionally higher to 1¢ higher.

Soybean futures closed mostly 3¢ to 6¢ higher.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 15¢ lower Thursday afternoon at $216.49/cwt. Select was $1.53 lower at $209.38.

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Major U.S. financial indices plunged Thursday, fueled by increasing worries about slowing global economic growth. A letter from Apple to investors seemed to fuel the selloff. Apple sees its first-quarter revenue at $84 billion, significantly lower than previous estimates and about $7 billion short of analyst expectations, according to various reports.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” explained Apple CEO, Tim Cook, in the letter. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

Domestically, investors also appeared rattled by a softer Purchasing Managers Index (PMI®) than expected. The December PMI was 54.1%, down 5.2% from the previous month, according to the latest Manufacturing ISM® Report On Business®.

The Dow Jones Industrial Average closed 660 points lower. The S&P 500 closed 62 points lower. The NASDAQ was down 202 points.

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“Beef production in 2018 is projected to total nearly 27 billion lbs. of beef products resulting from the slaughter of 33 million head of cattle. The economic system that connects cattle production to beef consumption is remarkably complex and is a challenge for producers and consumers alike to understand and appreciate,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel points to the diverse markets for beef, geographic production diversity, the array of demand factors affecting individual beef items, let lone beef overall, as well as beef’s perishability. Plus, meeting fresh beef demand requires a continuous flow of slaughter-ready cattle, despite the fact that about 80% of the nation’s calves are born in the spring.

“As we wrap up 2018, it’s worth a moment to pause and consider the amazing day-to-day performance and accomplishments of the U.S. cattle and beef industry,” Peel says. “Cow-calf and stocker producers, feedlots, packers, further processors and a host of other workers in transportation, stocking, cooking, serving and countless other industry participants work every day to make sure that restaurant diners and grocery shoppers don’t have to think about where and how beef came to be available at that moment…or indeed that it would be there at all. It truly is a miracle.” 

By | January 3rd, 2019|Daily Market Highlights|

Cattle Current Daily-Jan.3, 2019

Negotiated cash fed cattle prices end up sharply higher in late trade last week: $4 higher at $123/cwt. in the Southern Plains and Nebraska; $1-$3 higher in the western Corn Belt at $119-$121. Dressed sales were $5 higher in Nebraska at $195; steady to $5 higher in the western Corn Belt at $190-$195.

Recently higher cash fed cattle prices and continued firmness in wholesale beef values continue to support Cattle futures. They were pressured on Wednesday by likely profit taking; added pressure for Feeder Cattle early from stronger grain prices.

Live Cattle futures closed narrowly mixed (from an average of 29¢ lower to an average of 22¢ higher), with a sharp increase in open interest.

Feeder Cattle futures closed an average of 71¢ lower through the front four contracts, but well off of session lows, erasing Monday’s gains. They were 7¢ lower to 2¢ higher across the back half of the board.

Corn futures closed fractionally higher to 2¢ higher.

Soybean futures closed 10¢ to 12¢ higher through Sep ‘19 and then mostly 6¢ to 9¢ higher.

Wholesale beef values were higher on Choice and steady on Select with moderate to fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.29 higher Wednesday afternoon at $216.64/cwt. Select was 25¢ higher at $210.91.

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Major U.S. financial edged higher after early pressure on Wednesday. Support included higher crude oil prices, stronger tech stocks and bank shares.

The Dow Jones Industrial Average closed 18 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 30 points.

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“The past few years have been a demand-driven environment where stronger than expected beef demand led to stronger than expected calf and yearling prices,” says Josh Maples, Extension livestock economist at Mississippi State University. “These have been important transition years that coped with the sharp supply increases. Looking ahead, slower herd growth numbers begin to paint a brighter price picture for 2019 and 2020 if domestic demand and exports continue to grow.”

In the most recent issue of In the Cattle Markets, Maples explains beef production, including about 2% expected growth this year, would be about 15% more in 2019 than it was in 2015.

“This would be the fastest four-year growth since 1973-1977,” Maples says. “With respect to the cattle cycle, recent cowherd trends suggest 2020 could potentially mark the end of the current U.S. cattle inventory build-up. But, it is worth noting that this is looking like a unique cattle cycle. History might suggest that after herd growth stops, herd declines will follow, but the ingredients for near-term herd declines are not obvious at this point. Prices have mostly remained at or above profitable levels for cow-calf producers, which does not provide much incentive for liquidation.” He expects herd growth to be flat this year.

On the other side of the ledger, Maples emphasizes the strong domestic economy and international demand continue to support beef and cattle prices, despite increasing supplies of beef, pork and chicken.

By | January 2nd, 2019|Daily Market Highlights|

Cattle Current Daily-Dec. 31 to Jan. 2-2019

Negotiated cash fed cattle trade remained undeveloped through Friday afternoon. Though too few to trend, there were a few live sales reported in the western Corn Belt on Thursday at $119.00-$121.50/cwt., which was about $1 higher than the previous week.

Front-month Live Cattle set the tone for firm to higher futures prices, supported by expectations of steady to higher cash fed cattle prices.

Except for $1.15 higher in spot Dec and 22¢ lower in the back contract, Live Cattle futures closed an average of 27¢ higher.

Feeder Cattle futures closed narrowly mixed (10¢ lower to 22¢ higher).

Corn futures closed 1¢ higher.

Soybean futures closed 10¢ to 13¢ higher through March ’20 and then 8¢ to 9¢ higher.

Wholesale beef values were lower on Choice and firm on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 89¢ lower Friday afternoon at $214.41/cwt. Select was 30¢ higher at $207.52.

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Major U.S. financial indices closed mainly lower Friday, amid another day of volatile trade.

The Dow Jones Industrial Average closed 76 points lower. The S&P 500 closed 3 points lower. The NASDAQ was up 5 points.

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Most auctions were closed for the holiday last week, so there were no price trends for calves and feeder cattle. When sales start in the new year, they should receive support from recently stronger cash fed cattle and futures prices. Snugger front-end supplies and harsh winter weather in some cattle-feeding areas suggest that support should continue for a while.

Near-term wildcards continue to include volatile equity markets, tied to worries about rising interest rates and slowing global economic growth, as well as the government shutdown.

Depending on your abacus, cattle prices this past year were unsurprising and mostly on par with the previous year. As long as weather and demand hold up, it’s hard to argue that prices will be much different in 2019.

The Livestock Marketing Information Center (LMIC) projected calf prices for the first quarter of 2019 at $168-$172/cwt., according to Glynn Tonsor, agricultural economist at Kansas State University, in December. Yearling prices were projected at $147-$150 and fed prices at $118-$121.

By | December 29th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 28, 2018

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon, but Live Cattle futures bounced higher, pulling Feeder Cattle along. Apparently, traders expect solid consumer demand heading into the new year. That’s hard to argue against, given snugger front-month fed cattle supplies and wholesale beef values holding their ground.

After an average of $1.39 higher in the front two contracts, Live Cattle futures closed an average of 45¢ higher (an average of 69¢ higher overall).

Feeder Cattle futures closed an average of 52¢ higher (12¢ higher at the back of the board to 90¢ higher in spot Jan).

Corn futures closed 1¢ lower to 1¢ higher.

Soybean futures closed fractionally mixed to 1¢ higher.

Wholesale beef values were weaker on light demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 39¢ lower Thursday afternoon at $215.30/cwt. Select was 38¢ lower at $207.22. Both remained higher week to week.

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Major U.S. financial indices closed higher Thursday after a sharp drop early, following the previous session’s steep gains. Given fundamentals, apparently raw emotion and the vagaries of electronic trading are firmly in charge.

The Dow Jones Industrial Average closed 260 points higher. The S&P 500 closed 21 points higher. The NASDAQ was up 25 points.

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Since 2015, one in every five bushels of added feed demand for corn is due to beef and pork exports, according to a recently updated study—The Intersection of U.S. Meat Exports and Domestic Corn Use—conducted by World Perspectives, Inc. (WPI), on behalf of the U.S. Meat Export Federation.

The original study concluded that in 2015 exports of U.S. red meat accounted for 11.7 million tons of combined corn and Dried Distillers Grains with Solubles (DDGS) use. In the update, WPI analysts say that 2018 beef and pork exports will use a combined total of 14.9 million tons of corn and DDGS, which equates to an additional 459.7 million bu. of corn produced, an increase of 29% over the 2015 projections.

“While the original study utilized 2015 export numbers, combined U.S. beef and pork exports this year should be about 26% above the 2015 totals,” explains Dave Juday, WPI senior analyst. “If you look forward, we’re projecting that the baseline over the next 10 years will grow about 10% more than USDA had projected back in 2016.”

Beef and pork exports also have a direct impact on the utilization and value of DDGS, according to the updated study. Overall, the value of DDGS sold for feed to livestock represents about 23% percent of the value of ethanol per bushel of corn.

“Over the baseline period of 2018-2027, the combined value of beef and pork exports to corn and DDGS is projected to reach $22.2 billion—$19 billion for corn and $3.2 billion for DDGS. This cumulative 10-year total is almost 19% more than the $18.7 billion projected in 2016 using USDA’s 2016-2025 long term baseline meat export forecast,” Juday says.

Among other study highlights:

  • About 11% of the price of corn this year will be derived from red meat exports.
  • Red meat exports’ impact on corn price is 39¢/bu. (based on annual average price of $3.53/bu.).
  • There would be a loss of $5.7 billion in corn value without red meat exports.

By | December 27th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 27, 2018

Negotiated cash fed cattle trade was undeveloped Wednesday, as expected. There was chatter about steady to higher prices this week, though, based on current demand and an estimated holiday harvest larger than many expected.

Cash fed cattle prices last week were steady to a touch higher. Live prices were $119/cwt. in Kansas and Nebraska ($118-$120 in the western Corn Belt). Dressed prices were $190.

Cattle futures closed narrowly mixed to higher (Feeder Cattle), supported by firm fed cattle prices and boxed beef cutout values.

After 47¢ higher in spot Dec, Live Cattle futures closed narrowly mixed (17¢ lower to 7¢ higher). On Monday, except for unchanged in the spot month, they were an average of 22¢ higher.

Feeder Cattle futures closed an average of 34¢ higher. They were an average of 32¢ higher on Monday.

Wholesale beef values were steady on Select and higher on Choice with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.64 higher Wednesday afternoon at $215.69/cwt. Select was 10¢ higher at $207.60.

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Major U.S. financial indices blasted sharply higher Monday, regaining the steep losses from Monday’s short session, and then some. Support included retail and energy stocks. Crude oil prices (WTI-CME) closed $3.51 to $3.72 higher through the front 12 contracts. On Monday, spot Feb plunged to $42.53; it ended Wednesday at $46.22.

On the other side of the equation, plenty of worry continues over an assortment of issues, including slowing global economic growth, the trade standoff with China, rising interest rates and the domestic government shutdown.

On Wednesday, the Dow Jones Industrial Average closed 1,086 points higher. The S&P 500 closed 116 points higher. The NASDAQ was up 361 points.

By way of review, the DJIA plummeted 653 points in Monday’s holiday-shortened session. The NASDAQ closed 140 points lower Monday; 65 points lower for the S&P 500.

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Feedlot returns appear positive from now through the first quarter of the new year, based on the most recent Historical and Projected Kansas Feedlot Net Returns, from Kansas State University (KSU).

Currently, the net returns projected for closeouts in November are +$4.88 per head for steers and -$1.18 per head for heifers, according to Glynn Tonsor, KSU agricultural economist, who prepares the report. He reminds that the estimates assume no price risk management.

Projected returns for steers jump to +78.11 per head for December with an estimated feedlot cost of gain of $83.19/cwt. From there, projected returns remain in the black (+$29.46 to +$80.71) through March of 2019.

Likewise, projected returns for heifers bounce to +$62.46 per head for December with an estimated feedlot cost of gain of $90.83/cwt. Projected returns fall to -$13.17 in January, then climb to +$8.05 and +$33.54 in February and March, respectively.

Improved projections compared to the previous month are mostly due to about $5 more in forecast sales prices, according to Tonsor.

By | December 26th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 24-26, 2018

Cash fed cattle continued steady to a touch higher than the previous week, through late Friday afternoon. For the week, live sales were steady at $119/cwt. in Kansas and Nebraska. Dressed trade in Nebraska was $3 higher at $190. Live sales in the western Corn belt were $1-$2 higher at $118-$120, while dressed sales were $3 higher at $190.

Cattle futures closed narrowly mixed to end the week, with no reaction to the previous day’s monthly Cattle on Feed report and amid stronger wholesale beef prices.

Live Cattle futures closed narrowly mixed (an average of 42¢ higher through the front three contracts and then an average of 23¢ lower).

Feeder Cattle futures closed marginally mixed (17¢ lower to 7¢ higher).

Corn futures closed mostly 2¢ to 3¢ higher through Jul ’20 and then mostly fractionally lower.

Soybean futures closed 7¢ to 8¢ lower through Sep ’19 and then mostly 2¢ to 5¢ lower.

Wholesale beef values were higher to sharply higher on moderate to good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.58 higher Friday afternoon at $214.05/cwt. Select was $2.24 higher at $207.50.

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Major U.S. financial indices closed sharply lower again on Friday, amid continuing concerns about slowing global economic growth, domestic economic recession, trade issues and the likelihood of a partial government shutdown.

The Dow Jones Industrial Average closed 414 points lower. The S&P 500 closed 50 points lower. The NASDAQ was down 195 points.

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Total pounds of beef in freezers Nov. 30 were down slightly from the previous month but up 6% percent from last year, according to the monthly USDA Cold Storage report.

Frozen pork supplies were 11% less than the previous month but 1% more than the previous year. 

Total red meat supplies in freezers were down 6% from the previous month but up 4% from last year.

Total frozen poultry supplies were 13% less than the previous month but 2% more than a year ago.

By | December 22nd, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 21, 2018

Early dressed trade picked up a couple of dollars in the North Thursday…feedlot placements in November were almost 5% fewer than a year earlier… coming up on your Cattle Current Market Update with Wes Ishmael.

Cash fed cattle trade started Thursday at $190/cwt. in Nebraska, which was $2 more than last week. Though too few to trend, there were also some early live sales in the western Corn Belt at $120 and early dressed sales at $190, both $3 more than last week.

Cattle futures closed mostly higher ahead of the monthly Cattle on Feed report (see below), which will likely be viewed as neutral to a touch bearish.

Except for 50¢ higher in spot Dec and 17¢-27¢ lower at the back, Live Cattle futures closed 10¢ to 30¢ higher.

Other than 30¢ higher in the back two contracts, Feeder Cattle futures closed an average of $1.02 higher.

Corn futures closed mostly 5¢ to 6¢ lower through Jul ’20 and then fractionally lower to 2¢ lower.

Soybean futures closed 4¢ to 6¢ lower.

Wholesale beef values were firm to higher on good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 77¢ higher Thursday afternoon at $212.47/cwt. Select was 41¢ higher at $205.26.

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Major U.S. financial indices took another sharp turn south on Thursday. The growing likelihood of a partial government shutdown roiled already volatile markets. According to various reports, President Trump will veto any stopgap funding measure that doesn’t include money for a border wall. The deadline for a resolution is at midnight Friday.

The Dow Jones Industrial Average closed 464 points lower. The S&P 500 closed 39 points lower. The NASDAQ was down 108 points.

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Cattle feeders placed 4.91% fewer cattle on feed in November (1.996 million head), according to the monthly Cattle on Feed report. The report accounts for feedlots with 1,000 head or more capacity. A majority of estimates ahead of the report projected a decrease of about 6%.

As for placement weights, 52.36% went on feed weighing less than 700 lbs.; 36.62% weighing 700-899 lbs.; 11.02% weighing more than 900 lbs.

November marketings of 1,869 million head were 1.36% more than a year earlier, which was in line with most pre-report estimates. That’s the most for the month since the data series began in 1996.

Cattle on feed Dec. 1 of 11.739 million head were 1.94% more than last year, a touch more than pre-report estimates.

By | December 20th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 20, 2018

Cash fed cattle trade remained undeveloped through Wednesday afternoon.

There were only 250 head offered in the weekly Fed Cattle Exchange auction, and no takers.

Cattle futures closed either side of steady with no direction from the cash market, biding time for Thursday’s monthly Cattle on Feed report and little trading interest.

Live Cattle futures closed marginally mixed, (an average of 13¢ lower through the front three contracts and then an average of 12¢ higher).

Other than unchanged in spot Jan, Feeder Cattle futures closed an average of 24¢ lower.

Corn futures closed 2¢ to 3¢ lower through Jul ’20 and then mostly fractionally lower.

Soybean futures closed most 5¢ to 7¢ lower.

Wholesale beef values were lower on Choice and steady on Select with light to moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 98¢ lower Wednesday afternoon at $211.70/cwt. Select was 12¢ higher at $204.85.

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Major U.S. financial indices closed sharply lower Wednesday in turbulent trade that turned from positive to negative following the Fed announcement it was raising interest rates another 0.25%, marking the fourth increase this year. Though anticipated, the market seemed to be hoping for a reprieve, given the recent volatility of markets and expectations for slower global economic growth.

“A statement from the FOMC explained, in part: “Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2%. Indicators of longer-term inflation expectations are little changed, on balance.”

The Dow Jones Industrial Average closed 351 points lower. The S&P 500 closed 39 points lower. The NASDAQ was down 147 points.

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Live cattle are also contributing to the positive U.S. beef export picture.

“October cattle exports were about 29% higher than a year ago at 44,203 head,” say analysts with USDA’s Economic Research Service (ERS), in the December Livestock, Dairy and Poultry Outlook. “Despite exports to Mexico of less than half year-earlier levels, significantly higher exports to Canada resulted in the highest monthly export volume recorded since October 2001.”

Apparently Canadian cattle feeders are backfilling needed placements resulting from increasing fed cattle slaughter demand in tandem with continued flat herd growth.

“November through December is the peak placement season in Canada, which might support continued strong U.S. cattle shipments there as feedlots are sourcing cattle from the United States,” ERS analysts explain.

Besides Canada and Mexico, live cattle in October were exported to Qatar (2,184 head) and Russia (1,850 head), according to ERS. 

The cattle export forecast for 2018 was revised upward by 40,000 head to 250,000 head. The cattle export forecast for 2019 increased by 40,000 head to 255,000 head.

On the other side of the ledger, October cattle imports to the U.S.—primarily from Canada and Mexico—were 167,968 head, which was 20% more than a year earlier. For January through October, there were 1.497 million head of cattle imported to the U.S., about 82,000 head more than the previous year.

By | December 19th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 19, 2019

While volatility continued in outside markets Tuesday, Cattle futures managed to retrace some of the previous session’s losses …There’s a wide gap in expectations for placements in the looming Cattle on Feed report… coming up on your Cattle Current Market Update with Wes Ishmael.

As expected, negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Cattle futures firmed, amid continued light trade, apparently spurred along by short covering, more than anything.

Live Cattle futures closed an average of 62¢ higher.

Feeder Cattle futures closed an average of 91¢ higher.

Corn futures closed most 1¢ higher.

Soybean futures closed mostly 2¢ to 3¢ higher.

Wholesale beef values were steady on Choice and higher on Select with light to moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 1¢ higher Tuesday afternoon at $212.68/cwt. Select was 97¢ higher at $204.73.

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Major U.S. financial indices eked out gains Tuesday, amid another stormy day of trading. Pressure continued to stem, in part, from worries about slowing global economic growth, tied to unresolved trade issues.

Domestically, the angst was compounded by an expected rise in interest rates Wednesday, another slide in crude oil prices

Spot CME crude oil (WTI) closed at $46.24, the lowest in more than a year. Contracts for the next 12 months were down $3.36 to $3.64.

Pressure also included an anemic outlook from the National Association of Home Builders (NAHB).

Builder confidence in the market for newly built single-family homes fell four points to 56 in December on the NAHB/Wells Fargo Housing Market Index (HMI) with persistent concerns about housing affordability. Although this is the lowest HMI reading since May 2015, builder sentiment remains in positive territory.

“We are hearing from builders that consumer demand exists, but that customers are hesitating to make a purchase because of rising home costs,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, LA “However, recent declines in mortgage interest rates should help move the market forward in early 2019.”

The Dow Jones Industrial Average closed 82 points higher. The S&P 500 closed fractionally higher. The NASDAQ was up 30 points.

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When the monthly Cattle on Feed report comes out Thursday, it will show either a few more November cattle placements or lots fewer, depending on which analysts and surveys you follow.

For instance, Allendale, Inc. sees November placements 0.9% more than last year. According to the Daily Livestock Report, though, the average estimate of the Urner Barry survey is for a decrease of 6.3%. That represents an estimated difference of 153,000 head.

As for estimated marketings in November, both sources project a year-over-year increase of about 1%.

For Allendale, that leaves an estimated 3.2% more cattle on feed Dec. 1, versus 1.7% more for the average of estimates in the Urner Barry survey.

By | December 18th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 18, 2018

Cattle futures softened to start the week, especially Feeder Cattle. Pressure likely included the anticipated packer slowdown during the next two holiday-shortened weeks, as well as technical correction.

Live Cattle futures closed an average of 77¢ lower.

Feeder Cattle futures closed an average of $1.70 lower ($1.20 to $2.45 lower).

Corn futures closed fractionally lower through Dec ’10 and then mixed.

Soybean futures closed 2¢ to 4¢ higher.

Wholesale beef values were firm to higher on moderate to good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.71 higher Monday afternoon at $212.67/cwt. Select was 62¢ higher at $203.76.

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Major U.S. financial indices closed sharply lower again Monday, down about the same amount they were in the previous session. Concerns continued about slowing global economic growth and unresolved trade issues, in tandem with expectations the Fed will raise interest rates again Wednesday.

The Dow Jones Industrial Average closed 507 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 156 points.

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“Packer demand has increased seasonally, and strong margins this year have likely encouraged packers to be strong buyers of cattle,” say analysts with USDA’s Economic Research Service (ERS), in the December Livestock, Dairy and Poultry Outlook. “For the week ending December 8, the weekly slaughter estimate was 667,000 head. This would be the highest weekly slaughter total since the week ending May 19. This demand is also reflected in prices offered for fed steers in the 5-area marketing region. In November, monthly prices finally broke out of the 5-month narrow price window of $109.90 to 112.20/cwt. to reach over $115. Further, for the week ending December 9, fed steer prices climbed to $118.11, though still below year-earlier levels. From last month, the forecast for fourth-quarter 2018 price for fed steers in the 5-area marketing region was raised to $113-$116/cwt. However, the annual forecast for 2019 fed steer prices was left unchanged $114-$122/cwt.

The aggressive slaughter pace pushed estimated beef production for this year 25 million lbs. higher to 26.9 billion lbs. ERS analysts note lighter carcass weights and less projected cow slaughter in the fourth quarter partially offset increased steer and heifer slaughter. Likewise, beef production for 2019 was reduced slightly based on the expectation of lighter carcass weights. Estimated beef production for next year was reduced by 25 million lbs. to 27.8 billion lbs.

By | December 17th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 17, 2018

Negotiated cash fed cattle prices in the Southern Plains on Friday were mainly steady with the previous week at $119/cwt. on a live basis. Early dressed sales in Nebraska were $1 higher at $188. Though too few to trend, early live sales in the western Corn Belt were $1 higher at $117, while early dressed sales of $187 were at the upper end of the prior week’s trading range in the region.

Cattle futures meandered to a marginally softer close.

Other than 12¢ higher in spot Dec, Live Cattle futures closed an average of 29¢ lower.

Feeder Cattle futures closed an average of 22¢ lower.

Corn futures closed mostly unchanged to fractionally mixed.

Soybean futures closed 4¢ to 6¢ lower.

Wholesale beef values were lower on Choice and sharply higher on Select with light to moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.51 lower Friday afternoon at $210.96/cwt. Select was $2.14 higher at $203.14.

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Major U.S. financial indices closed sharply lower Friday, pressured by weak European and Chinese economic data pointing toward slowing global economic growth.

The Dow Jones Industrial Average closed 496 points lower. The S&P 500 closed 50 points lower. The NASDAQ was down 159 points.

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Despite some notions to the contrary, the nation’s beef cow herd likely continued to expand a mite this year, according to the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor. Specifically, LMIC analysts expect to see 0.2-0.4% growth as of January 1.

Yes, growth is anticipated despite federally inspected heifer slaughter through October running 7.3% more than the previous year; 10.7% more for federally inspected beef cow slaughter.

“The number of beef cows that calved has grown over the last four years, adding 2.6 million head since 2014,” says LMIC analysts. “This incredible growth pattern led to larger calf crops, and the economics has supported retaining a large number of heifers in recent years to continue adding to that beef cow number.”

By | December 16th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 14, 2018

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. Although too few to trend, there were some early live sales in the western Corn Belt at $117/cwt., which was $1 higher than last week. Early dressed sales at $187, were at the top of last week’s range for the region.

Live Cattle futures edged mostly higher, while recent pressure on grain prices added lift to Feeder Cattle.

Other than an average of 7¢ lower in near Feb, and Apr, Live Cattle futures closed an average of 27¢ higher.

Feeder Cattle futures closed an average of 60¢ higher.

Corn futures closed mostly fractionally mixed.

Soybean futures closed 10¢ to 13¢ lower through 2019.

Wholesale beef values were steady to weak on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 22¢ higher Thursday afternoon at $212.47/cwt. Select was 57¢ lower at $201.00.

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Major U.S. financial indices settled mixed Thursday. Support included perceptions that U.S. and China trade talks are progressing, including various reports suggesting China purchased a significant volume of U.S. soybeans.

The Dow Jones Industrial Average closed 70 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 27 points.

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“There are two overriding themes in livestock markets: generally low feed costs and record meat production,” says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets. “On the beef side, booming exports and strong domestic beef demand have cushioned the blow of increasing beef production. Record pork production in 2018 and again in 2019 will pressure pork prices lower. The chicken industry has continued to increase production, but prices have fallen to extremely low levels, which is likely to lead to some production restraint in the coming year. On the turkey side, falling demand has led to unprofitable prices for producers.”

By | December 13th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 13, 2018

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon.

There were only 156 head (two lots) offered in the weekly Fed Cattle Exchange auction. One lot (97 heifers) sold for delivery at 1-9 days for an average of $119/cwt.

Cattle futures continued to build on recent gains Wednesday, buoyed by last week’s large fed cattle harvest, as a barometer of domestic demand strength, in tandem with stronger cash prices.

Live Cattle futures closed an average of 39¢ higher.

Feeder Cattle futures closed an average of 34¢ higher.

Corn futures closed mostly unchanged to fractionally mixed.

Wholesale beef values were sharply lower on Choice and steady on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.21 lower Wednesday afternoon at $212.25/cwt. Select was 18¢ higher at $201.57.

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Although closing off of session highs, major U.S. financial indices settled higher Wednesday, reportedly fueled by increasing optimism regarding U.S.-China trade talks.

The Dow Jones Industrial Average closed 157 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 66 points.

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Congress passed the new Farm Bill, overwhelmingly in both the Senate and House of Representatives. All that’s left is President Trump’s, signature, which seems likely, based on his remarks ahead of the congressional vote.

“America’s cattlemen and women want common sense and certainty from Congress this holiday season and throughout the year; today, they received that through the passage of the Farm Bill,” said Kevin Kester, president of the National Cattlemen’s Beef Association. “Certainty that a Foot-and-Mouth Disease vaccine bank will be authorized and funded. Certainty that important conservation programs will be reauthorized and funded. And certainty that trade promotion and access to foreign markets will remain a priority in the years to come.”

“The passage of the 2019 Farm Bill is good news because it provides a strong safety net for farmers and ranchers, who need the dependability and certainty this legislation affords,” says U.S. Agriculture Secretary, Sonny Perdue. “This Farm Bill will help producers make decisions about the future, while also investing in important agricultural research and supporting trade programs to bolster exports. While I feel there were missed opportunities in forest management and in improving work requirements for certain SNAP recipients, this bill does include several helpful provisions and we will continue to build upon these through our authorities. I commend Congress for bringing the Farm Bill across the finish line and am encouraging President Trump to sign it.”

“Feeding an increasing global population is not simply an agriculture challenge, it is a national security challenge,” said Senator Pat Roberts (Rep, KS) after the Senate passed the conference report. “This means we need to grow more and raise more with fewer resources. That will take investments in research, new technology, lines of credit, and proper risk management. It takes the government providing tools, and then getting out of the producer’s way.”

By | December 12th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 12, 2018

Last week’s higher fed cattle prices and firmer wholesale beef values appeared to finally offer some spark to Cattle futures on Tuesday, especially Feeder Cattle.

Live Cattle futures closed an average of 77¢ higher.

Feeder Cattle futures closed an average of $1.68 higher ($1.15 higher to $2.27 higher in spot Jan).

Wholesale beef values were lower on Choice and firm on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 96¢ lower Tuesday afternoon at $214.46/cwt. Select was 45¢ higher at $201.39.

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Wild market swings continued on Wall Street Tuesday, apparently driven by continued kneejerk reactions to the headlines. By the end, major U.S. financial indices settled narrowly mixed.

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

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“The 2018 forecast for total red meat and poultry production is raised from last month as higher beef and poultry production forecasts more than offset lower pork production,” according to analysts with USDA’s Economic Research Service, in the monthly World Agricultural Supply and Demand Estimates (WASDE). “The increase in beef production reflects a faster pace of steer and heifer slaughter. However, this is slightly offset by lower carcass weights.”

Fed steer prices (5-area Direct) are projected at $119-$125/cwt. in the first quarter next year, $118-$128 in the second quarter and $109-$119 in the third.

Other WASDE highlights:

Corn

Lower corn used for ethanol, reduced imports and larger ending stocks.

The season-average corn price received by producers was unchanged at a midpoint of $3.60/bu., but the range was narrowed 5¢ cents on each end to $3.25 to $3.95/bu.

Wheat

Unchanged supplies, lower exports, and higher ending stocks.

The projected season-average farm price is up 5¢/bu. at the midpoint with the range narrowed to $5.05 to $5.25.

Soybeans

Supply and use projections for 2018-19 were unchanged. Soybean ending stocks were projected at a record 955 million bu.

The U.S. season-average soybean price for 2018-19 was forecast at $7.85 to $9.35/bu., unchanged at the midpoint. Soybean meal price was unchanged at $290 to $330 per short ton. Soybean oil price was unchanged at 28.0¢ to 32.0¢/lb.

By | December 11th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 11, 2018

Negotiated cash fed cattle trade last week ended up $1-$3 higher at $119/cwt. ($116 in the western Corn Belt). Dressed trade was steady to $4 higher at $187.

Feeder Cattle futures gained some ground Monday, amid limited trade, while Live Cattle closed narrowly mixed, despite stronger cash prices and wholesale beef values.

Live Cattle futures closed 32¢ lower to 32¢ higher.

Feeder Cattle futures closed an average of 67¢ higher

Wholesale beef values were firm to higher on moderate  to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.13 higher Monday afternoon at $215.42/cwt. Select was 44¢ higher at $200.94.

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Extreme volatility continued on Wall Street Monday with steep losses early and then recovery later on, led by tech stocks.

The Dow Jones Industrial Average closed 34 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 51 points.

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“The latest meat trade data shows that meat exports are continuing to help offset record meat production in 2018,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in December market comments.  “Each of the major meats—beef, pork and poultry—are projected to reach record levels in 2018 and will combine to push total U.S meat production to a record level of 102.3 billion lbs., up 2.6% year over year. However, 2018 per capita meat consumption in the U.S. is projected at 218.7 lbs., up 1.0% year over year. The smaller increase in meat consumption compared to production is largely due to the net movement of meat offshore through meat exports. Thus far in 2018 (January-October), total meat exports of 13.3 billion lbs. consist of broiler (44.0%); pork (36.3%); and beef (19.7%).

Moreover, Peel explains U.S. meat exports are forecast to increase next year, while total meat imports are forecast to decrease. 

“Continued improvements in the net trade balance will be critical to partially offset total 2019 meat production forecast at 103.7 billion lbs., up 1.4% year over year and another record level,” Peel says. “Domestic per capita total meat consumption is forecast to hold steady in 2019.”

However, Peel also pointed out earlier this fall, “There is general agreement that trade disruptions will likely reduce U.S. and global macroeconomic growth in 2019. While the beef industry has avoided most of the direct tariff impacts thus far, indirect tariff impacts will continue to grow unless the trade situation is resolved very soon. Consumers will see growing tariff impacts that may impact consumer spending and beef demand…Tariff-driven price increases could push consumers to cheap and abundant pork and poultry at the expense of beef demand.”

By | December 10th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 10, 2018

Negotiated cash fed cattle trade remained mostly undeveloped through Friday afternoon, according to USDA reports. There was some light to moderate trade in the western Corn Belt at $115-$117/cwt., which was $1 higher than the previous week. Early dressed sales were steady at $183-$185. By late in the day, AMS reported some dressed trade in Nebraska at $187, which was $2-$4 more than the previous week.

Cattle futures closed narrowly mixed in choppy trade.

Live Cattle futures closed an average of 22¢ higher, except for 5¢ to 27¢ lower at either end of the board.

Other than 17¢ higher in spot Jan, Feeder Cattle futures closed unchanged to an average of 22¢ lower. 

Wholesale beef values were higher to sharply higher on good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.62 higher Friday afternoon at $214.29/cwt. Select was $2.28 higher at $200.50.

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Major U.S. financial indices plunged again to end the week.

Pressure included ongoing worries about global economic growth and trade, as well as fewer jobs than expected in the monthly national employment report.

Total nonfarm payroll employment increased by 155,000 in November, according to the U.S. Bureau of Labor Statistics. The unemployment rate remained unchanged at 3.7%. 

Average November hourly earnings for all employees on private nonfarm payrolls rose by 6¢ to $27.35. Over the year, average hourly earnings have increased by 81¢ cents, or 3.1%.

The Dow Jones Industrial Average closed 558 points lower. The S&P 500 closed 62 points lower. The NASDAQ was down 129 points.

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U.S. beef exports continue at a torrid pace, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

October beef exports totaled 117,838 metric tons (mt), up 6% from a year ago, valued at $727.4 million, which was 10% more year over year and the second-highest monthly total on record.

For January through October, beef exports totaled 1.13 million mt, 9% more than last year, while value was 17% more at $6.92 billion. For beef muscle cuts only, exports increased 12% percent in volume (867,714 mt) and 19% in value ($6.19 billion).

 “Demand for U.S. beef continues to climb in nearly every region of the world, with annual records already falling in some markets,” says Dan Halstrom, USMEF president and CEO. “Per-head export value will also easily set a new record in 2018, which illustrates the strong returns exports are delivering for cattle producers and for the entire supply chain.”

Beef export value equated to $317.53 per head of fed slaughter in October, up 5% from a year ago. For January through October, the per-head average was up 15% to $320.50.

By | December 8th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 7, 2018

Negotiated cash fed cattle trade was undeveloped through Thursday afternoon.

Cattle futures softened but closed well off of session lows that came early, driven in part by the plummeting stock market (see below).

Live Cattle futures closed an average of 48¢ lower

Except for an average of 35¢ lower in the back two contracts, Feeder Cattle futures closed an average of $1.22 lower

Wholesale beef values were weak on Choice and higher on Select with light to moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 59¢ lower Thursday afternoon at $212.67/cwt. Select was $1.36 higher at $198.22.

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Maybe it still pays to leave that cash in the coffee can. Wall Street took a wild ride Thursday, with the Dow plunging nearly 800 points early on—driven in part by the overnight free fall in stock index futures —before ultimately recovering most of the loss. That followed the previous session’s steep losses.

Recent pressure includes the yield curve inversion, as a possible barometer of looming domestic economic recession, as well as fears of a global economic slowdown, tied to lingering trade issues. Support for the day included reports that the Fed may be less aggressive in raising interest rates after the December meeting.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed 4 points lower. The NASDAQ was up 29 points.

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“On average, bankers estimated that farmland prices declined by 4.0% over the past 12 months and expect farmland prices to fall by another 3.2% over the next 12 months,” according to the most recent Rural Mainstreet Economy Report from Creighton University.

“More than ever, farmland values are extremely dependent upon quality, and location, location, location,” says Fritz Kuhlmeier, CEO of Citizens State Bank at Lena, IL.

The monthly report is built from surveys of rural community bank CEOs in a 10-state region dependent on agriculture and/or energy. It includes the Rural Mainstreet Index (RMI), a real-time measure of rural economic health. The overall index expanded to 54.3 in October from 51.5 in September. The index ranges between 0 and 100 with 50.0 representing growth neutral. That’s the ninth consecutive month the index climbed above growth neutral. 

“Our surveys over the last several months indicate that the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of tariffs and low agriculture commodity prices continue to weaken the farm sector,” says Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. 

By | December 6th, 2018|Daily Market Highlights|

Cattle Current Market Update-Dec. 6, 2018

Major U.S. stock exchanges were closed Wednesday, saluting the life of patriot and former president George Herbert Walker Bush.

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon, but early signs pointed to at least steady money.

For instance, there were only two lots of steers from Kansas (219 head) offered in the weekly Fed Cattle Exchange auction. Both sold at a weighted average price of $117.83/cwt. for delivery at 1-9 days. That price was right at last week’s average country trade for the region.

Likewise, prices for Ch 2-4 steers ($115.58-$116.63) at the Tama fat cattle auction in Iowa were at the upper end of country prices in the western Corn Belt last week.

Cattle futures closed higher Wednesday—led by Feeder Cattle—building on gains from the previous session, although trade and overall direction were limited.

Live Cattle futures closed an average of 71¢ higher

Feeder Cattle futures closed an average of $1.02 higher

Wholesale beef values were weak on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 60¢ lower Wednesday afternoon at $213.26/cwt. Select was 65¢ lower at $196.86.

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“Restaurant operators are somewhat more optimistic about sales growth in the coming months, with their outlook rising to a six-month high,” according to the National Restaurant Association (NRA), in that organization’s most recent Restaurant Performance Index (RPI) report. “However, restaurant operators remain generally less bullish about the direction of the overall economy.”

Stronger same-store sales and customer traffic pushed the RPI to a slight gain in October at 101.2; it was 101.1 a month earlier. Index values above 100 indicate key industry indicators are in a period of expansion.

The RPI is comprised of the Current Situation Index (CSI) and the Expectations Index (EI). Month to month, the CSI increased from 100.6 to 100.9. The EI was stable at 101.6.

By | December 5th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 5, 2018

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon.

Cattle futures gained some traction, in the face of sharply lower outside markets. Feb Live Cattle led the way. Ultimately, Feeder Cattle tagged along to a lesser degree.

Except for 15¢ lower in the back contract, Live Cattle futures closed an average of 95¢ higher (30¢ to $1.47 higher).

Except for 10¢ lower in spot Jan, Feeder Cattle futures closed an average of 59¢ higher. 

Wholesale beef values were higher on Choice and lower on Select with light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 78¢ higher Tuesday afternoon at $213.86/cwt. Select was $1.67 lower at $197.51.

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Major U.S. financial indices dove lower Tuesday, reportedly pressured by a flattening yield curve, which investors fear portend an economic slowdown.

The Dow Jones Industrial Average closed 799 points lower. The S&P 500 closed 90 points lower. The NASDAQ was down 283 points.

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Agricultural producer sentiment held steady in November with producers remaining optimistic about the state of the agricultural economy, according to results from the Purdue University-CME Group Ag Economy Barometer.

The barometer reading of 134 was 1% lower than in October, but remains similar to levels last spring before trade disruptions began. The barometer utilizes a survey of 400 agricultural producers from across the country.

“Although there was a modest decline in the barometer this month, there was some evidence that producers are becoming more confident regarding the U.S. agricultural economy’s future,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The barometer’s two sub-indices remained mostly unchanged from October. The Index of Current Conditions held at 115, and the Index of Future Expectations dropped 3 points to a reading of 143.

Other Barometer Survey Highlights

50% expect higher farmland values over the next five years, significantly more than a month earlier when 21% said they expected farmland values to increase.

13% expect farm profitability to improve in the next 12 months.

44% expect to see equity diminish in the coming year.

75% said they were either ‘somewhat or very concerned’ that Congress had not passed new farm bill legislation.

By | December 4th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 4, 2018

Negotiated cash fed cattle trade ended up mostly $1-$2 higher on a live basis last week at $118/cwt. in the Southern Plains, $114-$116 in the western Corn Belt and $116-$118.50 in Nebraska. Dressed trade was $3-$6 higher in the western Corn Belt at $183-$186. In Nebraska, it was steady to $2 less than the bulk of the previous week’s trade at $183-$185.

Despite stronger cash prices, firmer wholesale beef values and positive news regarding U.S.-China trade (see below), Cattle futures softened to start the week. Pressure included the decline in Lean Hog futures, as well as recently strengthening grain prices, where Feeder Cattle are concerned.

Live Cattle futures closed an average of 49¢ lower (5¢ to 72¢ lower).

Feeder Cattle futures closed an average of $1.40 lower, (72¢ lower in spot Jan to $1.72 lower at the back).

Wholesale beef values were firm to higher on fairly good demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 47¢ higher Monday afternoon at $213.08/cwt. Select was 77¢ higher at $199.18.

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Major U.S. financial indices closed higher Monday, boosted by comments following the weekend meeting between President Trump and President Xi Jinping of China, during the G20 Summit in Argentina.

Included in a statement from President Trump’s press secretary:

“On Trade, President Trump has agreed that on Jan. 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time. China will agree to purchase a not-yet-agreed-upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately.

“President Trump and President Xi have agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%.”

The Dow Jones Industrial Average closed 287 points higher. The S&P 500 closed 30 points higher. The NASDAQ was up 110 points.

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Cull cow prices likely reached their seasonal low in November, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. However, he emphasizes making sense of the cull market has been challenging this year.

From May through October this year, Peel says cull cow prices averaged 13-15% less than the previous year. In his weekly market comments, he explains, Cull cow prices typically begin a slight recovery in December following the November seasonal low.

From current levels, he says seasonal trends suggest breaking cow prices of $53.47/cwt. in January; $58.26 in February; $59.53 in March; $59.94 by April; and $60.85 by May.

“One of the big factors contributing to weak cull cow prices has been weak cow boxed beef prices in the second half of 2018,” Peel says. “In the last week of November, cow boxed beef prices were 7.8% lower than year-earlier levels and have averaged 8.3% lower year over year since mid-year.”

Although overall beef demand remains strong, Peel explains cow beef demand is more uncertain, with most going into ground beef. So, along with total cow slaughter being 7.2% more than last year, he says it’s possible that large supplies of pork and poultry are applying more pressure to ground beef demand.

Even so, Peel expects a relative tightening of cow beef supplies to support a near-normal increase in cull cow prices heading into the new year.

By | December 3rd, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 3, 2018

Negotiated cash fed cattle trade remained largely undeveloped through USDA’s late-afternoon report Friday. There were some live sales in the western Corn Belt at $115/cwt., unevenly steady with Wednesday’s $114-$116, which was $1-$2 higher than the previous week. There was some early dressed trade in Nebraska at $183, but too few transactions to trend; prices the previous week were at $180-$185, mostly $185.

Live Cattle futures firmed on Friday (17¢ lower to 32¢ higher), supported by the steady to higher feel in the cash market.

Feeder Cattle futures softened amid continued lackluster trade and perhaps some month-end position squaring. Except for 7¢ lower in the back two contracts, Feeder Cattle futures closed an average of 60¢ lower.

Though futures prices remain channel-bound, there continue to be expectations for a secondary boost, if and when China and the U.S. settle their trade differences. The notion is that China’s ongoing problems with African Swine Fever mean that nation needs to import lots more pork, potentially significantly more from the U.S. President Trump and China’s President Xi Jingping were scheduled to meet over the weekend during the G20 Summit.

Wholesale beef values were steady on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was even with the previous day Thursday afternoon at $212.61/cwt. Select was 12¢ lower at $198.41.

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Major U.S. financial indices closed higher Friday, apparently boosted by optimism that the U.S. and China would make headway in solving their trade issues when leaders meet during the G20 Summit in Argentina over the weekend.

The Dow Jones Industrial Average closed 199 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 57 points.

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Leaders of the United States, Mexico, and Canada signed the U.S.-Mexico-Canada Agreement (USMCA) on Friday, during the G-20 meeting in Argentina. The USMCA maintains unrestricted, duty-free trade for beef and cattle in North America. It also maintains science-based trade standards.

All three countries must complete their own domestic processes before the USMCA comes into force. In the U.S., Congress will need to pass legislation to implement the deal. The U.S. International Trade Commission is currently conducting an investigation into the likely impacts of USMCA.

“With the signing of the, U.S. beef producers are one step closer to knowing that unrestricted, science-based trade will continue in North America,” says Kevin Kester, president of the National Cattlemen’s Beef Association. “The agreement brings the trading relationship with our neighbors into the 21st century – and clearly rejects the failed beef and cattle trade policies of the past. Open markets have helped U.S. producers flourish and created billion-dollar markets for U.S. beef. We look forward to working with Congress to get USMCA passed into law as quickly as possible.”

By | December 1st, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 30, 2018

Other than early live sales in the western Corn Belt Wednesday, which were $1-$2 higher than last week at $114-$116/cwt., negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Cattle futures dipped, recovering some from the strongest early pressure. Other than, arguably, more interest flowing to Lean Hogs, there seemed no apparent fundamental reason for the decline. Given the current support of fed cattle prices, it was one of those sessions that left you wondering exactly what components comprise electronic-trading algorithms, and perhaps more important, how far ahead.

After 17¢ lower in spot Dec and 27¢ lower in near Feb, Live Cattle futures closed an average of 97¢ lower (52¢ to $1.30 lower).

Feeder Cattle futures closed an average of $1.46 lower.

Wholesale beef values were weak on Choice and steady on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 67¢ lower Thursday afternoon at $212.61/cwt. Select was 3¢ higher at $198.53.

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Major U.S. financial indices trickled lower Thursday, as investors digested the interest rate news and trade hopes that boosted markets the previous day.

Battered nearby Crude Oil futures (WTI-CME) bounced about $1 higher.

The Dow Jones Industrial Average closed 27 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 18 points.

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Judging by projections in the latest Outlook for U.S. Agricultural Trade, beef exports will continue to lead the way next year.

Projected beef exports for fiscal year 2019 (October-September) were projected $500 million higher than the August forecast at $7.6 billion. That would be about $278 million more than this year. According to analysts with USDA’s Economic Research Service (ERS), the increase is driven mostly by higher unit values.

Overall, the projection for total livestock, dairy, and poultry exports are forecast $200 million less than the August projection at $30.1 billion, pressured by weaker demand for dairy, poultry and products, hides and skins, as well as rendered products.

For context, according to ERS analysts, “Per capita world GDP growth is expected to be robust at 2.1% in 2018 and to remain healthy at 2.0% percent in 2019, led by a thriving U.S. economy…Per capita GDP growth in the United States of 2.2% in 2018 is expected to be sustained in 2019. In 2018, the U.S. economy is bolstered by strong consumer spending and favorable business investment. Income growth is expected to slow during 2019, due to diminishing effects of fiscal stimulus, rising inflation and slower economic growth outside the United States.”

By | November 29th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 29, 2018

Notions grew stronger yesterday for steady to higher cash fed cattle prices this week.

Early live sales in the western Corn Belt were $1-$2 higher at $114-$116/cwt., on slow trade and light demand.

There were 620 head (seven lots) offered in the weekly Fed Cattle Exchange auction. One lot (148 head) of steers from Kansas sold at $116.75/cwt. for delivery at 1-9 days. That’s toward the top of the price range for country trade in the region last week.

Live Cattle futures closed marginally mixed Wednesday, while Feeder Cattle softened slightly, amid light trade and a lack of direction.

Live Cattle futures closed narrowly mixed, from an average of 5¢ higher in three contracts to an average of 12¢ lower.

Feeder Cattle futures closed an average of 54¢ lower.

Wholesale beef values were weak to lower on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 72¢ lower Wednesday afternoon at $213.28/cwt. Select was $1.74 lower at $198.50.

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Major U.S. financial indices closed sharply higher Wednesday, propelled by comments from Federal Reserve Chairman, Jerome Powell, suggesting interest rate increases may be nearing an end.

“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy—that is, neither speeding up nor slowing down growth,” Powell explained in prepared remarks at the Economic Club of New York Wednesday. “My FOMC colleagues and I, as well as many private-sector economists, are forecasting continued solid growth, low unemployment, and inflation near 2%.”

The Dow Jones Industrial Average closed 617 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 208 points.

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“Declining unemployment rates and a small increase in population ages 16 and older corresponded to the addition of more than 650,000 jobs in rural counties between 2013 and 2017,” according to the recently released Rural America at a Glance, from USDA’s Economic Research Service (ERS).

“At the same time, falling labor force participation (due primarily to an aging population among non-Hispanic Whites) corresponded to a decline in employment of nearly 280,000, leaving a net increase in jobs of roughly 370,000,” ERS analysts say.

In 2016-2017, rural counties added population for the first time in a decade, according to the report, though the total rural population has remained close to 46.1 million since 2013.

“The recent upturn in rural population comes from increasing rates of net migration as opposed to natural change (births minus deaths). Increased net migration has coincided with declining rural unemployment, rising incomes, and declining poverty since 2013,” say ERS analysts.

By | November 28th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 28, 2018

Cattle futures closed mainly narrowly lower Tuesday, with little direction one way or the other.

Except for 5¢ higher in away Dec and unchanged at the back, Live Cattle futures closed an average of 21¢ lower.

Feeder Cattle futures closed an average of 28¢ lower.

Wholesale beef values were weak on Choice and firm on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 45¢ lower Tuesday afternoon at $214.00/cwt. Select was 45¢ higher at $200.24.

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Major U.S. financial indices gained for the second consecutive day, reportedly buoyed by chatter about a U.S.-China trade truce.

The Dow Jones Industrial Average closed 108 points higher. The S&P 500 closed 8 points higher. The NASDAQ was fractionally higher.

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Although boxed beef cutout values never received as much seasonal pop as some expected, they continue to be strong in the face of increased production.

“The wholesale price of beef remained fairly strong through the holiday week. There may still be some end-of-the-year holiday beef buying on the table, which could provide support to the beef cutout,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. How much buying is left to be completed will determine the amount of support provided as retailers will soon be moving their focus to end cuts.”

Analysts with USDA’s Economic Research Service note that since early August, Choice wholesale beef cutout prices stayed well above year-earlier levels. 

“In fact, the weekly beef cutout price for the week ending Nov. 9 climbed to within June price levels despite higher year-over-year beef production for third-quarter 2018 and higher expected production in fourth-quarter 2018,” ERS analysts say in the latest monthly Livestock, Dairy and Poultry Outlook.

By | November 27th, 2018|Daily Market Highlights|

Cattle Current Podcast-Nov. 27, 2018

Cattle futures closed marginally mixed but mostly higher Monday, supported by last week’s friendly Cattle on Feed report and a recent bump in wholesale beef values.

Live Cattle futures closed an average of 21¢ lower through the front four contracts and then unchanged to 5¢ higher.  

Other than 22¢ lower in spot Jan, Feeder Cattle futures closed an average of 24¢ higher.

Corn futures closed mostly 1¢ to 2¢ lower.

Wholesale beef values were firm to higher on fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 60¢ higher Monday afternoon at $214.45/cwt. Select was $1.28 higher at $199.79.

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Major U.S. financial indices rallied higher on Monday, supported by a rebound in key tech stocks like Apple and Amazon. Retail stocks and higher oil prices also provided support.

West Texas Intermediate futures (CME) closed $1.05 to $1.21 higher through the front 12 contracts.

The Dow Jones Industrial Average closed 354 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 142 points.

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“The beef cow herd likely increased less than 1% year over year in 2018 to a projected Jan. 1, 2019 level of about 31.9 million head,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “This may be the cyclical peak in herd inventory or very close to it. From the 2014 low of 29.1 million head, this cyclical expansion has increased the beef cow herd by 2.8 million head or 9.6% over five years. The last full cyclical herd expansion occurred in 1990-1996 resulting in an 8.8% herd expansion in six years.”

Moreover, Peel explains beef cowherd dynamics are finally returning to normal, following the unprecedented market forces that drove volatility during the past decade. That included the drought-induced herd liquidation of 2011-2013 that took more cows out of production than would otherwise be expected, followed by the recent rapid expansion.

For instance, Peel says heifer retention projected at 19.3% this year and 18-18.5% are nearing the previous 30-year average of 17.6%. It was as low as 16.6% in 2011 and as high as 21% in 2016.

Similarly, Peel points to the steer-to-heifer ratio of the slaughter mix, which averaged 1.71 during the past 30 years. He explains the ratio increased to 2.14 in 2016, the highest since the early 1970s. It was 1.95 last year and is projected at 1.83 this year.

Finally, at its current rate, Peel says cow slaughter this year will be around 9.7%, close to the long-term average.

By | November 26th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 26, 2018

Negotiated cash fed cattle trade for the week ended up mostly $2-$3 higher on a live basis at $116-$117/cwt. ($113-$114 in the western Corn Belt), and $2-$7 higher in the beef at $180-$185.

Cattle futures continued higher on Friday, amid light holiday trade and continued support from the friendly Cattle on Feed report and stronger cash fed cattle prices.

Live Cattle futures closed an average of 37¢ higher (7¢ to 70¢ higher).  

Except for unchanged to 20¢ lower in the back three contracts, Feeder Cattle futures closed an average of 83¢ higher.

Corn futures closed mostly 1¢ to 2¢ lower.

Wholesale beef values were steady on moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 16¢ higher Friday afternoon at $213.85/cwt. Select was 25¢ higher at $198.51.

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Major U.S. financial indices closed lower on Friday, weighed down by trade concerns and the continuing slide of oil prices. West Texas Intermediate (CME) closed $3.84 to $4.21 lower through the next 12 contracts. Week to week, they closed an average of $6.33 lower through the front six contracts.

The Dow Jones Industrial Average closed 178 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 33 points.

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Total pounds of beef in freezers Oct. 31 were up 2% from the previous month and up 2% from the previous year, according to the latest Cold Storage report from USDA.

Frozen pork supplies were 3% less than the previous month and 5% less than last year.

Total red meat supplies in freezers were down 1% from the previous month and down 1% from last year.

Total frozen poultry supplies were down 9% from the previous month, but up 4% from a year ago.

By | November 25th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 22-23, 2018

Between late Tuesday and yesterday, negotiated cash fed cattle trade kicked off at higher money. Live trade was $2.50 higher in the Texas Panhandle at $116.50/cwt. and $1-$2 higher in the western Corn Belt at $113-$114. Dressed trade in the North was $2-$4 higher at $180.

Incidentally, there were 459 head offered in the weekly Fed Cattle Exchange auction and no takers.

Cattle futures closed higher on Wednesday, buoyed by stronger cash fed cattle and a much friendlier Cattle on Feed report than many expected (see below).

Live Cattle futures closed an average of 76¢ higher

Feeder Cattle futures closed an average of $1.21 higher.

Wholesale beef values were steady to weak on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 40¢ lower Wednesday afternoon at $213.69/cwt. Select was 17¢ lower at $198.26.

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Although closing even to a little higher Wednesday, Major U.S. financial indices were unable to sustain early positive momentum, amid light holiday trade.

The Dow Jones Industrial Average closed fractionally lower. The S&P 500 closed 8 points higher. The NASDAQ was up 63 points.

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Cattle Markets got a boost from Wednesday’s monthly Cattle on Feed report with fewer cattle placed in October than most expected (feedlots with 1,000 head or more capacity). There were 2.25 million head placed in October, which was 6.06% less than last year. Analyst estimates ahead of the report were for an increase of 1% more.

As for placement weights: 51.82% went on feed weighing less than 700 lbs.; 36.17% weighing 700-899 lbs.; 12.00% weighing 900 lbs. or more.

Cattle marketings in October were a touch more than expected at 1.89 million head, which was 4.78% more than last year.

Cattle on feed Nov. 1 of 11.69 million head were 3.18% more than last year, about 1% less than many expected.

By | November 21st, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 21, 2018

As suspected, negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Cattle futures closed mixed (Live Cattle) to a touch lower (Feeder Cattle) on Tuesday, pressured by sharply lower outside markets and light trade volume, as much as anything. There was also wait-and-see for Wednesday’s monthly Cattle on Feed report (see below).

Live Cattle futures closed 45¢ lower to 20¢ higher.

Feeder Cattle futures closed an average of 18¢ lower.

Wholesale beef values were steady to firm on moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 70¢ higher Tuesday afternoon at $214.09/cwt. Select was 14¢ lower at $198.43.

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Major U.S. financial indices fell hard on Tuesday, pressured by everything from tech stocks, to retail, to another plunge in crude oil prices. The underlying concern appears to be notions of slower global economic growth, tied to both trade issues and higher interest rates.

Futures prices for West Texas Intermediate Crude (CME) declined $3.72 to $3.85 over the next 12 months. Spot Jan closed at $53.43, which was $10 lower than where it started the month.

The Dow Jones Industrial Average closed 551 points lower. The S&P 500 closed 48 points lower. The NASDAQ was down 119 points.

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Judging by various estimates and surveys, most analysts expect the monthly Cattle on Feed report on Wednesday (12 p.m. EST) to show higher October placements and marketings, as well as more cattle on feed Nov. 1 than a year ago.

For instance, analysts at Allendale, Inc. expect placements to be 4.3% higher at 2.496 million head, the most for the month in eight years. They estimate marketings 3.4% more at 1.862 million head, the most for the month in 11 years. Finally, they project cattle on feed Nov. 1 to be 11.961 million head, which would be 5.6% more than last year, the most for the month in 12 years, and the second largest since the data series began in 1996.

You can also find other pre-report estimates that are a few points less bearish on placements.

By | November 20th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 20, 2018

Negotiated cash fed cattle sales were mainly steady last week on a live basis at $114/cwt. ($112 in the western Corn Belt). Dressed trade was $1-$2 lower at $176-$178.

Except for the back half of Live Cattle, futures prices on Monday eked out minimal gains following pressure early in the session.

Live Cattle futures closed an average of 40¢ higher through the front five contracts, and then unchanged to 35¢ lower.

Feeder Cattle futures closed an average of 38¢ higher, amid extremely thin trade. 

Wholesale beef values were firm to higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 48¢ higher Monday afternoon at $213.39/cwt. Select was $1 higher at $198.57.

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Major U.S. financial indices closed sharply lower Monday with tech stocks leading the sell-off.

Pressure also came from declining builder confidence, as measured by the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The index was 8 points lower month to month in November, pressured by concerns about affordability—home prices and interest rates.

The Dow Jones Industrial Average closed 395 points lower. The S&P 500 closed 45 points lower. The NASDAQ was down 219 points.

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“Beef markets have largely been a case of ‘so far, so good’ in 2018. I’m cautiously optimistic that this will continue in 2019 but the risks to beef demand will be higher in the coming year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. 

Although slowing, Peel explains beef production next year is forecast to be 1.5-2.0% higher at a record 27.5 billion lbs., following the estimated 3.3% increase this year to 27.0 billion lbs.

“Through 2018, total beef production has increased 14.2% (3.4 billion lbs.) since the recent 2015 low,” Peel says. “Strong beef demand has supported prices and margins at all levels of the beef and cattle industry as beef production expanded. Continued strong beef demand will be critical in 2019 as beef production pushes to new record levels.”

Among the challenges to beef demand, Peel cites:

Record poultry and pork production

“Thus far, beef has maintained good demand relative to pork and poultry, as indicated by the fact that beef retail prices are at near record ratios compared to retail pork and poultry prices,” Peel says.

Likewise, Peel explains beef imports are about steady with last year, while U.S. beef exports are 13.3% higher.

Domestic and global economic conditions

“The U.S. economy has supported beef demand thus far, but recent stock market volatility highlights fragile macroeconomic conditions going forward,” Peel says.  “Rising interest rates and growing budget deficits will add to inflationary pressures and contribute to a stronger dollar. A rising dollar could add to export headwinds in the coming months.”

Trade issues

“The uncertain global trade situation continues to hang over beef and other agricultural markets,” Peel explains. “There is general agreement that trade disruptions will likely reduce U.S. and global macroeconomic growth in 2019.  While the beef industry has avoided most of the direct tariff impacts thus far, indirect tariff impacts will continue to grow unless the trade situation is resolved very soon. Consumers will see growing tariff impacts that may impact consumer spending and beef demand…Tariff-driven price increases could push consumers to cheap and abundant pork and poultry at the expense of beef demand.”

By | November 19th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 19, 2018

Negotiated cash fed cattle trade remained largely undeveloped through late Friday afternoon, at least in term of trades reported to USDA. Although too few to trend, early prices in Nebraska and the western Corn Belt were unevenly steady to a touch softer than the previous week. Early dressed sales were at $178/cwt. in both regions. Early live sales in the western Corn Belt were at $111.50-$112.00.

Late Friday, the Texas Cattle Feeders Association reported its members trading at $114, just a touch lower than the previous week’s weighted average.

Live Cattle futures mainly paddled sideways on Friday as traders awaited direction from the cash market. Feeder Cattle softened a bit, amid anemic trade volume.

Live Cattle futures closed mostly higher, from an average of 26¢ lower to an average of 45¢ higher.

Other than $1.32 lower in spot Jan and 15¢ lower in the back two contracts, Feeder Cattle futures closed an average of 69¢ lower.

Wholesale beef values were weak on Choice and steady on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 64¢ lower Friday afternoon at $212.91/cwt. Select was 01¢ lower at $197.57.

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Cash bids were mixed for grains and soybeans Friday.

“Export sales for the week ending Nov. 8 were all within trade expectations,” said analysts with the Daily National Grain Market Summary. “Corn sales totaled 35.1 million bu., which was at the highest end of the range. Soybean sales totaled 17.3 million bu., which was on the low end of estimates.

Wheat bids were 3½¢ lower to 2¾¢ higher. Soybean bids were ½¢ lower to 3½¢ higher. Sorghum bids were 5¢ lower. Corn bids were 2¾¢ to 3¢ lower.

Corn futures closed mostly fractionally lower to 2¢ lower.

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Major U.S. financial indices closed mixed Friday, pressured by tech stocks, but buoyed by hopes regarding trade talks with China.

The Dow Jones Industrial Average closed 123 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 11 points.

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If the most recent USDA Farm Labor report is in the ballpark, job competition is helping to push farm wages higher.

“Farm operators paid their hired workers an average wage of $14.47 per hour during the October 2018 reference week (Oct. 7-13), up 8% from the October 2017 reference week,” according to the report from the National Agricultural Statistics Service (NASS). “Field workers received an average of $13.74 per hour, an increase of 7%. Livestock workers earned $13.38 per hour, up 9%. The field and livestock worker combined wage rate, at $13.64 per hour, was up 8% from the 2017 reference week. Hired laborers worked an average of 41.5 hours during the October 2018 reference week, down slightly from the hours worked during the October 2017 reference week.”

According to NASS, farm and ranch operators hired (directly) 784,000 workers during the October reference week, which was 7% less than a year earlier.

By | November 18th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 16, 2018

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Cattle futures gained a little ground, with some attributing part of the strength to rumors that Japan will remove its age restriction on U.S. beef—implemented in the wake of BSE discovered here in 2003.

Other than 20¢ lower in the back contract, Live Cattle futures closed an average of 27¢ higher.

Other than 35¢ lower in expiring Nov, Feeder Cattle futures closed an average of 85¢ higher.

Wholesale beef values were firm on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 39¢ higher Thursday afternoon at $213.55/cwt. Select was 40¢ higher at $197.58.

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Major U.S. financial indices closed higher Thursday, buoyed by tech stocks and reports that the U.S. and China were inching closer on trade talks.

The Dow Jones Industrial Average closed 208 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 122 points.

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The estimated number of cattle outside feedlots Oct. 1—cattle available to place on feed— was 30.1 million head, just 0.6% more than a year earlier, according to the most recent monthly Livestock, Dairy and Poultry Outlook.

“Winter forage seems to be in better condition than last year, which could provide a home for these calves to stock over the winter. While this may be a positive sign for feeder calf prices in the coming months, limiting factors are the record numbers of cattle already on feed at the beginning of October and expectations of higher feed prices,” say analysts with USDA’s Economic Research Service (ERS). “In addition, cattle are staying on feed longer than last year.”

The estimated percentage of cattle on feed for more than 150 days in October was around 17%, which was approximately 3% more than last year; slightly above the average for 2013-2017, but less than in 2016.

“The higher number of cattle already in feedlots may limit the competition from feedlots for ownership of these calves, and higher feed prices may limit feedlot management’s willingness to pay higher prices for calves,” say ERS analysts.

ERS left the projected fourth-quarter feeder steer price unchanged from the previous month at $151-$155/cwt. The 2019 annual price forecast was lowered to $140-$151 on slightly higher anticipated feed costs and continued large feedlot numbers.

By | November 15th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 15, 2018

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. If some of the fed cattle auctions—and a smattering of country sales—are any indication, though, steady money may be a hopeful stretch this week.

For instance, Choice 2-3 steers brought $110.00-$111.25/cwt. at Sioux Falls Regional in South Dakota. Choice 3-4 steers brought $109.00-$111.60.

Although too few to trend, there were some early live country sales in the western Corn Belt at $110, which was $1-$3 lower than last week’s trade in the region.

There were only 620 head offered in the weekly Fed Cattle Exchange auction Wednesday, and no takers.

As for Cattle futures, adjusting to the previous session’s rally seemed to be the main business.

Other than unchanged in June, Live Cattle futures closed an average of 35¢ lower.

After unchanged in the front two contracts, Feeder Cattle futures closed an average of 54¢ lower.

Wholesale beef values were lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 92¢ lower Wednesday afternoon at $213.16/cwt. Select was $1.80 lower at $197.18.

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Major U.S. financial indices closed lower on Wednesday, with pressure from tech stocks, led by Apple—tied to reports of softer iPhone sales. Banking shares also declined.

The Dow Jones Industrial Average closed 205 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 64 points.

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Culling decisions and the timing of them could be more complex for some this year, given the state of cull cow prices, says Josh Maples, Extension economist at Mississippi State University.

For price examples, Maples says average cull cow prices reported by AMS were about 12% lower year over year in South Dakota (July-October). Prices at San Angelo, Texas were 18% lower. They were 17% lower in Kentucky.

“While prices have been low already, we are now in the time of year when we typically expect lower cull prices,” Maples explains, in the latest issue of In the Cattle Markets. “Cow slaughter is seasonally higher during the last three months of the year as producers make culling decisions prior to winter. Combined with winter usually being a slower ground beef-demand time of the year, there usually is not much cull market strength until we get closer to Spring.”

For perspective, total cow slaughter this year is averaging 18.9% of total cattle slaughter, compared to a long-term average of 17.7% of total slaughter, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“Total cow slaughter is up 7.3% year to date with beef cow slaughter up 10.5% year over year as beef cow culling returns to long-term average levels,” Peel says.

“Dairy cow slaughter is currently up 4.3% year over year.”

Using NASS data, analysts with the Livestock Marketing Information Center (LMIC) say the average dairy cow price for the quarter ending Oct. 1 was $1,230. That’s $380 less (-24%) year over year. In the latest Livestock Monitor, they explain the NASS data reflect only cows sold to be used as dairy herd replacements.

Add it all up and Maples says deciding whether to sell cull beef cows now or carry them through the winter could be less straightforward than usual, at least for some.

“Culling, even at current prices, will still make sense for many (probably even most) producers once the cost of carrying a cow through the winter is considered,” Maples says. “But, for producers with relatively low marginal wintering costs, this is at least a year to crunch the numbers.”

By | November 14th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 14, 2018

Cattle futures got some spark Tuesday—especially Feeder Cattle— credited in part to oversold conditions.

Other than unchanged in the back contract, Live Cattle futures closed an average of 57¢ higher.

Except for 60¢ higher in spot Nov, Feeder Cattle futures closed an average of $2.12 higher ($1.32 to $3.15 higher).

Wholesale beef values were lower on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.47 lower Tuesday afternoon at $214.08/cwt. Select was $1.41 lower at $198.98.

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Major U.S. financial indices tried but failed on Tuesday to regain steep losses from the previous session. Along with tech stocks, the continuing decline in crude oil prices continued to weigh on the market.

West Texas Intermediate Crude Oil futures (CME) closed $4.02 to $4.24 lower through next November. Spot Dec closed at $55.69. It was $71.18 a month ago; $76.24 about six weeks ago. At least part of the recent slide in prices has to do with increased production by OPEC countries and the softer outlook for global economic growth.

The Dow Jones Industrial Average closed 100 points lower. The S&P 500 closed 4 points lower. The NASDAQ was just a tick to the positive side.

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Consumer spending for food and beverages (purchased for off-premises consumption—mainly grocery stores) increased 2.8% and 4.0% in the spring and summer quarters, respectively, according to analysts with the Livestock Marketing Information Center (LMIC).

Those increases fall into the middle range of growth for this sector during the last two years,” say LMIC analysts, in the latest Livestock Monitor. “Meanwhile, the spending category of ‘food services and accommodations’ jumped 8.1% and 6.9% during the spring and summer quarters, capturing the preference for away-from-home meals (e.g., restaurants).”

For overall context, the LMIC folks explain the net value of goods and service produced by the U.S. economy increased by an annual rate of 3.5% in the summer quarter and by 4.2% in the spring quarter.

“Wholesale market measures of beef demand were consistent with trends in consumer spending choices,” LMIC analysts say. “The Choice beef cutout this summer was up 3% from a year ago, even as beef supplies from steers and heifers increased by 0.5%. More product selling at a higher price is the essence of favorable demand. Impressive export growth also played a role in this situation.”

By | November 13th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 13, 2018

Bottom picking and a rally in Lean Hog futures were credited with some of the support that helped Cattle futures regain some stability in the wake of Friday’s sharp decline.

Other than an average of 27¢ higher in the front two contracts and 50¢ higher at the back, Live Cattle futures closed an average of 11¢ lower.

Except for 15¢ higher in the back contract, Feeder Cattle futures closed an average of 65¢ lower.

Wholesale beef values were firm to higher on moderate to fairly good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 35¢ higher Monday afternoon at $215.55/cwt. Select was $1.67 higher at $200.39.

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Major U.S. financial indices closed sharply lower Monday, pressured by tech stocks—led by Apple— and continued worries about global economic growth and trade.

The Dow Jones Industrial Average closed 602 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 206 points.

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“Steer slaughter continues to run below year-ago levels so far this year. This despite the fact that the quarterly feedlot inventories have shown more steers on feed in 2018 compared to last year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “For the year to date, steer slaughter is about 1% below last year, but in the last four weeks has averaged very close to year-ago levels. Steer slaughter has averaged 51.6% of total cattle slaughter so far this year, down from 52.9% of total cattle slaughter in 2017. As heifer and cow slaughter return to normal levels, steer slaughter will move closer to the long-term average of 50.6% of total slaughter.”

So far this year, Peel says heifer slaughter is averaging about 7% more than last year, but has been only 1.5% more over the past four weeks.

“Heifer slaughter thus far in 2018 has averaged 27.8% of total cattle slaughter, up from 27.2% in 2017,” according to Peel. “As heifer retention continues to slow, heifer slaughter will approach the long-term average of just under 30% of total cattle slaughter.”

By | November 12th, 2018|Daily Market Highlights|

Cattle Current Podcast-Nov. 12, 2018

Negotiated cash fed cattle prices lost ground. Live sales were mainly $1-$2 lower at mostly $114-$115/cwt. ($111-$113 in the western Corn Belt). Dressed trade was steady to $3 lower at $177-$180.

Those lower prices were made possible, in part by the sharp erosion in Cattle futures on Friday. Pressure for the board included faltering wholesale beef values, declining open interest and growing chatter that the top may already be in for beef prices this season.

Live Cattle futures closed an average of $1.21 lower (35¢ to $2.07 lower).

Feeder Cattle futures closed an average of $2.04 lower ($1.17 to $2.47 lower).

Wholesale beef values were weak to lower on light demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 87¢ lower Friday afternoon at $215.20/cwt. Select was 39¢ lower at $198.72.

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Major U.S. financial indices closed lower Friday, with weakness widely attributed to concerns about slowing global economic growth.

The Dow Jones Industrial Average closed 201 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 123 points.

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“When factoring in slaughter and weights, the grading data continues to indicate larger supplies of Prime and Select beef and a little less Choice than a year ago,” says David Anderson, Extension livestock economist at Texas A&M University, in the most recent issue of In the Cattle Markets. “It looks like steer slaughter is starting to pick up a little, so we might expect growing beef supplies in the coming months, especially when considering more cattle on feed than a year ago.”

For perspective, Anderson explains that for the week ending Oct. 20, 70.8% of cattle (presented for grading) graded Choice, compared to 71.6% for the same week a year earlier. There were 8.9% Prime-grading carcasses, which was 7.1% more than a year earlier. Likewise, 17.4% of carcasses graded Select, compared to 15.3% last year.

By | November 10th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 9, 2018

Although cash fed cattle trade remained undeveloped through Thursday afternoon, and wholesale beef values were sharply lower, Cattle futures eked out slight gains. Some credited part of the support to the lack of bounce in grain prices, following the monthly World Agricultural Supply and Demand Estimates.

Except for 2¢ lower in the back contract, Live Cattle futures closed an average of 44¢ higher.

Except for unchanged in the back contract, Feeder Cattle futures closed an average of 22¢ higher.

Wholesale beef values were sharply lower on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.15 lower Thursday afternoon at $216.07/cwt. Select was $2.66 lower at $199.11.

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Major U.S. financial indices closed narrowly mixed Thursday. Election-based optimism the previous day was tempered by indications the Federal Reserve will continue to increase interest rates, albeit gradually. They left the rate unchanged for the time being.

According to a statement from the FOMC. “The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective over the medium term. Risks to the economic outlook appear roughly balanced.”

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 7 points lower. The NASDAQ was down 39 points.

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Estimated beef production for this year was lowered by 30 million lbs. to 26.91 billion lbs., according to the latest monthly World Agricultural Supply and Demand Estimates (WASDE). For next year, beef production was reduced by 100 million lbs. to 27.81 billion lbs.

The estimated fed steer price for the fourth quarter is projected to be $112-$116/cwt., with an annual average for this year of $116.79, 50¢ more than the previous month’s projection. Fed steer prices for next year are estimated at $118-$126 in the first quarter; $118-$128 in the second quarter; $109-$119 in the third.

By | November 8th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 8, 2018

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. There were just 310 head offered in the weekly Fed Cattle Exchange auction, and no takers.

Despite sharply higher outside markets, Cattle futures continued to erode on Wednesday, led by Feeder Cattle, as traders seem to be concentrating on increased beef supplies down the road, rather than relative snugness through the end of the year.

Other than 67¢ higher in spot Nov, Live Cattle futures closed an average of 40¢ lower.

Other than 5¢ lower in spot Nov, Feeder Cattle futures closed an average of 98¢ lower.

Wholesale beef values were weak to lower on light demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 54¢ lower Wednesday afternoon at $218.22/cwt. Select was $2.89 lower at $201.77.

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Major U.S. financial indices bolted ahead Wednesday, with investors apparently cheering the outcome of the mid-term elections.

The Dow Jones Industrial Average closed 545 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 194 points.

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Increasing producer optimism about current and future conditions drove the Purdue University-CME Group Ag Economy Barometer sharply higher last month.

Specifically, the October barometer reading of 136 was 22 points higher than September, which was the lowest reading for the survey since 2016.

“We continue to see large month-to-month variations in the barometer readings as a result of swings in major commodity prices and emerging news about trade negotiations with key ag trade partners,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The barometer is based on a survey of 400 agricultural producers from across the country. It’s comprised of two sub-indices: the Index of Current Conditions rose 19 points in October to 115; the Index of Expectations rose 24 points to a reading of 146.

By | November 7th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 7, 2018

Cattle futures stabilized Tuesday, retaining the previous session’s steep losses, but holding ground. Trade was light with many apparently remaining on the sidelines to see the election results.

Live Cattle futures closed narrowly mixed (37¢ lower to 20¢ higher).

Other than 47¢ and 17¢ higher in the front two contracts, Feeder Cattle futures closed an average of 20¢ lower.

Wholesale beef values were steady on Choice and sharply higher on Select, with moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 17¢ higher Tuesday afternoon at $218.76/cwt. Select was $2.31 higher at $204.66.

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Major U.S. financial indices closed higher Tuesday with investors awaiting the outcome of mid-term elections.

The Dow Jones Industrial Average closed 173 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 47 points.

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“Yearling cattle ready for the feedlot remain in strong demand and will likely do so through the end of the year and into 2019,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

As for calves, Griffith says it’s reasonable to assume that prices will decline another 2-3% in November.

“The slaughter cow market further exacerbates the situation,” Griffith explains. “Good-conditioned slaughter cows weighing 1,300 lbs. would have resulted in about $560 per head this week based on weekly auction averages (TN), which is about $120 per head lower than what the same cows averaged in September. These value losses are sometimes phantom losses because many producers do not consider what could have been attained during a different marketing period.”

On the other end of the scale, Griffith points to seasonally higher wholesale beef values, which should provide support to fed cattle.

“Stronger beef prices generally result in packers being willing to pay higher money for finished cattle but they continue to fight with cattle feeders to maintain those strong margins,” Griffith says. “The price increase in wholesale beef was to be expected as holiday buying is underway, but beef demand continues to impress and further support prices.”

By | November 6th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 6, 2018

Negotiated cash fed cattle trade last week ended up steady to higher in late trade.

Live sales were $1-$2 higher in the Southern Plains at $116/cwt. They were steady to $1 higher in the Northern Plains at $114-$116. Live trade was steady in the Western Corn belt at $113-$114. Dressed trade was fully steady at $180.

Despite that, seasonally higher wholesale beef values and apparently snugger packer inventories, Cattle futures headed hard south on Monday. There were no easy explanations, at least not from a fundamental standpoint. Part of it could have been defensive positioning ahead of Tuesday’s election.

Live Cattle futures closed an average of $1.47 lower, from an average of (62¢ to $1.75 lower).

Feeder Cattle futures closed an average of $2.65 lower ($2.20 to $3.32 lower).

Wholesale beef values were steady on Choice and higher on Select, with moderate to fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 9¢ higher Monday afternoon at $218.59/cwt. Select was 88¢ higher at $202.35.

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Major U.S. financial indices closed mixed Monday. Financial institutions and some energy companies provided support, while tech stocks, including Apple, applied pressure.

The Dow Jones Industrial Average closed 190 points higher. The S&P 500 closed 15 points higher. The NASDAQ was down 28 points.

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U.S. beef exports continued at a stronger year-over-year pace in September, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

September beef exports of 110,160 metric tons (mt), were 6% more than a year earlier. Export value was 11% more at $687.1 million.

For January through September, beef exports were just over 1 million mt, up 9% from a year ago, while value surged 18% to $6.2 billion.

“With a full quarter still to be reported, beef export value records are already being surpassed in some markets and global value is on track for $8 billion by year’s end,” says USMEF President and CEO Dan Halstrom.

Beef export value equated to $334.63 per head of fed slaughter in September and $320.85 for January through September, each 16% more than a year ago.

For the first three quarters of 2018, exports accounted for 13.5% of total production (up from 12.8%) and 11.1% for muscle cuts, up one full percentage point from last year.

Among the highlights:

Exports to Korea were up 22% from a year ago in volume (19,116 mt) and were 29% percent higher in value ($143.1 million). January-September exports reached 180,495 mt, up 37% from a year ago, while export value soared 51% to $1.29 billion, already breaking last year’s full-year value record.

September beef exports to leading market Japan were up 4% from a year ago in both volume (28,086 mt) and value ($172.3 million). For the first three quarters of 2018, exports to Japan were up 7% from a year ago in volume (252,871 mt), while value increased 10% to $1.59 billion.

Exports to Mexico were up 1% from a year ago in volume (177,906 mt) and 8% higher in value ($783.1 million). With a strong fourth quarter, exports to Mexico should top $1 billion for the first time since 2015.

 

By | November 5th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 5, 2018

Negotiated cash fed cattle trade remained mostly undeveloped through late Friday afternoon, although there continued to be chatter that inventory needs would push packers to the trough before the end of the day. The lack of cash direction helped to hold Cattle futures in check, with Feeder Cattle getting extra pressure from rising corn prices.

Live Cattle futures closed narrowly mixed, from an average of 9¢ lower to an average of 37¢ higher.

Feeder Cattle futures closed an average of 46¢ lower in flea-thin trade.

Wholesale beef values were steady on Choice and sharply lower on Select, with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 5¢ lower Friday afternoon at $218.50/cwt. Select was $2.78 lower at $201.47.

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Major U.S. financial indices closed lower Friday, in volatile trade. Pressure included uncertainty surrounding trade issues. Support included a monthly employment report that beat expectations. Non-farm payroll employment increased by 250,000 in October, according to the U.S. Bureau of Labor Statistics. That left the nation’s unemployment rate at 3.7% for the second consecutive month, the lowest rate since 1969.

“…we have a total of 4.5 million new jobs since November 2016. Jobs were added across all industries. Employment hit a record high of 156,562,000,” says U.S. Secretary of Labor Alexander Acosta.

The Dow Jones Industrial Average closed 109 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 77 points.

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Early tables from USDA for the Agricultural Projections to 2028 that will be published in February suggest the nation’s beef cowherd will peak in 2021 at 32.00 million head, which would be 111,000 head more than the projected inventory on Jan. 1 of next year of 31.89 million head.

Those same projections estimate feeder steer prices (OKC) next year to average $146.50/cwt., compared to this year’s estimate of $148.20. The 5-area Direct fed steer price for next year is estimated at $117.75, compared to this year’s estimate of $116.29.

For this year, analysts with the Livestock Marketing Information Center (LMIC) noted earlier this week, higher costs—including winter feed, fuel, utilities and interest—along with lower cull cow prices are pressuring cow-calf returns.

“Last year had a positive return over cash costs, due to calf prices that strengthened during the second half of the year,” say LMIC analysts, in the latest Livestock Monitor. They estimate cash returns per cow this year at slightly less than breakeven.

By | November 3rd, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 2, 2018

Negotiated cash fed cattle trade for the week began to take shape Thursday, on light to moderate trade and moderate demand in the western Corn Belt. Early live sales were $1 higher at $113-$114/cwt., with dressed sales steady at $180. Although too few to trend, there were a few early live trades in Nebraska at $114, which was steady to $1 lower than last week.

Cattle futures firmed on Thursday, mostly retaining gains from the previous session. Along with increasing whole beef values and the promise of steady to higher cash fed cattle prices, strength was also attributed to lighter carcass weights, as a barometer of marketing currentness. According to USDA’s Actual Slaughter Under Federal Inspection report yesterday, steer carcass weights of 894 lbs. (week ending Oct. 20) were 5 lbs. lighter than the previous week and previous year. Heifer carcass weights of 826 lbs. were 5 lbs. lighter than the previous week and 3 lbs. lighter than the previous year.

Live Cattle futures closed an average of 49¢ higher.

Except for 17¢ lower in spot Nov, Feeder Cattle futures closed an average of 49¢ higher.

Wholesale beef values were higher on Choice and steady on Select, with moderate to good fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.62 higher Thursday afternoon at $218.55/cwt. Select was 22¢ higher at $204.25.

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Cash bids for grains and soybeans were higher Thursday.

“Corn shipments are up 76% in 2018-19, still a bullish pace, but sales have dropped off the past few weeks,” said analysts with the Daily National Grain market Summary. They add that sales and shipments of soybeans were bearish last week. As well, wheat exports remain 21% below last year’s pace.

Wheat bids were steady to 8¢ higher. Soybean bids were 30¢ lower to 44¢ higher. Sorghum bids were 6¼¢ higher. Corn bids were 3½¢ to 10½¢ higher.

Corn futures closed mostly 1¢ to 3¢ higher.

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Major U.S. financial indices closed sharply higher again Thursday, buoyed by positive quarterly earnings, as well as a more positive outlook for trade talks with China.

The Dow Jones Industrial Average closed 264 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 128 points.

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Lower same-store sales and lighter traffic pressured the Restaurant Performance Index (RPI) 0.9% lower to 101.1 in September, according to the National Restaurant Association (NRA).

More specifically, according to the report, “The RPI’s September decline was primarily the result of a pullback in the current situation indicators.” The Current Situation Index—one sub-index comprising the RPI—declined 1.7% in September to 100.6. That index accounts for same-store sales, traffic, labor and capital expenditures.

“In addition, 23% of operators expect economic conditions to worsen in six months–the highest level in two years,” according to NRA.

The other sub-index that informs the RPI is the Future Expectations Index. It was 0.1% lower in September at 101.6. That index measure restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.

By | November 1st, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 1, 2018

Only 209 head were offered in the weekly Fed Cattle Exchange Auction on Wednesday—no takers.

Cattle futures closed higher Wednesday, led by Feeder Cattle. Increasing wholesale beef values continued to provide support, as did increasing open interest and expectations for cash fed cattle prices this week to be at least steady with last week’s higher level.

After $1.95 higher in expiring Oct, Live Cattle futures closed an average of 40¢ higher, except for an average of 14¢ lower in two contracts.

Feeder Cattle futures closed an average of $1.35 higher (97¢ to $2.02 higher).

Wholesale beef values were higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.33 higher Wednesday afternoon at $216.93/cwt. Select was $1.15 higher at $204.03.

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Major U.S. financial indices closed sharply higher Wednesday, for a second consecutive day. Support included better than expected quarterly earnings from the likes of General Motors and Facebook.

The Dow Jones Industrial Average closed 241 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 144 points.

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African Swine Fever (ASF) could impact U.S. beef markets a couple of ways.

On one hand, and arguably, strength in Lean Hog futures in recent weeks can be attributed at least partly to speculation that the ASF outbreak in China and other countries will mean more international demand for U.S. pork, ultimately.

“The U.S. produces approximately 32% of world pork exports,” explains Brenda Boetel, an Extension economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “U.S. pork export quantities have increased in 2018, although prices have not held up as well. One country where U.S. export quantities have decreased steadily since April 2018 is China. China imports approximately 26% of the world trade, and in September 2018 China increased pork imports by 8.4% over September 2017. Yet, volume of U.S. pork exports to China and Hong Kong are down 9% from 2017. Given the African Swine Fever issues in China, and increasing Chinese demand for pork, one can assume the decrease in U.S. exports to China is related to tariff issues.”

On the other hand, U.S. pork exports could suffer if ASF to occur in this nation.

“Given that the U.S. will produce over 26 billion lbs. of pork in 2018, and over 22% will be exported, an incident of ASF in the U.S. would be challenging with regionalization and devastating without regionalization. Should the U.S. become infected with ASF, the impact on pork prices would be severe even if we can keep some of our export trade with regionalization.”

Regionalization refers to the notion of countries not infected with ASF or some other Foreign Animal Disease, continuing to accept exports from uninfected regions within ‘infected’ countries.

“The incidence of ASF in China has both the potential to increase U.S. pork exports, if we can work out a trade agreement with China to lower tariffs on U.S. pork, while also providing huge risk should ASF make the jump to the US,” Boetel says. “Cattle producers need to pay attention, as significant changes in pork prices will impact beef prices and eventually cattle prices.”

By | October 31st, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 31, 2018

Despite seasonally higher wholesale beef values and last week’s higher cash market, Cattle futures closed lower on Tuesday, led by Feeder Cattle, but still basically paddling sideways.

Live Cattle futures closed mostly an average of 51¢ lower.

Feeder Cattle futures closed an average of $1.39 lower.

Wholesale beef values were higher on moderate to good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.52 higher Tuesday afternoon at $215.28/cwt. Select was $1.77 higher at $202.88.

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Major U.S. financial indices closed sharply higher Tuesday, with a rebound in tech stocks and some positive quarterly earnings reports, such as those from Coca-Cola.

The Dow Jones Industrial Average closed 431 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 111 points.

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“With ample wheat pasture virtually assured at this point, producers may stock wheat pastures a bit heavier than usual, leading to additional stocker demand in the coming weeks,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in is weekly market comments

In the meantime, wheat planting and development remain behind the average.

78% of winter wheat is planted, according to the most recent Crop Progress report (week ending Oct. 29), which is 5% less than last year and 7% less than the average. 63% has emerged, which the same as last year, but 4% less than the average. 53% is rated in Good or Excellent condition, which is 2% more than a year earlier.

Overall, pasture and range conditions continue more favorable than last year, as well. 50% was in Good (42%) or Excellent (8%) condition compared to 40% a year earlier. 20% was rated as Poor (13%) or Very Poor (7%), which was 5% less than last year.

As for crops, corn harvest caught up with the average of 63%, which is 11% behind last year.

Soybean harvest remains behind, though, with 72% in the bin, which is 9% less than last year and the average.

By | October 30th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 30, 2018

Cattle futures settled mainly narrowly mixed on Monday, unable to build on last week’s strong cash markets and the seasonal uptick in wholesale beef values. Though trade was light, some analysts pinned part of the weakness on shifting fund positions, from the long side.

Live Cattle futures closed mostly narrowly mixed (from an average of 73¢ lower in three contracts to an average of 24¢ higher).

Except for 90¢ lower in spot Nov, Feeder Cattle futures closed narrowly mixed (25¢ lower to 15¢ higher).

Wholesale beef values were firm on Choice and sharply higher on Select, with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 29¢ higher Monday afternoon at $213.76/cwt. Select was $2.28 higher at $201.11.

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Major U.S. financial indices closed sharply lower again on Monday, amid a volatile day of trading with pressure from tech stocks and continuing trade worries, relative to China.

The Dow Jones Industrial Average closed 245 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 116 points

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Higher costs—including winter feed, fuel, utilities and interest—along with lower cull cow prices are pressuring cow-calf returns this year, according to the Livestock Marketing Information Center (LMIC).

“On a per cow basis, cash return for 2018 is expected to be slightly negative (about -$10 per cow),” say LMIC analysts, in the latest Livestock Monitor. “Last year had a positive return over cash costs, due to calf prices that strengthened during the second half of the year. Estimated loss per cow in 2018 was smaller than 2016’s. The preliminary 2019 LMIC forecast is for positive returns over cash costs. That situation may further improve in 2020.”

For context, LMIC emphasizes their annual calculations are for market analysis; they don’t reflect any individual operation.

“The estimates only incorporate cash production costs plus pasture rent. A commercial size herd that weans and sells calves in the fall is assumed,” LMIC analysts explain. “…These estimates are best interpreted in a broad context, focusing on the direction of change.”

By | October 29th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 29, 2018

Negotiated cash fed cattle prices surged higher on Friday. Live prices were mainly $3-$4 higher at mostly $114-$115/cwt., except for $2-$3 higher in the western Corn Belt at $112-$113. Dressed sales were $6 higher at $180.

Higher fed cattle prices, strengthening wholesale beef values and apparent position squaring helped lift Cattle futures.

Live Cattle futures closed an average of 86¢ higher (50¢ to $1.32 higher).

Feeder Cattle futures closed an average of 58¢ higher.

Wholesale beef values were firm on moderate to fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 37¢ higher Friday afternoon at $213.47/cwt. Select was 52¢ higher at $198.83.

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Major U.S. financial indices slid sharply on Friday, with continued investor jitters about rising interest rates and global trade. The decline came in spite of positive economic news that included the economy growing at 3.5% in the third quarter, according to the U.S. Commerce Department.

The Dow Jones Industrial Average closed 296 points lower. The S&P 500 closed 46 points lower. The NASDAQ was down 151 points.

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“Year-to-date cattle slaughter through September was 2.6% above last year and 8.6% above the previous 3-year average. Year-to-date steer and heifer slaughter is 1.2% below and 7.6% above last year respectively,” according to analysts with the Agricultural Marketing Service. “Year-to-date beef cow slaughter is 10.7% above a year ago and 22.8% above the previous 3-year average. With that many beef cows moved to slaughter this year, some analysts are looking at late 2019 futures to see if current $114-$116 prices are realistic.”

By | October 28th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 26, 2018

Cattle futures, led by Feeder Cattle, mostly softened Thursday, with no change in fundamentals but uncertainty surrounding the level of cash fed cattle trade this week in terms of both volume and price.

Except for 7¢ higher in spot Oct, Live Cattle futures closed an average of 78¢ lower (52¢ to $1.27 lower).

Feeder Cattle futures closed an average of $1.38 lower (65¢ to $2.30 lower).

Wholesale beef values were firm to higher on moderate to fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.71 higher Thursday afternoon at $213.10/cwt. Select was 49¢ higher at $198.31.

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Major U.S. financial indices surged on Thursday, recovering a fair portion of the previous session’s steep losses. Support was attributed to mainly oversold conditions, as well as positive quarterly earnings from folks like Microsoft and Amazon.

The Dow Jones Industrial Average closed 401 points higher. The S&P 500 closed 49 points higher. The NASDAQ was up 209 points.

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Another chapter in the regulation of fake meat unfolded the past couple of days at a joint public meeting hosted by the United States Department of Agriculture (USDA) and the U.S. Food and Drug Administration (FDA). The meeting—Use of Animal Cell Culture Technology to Develop Products Derived from Livestock and Poultry—included discussions about the safety and marketing of cell-based fake meat, as well as which agency will ultimately have regulatory control.

The North American Meat Institute (NAMI) continued to argue that the USDA Food Safety and Inspection Service (FSIS) has primary jurisdiction for regulation of new cell-based meat products.

FSIS oversight includes the USDA mark of inspection, providing consumer confidence that a product has been deemed wholesome by the agency.

Likewise, Jennifer Houston, president-elect of the National Cattlemen’s Beef Association (NCBA) explained, “Ensuring lab-grown fake meat products are subject to strong, daily inspection by USDA’s trained professionals is essential. The health of consumers is on the line, and USDA is far better suited to ensure the safety of lab-grown products.”

Mark Dopp, NAMI senior vice president of Regulatory and Scientific Affairs, also detailed the importance and benefits of USDA’s label approval process, which protects companies from frivolous lawsuits and gives consumers confidence that products are accurately labeled and not represented to be something they are not.

“USDA can be trusted to enforce truthful, transparent labeling of the products under its jurisdiction,” explained Kevin Kester, NCBA president. “Beef producers welcome competition, but product labels and marketing must be based on sound science, not the misleading claims of anti-animal agriculture activists.”

By | October 25th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 25, 2018

Although cash fed cattle trade remained undeveloped through Wednesday afternoon on light to moderate demand, there were some early live sales in the western Corn Belt on Tuesday at $112/cwt., which was $2 more than last week.

There were only 1,051 head offered in the weekly Fed Cattle Exchange Auction, and no takers. There were two lots passed out at $105.

Stronger wholesale beef prices, notions of steady-to-higher fed cattle prices, as well as a surge in Lean Hog futures, helped Cattle futures firm Wednesday.

Live Cattle futures closed an average of 71¢ higher (50¢ to $1.20 higher).

Except for 45¢ lower in spot Oct, Feeder Cattle futures closed an average of 48¢ higher.

Wholesale beef values were higher on moderate to fairly good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.11 higher Wednesday afternoon at $211.39/cwt. Select was 96¢ higher at $197.82.

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Major U.S. financial indices plunged Wednesday. Pressures appeared to be many and varied, everything from declining tech and bank stocks to concerns about economic growth, tied to worries about trade and rising interest rates.

For instance, sales of new single-family houses in September were 5.5% less than the prior month’s adjusted rate, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Although home sales were 3.5% more year over year, September sales represented the slowest pace since December of 2016, according to the National Association of Home Builders (NAHB).

The Dow Jones Industrial Average closed 608 points lower. The S&P 500 closed 84 points lower. The NASDAQ was down 329 points.

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“Stocker budgets for winter grazing still look quite favorable, unless grazing delays stretch out too long and cut days available for winter grazing down excessively,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

On the one hand, Peel explains precipitation in Oklahoma for the past month is the second most on record (187% of normal); the most all time in the last 90 days. That provides lots of promise.

“Producers may, in fact, be looking to stock a bit heavier than usual with potential for better than average wheat forage production this winter,” Peel says.

On the other hand, the extraordinary moisture is delaying some planting and development.

“For the first time in many years, turnout for wheat grazing is likely to be delayed by excess moisture across many regions of the state,” Peel explains. “Some wheat that was planted early is getting close to being ready to graze but some producers have struggled to get cattle ready for grazing. Wet, sloppy conditions make health challenges worse and producers have backed off of purchases recently. Some cattle sellers have also had difficulty gathering and getting cattle to market.”

By | October 24th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 24, 2018

Cattle futures softened Tuesday, following the previous session’s strong gains, apparently pressured mostly by the lower outside markets.

Live Cattle futures closed an average of 48¢ lower (2¢ to 92¢ lower).

Feeder Cattle futures closed an average of 75¢ lower.

Wholesale beef values were higher on Choice and lower on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.00 higher Tuesday afternoon at $210.28/cwt. Select was 80¢ lower at $196.86.

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Major U.S. financial indices closed lower again Tuesday, pressured by quarterly earnings reports from the likes of Caterpillar and 3M.

The Dow Jones Industrial Average closed 125 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 31 points.

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Total pounds of beef in freezers Sept. 30 were 1% more than the previous month and 3% more than the same time a year earlier, according to the latest USDA Cold Storage report. That appears to be a demand win, given the significant production increase through the summer.

Frozen pork supplies were 1% more than the previous month but 5% less than the same time a year earlier.

Total red meat supplies in freezers were up 1% from the previous month but down 1% from last year.

Total frozen poultry supplies were down slightly from the previous month but up 10% from a year ago.

By | October 23rd, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 23, 2018

Apparently, traders viewed Friday’s Cattle on Feed report as bullish overall (see below), helping to boost Cattle futures Monday.

Live Cattle futures closed an average of $1.10 higher (55¢ to $1.32 higher).

Feeder Cattle futures closed an average of $1.92 higher ($1.00-$2.97 higher).

Wholesale beef values were higher to sharply higher on moderate to good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.35 higher Monday afternoon at $209.28/cwt. Select was $3.42 higher at $197.66.

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Major U.S. financial indices closed lower Monday, pressured by bank stocks and trade worries.

The Dow Jones Industrial Average closed 126 points lower. The S&P 500 closed 11 points lower. The NASDAQ was up 19 points.

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From an expectations perspective, Stephen Koontz, agricultural economist at Colorado State University says Friday’s Cattle on Feed report is long-term bullish but short-term bearish.

Although September placements were less than expected (4.6% less than a year earlier), so were marketings (3.59% less).

“The drop off in marketings, regardless of placements, suggests the need for strong slaughter volumes the next two months,” Koontz explains, in the most recent issue of In the Cattle Markets. “On-feed numbers are nothing short of enormous, and placements in July and August were close to 7% above the prior year. The availability of market-ready cattle come the end of this year and the first of next will be substantial. However, the marketplace has handled the large volume of beef so far this year, and much of last, perfectly. Saturday slaughter volumes have been strong, packer and retailer margins have been excellent, slaughter weight increases are typical for the season but not excessive, and domestic demand is appearing to favor beef while exports have been excellent.”

By | October 22nd, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 22, 2018

Cattle futures continued to soften Friday, pressured in part by a lack of positive news, deterioration in Lean Hog futures and perhaps positioning ahead of the monthly Cattle on Feed report (see below).

Live Cattle futures closed an average of 47¢ lower.

Feeder Cattle futures closed an average of 66¢ lower.

Wholesale beef values were higher on moderate to good demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.11 higher Friday afternoon at $207.93/cwt. Select was $1.89 higher at $194.24.

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Major U.S. financial indices closed narrowly mixed Friday. Strong quarterly earnings reports provided support, while worries about global trade and higher interest rates continued to pressure.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 36 points.

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Both bears and bulls can likely find support in Friday’s monthly Cattle on Feed report, with fewer placements and slightly fewer cattle on feed than expected, but also fewer marketings.

Cattle on feed Oct. 1 were the most since the data series began in 1996 at 11.40 million head, which was 5.43% (+587,000 head) more than last year. Most analysts expected to see about 6% more. That’s for feedlots with a capacity of 1,000 head or more.

While most analysts ahead of the report expected September placements to be about even with last year, the 2.05 million head placed were 4.60% less (-99,000 head) than a year earlier.

“High placements have been seen despite profitability concerns,” explained analysts with Allendale, Inc., ahead of Friday’s report. “Kansas State estimates a $110 loss per head on finished cattle in September. First-half 2019 marketings are slated for $122-$125 breakevens. August placements determine a part of the March through early August beef supply.”

In terms of weights, 36.81% went on feed weighing 699 lbs. or less; 43.69% weighing 700-899 lbs.; 19.5% weighing 900 lbs. or more. That continues the trend of recent months.

September marketings of 1.72 million head were 3.59% less (-64,000 head) than the previous year. Expectations ahead of the report were for marketings to be about even.

Of the 12 major cattle feeding states listed in the report, South Dakota was the only one with fewer cattle on feeder Oct. 1, year over year. There were 2.30% more steers on feed than a year earlier and 11.03% more heifers.

By | October 21st, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 19, 2018

There was limited negotiated cash fed cattle trade Thursday with light to moderate demand in all major cattle feeding regions, but too few transactions to trend in any region. So far this week, trade has been at $109-$111/cwt. on a live basis in Nebraska and the western Corn Belt, with dressed sales in those regions at $174.

Cattle futures closed mostly narrowly mixed Thursday.

Other than 15¢ higher in spot Oct, Live Cattle futures closed an average of 17¢ lower.

Feeder Cattle futures closed mixed but mostly higher. The front two contracts were an average of $1.12 higher and then 7¢ lower to 35¢ higher across the rest of the board.

Wholesale beef values were sharply higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.26 higher Thursday afternoon at $206.82/cwt. Select was $1.16 higher at $192.35.

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Wall Street continued to search for a bottom in the recent sell-off as major U.S. financial indices closed steeply lower Thursday. Among pressures cited by analysts are lingering worries about the trade impasse with China and higher interest rates, as well as some thoughts that tech stocks are valued too high.

The Dow Jones Industrial Average closed 327 points lower. The S&P 500 closed 40 points lower. The NASDAQ was down 157 points.

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“Fourth-quarter 2018 is likely to be characterized by feedlots feeding cattle longer than previously expected, lowering expected fourth-quarter fed cattle slaughter,” say analysts with USDA’s Economic Research Service (ERS), in this month’s Livestock, Dairy and Poultry Outlook. “This is largely responsible for reducing the 2018 commercial beef production forecast from the previous month. The beef production forecast for 2019 was raised on greater expected placements in second-half 2018 and first-half 2019.”

Projected beef production for this year was lowered by 150 million lbs. to 26.9 billion lbs., based on expectations of fewer steers and heifers to be slaughtered more than offsetting additional cows in the slaughter mix.

Projected beef production for next year was raised by 190 million lbs. to 27.9 billion lbs., based aforementioned projections for more placements than expected.

“The expected higher number of fed cattle to be slaughtered was partially offset by an expectation of lower dressed weights in early 2019,” ERS analysts say.

By | October 18th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 18, 2018

Negotiated cash fed cattle trade picked up in the North Wednesday with moderate demand and slow to moderate trade. Live prices were steady to $2 lower in Nebraska at $109-$111/cwt., and steady to $1 higher in the western Corn Belt at $109-$110. Dressed trade was steady in Nebraska at $174; steady to $1 lower in the western Corn Belt at $173-$174.

There were 1,103 head offered in the weekly Fed Cattle Exchange Auction, but no takers.

Cattle futures softened Wednesday, led by Feeder Cattle.

Other than 27¢ higher in spot Oct, Live Cattle futures closed an average of 31¢ lower.

Other than 5¢ higher in spot Oct, Feeder Cattle futures closed an average of 67¢ lower.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 5¢ lower Wednesday afternoon at $204.56/cwt. Select was $1.36 lower at $191.19.

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Major U.S. financial indices wobbled lower Wednesday, amid mixed quarterly earnings reports and continued angst over higher interest rates.

The Dow Jones Industrial Average closed 91 points lower. The S&P 500 closed fractionally lower. The NASDAQ was down 2 points.

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Analysts with USDA’s Economic Research Service raised expected feeder cattle prices (OKC, 750-800 lbs.) to $150-$156/cwt. for the fourth quarter, based on expectations of continued strong demand.

“Price information from Oklahoma National Stockyards for feeder steers weighing 750-800 lbs. suggests that there is competition for ownership of these animals,” ERS analysts say, in the latest monthly Livestock, Dairy and Poultry Outlook. “Coupled with counter-seasonal gains in prices for lighter-weight feeder cattle, this may suggest that winter forage conditions have improved over last year.”

ERS estimates feeder prices at $141-$149 in the first quarter next year, $143-$153 in the second quarter and $145-$155 in the third quarter.

Likewise, ERS raised the expected fourth-quarter price for fed steers (5-area Direct) to $110-$114 on a projected slower marketing pace.

“The slower pace is likely in part a reflection of lighter placement weights during the spring months, but may also reflect a desire by feedlots to capture premiums implied by October and December futures,” ERS analysts explain. “Although fed steer prices in the 5-area marketing region for September averaged above year-earlier levels, expected increased supplies of cattle available for slaughter in fourth-quarter 2018 are likely to pressure prices relative to last year.”

By | October 17th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 17, 2018

Cattle futures closed mostly lower Tuesday, buoyed by support late in the day, but amid limited trade and interest overall.

Except for 12¢ and 10¢ higher, in near Feb and Apr, respectively, Live Cattle futures closed an average of 30¢ lower.

Feeder Cattle futures closed an average of 63¢ lower.

Wholesale beef values were steady on Choice and firm on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 19¢ lower Tuesday afternoon at $204.61/cwt. Select was 66¢ higher at $192.55.

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Major U.S. financial indices surged higher Tuesday, lifted by strong quarterly earnings across a broad base of companies, including Morgan Stanley, Netflix and United Health.

The Dow Jones Industrial Average closed 547 points higher. The S&P 500 closed 59 points higher. The NASDAQ was up 214 points.

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Although most expectations are for September feedlot placements to be about even with last year, in this Friday’s monthly Cattle on Feed report, a majority of analysts expect the on-feed number Oct. 1 to be about 6% more.

For instance, analysts at Allendale, Inc. expect placements to be 0.2% more than last year (2.154 million head). If so, they say that would be the largest placement for the month in seven years and mark the fifth consecutive month of higher year-over-year placements.

“High placements have been seen despite profitability concerns,” say Allendale analysts. “Kansas State estimates a $110 loss per head on finished cattle in September. First-half 2019 marketings are slated for $122-$125 breakevens. August placements determine a part of the March through early August beef supply.”

The folks at Allendale expect marketings in September to be 0.7% less than last year at 1.771 million head. They look for the number of cattle on feed Oct. 1 to be 5.9% more than a year earlier at 11.446 million head, which would be record high for the month since the data series that began in 1996.

By | October 16th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 16, 2018

Sharply higher wholesale Choice beef cutout values helped boost Live Cattle futures Monday. That provided support to Feeder Cattle, after follow-through pressure tied in part to higher gain prices.

Live Cattle futures closed an average of 95¢ higher (55¢ higher to $1.80 higher in near Dec).

Feeder Cattle futures closed an average of 70¢ higher.

Wholesale beef values were sharply higher for Choice and weak on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.09 higher Monday afternoon at $204.80/cwt. Select was 39¢ lower at $191.89.

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Despite positive quarterly earnings reports, investors started the week with renewed pessimism; pushing U.S. financial indices lower Monday.

The Dow Jones Industrial Average closed 89 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 66 points.

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Retail prices for beef and pork drifted lower in September, reversing a trend from the summer months, according to the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. Retail chicken prices moved lower, too, but within a narrow range established early last year.

“The biggest retail price decline from August to September was for Choice Beef, falling 15¢ per pound,” say LMIC analysts. “Even with the drop in price, compared to 12 months earlier, prices were still 2% higher. That compares with retail pork prices that were 5% lower than a year earlier and chicken prices that were lower by a fraction of a percent.” They note the prices are based on Bureau of Labor Statistics survey data that is compiled by USDA’s Economic Research Service (ERS).

By | October 15th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct 15, 2018

Negotiated cash fed cattle trade for the week was mainly steady to weak with live sales at $111/cwt. in the Northern and Southern Plains; mostly $2 lower in the western Corn Belt at $108. Dressed sales were $1 lower at $174.

Firming grain prices helped pressure Feeder Cattle futures sharply lower Friday. In turn, Live Cattle closed lower to a much lesser degree.

Live Cattle futures closed an average of 55¢ lower.

Feeder Cattle futures closed an average of $1.63 lower ($1.27 to $2.12 lower).

Wholesale beef values were steady on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 20¢ higher Friday afternoon at $202.71/cwt. Select was 21¢ lower at $192.28.

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Gains in Asian and European shares overnight helped plug the recent sell-off as major U.S. financial indices closed higher Friday.

The Dow Jones Industrial Average closed 287 points higher. The S&P 500 closed 38 points higher. The NASDAQ was up 167 points.

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Strong growth in both the U.S. and global economies will support increased demand in domestic and export markets through the end of the year. However, according to the latest Quarterly Rural Economic Review (QRER) from CoBank’s Knowledge Exchange Division (KED), U.S. competitiveness is currently constrained by trade uncertainties and the elevated value of the U.S. dollar, further placing pressure on the agricultural economy as output in most industries rises.

“Agricultural markets are being squeezed as prices remain weak,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division. “While recently negotiated trade deals show some upside for agriculture, global demand for output from the U.S. agriculture sector is being outpaced by current U.S. production.”

CoBank’s latest QRER indicates that any significant farm price improvements over last year’s prices will be limited, particularly with record U.S. yields for many of the major crop commodities adding to available supply levels. Meanwhile, the animal protein and dairy sectors continue to benefit from strong domestic demand and the promise of better access to Mexico and Canada, but will need more export market growth to absorb their current pace of output and expansion.

By | October 14th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 12, 2018

Negotiated cash fed cattle trade was steady in the Southern Plains Thursday at $111/cwt. It was steady to weak in the North at $108 in the western Corn Belt, $110.50-$111.50 in Nebraska and $111 in Colorado. Dressed trade was steady to $1 lower at $174.

Other than some support at the front of the board, Cattle futures continued to trend lower Thursday.

Except for 55¢ and 30¢ higher in the front two contracts, Live Cattle futures closed an average of 15¢ lower.

Except for 82¢ higher and 57¢ higher in the front two contracts, Feeder Cattle futures closed an average of 60¢ lower.

Wholesale beef values were firm on fairly good demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 40¢ higher Thursday afternoon at $202.51/cwt. Select was 72¢ higher at $192.49.

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Worries about rising interest rates continued to fuel the plunge in major U.S. financial indices Thursday.

The Dow Jones Industrial Average closed 545 points lower. That’s a decline of 1,376 points in the last two sessions. The S&P 500 closed 57 points lower (151 points lower in the last two days). The NASDAQ was down 92 points (407 points lower in the last two sessions).

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“The forecast for 2018 total red meat and poultry production is lowered from last month,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). “Beef production is reduced from the previous month, largely due to lower expected fourth-quarter fed cattle slaughter. Carcass weights are forecast lower on a higher expected proportion of cows in the slaughter mix.”

Beef projection for this year was projected 150 million lbs. less than the previous month at 26.94 billion lbs. Next year’s beef production is estimated to be 970 million lbs. more than this year at 27.91 billion lbs.

The fourth-quarter fed steer price (5-area direct) is estimated at $110-$114/cwt. Next year: $117-$125 in the first quarter; $118-$128 in the second; $109-$119 in the third.

“For 2019, the total red meat and poultry production forecast is raised from the previous month as higher expected beef production more than offsets lowered forecasts for pork and broiler production,” say ERS analysts. “Beef production is raised from last month as larger placements in late 2018 and early 2019 are marketed during 2019. However, carcass weights are lowered for the early part of the year.”

Red meat and poultry production this year was estimated 477 million lbs. less at 102.61 billion lbs. Red meat and poultry production next year was estimated to be 3.2 billion lbs. more than this year at 105.85 billion lbs.

By | October 11th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 11, 2018

Negotiated cash fed cattle trade remained mostly undeveloped through Wednesday afternoon.

There were a few early dressed sales in the western Corn Belt for steady to $1 lower than last week at $174/cwt. A few live sales there were at $109-$111, but too few to trend.

There were 1,246 head offered in the weekly Fed Cattle Exchange auction Wednesday, and no sales.

A steep plunge on Wall Street helped pressure Cattle futures lower Wednesday.

Live Cattle futures closed an average of 60¢ lower (32¢ to $1.27 lower in spot Oct).

Feeder Cattle futures closed an average of $1.16 lower.

Wholesale beef values were lower on light demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 74¢ lower Wednesday afternoon at $202.11/cwt. Select was 95¢ lower at $191.77

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Major U.S. financial indices closed steeply lower Wednesday amid a massive sell-off led by tech stocks and fears about rising interest rates.

The Dow Jones Industrial Average closed 831 points lower. The S&P 500 closed 94 points lower. The NASDAQ was down 315 points.

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Overall, pasture and range conditions improved again, according to the latest weekly Crop Progress report (week ending Oct. 9). Among states with 35% or more of pasture and range rated as Poor or Very Poor the previous week, conditions improved or stayed the same everywhere, except in Colorado and Idaho.

Nationally, 48% of pasture and range is in Good (40%) or Excellent (8%) condition, 1% more than a week earlier and 7% more than a year earlier. 22% is rated as Poor (14%) or Very Poor (8%), which is 1% less than a week earlier and 3% less than last year.

States with 35% or more pasture and range rated as Poor or Very Poor in the recent report include: Arizona (68%), California (60%), Colorado (62%), Idaho (43%), New Mexico (45%), Oregon (73%), Utah (63%) and Washington (56%). 

Crop progress and harvest continues at a positive pace.

93% of the corn crop is mature, which is 13% more than last year and 10% more than the average. 34% is harvested, which is 13% more than last year and 8% more than average.

91% of soybeans are dropping leaves, which is 3% more than last year and 6% ahead of the average. 32% are harvested, which is 2% less than last year and 4% less than the average.

73% of sorghum is mature, which is 5% more than last and 1% more than average. 39% is harvested, which is 4% more than last year but 3% less than the average.

57% of winter wheat is planted, which is 11% more than last year and 3% more than the average. 30% has emerged, which is 7% more than last year and 2% more than the average.

By | October 10th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 10, 2018

Cattle futures softened Tuesday as wholesale beef values continue to languish ahead of the expected seasonal uptick.

Live Cattle futures closed an average of 69¢ lower.

Feeder Cattle futures closed an average of $1.02 lower.

Wholesale beef values were weak on Choice and higher on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 36¢ lower Tuesday afternoon at $202.85/cwt. Select was 91¢ higher at $192.72.

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Major U.S. financial indices closed mostly lower Tuesday as benchmark Treasury Note yields climbed to the highest level in several years, continuing recent investor angst about rising interest rates.

The Dow Jones Industrial Average closed 56 points lower. The S&P 500 closed 4 points lower. The NASDAQ was up 2 points.

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U.S. beef exports topped $750 million in August for the first time, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Specifically, August beef export value was $751.7 million, which was 11% more than the previous year, easily exceeding the previous record of $722.1 million reached in May 2018. In terms of volume, August beef exports were 7% more than the previous year at 119,850 metric tons (mt).

For January through August, beef exports totaled 899,300 mt, up 9% from a year ago, while value climbed 18% to $5.51 billion.

“U.S. beef exports continue to achieve tremendous growth, not only in our mainstay Asian markets but in the Western Hemisphere as well,” says Dan Halstrom, USMEF President and CEO. “USMEF is excited about the recent market access developments achieved by the Office of the U.S. Trade Representative (USTR) and USDA, with favorable terms being preserved in Mexico, Canada and South Korea and trade talks getting underway with Japan. A trade agreement with Japan would bring opportunities for even greater expansion as U.S. beef becomes more affordable for Japanese consumers and is back on a level playing field with Australian beef.”

Beef export value averaged $320.92 per head of fed slaughter in August, up 11% from a year ago. The January-August average was $318.66 per head, up 16%. Through August, beef exports accounted for 13.5% of total U.S. beef production, which was 0.7% more than the previous year.

Conversely, U.S. pork exports were pressured by retaliatory tariffs in China and Mexico. August pork export volume was down 1% from last year at 182,372 mt, while export value fell 3% to $494.1 million.

China’s duty rate on pork muscle cuts and variety meat increased from 12% to 37% in April and from 37% to 62% in July. Mexico’s duty rate on pork muscle cuts increased from 0% to 10% in June and then jumped to 20% in July (pork variety meats continue to enter Mexico duty-free). Beginning in June, Mexico also imposed a 15% duty on sausages and a 20% duty on some prepared or preserved hams and shoulders.

“Pork exports have posted an impressive performance in 2018, but the retaliatory duties are a clearly a significant obstacle,” Halstrom explains. “The fact that U.S. trade officials were able to secure duty-free access for U.S. red meat in the new U.S.-Mexico-Canada Agreement is critically important, and we are hopeful that duty-free access for U.S. pork entering Mexico will be restored soon. Tariff relief in China may not come as quickly, but USMEF continues to work with industry partners to keep as much product as possible moving to China while also working aggressively to expand exports in other key markets, including Korea, Central and South America, the ASEAN region and Australia.”

Keep in mind that U.S. beef still faces retaliatory duties in China and Canada. China’s duty rate increased from 12% to 37% in July, with the higher rate applying to all eligible products. Canada’s 10% duty, which also took effect in July, applies to cooked/prepared beef products. All other U.S. beef still enters Canada duty-free.

By | October 9th, 2018|Daily Market Highlights|

Cattle Current daily-Oct. 9, 2018

Negotiated cash fed cattle trade last week was mainly steady at $110-$112/cwt. on a live basis and at $174-$175 in the beef.

Despite continued early pressure in equity markets—tied to worries about rising interest rates—Cattle futures managed to eke out gains to start the week.

Other than 2¢ lower in the back contract, Live Cattle futures closed an average of 24¢ higher.

Except for 10¢ lower in spot Oct and unchanged in the back contract, Feeder Cattle futures closed an average of 19¢ higher.

Wholesale beef values were steady on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 4¢ lower Monday afternoon at $203.21/cwt. Select was 7¢ lower at $191.81.

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Major U.S. financial indices closed mixed Monday after stronger pressure early in the session, tied to continued worries over rising interest rates. Bond markets were closed Monday, perhaps providing a reprieve.

The Dow Jones Industrial Average closed 39 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 52 points.

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Restaurant sales and traffic increased in August (latest data available), according to the National Restaurant Association’s (NRA) most recent Restaurant Performance Index (RPI), which is comprised of two sub-indices: Current Situation Index (CSI) and the Expectations Index (EI).

The August RPI rose 1% from the prior month to 102.0 in August, driven mostly by more optimism surrounding current conditions. The CSI was 1.6% higher month to month at 102.3, the highest level since December of last year. That index accounts for same-store sales, traffic, labor and capital expenditures. August was the seventh consecutive month the CSI was above 100. According to NRA, measures above 100 indicate expansionary industry indicators.

“Restaurant operators reported a net increase in same-store sales for the 10th consecutive month, with customer traffic also turning positive in August,” according to the NRA report.

The Expectations Index in August was 0.4% more than the previous month at 101.7. It measures restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.

By | October 8th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct 8, 2018

Negotiated cash fed cattle trade was mainly steady through late Friday afternoon at $110-$112/cwt. on a live basis and at $174-$175 in the beef. Trade remained undeveloped in the Southern Plains.

Steady cash and surging Lean Hog futures helped cap pressure in Cattle futures.

Other than narrowly mixed through the front four contracts, Live Cattle futures closed an average of 36¢ higher.

Except for 12¢ lower in Jan, Feeder Cattle futures closed an average of 45¢ higher.

Wholesale beef values were steady to weak on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 61¢ lower Friday afternoon at $203.25/cwt. Select was 24¢ lower at $191.74.

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Major U.S. financial indices closed sharply lower again Friday, pressured by higher interest rates and fewer jobs than expected in the monthly employment report.

Total non-farm employment increased by 134,000 in September as the nation’s unemployment rate decline 0.2% to 3.7%. Average hourly earnings are 73¢ higher (+28%) over the year to $27.24/hour.

The Dow Jones Industrial Average closed 180 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 91 points.

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The United States-Mexico-Canada Agreement (USMCA) announced last week offers added market certainty, but leaves some tariffs in place.

“Canada and Mexico are the first and third largest export markets for U.S. agriculture, accounting for more than a quarter of all U.S. agriculture exports,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division (KED). “This agreement will advance the ball for some sectors, but for others, the deal represents a return to the status quo. Market access gains will be modest, but we expect the increased certainty to boost domestic and cross-border investment. However, Canada and Mexico still have tariffs in place that affect the U.S. dairy, pork and beef sectors. U.S. agriculture will have much more to celebrate when those barriers are removed.”

A new KED report—From NAFTA to USMCA—breaks down the impacts of the new agreement on U.S. agriculture by sector, and assesses the issues facing those sectors going forward.

“In many respects, the new North American free trade pact will look very similar to the old one,” according to the KED report. “It will lead to significant change in the auto industry, but changes to other industries will be marginal, including agriculture. While modest, the vast majority of impacts to agriculture will be positive. Access to the Canadian dairy and animal protein sectors will improve, and more importantly, the risk of NAFTA being dismantled will be eliminated.

This will clear the way for domestic investment that is dependent on cross-border demand, as well as cross-border investment by firms that are active in two or all three of the markets.

“The modest benefits that U.S. agriculture will gain from USMCA, however, will continue to be overshadowed by the remaining retaliatory tariffs imposed by Mexico and Canada. The impact of Mexico’s tariffs on cheese and pork, and Canada’s tariffs on prepared beef, far outweigh the benefits laid out in USMCA. Therefore, an agreement on steel and aluminum trade, whenever it is struck, will offer much more for U.S. agriculture to celebrate.”

By | October 7th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 5, 2018

Lower outside markets helped push Feeder Cattle futures lower Thursday; mixed for Live Cattle. However, futures closed off of session lows, helped along by increasing odds that negotiated cash fed cattle prices will be steady to higher this week.

Although trade remained undeveloped through late Thursday afternoon, and there were too few to trend, some early dressed sales in Nebraska traded at $175/cwt., which was $1 higher than the bulk of last week’s trade.

Live Cattle futures closed narrowly mixed (30¢ lower to 42¢ higher).

Feeder Cattle futures closed an average of 85¢ lower.

Wholesale beef values were weak on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 56¢ lower Thursday afternoon at $203.86/cwt. Select was 32¢ lower at $191.98.

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Major U.S. financial indices closed sharply lower Thursday, pressured by investors fretting over higher interest rates.

The Dow Jones Industrial Average closed 200 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 145 points.

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“As history has taught us, open markets and science-based trade are the key ingredients for export success in the U.S. beef industry,” says Kevin Kester, a fifth-generation rancher from Parkfield, CA, who serves as president of the National Cattlemen’s Beef Association (NCBA). “Once passed, the new U.S.-Mexico-Canada Agreement will build on over two decades of unrestricted, science-based, duty free trade for U.S. beef in North America. The results have been outstanding: Today the U.S. exports around $2 billion worth of beef to Canada and Mexico each year.”

In a recent op-ed, Kester goes on to explain, “Similarly, KORUS reduced tariffs on U.S. beef exports and removed many trade restrictions. Our sales have skyrocketed under KORUS. Global retail giant Costco, who previously sourced Australian beef for their stores in South Korea, is now importing every single ounce of their chilled beef from the United States. Some aspects of previous trade agreements were in serious need of modernization, but the established framework for beef trade works remarkably well.”

By | October 4th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 4, 2018

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon.

There were 358 head offered in the weekly Fed Cattle Exchange Auction: no sales  but one P.O. at $111/cwt.

Cattle futures closed lower Wednesday on apparent technical correction, profit taking and an overall lack of interest, but remained narrowly mixed week to week.

Live Cattle futures closed an average of 78¢ lower (47¢ to $1.07 lower).

Feeder Cattle futures closed an average of 94¢ lower.

Wholesale beef values were weak to lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 47¢ lower Wednesday afternoon at $204.42/cwt. Select was $1.68 lower at $192.30.

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Major U.S. financial indices edged higher Wednesday, capped in part by increasing interest rates.

The Dow Jones Industrial Average closed 54 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 25 points.

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Although Quality Grade Choice and Prime beef continues at the sustained higher level of recent years, David Anderson, Extension livestock economist at Texas A&M University points out the recent, relative decline is adding support to Choice prices.

“Choice beef production over the last four weeks is about 3.2% below a year ago. The effect of fewer carcasses grading Choice is compounded by fewer steers and relatively more heifers in the slaughter mix,” Anderson says, in the most recent issue of In the Cattle Markets. “Fed steer weights are about the same as a year ago while heifers are reflecting heavier weights. This lack of Choice beef is showing up in prices with the Choice cutout at about $204/cwt. compared to about $192 a year ago.”

For broader perspective on beef quality trends over time, Anderson explains that of the carcasses graded in September of 1997, 2% were Prime, 51% were Choice and 37% were Select. In September this year, nearly 8% were Prime, 70% Choice and 18% Select.

“Federally inspected beef production over the last month is up 1.1% over the same period last year. During the same period fed steer slaughter is down almost 2%, while heifer and cow slaughter are 4.4% and 7% higher than a year ago, respectively,” Anderson says. “So, all the increase in beef production in recent weeks is coming from heifers and cull cows. It’s worth a reminder that cull cow beef goes to a different (but related) market than beef from fed steers and heifers.  Cull cow beef most often goes to ground beef.”

By | October 3rd, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 3-2018

After some early pressure, Cattle futures firmed and closed a touch higher Tuesday.

Except for 12¢ lower in the back contract, Live Cattle futures closed an average of 29¢ higher.

Feeder Cattle futures closed an average of 60¢ higher.

Wholesale beef values were steady to weak on light to moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 19¢ lower Tuesday afternoon at $204.89/cwt. Select was 65¢ lower at $193.98.

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Major U.S. financial indices closed mixed Tuesday with the DJIA continuing to receive support from the announced United States-Mexico-Canada Agreement.

The Dow Jones Industrial Average closed 122 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 37 points.

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Agricultural producer sentiment dropped to its lowest level since October 2016 as producers expressed concern over worsening farm financial conditions, according to the latest Purdue University/CME Group Ag Economy Barometer. That barometer is based on a monthly survey of 400 agricultural producers from across the country.

The September barometer reading of 114 declined 15 points from the previous month. As for the sub-indices that comprise the Barometer, the Index of Future Expectations declined 10 points and the Index of Current Conditions dropped 25 points.

“The barometer readings have been unusually volatile over the past few months,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Concerns about the ongoing impact of trade conflicts, and especially China’s tariffs on imports of U.S. ag products, continue to reverberate throughout the U.S. agricultural sector.”

Producers indicated that financial conditions on their farms deteriorated significantly as 2018 unfolded and their expectations for the future also weakened. In September, 54% of farmers surveyed said their farm’s financial condition was worse than a year earlier, up from 38% who felt that way in June. The September survey also indicated that 33% of producers expect their farm’s financial condition to be worse a year from now, up 15 points compared to responses received to the same question in June.

By | October 2nd, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 2, 2018

News that Canada will join the U.S. and Mexico and a new North American trade agreement—the United States-Mexico-Canada Agreement (USMCA)— fueled optimism in commodity and equity markets to start the week.

Between the news, firmer wholesale beef values and last week’s steady negotiated cash fed cattle trade, Cattle futures moved higher.

Live Cattle futures closed an average of 34¢ higher.

Feeder Cattle futures closed an average of $1.24 higher (47¢ to $1.52 higher).

Wholesale beef values were higher on fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.20 higher Monday afternoon at $205.08/cwt. Select was $1.19 higher at $194.63.

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Major U.S. financial indices mostly surged higher Monday with the late weekend news about the United States-Mexico-Canada Agreement (see below). CME Crude Oil futures (WTI) closed $2.05 to $2.19/bbl. higher through the next 12 months. Spot Nov closed $6.62 higher than two weeks ago at $75.30.

The Dow Jones Industrial Average closed 192 points higher. The S&P 500 closed 10 points higher. The NASDAQ was down 9 points.

Regarding announcement of a United States-Mexico-Canada Agreement (USMCA), U.S. Secretary of Agriculture Sonny Perdue issued the following statement:

“The new USMCA deal is important for our economy as a whole, including the agricultural sector, which counts Canada and Mexico in our top three trading partners. I have long said that I believe our country is located in the best neighborhood on Earth – North America – with valuable allies to our north and south. We have secured greater access to these vital markets and will maintain and improve the highly productive integrated agricultural relationship we have as nations. Notably, as one of the President’s top goals, this deal eliminates Canada’s unfair ‘Class 7’ milk pricing scheme, cracks open additional access to U.S. dairy into Canada, and imposes new disciplines on Canada’s supply management system. The agreement also preserves and expands critical access for U.S. poultry and egg producers and addresses Canada’s discriminatory wheat grading process to help U.S. wheat growers along the border become more competitive.”

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“Numerous factors will affect the likelihood of a seasonal stocker calf price low in the next month,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Supplies will grow as feeder volumes increase to a seasonal peak by early to mid-November. With the larger 2018 calf crop, the fall run of calves is expected to exceed last year. However, demand for wheat pasture stockers may partially or totally offset increased stocker calf supplies. 

“I really don’t expect much more increase in stocker prices, but additional increases are possible in the next couple of weeks. As we move through October into November, feeder prices are likely to stabilize or perhaps move lower, but the seasonal low may be quite muted.”

By | October 1st, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 1, 2018

Negotiated cash fed cattle trade was mainly steady with the previous week at $110-$111/cwt. on a live basis and mostly $174 in the beef.

Cattle futures closed little changed Friday but mostly to the upside.

Live Cattle futures closed an average of 20¢ higher.

Except for 95¢ lower in newly minted away Sep, Feeder Cattle futures closed an average of 59¢ higher.

Wholesale beef values were lower on Choice and higher on Select, with light to moderate demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 83¢ lower Friday afternoon at $203.88/cwt. Select was 88¢ higher at $193.44.

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Major U.S. financial indices closed little changed Friday as investors squared the books for the week, month and quarter.

The Dow Jones Industrial Average closed 18 points higher. The S&P 500 closed fractionally lower. The NASDAQ was up 4 points.

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Heading into fall, availability of winter wheat pasture looks to be well above normal, say analysts with the Livestock Marketing Information Center (LMIC), noting the planting pace is ahead of last year and the 5-year average.

“Early planting and quick germination will grant cattle earlier access to those fields and allow for longer grazing without sacrificing harvesting wheat for grain,” LMIC analysts say, in the latest Livestock Monitor.

In fact, there likely will be the most cattle grazing wheat pasture since 2007 in Kansas, Oklahoma and Texas, according to LMIC. Analysts there say the number of winter-grazing cattle in those three states averaged about 2.1 million head over the last 18 years (based on Jan. 1 numbers). There were 1.50 million head last year, the least since 2013.

“As of Jan. 1, 2019, the 3-state total could be 1.8 to 2.0 million head,” AMS analysts say. “At that midpoint (1.9 million head), it would indicate the number of head winter grazing has increased from the prior year by 400,000 head (up 27%). That number would go a long way in absorbing the growth in this year’s national calf crop, but it may also bunch-up sales of short yearling animals coming off those pastures as early as mid-February.”

By | September 30th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 28, 2018

Dressed beef sales trended $1 lower in Nebraska and the western Corn Belt through Thursday afternoon at $174/cwt. Live sales in those regions thus far are near steady to steady at $110.00-$110.50.

Cattle futures recovered from the worst of the early pressure Thursday, closing lower but still within the recently established higher, narrow channel.

Other than 12¢ higher at the back of the board, Live Cattle futures closed an average of 26¢ lower.

Other than 25¢ higher in expiring Sep, Feeder Cattle futures closed an average of 60¢ lower, amid extremely light trade.

Wholesale beef values were steady to weak on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 14¢ lower Thursday afternoon at $204.71/cwt. Select was 39¢ lower at $192.56.

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Major U.S. financial indices closed higher Thursday. Support included tech stocks like Apple and Amazon, as well as Crude Oil futures continuing to edge higher.

The Dow Jones Industrial Average closed 54 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 51 points.

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“Despite more cattle on feed, the market price of finished cattle remains strong and continues to outperform year-ago prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his most recent market comments. “Cattle feeders continue to fill pens and the strong feeder cattle prices demonstrate how much cattle feeders want to purchase cattle. It would appear cattle feeders are expecting finished cattle prices to remain strong in the near term and escalate moving into 2019. This thought process may not be as wild as many think it is as beef demand remains strong, which supports prices. Does this mean finished cattle prices will only escalate through the end of the year? One should probably not be so bold at this juncture, but the market does appear to be holding its own plus some at this time.”

For demand perspective, Griffith notes the retail value for Choice beef in August was the highest since July of last year at 608.2¢/lb.

By | September 27th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 27, 2018

There were only 242 head offered and no takers in the weekly Fed Cattle Exchange auction.

Cattle futures continued to firm Wednesday, closing higher on reportedly increased commercial interest.

Live Cattle futures closed an average of $1.39 higher through the front four contracts and then an average of 74¢ higher.

Feeder Cattle futures closed an average of $1.28 higher (42¢ to $1.82 higher).

Wholesale beef values were lower on light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 88¢ lower Wednesday afternoon at $204.85/cwt. Select was $1.92 lower at $192.95.

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Major U.S. financial indices closed lower Wednesday. Many attributed the lion’s share of pressure to remarks made by Federal Reserve Chairman Jerome Powell, indicating the Fed didn’t foresee inflation surprising to the upside, i.e. less growth in interest rates over the long haul. That dampened bank stocks. Powell’s remarks came following the Fed’s decision to raise the federal funds rate for the third time this year to 2.00 to 2.25%.

The Dow Jones Industrial Average closed 106 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 17 points.

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A day following completion of the revised Korea-U.S. Trade agreement, the United State and Japan announced they would begin negotiating a trade pact.

“This is welcome news, since we know that export income is critical to the financial health of agriculture and is a key contributor to rural prosperity,” said Agriculture Secretary, Sonny Perdue. “Japan is an important customer for our agricultural products and we look forward to the great potential this breakthrough represents.”

Earlier this year, President Trump withdrew the U.S. from the Tran Pacific Partnership (TPP), which includes Japan.

According to a joint statement made by the two nations, President Trump and Japanese Prime Minister Shinzo Abe, affirmed the importance of a strong, stable, and mutually beneficial trade and economic relationship, recognizing that together, the two economies represent approximately 30% of global Gross Domestic Product.

By | September 26th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 26, 2018

Negotiated cash fed cattle trade was light on light to moderate demand in Nebraska and the western Corn Belt through Tuesday afternoon. There were a few live trades in both regions at $110.50/cwt.—steady with last week—but too few to trend.

Live Cattle futures closed an average of 14¢ higher.

Feeder Cattle futures closed an average of 24¢ higher.

Wholesale beef values were weak on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 43¢ lower Tuesday afternoon at $205.73/cwt. Select was 52¢ lower at $194.87.

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Except mixed for soybeans and wheat, cash bids for grains were higher Tuesday.

“Most of the Midwest is at a standstill in regards to harvest due to precipitation,” explained analysts with the Daily National Grain Market Summary. “The 10-day forecast is calling for more precipitation, which could slow harvest further.” 

Wheat bids were 7¢ lower to 1¢ higher. Soybean bids were ¼¢ lower to 16¾¢ higher. Sorghum bids were 5¾¢ higher. Corn bids were 3¢ lower to 5¼¢ higher.

Corn futures closed mostly 2¢ to 3¢ higher through March’20 and then fractionally higher to 1¢ higher.

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Major U.S. financial indices closed mostly lower on Tuesday. Pressure included more tough trade talk from the White House and higher 10-year Treasury yield.

The Dow Jones Industrial Average closed 69 points lower. The S&P 500 closed 3 points lower. The NASDAQ was up 14 points.

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 “We are entering into a new KORUS (Korea-U.S.) agreement that is a better deal for the entire United States economy, including the agricultural sector,” said Agriculture, Sonny Perdue on Tuesday. “This represents an important improvement in trade relations between our two nations, building on long-standing cooperation we have enjoyed. This agreement adds to the momentum building for President Trump’s approach to trade, which is to stand strong for America’s interests and strike better deals. I am optimistic that the dominoes will continue to fall: KORUS, then a new NAFTA, and new agreements with the European Union, Japan, and, most notably, China. As an avid sportsman, I would say ‘put this one in the bag and keep hunting for more.’”       

“Signing of the revised KORUS agreement (Korea-U.S. trade agreement) is reassuring news for the U.S. beef and pork industries,” said Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF), following Tuesday’s announcement of the agreement. “The market access terms secured in the original KORUS not only helped increase U.S. red meat’s market share in South Korea, but also bolstered consumption by making our beef and pork products more affordable and accessible to Korean consumers.”

The U.S. is the world’s largest beef supplier to Korea and second largest supplier of pork, according to Halstrom.

“U.S. red meat exports to Korea set a record last year of $1.7 billion, up 19% year-over-year and up 69% from 2012, when KORUS entered into force,” Halstom explains. “This trend continues in 2018, with both U.S. beef and pork export value increasing more than 50% percent compared to a year ago. Korea is now the second-largest value market for U.S. beef (after Japan) and fourth largest for U.S. pork (after Japan, Mexico and China/Hong Kong).

The duty rate on U.S. beef has been reduced from 40% to 21.3% and will continue to decline each year until it is eliminated by 2026.

By | September 25th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 25, 2018

Negotiated cash fed cattle trade ended up being steady to $1 lower last week at $110-$111/cwt. on a live basis and mostly $175 in the beef.

Higher feedlot placements in August weighed on Cattle futures Monday.

Except for 15¢ lower in the back contract, Live Cattle futures closed an average of 79¢ lower (42¢ to $1.45 lower).

Except for 50¢ lower in the front contract, Feeder Cattle futures closed an average of $1.19 lower (75¢ to $1.87 lower).

Wholesale beef values were firm to higher on fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.36 higher Monday afternoon at $206.16/cwt. Select was 68¢ higher at $195.39.

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Major U.S. financial indices closed mostly lower on Monday. Pressure included cancellation of trade talks between the U.S. and China as counter tariffs begin this week.

The Dow Jones Industrial Average closed 181 points lower. The S&P 500 closed 10 points lower. The NASDAQ was up 6 points.

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 “Lightweight placements since May will result in lighter and later fed cattle marketings and may contribute to relatively tighter fed cattle supplies for the remainder of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

As noted in the last issue of Cattle Current, placements in feedlots with more than 1,000 head capacity were 7.36% more than the previous year at 2.07 million head, according to Friday’s Cattle on Feed report.

“Increased August placements largely consisted of cattle under 700 lbs., with the under-600 lb. category up 19.4% year over year and cattle placed weighing 600-700 lbs. up 17.5% compared to last year,” Peel says. “In the last four months, placements of cattle under 700 lbs. has been up 13.2% year over year, while placements weighing over 700 lbs. were down 1.0% year over year. Lightweight feedlot placements likely include lighter-weight steer placements, as well as continued high proportions of heifers in the feedlot total. Heifers are typically placed 50-100 lbs. lighter in weight compared to steers.”

Although total cattle slaughter is 3.2% more so far this year, Peel notes heifer slaughter is 8.3% higher for the year to date.

“However, heifer slaughter is expected to show much smaller year-over-year increases in the fourth quarter, thereby moderating the annual increase,” Peel explains. “Beef cow slaughter is 11.4% larger year over year so far this year. Dairy cow slaughter continues to inch higher and is up 4.5% so far this year. Steer slaughter continues below year-ago levels and is down 0.8% year over year for the year to date. Steer slaughter will likely increase some relative to last year and result in an annual total slightly larger than last year.”

By | September 24th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 24, 2018

Other than Nebraska, negotiated cash fed cattle trade remained mostly undeveloped through late Friday afternoon. Live trades there were $1 lower than the previous week at $110-$110.50/cwt. Dressed trade was steady at $175.

Late Friday, the Texas Cattle Feeders Association reported its members trading cattle at steady money of $111.

Cattle futures firmed on Friday with apparent positioning ahead of the monthly Cattle on Feed report (see below).

Except for 5¢ higher in the back contract, Live Cattle futures closed an average of 51¢ higher.

Feeder Cattle futures closed an average of 87¢ higher across the front half of the board, and then an average of 10¢ higher.

Wholesale beef values were steady to firm on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 28¢ higher Friday afternoon at $204.80/cwt. Select was 20¢ lower at $194.71.

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Major U.S. financial indices closed mixed on Friday, with investors squaring the books amid little market-moving news.

The Dow Jones Industrial Average closed 85 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 41 points.

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Friday’s monthly Cattle on Feed report will likely be viewed as bearish, with more August placements than average estimates ahead of the report.

Placements in feedlots with more than 1,000 head capacity were 7.36% more than the previous year at 2.07 million head. That’s 2-4% more than expected.

Most cattle went on feed weighing less than 800 lbs. Specifically, 20.8% weighed less than 600 lbs.; 16.2% weighed 600-699 lbs.; 22.2% at 700-799 lbs.; 22.9% weighing 800-899 lbs.; 11.6% weighing 900-999 lbs.; 6.3% at weights of 1,000 lbs. or more.

Marketings in August of 1.98 million head were just about even with the previous year, but 4,000 head more.

All told, 11.125 million head were on feed Sept. 1, which was 5.9% more (+621,000 head) than the same time last year. That’s the largest inventory for the month since the data series began in 1996.

By | September 23rd, 2018|Daily Market Highlights|

Cattle Current-Sept. 21, 2018

Negotiated cash fed cattle trade was slow on light to moderate demand in Nebraska through Thursday afternoon, with a few dressed trades at $175/cwt.; steady with last week, but too few to trend.

Early support faded in Cattle futures Thursday, ending with a mainly narrowly mixed to narrowly lower close.

Except for 65¢ lower in spot Oct, Live Cattle futures closed narrowly mixed, from 2¢ to 25¢ lower across the front half of the board, then 5¢ to 15¢ higher the rest of the way.

Other than 15¢ higher in spot Sep, Feeder Cattle futures closed an average of 29¢ lower, with most pressure in the front contracts.

Wholesale beef values were firm on moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 27¢ higher Thursday afternoon at $204.52/cwt. Select was 73¢ higher at $194.91.

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Major U.S. financial indices surged higher Thursday, fueled by global bell-weather stocks such as Boeing, Caterpillar and Apple, presumably on optimism over what traders gauged as a muted response by China to the most recent tariffs imposed by the U.S.

The Dow Jones Industrial Average closed 251 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 78 points.

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“A strong domestic economy and robust exports have buffered beef, and hence, cattle prices against near record large U.S. beef production and all-time highs in competing meats and poultry supplies,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “There are unknowns and potential headwinds for cattle markets during the next few years, not the least of which is the potential for U.S. beef, pork, and chicken exports to falter under a cycle of tariffs and retaliation. Also, any significant weakness in the domestic or global economy compared to the healthy conditions of the last 12 months could dampen demand for beef, and therefore cattle.”

In the meantime, LMIC analysts point out projected beef production this year of 27.5 billion lbs.—assuming normal weather conditions—will be the smallest year-to-year increase since 2015 at 1-2%.   

“In the first quarter of 2019, fed cattle prices could be below 2018’s. In subsequent quarters prices are forecast to be similar to a year earlier,” say LMIC analysts.  “A normal 2019 Midwest corn crop would set the stage for steady to modestly higher yearling and calf cattle prices in the second half of 2019, compared to the corresponding quarters in 2018.”

By | September 21st, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 20, 2018

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. Depending on the snugness of packer inventories, odds appear to favor at least steady money.

There were only 528 head offered in the weekly Fed Cattle Exchange auction. No takers.

Cattle futures continued to putter along, holding on to most of last week’s gains, closing narrowly mixed to a touch lower and awaiting cash direction.

Live Cattle futures closed unchanged to an average of 10¢ lower.

Feeder Cattle futures closed from 42¢ lower to 50¢ higher.

Wholesale beef values were lower on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.04 lower Wednesday afternoon at $204.25/cwt. Select was $1.29 lower at $194.18.

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Major U.S. financial indices closed mixed Wednesday, with bank shares pushing the Dow higher with support from the higher 10-year treasury yield.

The Dow Jones Industrial Average closed 158 points higher. The S&P 500 closed 3 points higher. The NASDAQ was down 6 points.

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“Feeder cattle prices have shown strength through the summer, but seasonal pressures will likely take hold, moving prices lower in the fourth quarter,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “Prices typically decrease when the spring-born calves (about two-thirds of the annual calf crop) are brought to market in the fall. Assuming normal weather in the Great Plains, availability of winter forages for backgrounding could bolster prices in fourth-quarter 2018.”

Prices for the rest of this year and next were forecast