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

Daily Market Highlights

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Cattle Current—Dec. 13, 2019

Negotiated cash fed cattle trade was light on light to moderate demand in Kansas through Thursday afternoon, based on USDA reports. Prices were steady with last week at $119/cwt.

Cattle futures closed narrowly mixed again on Thursday.

Live Cattle futures closed from an average of 18¢ lower to an average of 14¢ higher.

Feeder Cattle futures closed from an average of 25¢ lower to an average of 13¢ higher.

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

Choice boxed beef cutout value was $3.00 lower Thursday afternoon at $215.65/cwt. Select was $1.16 lower at $202.56.

Corn futures closed mostly 4¢ to 6¢ higher; 9¢ higher in spot Dec.

Soybean futures closed 2¢ to 4¢ higher through Nov. ’20 and then fractionally higher to 1¢ higher.

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Major U.S. financial indices closed higher on Wednesday, buoyed by reports that the U.S. and China reached a phase-one trade deal, which awaited President Trump’s signature.

The Dow Jones Industrial Average closed 220 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 63 points.

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“Most current signals indicate the overall domestic economy is on firm footing, thanks almost exclusively to the consumer,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange division (CKE). “However, without a meaningful U.S.-China trade deal, the U.S. agricultural economy will continue to struggle with uncertainty in 2020.”

For perspective, CKE analysts explain GDP growth in rural counties since 2014 has averaged almost 1% less than in urban counties. That trend is likely to continue without a significant upswing in agricultural commodity prices, energy exploration, rural manufacturing and other industries upon which rural economic growth depend.

Despite that bearish prognosis, and lingering uncertainty surrounding trade issues, CKE analysts believe some agriculture sectors will see stronger exports and higher prices next year.

CoBank’s 2020 Year Ahead outlook report, released Thursday, examines 10 key factors that will shape agriculture and market sectors that serve and impact rural communities throughout the U.S.

Among the highlights:

Animal Protein and Dairy

With dairy and animal protein production looking toward another year of increased production in 2020, a rebound in exports will be critical to profitability in both sectors, according to CKE. Per capita consumption of animal protein in the U.S. will likely set a new record in 2019. Strong demand and rising exports, though, will not erase financial stress at the farm level. Producers of beef, pork, poultry, and dairy will likely experience stress from higher feed costs due to lower crop yields this fall.

Grain, Farm Supply and Biofuels

Challenges for the grain sector will persist in 2020, fueled by commodity price pressure, policy uncertainty and export weakness amid growing global supply abundance, especially for corn and soybeans. U.S. wheat producers and exporters, though, may benefit from an improved export pace in 2020 with the Russian wheat crop struggling. Biofuels also face challenges in 2020. U.S. ethanol production, according to the U.S. Energy Information Administration, is expected to fall by 1.9% in 2019 to 15.8 billion gallons and remain flat in 2020.

Global Economy

Consumer strength the world over has prevented further slowing in the global economy. The direction and severity of the U.S.-China trade dispute will continue to have the most significant influence on the world economy in 2020. A leveling off of trade tensions would allow global economic growth to bottom out in early 2020 before showing signs of life later in the year. However, the vulnerable state of the global economy makes it susceptible to contraction if trade conditions worsen.

U.S. Economy

The U.S. economy will enter 2020 decisively split—powered by a resilient and confident consumer but hamstrung by a risk-averse business sector that has stopped investing. Now that stimulus effects from the 2017 tax reform and the 2018 spending bill have faded, the economic expansion will show its age, losing steam in the coming year. There is evidence that since 2017 more people, including those in rural communities, have broadly shared the benefits of economic growth, despite the continual rise in wealth inequality.

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

Cattle Current Daily—Dec. 12, 2019

Negotiated cash fed cattle trade remained mostly undeveloped through Wednesday afternoon, with too few transactions to trend in any region.

There were 1,068 head offered in the weekly Fed Cattle Exchange auction, but no takers.

Midwestern fat auction prices were less than encouraging: $1-$2/cwt. lower at Sioux Falls, a touch lower at Tama. Yet, logic suggests packers need to be somewhat aggressive given the upcoming mid-week holidays.

Despite the lack of cash direction, Cattle futures closed higher Wednesday.

Live Cattle futures closed an average of 60¢ higher.

Feeder Cattle futures closed an average of 78¢ higher (47¢ higher at the back to $1.15 higher toward the front).

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

Choice boxed beef cutout value was $2.84 lower Wednesday afternoon at $218.65/cwt. Select was $1.63 lower at $203.72.

Corn futures closed 4¢ to 5¢ lower through Jul ’20 and then mostly 1¢ to 2¢ lower.

Soybean futures closed 5¢ to 7¢ lower through Nov. ’20 and then 3¢ to 4¢ lower.

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Major U.S. financial indices edged higher on Wednesday. Support included the Federal Reserve’s decision to leave interest rates unchanged. Further, economic projections of Federal Reserve Board members and Federal Reserve Bank presidents suggest little to no change next year.

“Information received since the Federal Open Market Committee (FOMC) met in October indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low,” according to the FOMC statement. “Although household spending has been rising at a strong pace, business fixed investment and exports remain weak. On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2%. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.”

The Dow Jones Industrial Average closed 29 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 37 points.

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U.S. Senator Deb Fischer (R-Neb.), a member of the Senate Agriculture Committee, introduced the Real MEAT Act on Tuesday to end deceptive labeling practices for alternative protein products. The bill would clarify the definition of beef for labeling purposes, eliminate consumer confusion resulting from misbranding, and ensure that the federal government is able to enforce the law. 

“Beef is derived from cattle—period. Under USDA, beef undergoes a rigorous inspection and labeling process, but plant-based protein products that mimic beef and are sometimes labeled as beef are overseen by the FDA instead. These products are not held to the same food safety and labeling standards as beef. Americans deserve to know what’s on their dinner plate. The Real MEAT Act will protect consumers from deceptive marketing practices and bring transparency to the grocery store,” Fischer explains.

Senator Fischer cited a study by the National Cattlemen’s Beef Association (NCBA) that found 55% of consumers did not understand that “plant-based beef” wasn’t beef at all. This bill would help to clear the confusion by codifying a definition of beef for labeling purposes and allowing the USDA to take action against misbranded products, she explains.

“It’s clear that fake-meat companies are continuing to mislead consumers about the nutritional merits and actual ingredient composition of their products,” says NCBA president Jennifer Houston. “We commend the efforts of Senator Fischer on introducing this legislation, which would end deceptive labeling of fake meat products and allow cattle producers to compete on a level playing field.”

The Senate bill is a companion to H.R. 4881, which was introduced by U.S. Representatives Roger Marshall (R – 1st Dist., Kansas) and Anthony Brindisi (D – 22nd Dist., N.Y.) in October.

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

Cattle Current Daily—Dec. 11, 2019

Cattle futures closed narrowly mixed for the second consecutive session on Tuesday, amid seasonally declining wholesale beef prices and awaiting cash direction.

Live Cattle futures closed from an average of 22¢ lower across the front half of the board to an average of 11¢ higher.

Other than unchanged and 5¢ lower in Sep and Oct, Feeder Cattle futures closed an average of 26¢ higher.

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

Choice boxed beef cutout value was $2.15 lower Tuesday afternoon at $221.49/cwt. Select was $1.14 lower at $205.35.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 1¢ to 3¢ higher.

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Major U.S. financial indices edged lower on Tuesday. Pressure was broadly attributed to positioning ahead of the U.S. tariff increase on Chinese imports scheduled to begin this weekend.

The Dow Jones Industrial Average closed 27 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 5 points.

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U.S. ratification of the United States-Mexico-Canada Trade Agreement (USMCA) took a major step forward Tuesday with agreement between the U.S. Trade Representative and House democrats, who had refused to schedule a vote unless there were revisions.

“USMCA is a big win for American workers and the economy, especially for our farmers and ranchers,” says U.S. Secretary of Agriculture Sonny Perdue. “The agreement improves virtually every component of the old NAFTA, and the agriculture industry stands to gain significantly. President Trump and Ambassador Lighthizer are laying the foundation for a stronger farm economy through USMCA and I thank them for all their hard work and perseverance to get the agreement across the finish line. While I am very encouraged by today’s breakthrough, we must not lose sight—the House and Senate need to work diligently to pass USMCA by Christmas.”

Canada and Mexico are the first and second largest export markets for United States food and agricultural products, totaling more than $39.7 billion worth of food and agricultural exports in 2018. These exports support more than 325,000 American jobs.

Under the new agreement, all food and agricultural products that have zero tariffs under the North American Free Trade Agreement will remain at zero tariffs.

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USDA’s Economic Research Service (ERS) reduced expectations of U.S. beef production next year, in the monthly World Agricultural Supply and Demand Estimates released Tuesday. That’s based on the anticipated slower pace of fed and non-fed cattle slaughter in the first half of the year.

For 2020, total beef production is forecast to be 27.51 billion lbs., which would be 379 million lbs. more (+1.40%) than this year’s 27.14 billion lbs.

USDA increased the projected average fed steer price in the fourth quarter by $3 to $115/cwt., compared to the previous month. The estimated annual average price for 2019 increased $1 to $117.

For next year, the average fed steer price is projected $2 higher at $122 in the first-quarter; $1 higher in the second quarter at $118; $1 lower in the third quarter at $112. Next year’s annual average price was estimated $1 higher at $117.

Total U.S. red meat and poultry production next year is projected to increase 2.70% to a staggering 108.14 billion lbs., with higher broiler production more than offsetting lower expected beef production.

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

Cattle Current Daily—Dec. 10, 2019

Cattle futures closed narrowly mixed Monday, unable to get much lift from stronger cash prices or last week’s massive total cattle slaughter of an estimated 679,000 head under federal inspection.

Live Cattle futures closed narrowly mixed, from an average of 11¢ lower to an average of 18¢ higher.

Feeder Cattle futures closed narrowly mixed, from an average of 19¢ lower to an average of 32¢ higher.

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

Choice boxed beef cutout value was 92¢ lower Monday afternoon at $223.64/cwt. Select was 81¢ lower at $206.49.

Corn futures closed fractionally lower to 1¢ lower.

Soybean futures closed mostly 5¢ to 7¢ higher.

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Major U.S. financial indices closed lower on Monday, with no definitive source. Profit taking and rally fatigue could have been part of it, as well as ongoing skittishness regarding U.S-China trade talks.

The Dow Jones Industrial Average closed 105 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 34 points.

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Agricultural producer sentiment rose 17 points month to month in November, to the second highest level of the year, according to the most recent Purdue University/CME Group Ag Economy Barometer.

“Except in the northern Corn Belt, farmers were wrapping up their fall harvest in November and yields were better than expected earlier this year, which helped boost sentiment along with news that the trade dispute might be settled soon,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Since early fall, cattle prices also rallied substantially, helping make both cattle ranchers and feeders feel better about their operations’ finances.”

The Index of Current Conditions—one sub-index of the Barometer—soared 38 points to 153 in November. The Index of Future Expectations edged 7 points higher. The barometer is based on a mid-month survey of 400 U.S. crop and livestock producers.

Confidence in a quick resolution to the U.S.-China trade dispute increased to its highest point since the question was first posed in March of this year. In November, 57% of respondents say they expect a resolution soon; only 29% did in August.

Moreover, 80% of respondents expect the trade dispute to be resolved in a way that favors U.S. agriculture, up 5% from the previous month.

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

Cattle Current Daily—Dec. 9, 2019

Negotiated cash fed cattle prices were mainly $1 higher last week, with live prices in the Southern Plains at $119/cwt. and at $118-119 in the western Corn Belt. Dressed prices were $1 higher at $188.

Cattle futures closed higher Friday, supported by stronger cash trade and higher outside markets.

Other than 17¢ lower in the back contract, Live Cattle futures closed an average of 28¢ higher.

Feeder Cattle futures closed an average of 65¢ 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 $1.04 lower Friday afternoon at $224.56/cwt. Select was 82¢ lower at $207.30.

Corn futures closed mostly unchanged to fractionally lower.

Soybean futures closed 2¢ to 5¢ higher through Sep ’21 and then fractionally higher.

Over the weekend, various reports suggested China will reduce or waive import tariffs on some agricultural products imported from the U.S., including some shipments of pork and soybeans. If that’s true, then both markets could see some bounce to start the week. On the other hand, with additional U.S. tariffs scheduled to be imposed on Chinese imports Dec. 15, the move may create more uncertainty.

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Major U.S. financial indices closed strongly higher on Friday, buoyed by positive jobs data.

Total non-farm payroll employment increased by 266,000 in November, according to the U.S. Bureau of Labor Statistics. That was stronger than the trade expected. The unemployment rate was little changed at 3.5%.

Average hourly earnings for all employees on private non-farm payrolls rose 7¢ in November to $28.29. Average hourly earnings are 3.1% higher over the last 12 months.

The Dow Jones Industrial Average closed 337 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 85 points.

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Although still strong, U.S. beef exports softened in October in terms of both value and tonnage, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports in October of 108,017 metric tons were 8% less than a year earlier; value was 11% less at $649.1 million. Through the first 10 months of the year, export volume was 2.5% less and value was 2.5% less than last year’s record pace.

Beef export value per head of fed slaughter averaged $284.56 in October, down 10% from a year ago. The January-October average was down 4% to $308.04.

The Japanese Parliament’s recent ratification of the trade agreement with the U.S. should help bolster beef exports to that value-leading customer.

According to USMEF, the rate for U.S. beef muscle cuts is 38.5% but will drop by nearly one-third when the agreement enters into force, mirroring the 26.6% rate imposed on Australian, Canadian, Mexican and New Zealand beef. Another rate reduction will come April 1, when the Japanese fiscal year begins.

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

Cattle Current Daily—Dec. 6, 2019

Negotiated cash fed cattle trade developed in Kansas Thursday, with live prices mostly $1 higher than last week at $119/cwt.; light to moderate trade and moderate demand.

Cattle futures closed marginally mixed.

Live Cattle futures closed an average of 24¢ higher.

Feeder Cattle futures closed an average of 26¢ lower.

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

Choice boxed beef cutout value was $1.35 lower Thursday afternoon at $225.60/cwt. Select was $2.19 lower at $208.12.

Corn futures closed mostly fractionally lower to 2¢ lower.

Soybean futures closed 3¢ to 6¢ higher.

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Major U.S. financial indices closed marginally higher on mixed news Thursday.

The Dow Jones Industrial Average closed 28 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 4 points.

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Although analysts with Rabo AgriFinance expect fed cattle prices next year to mirror those of the last couple of years, they say there are two possibilities that could give them a boost.

One is a resolution in U.S.-China trade talks, which they say would allow for increased pork exports to China and elevate all protein prices. The other has to do with disruption in global animal protein trade, due to African Swine Fever.

“As a larger share of beef from Australia and New Zealand go to China, it is forcing a reduction in the quantity of manufacturing beef coming to the U.S.,” explain Rabo AgriFinance analysts, in that organization’s RaboResearch Q4 Beef Quarterly. “As a result prices of Australian and New Zealand 90% lean trimmings delivered to the U.S. currently hold a $54/cwt. (USD) premium to domestic lean trimmings. This is forcing U.S. quick service burger restaurants to look for domestic alternatives for supplies, supporting U.S. cattle and beef prices. This situation is not expected to be quickly resolved and will be an interesting market development to watch during the coming year.”

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

Cattle Current Daily—Dec. 5, 2019

Negotiated cash fed cattle trade perked up Wednesday, but too few transactions to trend, according to USDA reports.

There were 1,189 head offered in the weekly Fed Cattle Exchange auction, with 860 head selling for a weighted average price of $118.36/cwt. for delivery at 1-9 days. That was three lots from Kansas and Nebraska.

Cattle futures sagged lower Wednesday, perhaps pressured by seasonally declining wholesale beef values and the lack of cash direction.

Live Cattle futures closed an average of $1.06 lower.

Feeder Cattle futures closed an average of $1.56 lower.

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

Choice boxed beef cutout value was $3.20 lower Wednesday afternoon at $226.95/cwt. Select was $2.00 lower at $210.31.

Corn futures closed 1¢ to 3¢ higher through Sep ’20 and then mostly fractionally lower.

Soybean futures closed 3¢ to 7¢ higher through Sep ’21 and then mostly 1¢ higher.

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Major U.S. financial indices closed higher Wednesday, supported by a bounce in energy and positive rhetoric about the U.S.-China trade talks.

West Texas Intermediate crude oil futures (CME) closed $2.02-$2.33 higher through the front five contracts.

The Dow Jones Industrial Average closed 146 points higher. The S&P 500 closed 19 points higher. The NASDAQ was up 46 points.

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The Upper House of the Japanese Parliament approved the U.S.-Japan trade agreement yesterday, which will greatly improve access for U.S. red meat in Japan, according to the U.S. Meat Export Federation (USMEF).

“With the U.S.-Japan trade agreement now approved by the Japanese Parliament, the U.S. beef and pork industries look forward to expanded opportunities in Japan, which is already the largest value destination for U.S. pork and beef exports (combined export value in 2018 was $3.7 billion),” says Dan Halstrom, USMEF president and CEO. “This agreement is one of the biggest developments in the history of red meat trade, as no international market delivers greater benefits to U.S. farmers and ranchers, and to the entire U.S. supply chain, than Japan.”

USMEF’s projected impact on U.S. beef and pork exports to Japan:

With tariff rates mirroring those imposed on major competitors, USMEF’s forecast for 2020 is for U.S. beef and pork exports to Japan to reach $2.3 billion and $1.7 billion, respectively.

USMEF projects that by 2025, U.S. red meat exports to Japan will approach $5 billion—roughly $2.8 billion for U.S. beef and more than $2 billion for U.S. pork—as consumption of U.S. red meat increases due to greater access for Japanese consumers and the U.S. gaining market share.

Moreover, the agreement also opens new opportunities for value-added and processed red meat products, with tariffs on these products phasing to zero, which contributes to the overall growth in U.S. exports to the high-value Japanese market.

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

Cattle Current Daily—Dec. 4, 2019

Cattle futures mainly hovered on Tuesday, awaiting cash direction and in the face of a plunge on Wall Street.

Live Cattle futures closed narrowly mixed, from 20¢ lower to 25¢ higher.

Other than 2¢ and 10¢ lower in two contracts, Feeder Cattle futures closed an average of 33¢ higher.

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 $2.46 lower Tuesday afternoon at $230.15/cwt. Select was 67¢ lower at $212.31.

After 1¢ lower and fractionally lower in the two front contracts, Corn futures closed mostly fractionally higher.

Soybean futures closed fractionally higher to 1¢ higher through Sep ’21 and then 3¢ higher.

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Major U.S. financial indices closed sharply lower xTuesday, expanding recent losses. Primary angst seemed to revolve around, what else, but U.S.-China trade talks. This time it was investors interpreting comments from President Trump to mean it less likely that phase one of the deal will be concluded before new U.S. tariffs on Chinese imports begin Dec. 15.

The Dow Jones Industrial Average closed 280 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 47 points.

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“The wide spread between Choice and Select beef cutout values continues to send a signal for more Choice beef,” says Josh Maples, Extension economist at Mississippi State University. “The spread has been near or above $20/cwt. since June. The average weekly spread in October was more than double the historical seasonal average; November was seasonally large, too. For 17 of the 21 weeks from July 6th to Nov. 23, the weekly average Choice-Select spread was the largest for that week of the year over the past two decades.”

In the latest issue of In the Cattle Markets, Maples explains supply is the most visible driver, with Choice-grade supplies 1-2% below year-ago levels since June. For the same months, he adds that Choice supplies were also at or below the five-year average.

“Demand for particular beef cuts also plays an important role,” Maples explains. “A wider Choice-Select spread is typically expected in October and November, largely due to seasonal demand for Choice ribs and loins (i.e. the middle meats) during the holidays. For example, Choice ribeye prices usually increase due to seasonal demand. Wholesale Choice ribeye prices hit just over $10.00/lb. a few weeks ago and continue to hover around $9.60. This is compared to a 2018 high of $9.15/lb. Choice rib and loin primal values are 4% and 7% above a year ago, respectively, while the Select rib primal value is only up 1% and the loin primal value is the same as a year ago.”

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

Cattle Current Daily—Dec. 3, 2019

The 5-area direct average steer price last week was $118.21/cwt. on a live basis, which was $2.25 higher than the previous week. The average dressed price of $186.83 was $3.24 higher. Total volume of just 51,310 head, pressured by both the holiday and winter storms suggests packers need to be in a buying mood this week.

Cattle futures began the week narrowly mixed, amid relatively light trade, with little urgency one direction or the other.

Except for unchanged and 5¢ higher in the middle of the board, Live Cattle futures closed an average of 23¢ lower.

Except for unchanged to 12¢ lower in the front three contracts, Feeder Cattle futures closed an average of 40¢ higher.

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

Choice boxed beef cutout value was 49¢ higher Monday afternoon at $232.61/cwt. Select was $2.64 higher at $212.98.

Corn futures closed mostly unchanged to fractionally higher.

Soybean futures closed 2¢ to 6¢ lower through Nov ’20 and then most fractionally lower.

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Major U.S. financial indices closed lower Monday, pressured by weak manufacturing data and ongoing uncertainty surrounding a U.S.-China trade deal.

Economic activity in the manufacturing sector declined in November, according to the closely watched Purchasing Managers Index® from the Institute for Supply Management® (ISM). Month to month, it declined two percentage points in November to 48.1%

“Global trade remains the most significant cross-industry issue. Among the six big industry sectors, Food, Beverage and Tobacco Products remains the strongest, while Fabricated Metal Products is the weakest. Overall, sentiment this month is neutral regarding near-term growth,” says Timothy R. Fiore, CPSM, C.P.M., Chair of the ISM Manufacturing Business Survey Committee.

The Dow Jones Industrial Average closed 268 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 97 points.

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Although recent winter storms may not be widespread enough to cause noticeable fed cattle market reactions, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says they may delay cattle finishing and disrupt slaughter flows in some regions.

In his weekly market comments, Peel explains the storms may also ensure the seasonal peak is in for carcass weights.

“Steer and heifer carcass weights pushed above year-ago levels the past few weeks with the latest steer carcass weights at 912 lbs. compared to 900 lbs. last year and heifer carcasses at 841 lbs., up from 836 lbs. one year ago on the same date. However, for the year to date, steer carcass weights are down 3.3 lbs. and heifer carcasses are down 4.4 lbs. An early storm like this may set the stage for a long period of feedlot production challenges with impacts persisting and accumulating through the winter.”

Of course, widespread severe weather also can impact demand.

“Winter storms may disrupt transportation and the flow of perishable products to markets,” Peel says. “Though people continue to eat during storms, travel and business disruptions often reduce restaurant traffic and power disruptions may reduce meat demand as consumers hunker down and get through the storm with minimal cooking and more use of prepared and ready-to-eat products.”

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

Cattle Current Daily—Dec. 2, 2019

Negotiated cash fed cattle trade for the week was mainly $2-$3 higher on a live basis at $118/cwt. in Kansas, $118-$120 in Nebraska and $117-$118 in the western Corn Belt. Dressed trade was $3 higher at $187.

Cattle futures softened Friday, amid light holiday trade and month-end positioning.

Other than unchanged to 10¢ higher in the last three contracts, Live Cattle futures closed an average of 28¢ lower.

Feeder Cattle futures closed an average of 53¢ lower (15¢ lower at the back to $1.05 lower in spot Jan).

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

Choice boxed beef cutout value was 12¢ lower Friday afternoon at $232.12/cwt. Select was 30¢ lower at $210.34.

Corn futures closed 4¢ to 8¢ higher through Sep ’20 and then mostly fractionally higher to 1¢ higher.

Soybean futures closed 3¢ to 5¢ lower through Jan ’21 and then most unchanged to fractionally lower.

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Major U.S. financial indices closed lower Friday, amid holiday-shortened trade and likely month-end profit taking and book squaring.

The Dow Jones Industrial Average closed 112 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 39 points.

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The European Parliament approved the previously announced plan granting the United States a country-specific share of the European Union’s (EU) duty-free high-quality beef quota, according to the US. Meat Export Federation (USMEF).

Specifically, the U.S. will be able to nearly triple its annual duty-free exports of beef to the EU over the next seven years, with annual duty-free exports expected to grow from $150 million to $420 million when the agreement is fully implemented.

“Approval by the European Parliament keeps this agreement on track for implementation in early 2020, which is outstanding news for the U.S. beef industry and our customers in Europe,” according to a USMEF statement. “Lack of capacity in the duty-free quota has been a source of frustration on both sides of the Atlantic, and a U.S.-specific share of the quota will help ensure that U.S. beef can enter the European market 52 weeks per year, without delay or interruption.”

The EU is one of the world’s highest value destinations for U.S. beef.

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

Cattle Current Daily—Nov. 28-29, 2019

Although undeveloped through Wednesday afternoon, there was some negotiated cash fed cattle trade in Kansas, with live prices $2 higher than last week at $118/cwt.

Similarly, Choice steers and heifers sold $3.00-$3.25 higher at the fat auction in Tama, IA on Wednesday. There were 124 Ch 2-4 steers weighing an average of 1,477 lbs. that brought an average of $118.12.

Cattle futures closed higher, supported by positive fundamentals, this week’s winter storms and the presumption that Tyson’s Kansas plant will resume operation next week.

Live Cattle futures closed an average of 77¢ higher (47¢ higher to $1.02 higher at the front of the board.

Other than 57¢ higher in the back contract, Feeder Cattle futures closed an average of $1.52 higher.

Wholesale beef values were firm 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 40¢ higher Wednesday afternoon at $232.24/cwt. Select was $1.65 lower at $210.64.

Corn futures closed mostly 3¢ to 5¢ lower.

Soybean futures closed 2¢ to 3¢ lower.

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Major U.S. financial indices closed higher again Wednesday on strong economic data. For instance, new durable goods orders were 0.6% higher than the previous month, while economist consensus was for a decline. As well, the Bureau of Economic Analysis revised estimated third-quarter GDP 0.2% higher to 2.1%.

The Dow Jones Industrial Average closed 42 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 57 points.

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“Lifetime animal health management is increasingly recognized as a significant challenge for the beef cattle industry with implications ranging from fetal programming that impacts lifetime health and productivity; to genetic identification of disease susceptibility; to improved economic incentives for better coordination of animal health management across multiple production sectors,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “Improved animal health management not only increases ranch returns but increases value to the entire industry.”

In recent market comments, Peel points out Kansas feedlot survey data underscores what stocker operators and feedlots know far too well: health challenges continue to increase over time.

For instance, based on the aforementioned data, Peel says average feedlot death loss nearly doubled from 0.82% in 1995-1996 to 1.60% in the most recent 24 months. He adds that Bovine Respiratory Disease (BRD) causes 70-80% of feedlot morbidity and 40-50% of feedlot mortality.

“Preconditioning programs add value to cattle and the value is consistently reflected in premiums for certified preconditioned calves sold under programs such as the Oklahoma Quality Beef Network (OQBN). Weaning is arguably the most important component of preconditioning and preconditioning protocols routinely call for a minimum of 45 days of weaning prior to marketing calves,” Peel explains. “Anecdotal indications are that 45 days is becoming a bare minimum with 60 or more days of weaning preferred by buyers struggling with the continuing health challenges of cattle. Calves noted as un-weaned are currently discounted 4-5% in Oklahoma auctions.”

Basis the $162.36/cwt. paid for Medium and Large #1 steers weighing an average of 527 lbs. at Oklahoma National Stockyards on Monday, that was a discount of $6.49 to $8.12/cwt. or roughly $30-$40 per calf.

Of course, some producers are unable to wean and precondition calves, while the added return falls short of added cost and risk for others. In those cases, Peel emphasizes other management that helps increase calf health; such things as complete vaccinations, deworming, castration and dehorning ahead of marketing.

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

Cattle Current Daily—Nov. 27, 2019

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon, based on USDA reports. Recent fundamentals and this week’s winter storms suggest prices should be no worse than steady.

Cattle futures mostly edged higher, amid light trade and waiting for cash direction.

Live Cattle futures closed an average of 52¢ higher, with open interest continuing to build.

After 35¢ and 12¢ lower at the front of the board, Feeder Cattle futures closed an average of 35¢ 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 $1.40 lower Tuesday afternoon at $231.84/cwt. Select was 38¢ higher at $212.29.

Corn futures closed mostly 2¢ lower.

Soybean futures closed 7¢ to 8¢ lower through Aug ’21 and then mostly 3¢ lower.

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Major U.S. financial indices extended gains Tuesday, helped along by positive sales and earnings from major retailers.

The Dow Jones Industrial Average closed 55 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 15 points.

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U.S. consumers may appear to be creatures of habit in their eating patterns but the foods they eat today have a modern twist influenced by a host of factors such as ethnicity, age/generational group, and health/social consciousness, according to the NPD Group (NPD). That organization has tracked American eating patterns for the last 34 years.

Here are some highlights from NPD Group’s latest annual edition of Eating Patterns in America:

  • There were more than 460 billion in-home and away-from-home eating and drinking occasions in the U.S. last year.
  • 16% of consumers regularly use plant-based alternatives such as almond milk, tofu, and veggie burgers; 89% of these consumers do not consider themselves vegan or vegetarian.
  • 14% of in-home eating occasions included at least one item that required no preparation, compared to only 11% of occasions in 2013.
  • Visits to quick-service restaurants increased by 630 million visits since 2014, while total visits to restaurants declined by more than 700 million visits.
  • 19% of grocery shoppers now order their edible groceries online; from 2017 to 2020 the average annual growth rate for digital restaurant orders is forecast at 22%.
  • One in five adults try to manage a health condition with their food and beverage choices.

“This past year we’ve seen emerging new eating trends that will impact both the food and beverage and restaurant industries in the years to come,” says David Portalatin, NPD Food Industry advisor and author of Eating Patterns in America. “Food manufacturers and restaurant operators will need to understand how these trends will impact their businesses in order to stay ahead of the curve.”

By | November 26th, 2019|Daily Market Highlights|

Cattle Current Daily—Nov. 26, 2019

Logic suggested markets should view Friday’s Cattle on Feed as at least neutral, with placements 2% less than expected. However, the fact that placements were 10% higher year over year also suggested there might be an opportunity for bears to press their case with follow-through selling. Instead, Cattle futures climbed higher to start the week, gaining back a lion’s share of Friday’s retreat.

Live Cattle futures closed an average of $1.27 higher.

Feeder Cattle futures closed an average of $2.72 higher.

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

Choice boxed beef cutout value was 67¢ higher Monday afternoon at $233.24/cwt. Select was 59¢ higher at $211.91.

Corn futures closed mostly 2¢ to 3¢ higher through Mar ’21 and then 1¢ higher.

Soybean futures closed 2¢ to 4¢ lower through Sep ’20 and then mostly 1¢ higher.

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Major U.S. financial indices closed higher Monday, with growing optimism about the U.S. and China reaching agreement on the first phase of a trade deal.

The Dow Jones Industrial Average closed 190 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 112 points.

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“Annual average feedlot inventories (12-month moving average) peaked in August but there is a chance that strong placements in the next few months could push to a higher average total,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “In other words, feedlot inventories are close but may not yet be quite at a cyclical peak.”

Reviewing Friday’s monthly Cattle on Feed report, Peel points out heavy feeders dominated placements.

“Placements of feeder cattle over 800 lbs. were up 29.5% year over year, with placements 700-800 lbs. up 14.9% compared to one year ago,” Peel says.  “Meanwhile, placement of feeders under 600 lbs. were down 6.3% year over year.  In the three months from August-October, placements of feeders over 700 lbs. were up 4.6% year over year, while placements of cattle less than 700 lbs. were down 2.8%. This means that feedlots will be somewhat front-loaded for the next few months.”

As noted in Monday’s Cattle Current, 46.02% of October placements weighed 699 lbs. or less; 40.05% weighed 700-899 lbs.; 13.93% weighed more than 900 lbs.

“It would appear that anecdotal stories of cattle doing very well this summer were accurate, given placement weights,” says David Anderson, Extension livestock economist at Texas A&M University. “It’s interesting to note that 25,000 more head were placed weighing over 1,000 pounds than a year ago. For the year, placements are about half a percent ahead of last year.”

In the latest issue of In the Cattle Markets, Anderson explains most heavyweight placements in the fall usually come in September, while heavyweight placements in the spring usually come in March and May as cattle come off wheat pasture and other winter grazing programs.

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

Cattle Current Daily—Nov. 25, 2019

The widely expected significant increase in October feedlot placements was confirmed in Friday’s monthly Cattle on Feed report. Although less than most expected (see below), positioning ahead of the report provided the opportunity some had been seeking for a market correction.

Live Cattle futures closed an average of $1.52 lower

Feeder Cattle futures closed an average of $3.03 lower.

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

Choice boxed beef cutout value was $2.29 lower Friday afternoon at $232.57/cwt. Select was $2.54 lower at $211.32.

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed 1¢ to 4¢ lower.

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Major U.S. financial indices closed higher Friday. Once again, many ascribed movement to U.S.-China trade talks; positive this time.

The Dow Jones Industrial Average closed 109 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 13 points.

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Feedlot placements in October were significantly higher than the previous year, as many expected, but a little less than pre-report estimates, according to Friday’s monthly Cattle on Feed report for feedlots with 1,000 head or more capacity.

There were 2.48 million head placed, which was 10.19% more (+299,000 head) than last year. Ahead of the report, amid a wide range, analyst consensus was for an increase of 12%.

In terms of placement weight, 46.02% weighed 699 lbs. or less; 40.05% weighed 700-899 lbs.; 13.93% weighed more than 900 lbs.

“If you remember back to last year, drought throughout the Plains brought many more calves to market through the summer months than in recent times,” say analysts with USDA’s Agricultural Marketing Service (AMS). “This year, with the excellent grazing conditions and uncertainty fueled by the fire at a packing plant in Kansas, producers were content to graze calves longer. At some point, though, these cattle had to show up at auction or be marketed directly to feedlots.” 

Marketings in October of 1.88 million head were 0.64% less (-12,000 head), which was in line with expectations.

As of Nov. 1, there were 11.83 million head on feed, which was 1.19% more (+139,000 head) than the previous year.

Beef in Cold Storage Declines

Total pounds of beef in freezers Oct. 31 were 1% less than the previous month and 10% less than a year earlier, according to the monthly Cold Storage report issued Friday.

Frozen pork supplies were record large for the month, up 3% from the previous month and up 8% from last year.

Total red meat supplies in freezers were up 1% from the previous month but down 1% from last year.

Total frozen poultry supplies were 7% less than the previous month and 3% less than a year earlier.

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

Cattle Current Daily—Nov. 22, 2019

For the week so far, negotiated cash fed cattle trade is mainly $1 higher on a live basis at $116/cwt. in the Southern Plains and at $115-$117 up north. Dressed trade is $2 higher at $184.

Cattle futures closed lower Thursday, though, especially Feeder Cattle, as wholesale beef values show signs of seasonal weakening, and ahead of Friday’s Cattle on Feed report.

Other than 2¢ higher in spot Dec, Live Cattle futures closed an average of 49¢ lower

Feeder Cattle futures closed an average of $1.18 lower.

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

Choice boxed beef cutout value was $3.35 lower Thursday afternoon at $234.86/cwt. Select was 91¢ lower at $213.86.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed 1¢ to 4¢ lower.

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Major U.S. financial indices continued to drift lower Thursday, with continued uncertainty surrounding the enigmatic back and forth chatter concerning the U.S.- China trade deal.

The Dow Jones Industrial Average closed 54 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 20 points.

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Beef cow slaughter appears to be picking up speed, based on USDA’s monthly Livestock Slaughter report issued Thursday.

Non-dairy cow slaughter—the ‘other cow’ category in USDA’s report—for October of 307,900 head was 28,800 head more (+10.32%) than last year. For January through October, non-dairy cow slaughter of 2.61 million head is 82,000 head more (+3.24%) than the same period last year.

Similarly, fed heifer slaughter of 8.16 million head for the first 10 months of the year is 572,400 head more (+7.54%) than the same period in 2018.

For perspective, total fed steer and heifer slaughter in October of 2.28 million head was 9,900 head fewer (-0.43%) than the previous year. For January through October, however, fed steer and heifer slaughter of 21.85 million head is 253,100 head more (+1.17%) than the same period last year.

Federally inspected cattle slaughter for the month of October was 2.93 million head, which was 17,600 head more (+0.61%) than the previous year.

Dressed steer weights in October averaged 902 lbs., which was 4 lbs. heavier than the previous year. For January through October, though, dressed steer weights are 4 lbs. lighter at 872 lbs.

Dressed heifer weights in October averaged 830 lbs., which was even with the previous year. For January through October, however, dressed heifer weights are 5 lbs. lighter at 808 lbs.

Total beef production in October was 2.44 billion lbs., which was 7.5 million lbs. more (+0.31%) than the previous year. For January through October, total beef production of 22.59 billion lbs. was 147.5 million lbs. more (+0.66%) than last year.

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

Cattle Current Daily—Nov. 21, 2019

Negotiated cash fed cattle trade developed in the Southern Plains Wednesday at $116/cwt., which was $1 higher than last week.

That matched optimism in the weekly Fed Cattle Exchange Auction, where 1,229 head—three lots each from Kansas and Nebraska—sold out of 1,398 head: 283 head for a weighted average price of $116/cwt. (delivery at 1-9 days) and 946 head for a weighted average price of $115.44 (delivery at 1-17 days). One other lot of Texas heifers was passed at $114.50 for delivery at 1-9 days.

Although too few to trend, there were also some early sales in Nebraska Wednesday at $114-$116 and some in the beef at $184, which was $2 higher than the previous week. Early live sales in the western Corn Belt were steady to $2 higher at $115-$117.

Cattle futures were mixed Wednesday, mainly higher toward the front of the board for Live Cattle, but lower for Feeder Cattle, perhaps with defensive positioning ahead of Friday’s Cattle on Feed report (see below).

Live Cattle futures closed narrowly mixed from an average of 27¢ lower to an average of 21¢ higher.

After unchanged and 5¢ higher in the front two contracts, Feeder Cattle futures closed an average of 41¢ lower.

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

Choice boxed beef cutout value was 80¢ lower Wednesday afternoon at $238.21/cwt. Select was 70¢ lower at $214.77.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed 1¢ to 6¢ lower through Nov ’20 and then 1¢ to 2¢ higher.

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Major U.S. financial indices closed lower Wednesday. Despite strong earnings from retailers like Lowe’s and Target, pressure came on chatter that the first phase of the U.S.-China trade deal might not get signed this year.

The Dow Jones Industrial Average closed 112 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 49 points.

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Pre-report estimates of feedlot placements in October are canyon-wide, which could jolt markets one way or the other, after the monthly Cattle on Feed report comes out Friday.

Allendale Inc. projects October placements at 2.163 million head, which would be 3.8% less than the previous year and the least for the month in seven years.

On the other hand, the average estimate of analysts surveyed by Urner Barry, and reported by the Daily Livestock Report, is for placements to be up 12.2%.

There are a number of factors likely driving such diverse views.

Apparent improvement in feedlot margins, reports of poor wheat pasture conditions, delayed calf marketing—due to low prices and market uncertainty and made possible by positive forage conditions—support the notion of higher placements. 

Conversely, lower placements could be driven, in part, by the current value of gain for growing cattle outside the feedyard, reduced imports of feeder cattle, as well as growing chatter that there may be fewer cattle than previously thought. 

Both of the aforementioned groups estimate October marketings to be slightly less than the previous year.

Allendale estimates total cattle on feed Nov. 1, for feedlots with 1,000 head or more capacity to be 11.484 million head, which would be 1.8% less than the previous year. However, given the significantly higher placements anticipated by those in the Urner Barry survey, they estimate a year-over-year on-feed increase of 1.3%.

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

Cattle Current Daily—Nov. 20, 2019

Cattle futures closed narrowly mixed Tuesday with most of the pressure coming toward the front of the board, but remaining channel bound.

After 7¢ higher in spot Dec and then 5¢ to 22¢ lower in the next three contracts, Live Cattle futures closed an average of 44¢ higher. 

Other than an average of 26¢ lower in three of the front contracts, Feeder Cattle futures closed an average of 33¢ higher.

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

Choice boxed beef cutout value was 11¢ lower Tuesday afternoon at $239.01/cwt. Select was 12¢ lower at $215.47.

Combined, 78.19% of carcasses graded Prime and Choice the week ending Nov. 8, according to the USDA National Steer and Heifer Estimated Grading Percent report. That was the highest level since last May. At 9.89%, Prime was the highest since last March.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed mostly fractionally higher to 2¢ higher.

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Major U.S. financial indices closed mixed Tuesday. Weaker same-store sales from the likes of Home Depot and Kohl’s appeared to be the primary pressure.

The Dow Jones Industrial Average closed 102 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 20 points.

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“While beef exports (U.S.) are likely to end 2019 with an almost 2% decline, shipments are expected to rebound in 2020 by about 7%, as drought in

competitor Australia reduces its exportable supply at the same time as beef demand continues to expand in Asia,” say analysts with USDA’s Economic Research Service (ERS), in the November Livestock, Dairy and Poultry Outlook.

U.S. beef exports in September were 3% less than a year earlier, according to ERS, with most of the decline coming from shipments to Japan, Hong Kong and Mexico. But, exports were higher year over year to South Korea, Indonesia, China, Philippines, Taiwan and Vietnam.

“Several factors, including increased demand for animal proteins in Asia, changes in trading patterns, and tighter supplies in Australia, positioned the United States to expand its shipments of beef to a number of Asian countries during September,” say ERS analysts.

Net sales of beef to international customers (25,300 mt) for the week ending Nov. 7 were up 92% from the four-week average, according to the most recent Weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service.

Domestically, retail beef demand in the third quarter was the highest since 2015, according to the Meat Demand Index (MDI) calculated by the Livestock Marketing Information Center (LMIC).

“Retail beef demand is currently in an up-cycle after 2008-2013 showed values below 100. Since 2014 the index for the third quarter has ranged from 102 to 110,” say LMIC analysts, in the latest Livestock Monitor.

By | November 19th, 2019|Daily Market Highlights|

Cattle Current Daily—Nov. 19, 2019

Last week’s weighted average 5-area direct price for fed steers was 59¢ higher at $115.19/cwt. on a live basis and 68¢ higher in the beef at $181.72.

Cattle futures firmed to start the week, helped along by the Tyson announcement regarding the reopening of its Kansas plant (see below).

Other than 40¢ and 2¢ lower at either end of the board, Live Cattle futures closed an average of 32¢ higher. 

Feeder Cattle futures closed an average of 35¢ higher.

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

Choice boxed beef cutout value was $1.68 lower Monday afternoon at $239.12/cwt. Select was $1.26 higher at $215.59.

Corn futures closed mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 6¢ to 8¢ lower Jul ’21 and then 4¢ lower.

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Major U.S. financial indices edged higher Monday, with little definitive impetus one way or the other.

The Dow Jones Industrial Average closed 31 points higher. The S&P 500 closed 1 point higher. The NASDAQ was up 9 points.

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Tyson Fresh Meats—the beef and pork subsidiary of Tyson Foods, Inc.—announced Monday that efforts to resume harvest operations at its Holcombe, KS beef plant will begin the first week of December, with intentions to be fully operational by the first week of January. It plans to resume receiving cattle at the facility the first week of December.

“We recognize the disruption the fire caused for our suppliers and our customers and are more than pleased to announce we are in the final stages of reconstruction,” says Steve Stouffer, group president, Tyson Fresh Meats. “Our team is ready to begin the process of ramping back up, recognizing that there will be testing and adjustments over the first few weeks to ensure equipment functionality while maintaining our commitment to team member safety and food safety.”

The Aug. 9 fire that disrupted operations severely damaged a critical part of the plant containing the hydraulic and electrical systems that support the harvest floor and cooler areas.

Before the fire, the plant was harvesting about 6,000 head of fed cattle per day, accounting for about 6% of total U.S. fed cattle packing capacity.

Reconstruction included completely replacing support beams and the roof, hydraulic piping and pumps, installing over 50,000 feet of new wiring and the reconstruction of all new electrical panel rooms and equipment.

Since the fire, cattle have been diverted to the company’s other beef facilities, where they were able to offset some of the production volume losses, to try and help mitigate disruption to cattle producers and customers and has continued to pay active, full-time team members for 40 hours per week. Team members have been instrumental in helping with cleanup and the reconstruction process.

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

Cattle Current Daily—Nov. 18, 2019

Negotiated cash fed cattle trade ended the week mainly steady to $1 higher at $115/cwt. on a live basis and at $182 in the beef, based on USDA reports.

There were 1,264 head offered in a Friday edition of the Fed Cattle Exchange auction, and no takers.

Cattle futures traded sideways and closed marginally mixed Friday.

Other than 2¢ and 5¢ higher in the front two contracts, Live Cattle futures closed an average of 17¢ lower. 

Other than 37¢ lower in spot Nov and 15¢ lower in Sep Feeder Cattle futures closed an average of 16¢ higher.

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

Choice boxed beef cutout value was 26¢ lower Friday afternoon at $240.80/cwt. Select was $1.51 lower at $214.33.

Corn futures closed mostly 3¢ to 4¢ lower.

Soybean futures closed fractionally higher to 1¢ higher.

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Major U.S. financial indices closed strongly higher Friday, buoyed by reports that the U.S. and China are getting closer to a trade deal.

The Dow Jones Industrial Average closed 222 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 61 points.

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“As the Choice-Select price spread stays abnormally high, packers appear to be paying higher prices to bid cattle out of the feedlots, as the spread is likely incentivizing feedlots to keep cattle on feed longer,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “Packers’ willingness to pay higher prices is likely supported by the strong boxed beef market going into the holiday season.”

USDA increased the expected fed steer price (5-area direct) $2 for the fourth quarter to $112/cwt. with a forecast annual price this year of $116. Average prices through the first three quarters of next year are projected at $113 (third quarter) to $120 (first quarter).

In turn, feeder steer prices finally started to increase.

ERS analysts point out feeder steers weighing 750-800 lbs. traded $13 higher ($148.04/cwt.) at Oklahoma City the week of Nov. 4, compared to the recent low the week of Sept. 9.

“Based on recent price data, the fourth-quarter 2019 feeder steer price was raised by $3 to $144/cwt. (basis Oklahoma City),” say ERS analysts. “The first-quarter price forecast for 2020 was raised by $2 to $138. The annual price forecast for feeder steers is raised by $1 to $142.

Projected feeder steer prices are expected to increase in 2020, especially in the latter half, compared to 2019. Year over year, the forecast first-quarter average price next year is $2.76 lower at $138/cwt., about even in the second at $130, but $6.81 higher in the third quarter at $147.90. The projected annual average price is $1.50 higher at $143.

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

Cattle Current Daily—Nov. 15, 2019

Negotiated cash fed cattle trade on Thursday continued steady with last week in Nebraska and the western Corn Belt at mostly $115/cwt. on a live basis. Dressed sales were steady to $1 higher at $182.

Cattle futures strengthened on Thursday, regaining some of the losses from the previous session, with continued overall strength in beef demand.

Live Cattle futures closed an average of 59¢ higher (32¢ higher to 97¢ higher in spot Dec).

Feeder Cattle futures closed an average of 84¢ higher, (42¢ to $1.22 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 $1.28 lower Thursday afternoon at $241.06/cwt. Select was $1.69 lower at $215.84.

Steer carcasses weighed an average of 903 lbs. for week ending Nov. 2, which was 3 lbs. lighter than the previous week, but 4 lbs. heavier than the same time a year earlier, according to the most recent USDA Actual Slaughter Under Federal Inspection report. Fed heifer carcasses weighed an average of at 835 lbs., on par with the previous week and year.

Corn futures closed mostly 1¢ higher.

Soybean futures closed mostly unchanged to 3¢ lower, but 1¢ higher in a couple of the front months.

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

The Dow Jones Industrial Average closed 1 point lower. The S&P 500 closed 2 points higher. The NASDAQ was down 3 points.

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So far, rather than swap alternative proteins for real meat, it appears consumers in the western world are adding alternatives to what they already eat, according to the annual global animal protein outlook from RaboResearch Food & Agribusiness (RRFA).

“Contrary to expectations, the growing interest in alternative proteins has added to total protein consumption; the substitution effect is not yet clear in the consumption data,” according to RRFA analysts. “At the same time, animal

protein consumption has been stable, or up slightly, in the E.U. and U.S. in recent years. This is despite double-digit growth in alternatives’ sales: 16% year-over-year growth for 2018 in the U.S. and a compound annual growth rate of 16% in the Netherlands since 2016.”

Rabobank expects alternative protein consumption to grow next year, along with meat and seafood consumption.

“We also expect more clarity as to whether alternatives are an addition to or a substitute for meat and seafood. Alternatives will need to improve their nutritional profile and eating quality, and address regulatory barriers such as terminology, in order to maintain current growth rates,” according to RRFA analysts.

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

Cattle Current Daily—Nov. 14, 2019

Negotiated cash fed cattle trade developed in the Southern Plains Wednesday with prices steady to $1 higher at $115/cwt. on a live basis.

There were 1,393 head offered in the weekly Fed Cattle Exchange Auction, and no takers. Two lots from the Southern Plains were passed at bids of $115.00 and $115.50/cwt.

Choice steers and heifers sold $1.50-$2.00 higher at the fat auction in Tama, IA on Wednesday. There were 358 Choice 2-4 steers weighing an average of 1,452 lbs. and bringing an average price of $117.68. Country trade in the region last week was at $114-$115.

Cattle futures stepped lower, though, with heavy volume and about even open interest. Rather than the beginning of a correction, one could argue retrenchment ahead of what looks to be a higher trending market.

Live Cattle futures closed an average of $1.60 lower.

Feeder Cattle futures closed an average of $3.13 lower, ($2.25 to $4.30 lower). A day earlier, the CME Feeder Cattle Index reached the highest level since last December at $147.44. 

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

Choice boxed beef cutout value was $1.84 higher Wednesday afternoon at $242.34/cwt. Select was $1.30 higher at $217.53.

Corn futures closed 2¢ to 3¢ lower.

Soybean futures closed mostly 2¢ lower.

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Major U.S. financial indices closed mixed on Wednesday, with support from positive news, including a stout pop in Disney shares, capped by another see-saw chapter of U.S.-China trade talks; reports that there was yet another snag.

The Dow Jones Industrial Average closed 92 points higher. The S&P 500 closed 2 points higher. The NASDAQ was down 3 points.

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“Besides the impact of ASF (African Swine Fever), many trade disputes and issues are causing uncertainty for global animal protein, with the US-China trade war the most apparent, but not the only trade uncertainty,” says Justin Sherrard, Global Strategist, Animal Protein at RaboResearch Food & Agribusiness (RRFA). “In addition, the ongoing rise of alternative proteins also adds to the uncertainty, even though Rabobank has a less bullish view of alternatives than others do.”

RRFA released its annual global animal protein outlook Wednesday.

Rabobank projects protein growth in most regions next year, but analysts say production losses, due to ASF, particularly in China, will exceed combined production growth in all other regions.

For North America, Rabobank anticipates production growth from all species, led by pork and followed by poultry and then beef.

“We expect U.S. beef production to be up slightly, by less than 1% in 2020,” according to the report. “Non-fed slaughter could also be up a little, as a result of liquidation. We expect the calf crop to come down slightly, reflecting weather conditions at calving and in the spring. We expect carcass weights to return to trend, offsetting any reduction in numbers.

“With only a fractional increase in production and solid exports, U.S. fed cattle prices are expected to change little. We expect a spring high of $128-$130/cwt. and a summer low of $100-$105.”

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

Cattle Current Daily—Nov. 13, 2019

Cattle futures traded either side of steady on Tuesday, awaiting further direction from the cash market.

Live Cattle futures closed narrowly mixed but mostly marginally higher, from an average of 8¢ lower to an average of 11¢ higher.

Feeder Cattle futures closed narrowly mixed, from 17¢ lower to 22¢ higher.

Currently strong market fundamentals should grow more positive when Tyson reopens the Kansas plant that was shuttered by fire in August. During a Tuesday conference call to share the company’s fourth-quarter fiscal results, Noel White, Tyson CEO said the company expects to have the plant fully operational within 60 days, and potentially sooner.

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

Choice boxed beef cutout value was $1.91 higher Tuesday afternoon at $240.50/cwt.—the highest since June of 2017. Select was $2.54 higher at $216.23.

Corn futures closed 3¢ to 4¢ higher through Jly ’20 and then mostly 1¢ higher.

Soybean futures closed fractionally mixed to 1¢ lower.

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Major U.S. financial indices mainly edged higher on Tuesday, supported once again by positive quarterly corporate earnings.

The Dow Jones Industrial Average closed unchanged. The S&P 500 closed 4 points higher. The NASDAQ was up 21 points.

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Increased uncertainty and price pressure from the Tyson plant fire may have helped encourage some cow-calf producers to begin herd liquidation, says Elliott Dennis, livestock marketing economist at the University of Nebraska-Lincoln.

To illustrate the market uncertainty leading into the fire, Dennis uses the example of a cow-calf producer in the Northern Plains, who calves in March or April and then sells weaned calves in October. At calving time, Dennis points out Feeder Cattle futures for Oct were around $157. After higher Corn futures rose in response to late and poor planting conditions, and applied price pressure to Feeder Cattle, he explains the October Feeder Cattle contract fluctuated between $132 and $145 in June, July and August, before sinking to $127, in the wake of the Tyson plant fire. By expiration, the contract was back up $145.

“How risk averse producers were likely determined price risk management used and ultimately gross revenue received for sold calves,” Dennis says, in the latest issue of In the Cattle Markets. He adds that cow-calf producers could respond to the increased market volatility by selling cows and exiting the market or by retaining beef cows for breeding.

Although the number of beef cows bred and the number of heifers retained for breeding this year won’t be known until the Jan. 1 USDA Cattle report, Dennis says cow slaughter provides some indication of producer response.

Beef cow slaughter numbers this year tracked close to last year’s pace through much this year. However, Dennis says, USDA’s Cow Slaughter Under Federal Inspection reports suggest a large beef cow sell-off since the week of September 14. He adds that beef cow slaughter numbers are on an upward trend and show no sign of slowing down.

Besides the fire, Dennis explains cow slaughter likely increased, due to skyrocketing prices for 90% lean beef, tighter hay supplies borne by the wet spring and summer, and the slow recovery of cash prices.

“In the short term, this reduction in beef cows affects the number of calves born next year, and feeder cattle available to enter feedlots,” Dennis says. “In the long term, it could ultimately signal that the industry is beginning to enter a contraction phase of the cattle cycle.”

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

Cattle Current Daily—Nov. 12, 2019

Cattle futures firmed and gained on Monday, supported by currently positive fundamentals, including seasonal strength for wholesale beef values and cash fed cattle prices.

Live Cattle futures closed an average of 56¢ higher.

Feeder Cattle futures closed an average of 92¢ higher (57¢ to $1.25 higher).

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

Choice boxed beef cutout value was 53¢ lower Monday afternoon at $238.59/cwt. Select was 43¢ higher at $213.69.

Corn futures closed 4¢ lower through Jly ’20 and then mostly 2¢ lower.

Soybean futures closed 10¢ to 14¢ lower through Nov ’20 and then 5¢ to 9¢ lower.

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Major U.S. financial indices closed marginally mixed on Monday, amid mixed news.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 6 points lower. The NASDAQ was down 11 points.

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“Prices for most weight classes of feeder cattle increased last week, suggesting that the last week of October may have been the seasonal low,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “However, cold weather this week may dampen demand and could pressure prices a bit more as large fall run numbers will likely continue for another couple of weeks.”

In his weekly market comments, Peel explains price patterns are typical for the time of year in Oklahoma, with prices per hundredweight decreasing sharply from 400 to 600 lbs. and prices largely unchanged at weights from 600 to 800 lbs.

“The current price patterns suggest marketing considerations for both cow-calf sellers and stocker buyers. For example, the value of additional weight for retained weaned calves depends on the weaning weight of the animals and the amount of additional weight planned,” Peel explains. “At 450 lbs., the value of 50 lbs. of weight gain is only $34/head but the value of 50 additional lbs. for a steer weighing 550 lbs. at weaning is $46/head. However, under the current price pattern, the value per pound of additional weight is higher as more weight is added. Of course, prices at this point in time do not account for price changes over the time it takes to add additional weight. However, current price patterns provide information about potential value relative to additional costs to add weight.”

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

Cattle Current Daily—Nov. 11, 2019

Cash fed cattle trade ended the week at $114-$115/cwt. in the Southern Plains, which was mainly $2 higher in Kansas and $2-$3 higher in the Texas Panhandle. In Nebraska, live trade was unevenly steady at $114-$116. Prices in the western Corn Belt were $1-$2 higher at $114-$115. Dressed trade was $1-$2 higher at $181-$182.

Cattle futures closed narrowly mixed to marginally higher with positive Live Cattle fundamentals tempered by the more price-positive outlook for corn prices (see World Agricultural Supply and Demand Estimates below).

Except for 20¢ lower in the back contract, Live Cattle futures closed an average of 19¢ higher.

Feeder Cattle futures closed narrowly mixed (27¢ lower to 22¢ higher).

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

Choice boxed beef cutout value was 83¢ higher Friday afternoon at $239.12/cwt. Select was 24¢ higher at $213.26.

Corn futures closed 2¢ higher through Jly ’20 and then mostly 1¢ higher.

Soybean futures closed mostly 3¢ to 5¢ Lower. 

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Major U.S. financial indices edged higher on Friday, with continued optimism regarding progress in U.S.-China trade talks.

The Dow Jones Industrial Average closed 6 points higher. The S&P 500 closed 7 points higher. The NASDAQ was up 40 points.

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Forecast total red meat and poultry production for this year increased by 257 million lbs. to 105.02 billion lbs. (+0.25%) in the monthly World Agricultural Supply and Demand Estimates (WASDE) issued Friday.

Projected beef production increased 88 million lbs. to 27.04 billion lbs. (+0.32%) on higher expected slaughter of fed cattle and non-fed cattle.

The expected average fed steer price (5-area direct) for this year increased 50¢ from the previous month to $116/cwt., based on recent price strength. Fourth-quarter price is projected at $112.

Forecast total red meat and poultry production for next year increased by 45 million lbs. to 107.46 billion lbs., with increased broiler and turkey production offsetting lower anticipated beef production. That would be 2.44 billion lbs. (+2.32%) more than this year.

Total projected beef production for next year was lowered by 120 million lbs. (-0.43%) on a slower expected pace of gains in carcass weights. That would be 514 million lbs. (+1.90%) more than this year.

The annual fed steer price for next year is projected at $116, with the first-quarter price at $120 and the second-quarter price at $117.

Corn

WASDE increased the season-average corn price by 5¢ to $3.85/bu., based on current prices.

This month’s 2019-20 U.S. corn outlook is for lower production, reduced use, and smaller ending stocks.

Corn production is forecast at 13.66 billion bu., down 118 million from last month with reduced yield of 1.4 bu. to 167.0 bu./acre. Corn ending stocks are lowered 18 million bu. 

Soybeans

The U.S. soybean outlook is for slightly lower production of 3.55 billion bu., down less than 1 million bu. from the previous month, on fractionally lower yields and unchanged harvested area. But, ending stocks were projected higher on reduced crush.

The U.S. season-average soybean price for 2019-20 is forecast at $9/bu., unchanged from last month. The soybean meal price forecast is also unchanged at $325/short ton. The soybean oil price is forecast at 31¢/lb., up 1¢ from last month, on sharply higher reported prices through October.

Wheat

The outlook for 2019-20 U.S. wheat is for smaller supplies, reduced domestic use, and lower stocks. Projected wheat supplies were lowered by 42 million bu., based on updated production estimates for the states resurveyed following the NASS Small Grains Summary, issued September 30.

The season-average farm price was reduced 10¢/bu. to $4.60, based on NASS prices reported to date and expectations for cash and futures prices the remainder of the 2019-20 marketing year.

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

Cattle Current Daily—Nov. 8, 2019

Negotiated cash fed cattle trade remained largely undeveloped through Thursday afternoon, based on USDA reports. There was some early dressed trade in Nebraska at $181-$182/cwt., which was $1-$2 higher than last week. Although too few to trend, there were also some dressed sales in the western Corn Belt at $181-$182 and some live at $114.

Continued higher wholesale beef values, the positive outlook for cash prices and higher outside markets helped lift Cattle futures Thursday.

Except for unchanged in spot Dec, Live Cattle futures closed an average of 42¢ higher.

Except for 2¢ lower in spot Nov, Feeder Cattle futures closed an average of 96¢ higher (40¢ to $1.52 higher).

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

Choice boxed beef cutout value was $1.15 higher Thursday afternoon at $238.29/cwt. Select was $1.49 higher at $213.02.

Grain futures were mixed as traders positioned themselves ahead of Friday’s monthly World Agricultural Supply and Demand Estimates.

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

Soybean futures closed 7¢ to 10¢ higher through Aug ’20 and then mostly 2¢ to 5¢ higher.

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Major U.S. financial indices climbed on Thursday, with reports that the U.S. and China are making progress on a trade deal, including agreement to roll back some existing tariffs if and when a deal is struck.

The Dow Jones Industrial Average closed 182 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 23 points.

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“Fed cattle, feeder cattle, and calf cash prices have all been stronger than expected through this fall. Live Cattle and Feeder Cattle futures contract prices have also shaken off the pessimism of abundant supplies, compounded by the unexpected closure of the Tyson beef plant in southwest Kansas,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets.

He explains part of the support comes from the supply side, including the lighter year-over-year carcass weights for much of the year, as well as packers running substantial Saturday kills for a long while.

“What is being discussed less is the strong retailer and, by definition, consumer effects,” Koontz says. “Packers margins have been very strong in August and September, and likely October, approaching $500 per head. These are the live-to-wholesale beef price spreads. This value is much higher than other months and much higher than prior year highs. This is, of course, due in part to the plant closure. But it is interesting that the live-to-retail price spread has moved little in these same two months. The live-to-retail spread is up less than 2-3%. The retailer margin or the wholesale-to-retail spread has declined sharply. Again, the live-to-wholesale spread is up, the live-to-retail spread is even, so it is the retailer that has taken a chunk out of their margin.”

Koontz also points to the current Choice-Select spread of more than $25/cwt. compared to what’s typically about $10 this time of year.

“It is clear the retailer has helped the cattle market turn the corner on any pessimism from summer supplies and slaughter disruption. And, there does not appear to be any pushback from the consumer,” Koontz says.

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

Cattle Current Daily—Nov. 7, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, but early indications were positive.

Choice steers and heifers sold $1.75-$2.00 higher at the fat auction in Tama, IA. There were 192 head of Ch 2-4 steers weighing an average of 1,455 lbs. that brought an average price of $116.28/cwt. That was $2-$3 higher than last week’s country trade in the region.

Likewise, slaughter steers and heifers traded $1-$2 higher at Sioux Falls Regional in South Dakota. There were 348 head of Ch 2-3 steers weighing an average of 1,468 lbs. and bringing an average price of $113.03.

Only 547 head were offered in Wednesday’s weekly Fed Cattle Exchange auction, and no takers. There were two heifer lots from the Southern Plains passed on with bids of $114/cwt. and $113.

Cattle futures softened, though, likely with some defensiveness ahead of the Goldman Roll, when the Goldman Sachs Commodity Index rolls its futures holdings forward from the expiring month.

Live Cattle futures closed an average of 57¢ lower, except for 2¢ higher in near Feb.

Feeder Cattle futures closed an average of $1.03 lower (67¢ to $1.35 lower).

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

Choice boxed beef cutout value was $1.09 higher Wednesday afternoon at $237.14/cwt. Select was $1.71 higher at $211.53.

Corn futures closed 2¢ to 4¢ lower through Sep ’20 and then mostly unchanged to fractionally lower.

Soybean futures closed 3¢ to 6¢ lower across most of the board.

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Major U.S. financial indices basically hovered in place on Wednesday, with continued strong quarterly corporate earnings tempered by lingering uncertainty about a U.S.-China trade deal.

The Dow Jones Industrial Average closed fractionally lower. The S&P 500 closed 2 points higher. The NASDAQ was down 24 points.

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U.S. beef exports in September were steady with last year in volume at 109,799 metric tons (mt), but value was 4% less at $661.3 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Through the first three quarters of the year, beef exports were 2% below last year’s record pace in both volume (991,325 mt) and value ($6.1 billion).

“While red meat exports face obstacles in some key markets, global demand dynamics are strong and we see opportunities for significant growth in the fourth quarter and into 2020,” says USMEF President and CEO Dan Halstrom. “Progress is being made on market access improvements and this makes for a very positive outlook going forward.”

With that said, lingering trade issues continue to constrain potential. For instance the recently signed U.S.-Japan trade agreement awaits approval, and tariff relief, from the Japanese Parliament. In the meantime, September beef exports to that leading market were 14% below last year in both volume (24,041 mt) and value ($148.3 million).

“Japan is still delivering excellent value for U.S. beef producers, but tariff relief cannot come soon enough,” Halstrom says. “With a level playing field, the U.S. beef industry will move a wider range of products to our loyal customers in Japan and will definitely capitalize on emerging growth opportunities.”

Beef export value per head of fed slaughter averaged $318.54 in September, up significantly from the previous month but 5% below last year. The January-September average was down 3% at $310.77.

U.S. Pork Exports Churn Higher

U.S. pork exports in September increased 13% from a year ago in both volume (202,248 mt) and value ($532.2 million). For January-September, pork export volume was 5% ahead of last year’s pace at 1.9 million mt, while value increased 2% to $4.89 billion.

“Although the U.S. industry has made rebuilding pork demand in Mexico a top priority, there is definitely a lingering effect from the retaliatory duties, which were in place for nearly a full year,” Halstrom explains. “While it is a great relief to once again move pork to Mexico duty-free, ratification of the U.S.-Mexico-Canada Agreement would certainly help the psychology of the market and bolster our major customers’ confidence in the U.S. supply chain.”

 

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

Cattle Current Daily—Nov. 6, 2019

Cattle futures faded early pressure to close mainly narrowly mixed on Tuesday, supported by the continued surge in beef cutout values and the outlook for steady to higher cash fed cattle prices this week.

Except for 62¢ lower in spot Dec and 52¢ higher at the back of the board, Live Cattle futures closed marginally mixed (10¢ lower to 25¢ higher).

Other than $1.22 lower in spot Nov and 10¢ higher at the back of the board, Feeder Cattle futures closed an average of 11¢ lower.

Wholesale beef values were higher 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 $1.24 higher Tuesday afternoon at $236.05/cwt. Select was 56¢ lower at $209.82.

Corn futures closed mostly 1¢ lower.

Soybean futures closed 3¢ to 4¢ lower through Jan. ’21 and then mostly 1¢ lower.

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Major U.S. financial indices closed narrowly mixed Tuesday, amid continued strong quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 3 points lower. The NASDAQ was up 1 point.

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Agricultural producer sentiment rose in October, according to the Purdue University/CME Group Ag Economy Barometer. It increased 15 points from September to a reading of 136. Sub-indices also increased, with an increase of 15 points in both the Index of Current Conditions (155) and the Index of Future Expectations (146).

The barometer is based on a mid-month survey of 400 U.S. crop and livestock producers.

“Almost across the board, farmers were more optimistic about the agricultural economy in October,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “While the level of optimism among farmers is higher than earlier this year, the survey uncovered additional uncertainty related to trade agreements that are still being negotiated.”

For instance, 96% of producers indicated the U.S.-Mexico-Canada Trade Agreement—waiting for approval by Congress—was either important or very important. However, only 55% expect it to be approved by Congress soon. At the same time, 97% of producers felt the recently announced trade deal with Japan was also important or very important to U.S. agriculture.

As for the ongoing trade war between the U.S. and China, 51% of respondents believed an imminent resolution was unlikely. But, that was 8% fewer than in September and 20% less than when the same question was posed in August. At the same time, 75% in the October survey said they expect the final outcome will ultimately prove beneficial to U.S. agriculture. October was the fourth consecutive month that more than 70% expected a beneficial outcome to the trade dispute.

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

Cattle Current Daily—Nov. 5, 2019

When all was said and done last week, negotiated cash fed cattle sales ended up $2 higher on a live basis in the Southern Plains at $112/cwt., mostly $5 higher in Nebraska at mostly $115 and $3-$4 higher in the western Corn Belt at $113-$114. Dressed sales were mostly $5 higher at mostly $180.

Cattle futures edged mostly higher to start the week, maintaining gains from Friday’s rally, borne by higher cash fed cattle prices and increasing wholesale beef values.

Live Cattle futures closed an average of 39¢ higher.

Other than 5¢ lower and unchanged in the front two contracts, Feeder Cattle futures closed an average of 63¢ higher (17¢ to $1.07 higher).

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

Choice boxed beef cutout value was $1.61 higher Monday afternoon at $234.81/cwt. Select was $2.87 higher at $210.38.

Corn futures closed 3¢ to 6¢ lower in the front four contracts and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 2¢ higher through Jan. ’21 and then mostly fractionally lower.

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Major U.S. financial indices closed higher Monday, with follow-through buying from Friday’s rally, sparked by a strong monthly employment report and continued strong quarterly corporate earnings.

The Dow Jones Industrial Average closed 114 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 46 points.

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Cyclical price support could be nearer than previously supposed, based on recent estimates from the Livestock Marketing Information Center (LMIC).

First, LMIC projects the Jan. 1 cattle inventory will be slightly less year over year.

“Regional cow slaughter suggests beef cows are being slaughtered at a much higher rate in most of the regions except the Southern Plains,” say LMIC analysts, in the latest Livestock Monitor. “Total beef cow slaughter through 42 weeks of the year is up 2.9%. Heifer slaughter continues to post large gains compared to a year ago. Weekly heifer slaughter year to date is up 7.3%.”

Further, LMIC analysts explain heifer slaughter is on pace for about 500,000 head more than was in the Jan. 1 ‘other heifer’ category.

“That would indicate more heifers that were considered for replacement were pulled from the herd,” they say. “The latest Cattle on Feed report showed 39% of the on-feed mix were heifers. This suggests that the number of heifers held for replacement for beef-type animals will also likely be below a year ago. LMIC is penciling in beef heifer replacements down more than 2%.”

As for dairy, LMIC analysts say the cow inventory edged lower since last year, with the latest milk production report indicating 30,000 fewer cows than when the year began.

Finally, LMIC analysts point out steer slaughter for the first 42 weeks of this year is more than 2% less than the same period last year.

“Reconciling the steer slaughter deficit against 2018’s large 1.8% increase in the calf-crop year from the previous year has been difficult,” they say. “The calf crop and the number reported for steers 500 lbs. and heavier both appear to be too high in last year’s report (Cattle).”

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

Cattle Current Daily—Nov. 4, 2019

Negotiated cash fed cattle trade remained undeveloped in the North through Friday afternoon, based on USDA reports. Although there were too few transactions to trend, a few live sales in the western Corn Belt were at $112-$114/cwt. and a few dressed sales in Nebraska were at $180. Compared to the previous week, that was $2-$4 higher on a live basis and $5 higher in the beef.

Furthermore, USDA’s Direct Slaughter Cattle Reporting Dashboard tallied 12,560 head of steers and heifers Friday (live and dressed), with the average steer price at $113.70 on a live basis and $177.04 in the beef.

For the week, live sales in the Southern Plains were $2 higher at $112/cwt.

Stronger cash prices and the recent surge in wholesale beef values helped Cattle futures rally on Friday.

Not counting 40¢ lower in newly minted away April, Live Cattle futures closed an average of $1.55 higher ($1.07 higher to $2.30 higher in spot Dec).

Feeder Cattle futures closed an average of $1.94 higher ($1.32 to $2.72 higher).

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

Choice boxed beef cutout value was $1.02 higher Friday afternoon at $233.20/cwt. Select was also $1.02 higher at $207.51.

Corn futures closed mostly fractionally lower.

Soybean futures closed 3¢ to 7¢ higher through Aug. ’20 and then mostly 1¢ lower.

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Major U.S. financial indices closed higher Friday, buoyed by a strong monthly employment report.

Total non-farm payroll employment increased by 128,000 in October, according to the U.S. Bureau of Labor Statistics. That was significantly more than expectations. The unemployment rate was little changed at 3.6%. The average hourly earnings of all employees on non-farm payrolls increased 6¢ to $28.12. Average hourly earnings are 3.0% higher over the last 12 months.

Crude oil rallied with West Texas Intermediate (CME) up $1.80 to $2.02 higher through the front 12 contracts.

The Dow Jones Industrial Average closed 301 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 94 points.

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Choice boxed beef cutout value was $233.20/cwt. Friday, the highest since August—about a week after the Tyson fire. That was $14.65 more (+6.7%) than a year earlier. At $207.52 on Friday, Select was $3.27 more (+1.6%) more. The Choice-Select spread was 79.6% higher (+$11.39) at $25.69.

“Most of the strength in cutout prices right now is coming from the rib and brisket primal, with slight support from the chuck and round,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The chuck and round will bear more of the burden of supporting the cutout value moving through the winter months.”

Griffith also notes 90%-lean beef prices remain strong, despite seasonal fourth-quarter pressure.

“Current prices are about 16% above where they were this time one year ago, but they are slightly lower than the five-year average price for the beginning of November,” Griffith says.

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

Cattle Current Daily—Nov. 1, 2019

Except for some scattered sales in Kansas on Thursday—steady with the previous day’s higher market in the Southern Plains at $112/cwt.—negotiated cash fed cattle trade remained undeveloped, based on USDA reports.

Cattle futures pulled back from the strong rally the previous day, pressured by outside markets on new doubts about a U.S.-China trade deal.

Live Cattle futures closed an average of 63¢ lower (15¢ lower at the back to $1.70 lower in expiring Oct).

Feeder Cattle futures closed an average of 19¢ lower.

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 $2.13 higher Thursday afternoon at $232.18/cwt. Select was 18¢ lower at $206.49.

Corn futures closed mostly fractionally lower.

Soybean futures closed mostly 2¢ higher.

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Major U.S. financial indices closed lower Thursday. Pressure included chatter about a more dismal outlook for U.S.-China trade talks, but nothing definitive, as always. Likely, there was also some month-end profit taking and book squaring.

The Dow Jones Industrial Average closed 140 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 11 points.

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For the first time in a long while, carcass weights trended higher year over year, for the week ending Oct. 19.  

The average dressed steer weight was 900 lbs., according to the most recent Actual Slaughter Under Federal Inspection report. That was 1 lb. lighter than the previous week but 6 lbs. heavier than the same time a year earlier. The average dressed heifer weight of 831 lbs. was 3 lbs. heavier than the previous week and 5 lbs. heavier than the previous year.

By | October 31st, 2019|Daily Market Highlights|

Cattle Current Daily—Oct. 31. 2019

Negotiated cash fed cattle trade developed in the Southern Plains Wednesday at $112/cwt. on a live basis. That was $2 more than the bulk of last week’s trade in the region.

Likewise, there were four lots of heifers (433 head) offered in the weekly Fed Cattle Exchange Auction, for delivery at 1-9 days. Two Kansas lots sold for a weighted average price of $112. The other two lots were passed at $112.25 and $112.75.

Also, there were 237 head of Ch 2-4 steers at the fat auction in Tama, IA—average weight of 1,445 lbs. They sold for a weighted average price of $113.05

Cattle futures rallied strong on Wednesday, supported by stronger cash fed cattle prices and the sharp seasonal uptick in wholesale beef values.

Except for 2¢ higher in expiring October, Live Cattle futures closed an average of $1.24 higher, with increasing open interest and the heaviest trade in a month. Dec closed at the highest level since April at $118.30.

Other than 60¢ higher in nearly spent October, Feeder Cattle futures closed an average of $2.69 higher, with active trade and expanding open interest.

Wholesale beef values were weak 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 50¢ lower Wednesday afternoon at $230.05/cwt. Select was $3.10 higher at $206.67.

Corn futures closed 2¢ to 4¢ higher in the front three contracts, and then mostly fractionally higher.

Soybean futures closed mostly 2¢ lower.

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Major U.S. financial indices closed higher Wednesday. Support included stronger domestic economic performance last month, as well as a positive barometer for job growth.

Real gross domestic product (GDP) increased at an annual rate of 1.9% in the third quarter of this year, according to the advance estimate released by the Bureau of Economic Analysis.

On the jobs front, non-farm jobs in the private sector increased by 125,000 from September to October, according to the closely-watched ADP National Employment report.

Also, as expected, the Federal Open Markets Committee (FOMC), cut the target range for the federal funds rate by 25 points for the third time this year.

The Dow Jones Industrial Average closed 115 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 27 points.

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Whether current interest in plant-based proteins is a fad or a long-term trend depends on the particular consumer and their reasons for choosing plant-based foods.

That’s the conclusion of a new study by the NPD Group (NPD), which finds that Millennials (born 1981-1996) are the top consumers of plant-based meat alternatives. According to The Future of Plant-based Snapshot, this generational group has adopted plant-based meat alternatives as a way to indulge sensibly while addressing their long-term health goals and animal welfare concerns.

Likewise, the study indicates Gen Xers (born 1965-1980) are also a core consumer group of plant-based meat alternatives. Many in this group are parents of Gen Zs (born 1997 to present), and they raised their Gen Z children on plant-based beverages and foods. Boomers are decelerating their consumption of plant-based meat alternatives but are the top consumers of plant-based dairy alternatives.

Since the core consumer groups for plant-based dairy and meat alternatives are younger, NPD forecasts that plant-based foods, to varying degrees, do have staying power. NPD’s study also finds that plant-based food consumption is not about rejecting traditional protein sources, as about 90% of plant-based users are neither vegetarian nor vegan.

“First and foremost taste is king when considering entering the plant-based foods category,” says Darren Seifer, NPD food and beverage industry analyst. “Attributes such as health and convenience go far to drive consumption, but if the flavor profile falls below consumers’ expectations, then the product will likely have a short run…”

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

Cattle Current—Oct. 30, 2019

Cattle futures closed mixed Tuesday, with modest pressure likely stemming from technicals, as well as near month-end and contract-end jockeying.

Live Cattle futures closed mixed, from an average of 25¢ higher across the front half of the board to an average of 27¢ lower.

Other than 2¢ higher in spot October and unchanged in Jan, Feeder Cattle futures closed an average of 30¢ lower amid sluggish trade.

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

Choice boxed beef cutout value was $2.65 higher Tuesday afternoon at $230.55/cwt. Select was $2.81 higher at $203.57.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed fractionally lower to 2¢ lower through Jul ’20 and then fractionally higher to 2¢ higher. 

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Major U.S. financial indices edged Lower Tuesday, amid mixed economic news.

The Dow Jones Industrial Average closed 19 points lower. The S&P 500 closed 2 points lower. The NASDAQ was down 49 points.

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Fed cattle prices next quarter should be supported by the higher proportion of heifers on feed, says Matthew Diersen, a risk and business management specialist at South Dakota State University.

On the other side of the fence, he explains calf prices remain under pressure by the supply of feedlot-ready cattle, made larger as producers retain fewer replacements. But, that also means cyclically higher prices may be closer than originally anticipated.

“The slight increase in cow slaughter volume, coupled with fewer beef replacements, suggest that Jan. 1, 2020 cow inventory levels will be even with or slightly lower than year-earlier levels,” Diersen explains, in the latest issue of In the Cattle Markets. “The USDA baseline did not have a decline happening until 2022. A smaller 2020 calf crop would be supportive of prices next fall.”

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

Cattle Current Daily—Oct. 29, 2019

The 5-area direct average fed steer price last week was $110.13/cwt. on a live basis, which was 40¢ higher than the previous week. The average dressed steer price of $174.56 was 25¢ higher.

Cattle futures mostly edged higher Monday, with firm cash trade and increasing wholesale beef values. 

Live Cattle futures closed an average of 45¢ higher.

Feeder Cattle futures closed an average of 25¢ higher except for unchanged to 30¢ lower in three contracts.

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

Choice boxed beef cutout value was $2.46 higher Monday afternoon at $227.90/cwt. Select was 92¢ higher at $200.76.

Corn futures closed mostly 2¢ lower.

Soybean futures closed 1¢ to 3¢ higher. 

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Major U.S. financial indices closed higher Monday, with follow-through buying, based on strong quarterly earnings reports and reports of progress on the first phase of a U.S.-China trade deal.

The Dow Jones Industrial Average closed 132 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 82 points.

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Cow slaughter and the mix of heifers on feed continue suggesting a cyclical plateau to the size of the nation’s cowherd.

“The number of heifers on feed (Oct. 1) was 4.4 million head, 2.3% higher year over year,” notes Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Over the last 20 years, heifers represented an average of 36.7% of feedlot inventories.” They represented 39.1% at the beginning of the month, he says, the highest percentage in more than 18 years. Peel notes the record low was in April 2015, when heifers represented 31.0% of the mix.

Further, Peel says beef cow slaughter so far this year is 2.4% more than last year. Total cow slaughter is up 3.0%, with dairy cow slaughter 3.5% higher.

“Total steer and heifer slaughter thus far in 2019 is up 1.0% year over year. Year-to-date steer slaughter is down 2.4% year over year, while heifer slaughter is up 7.4%…” Peel explains. “Modest increases in yearling and cow slaughter, combined with lower carcass weights, results in year-to-date beef production up 0.5% year over year. Beef production for 2019 is projected to total 27.1 billion lbs., 0.7% higher year over year. Beef production is expected to peak cyclically in 2020 with a slight year-over-year increase to 27.2 billion lbs.” 

So far this year, Peel says steer carcass weights averaged 4.6 lbs. less than last year, while heifer carcass weights averaged 5.4 lbs. less. Cow carcass weights are averaging 6.6 lbs. less. 

Considering Friday’s monthly Cattle on Feed report, Peel adds, “The 12-month moving average feedlot inventory reached 11.6 million head in August and has dropped slightly in the past two months. It is possible that feedlot inventories have peaked cyclically, although there is still a chance that average feedlot totals could push slightly higher into early 2020.”

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

Cattle Current daily—Oct. 28, 2019

Except for the Southern Plains, negotiated cash fed cattle trade remained undeveloped through Friday afternoon, based on USDA reports. Live sales in the Southern Plains on Thursday were at $110/cwt., which was $1 higher in Kansas and $2 higher in the Texas Panhandle.

Cattle futures strengthened Friday, supported by steady to higher cash trade, increasing wholesale beef values and higher Lean Hog futures.

Live Cattle futures closed an average of 94¢ higher.

Feeder Cattle futures closed an average of 86¢ higher.

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

Choice boxed beef cutout value was 18¢ lower Friday afternoon at $225.44/cwt. Select was 75¢ higher at $199.84.

Corn futures closed unchanged to fractionally lower.

Soybean futures closed 9¢ to 13¢ lower through Aug. 20 and then mostly 4¢ to 6¢ lower.

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Major U.S. financial indices closed higher Friday, amid strong quarterly earnings reports and chatter about progress being made on the first phase of a U.S.-China trade deal.

The Dow Jones Industrial Average closed 152 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 57 points.

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Markets will likely view Friday’s monthly Cattle on Feed report as neutral. Except for about 0.5% more placements than pre-report estimates, numbers reflected most expectations.

Placements in September for feedlots with 1,000 head or more capacity were 2.09 million head. That was 2.04% more (+42,000 head) than last year. As for placement weights: 37.02% weighed less than 700 lbs., 44.67% weighed 700-899 lbs. and 18.30% weighed 900 lbs. or more.

Marketings in September of 1.74 million head were 1.11% more (+19,000 head) than a year earlier.

Cattle on feed Oct. 1 of 11.28 million head were 1.07% less (-122,000 head) than the same time last year. There were 2.32% more (+100,000 head) heifers and heifer calves on feed.

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

Cattle Current Daily—Oct. 25, 2019

Negotiated cash fed cattle trade developed in the Southern Plains on Thursday, with live sales at $110/cwt. That was $1 higher in Kansas and $2 higher in the Texas Panhandle. Although too few to trend, there were also some early dressed sales in the North at $174-$175, which was $1 higher than the low end of last week’s range.

Cattle futures softened a touch. Part of the pressure might have been defense ahead of Friday’s USDA monthly Cattle on Feed report. 

Except for 22¢ higher in spot Oct, Live Cattle futures closed an average of 33¢ lower.

Except for 20¢ higher in spot Oct, Feeder Cattle futures closed an average of 64¢ lower.

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

Choice boxed beef cutout value was $2.34 higher Thursday afternoon at $225.62/cwt. Select was 15¢ higher at $199.09.

Although increasing seasonally, dressed fed cattle carcass weights continue to be lighter year over year, according to USDA’s weekly Actual Slaughter Under Federal Inspection report. The average dressed steer weight of 901 lbs. for the week ending Oct. 12 was 2 lbs. heavier than the previous week but 2 lbs. lighter than the same week last year. The average dressed heifer weight of 828 lbs. was 4 lbs. heavier than the prior week but 3 lbs. lighter than a year earlier.

Corn futures closed mostly 1¢ lower.

Soybean futures closed fractionally lower to 1¢ lower in the front three contracts and then fractionally higher to 5¢ higher.

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Major U.S. financial indices closed narrowly mixed Thursday. Although corporate quarterly earnings reports continue mostly positive, investors remain uncertain about economic growth.

The Dow Jones Industrial Average closed 28 points lower. The S&P 500 closed 5 points higher. The NASDAQ was up 66 points.

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The closely watched Rural Mainstreet Index (RMI) from Creighton University rose above growth neutral this month, but rural bankers’ economic expectations fell to the lowest level in two years.

Specifically, the RMI increased to 51.4 in October from 50.1 in September. Although still weak, it was the highest level since June and marked the third time in the past four months that the overall index rose above growth neutral.

“Federal agriculture crop support payments and somewhat higher grain prices boosted the Rural Mainstreet Index slightly,” says Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. Even so, he adds that 73% of bank CEOs reported continuing negative impacts from the trade war.

Bank CEO expectations for the economy six months out, slumped to 36.5 from September’s 42.9, and continues to indicate a very negative economic outlook among bankers, according to the associated confidence index.

“This is the lowest economic confidence we have recorded in two years,” says Goss. “The trade war with China and the lack of passage of the USMCA (NAFTA’s replacement) are driving confidence and growth lower for most areas of the region.”

The RMI is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation.

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

Cattle Current Daily—Oct. 24, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, but early trades hinted at steady to higher money.

Although too few to trend, early live sales were reported at $109/cwt. in the Southern Plains and Nebraska. That was $1 higher in the south and steady with the lower end of last week’s range in Nebraska.

Likewise, one lot (131 head) of heifers in Texas sold for a weighted average price of $109, for delivery at 1-9 days, in the weekly Fed Cattle Exchange auction. There was only one other lot in the sale, which was passed on at $105.

Choice 2-4 steers (308 head) and averaging 1,414 lbs. sold for an average of $112.83 at the fat auction in Tama, IA. That was $1 higher than the top of last week’s country trade.

Cattle futures took a step higher Wednesday, supported by the seasonal surge in wholesale beef values and the previous day’s Cold Storage report.

Except for 32¢ higher in spot Oct, Live Cattle futures closed an average of $1.09 higher.

Feeder Cattle futures closed an average of $1.35 higher.

Wholesale beef values were sharply higher 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 $2.35 higher Wednesday afternoon at $223.28/cwt. Select was 86¢ higher at $198.94.

Corn futures closed unchanged to fractionally lower.

Soybean futures closed mostly fractionally lower. 

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Major U.S. financial indices closed higher Wednesday on mostly positive quarterly earnings reports.

The Dow Jones Industrial Average closed 45 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 15 points.

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Cow-calf profitability may begin turning the corner next year, according to analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor. Currently, LMIC projects typical returns over cash costs, plus pasture rent (basis, the Southern Plains) at $70-$85/cow in 2020 and 2021.

Heading into cyclically higher returns, however, estimated returns continue to represent a loss.

“Overall, this year’s estimated cow-calf returns over cash costs plus pasture rent for the Southern Plains is projected to be negative and the worst since 1996 (unadjusted for inflation),” say LMIC analysts. “Three out of the last four years have been in the red.”

On the cost side of the equation, LMIC projects that Southern Plains cash costs plus pasture rent at more than $850 per cow.

On the revenue side, LMIC projects prices for steer calves (600 lbs.) sold August-November to be 5.5% to 6.0% less than the same time a year earlier; about $9/cwt. less. That’s based on information from USDA’s Agricultural Marketing Service through mid-October.

“That will be the lowest since 2016,” say LMIC analysts. “So far this year, cull cow prices averaged over $10/cwt. below 2018’s, and for the full year, are expected to be the lowest since 2009.”

Keep in mind, LMIC estimates are not survey-based. LMIC analysts emphasize calculations only include cash costs of production and pasture rent; owner management, labor, etc., are not included. The calculations are based on a typical fulltime spring-calving, fall-weaning Southern Plains operation.

“The returns are useful only in a general context,” say LMIC analysts. “The LMIC uses those estimates because producer return is a key factor influencing national herd growth/contraction.”

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

Cattle Current Daily—Oct. 23, 2019

Cattle futures were mixed on Tuesday, with Lean Hogs helping pressure Live Cattle.

Live Cattle futures closed mixed, from an average of 26¢ lower across most of the board (12¢ lower to $1.07 lower in spot Oct) to an average of 9¢ higher in three contracts.

Feeder Cattle futures closed an average of 45¢ higher.

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

Choice boxed beef cutout value was 80¢ higher Tuesday afternoon at $220.93/cwt. Select was $3.64 higher at $198.08.

Corn futures closed mostly unchanged to fractionally higher.

Soybean futures closed 1¢ to 2¢ higher. 

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Major U.S. financial indices closed lower Tuesday on mixed quarterly earnings reports.

The Dow Jones Industrial Average closed 39 points lower. The S&P 500 closed 10 points lower. The NASDAQ was down 58 points.

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Winter wheat planting and development made strong progress last week, according to the most recent weekly USDA Crop Progress report for the week ending Oct. 20.

77% of winter wheat was planted, which was 6% more than the previous year and 2% more than the average. 53% had emerged, compared to 52% last year and 53% for average.

86% of corn was mature, compared to 99% a year earlier and 97% for the five-year average. 30% was harvested, which was 18% less than last year and 17% less than average. 56% was in Good (45%) or Excellent (11%) condition, which was 1% more than the previous week and 12% less than last year. 14% was in Poor (10%) or Very Poor condition (4%), which was 1% less than a week earlier and 2% more than a year earlier.

94% of soybeans were dropping leaves, which was 4% less than the previous year and 3% less than the average. 46% were harvested, which was 5% less than a year earlier and 18% less than average. 54% were rated in Good (45%) or Excellent (9%) condition, the same as a week earlier and 12% less than a year ago. 14% were in Poor (10%) or Very Poor (4%) condition, which the same as a week earlier and 3% more than a year earlier.

92% of sorghum was mature, which was 4% more than last year and 3% more than average. 49% was harvested, which was 4% more than last year but 4% less than the average. 64% was in Good (50%) or Excellent (14%) condition, which was 11% more than a year earlier. 8% was rated as Poor (7%) or Very Poor (1%), compared to 18% last year.

43% of the nation’s pasture and range was rated in Good (36%) or Excellent (7%) condition, which was the same as a week earlier and 7% less than a year earlier. 27% was rated as Poor (18%) or Very Poor (9%), which was 1% less than the previous week and 7% more than a year earlier.

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Beef in freezers continues to suggest strong demand. As of Sept. 30, total pounds of beef in freezers were 1% less than the previous month and 8% less than the same time last year, according to the monthly USDA Cold Storage report released Tuesday.

Frozen pork supplies were down 1% from the previous month but up 2% from last year.

Total red meat supplies in freezers were down 2% from the previous month and down 4% from last year.

Total frozen poultry supplies were 1% less than the previous month and 5% less than a year ago.

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

Cattle Current Daily—Oct. 22, 2019

When all was said and done last week, negotiated cash fed cattle trade was mainly higher in the North and steady to lower in the South. Live sales were steady in Nebraska at $109-$111/cwt., steady to $3 higher in the western Corn Belt at $110-$111 and steady to $1 lower in the Southern Plains at $108. Dressed trade was mainly $1-$3 higher at $173-$175.

Cattle futures were narrowly mixed on Monday, with steady to strong cash fed cattle prices supporting Live Cattle and extremely light trade allowing Feeder Cattle to drift.

Live Cattle futures closed an average of 19¢ higher.

Feeder Cattle futures closed unchanged to 35¢ lower, except for an average of 40¢ higher in the back three contracts.

Wholesale beef values were sharply higher 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 $2.09 higher Monday afternoon at $220.13/cwt. Select was $1.40 higher at $194.44.

Corn futures closed 1¢ to 3¢ lower through away Dec and then mostly fractionally lower.

Soybean futures closed fractionally lower in the front months and then mostly 1¢ to 2¢ higher.

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Major U.S. financial indices edged higher Monday, with support from positive quarterly earnings reports and deal-friendly chatter from China.

The Dow Jones Industrial Average closed 57 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 73 points.

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“Global production of beef, pork and poultry is projected to decline by 1.5% year over year in 2019 and decrease another 2.4% in 2020 as a result of decreased pork production due to African Swine Fever (ASF),” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “At the same time, global meat exports are expected to increase 6.9% in 2019 compared to 2018, and to grow another 6.1% in 2020. As a result, global meat exports are projected to expand from 11.2% of total production to 13.2% in just two years.”

Until ASF, China produced about half of the world’s pork supply.

“Pork production in China is projected to decrease 14.0% in 2019 from 2018 levels with another 25.3% drop year over year in 2020. That implies a 35.7% decrease in Chinese pork production in two years,” Peel says. “This contributes to a 15.7% decrease in global pork production from 2018 to 2020. The losses in China may well exceed these estimates.”

Spun another way, Peel explains pork consumption last year accounted for 74% of total Chinese beef, pork and poultry consumption. Total Chinese consumption of pork, poultry and beef is projected to decrease by 14.9% from 2018 to 2020; with pork dropping to a 59.8% share of total meat consumption. 

“Pork imports (to China) are projected to increase 66.6% in 2019 over 2018 and another 34.6% year over year in 2020,” Peel explains. “Global pork imports are expected to grow 13.5% year over year in 2019 and another 11.0% in 2020 as China’s share of global pork imports grows from 19.7% in 2018 to 35.1% in 2020. Global pork exports are expected to grow 11.3% year over year in 2019 and another 10.4% in 2020. The U.S. began to see direct impacts of this with a 479% jump in pork exports to China in July and August.”

As China works to mitigate lost pork production, Peel says Chinese beef imports to that nation are expected to increase 63.6% year over year in 2019 and another 20.8% next year. Chinese imports of poultry meat are projected to increase 82.7% year over year in 2019 and another 20% in 2020 leading to a two-year increase of 119.3%.

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

Cattle Current Daily—Oct. 21, 2019

Based on USDA reports, negotiated cash fed cattle trade through Friday afternoon was looking most steady to mixed. Live prices in the Southern Plains were steady to $1 lower at $108/cwt. Dressed trade in the North was $1-$3 higher at mostly $173 in the western Corn Belt and at $173-$175 in Nebraska.

Higher Corn futures, follow-through softness in Lean Hog futures, and likely skittishness over the plant explosion at Cargill’s packing facility in Dodge City helped push Cattle futures lower Friday, but they closed off of session lows. Various reports suggest the Cargill plant will resume normal operations Monday.

Live Cattle futures closed an average of 76¢ lower (40¢ lower to $1.92 lower in spot Oct).

Feeder Cattle futures closed an average of $1.10 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 7¢ lower Friday afternoon at $218.04/cwt. Select was 44¢ higher at $193.04.

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

Soybean futures closed 2¢ to 3¢ higher.

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Major U.S. financial indices closed lower Friday, on mixed news that included weak economic growth in China.

The Dow Jones Industrial Average closed 255 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 67 points.

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If recent forecasts from USDA are any indication, international beef demand next year will continue to help underpin domestic prices. Demand strength grows in importance with expectations of record large commercial beef production in 2020, along with record large total red meat and poultry production.

“Total exports (beef) in 2020 are forecast up 6% to a record 3.3 billion lbs., accounting for 12% of U.S. production,” say Analysts with USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook. “The United States is poised to expand market share in top markets such as Japan, South Korea, and Taiwan as key competitor Australia struggles to maintain its market shares, given its reduced exportable supplies and its dominance in filling China demand.”

At the same time, ERS expects the U.S. to import less beef in 2020.

“U.S. imports will likely be limited by a combination of tighter supplies in Oceania and expected increased demand for beef in Asia due to African Swine Fever,” say ERS analysts.

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

Cattle Current Daily—Oct. 18, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon, based on USDA reports.

Cattle futures softened.

Other than 5¢ and 50¢ higher in the front two contracts, Live Cattle futures closed an average of 34¢ lower. That was despite reports that Cargill suspended some operations at its Dodge City facility, in the wake of an explosion in a stand alone building.

Feeder Cattle futures closed an average of $1.15 lower (85¢ to $1.60 lower). Pressure likely included early spillover pressure from Live Cattle, as well as higher front-month Corn futures.

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

Choice boxed beef cutout value was 17¢ lower Thursday afternoon at $218.11/cwt. Select was $1.23 higher at $192.60.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed 1¢ to 3¢ higher through Aug ‘20 and then mostly fractionally mixed to 1¢ lower.

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Major U.S. financial indices regained losses from the previous session Thursday, with renewed hopes over a Brexit deal and continued strong quarterly earnings reports.

The Dow Jones Industrial Average closed 23 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 32 points.

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“Warmer than expected weather patterns and improved supplies of forage may have extended cattle grazing periods, slowing the pace of placements in third-quarter 2019,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “However, some of these feeder cattle will likely need to be moved off grass and into the feedlots in fourth-quarter 2019, keeping feeder prices under pressure in the fourth quarter.”

ERS pegs prices for feeder steers (750-800 lbs., basis Oklahoma City) the week of Oct. 7 at $147.26/cwt., which was $12 higher than the recent trough of $134.80 the week of Sept. 9 and more than $6 higher than the week before the Tyson plant fire.

Based on recent price strength, ERS increased the average expected feeder steer price in the fourth quarter by $4 to $137. The annual price forecast for feeder steers next year was unchanged at $141.

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

Cattle Current Daily—Oct. 17, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, based on USDA reports. There were a few early live sales in the western Corn Belt at $111/cwt.—$1 more than the top of the range for the region last week—but too few to trend.

There were 768 head offered in the weekly Fed Cattle Exchange Auction and no takers.

Cattle futures continued to edge higher, except for a strong bounce in spot Live Cattle, supported by recent cash strength and gains in wholesale beef values.

After $1.35 higher in spot Oct, Live Cattle futures closed an average of 17¢ higher.

Except for 15¢ lower in Nov, Feeder Cattle futures closed an average of 27¢ higher.

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

Choice boxed beef cutout value was 26¢ higher Wednesday afternoon at $218.28/cwt. Select was 11¢ lower at $191.37.

Corn futures closed mostly fractionally mixed

Soybean futures closed 3¢ to 6¢ lower through Sep ‘20 and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices softened Wednesday, despite continued positive quarterly corporate earnings reports. Pressure was mostly ascribed to the month-to-month decline in retail sales. The U.S. Commerce Department estimated U.S. retail and food service sales 0.3% less in September at $525.6 billion. However, sales were 4.1% more than last year.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 24 points.

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A couple of observations shared by Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments:

“Globally, the middle class is projected to expand from 2 billion to 4.9 billion people by 2030. China, alone, is projected to add 850 million new middle class consumers by 2030. It is well documented that meat consumption increases as growing incomes support better quality diets and increased protein consumption.

“It appears at this time, that swine and pork losses in China, Vietnam, North and South Korea, and the Philippines, along with other outbreaks of African Swine Fever in Europe and Africa are creating a protein deficit that cannot be currently filled by all proteins in the world.”

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

Cattle Current Daily—Oct. 16, 2019

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon, based on USDA reports. Early expectations are for steady to higher prices.

Cattle futures ended up mostly narrowly higher amid two-sided action, awaiting direction from this week’s cash market.

Live Cattle futures closed an average of 31¢ higher, except for unchanged in near Dec.

Feeder Cattle futures closed mixed, unchanged to 55¢ lower in the front three contracts and then an average of 31¢ higher.

Wholesale beef values were higher 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 80¢ higher Tuesday afternoon at $218.02/cwt. Select was $2.15 higher at $191.48.

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

Soybean futures closed 3¢ to 6¢ lower through Aug ‘20 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed higher Tuesday on positive corporate earnings and optimism over a resolution to Brexit.

The Dow Jones Industrial Average closed 237 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 100 points.

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Pasture and range conditions continued to erode last week, compared to the same time last year, according to the most recent weekly USDA Crop Progress report for the week ending Oct. 13.

96% of the corn crop was dented, which was 4% less than last year and the average. 73% of corn was mature, compared to 96% a year earlier and 92% for the five-year average. 22% was harvested, which was 16% less than last year and 14% less than average. 55% was in Good (44%) or Excellent (11%) condition, which was 1% less than the previous week and 13% less than last year. 15% was in Poor (11%) or Very Poor condition (4%), which was the same as a week earlier and 3% more than a year earlier.

85% of soybeans were dropping leaves, which was 9% less than the previous year and 8% less than the average. 26% were harvested, which was 11% less than a year earlier and 23% less than average. 54% were rated in Good (45%) or Excellent (9%) condition, 1% more than a week earlier and 12% less than a year ago. 14% were in Poor (10%) or Very Poor (4%) condition, which was 1% less than a week earlier and 3% more than a year earlier.

81% of sorghum was mature, which was 1% more than last year but 1% less than average. 40% was harvested, which was 2% less than last year and 6% less than the average. 65% was in Good (51%) or Excellent (14%) condition, which was 10% more than a year earlier. 7% was rated as Poor (6%) or Very Poor (1%), compared to 17% last year.

65% of winter wheat was planted, which was 1% more than the previous year and on par with the average. 41% had emerged, compared to 42% last year and 40% for average.

43% of the nation’s pasture and range was rated in Good (35%) or Excellent (8%) condition, which was 2% less than a week earlier and 6% less than a year earlier. 28% was rated as Poor (18%) or Very Poor (10%), which was 1% more than the previous week and 7% more than a year earlier.

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

Cattle Current Daily—Oct. 15, 2019

Negotiated cash fed cattle trade ended up higher last week. Live prices in the Southern Plains were $1-$3 higher at $109/cwt. in the Texas Panhandle and at $108-$109 in Kansas. Live trade in the Northern Plains ranged from steady to $4 higher in Nebraska at $109-$111, to $1 lower to $2 higher on a light test in Colorado at $108-$111. Dressed trade in Nebraska and the western Corn Belt was mainly $2 higher at mostly $172. Live sales in the western Corn Belt were $1 higher at $108-$110.

Stronger cash prices lifted Cattle futures.

Live Cattle futures closed an average of $1.09 higher (72¢ to $1.60 higher). 

Feeder Cattle futures closed an average of $1.54 higher.

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

Choice boxed beef cutout value was $1.56 higher Monday afternoon at $217.22/cwt. Select was 65¢ higher at $189.33.

Corn futures closed mostly unchanged to fractionally lower.

Soybean futures closed 3¢ to 4¢ higher through Jan ’21 and then mostly 2¢ lower to 2¢ higher.

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Major U.S. financial indices softened Monday as investors contemplated the potential breadth, depth and timing of the phased U.S.-China trade deal bandied about Friday.

The Dow Jones Industrial Average closed 29 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 8 points.

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“Relatively tight supplies of Prime and Choice beef are contributing to historically wide price spreads and high values for high quality-grade beef,” says David Anderson, Extension livestock economist at Texas A&M University.

In the latest issue of In the Cattle Markets, Anderson explains the Prime boxed beef cutout averaged $279.55/cwt. during the last month, which is a staggering $64.74 more than a year earlier. During the same period, the Choice cutout was $13.28 more at $215.76.

So, the Prime-Choice spread was $63.80/cwt., compared to $12.33 last year. The average Choice-Select spread was $25.76, compared to about $11 last year and for the five-year average.

“The Choice-Select spread tends to increase seasonally this time of the year and that seasonal trend is again occurring, but at a much higher price level this year,” Anderson says.

The spread is being magnified by less year-over-year fed beef production and a decline in carcasses grading Choice and higher.

“Over the last four weeks, total beef production is more than 0.5% below the same period a year ago,” Anderson says. “Over this period, fed steer and heifer slaughter is down 1.7%, while cow slaughter is up 4.2%. Digging in a little deeper, fed steer slaughter is down 6.5% while fed heifer slaughter is up 6.7%. Dressed weights continue to be down about 2 lbs. per head over the last month for steers, heifers, and cows. Combining weekly slaughter and dressed weights leaves fed beef production about 2.2% lower than a year ago, while cow beef is up 3.8%.”

Also for the last month, Anderson says Prime is running about 1.6% less than same period a year earlier and Choice is about 2.6% less. Approximately 7.7% more carcasses graded Select.

“Combining the percentage of carcasses by grade and pounds of fed steer and heifer beef produced indicates that over the last month Prime beef production has been almost 4% below a year ago. Choice beef production is almost 5% lower than a year ago, while Select production is about 5% higher,” Anderson says.

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

Cattle Current Daily—October 14, 2019

Except for some early sales in the North, negotiated cash fed cattle trade remained undeveloped through Friday afternoon, based on USDA reports.

Early dressed sales in Nebraska were $2 higher than the previous week at $172/cwt. Early dressed sales also were trading for $172 in the western Corn Belt, but too few to trend. Live sales in the western Corn Belt were steady to $2 higher than the previous week at $109. Live sales were at $109-$110 in Nebraska, but too few to trend.

Feeder Cattle futures closed mostly narrowly lower, while Live Cattle moved higher, helped along by stronger cash prices, the uptick in wholesale beef values and outside market support.

Live Cattle futures closed an average of 70¢ higher.

Except for 12¢ and 5¢ higher toward the front of the board, Feeder Cattle futures closed an average of 12¢ 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 3¢ higher Friday afternoon at $215.66/cwt. Select was $2.02 higher at $188.68.

Corn futures closed 14¢ to 17¢ higher through Jul ’20 and then mostly 1¢ to 4¢ higher.

Soybean futures closed 7¢ to 12¢ higher through Aug ’20 and then mostly 1¢ to 2¢ higher.

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Major U.S. financial indices closed sharply higher Friday with various reports indicating the U.S. and China agreed to a phased trade deal that suspends tariff increases originally scheduled to begin next week.

The Dow Jones Industrial Average closed 319 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 106 points.

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By all accounts, it’s going to take a long while for China to rebuild its pork supply in the wake of African Swine Fever (ASF). It likely will also take plenty of time to rebuild Chinese pork demand which faltered first due to fears of the disease— though it has no consequence for human health—and then from the high prices related to limited supplies.

“In Beijing, industry contacts observed a roughly 15% decline in consumption during the first half of the year,” explains agricultural economist, Lindsay Kuberka, in the recent Livestock and Poultry: World Markets and Trade, from USDA’s Foreign Agricultural Service (FAS). “They attributed much of the decline to voluntary shifts from pork to other proteins out of disease concern. In addition, food service operators sought to minimize exposure to pork price inflation by substituting other proteins like poultry meat.”

Preventive herd culling and lessened demand bolstered supplies and kept price increases at bay for the first half of this year. By the first week of October, though, Kuberka says pork prices in China were 84% higher than a year earlier.

For perspective, FAS estimates Chinese pork production 14% less this year than in 2018 and 25% less next year. China’s total swine herd is forecast to decline to 275 million head by the end of 2020, down nearly 40% since the beginning of 2018, before the crisis began.

“Consumers have reacted to high pork prices by cutting back purchases and pork prices are expected to reach record levels through the peak demand season—autumn holidays and Chinese New Year,” Kuberka says. “Supplies are expected to be released from the national pork reserve during this period to offset prices. In some areas, retail subsidies may also cushion the impact for consumers. Initiatives to lower pork prices will help some consumers but are expected to have limited impact overall.”

Moreover, Kuberka says high pork prices will encourage Chinese consumers and food service operators to purchase alternative proteins, such as beef, poultry, lamb and seafood.

“Retail prices for competing proteins are rising as a result, with chicken meat up 24% and beef up 20% year over year during the first week of October,” Kuberka explains. “Chicken meat is expected to benefit from the biggest boost in demand, given prices remain well below the cost of pork. Substitution to beef and lamb will be more limited as prices are close to double that of pork.”

Even so, China is projected to import 2.4 million metric tons (mt) of beef this year, which would be 63.6% more than last year and 146.4% more than in 2017. Forecasts see China’s beef imports increasing to 2.9 million mt next year, another 20.1% than this year.

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

Cattle Current Daily—Oct. 11, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Feeder Cattle futures crept mostly higher, while Live Cattle hovered amid sluggish two-sided trading.

Except for 25¢ higher in the front two contracts Live Cattle futures closed an average of 28¢ lower.

Except for 20¢ and 12¢ lower in the front two contracts, Feeder Cattle futures closed an average of 58¢ higher (10¢ to 95¢ 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 $1.03 higher Thursday afternoon at $215.63/cwt. Select was 54¢ higher at $186.66.

Corn futures closed 12¢ to 14¢ lower through Jul ’20 and then 1¢ to 4¢ lower. Thursday’s World Agricultural Supply and Demand Estimates (see below) were much more production friendly than traders and pre-report estimates expected.

Soybean futures closed fractionally lower through Aug ’20 and then mostly 2¢ to 4¢ lower.

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Major U.S. financial indices closed higher again Thursday with continuing hopes of a trade deal with China.

The Dow Jones Industrial Average closed 150 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 47 points.

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USDA increased fed steer price projections for the remainder of this year, in the latest World Agricultural Supply and Demand Estimates (WASDE), based on current price strength. The average 5-Area direct fed steer price for the fourth quarter is forecast at $110/cwt. The annual estimate increased $2 from the previous month’s projection to $115.50.

“Beef production is unchanged for the year, although a slower pace of placements in third-quarter 2019 is expected to result in lower first-quarter beef production, but higher second quarter production,” say analysts with USDA’s Economic Research Service (ERS). Projected fed steer price for the first quarter next year is $120; it’s $117 for the second quarter.

WASDE left anticipated beef production this year virtually unchanged (+5,000 lbs.) at 26.95 billion lbs., based on slower fed cattle slaughter than expected the prior month.

Estimated total red meat and poultry production for this year increased by 164 million lbs. (+0.16%) to 104.77 billion lbs., on higher forecast broiler production.

For next year, USDA projects beef production at 27.67 billion lbs. and total red meat and poultry production at 107.42 billion lbs.

USDA projects alfalfa and alfalfa mixture for hay production at 54.22 million tons, with more acres and slightly higher yield than the previous year, according to the Crop Production report. The total is 1.56 million tons more (+2.92%) than last year. All other hay production is forecast 5.75 million tons more (+7.49%) at 76.71 million tons.

Corn production is forecast at 13.779 billion bu., down 20 million from the previous month’s estimate (4% less than last year), with a decline in harvested area more than offsetting increased forecast yield. As of Oct. 1, the National Agricultural Statistics Service (NASS) estimated corn yield at 168.4 bu./acre, up 0.2 bu. from the previous forecast, but 8 bu. less than last year. According to the Crop Production report, corn area harvested for grain is forecast at 81.8 million acres, down less than 1% from the previous forecast but up slightly from 2018.

WASDE forecasts corn supplies sharply lower from last month on a reduced crop and lower beginning stocks, based on the September 30 Grain Stocks report. Corn ending stocks for 2019-20 were lowered 261 million bu. The season-average corn price received by producers was raised 20¢ to $3.80/bu.

Soybean production for beans is forecast at 3.55 billion bu., down 2% from the previous forecast and down 20% from last year, according to the Crop production report. Based on conditions as of Oct. 1, yields are expected to average 46.9 bu./acre, down 1.0 bu. from the previous forecast and down 3.7 bu. from 2018. Area harvested for beans in the United States is forecast at 75.6 million acres, down less than 1% from the previous forecast and down 14% from 2018.

WASDE projects soybean supplies for 2019-20 at 4.5 billion bu. down 175 million on lower production and beginning stocks. With a small increase in soybean crush, ending stocks are projected at 460 million bushels, down 180 million.

The U.S. season-average soybean price for 2019-20 is forecast at $9.00/bu., up 50¢, reflecting smaller supplies. The soybean meal price is forecast at $325.00/short ton, up $20.00. The soybean oil price forecast is raised 5¢ to 30¢/lb.

 

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

Cattle Current Daily—Oct. 10, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. Many expect prices this week to be no worse than steady.

Slaughter steers and heifers sold $1-$2 higher at Sioux Falls Regional in South Dakota on Wednesday. “Packer buyers weren’t keen on pushing the market, especially on steers over 1500 lbs., but did have to pay more to get cattle bought,” explained the AMS reporter.

There were four lots (666 head) offered in the weekly Fed Cattle Exchange auction, and no takers.

Cattle futures rallied on Wednesday, led by Feeder Cattle, amid more active trade and growing Open Interest. It was hard to pin the optimism on a particular factor. Arguably, some support came from traders trying to get in front of a potential trade deal with China—leaders are scheduled to meet tomorrow and Friday.

Live Cattle futures closed an average of 51¢ higher.

Feeder Cattle futures closed an average of $2.40 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 $1.00 higher Wednesday afternoon at $214.60/cwt. Select was 94¢ lower at $186.12.

Corn futures closed mainly unchanged to fractionally lower.

Soybean futures closed 2¢ to 3¢ higher through Nov ’20 and then mostly unchanged to fractionally higher.

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Major U.S. financial indices closed higher on Wednesday, as the U.S.-China trade talk seesaw continued to rock, to the upside this time, with reports China might settle for a partial deal.

The Dow Jones Industrial Average closed 181 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 79 points.

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“Regardless of the decline in Chinese pork production, the gap between Chinese supply and Chinese demand will be filled by either imported pork, or substitution of an alternative protein product,” says Brenda Boetel, a livestock economist at the University of Wisconsin-River Falls.

Prior to the outbreak of African Swine Fever (ASF) in China, Boetel explains that nation’s annual per capita consumption of pork was approximately 73 lbs.; 13 lbs. for beef and 25 lbs. for poultry.

“Chinese pork consumption is expected to drop sharply in response to soaring prices, as well as lack of physical supply,” Boetel says, in the latest issue of In the Cattle Markets. “In an attempt to curb price increases (and resulting inflation) reserve pork supplies have been released and price ceilings have been created. Nevertheless, Chinese pork prices have increased 33% to 100% since January. Additionally, retail prices for sheep, beef and chicken are also at record levels.”

Chinese pork imports were 30% higher year over year for January through August, according to Boetel. U.S. pork exports to China were 38% higher for the same period. She adds that Chinese beef imports increased approximately 57% over the same period. US beef exports to China were up 24%.

“Given that Chinese beef imports are increasing at a faster rate than pork, and that Chinese beef and poultry prices are at record levels, one can assume there has been some substitution from pork consumption to alternative proteins,” Boetel says. “…Poultry production has increased in China due to the much shorter production cycle than either pork or beef and poultry’s similar price point to pork. If Chinese consumers switch to poultry in the short-run to accommodate the Chinese pork shortage, it will take some time for Chinese pork consumption to rebound.”

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

Cattle Current—Oct. 9, 2019

Cattle futures edged higher Tuesday, supported by the turnaround in Lean Hogs and despite a surge in Corn futures.

Except for 7¢ and 35¢ lower in the front two contracts, Live Cattle futures closed an average of 31¢ higher.

Feeder Cattle futures closed an average of 27¢ higher, except for 2¢ to 12¢ lower in the back three contracts.

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

Choice boxed beef cutout value was $2.51 higher Tuesday afternoon at $213.60/cwt. Select was $1.15 higher at $187.06.

Corn futures closed 6¢ to 8¢ higher through Jul ’20 and then mostly 1¢ to 2¢ higher. Presumably, the surge had to do with the pending winter storm in the North, combined with ongoing delayed crop maturity.

Soybean futures closed mostly 5¢ to 6¢ higher.

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Major U.S. financial indices closed sharply lower on Tuesday, with reports of dimming hopes for a trade resolution between the U.S. and China.

The Dow Jones Industrial Average closed 313 points lower. The S&P 500 closed 45 points lower. The NASDAQ was down 132 points.

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“If the Kansas plant reopens as announced (by early January 2020), and Mother Nature does not dish out another very harsh fall and winter, as 2018-19 did for many U.S. cattle feeders, LMIC projects positive closeouts for the first five months of 2020,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Breakeven sales prices for February through May of 2020 are in the $113 to $116/cwt. range. At this time, feeding out 750-lb. steers that are scheduled to be marketed in mid-June through mid-September looks like a breakeven proposition at best. That is, would be a loss if all economic costs are considered. Of course, it is common for that  timeframe to be the least profitable.”

LMIC’s assessment is based on feeding in a commercial Southern Plains feedlot and assumes animals are sold on the cash market, i.e. no hedging and does not include premiums incorporated into quality carcass-based pricing programs.

In the meantime, LMIC estimated September feedlot returns at -$150 to -$155 per fed steer, driven by impacts from the Tyson plant fire. Those were the steepest losses since October 2016. Analysts project moderating losses in October and November and then positive returns in December.

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

Cattle Current Daily—Oct. 8, 2019

When all was said and done last week, negotiated cash fed cattle trade ended up mainly $3-$4 higher on a live basis—$106-$107 in the South and $107-$109 in the North—and $5 higher in the beef at $170.

The 5-area direct average steer price was $2.37 higher on a live basis last week at $107.30/cwt., according to the latest USDA report. The average dressed steer price was $169.79, which was $4.50 higher.

Live Cattle futures closed narrowly mixed Monday, while Feeder Cattle closed lower, with pressure including firm grain prices and a sharp sell-off in Lean Hog futures.

Live Cattle futures closed mixed, from and average of 28¢ lower to an average of 40¢ higher (10¢ to 90¢ higher) with the gains coming on both ends of the board.

Feeder Cattle futures closed an average of 95¢ lower (27¢ lower in spot Oct to $1.37 lower).

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

Choice boxed beef cutout value was 87¢ lower Monday afternoon at $211.09/cwt. Select was $1.01 lower at $185.91.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly fractionally higher.

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Major U.S. financial indices closed lower on Monday, on likely profit taking and also defensiveness ahead of this week’s scheduled trade talks between the U.S. and China.

The Dow Jones Industrial Average closed 95 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 26 points.

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U.S. beef exports softened in August, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports for the month totaled 114,119 metric tons (mt), a 4% decline from the previous year’s record-large volume. Beef export value of $690.3 million was down 8%. January-August beef exports were slightly below last year’s record pace, declining 2% in volume (881,526 mt) and 1% in value ($5.44 billion).

Beef export value per head of fed slaughter averaged $298.94 in August, down 7% from a year ago, while the January-August average was down 3% to $309.85.

Part of the monthly decline came with 9% fewer beef exports to South Korea than a year earlier, in terms of volume, and 11% less for value at $157.4 million. For the year, however, U.S. beef exports to Korea are 8% ahead of the previous year’s record pace for volume, and 10% higher for value at $1.26 billion.

Exports for the month were less to Japan, too: 15% less for volume and 22% less for value at $164.3 million. Keep in mind that export value the previous August was $209.3 million, a post-BSE record high. For January through August, exports to Japan were 3% below last year’s pace in volume and 4% lower in value at $1.36 billion.

“The U.S. beef industry is extremely excited at the prospect of lower tariffs in Japan, as 38.5% is the highest rate assessed in any major market,” says Dan Halstrom, USEMF president and CEO. “As we’ve seen in Korea, where the tariff rate was once 40% but has been reduced by more than half, lower tariffs make U.S. beef even more affordable for a wider range of customers. While the agreement still needs parliamentary approval in Japan, importers are already enthused and preparing for long-awaited tariff relief.”

Pork exports up significantly

August U.S. pork exports increased 22% from a year ago to 221,586 mt, while export value climbed 19% to $588.8 million. These results pushed January-August export volume 4% ahead of last year’s pace at 1.7 million mt, while value increased 1% to $4.35 billion.

Although still restrained by China’s retaliatory duties, pork exports to China/Hong Kong were three times more than the previous year’s volume at 63,656 mt, while value was up 160% at $137.6 million. For January through August, exports to China/Hong Kong were up 38% in volume (356,322 mt) and 17% in value ($717.9 million).

“China’s demand for imported pork has increased steadily over the past few months and the U.S. industry is well-positioned to help fill that need,” Halstrom explains. “But, the really positive story behind these numbers is that even as U.S. exports to China/Hong Kong have surged and exports to Mexico rebounded after the removal of retaliatory duties, demand in other markets is proving resilient and continues to grow. This is exactly why the U.S. industry invested in emerging markets over the years, and it is definitely paying dividends.”

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

Cattle Current Daily—Oct. 7, 2019

Negotiated cash fed cattle prices extended gains last week, with live sales in the Southern Plains $4/cwt. higher in Kansas at $107 and $3-$4 higher in the Texas Panhandle at $106-$107. Dressed trade in Nebraska, and early sales in the western Corn Belt were $5 higher at $170.

Cattle futures softened Friday, amid sluggish trade and week-end position squaring.

Other than 55¢ higher in spot Oct, Live Cattle futures closed an average of 26¢ lower.

Feeder Cattle futures closed an average of 42¢ lower. 

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

Choice boxed beef cutout value was 10¢ lower Friday afternoon at $211.96/cwt. Select was 29¢ lower at $186.92.

Corn futures closed 2¢ to 4¢ lower through Jul ’20 and then fractionally lower to 1¢ lower.

Soybean futures closed 3¢ to 4¢ higher through Aug. ’20 and then mostly fractionally higher to 1¢ higher.

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Major U.S. financial indices closed higher again on Friday, buoyed by the bullish U.S. employment report.

Total nonfarm payroll employment increased by 136,000 in September, and the unemployment rate declined to 3.5%, according to the Employment Situation report from the U.S. Bureau of Labor Statistics.

Average hourly earning for all employees on private nonfarm payrolls was little changed at $28.09. Average hourly earnings increased 2.9% over the last 12 months.

The Dow Jones Industrial Average closed 372 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 110 points.

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Federally inspected beef production slowed in September, down 1.9% from the previous year, according to Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. He explains declining beef production was mainly due to lighter steer and heifer carcasses, along with more cows and heifers in the harvest mix.

“Cattle slaughter the first nine months of 2019 exceeded 24.6 million head which is 1.4% greater than 2018. Alternatively, September cattle slaughter compared to a year ago was down 0.6%,” Griffith says. “If beef production keeps pace in the fourth quarter then total 2019 federally inspected beef production will exceed 26.6 billion lbs. If slaughter maintains pace in the fourth quarter then federally inspected cattle slaughter will be close to 32.9 million head. The beef cutout will come under seasonal pressure the next couple of months and strong beef production will only aid that pressure.”

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

Cattle Current Daily—Oct. 4, 2019

Negotiated cash fed cattle trade opened higher on Thursday, with live prices in the Texas Panhandle $3 higher than the previous week at $106/cwt.

Cash optimism helped Cattle futures fade some early pressure and edge higher, although trade was sluggish and open interest continued to decline.

Live Cattle futures closed an average of 33¢ higher.

Feeder Cattle futures closed an average of 32¢ higher. 

Wholesale beef values were lower 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 91¢ lower Thursday afternoon at $212.06/cwt. Select was $1.31 higher at $187.21.

Corn futures closed fractionally higher to 1¢ higher.

Except for 1¢ higher in the back three contracts, Soybean futures closed mostly 1¢ to 2¢ lower.

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Major U.S. financial indices closed higher on Thursday, curbing steep losses from the previous two sessions. The popular notion for support was thinking that odds favored the Fed cutting interest rates at the end of the month.

The Dow Jones Industrial Average closed 122 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 87 points.

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More optimism by restaurant operators about the six-month outlook boosted the National Restaurant Association’s (NRA) Restaurant Performance Index (RPI) in August for the first time in three months.

Overall, the RPI— a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry—was 100.7 in August, which was 0.3% more than the previous month, according to NRA.

The Expectations Index was 101.2 in August, up 1.1% from the previous month, with restaurant operators slightly more optimistic about the direction of the economy. Operator outlook for capital spending was the highest in five months.

“Although the forward-looking indicators improved from last month, they remain tepid by historical standards,” say NRA analysts. “Only one in three operators expect their sales to be higher in six months, while just one in five think the economy will improve. Headlined by softer same-store sales readings and a net decline in customer traffic levels, current situation indicators trended lower in August.”

The Current Situation Index was down 0.5% from the previous month to 100.3. It lost ground mostly due to a net decline in customer levels, say NRA analysts.

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

Cattle Current Daily—Oct. 3, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon, but early indications appeared positive.

For instance, 264 head of Choice 2-4 steers weighing an average of 1,402 lbs. brought an average of $108.16/cwt. at the fat auction in Tama, IA. Country trade in the region last week was at $104-$106.

At Sioux Falls Regional in South Dakota, slaughter steers and heifers sold $2-$4 higher than a week earlier, with instances of up to $5 higher. One example: 330 head of Choice 2-3 steers weighing an average of 1,467 lbs. brought an average of $103.84.

There were only 846 head offered in the weekly Fed Cattle Exchange auction, and no takers.

Cattle futures recovered the majority of the previous session’s decline, helped along by lower Corn futures and the firmer feel to cash prices.

Live Cattle futures closed an average of 79¢ higher.

Except for 27¢ higher in the back contract, Feeder Cattle futures closed an average of 96¢ 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 50¢ lower Wednesday afternoon at $212.97/cwt. Select was 15¢ lower at $185.90.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed 1¢ to 5¢ lower through May ’20 and then mostly 1¢ to 4¢ higher. 

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Major U.S. financial indices closed sharply lower on Wednesday, with follow-through pressure from the previous day’s weak manufacturing data and growing concerns about economic growth, tied to the ongoing uncertainty about a U.S.-China trade deal.

The Dow Jones Industrial Average closed 494 points lower, making for a decline of 837 points in the last two sessions. The S&P 500 closed 52 points lower—down 88 points in the last two days. The NASDAQ was down 123 points—213 points lower in the last two sessions.

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Analysts with CoBank’s Knowledge Exchange division (CKE) say trade volume is expanding and will begin to yield benefits to producers across the meat and poultry industries.

“Beef exports have improved from the sluggish start at the beginning of the year. May and June exports were flat year over year, an improvement from February, March and April when exports were down approximately 5%,” say CKE analysts, in CoBank’s Quarterly U.S. Rural Economic Review. “The outlook for beef exports brightened after the U.S. and Japan signed an important trade agreement in late August with Japan announcing in late September it will phase in tariff reductions on beef, which currently carries a hefty 38.5% tariff. This will likely pave the way for U.S. beef to regain a competitive footing with countries in the CPTPP, which the U.S. opted out of last year.”

Moreover, CKE analysts say the impact of African Swine Fever on global pork supplies is just beginning to be felt in the U.S. animal protein sector. U.S. pork exports to China were up 28% through the first half of the year, but they say those gains were offset by declining exports to Mexico, Korea and Japan.

“As we look to the remainder of 2019, though, the U.S. has resolved some key

trade disputes in the steel and aluminum tariffs with Mexico, and signed a new trade agreement with Japan. Also, and likely more importantly, the U.S. set a new record for pork exports to China in July,” explain CEK analysts. “If these trends continue, and exports improve to Mexico and Japan, then U.S. supply and demand will continue to improve to a greater degree through the remainder of 2019 than the futures market indicates.”

As for U.S. beef and China, according to the CoBank report, “While it’s unlikely that the U.S. will export beef to China, China’s overall beef imports continue to climb, thus helping to tighten trade flows that may have historically competed with the U.S. market.”

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

Cattle Current Daily—Oct. 2, 2019

Cattle futures closed lower Tuesday, with pressure including technical correction, sharp declines in front-month Lean Hogs and the fact that Corn futures were an average of 17¢ higher week to week through the front four contracts.

Except for 5¢ and 7¢ higher on either end of the board, Live Cattle futures closed an average of 35¢ lower.

Feeder Cattle futures closed an average of $1.21 lower (75¢ to $1.75 lower).

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

Choice boxed beef cutout value was $1.03 higher Tuesday afternoon at $213.47/cwt. Select was $1.06 lower at $186.05.

Corn and soybean futures continued higher Tuesday, with follow-through support from the previous day’s Grain Stocks report and on likely short covering.

Corn futures closed 3¢ to 5¢ higher through Jul ’20 and then mostly unchanged to 1¢ lower.

Soybean futures closed 10¢ to 13¢ higher through May ’20 and then 3¢ lower to 9¢ higher. 

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Major U.S. financial indices closed solidly lower on Tuesday, pressured by weak manufacturing data.

Economic activity in the manufacturing sector contracted in September, as the overall economy grew for the 125th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The September Purchasing Managers Index PMI® was 47.8% in September, which was 1.3% less than the previous month.

“Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth,” says Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® Manufacturing Business Survey Committee. “September was the second consecutive month of PMI contraction, at a faster rate compared to August. Demand contracted, with the New Orders Index contracting at August levels, the Customers’ Inventories Index moving toward ‘about right’ territory and the Backlog of Orders Index contracting for the fifth straight month (and at a faster rate). The New Export Orders Index continued to contract strongly, a negative impact on the New Orders Index.”

The Dow Jones Industrial Average closed 343 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 90 points.

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Agricultural producers grew more pessimistic about current ag-economic conditions in late summer, according to the September Purdue University/CME Group Ag Economy Barometer.

The overall Ag Economy Barometer reading dipped three points from August to a reading of 121 in September, but the Index of Current Conditions, a sub-index of the barometer, dropped 22 points to a reading of 100. The barometer is based on a mid-month survey of 400 agricultural producers across the U.S.

“Even though farmers are concerned about the near term, both on their own farms and for the ag economy, improved crop growing conditions during the last half of the summer appeared to boost optimism regarding the future,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The Index of Future Expectations, another sub-index of the Ag Economy Barometer, rose six points compared to August.

One in five producers polled for the September survey said they expect profitability to decline over the next year, compared to 41% that expected declining profits when the same question was posed in May.

“Considered jointly with this month’s decline in the Index of Current Conditions, this could be a signal that growers expect better times in 2020 compared to 2019, possibly because they are looking forward to a return to more normal growing conditions and crop production in 2020,” Mintert says.

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

Cattle Current Daily—Oct. 1, 2019

Cattle futures were mixed on Monday, with Live Cattle mostly higher, but Feeder Cattle mostly lower, pressured by surging Corn futures.

Except for 45¢ and 27¢ lower in the front two contracts, Live Cattle futures closed an average of 40¢ higher.

Except for 45¢ and 30¢ higher in the back two contracts, Feeder Cattle futures closed an average of 77¢ lower (37¢ lower to $1.92 lower in spot Oct).

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

Choice boxed beef cutout value was 14¢ lower Monday afternoon at $212.44/cwt. Select was $2.75 lower at $187.11.

Corn and soybean futures rallied Monday, in the wake of a bullish USDA grain stocks report (see below), as well as positive export news for corn.

Corn futures closed 12¢ to 16¢ higher through Jul ’20 and then mostly 4¢ higher.

Soybean futures closed 13¢ to 20¢ higher through Nov ’20 and then 5¢ to 11¢ higher. 

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Major U.S. financial indices closed out the third quarter on a higher note Monday, with support from more optimism surrounding U.S.-China trade talks later this month. Nothing specific on trade talks; more of the he-said, she-said stuff.

The Dow Jones Industrial Average closed 96 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 59 points.

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USDA surprised plenty of folks with its quarterly Grain Stocks report issued Monday.

Old crop corn stocks in all positions Sept. 1 totaled 2.11 billion bu., which was 1% less than a year earlier. That was a more significant decline than the trade was expecting. Of the total stocks, 753 million bu. were stored on farms, up 22% from a year earlier. Off-farm stocks of 1.36 billion bu. were 10% less than a year ago.

Likewise, old-crop soybeans stored in all positions totaled 913 million bu. at the beginning of the month, up 108% from the previous year, but significantly less than pre-report expectations. Soybean stocks stored on farms totaled 265 million bu., up 162% percent from a year ago. Off-farm stocks, at 648 million bushels were up 92% from last September.

As well, the weekly Crop Progress report continues to underscore late crop development.

For the week ending Sept. 29, 88% of the corn crop was dented, which was 12% less than last year and 10% less than the average. 43% of corn was mature, compared to 84% a year earlier and 73% for the five-year average. 11% was harvested, which was 14% less than last year and 8% less than average. 57% was in Good (46%) or Excellent (11%) condition, the same as the previous week but 12% less than last year. 14% was in Poor (10%) or Very Poor condition (4%), which was 1% more than a week earlier and 2% more than a year earlier.

55% of soybeans were dropping leaves, which was 26% less than the previous year and 21% less than the average. 7% were harvested, which was 15% less than a year earlier and 13% less than average. 55% were rated in Good (46%) or Excellent (9%) condition, 1% more than a week earlier, but 13% less than a year ago. 13% were in Poor (10%) or Very Poor (3%) condition, which was 3% more than a year earlier.

90% of spring wheat was harvested, which was 10% less than last year and 9% less than average.

95% of sorghum was coloring, which was 2% less than the previous year but on par with the average. 54% was mature, which was 6% less than last year and 9% less than average. 30% was harvested, which was 3% less than last year and 5% less than the average. 65% was in Good (50%) or Excellent (15%) condition, which was 11% more than a year earlier. 8% was rated as Poor (6%) or Very Poor (2%), compared to 17% last year.

39% of winter wheat was planted, which was 2% less than the previous year but 1% more than the average. 11% had emerged, compared to 12% last year and 13% for average.

45% of the nation’s pasture and range was rated in Good (37%) or Excellent (8%) condition, the same as a week earlier and 2% less than a year earlier. 25% was rated as Poor (17%) or Very Poor (8%), which was 1% more than the previous week but 2% more than a year earlier.

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

Cattle Current Daily—Sept. 30, 2019

Negotiated cash fed cattle prices made solid gains for the week, with live prices $2 higher in the Southern Plains at $103/cwt., $4-$5 higher in the Northern Plains at $106-$107 and $1-$5 higher in the western Corn Belt at $104-$105. Dressed trade was steady to $5 higher at mostly $165.

Cattle futures continued higher on Friday, supported by stronger fed cattle prices and apparent commercial interest.

Except for 10¢ lower in the back contract, Live Cattle futures closed an average of $1.09 higher, (27¢ to $2.07 higher).

Except for $2.00 lower in newly minted away Sep, Feeder Cattle futures closed an average of $1.21 higher.

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 93¢ lower Friday afternoon at $212.58/cwt. Select was 53¢ lower at $189.86.

Corn futures closed 1¢ lower.

Soybean futures closed fractionally mostly 3¢ to 5¢ lower. 

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Major U.S. financial indices closed lower on Friday, with reports that the White House was considering ways to limit U.S. investment in Chinese companies.

The Dow Jones Industrial Average closed 70 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 91 points.

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When the weather finally permits Australia to begin rebuilding its drought-decimated cowherd, the U.S. may have more beef export opportunity, according to the Livestock Marketing Information Center (LMIC).

“Through July, Australia is reporting 4.9 million head slaughtered, an increase of 8% over the same time period in 2018,” say LMIC analysts, in the most recent Livestock Monitor. “Since April 2018, each month (except November 2018) over 50% of Australia’s total slaughter has consisted of cows and heifers. Typically, when a majority of total slaughter is comprised of females this is an indication that the herd is contracting. Increased cow and heifer slaughter has led to a 4% growth in beef production through the first seven months of 2019. Much of the growth has been absorbed by expanding foreign demand, especially in China as they are looking to fill a meat protein supply gap left behind by a declining hog herd due to the spread of African Swine Fever (ASF).”

For perspective, the most recent peak in Australian cattle inventory was 29.3 million head in 2014, according to LMIC. The USDA Global Agricultural Information Network (GAIN) pegs the 2019 inventory at 25.73 million head and forecasts next year’s inventory at 24.48 million head, which would be 16.4% less than the recent peak and the fewest in three decades.

“As China’s demand for beef is rising, especially for grain-fed beef, Australia has been well positioned to fill demand,” LMIC analysts explain. “This is expected to change in 2020 as USDA’s GAIN report is forecasting Australia’s cattle sector to start herd rebuilding efforts if weather conditions improve. Rebuilding efforts will require more females causing lower slaughter levels and reduced available beef supplies for export in 2020.”

LMIC currently forecasts U.S. beef exports to grow 6% in 2020 with ample supplies and competitive prices spurring shipments.

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

Cattle Current Daily—Sept. 27, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon, as Cattle futures continued to mostly grind higher.

Live Cattle futures closed an average of 17¢ higher, except for an average of 10¢ lower at either end of the board.

Except 7¢ lower for expiring Spot Sep, Feeder Cattle futures closed an average of 33¢ higher.

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

Choice boxed beef cutout value was $1.12 lower Thursday afternoon at $213.51/cwt. Select was 56¢ higher at $190.39.

Corn futures closed mostly fractionally lower.

Soybean futures closed fractionally mixed to 1¢ higher. 

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Major U.S. financial indices closed lower on Thursday, riding a similar seesaw from earlier in the week with the ebb and flow of trade talk with China.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed 7 points lower. The NASDAQ was down 46 points.

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Beef supplies in Cold Storage continue less year over year.

Total pounds of beef in freezers, as of Aug. 31, were 4% more than the previous month but 6% less than the same time last year, according to the most recent USDA Cold Storage report.

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

Total red meat supplies in freezers were up 1% from the previous month but down 1% from last year.

Total frozen poultry supplies were 4% more than the previous month but 5% less than a year ago.

By | September 26th, 2019|Daily Market Highlights|

Cattle Current Daily—Sept. 26, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon.

There were 1,533 offered, but no sales, in the weekly Fed Cattle Exchange auction.

Although expectations remain for steady to higher prices this week, slaughter cattle sold $2-$5 lower at Sioux Falls Regional in South Dakota. Choice 2-3 steers (395 head) brought an average of $100.07/cwt. That’s on the lower end of country trade in the region last week.

Cattle futures continued to exhibit firmness on Wednesday, maintaining and extending recent gains.

Live Cattle futures closed an average of 52¢ higher (15¢ to $1.07 higher).

Feeder Cattle futures closed an average of 89¢ higher (32¢ to $1.05 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 76¢ lower Wednesday afternoon at $214.63/cwt. Select was 17¢ higher at $189.83.

Corn futures closed mostly fractionally higher.

Soybean futures closed 3¢ to 5¢ lower through Jul ’20 and then 1¢ to 2¢ lower.

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Major U.S. financial indices closed higher on Wednesday, mostly retracing lost ground from the previous session. Some attributed support to a comment by President Trump suggesting optimism over a trade deal with China.

The Dow Jones Industrial Average closed 162 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 87 points.

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U.S. beef and red meat exports got a shot in the arm yesterday with completion of the previously announced U.S.-Japan Trade Agreement (USJTA).

“This agreement between the United States and Japan is a better deal for the entire U.S. economy, but is a particularly big win for our farmers and ranchers,” says U.S. Secretary of agriculture, Sonny Perdue. “When I visited Japan in May for the G20, I made it clear that the U.S. is Japan’s best customer and we felt that relationship was not reciprocal. This agreement helps level the playing field.”

When implemented, Secretary Perdue says the agreement will enable American producers to compete more effectively with countries that currently have preferential tariffs in the Japanese market.

“With Japan being the largest value destination for U.S. pork and beef exports (combined export value in 2018 was $3.7 billion), there is no market more critical to the profitability and prosperity of the U.S. red meat industry,” explains Dan Halstrom, president and CEO of the U.S. Meat Export Federation. “It is therefore imperative that we achieve a level playing field for U.S. pork and beef in Japan, so that the U.S. industry can further expand its customer base in this increasingly competitive market. Today’s announcement is not only excellent news for U.S. farmers and ranchers, but also for Japanese consumers who will have greater access to U.S. pork and beef products.”

Under the USJTA, Japan committed to provide substantial market access to American food and agricultural products by eliminating tariffs, enacting meaningful tariff reductions, or allowing a specific quantity of imports at a low duty (generally zero), according to Secretary Perdue. Tariff treatment for the products covered in the agreement will match the preferential tariffs Japan provides to countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. 

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

Cattle Current Daily—Sept. 25, 2019

After early follow-through support Tuesday, Cattle futures traders seemed content to hold their positions and wait for direction from the cash market.

Live Cattle futures closed narrowly mixed but mostly higher (35¢ lower to 30¢ higher).

Other than 35¢ lower at the front and 5¢ lower at the back, Feeder Cattle futures closed an average of 57¢ higher.

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

Choice boxed beef cutout value was $1.06 lower Tuesday afternoon at $215.39/cwt. Select was $1.18 lower at $189.66.

Corn futures closed mostly unchanged to fractionally mixed.

Soybean futures closed mostly 1¢ lower to 1¢ higher.

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Major U.S. financial indices closed lower on Tuesday amid chatter about the Democrats calling for an impeachment inquiry into President Trump, as well as weaker consumer confidence.

The Conference Board Consumer Confidence Index® decreased to 125.1 (1985=100) in September from 134.2 in August.

“Consumers were less positive in their assessment of current conditions and their expectations regarding the short-term outlook also weakened,” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The escalation in trade and tariff tensions in late August appears to have rattled consumers. However, this pattern of uncertainty and volatility has persisted for much of the year and it appears confidence is plateauing. While confidence could continue hovering around current levels for months to come, at some point this continued uncertainty will begin to diminish consumers’ confidence in the expansion.” 

The Dow Jones Industrial Average closed 142 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 118 points.

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If current high levels of beef cow and heifer slaughter continue, then analysts with the Livestock Marketing Information Center (LMIC) say the beef cow inventory at the beginning of next year could be lower than the previous year.

For January through August, LMIC pegs federally inspected heifer slaughter 7.0% higher than the same period a year earlier, with beef cow slaughter up 1.9%.

“The last week of August, heifer slaughter surged to over 200,000 head, the highest weekly figure since June 2011,” say LMIC analysts, in the most recent Livestock Monitor. “The last several weeks of actual heifer slaughter has been above a year ago by over 5% and jumped in the final week of August to 11%…The climb in heifer slaughter offers a few signposts. The first is that these are likely heifers that didn’t get bred. July’s cattle on feed report indicated that animals 900 lbs. and heavier jumped 11.5% higher than a year ago. The U.S. does not break down each weight group by heifers and steers, but the large volume in the slaughter mix, coupled with higher heavier placement weights, could imply that some of those heavier cattle were female replacements that remain open.”

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

Cattle Current Daily—Sept. 24, 2019

Cattle futures rallied Monday, helped along by stronger cash fed cattle prices last week, as well as Friday’s bullish Cattle on Feed report.

Live Cattle futures closed an average of $1.54 higher ($1.05 to $2.62 higher).

Feeder Cattle futures closed an average of $2.03 higher ($1.77 to $2.70 higher).

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 52¢ lower Monday afternoon at $216.45 cwt. Select was 88¢ lower at $190.84.

Corn futures closed 1¢ to 2¢ higher.

Soybean futures closed 5¢ to 9¢ higher through Sep ’20 and then mostly 1¢ to 2¢ higher. 

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Major U.S. financial indices closed narrowly mixed and little changed on Monday. Pressure included weak manufacturing data out of Europe, adding to concerns about the global economy.

The Dow Jones Industrial Average closed 14 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 5 points.

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Although the cyclical peak in feedlot inventories likely remains in the future, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University notes the year-over-year decline of 1.3% decline in September was the first monthly decrease since December of 2016.

“The short-term disruption of the plant fire in August and early September likely delayed some feedlot placements, but a larger 2018 calf crop and generally good forage conditions in 2019 likely means that significant numbers of yearlings are still to be marketed in the fourth quarter,” Peel explains in his weekly market comments. “The estimated 2019 calf crop is equal to 2018 levels, meaning that plenty of new-crop calves will be marketed this fall, with feeder supplies ample through 2020. It will likely be a few more months before we will see sustained year-over-year decreases in feedlot inventories.”

Peel also points out August feedlot placements estimated in the monthly Cattle on Feed report were down for the fourth consecutive month.

“Total placements the last six months, capturing the bulk of current cattle on feed, are down 0.8% percent year over year,” Peel says. “Monthly marketings for the past six months are up 1.0% year over year. Feedlots have continued to market cattle timely and maintain currentness.”

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

Cattle Current Daily—Sept. 23, 2019

Negotiated cash fed cattle prices continued to look stronger through Friday afternoon, based on USDA reports. Although too few to trend, there were a few live trades reported at $102/cwt. in Kansas and Nebraska, which was $1-$2 higher than the previous week. Overall, live trade in in the Southern Plains was $1 higher at $101 and steady to $2 higher in the western Corn Belt at $100-$104. Dressed trade was $2-$7 higher in Nebraska at mostly $162; steady to $5 higher in the western Corn Belt at $160-$165.

Cattle futures closed a touch softer in sluggish trade on Friday with apparent positioning ahead of the monthly Cattle on Feed report (see below) and ahead of the weekend.

Live Cattle futures closed an average of 37¢ lower.

Except for an average of 32¢ higher in the front two contracts, Feeder Cattle futures closed an average of 44¢ lower.

Wholesale beef values were lower 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 $1.20 lower Friday afternoon at $216.97 cwt. Select was 44¢ lower at $191.72.

Corn futures closed mainly 2¢ to 3¢ lower.

Soybean futures closed mostly 6¢ to 9¢ lower.

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Major U.S. financial indices closed lower on Friday. Apparently, the primary pressure was circulation of a report that Chinese officials cut short or cancelled their planned visit to a U.S. farm, which investors viewed in a bearish light.

The Dow Jones Industrial Average closed 159 points lower. The S&P 500 closed 14 points lower. The NASDAQ was down 65 points.

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As many suspected, there were fewer cattle placed on feed in August, year over year and fewer total cattle on feed Sept. 1. If anything, though, Friday’s monthly Cattle on Feed report was more bullish than anticipated.

Placements in August for feedlots with 1,000 head or more capacity was 1.88 million head, which was 186,000 head fewer, or 8.99% less than the previous year. Most analyst estimates ahead of the report were for a decline of 6-8%.

In terms of placement weight, 36.35% went on feed weighing 699 lbs. or less, 45.85% weighing 799-899 lbs. and 17.78% weighing 900 lbs. or more.

Marketings in August of 1.95 million head were 1.51% less, compared to the 1.7% to 1.9% reduction analysts expected.

Cattle on feed Sept. 1 of 10.98 million head were 143,000 head fewer, or 1.29% less than a year earlier. Ahead of the report analysts anticipated a decline of about 0.50% to 1.0%.

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

Cattle Current Daily—Sept. 20, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon, according to USDA reports. Although too few to trend, there were a few live trades reported at $100-$101/cwt. in Kansas, which was $1 higher than last week.

Cattle futures closed mostly narrowly higher as traders anticipated cash trade and Friday’s monthly Cattle on Feed report.

Except for an average of 45¢ lower in the front two contracts, Live Cattle futures closed an average of 35¢ higher.

Except for an average of 20¢ lower in May, Feeder Cattle futures closed an average of 49¢ higher, from 7¢ higher to $1.00 higher.

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

Choice boxed beef cutout value was 7¢ lower Thursday afternoon at $218.17 cwt. Select was 19¢ higher at $192.16.

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed 1¢ to 4¢ higher through Aug ’20 and then mostly 3¢- 6¢ lower.

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

The Dow Jones Industrial Average closed 52 points lower. The S&P 500 closed unchanged. The NASDAQ was up 5 points.

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Depending on which analysts you consult, many expect Friday’s monthly Cattle on Feed report to show August placements approximately 6-8% less year over year, fueled in part by available forage and the tougher prices. August marketings are expected to be about 1.5% less. Most believe cattle on feed Sept. 1 will be less year to year—up to 1% less—for the first time in several years.

In the meantime, fed cattle slaughter continues to suggest current feedlot marketing, despite the logistical challenges from the hole in capacity, due to the Tyson fire.

The average fed steer dressed weight the week ending Sept. 7 was 893 lbs. according to USDA’s Actual Slaughter Under Federal Inspection report. That was 9 lbs. heavier week to week but 3 lbs. less year to year. Likewise the average dressed heifer weight was 4 lbs. heavier week to week, but 4 lbs. lighter year over year at 815 lbs.

By | September 19th, 2019|Daily Market Highlights|

Cattle Current Daily—Sept. 19, 2019

Negotiated cash fed cattle prices took on a firmer feel Wednesday.

There were 1,229 head offered in the weekly Fed Cattle Exchange auction. Of those, 281 head—two lots in the Southern Plains—sold for a weighted average price of $101.13/cwt., for delivery at 1-9 days. That’s $1-$2 more than negotiated trade in the region last week.

Slaughter steers and heifers sold $3-$5 higher at Sioux Falls Regional in South Dakota. Choice 2-3 steers (319 head) averaged $103.40. Country trade in the region last week was at $101-$102.

Likewise, steers and heifers sold $4-$5 higher at the fat auction in Tama, IA. Choice 2-4 steers (197 head) averaged $107.54.

That helped Cattle futures close higher, despite continued erosion in wholesale beef values.

Except for an average of 10¢ lower in the back two contracts, Live Cattle futures closed an average of 59¢ higher.

Feeder Cattle futures closed an average of 76¢ higher.

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

Choice boxed beef cutout value was $1.53 lower Wednesday afternoon at $218.24/cwt. Select was $1.94 lower at $191.97.

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

Soybean futures closed mostly 4¢ lower.

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Major U.S. financial indices closed little changed on Wednesday. There was pressure earlier in the session, tied to the Fed meeting. Investors got the widely anticipated rate cut (down 25 basis points) but no confirmation that the central bank plans any more cuts this year.

“In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 1.75- 2.00%,” according to a statement from the FOMC. “This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective are the most likely outcomes, but uncertainties about this outlook remain.”

The Dow Jones Industrial Average closed 36 points higher. The S&P 500 closed 1 point higher. The NASDAQ was down 8 points.

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USDA expects lingering effects from the Tyson fire to keep pressure on feeder cattle prices, at least through the first part of next year.

“The shift in demand for fed cattle has put considerable pressure on feeder steer prices. Weakness in fed cattle prices will likely affect feedlots’ pricing of feeder cattle,” say analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook released yesterday. “On Sept. 9 at the Oklahoma National Stockyards, sales of feeder steers weighing 750-800 lbs. were reported at $134.80/cwt., down about $6 from the week before the fire. Based on recent price data, the third-quarter 2019 feeder steer price was lowered by $4 to $138/cwt. Because of the expected continuation of weaker fed cattle prices and a slower pace of marketing, the 2019 fourth-quarter feeder steer price forecast was lowered $5 from the prior month to $133. The impact of lower fed cattle prices is likely to carry into 2020. The price forecasts for feeder steer prices in the first and second quarter of 2020 were reduced by $5 to $135 and $140, respectively. As a result, the 2020 annual price forecast for feeder steers was $140.50 per cwt.”

As for the weaker fed cattle prices driving the pressure, ERS analysts point out the average 5-area direct fed steer price last week of $110.07/cwt. was almost 11% less than the week of the fire. Expected fed steer price for the third quarter was reduced by $3 to $107/cwt.

“With the expected return of the Holcomb plant in first-quarter 2020, the additional capacity would suggest some price support for fed cattle in early 2020. However, to the extent feedlots may have held cattle over from fourth-quarter 2019 into early 2020, increased availability of cattle may mitigate some of the upward pressure on prices from increased packer demand,” ERS analysts explain. “Accordingly, the first and second-quarter price forecasts for 2020 were reduced by $5 to $119 and $117, respectively. As a result, the 2020 annual price forecast for fed steers was lower by $4 to $115 per cwt.”

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

Cattle Current Daily—Sept. 18, 2019

Cattle futures rallied higher Tuesday. Some of it could be traders sensing a bottom in the cash market, as well as potential optimism about the monthly Cattle on Feed report due out Friday.

Live Cattle futures closed an average of $1.32 higher through the front three contracts and then an average of 48¢ higher.

Feeder Cattle futures closed an average of $2.34 higher ($1.77 to $3.10 higher).

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

Choice boxed beef cutout value was 85¢ lower Tuesday afternoon at $219.77/cwt. Select was $2.66 lower at $193.91.

Corn futures closed mostly 6¢ lower.

Soybean futures closed 5¢ to 6¢ lower through Aug ’20 and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices edged higher Tuesday, helped by lower oil prices, as investors await the latest interest rate decision from the Fed’s meeting, which concludes Wednesday.

Oil prices declined after the previous day’s spike, with reports that Saudi Arabian production will recover quickly from the weekend attacks on its oil fields.

Through the front six contracts, crude oil futures (WTI-CME) were down an average of 3.24.

The Dow Jones Industrial Average closed 33 points higher. The S&P 500 closed 7 points higher. The NASDAQ was up 32 points.

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“If we want to knock down barriers we need to make all players feel valued,” says Marcelo Gonzalez, Paraguayan Vice Minister of Livestock. “Think ahead and have a plan that thinks beyond 10 or 20 years to be sustainable. Sometimes farmers are already doing what we want them to do, but consumers don’t know and government doesn’t know.”

Gonzalez spoke at last week’s 9th annual meeting of the Global Agenda on Sustainable Livestock (GASL), at Kansas State University.

Besides being the first time the GASL meeting took place in the United States, it was also the first time trade issues were part of the formal agenda.

“Sustainability should go hand in hand with negotiation,” Gonzalez explained, adding that transparency and consumer education is also important. “Some car companies have said they won’t use leather because they don’t want to support an industry that’s not sustainable. They don’t realize they’re hurting farmers who are trying to produce in more sustainable ways.”

Trade is essential to sustainable outcomes, according to Jason Hafemeister, U.S. Department of Agriculture Foreign Agricultural Service.

“We have to produce more with less,” Hafemeister said, but warned that if productivity is driven by something other than consumer preferences, it can be captured by special interests.

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

Cattle Current Daily—Sept. 17, 2019

Negotiated cash fed cattle trade last week ended up steady to $1 lower in the Southern Plains at $99-$100/cwt., and steady to as much as $5 lower in Nebraska and the western Corn Belt at $100-$102. Dressed trade was $3-$8 lower in the western Corn Belt at mostly $160. It was $7-$10 lower in Nebraska at $155-$160.

Week to week on Monday, the 5-area direct average steer price was $1.66 lower on a live basis at $100.07/cwt. It was $6.66 less in the beef at $159.17.

Light trade, last week’s lower cash prices and the stronger dollar all helped dampen interest in Cattle futures Monday.

Live Cattle futures closed an average of 51¢ lower.

Except for 5¢ higher in spot Sep, Feeder Cattle futures closed an average of 67¢ 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 26¢ lower Monday afternoon at $220.62/cwt. Select was $2.03 lower at $196.57.

Although they closed off of session highs, Corn and Soybeans continued higher.

Corn futures closed mostly 3¢ to 4¢ higher.

Soybean futures closed 1¢ to 3¢ higher.

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Major U.S. financial indices closed lower Monday, with worries that sharply higher oil prices could slow the global economy.

Oil prices shot higher after the weekend attack on Saudi Arabian oil fields. Some estimates put the temporary lost oil production at approximately 5-6 million barrels per day.

Through the front three contracts, crude oil futures (WTI-CME) were up an average of $7.78; up and average of $7.03 through the front six contracts.

The Dow Jones Industrial Average closed 142 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 23 points.

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China has a growing appetite for beef, although they’re not getting much from the U.S.

“Projections for 2019 show China importing 18.7% of global beef imports,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Along with another 6.1% of imports into Hong Kong, the China/Hong Kong region currently accounts for a 24.8% share of world beef imports.”

For comparison, Peel says China accounted for 8.7% of world beef imports in 2015; 13.1%, including Hong Kong. For broader context, total world beef imports increased by 17.7% in the five years from 2015 to projected 2019 totals. During that period, beef imports in China increased 153.4%; a 62.2% increase for Hong Kong.

“The rapid growth in Chinese beef imports has dramatically altered global beef flows with several countries now exporting a significant share of total exports to China,” Peel explains. “China receives the majority of beef imports from Brazil, Uruguay, Argentina, Australia, and New Zealand. 

There are a number of reasons the U.S. has yet to become a key beef provider to China, despite gaining access in 2017.

For one thing, Peel says the market for higher quality, more expensive U.S. beef needs to be developed, a lengthy and arduous process currently curtailed by the trade war between the two nations.

“Restrictions on production technology allowed in beef exported to China (implants, beta agonists, etc.) mean that the supply of U.S. beef available for the Chinese market is limited,” Peel explains. “The U.S. is currently caught in a chicken and egg situation of not having much supply for the Chinese market and not having enough market potential to warrant increased production to meet Chinese demand. Nevertheless, it is important for the U.S. to participate in the growing Chinese beef market. At current levels, if the U.S. could achieve a 10% market share of Chinese beef imports, it would add over 11% to total U.S. beef exports.”

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

Cattle Current Daily—Sept. 16, 2019

Despite last week’s rally in Cattle futures, negotiated cash fed cattle prices continued under pressure from available supplies and the continued bottleneck in fed cattle harvest capacity left from the Tyson fire.

Through Friday afternoon, USDA reported negotiated prices in the Texas Panhandle $1 lower at $99. 

Week to week through Thursday afternoon, on lighter trade, the Five Area direct average steer price was $2.82 lower at $99.49/cwt. on a live basis.

Cattle futures closed narrowly mixed to marginally lower Friday as traders likely took some profits from the week’s strong gains.

Except for an  average of 32¢ higher in the back two contracts, Live Cattle futures closed an average of 30¢ lower.

Feeder Cattle futures closed narrowly mixed, from 35¢ lower to 32¢ higher.

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

Choice boxed beef cutout value was 91¢ higher Friday afternoon at $220.88/cwt. Select was unchanged at $198.60.

Corn and Soybean futures manly tread water Friday on likely week-end profit taking.

Corn futures closed mostly 1¢ higher across the front half of the board and then mostly fractionally lower to 1¢ lower.

Soybean futures closed 1¢ to 3¢ higher across the front half of the board and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed narrowly mixed and little changed Friday, with probably position squaring offsetting continued optimism over a trade resolution between the U.S. and China.

The Dow Jones Industrial Average closed 37 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 17 points.

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Sustainability may not be a deal breaker for consumers, but it can be a tie breaker, according to recent research from the NPD Group.

“Marketers need to understand that sustainability can be a deciding factor for consumers,” says Darren Seifer, food and beverage industry analyst for NPD Group (NPD). “While concerns like taste, convenience, health, and affordability are still primary factors for choosing foods and beverages, a company’s sustainability efforts can be the tie breaker if all other factors are equal.”

According to NPD, 9% of adults consider the environment as a top factor when making food and beverage purchase decisions. Young adults, ages 18-44 years old, are most likely to feel this way.

That adds some quantification to the quest in recent years by grocers, food manufacturers and restaurant operators to initiate sustainability efforts as socially responsible corporate citizens and to support consumer interests.

Among NPD’s findings:

One in ten U.S. adults, or roughly 20 million consumers, said that they have switched to a different food or beverage brand because it had earth-friendly packaging.

Over half of adults who ordered restaurant take-out or delivery in the past 30 days report that the restaurant they ordered from had earth-friendly practices, like using food containers made from recycled materials, according to NPD’s  Health Aspirations & Behavioral Tracking Service. 

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

Cattle Current Daily—Sept. 13, 2019

Negotiated cash fed cattle trade remained mainly undeveloped through Thursday afternoon. USDA reported some live trade in the Texas Panhandle at $99/cwt., at the upper end of the $97-$99 price range paid in the region so far this week. Live sales there last week were at $100.

Despite early pressure, Cattle futures continued to extend gains on Thursday, helped by the limit-up move in Lean Hog futures—across all but the back contract—presumably stemming from recent Chinese pork purchases and reports the U.S. will delay imposing additional tariffs, for a while.

Live Cattle futures closed an average of 60¢ higher (22¢ to $1.32 higher).

Feeder Cattle futures closed an average of 47¢ higher.

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

Choice boxed beef cutout value was 8¢ higher Thursday afternoon at $219.97/cwt. Select was 20¢ higher at $198.60.

Corn and Soybean futures climbed Thursday, especially soybeans, on reduced yield and production estimated in the monthly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed mostly 5¢ to 7¢ higher. 

Soybean futures closed 20¢ to 29¢ higher through Jan ’21 and then mostly 15¢ to 19¢ higher.

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Major U.S. financial indices closed higher Thursday.

Positive news included the aforementioned report that President Trump was delaying the imposition of added tariffs on Chinese imports for two weeks, as the two sides prepare for renewed negotiations in October.

Also, the European Central Bank lowered its deposit rate by 10 basis points to -0.50% and also renewed quantitative easing in the form of buying €20 billion of bonds per month, beginning in November.

The Dow Jones Industrial Average closed 45 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 24 points.

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The World Agricultural Supply and Demand Estimates released yesterday reduced beef production and fed cattle prices for this year, compared to the previous month’s estimate

Beef production for this year was estimated 90 million lbs. less than the previous month at 26.95 billion lbs., primarily on the slower expected pace of fed cattle slaughter and lighter carcass weights in the fourth quarter. That would still be 81 million lbs. more than last year.

The average 5-area direct fed steer price (all grades) for this year is estimated at $113.50/cwt., which is $3 less than the previous month’s estimate, based on current prices and anticipated continued price weakness. Price for the third quarter is forecast at $107; $103 in the fourth quarter.

Total red meat and poultry production for this year is forecast at 104.60 billion lbs., which is 21 million lbs. less than the previous month’s estimate, but would be 2.17 billion lbs. more than last year. Higher expected broiler production offsets lower forecasts for beef, pork and turkey production.

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

Cattle Current Daily—Sept. 12, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon.

Choice 2-4 steers (172 head) weighing an average of 1,380 lbs. brought an average of $102.84/cwt. at the fat auction in Tama, IA. At Sioux Falls Regional, in South Dakota, though, 365 head of Choice 2-4 steers weighing an average 1,455 lbs. brought an average of $99.68.

There were 636 head offered in the weekly Fed Cattle Exchange Auction. No sales, but two lots—a pen each of steers and heifers—were passed out at $99.

Cattle futures continued to rally, extending gains from the previous session and lifting hopes that markets carved out a bottom on Monday.

Live Cattle futures closed an average of $1.80 higher ($1.55 to $2.40 higher). That’s an average of $3.67 higher in the last two sessions.

Feeder Cattle futures closed an average of $2.46 higher, making for an average increase of $3.78 over the last two days.

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

Choice boxed beef cutout value was $5.49 lower Wednesday afternoon at $219.89/cwt. Select was $2.58 lower at $198.40.

Grain futures traded lower on apparent profit taking Wednesday.

Corn futures closed mainly fractionally lower to 1¢ lower. 

Soybean futures closed 4¢ to 5¢ lower through Sep ’20 and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices closed higher Wednesday, led by tech stocks, especially Apple.

The Dow Jones Industrial Average closed 227 points higher. The S&P 500 closed 21 points higher. The NASDAQ was up 85 points.

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“Strong basis can help pull cattle through the supply chain, even at low prices, because producers who hedged their cattle want to take advantage of the additional revenue that larger basis provides,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest issue of In the Cattle Markets. “That is likely the case in recent weeks even as fed prices have deteriorated.”

For those with passing familiarity, Maples explains fed cattle basis is the difference between cash fed cattle prices and spot month Live Cattle futures. He points to last week to illustrate. The 5-area weekly weighted average cash price at the end of last week for all grades of live steers was $101.73/cwt. October Live Cattle futures (the spot month) averaged $97.76 last week. So, the average basis was a positive $3.97.

Those who hedge cattle swap price risk for basis risk, which generally poses less risk, Maples says.

“Using a simplified example, assume a manager purchased a group of steers in March 2019 with plans to feed them for six months and immediately hedged by selling an October 2019 Live cattle futures contract which was trading at $116 at the time. After that point, prices going down helps them in their futures position but hurts them in their cash position, hence they are hedged against the impact of price changes,” Maples explains. “If this manager sold their steers last week and offset (bought back) their futures contract, they would have made $18.24/cwt. in the futures market ($116.00 – $97.76 = $18.24). Their cash cattle were worth much less than they were in March and they sold them for $101.73. Add the $18.24 made in the futures market to the $101.73 from selling the fed steers and this manager earned $119.97, which is $3.97 more than the futures price locked-in back in March ($119.97 – $116 = $3.97). This improvement over the locked-in price is due to the positive basis last week.”

Bottom line, based on average weekly nearby futures and average weekly fed steer price averages, Maples notes basis has been positive since the middle of April.

“This means that hedgers closing out in these weeks generally took home more than what they originally locked-in,” Maples says. “Conversely, from September 2018 through March 2019, basis was negative for 28 out of 32 weeks; hedgers generally took home less than their lock-in price. This shows that there is still risk in hedging, but the range (distribution) of basis risk is usually not as wide as the range of price risk.”

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

Cattle Current Daily—Sept. 11, 2019

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Choice 2-4 steers sold $4.25-$4.50/cwt. lower at the fat auction in Dunlap, IA, bringing an average of $97.76 at an average weight of 1,374 lbs.

Cattle futures showed some life, though, with support from oversold conditions and after early follow-through pressure.

Live Cattle futures closed an average of $1.87 higher ($1.67 to $2.35 higher).

Feeder Cattle futures closed an average of $1.32 higher.

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

Choice boxed beef cutout value was $1.57 lower Tuesday afternoon at $225.38/cwt. Select was 94¢ lower at $200.98.

Grain futures traded higher Tuesday, perhaps on this week’s USDA Crop Progress report (see below), as well as some defensiveness heading into Thursday’s World Agricultural Supply and Demand Estimates.

Corn futures closed 6¢ to 7¢ higher through Sep ’20 and then mostly 3¢ to 4¢ higher. 

Soybean futures closed 10¢ to 14¢ higher through Sep ’20 and then fractionally higher to 3¢ higher.

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Major U.S. financial indices softened Tuesday, led by tech stocks, but closed little changed.

The Dow Jones Industrial Average closed 73 points higher. The S&P 500 closed fractionally higher. The NASDAQ was down 3 points.

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Plenty of folks will be sorting through the monthly World Agricultural Supply and Demand Estimates (due Thursday morning) for clues about where USDA sees crop yield and production at this point.

Allendale Incprojects the USDA number for corn production at 13.90 billion bu. Based on its own Nationwide Yield Survey, Allendale projects production at 13.78 billion bu., with a yield of 167.71 bu./acre.

As for soybeans, Allendale projects yield at 46.13 bu./acre for production of 3.50 billion bu. They expect USDA to come out with an estimate of 3.68 billion bu.

In the meantime, corn crop condition lost ground last week, according to the most recent Crop Progress report for the week ending Sept. 8.

89% of corn was at the dough stage, which was 10% less than last year and 8% less than average. 55% was dented, which was 29% less than last year and 22% less than the average. 11% was mature, compared to 33% a year earlier and 24% for the five-year average. 55% was in Good (45%) or Excellent (10%) condition, which was 3% less than the previous week and 13% less than last year. 14% was in Poor (10%) or Very Poor condition (4%), which was 2% more than a year earlier.

92% of soybeans were setting pods, which was 8% less than the previous year and 7% less than the average. 55% were rated in Good (45%) or Excellent (10%) condition, the same as a week earlier, but 13% less than a year ago. 12% were in Poor (9%) or Very Poor (3%) condition, which was 2% more than a year earlier.

71% of spring wheat was harvested, which was 21% less than last year and 16% less than average.

97% of sorghum was headed, which was 2% less than the previous year and 1% less than the average. 65% was coloring, compared to 78% for the prior year and 74% for average. 27% was mature, which was 6% less than last year and 10% less than average. 22% was harvested, which was 2% less than last year and the average. 68% was in Good (53%) or Excellent (15%) condition, which was 15% more than a year earlier. 6% was rated as Poor (5%) or Very Poor (1%), compared to 17% last year.

51% of the nation’s pasture and range was rated in Good (43%) or Excellent (8%) condition, compared to 53% a week earlier and 43% last year. 20% was rated as Poor (14%) or Very Poor (6%), compared to 26% a year earlier.

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

Cattle Current Daily—Sept. 10, 2019

Although there was no negotiated cash fed cattle trade reported by USDA through Monday afternoon, other sources reported live trade breaking out in various regions at $96-$97/cwt., another step lower from last week’s slide.

The average 5-area direct price for steers last week was $3.86 lower on a live basis at $101.73/cwt., according to USDA. The average dressed steer price was $5.69 lower at $165.83.

After attempts for stability early in the session, Live Cattle futures lost ground, while Feeder Cattle remained under pressure.

Live Cattle futures closed mixed, from an average of 39¢ lower (six contracts) to an average of 13¢ higher, with heavy trade and expanding open interest.

Except for 52¢ and 20¢ lower on either end of the board, Feeder Cattle futures closed an average of $1.15 lower.

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 36¢ lower Monday afternoon at $226.95/cwt. Select was 2¢ lower at $201.92.

Corn futures closed 1¢ lower through Mar ’20 and then mostly fractionally higher. 

Soybean futures closed mostly unchanged to fractionally higher across the front half of the board and then mostly 3¢ higher.

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

The Dow Jones Industrial Average closed 38 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 15 points.

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As consumers seek to save time, convenience stores around the world provide a rapidly growing opportunity for U.S. beef and pork exports, according to the U.S. Meat Export Federation (USMEF).

Specifically, according to a 2019 report by Euromonitor, per capita spending on foodservice products at convenience stores increased 14% worldwide between 2013 and 2018 and is projected to increase another 11% by 2023. South Korea led the way, with a 142% increase in per capita convenience store foodservice spending from 2013 to 2018; another 47% increase is projected by 2023.

Japan, Taiwan, the ASEAN region and Mexico are other fast-growing markets identified by Euromonitor, while a USDA report suggests China’s convenience store chains, which have historically focused on lower-priced processed foods, are beginning to expand premium and imported food offerings. This trend is likely to continue as younger Chinese consumers shift away from traditional retail outlets.

The USMEF uses funding from the USDA Market Access Program (MAP), the Beef Checkoff Program and the National Pork Board to promote U.S. beef and pork—especially processed beef and pork items, but also raw material for further processing—as the centerpiece of convenience store fare in several international markets.

“Just as important as promoting existing products, we are developing brand new ideas for packaged meals and protein snack items featuring U.S. beef and pork that fit well with consumer trends in each individual market,” says Dan Halstrom, USMEF President and CEO. “USMEF recognizes the scope of this opportunity and the enormous demand that is driving it. As the convenience store sector has taken off in various parts of the world, suppliers realize they need products to help meet the demand for these meat snacks and packaged meals. The trend is toward high-quality meat, and that is definitely an advantage for U.S. beef and pork.”

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

Cattle Current Daily—Sept. 9, 2019

Live sales ended up $3 lower in the Southern Plains last week at $100/cwt., $4-$6 lower in Nebraska at mostly $100 and $2-$5 lower in the western Corn Belt at $102-$107. Dressed sales were $9-$10 lower in Nebraska at $160-$166; $7-$9 lower in the western Corn Belt at $163-$166.

Cattle futures, especially Live Cattle closed sharply lower Friday, with pressure including the softer fed cattle prices, declining wholesale beef values and mounting technical pressure.

Live Cattle futures closed an average of $2.12 lower in the front four contracts (including limit down in spot Oct) and then an average of 68¢ lower.

Feeder Cattle futures closed an average of 94¢ lower.

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

Choice boxed beef cutout value was $2.11 lower Friday afternoon at $227.31/cwt. Select was $2.53 lower at $201.94.

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

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

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Major U.S. financial indices closed little changed Friday, fading a weaker than expected outlook for national employment.

Total nonfarm payroll employment increased by 130,000 in August, according to the Employment Situation Summary from the U.S. Bureau of Labor Statistics. The unemployment rate remained unchanged at 3.7%.

Average hourly earnings for all employees on private nonfarm payrolls increased 11¢ to $28.11. Average hourly earnings are up 3.2% over the last 12 months.

The Dow Jones Industrial Average closed 69 points higher. The S&P 500 closed 2 points higher. The NASDAQ was down 13 points.

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All else being equal, cattle producers face more price pressure for at least another year before cyclical transition offers support, according to the U.S. Baseline Outlook Report Update issued by the Food and Agricultural Policy Institute (FAPRI) at the University of Missouri (MU).

For price perspective between FAPRI’s annual U.S. Baseline Outlook released in the spring and the recent update, see the tables below.

“Though pasture and range conditions have been much improved this spring and summer relative to previous years, cow-calf returns have reached the lowest level in a decade as feeder steer prices decline with cattle on feed numbers continuing to exceed year-ago levels,” say MU agricultural economists, Scott Brown and Daniel Madison, in the companion update for livestock and dairy markets. “Fed steer prices had been steady for most of the first half of the year, with recent weakness noted, due to the Aug. 9 fire at a Tyson cattle processing plant in Kansas. This has strained already tight beef packing capacity, resulting in higher beef prices along with depressed demand for cattle. Cattle and beef prices will remain under pressure as beef production grows through 2020. Good domestic demand for beef, particularly higher-quality product, continues to prevent even larger price declines.”

In the FAPRI Update, the projected 5-area direct average fed steer price for this year is $116.58/cwt. It drops to $113.64 next year, then begins to gain traction in 2022.

As for feeder prices, basis OKC and 600-650 lbs. FAPRI projects this year’s average price at $153.61 this year, $145.28 next year and $149.66 in 2021.

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

Cattle Current Daily-Sept. 6, 2019

Negotiated cash fed cattle trade continued softer Thursday with live sales in the Southern Plains $3 lower than last week at $100/cwt. Dressed trade for the week so far is $9-$10 lower in Nebraska at $160-$166 and $3-$8 lower in the western Corn Belt at $167-$168.

Although closing off of session lows, Cattle futures ended lower, amid softer cash prices, demand worries and technical pressure.

Live Cattle futures closed an average of $1.13 lower in the front three contracts, and then an average of 37¢ lower, except for unchanged in Jun and 5¢ higher in Apr.

Feeder Cattle futures closed an average of 58¢ lower (25¢ lower to $1.15 lower in spot Sep).

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

Choice boxed beef cutout value was $1.23 lower Thursday afternoon at $229.42/cwt. Select was $4.48 lower at $204.47.

Corn futures closed unchanged to fractionally mixed. 

Soybean futures closed mostly 11¢ to 13¢ lower.

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Major U.S. financial indices blasted sharply higher Thursday, amid reports that the on-again, off-again trade talks are back on between the U.S. and China.

Other support included positive employment data.

Private sector employment increased by 195,000 jobs month to month in August, according to the monthly ADP National Employment Report®. 

“Businesses are holding firm on their payrolls despite the slowing economy,” says Mark Zandi, chief economist of Moody’s Analytics. “Hiring has moderated, but layoffs remain low. As long as this continues, recession will remain at bay.”

The Dow Jones Industrial Average closed 350 points higher. The S&P 500 closed 38 points higher. The NASDAQ was up 139 points.

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U.S. beef exports in July held mainly steady with the previous year’s strong pace, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports increased 1% in volume year-over-year at 117,842 metric tons (mt), while export value of $720.4 million was down slightly from a year earlier, but still the seventh-highest monthly total on record.

For January-July, beef exports were 2% less than the same period last year at 766,607 mt. Beef export value of $4.75 billion was slightly below last year’s record pace.

South Korea continued to set the pace for growth. July U.S. beef export volume to that nation was 6% more than a year ago at 25,104 mt. Export value exceeded the previous month’s record at $181.3 million, up 7% from a year earlier. For January through July, beef exports to Korea climbed 11% in volume,) while export value eclipsed the previous year’s record pace by 14% at $1.1 billion.

“The Korean market is a remarkable success story and a blueprint for what U.S. beef can achieve when consumers are not shouldering such a heavy tariff burden,” says Dan Halstrom, USMEF president and CEO. “With the duty rate now less than half of its pre-FTA level, U.S. beef is enjoyed by more Korean consumers than ever, and in a wider variety of venues. This will also happen in Japan when duty rates come down, but on an even larger scale.”

Beef export value per head of fed slaughter averaged $308.47 in July, down 7% from a year ago, while January-July export value averaged $311.51 per head, down 2%.

July pork exports surged by 32% year over year to 233,242 mt. U.S. pork export value was up 34% at $623.3 million. For January-July, pork exports are running 2% ahead of last year’s pace at 1.48 million mt, while value was down 2% at $3.77 billion.

“USMEF anticipated a rebound in Mexico once duty-free status was restored for U.S. pork,” Halstrom explains. “But I want to emphasize that we did not take this recovery for granted. While those retaliatory duties were in place, USMEF ramped up our outreach with processors and other major buyers in Mexico and worked closely with them to keep product moving south, and with the duties removed we’re seeing the results of these efforts. Now ratification of the U.S.-Mexico-Canada Agreement is critical to ensure long-term duty-free access to this key market.”

July pork exports to Mexico were 19% more in July than a year earlier and value was 38% higher at $126.7 million.

Although held back by China’s retaliatory duties on U.S. pork, exports to China/Hong Kong were a record 68,657 mt in July, more than tripling from a year earlier, while value climbed 173% to a record $152.5 million.

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

Cattle Current Daily—Sept. 5, 2019

Negotiated cash fed cattle trade remained largely undeveloped through Wednesday afternoon. The early tone was bearish, though, with AMS reporting early dressed sales in Nebraska $3-$8 lower at $167, on light trade and moderate demand.

Fat cattle auctions were mixed.

For instance, there was no trend, but demand was good and trade active at Tama, IA, where Choice 2-4 steers weighing an average of 1,371 lbs. brought $110.21/cwt.

On the other hand, the AMS reporter at Sioux Falls Regional said demand was light and activity slow—few packer buyers present—for the high quality grading steers and heifers, offered in a fair weighing condition. All told, 434 head of Ch 2-3 steers weighing an average of 1,431 brought $101.34.

Lower Corn futures continued to support Feeder Cattle futures Wednesday, while apparently continued queasiness over demand and supply-side logistics helped apply some pressure to front-month Live Cattle.

Live Cattle futures closed mixed but mostly higher, from 2¢ to 75¢ lower in three contracts to an average of 47¢ higher.

Feeder Cattle futures closed an average of $1.16 higher.

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

Choice boxed beef cutout value was 1¢ lower Wednesday afternoon at $230.65/cwt. Select was $2.67 lower at $208.95.

Corn futures closed 2¢ to 3¢ lower through May ‘20 and then mostly fractionally mixed.

Soybean futures closed 6¢ to 7¢ higher through Aug ’20 and then mostly 3¢ to 4¢ higher.

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Major U.S. financial indices closed sharply higher Wednesday, basically erasing losses from the previous session. Primary support, according to many analysts, was the easing of political tensions in Hong Kong, which is thought to be favorable for U.S.-China trade talks.

The Dow Jones Industrial Average closed 237 points higher. The S&P 500 closed 31 points higher. The NASDAQ was up 102 points.

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Less cow slaughter and lighter dressed cow weights continue to boost cull cow prices, says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets.

“Prices in the Southern Plains reached their high of the year, so far, at $54.36/cwt. at the end of August,” Anderson says. “That was 12.5% higher than a year ago. There is some good reason to think that prices may continue to be above a year ago.”

After increased dairy slaughter drove total cattle slaughter to multi-decade highs during the first few months of the year, Anderson explains it moderated and was 1% less year-to-year over the last month.

Likewise, he points out beef cow slaughter was 1% less year over year for the last two months.

“Beef cow culling typically hits its seasonal peak for the year in the Fall. It’s likely some earlier culling this year may have pulled some cows ahead into slaughter,” Anderson says. “Growing dry conditions in the Southern Plains have likely not added to culling numbers, yet.”

Total cow slaughter was 0.5% less over the last two months, compared to the same time last year, according to Anderson.

At the same time, he explains cow dressed weights averaged 7.6 lbs. less so far in 2019, compared to a year earlier.

“So, not only have fewer gone to market, but they have weighed less, as well,” Anderson says. “The overall effect has been less cow beef production in recent weeks, supporting the 90% lean fresh beef price, the wholesale cutout value, and the cull cow price.”

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

Cattle Current Daily—Sept. 4, 2019

When USDA finished tallying last week’s negotiated cash fed cattle trade, live sales ended up $3 lower in the Southern Plains at $103/cwt., $2-$3 lower in Nebraska at $104-$106 and mostly $1-$3 lower in the western Corn Belt at $107-$109. Dressed trade was mainly $3-$5 lower at $170-$175.

The 5-area direct average steer price last week was $105.59/cwt. on a live basis, which was $1.53 lower than the previous week. The average dressed steer price of $171.52 was down $3.82.

Lower Corn futures helped Feeder Cattle bounce higher to start the week, recovering about half the losses from the previous session. That, along with oversold conditions and surging Lean Hogs helped Live Cattle edge higher.

Except for unchanged in Apr and 2¢ lower in the back contract, Live Cattle futures closed an average of 25¢ higher.

Feeder Cattle futures closed an average of 86¢ higher (35¢ higher to $1.75 higher in spot Sep).

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

Choice boxed beef cutout value was $1.11 lower Tuesday afternoon at $230.66/cwt. Select was 65¢ lower at $211.62.

Corn futures closed 7¢ to 8¢ lower through Jul ‘20 and then mostly 3¢ to 4¢ lower.

Soybean futures closed fractionally mixed to mostly 1¢ to 2¢ higher.

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Major U.S. financial indices closed sharply lower Monday, on weak manufacturing data and the beginning of new tariffs between the U.S. and China.

Economic activity in the manufacturing sector contracted in August, for the first time in three years, according to the latest Manufacturing ISM® Report On Business®. Specifically, the August Purchasing Managers Index (PMI) of 49.1% was 2.1% lower month to month.

“Comments from the panel reflect a notable decrease in business confidence. August saw the end of the PMI expansion that spanned 35 months, with steady expansion softening over the last four months,” says Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® Manufacturing Business Survey Committee. “Respondents expressed slightly more concern about U.S.-China trade turbulence, but trade remains the most significant issue, indicated by the strong contraction in new export orders. Respondents continued to note supply chain adjustments as a result of moving manufacturing from China. Overall, sentiment this month declined and reached its lowest level in 2019.” 

The Dow Jones Industrial Average closed 285 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 88 points.

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Agricultural producer sentiment weakened significantly in August, according to the most recent Purdue University/CME Group Ag Economy Barometer. The August reading of 124 was down 29 points from the previous month.

Farmers’ expectations for both current and future economic conditions also tumbled. Compared to a month earlier, the Index of Current Conditions dropped 19 points and the Index of Future Expectations dropped 34 points.

“Sharp declines in most commodity prices during July and early August weighed heavily on farmer sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “While USDA’s announcement of the Market Facilitation Program (MFP) payment rates did help alleviate concerns about 2019 income for many farmers, the big decline in the Index of Future Expectations indicates farmers are becoming more concerned about the future for U.S. agriculture and their farms.”

In late July, USDA announced per-planted-acre payment rates by county for the 2019 MFP. The Ag Economy Barometer survey asked participants to what degree the $16 billion in MFP payments to U.S. farmers relieves their concerns about the impact of tariffs on their 2019 farm income.

More than two-thirds (71%) of respondents feel the 2019 MFP program will, “completely or somewhat relieve,” their concerns about tariffs’ impact on 2019 farm income. However, nearly three out of 10 respondents (29%) said the payments did nothing to relieve their concerns, indicating that a significant minority of farmers think the MFP payments fall short of making up for income losses stemming from ongoing tariff battles.

The barometer is based on a mid-month survey of 400 agricultural producers across the U.S. It was conducted Aug. 12-20, with nearly all of the responses collected following USDA’s release of the Aug. 12 Crop Production report.

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

Cattle Current Daily—Sept. 2-3, 2019

Negotiated cash fed cattle trade ended up $3/cwt. lower in the Southern Plains last week at $103/cwt. Live trades were $2-$3 lower in Nebraska at $104-$106 and steady to $5 lower in the western Corn Belt at $105-$110. Dressed sales in Nebraska were $6-$10 lower at $165-$172; $3-$7 lower in the western Corn Belt at mostly $171.

The weaker cash outlook, stronger U.S. dollar and continued uncertainty from the Tyson fire helped pressure Cattle futures to end the week.

Live Cattle futures closed an average of 90¢ lower.

Not counting newly hatched away-Aug, Feeder Cattle futures closed an average of $1.76 lower.

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

Choice boxed beef cutout value was 42¢ lower Friday afternoon at $231.77/cwt. Select was 51¢ lower at $212.27.

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

Soybean futures closed mostly fractionally mixed.

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Major U.S. financial indices closed mixed and little changed Friday, as investors closed out the month.

The Dow Jones Industrial Average closed 41 points higher. The S&P 500 closed 1 point higher. The NASDAQ was down 10 points.

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“The U.S. labor market—with 3.7% unemployment in August—and continued consumer confidence are providing a floor to an otherwise cooling economy,” say analysts with USDA’s Economic Research Service and Foreign Agricultural Service, in the quarterly Outlook for U.S. Agricultural Trade, released Friday.

Compared to the previous quarter, the report revised U.S. per capita Gross Domestic Product (GDP) down to 1.6% for this year and down to 1.3% next year.

“Per capita world GDP is expected to grow 1.6% in 2020, up slightly from 1.5% in 2019, according to the report. “This quarter’s projected per capita GDP growth for 2019 is down 25% from last quarter’s projection, and this quarter’s projection for 2020 is 15% lower. The U.S.-China trade conflict, Brexit, and the developing trade dispute between Japan and South Korea are some of the key uncertainties slowing global trade and investment and pushing forecasts for economic growth lower.”

Even so, U.S. agricultural exports are projected to reach $137.0 billion next year, up $2.5 billion from the revised forecast for fiscal year (FY) 2019; driven primarily by higher exports of pork, beef, soybeans, and horticultural products.

“Beef and veal exports are forecast at $7.8 billion (up $300 million from FY 2019) on higher volumes and unit values,” say analysts.

By | August 31st, 2019|Daily Market Highlights|

Cattle Current Daily—Aug. 30, 2019

Negotiated cash fed cattle prices sank in the North on Thursday.

In Nebraska, dressed sales were at $165-$172/cwt., which was $6-$10 lower than the bulk of last week’s light test. Early live sales for the week are at $106, which is $1-$2 lower.

Dressed sales in the western Corn Belt were at $171, which was $3-$7 lower than last week. For the week so far, live sales are at $109, which is $1 less than last week.

Surging Lean Hog futures—perhaps tied in part, to hopeful rhetoric surrounding trade talks with China—helped lift Cattle futures Thursday, although they closed off of session highs.

Except for 20¢ lower in the back contract, Live Cattle futures closed an average of 31¢ higher.

Other than unchanged in expiring Aug and 2¢ lower in March, Feeder Cattle futures closed an average of 22¢ higher.

Wholesale beef values were lower 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 77¢ lower Thursday afternoon at $232.19/cwt. Select was 97¢ higher at $212.78.

After 3¢ lower in spot Sep, Corn futures closed mostly 1¢ higher.

Soybean futures closed mostly 1¢ to 2¢ higher.

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Major U.S. financial indices closed sharply higher Thursday, with renewed optimism surrounding trade talks between the U.S. and China. That was based on reports suggesting China would prefer to avoid escalating trade tensions.

The Dow Jones Industrial Average closed 326 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 116 points.

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“While the impacts of the Tyson plant fire will likely diminish relatively quickly in the next few weeks, feeder cattle markets are still nervous and defensive about the corn market situation, increasingly shaky macroeconomic conditions and continued global economic turmoil,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Expectations about the 2019 corn crop vary widely, as do the emotions about the crop situation. The latest private crop tour estimates suggest a significantly lower corn yield than current USDA estimates and acres harvested remains an unknown. One thing that seems clear is that much of the corn crop is sharply delayed in maturity. The risk associated with an early or even normal frost in the Corn Belt is high.”

Peel made those comments relative to running several winter stocker budgets, which yielded a wide range of results from decent profit to little or no return.

“The uncertainty and volatility impacting feeder cattle markets is likely to continue this fall and winter. This increases the risks of winter stocker production but may also present short term opportunities for either buying or selling cattle or both,” Peel says. “The best advice at this point is to evaluate and reevaluate possibilities frequently and remain as nimble as possible both offensively and defensively.”

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

Cattle Current Daily—Aug. 29, 2019

Although still largely undeveloped through Wednesday afternoon, negotiated cash fed cattle trade appears steady to weaker than last week.

For instance, slaughter steers and heifers sold fully $1 lower at Sioux Falls Regional in South Dakota on Wednesday. There were 337 Choice 2-3 steers weighing an average of 1,433 lbs. that brought an average of $108.01/cwt.

A day earlier, negotiated trade in the western Corn Belt was at $109 on a live basis, which was $1 less than the previous week. Although too few to trend, there were some dressed sales in the region on Wednesday at $173. Dressed prices last week were $174-$178.

Also, there were 734 head offered in the weekly Fed Cattle Exchange auction—432 head (two lots of Nebraska heifers) sold for $106/cwt. for delivery at 1-17 days. Negotiated live prices in Nebraska last week were at $107-$108.

Despite early support from higher outside markets, Cattle futures continued mostly lower Wednesday amid light trade; extremely light trade in Feeder Cattle. Pressure included the early tone of the cash fed cattle market, as well as the overall decline in wholesale beef values that continue to adjust toward pre-fire levels.

Except for 20¢ higher in the back contract, 32¢ higher in almost spent Aug and unchanged in away Oct, Live Cattle futures closed an average of 50¢ lower.

Other than 20¢ higher in soon to expire Aug, Feeder Cattle futures closed an average of 87¢ lower.

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 $3.80 lower Wednesday afternoon at $232.96/cwt. Select was $1.10 higher at $211.81.

Corn futures closed 3¢ to 5¢ higher through Jul ’20 and then mostly fractionally lower.

Soybean futures closed 4¢ to 6¢ higher.

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Major U.S. financial indices closed higher Wednesday, recovering ground lost in the previous session. Support included the increase in crude oil prices, tied to a significantly steeper decline in U.S. crude oil inventories than expected.

The Dow Jones Industrial Average closed 258 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 29 points.

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“As part of our continued efforts to monitor the impact of the fire at the beef processing facility in Holcomb, KS, I have directed USDA’s Packers and Stockyards Division to launch an investigation into recent beef pricing margins to determine if there is any evidence of price manipulation, collusion, restrictions of competition or other unfair practices,” said U.S. Secretary of Agriculture Sonny Perdue, in a statement yesterday. If any unfair practices are detected, we will take quick enforcement action. USDA remains in close communication with plant management and other stakeholders to understand the fire’s impact to industry.”

Jennifer Houston, president of the National Cattlemen’s Beef Association says the announcement demonstrates the government’s understanding that the fire placed extreme strain on the cattle industry. 

“We encourage USDA to look at all aspects of the beef supply chain and to utilize internal and external expertise in this investigation,” Houston adds. “We believe it adds transparency that will help build confidence in the markets among cattlemen and women.”

“Cattle producers have sound reason to question market events that transpired after the Holcomb fire,” says Bobby Simpson, president of the Missouri Cattlemen’s Association (MCA). “While a sharp decrease in slaughter capacity was anticipated, slaughter actually increased some 9,000 head from the week prior to the fire. Further, most expected this market disruption to cause uncertainty, but few could believe in one week fed cattle prices would drop 5% and Choice boxes would spike 9% while total slaughter increased. All the while, prices for feeder calves plummeted. The financial woes do not reside within one segment of the industry. It impacts the entire chain and causes lending institutions a high level of uncertainty as equity dwindles across the board.

“There is no harm in conducting an investigation to ensure integrity of the markets and to respond to the justified concerns of thousands of U.S. cattle producers. In fact, it’s simply the right thing to do. No matter the result of the investigation, good can come from better understanding what took place and how to best mitigate future disruptions.”

Certainly, punishment is due to anyone found guilty of the actions Perdue mentioned. If no wrongdoing is found, however, then hopefully the investigation will appease those who believe something other than market forces were at work, propelling wholesale beef value so high, while fed cattle prices took a step back.

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

Cattle Current Daily—Aug. 28, 2019

Other than a few live sales in the western Corn Belt at $109/cwt.—too few to trend—negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon, according to USDA’s Afternoon National Slaughter Cattle Review.

Cattle futures continued recent yo-yo movement, to the downside this time, with sluggish trade and traders apparently waiting for further direction.

Except for 7¢ lower in the back contract, Live Cattle futures closed an average of 83¢ lower.

Other than 10¢ lower in soon to expire Aug, Feeder Cattle futures closed an average of $1.21 lower, (92¢ to $2.25 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 $1.30 lower Tuesday afternoon at $236.76/cwt. Select was 95¢ lower at $210.71.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 4¢ to 7¢ lower.

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Major U.S. financial indices closed lower Tuesday, amid fretting over trade issues and possibilities of a coming recession, as indicated by the yield curve inversion.

The Dow Jones Industrial Average closed 120 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 26 points.

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Although feedlot marketing remained aggressive last month, the estimated supply of cattle on feed more than 120 days was 0.7% more than the previous year, according to Brenda Boetel, a livestock economist at the University of Wisconsin-River Falls.

“Total cattle on feed inventory saw the largest July-to-August decline since 2008,” Boetel explains in the most recent In the Cattle Markets. “Although cattle are currently being marketed in a timely manner, there is danger that this pace will slow and currentness will slip. Given the decrease in slaughter capacity due to the Tyson fire, Saturday slaughter will need to continue to keep the market current. Keeping up with the increased supply in the fourth quarter will be a challenge.”

Further, Boetel says current placement weights may suggest placement rates accelerating at a faster clip later.

“Placements of cattle weighing less than 800 lbs. were down 7.6%, while cattle weighing over 800 lbs. saw placements increase 7.7%. Placements as a percentage of marketings were down 8% year-over-year from July 2018. Seasonally, net feedlot placements as a percentage of marketings typically increase between June and October,” Boetel says. “Given that we have seen a decrease in this number, while the number of feeder cattle remains high indicates placements will be increasing at a faster rate later this fall.”

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

Cattle Current Daily—Aug. 27, 2019

Negotiated cash fed cattle trade ended up $1 higher in the Southern Plains last week at $106/cwt. Live prices were also $1 higher in Nebraska at $107-$108 and steady to $3.50 higher in the western Corn Belt at mostly $110. Dressed trade was $6-$10 higher in Nebraska at $175-$178, in a light test. In the western Corn Belt, dressed prices were $4-$6 higher at $174-$178.

Week to week (ending Aug. 25), the average 5-area direct steer price was 44¢ more on a live basis at $107.12, according to USDA. The average dressed steer price was $4.39 more at $175.34.

That was with 55,786 head of fed cattle slaughter, which were 10,874 more than the previous week. Estimated total cattle slaughter for the week was 654,000 head, according to USDA’s Weekly Livestock, Poultry and Grain Highlights. That was 3,000 head more than the previous week’s estimated slaughter. Total estimated cattle slaughter the week of the Tyson fire was 645,000 head.

Cattle futures made strong gains to start the week, buoyed by Friday’s friendlier than expected Cattle on Feed report, the weekend announcement of a new trade pact with Japan (see below), as well as reports that China is willing to renew trade talks with the U.S.

Live Cattle futures closed an average of $1.29 higher, recapturing most of Friday’s decline.

Feeder Cattle futures closed an average of $1.80 higher, recovering about three-quarters of what was lost in the previous session.

Wholesale beef values were firm 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 54¢ higher Monday afternoon at $238.06/cwt. Select was $1.05 lower at $211.66.

Corn futures closed mostly fractionally higher.

Soybean futures closed 6¢ to 10¢ higher.

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Major U.S. financial indices closed higher Monday with the aforementioned reports that China wants to return to the trade negotiation table with the U.S.

The Dow Jones Industrial Average closed 269 points higher. The S&P 500 closed 31 points higher. The NASDAQ was up 101 points.

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Positive news for U.S. beef exports came over the weekend with the announcement that the U.S. and Japan reached agreement, in principal, on a bilateral trade pact. In terms of value, Japan continues to be the leading customer for U.S. beef.

According to U.S. Trade Representative Robert Lighthizer, the agreement focuses on agriculture, industrial tariffs and digital trade.

“In the agriculture area, it will be a major benefit for beef, pork, wheat, dairy products, wine, ethanol, and a variety of other products,” Lighthizer explained during a Sunday press conference. “It will lead to substantial reductions in tariffs and non-tariff barriers across the board…this will allow us to compete more effectively with people across the board, particularly the TPP countries and Europe.”

The U.S. tariff disadvantage in Japan increased when the U.S. withdrew from the Trans Pacific Partnership (TPP), while the other 11 nations involved in TPP ultimately agreed to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). With it, key U.S. beef export competitors, including Australia and Canada, gained tariff advantage over the U.S. on beef exports to Japan.

“This announcement is tremendous news for U.S. farmers and ranchers, and for everyone in the red meat supply chain, because it will level the playing field for U.S. pork and beef in the world’s most competitive red meat import market,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF). “It is also a very positive development for our customer base in Japan, which USMEF and our industry partners have spent decades building. These customers have been very loyal to U.S. pork and beef, but our exports to Japan could not reach their full potential under Japan’s current tariff structure.”

According to Lighthizer, Japan currently imports about $14 billion worth of U.S. agricultural products.

“The Meat Institute applauds the Trump Administration for negotiating better access to a critical and growing market for American beef and pork,” says Julie Anna Potts, CEO of the North American Meat Institute. “The U.S. will be better able to compete with the Comprehensive and Progressive Trans-Pacific Partnership nations and the European Union for valuable market share.”

“Removing the massive 38.5% tariff on U.S. beef will level the playing field in Japan, and we are very thankful to President Trump and his trade team for continuing to fight on behalf of America’s ranching families,” says Jennifer Houston, president of the National Cattlemen’s Beef Association. “Last year, Japanese consumers purchased over $2 billion of U.S. beef, accounting for roughly one-quarter of overall U.S. beef exports.”

By | August 26th, 2019|Daily Market Highlights|

Cattle Current Daily-Aug. 26, 2019

Negotiated cash fed cattle trade was $1 higher in the Southern Plains on Friday at $106/cwt. Although there were too few transactions to trend, early sales were higher in Nebraska at $108 on a live basis and $175-$178 in the beef; $176 in the western Corn Belt.

Cattle futures closed sharply lower Friday beneath the weight of a variety of factors that included record-high July U.S. red meat production, the sharp month-to-month increase in frozen beef supplies and sharply lower outside markets tied to increasingly volatile trade relations between the U.S. and China.

Live Cattle futures closed an average of $1.56 lower, except for 35¢ lower in spot Aug.  

Feeder Cattle futures closed an average of $2.50 lower ($1.05 to $3.17 lower).

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

Choice boxed beef cutout value was $1.76 lower Friday afternoon at $237.52/cwt. Select was $3.20 lower at $212.71.

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

Soybean futures closed mostly 9¢ to 12¢ lower through Jul ’20 and then mostly 2¢ to 8¢ lower.

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Major U.S. financial indices plummeted lower Friday with accelerated tariffs and counter-tariffs between the U.S. and China.

The Dow Jones Industrial Average closed 626 points lower. The S&P 500 closed 75 points lower. The NASDAQ was down 239 points.

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If anything, the monthly Cattle on Feed report should likely be viewed as neutral to slightly bullish, with July placements less than expected, while July marketings and the Aug. 1 inventory were in line with pre-report estimates.

Placements in July of 1.70 million head were 2.12% less than the previous year.In terms of placement weight, 36.36% went on feed weighing 699 lbs. or less; 46.62% weighing 700-899 lbs.; 17.00% weighing 900 lbs. or more.

Marketings in July of 2.00 million head were 6.89% more than the prior year.

Cattle on feed Aug. 1 of 11.11 million head were 0.17% more than the same time last year. “This makes the fourth month in a row that the on-feed number is the largest since the data series started in 1996,” according to the Agricultural Marketing Service. 

By | August 26th, 2019|Daily Market Highlights|

Cattle Current Daily—Aug. 23, 2019

Negotiated cash fed cattle trade remained largely undeveloped through Thursday afternoon, based on USDA reports. However, although too few to trend, there were some early dressed sales in Nebraska at $170-$178/cwt., which was $2 lower to $6 higher than last week. There were also a few dressed trades in the western Corn Belt at $178, which was $6-$8 higher than the previous week.

Despite more pressure in Lean Hogs, Cattle futures on Thursday took another measured step closer to where they were before the Tyson fire.

Live Cattle futures closed an average of 84¢ higher (40¢ higher at the back to $2.30 higher in spot Aug at $104.975). 

Feeder Cattle futures closed an average of 82¢ higher.

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 $2.46 lower Thursday afternoon at $239.28/cwt. Select was 21¢ higher at $215.91.

Corn futures closed fractionally higher.

Soybean futures closed mostly 3¢ to 4¢ lower.

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Major U.S. financial indices closed narrowly mixed Thursday, with investors apparently content to wait for the much-anticipated speech from Fed Chairman Jerome Powell on Friday.

The Dow Jones Industrial Average closed 49 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 28 points.

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Commercial red meat production in July was record high for the month at 4.59 billion lbs., which was 8% more than the same time last year, according to USDA’s monthly Livestock Slaughter report released yesterday. Keep in mind there was an extra weekday in July this year.

The total included beef production for the month of 2.36 billion lbs., which was 6% more than last year. Average steer carcass weight for July was 866 lbs., which was 4 lbs. less than the same time a year earlier. The average carcass weight for heifers was 796 lbs., which was 7 lbs. less than the previous year.

Total cattle slaughter in July was 2.90 million head, which was 120,600 head more than the same month last year.

For January through July, commercial red meat production of 31.4 billion lbs. was 3% more than the same period last year. Accumulated beef production was 1% higher; pork production was up 5%.

Total pounds of beef in freezers as of July 31 were 12% more than the previous month, but 6% less than the previous year, according to the monthly USDA Cold Storage report.

Frozen pork supplies were down 3% from the previous month but were 9% more than last year.

Total red meat supplies in freezers were up 3% from the previous month and up 1% from last year.

Total frozen poultry supplies were 2% more than the previous month but 4% less than a year earlier.

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

Cattle Current Daily—Aug. 22, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, based on USDA reports.

Choice steers brought $1.75-$2.00/cwt. higher at the fat auction in Tama, Iowa. Ch 2-4 steers (152 head) at an average of 1,344 lbs. brought an average of $109.27/cwt. Choice heifers were $2.25-$2.50 higher.

Similarly, slaughter steers sold $3-$4 higher at Sioux Falls Regional in South Dakota; $5-$6 higher for slaughter heifers. Ch 2-3 steers (182 head) weighing an average of 1,440 lbs. brought an average of $108.89.

Incrementally, Cattle futures continued to recover some of last week’s steep losses, helped along by wholesale beef strength, as well as notions that Friday’s Cattle on Feed report should be neutral to slightly bullish (see below).

Live Cattle futures closed an average of 53¢ higher (17¢ higher at the back to 95¢ higher).

Feeder Cattle futures closed an average of $1.09 higher (77¢ to $1.57 higher).

Wholesale beef values were steady 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 4¢ higher Wednesday afternoon at $241.74/cwt. Select was $1.43 higher at $215.70.

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 higher Wednesday, recovering losses from the previous session. Support included loftier quarterly earnings than expected from consumer giants Lowes and Target.

The Dow Jones Industrial Average closed 240 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 71 points.

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Positive forage conditions for longer grazing, as well as the bump higher in grain prices earlier this summer are among reasons market analysts seem to be expecting lower year-over-year July feedlot placements when the monthly Cattle on Feed report comes out Friday.

For instance, analysts at Allendale, Incestimate July placements to be 1.6% less than last year. Analysts surveyed by Urner Barry expect, on average, placements to be 0.5% less, according to the Daily Livestock Report.

If either are correct, Allendale analysts point out it would be the third consecutive month of placements below year-earlier levels.

“Concerns over feedlot profitability, and more restrained supplies of replacement feeders are two important reasons,” say Allendale analysts. “July placements supply a portion of the January through April finished cattle supply. Kansas State University estimates fed cattle finishing in that period may run losses averaging $106 per head.”

Helped along by an extra marketing day in July this year, both estimate marketings to be 6.6-6.8% more than a year earlier.

Allendale’s estimate puts marketing in July at 1.997 million head. That would be the most for the month in 11 years, according to analysts there.

Likewise, between both sources, cattle on feed Aug. 1 is estimated to be up 0.5-0.6%, compared to the same time last year.

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

Cattle Current Podcast—Aug. 21, 2019

Cattle markets on Tuesday continued to retrace some of last week’s steep losses.

Although negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon, prices for the week were looking higher. Through Monday, though a light test, the 5-area direct steer price average was $109/cwt. on a live basis. Chatter also continued that less negotiated trade the last couple of weeks mean packers need to renew inventory.

Oversold conditions and continued erosion in Corn futures helped Cattle futures close higher.

Live Cattle futures closed an average of $1.49 higher through the front three contracts, and then an average of 42¢ higher.

Feeder Cattle futures closed an average of 64¢ higher, except for 12¢ lower in the back contract.

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

Choice boxed beef cutout value was $2.57 higher Tuesday afternoon at $241.70/cwt. Select was 25¢ lower at $214.27.

Despite softer week-to-week corn condition, Corn futures closed 4¢ to 5¢ lower through Jul ’20 and then fractionally mixed to 2¢ lower.

Soybean futures closed mostly fractionally mixed to 1¢ higher.

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Major U.S. financial indices closed lower Tuesday, with traders apparently taking profits from gains in the previous several sessions, perhaps prompted by lower Treasury yield rates.

The Dow Jones Industrial Average closed 173 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 54 points.

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As market reaction to the Tyson fire captures a lion’s share of attention, Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln suggests it be considered within the context of the macro economy that already enveloped cattle markets.

“Chinese trade issues continued to weigh on the agriculture markets,” Dennis explains, in the latest issue of In the Cattle Markets. “Effects were seen in corn and soybeans, spilling over into the cattle markets. The markets avoided a selloff when President Trump delayed tariffs on Beijing until December. Cattle markets saw a response with Chinese purchases towards the end of this past week. In absence of China, several negotiated trade deals have yet to be ratified by Congress. Combined, this has weighed down the domestic market.”

Next, Dennis points to worries about global economic growth and the impact on beef demand. For instance, faltering manufacturing and company profits in the second quarter, as well as last week’s yield curve inversion heighten concerns about domestic economic recession.

“The beef market will need to find additional homes for the beef on the market,” Dennis says. “More beef on the domestic markets will further depress prices. While beef was doing a decent job at finding international homes, this trend will need to continue and, in some cases, increase. While domestic demand has been strong, there is greater uncertainty whether consumers will continue to have increasing disposable income in the future, due to inflation. If inflation spills into the consumer goods market, then this could further depress derived demand prices.”

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

Cattle Current Daily—Aug. 20, 2019

Renewed stability defined cattle markets Monday, helped along by news that estimated cattle slaughter last week, following the Tyson fire, was 9,000 head more than the previous week at 651,000 head. That according to USDA’s Estimated Daily Livestock Under Federal Inspection reports.

When all was said and done last week, negotiated cash fed cattle traded mostly $5 lower in the Southern Plains at mostly $105/cwt. They were $6-$7 lower in Nebraska at mostly $107 and $5-$6 lower in the western Corn Belt at $106.50-$110.00. In Nebraska, dressed trade was at $165-$172 in a light test, which was $13-$15 lower. It was $9-$10 lower in the western Corn Belt at $170-$172.

Cattle futures showed signs of life early in Monday’s session but lost steam as the session progressed.

Live Cattle futures closed narrowly mixed, from and average of 12¢ lower to an average of 15¢ higher.

Other than $1.10 higher in spot Aug, Feeder Cattle futures closed narrowly mixed, from and average of 3¢ lower to an average of 29¢ higher.

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

Choice boxed beef cutout value was 44¢ higher Monday afternoon at $239.13/cwt. Select was $1.26 higher at $214.52.

Corn and Soybean futures softened with a more favorable weather outlook and worries about export demand.

Corn futures closed mostly 3¢ to 6¢ lower.

Soybean futures closed mostly 11¢ to 13¢ lower.

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Major U.S. financial indices continued to rally Monday, building on gains from the end of last week. Support included further strengthening of bond yields.

The Dow Jones Industrial Average closed 249 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 106 points.

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The degree of price movement following the fire at Tyson’s beef packing plant at Holcombe, KS may have been shocking, but the way the market reacted wasn’t, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

Markets seek to coordinate equilibrium between supply and demand, Peel explains in his weekly market comments. When a severe shock occurs to either, markets seek to reestablish that equilibrium as quickly as possible.

“With fresh beef production suddenly decreased, boxed beef prices rose sharply to ration a suddenly limited supply,” Peel explains. “Choice boxed beef prices increased by over $22/cwt. or 10.3% in one week. This illustrates one of the most important functions of markets (one that is commonly taken for granted): markets make sure that we don’t run out of things. With less supply available, the market uses higher prices to determine how limited beef supplies will be allocated. It is a common market reaction. When a freeze hits Florida, orange juice prices begin to rise immediately, not because there is an immediate shortage of juice but to make sure that the current supply continues to be available over time. Markets will never tell a consumer that they cannot have a product but prices will rise enough to convince some consumers not to consume as much of the product at this time.”

As well, Peel says markets discourage wasting products.

“This is particularly important for perishable products. Thus, watermelon prices drop dramatically when the seasonal supply becomes available to make sure that all watermelons are consumed. Fed cattle ready for slaughter are no less perishable and the current drop in fed prices ensures that all possible adjustments are used to absorb the cattle into remaining industry capacity,” Peel says. “Prices decrease enough initially to provide ample incentive to change existing production plans and cover the additional costs of shifting logistics and timing of production.”

Looking ahead, Peel provides some context, via a similar situation almost 20 years ago, when the ConAgra beef packing plant at Garden City burned and never reopened. 

“Subsequent research confirmed initial reactions generally similar to the current situation.” Peel says. “Most of the negative impacts on fed cattle prices subsided in three to six weeks after the event. Packing capacity, relative to cattle supplies, is somewhat tighter this time, so the impacts may be slightly larger or longer-lived. Nevertheless, boxed beef and cattle markets will likely adjust relatively quickly in the coming weeks with final adjustments depending on the duration of the plant closure.” 

By | August 19th, 2019|Daily Market Highlights|

Cattle Current Daily—Aug. 19, 2019

Through late Friday afternoon, the only established negotiated cash fed cattle trade for the week remained the $105/cwt. paid in the Southern Plains, which was $5 less than the previous week. Although too few to trend, there were a few trades in Nebraska Friday at $106/cwt. on a live basis and at $172 in the beef.

Through Thursday the 5-area direct steer price was $105.40 on a live basis (7,941 head) and $170.46 in the beef (4,172 head). Week to week that was $8.71 less on a live basis and $12.11 less dressed.

Cattle futures were unable to hold early-session support Friday as another trip lower in Lean Hogs provided pressure.

After unchanged in spot Aug, Live Cattle futures closed an average of 57¢ lower (17¢ to 87¢ lower).

Feeder Cattle futures closed an average of 84¢ lower, (57¢ lower at the back to $1.20 lower in spot Aug).

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

Choice boxed beef cutout value was $2.57 higher Friday afternoon at $238.69/cwt. Select was $2.59 higher at $213.26.

Corn and Soybean futures grained support from the dryer weather outlook for the Corn Belt.

Corn futures closed 8¢ to 10¢ higher through Jul ’20 and then mostly 4¢ to 5¢ higher.

Soybean futures closed mostly 9¢ higher.

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Major U.S. financial indices rallied Friday, on the back of resurgent bond yields, apparently allaying recession fears among investors. It was inversion of the yield curve earlier in the week that drove steep losses, along with continued anxiety about global economic growth.

The Dow Jones Industrial Average closed 306 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 129 points.

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Although cattle markets had a firmer feel, albeit lower, at the end of the week,

plenty of market uncertainty remains following  the fire at Tyson Foods beef slaughter plant at Holcombe, KS Aug. 9.

Among what’s known:

“The plant operated at about 6,000 head of fed cattle per day, leaving a shortfall in the national packing capacity of 30,000 head for a five-day work week,” said representative of the Kansas Livestock Association (KLA), in a Monday assessment for its members. “According to CattleFax, that amounts to 6% of total U.S. fed cattle packing capacity the rest of the processing industry will need to absorb.”

“According to CattleFax, in order to compensate for the loss of capacity at Holcomb, the major packing plants in Texas, Kansas, Colorado, Nebraska, and Iowa, which represent 83 percent of U.S. fed slaughter capacity, would need to slaughter 8.2% more cattle per week, or run 3.3 more hours per week, to make up the production lost in Holcomb,” explained Colin Woodall, senior vice president of government affairs for the National Cattlemen’s Beef Association (NCBA) in a Tuesday letter to Greg Ibach USDA Under Secretary for Marketing and Regulatory Programs. “While we expect other processing facilities to take more cattle, the shortfall created by the Holcomb fire will be incredibly difficult to make up based on the current packing infrastructure.” On behalf of NCBA, Woodall requested, “…that APHIS and FSIS inspectors, along with AMS graders, be provided the flexibility needed to move to other plants and work expanded shift hours, including weekends, in order to help the packing segment of our industry process the cattle headed to harvest… we ask that Packers and Stockyards Division staff remain vigilant against any effort to illegally capitalize on the current market situation.”

In another letter, NCBA asked the U.S. Department of Transportation to declare an emergency suspension of Hours of Service for cattle haulers. The organization also sent a letter to the Commodity Futures Trading Commission, requesting that the agency, “…keep an even closer eye on the cattle markets to ensure that no market participant tries to use the uncertainty to manipulate or illegally take advantage of the situation…”

Tyson will rebuild the plant. At a late-week new conference, Tyson officials explained the area impacted by the fire was relatively small, in terms of square footage, but large in terms of the plant’s electric and hydraulic infrastructure. Officials said rebuilding will likely be a matter of months, rather than weeks.

As long suspected, beef packing capacity shuttered during historically long beef cowherd liquidation, fueled by historic drought, increased market vulnerability.

Live Cattle and Feeder Cattle futures were limit-down last Monday, then down the expanded limit in some contracts Tuesday as traders panicked and liquidated long positions. Part of the panic stemmed from seasonally and cyclically large fed cattle supplies at a time when beef packer capacity utilization was, by most accounts, already running historically high.

On the surface at least, lots of beef buyers were relying on the spot market for their immediate supply. There seems no other way to explain the massive surge in wholesale beef prices.

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

Cattle Current Daily—Aug. 16, 2019

Other than the $105 paid in the Southern Plains a day earlier, negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Cattle futures mostly edged higher, with plenty of uncertainty in the wake of this week’s volatile trade.

After unchanged in spot Aug, Live Cattle futures closed an average of 37¢ higher, except for 27¢ and 2¢ lower in near Dec and Feb, respectively.

Other than 10¢ and 25¢ lower in two contracts toward the back, Feeder Cattle futures closed an average of 43¢ higher, (2¢ higher to $1.30 higher in spot Aug).

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

Choice boxed beef cutout value was $3.78 higher Thursday afternoon at $236.12/cwt. Select was $4.75 higher at $210.67. That was $19.24 for Choice week to week and $18.30 more for Select, driven by the recent supply disruption.

Corn futures closed mostly fractionally higher.

Soybean futures closed mostly 6¢ to 9¢ lower.

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Major U.S. financial indices closed mixed Thursday, stemming the steep slide from the previous day. Support included more than expected retail sales in July.

Advance estimates of U.S. retail and food services sales for July were $523.5 billion, which was of 0.7% more than the previous month and 3.4% more than the previous year, according to the U.S. Commerce Department.

The Dow Jones Industrial Average closed 99 points higher. The S&P 500 closed 7 points higher. The NASDAQ was down 7 points.

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Carcass weights continue lighter year over year, according the most recent USDA Actual Slaughter Under Federal Inspection report.

The average dressed steer weight for the week ending Aug. 3 was 872 lbs., which was 3 lbs. heavier than the previous week, but 8 lbs. lighter than a year earlier. The average dressed heifer weight of 805 lbs. was 5 lbs. heavier week to week, but 4 lbs. lighter year over year.

Total cattle slaughter for the week of 632,874 head was 8,419 more than the same week a year earlier. Fed cattle slaughter was 30,613 head fewer. Beef production for the week was 1.3 million lbs. more at 510.7 million lbs.

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Count analysts with the Livestock Marketing Information Center (LMIC) among those less bullish than USDA when it comes to corn production this year.

“The challenge for this year’s crop is now focused on favorable weather conditions to reach maturity in optimal condition,” say LMIC analysts, in the latest Livestock Monitor. “Delayed planting means that the crop will have less time to develop, which elevates the risks of lower average yields per acre and fewer acres of harvestable quality when combines move through the fields later this year.”

The USDA Crop Production estimates that drove corn prices lower this week forecast 90.01 million acres planted to corn, 82 million acres harvested, and yield at 169.5 bu./acre for production of an estimated 13.9 billion bu.

Between impacts of delayed planting and the chance of an early frost, LMIC forecasts 81.5 million corn acres harvested with an average yield of 166 bu./acre.

for production of 13.5 billion bu., the least since 2012. These numbers support a an average corn price at the farm for the new crop year of slightly more than $4/bu., according to LMIC analysts.

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

Cattle Current Daily—Aug. 15, 2019

Negotiated cash fed cattle trade sputtered back to life Wednesday, following last week’s Tyson fire. Live trade in the Southern Plains was at $105/cwt. on light to moderate trade and light demand, according to the Agricultural Marketing Service (AMS). That was $5 less than last week. Although too few to trend, there were also some early sales in the western Corn Belt at $105.00-$106.50 live and at $170-$172 in the beef.

Cattle futures surged higher, especially Feeder Cattle, as buyers took advantage of the oversold conditions created by massive selling the previous two sessions.

Other than an average of 55¢ lower in the front two contracts, Live Cattle futures closed an average of $1.61 higher.

Feeder Cattle futures closed an average of $5.18 higher, almost retracing what was lost in the previous day.

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

Choice boxed beef cutout value was $5.98 higher Wednesday afternoon at $232.34/cwt. Select was $5.34 higher at $205.92. Packers continue to benefit from the price bounce tied to the recent supply disruption.

Corn futures closed 5¢ to 7¢ lower through May ’21, and then mostly 1¢ to 2¢ lower.

Soybean futures closed 10¢ to 11¢ lower across the board.

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Major U.S. financial indices plunged steep and fast Wednesday, fueled by a brief inversion of the yield curve. That’s when the yield on the 10-year Treasury note drops below the 2-year rate. Based on history, many believe that’s the harbinger of economic recession within 18 months or so.

The Dow Jones Industrial Average closed 800 points lower. The S&P 500 closed 85 points lower. The NASDAQ was down 242 points.

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Burgers are often thought of as being more affordable than other menu items, but as prices continue to rise at a faster rate than the average entree, this view may start shifting, according to Technomic’s 2019 Burger Consumer Trend Report.

“Price increases are offering operators a form of relief as they struggle with rising labor and delivery costs, as well as limited growth through traffic,” explains Charles Winship, manager of consumer insights at Technomic. “But continued price increases for burgers could ultimately cut into perceptions around their affordability and push consumers toward other options.”

Key takeaways from the report include:

42% of consumers who eat burgers strongly agree that they have a preferred restaurant they almost always go to for burgers.

46% of consumers who eat burgers strongly agree that they’ve noticed price increases for burgers at restaurants over the past year.

44% of millennials who eat burgers expect restaurants to offer at least one plant-based burger option.

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

Cattle Current Daily—Aug. 14, 2019

Cash cattle markets never stop completely, but plenty of folks continued to take cover Tuesday as Cattle futures sank further—limit and near-limit down in some contracts, with expanded limits—in response to fed cattle harvest disruptions caused by the fire at Tyson’s plant in Holcombe, KS.

As reported in Cattle Current yesterday, estimates suggest lost fed harvest capacity amounts to approximately 30,000 to 35,000 head per week. With industry-wide beef packing capacity utilization already running historically high before the fire, by most accounts, both cattle feeders and packers are scrambling to find solutions.

Live Cattle futures closed an average of $4.34 lower.

Feeder Cattle futures closed an average of $5.60 lower.

Wholesale beef values continued to climb Tuesday, with the shortage in immediate supplies fostered by the Tyson fire. Prices were sharply higher on good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $7.74 higher Tuesday afternoon at $226.36/cwt. Select was $2.79 higher at $200.58.

USDA acreage numbers continued to weigh on corn Tuesday. Corn futures closed 8¢ to 19¢ lower through Jul ’20, then mostly fractionally mixed.

Soybean futures gained, though, after ignoring the previous day’s positive acreage news. Soybean futures closed 8¢ to 10¢ higher through Jul ‘20, and then mostly 4¢ to 5¢ higher.

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Major U.S. financial indices closed sharply higher Tuesday. Stocks rebounded after the U.S. Trade Representative (USTR) announced removing some items from the list of Chinese imports that are subject to an additional 10% tariff beginning Sept. 1.

“Further, as part of USTR’s public comment and hearing process, it was determined that the tariff should be delayed to December 15 for certain articles,” according to a USTR statement. “Products in this group include, for example, cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.”

All told, the news buoyed investor hopes that the U.S. and China can resolve their trade differences.

The Dow Jones Industrial Average closed 372 points higher. The S&P 500 closed 42 points higher. The NASDAQ was up 152 points.

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Analysts with USDA’s Economic Research Service (ERS) increased the anticipated average fed steer price for this year by $1 to $116.50/cwt., in the most recent monthly World Agricultural Supply and Demand Estimates. That was based on recent price strength, before the Tyson fire. Average price for the third quarter is forecast to be $110 and then $112 in the fourth quarter.

Estimated beef production for this year was reduced by 86 million lbs. to 27.04 billion lbs., compared to the previous month’s forecast. That’s based on the expected slower pace of cattle slaughter in the third quarter and lighter expected carcass weights through the remainder of this year.

For next year, though, ERS analysts say, “The beef production forecast is raised from the previous month on a higher expected pace of first-half marketings. However, the 2019 calf-crop estimated in the July 19 Cattle report implies lower-than-previously expected marketings in the latter part of 2020.”

Beef production for 2020 is forecast at 27.57 billion lbs. WASDE has next year’s average fed steer price at $119.

Forecast total red meat and poultry production was forecast 107 million lbs. higher for this year at 104.62 billion lbs., based on increased broiler and turkey production.

Total red meat and poultry production estimates were higher for next year, too, at 106.48 billion lbs., with increased beef and poultry production.

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

Cattle Current Daily—Aug. 13, 2019

Cattle and grain markets were plumb ugly Monday.

The fire that partly destroyed the Tyson Foods beef plant in Holcomb, KS (near Garden City) on Friday took Cattle futures limit down as traders tried to assess what the lost packing capacity means to markets.

Live Cattle futures closed limit down $3.00, except for $2.67 lower in the back contract.

Feeder Cattle futures closed limit down $4.50.

According to the Kansas Livestock Association, in an assessment sent to its members Monday, “The Holcombe plant operated at about 6,000 head of fed cattle per day, leaving a shortfall in the national packing capacity of 30,000 head for a five-day work week. “According to CattleFax, the association says that amounts to 6% of total U.S. fed cattle packing capacity the rest of the processing industry will need to absorb.

In his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University  explains, “The loss of 30,000-35,000 head of slaughter capacity per week will disrupt both boxed beef and fed cattle markets, at least initially and potentially longer, depending on the duration of the plant closure.” He adds that, “The disruptions will add costs for both fed cattle and boxed beef as additional logistics are needed to adjust flows of slaughter cattle and boxed beef. There are many unknowns for Tyson and the industry going forward, he says, including the possibility that this sets the stage for new investment in beef packing.

According to KLA, “Based on CattleFax analysis, shifting the supply to other plants in Kansas, Texas, Colorado, Nebraska and Iowa will mean capacity in those regions needs to run 8% to 8.5% higher, which will be difficult to make up based on current packing industry infrastructure.            

“Potential market impacts predicted by CattleFax include a possible loss of currentness in the cattle feeding segment, possibly some lost market leverage by cattle feeders and possibly more price risk for all classes of cattle.

Likewise, Stephen Koontz, agricultural economist at Colorado State University, says in the latest In the Cattle Markets, “The impact of this event on fed cattle markets will be substantial. The market is in the middle of the third quarter: supplies are heaviest, slaughter weights are ramping up, and competing meat supplies will begin their fall increase. This is the quarter with the highest volume of beef supplies and forecasts are for sustained supplies into the fourth quarter.”

Koontz expects the rest of this month will be difficult, as plenty of uncertainty will surround the largest annual fed cattle supplies being moved around temporally and spatially to make up for the capacity loss in the Southern Plains.

By all measures, though, beef packing capacity utilization has been running historically high as consumer beef demand and packer economics encourage timely harvest of record large fed cattle supplies.

“This disruption will maintain incentives for a packer to run as many hours as possible,” Koontz explains. “Market-ready inventories of cattle are strong but are being depleted through the summer and this will persist into the fall. Further, prices for fed cattle have been reasonable through the summer—after early summer collapses—and feeding costs have been declining. Also, margins for retailers have been very strong and some of the strongest in recent years.”

Tyson plans to rebuild the Holcombe plant at the same location, though it’s way too early to know when a revamped facility will be up and running.

In the meantime, Steve Stouffer, group president of Tyson Fresh Meats explains, “We’re taking steps to move production to alternative sites. Tyson Foods has built in some redundancy to handle situations like these and we will use other plants within our network to help keep our supply chain full.”

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The same uncertainty about supply disruptions that cratered cattle futures helped boost Wholesale beef values Monday, with good demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.25 higher Monday afternoon at $218.62/cwt. Select was $3.98 higher at $197.79.

Negotiated cash fed cattle traded ended up $1 lower last week in the Southern Plains and Nebraska at $110/cwt. and $113, respectively. Live prices were steady to $2 lower in the western Corn Belt at $113-$115. Dressed sales were steady to $5 lower in Nebraska at $180-$185. Prices in the western Corn Belt were $4-$5 lower at $180-$181.

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Grain futures collapsed on Monday, too, beneath the weight of bearish USDA numbers the latest World Agricultural Supply and Demand Estimates and the August Crop Production report.

Revised acreage estimate for corn of 90.01 million acres was above the top end of the range for pre-report estimates and only 1.84% less than the estimate in the June Acreage report. Estimated yield of 169.5 bu./acre was 3.5 bu. more than the previous estimate. Corn production of 13.9 billion bu. is 26 million bu. more than the July estimate and just 500 million bu. less than last year. The season average corn price received by producers was lowered 10¢ to $3.60/bu.

Corn futures closed mostly 25¢ limit-lower through Jul ’20, then 7¢ to 15¢ lower through Jul ’21; mostly 3¢ lower the rest of the way.

Even though acreage numbers were positive, Soybean futures closed 10¢ to 12¢ lower through May ‘20, and then mostly 4¢ to 9¢ lower.

U.S. soybean acres were estimated at 76.70 million acres, which was 3.3 million acres fewer than in the June Acreage report and below pre-report estimates. Estimated yield of 48.5 bu./acre would be 3.1 bu./acre less than last year. U.S. soybean production was forecast at 3.68 billion bu., which would be 165 million bu. less than the previous estimate and 860 million bu. less than the previous year. The U.S. soybean average price for 2019-20 was unchanged at $8.40/bu. Forecast prices for soybean meal and oil were also unchanged at $300/short ton and 29.5¢/lb., respectively.

Incidentally, Agricultural producers reported they were unable to plant crops on more than 19.4 million acres, according to the most recent USDA data. This marks the most prevented plant acres reported since USDA’s Farm Service Agency began releasing the report in 2007 and 17.49 million acres more than reported at this time last year.

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Major U.S. financial indices closed sharply lower Monday, driven by declining bond yields and rising geopolitical uncertainty with the protests in Hong Kong.

The Dow Jones Industrial Average closed 391 points lower. The S&P 500 closed 35 points lower. The NASDAQ was down 95 points.

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

Cattle Current Daily—Aug. 12, 2019

Cattle feeders and beef packers appeared to remain mostly at a stalemate through late Friday afternoon, based on USDA reports.

“Negotiated cash trade followed a similar trend compared to recent weeks with early dressed purchases in the North ranging from $183 to $185/cwt. Dressed purchases late in the week traded mostly at $180,” said analysts with the Agricultural Marketing Service on Friday. “In the Western Corn Belt, early live purchases traded at $114-$115. Early live purchases in Nebraska were at $113.” They add that trade was slow to develop in the Southern Plains with producers passing on bids of $109.

Stronger corn prices early in the session and sluggish trade weighed on Feeder Cattle futures, while Live Cattle paddled in place. 

Other than 10¢ higher and unchanged in the front two contracts, Live Cattle futures closed an average of 19¢ lower.

Feeder Cattle futures closed an average of $1.16 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 51¢ lower Friday afternoon at $216.37/cwt. Select was $1.44 higher at $193.81.

“Grain traders spent most of the day repositioning themselves ahead of the highly anticipated Monday report,” say analysts with USDA’s Agricultural marketing Service (AMS). “There is a wide range of estimates for corn: 83.5 to 89.8 million acres planted, down from 91.7 million acres first reported for corn in June. Soybean estimates range from 78.0 to 83.5 million acres planted. The June report had soybean acres at 80 million. The WASDE report plus the re-survey of June acres report is set to be released at 11 a.m. CDT Monday.” 

Corn futures closed fractionally mixed.

Soybean futures closed 7¢ to 8¢ higher, up 19¢ to 24¢ in the last two sessions.

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Major U.S. financial indices closed lower Friday, but well off session lows, ending a wildly volatile week of trading, due mainly to the trade jabs between the U.S. and China.

The Dow Jones Industrial Average closed 90 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 80 points.

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“Restaurants, food service providers, and grocery stores are making final preparations for beef purchases to meet Labor Day weekend beef demand,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Labor Day weekend marks the unofficial end of summer and the end of the summer grilling season. This holiday provides the beef industry one last opportunity to push high-valued cuts out the door and on to consumers’ plates.”

Consumers can choose from lots of quality, too. Although the percentage of Choice-grading carcasses sagged below year-earlier levels in recent weeks, Griffith points out the level remains high, compared to recent years, dropping below 70% only two weeks this year.

In fact, for May through July, the percentage of fed cattle grading Choice ranged from 69.6% to 71.6%, according to USDA’s weekly National Steer and Heifer Estimated Grading Percent reports. For Choice and Prime combined, the range was 77.1% to 78.8%. During the same period, 30.1% to 31.9% of carcasses graded in the upper two-thirds of Choice.

“The market continues to demand higher quality beef and cattle producers continue to find ways to improve quality grade in cattle,” Griffith says. “The consumer trend to higher quality beef is likely to continue.”

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

Cattle Current Daily—Aug. 9, 2019

Cash fed cattle trade remained undeveloped through Thursday afternoon.

Cattle futures drifted higher amid sluggish trade, higher outside markets and help from Lean Hogs at the end of the session.

Live Cattle futures closed an average of 45¢ higher, except for 15¢ lower in the back two contracts. 

Feeder Cattle futures closed an average of 48¢ higher.

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

Choice boxed beef cutout value was 39¢ higher Thursday afternoon at $216.88/cwt. Select was 34¢ lower at $192.37.

Grain futures were higher, especially soybeans, buoyed by dry weather forecast in the Corn Belt and likely positioning ahead of Monday’s government reports that will provide updates to planted acres.

Corn futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed 12¢ to 16¢ higher.

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Major U.S. financial indices closed sharply higher Thursday, led by tech stocks and supported by stronger than expected Chinese exports.

The Dow Jones Industrial Average closed 371 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 176 points.

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An extra dollar invested in Cattlemen’s Beef Promotion and Research Board (CBB) activities returned $11.91 to beef industry profit for 2014-2018, according to independent research conducted by Harry M. Kaiser, a Gellert Family Professor of Applied Economics and Management at Cornell University.

Specifically, the $11.91 is what’s termed the marginal beef-cost ratio (BCR).

Key objectives of the study—An Economic Analysis of the Cattlemen’s Beef Promotion and Research Board Demand-Enhancing Programs—were to:

Measure the impact of CBB demand-enhancing activities on beef demand in the U.S. and in foreign markets.

Compare benefits to costs of CBB activities for producers’ and importers’ investments in the national checkoff program.

Among the conclusions:

Had there not been any domestic CBB demand enhancing activities over the latest 5-year period, (2014-18) total domestic beef demand would have been 14.3% lower than it actually was. CBB’s promotion and research activities increased total domestic beef demand by 12.8 billion lbs. in total, during that time, or 2.6 billion lbs. per year.

Had there not been any CBB export promotion, U.S beef exports would have been 5.5% lower than it was in 2014-18. The study considered eight international markets: Mexico, Japan, South Korea, Taiwan, Hong Kong, China, European Union, and Russia and surrounding regions.

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

Cattle Current Daily—Aug. 8, 2019

Cash fed cattle trade was yet to develop to any degree through Wednesday afternoon. Fat auctions in the western Corn Belt provided divergent signals.

At Sioux Falls Regional in South Dakota, slaughter steers and heifers sold $5-$7/cwt. lower than the previous week. For instance, Choice 2-3 steers (857 head) weighing an average of 1,420 lbs. brought $111.94. That’s $3-$4 lower than last week’s country trade in the region.

On the other hand, with a significantly narrower offering, Choice steers and heifers brought $118.00 to $120.75 at Tama, IA.

Although closing well off of session highs, Cattle futures firmed Wednesday, helped along by the latest rebound in Lean Hogs.

Live Cattle futures closed an average of 41¢ higher. 

Feeder Cattle futures closed an average of 22¢ higher, except for 42¢ lower in spot Aug and 7¢ lower in Sep.

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 71¢ higher Wednesday afternoon at $216.49/cwt. Select was 6¢ higher at $192.71.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed fractionally higher to 1¢ higher.

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Major U.S. financial indices closed little changed Wednesday after a volatile session in which the Dow was down almost 600 points. Continued angst over the trade impasse with China seemed to be the most prevalent driver.

West Texas Intermediate crude oil futures on the CME closed $2.49 to $2.58 lower through the front six contracts. Week to week, those contracts closed an average of $7.59 lower.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 2 points higher. The NASDAQ was up 29 points.

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U.S. pasture value averaged $1,400/acre this year, according to the latest Land Values Summary released this week by USDA’s National Agricultural Statistics Service (NASS). That’s up $30 (+2.2%)  from last year.

Regionally, pasture value was highest in the Southeast with a combined average of $4,180 per acre for Alabama, Florida, Georgia and South Carolina. It was lowest in the Mountain States at an average of $683/acre, followed by a combined average of $1,090/acre for the Northern Plains states of Kansas, Nebraska, North Dakota and South Dakota.

Pasture value increased each year since 2014, when the average value was $1,290/acre, according to Agricultural Land Values Final Estimates 2014-2018 from NASS.

By way of reference, U.S. cropland value this year averaged $4,100/acre, which was $50/acre more (+1.2%) than last year. Between 2014 and this year, average cropland value ranged from $4,030/acre in 2017 to $4,100 this year and in 2015.

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

Cattle Current Daily—Aug. 7, 2019

Cash fed cattle trade remained undeveloped through Tuesday afternoon.

Cattle futures sagged lower toward the end of the session, following the reprieve from negative trade news and wild gyrations the previous day.

Live Cattle futures closed an average of 93¢ lower. 

Other than 5¢ and 22¢ higher in Sep and Oct, Feeder Cattle futures closed an average of 63¢ 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 $1.08 higher Tuesday afternoon at $215.78/cwt. Select was 98¢ higher at $192.65.

Corn futures closed 1¢ to 6¢ lower.

Soybean futures closed mostly 2¢ to 3¢ lower.

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Major U.S. financial indices rebounded from the previous day’s massive selloff.

Apparently, primary support came from reports that China intends to maintain its currency at higher levels than appeared Monday, when that nation allowed its currency to slide to decade-low values, in retaliation for the recently announced additional tariffs on Chinese imports.

The Dow Jones Industrial Average closed 311 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 107 points.

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Improved expectations for current economic conditions helped drive producer sentiment sharply higher in July, according to the Purdue University/CME Group Ag Economy Barometer.

The overall Barometer reading of 153 in July was 27 points higher than the previous month and 52 points higher than in May. Results are based on a survey of 400 agricultural producers across the U.S (surveyed July 15-19).

Improving crop conditions after an extraordinarily wet planting season, combined with a late spring/early summer crop price rally, boosted farmer sentiment.

“The Corn Belt is continuing to see better crop conditions and that has farmers, at least momentarily, breathing a sigh of relief,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “However, the agricultural economy is still in flux. The impact of prevented planting on 2019 corn and soybean acreage and prices along with the outcome of trade talks with China remain unknown.” 

The Index of Current Conditions, a sub-index of the ag barometer, increased 44 points in July to a reading of 141, marking the largest one-month improvement since data collection began in October of 2015. The barometer’s other sub-index, the Index of Future Expectations, increased 18 points from June, to a reading of 159 in July.

Mintert notes that improvement in producer sentiment occurred despite the fact that many producers were in the midst of filing prevented planting crop insurance claims and wondering about the size of the USDA’s 2019 Market Facilitation Payments (MFP).

Given the late planting season, USDA re-surveyed corn and soybean growers in July to better estimate actual planted acreage of both crops. In the meantime, the Ag Economy Survey asked corn and soybean participants whether they were taking a prevented planting payment on any of the corn or soybean acreage they intended to plant this year.

Of those planting corn, 25% said they were filing a prevented planting claim on some of their intended acreage: 61% said their prevented planting totaled 15% or more of their intended acreage; 42% said that they did not plant 25% or more of their intended acreage

For those with soybeans, 24% said they were filing a prevented planting claim on some of their intended acreage: 39% said their prevented planting totaled 15-25% of their intended acreage; 2% said they were unable to plant 25% or more of their intended acreage.

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

Cattle Current Daily—Aug. 6, 2019

Despite collapsing equities tied to China’s trade retaliation (more later), and despite the steep selloff on Friday, Feeder Cattle futures closed higher Monday, as did Live Cattle, for the most part; Lean Hogs, too.

Support likely stemmed from generally oversold conditions, position squaring from the previous session’s liquidation, as well as funds fleeing equities and parking money on the commodity side of the fence. The latest data for U.S. beef and pork exports is also encouraging (see below).

Except for 42¢ lower in near Oct, Live Cattle futures closed an average of 48¢ higher (12¢ to 67¢ higher).

Feeder Cattle futures closed an average of 86¢ higher (45¢ to $1.22 higher), with the heaviest volume since last September.  

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 3¢ lower Monday afternoon at $214.70/cwt. Select was $1.04 higher at $191.67.

Corn futures closed mostly 3¢ to 5¢ higher, extending the previous session’s gains.

Soybean futures closed fractionally mixed.

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Major U.S. financial indices blasted lower Monday as China responded to the latest intended U.S. tariffs by allowing its currency to slide to decade-low values—making their exports significantly, artificially cheaper—and with reports that China ordered state-owned companies to suspend purchases of U.S. agricultural goods.

The Dow Jones Industrial Average closed 767 points lower. The S&P 500 closed 87 points lower. The NASDAQ was down 278 points.

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U.S. beef exports in June were up 3% year-over-year for volume (118,677 mt) and were 1% higher for value at $724.8 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Value was the fourth most on record for any month.

For January-June, beef exports were 2% less in volume (648,765 mt), compared to the same period last year, but value was steady with last year’s record value pace at $4.03 billion.

Beef export value per head of fed slaughter in June averaged $325.10, up 4% from a year ago, while export value for the first six months of the year averaged $312.06 per head, down 2%.

Korea and Taiwan paced beef export growth.

Last year South Korea surpassed Mexico as the second-largest destination for U.S. beef exports, and in 2019 it continues to close the gap on leading market Japan.

Exports to Korea remained on a record pace in June, increasing 2% from a year ago to 25,118 mt (a post-BSE high), while value climbed 15% to a record $178.3 million. Beef exports to Korea for January-June were 12% more than last year for volume (126,879 mt) and 15% higher in value at $921.8 million. U.S. beef now accounts for 61% of Korea’s chilled beef imports, up from 57% in the first half of last year, with chilled volume increasing 7% to 26,537 mt.

As for Taiwan, beef exports in June reached a new monthly high of 6,654 mt, up 40% from a year ago, valued at $58 million, which was 46% higher and the second highest on record. First-half exports to Taiwan were 16% above last year’s record pace in volume (31,132 mt) and 11% higher in value ($276.2 million).

“It is very gratifying to see U.S. beef posting such remarkable gains in Korea and Taiwan, and the $2 billion milestone could even be in play this year for Korea,” says Dan Halstrom, USMEF president and CEO. “Exports to Japan can definitely achieve a similar trajectory if the U.S. can get back on a level playing field with our competitors, so we are encouraged by the progress in the U.S.-Japan trade negotiations.”

U.S. beef faces a significant tariff rate disadvantage in leading market Japan, where June exports totaled 29,794 mt, down 4% year-over-year, while value was down 7% to $179 million. For the first half of the year, exports to Japan were 1% below last year’s pace in both volume (157,839 mt) and value (just over $1 billion).

All of U.S. pork and beef’s major competitors gained tariff relief in Japan this year through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the economic partnership agreement between Japan and the European Union, making red meat trade a major focus of the U.S.-Japan trade agreement negotiations that continued last week.

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

Cattle Current Daily—Aug. 5, 2019

Through late Friday afternoon, the week’s negotiated cash fed cattle trade was $1 lower in the Southern Plains at $111/cwt. Dressed sales in Nebraska were $2 higher than the bulk of the previous week’s trade at mostly $185. In the western Corn Belt, prices were steady: $115-$116 on a live basis and at mostly $185 in the beef.

Even so, newly announced tariffs on an additional $300 billion worth of Chinese imports—scheduled to go into effect Sept. 1—higher grain futures prices and increased uncertainty weighed on Cattle futures Friday.

Live Cattle futures closed an average of $1.01 lower (22¢ lower in spot Aug to $1.27 lower).

Feeder Cattle futures closed an average of $2.61 lower ($1.60 to $3.55 lower).  

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

Choice boxed beef cutout value was 49¢ higher Friday afternoon at $214.73/cwt. Select was $1.29 higher at $190.63.

Grain futures rebounded some Friday, but still closed lower week to week.

Corn futures closed 6¢ to 7¢ higher through Jul ’20 and then mostly 1¢ to 4¢ higher.

Soybean futures closed 2¢ to 3¢ higher through Sep ’20 and then fractionally higher to 1¢ higher.

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Major U.S. financial indices closed sharply lower again Friday with continued pressure from the previous day’s news that the U.S. will impose a 10% tariff on an additional $300 billion worth of Chinese imports, beginning Sept. 1.

Indices closed off of session lows, though, helped along by a monthly employment report that was in line with expectations.

Total nonfarm payroll employment increased by 164,000 in July, compared to the previous month, according to the Employment Situation Summary from the U.S. Bureau of Labor Statistics. The unemployment rate was unchanged at 3.7%. Average hourly earnings for all employees on private nonfarm payrolls

rose by 8¢ to $27.98. Over the past 12 months, average hourly earnings have increased by 3.2%.

The Dow Jones Industrial Average closed 98 points lower. The S&P 500 closed 21 points lower. The NASDAQ was down 107 points.

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Some positive news for U.S. beef trade.

The Unites States reach a new agreement with the EU on Friday that establishes a duty-free tariff rate quota (TRQ) exclusively for the United States. Under the agreement, American ranchers will have an initial TRQ of 18,500 metric tons annually, valued at approximately $220 million, according to the United States Trade Representative (USTR). Over seven years, the TRQ will grow to 35,000 metric tons annually, valued at approximately $420 million.

Under the current agreement, U.S. duty-free beef exports to the EU are only approximately 13,000 metric tons annually, valued at approximately $150 million, and risked declines going forward. The new agreement will go into effect following the European Parliament’s approval, which is expected this fall.

Negotiations for the new agreement stemmed from the National Cattlemen’s Beef Association, U.S. Meat Export Federation (USMEF), and the North American Meat Institute requesting (in 2016) the USTR to take tariff action under Section 301 of the Trade Act of 1974 to enforce the World Trade Organization dispute finding in favor of the United States against the EU’s ban on the use of hormones in cattle production. As a part of the new agreement, the U.S. will conclude those proceedings.

“This agreement provides more reliable and consistent access to the EU market and will be a tremendous boost for the U.S. beef industry,” says Dan Halstrom, USMEF president and CEO. “The agreement sends a very positive signal to customers in Europe who see a bright future for U.S. beef and to producers who are interested in expanding their non-hormone treated cattle (NHTC) business but have grown frustrated as they struggled to recover the additional production costs. USMEF greatly appreciates the tireless efforts of USTR and USDA to secure better access to this very high-value beef market.”

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

Cattle Current Daily—Aug. 2, 2019

Negotiated cash fed cattle sales were mostly inactive on light to moderate demand through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. So far this week, live sales are $1 lower in the Southern Plains at $111/cwt. Dressed trade in the North is steady at $185. Live sales in the western Corn Belt are steady at $115-$116.

Live Cattle futures closed higher Thursday, despite continued hard pressure on Lean Hogs.

Except for 20¢ lower in the back two contracts, Live Cattle futures closed an average of 52¢ higher (7¢ higher to $1.07 higher).

Feeder Cattle futures continued to sink lower, though, closing an average of 62¢ lower.

Wholesale beef values were higher 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 70¢ higher Thursday afternoon at $214.24/cwt. Select was 35¢ lower at $189.34.

Grain futures continued under pressure on Thursday with the continued stalemate between the U.S. and China, favorable crop weather and reports of bumper production in parts of Europe and South America.

Corn futures closed 5¢ to 7¢ lower through Jul ’20 and then fractionally mixed to 3¢ lower.

Soybean futures closed 15¢ to 17¢ lower through Sep ’20 and then 9¢ to 12¢ lower.

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Major U.S. financial indices closed sharply lower again Thursday on tweets from President Trump that the U.S. will impose a 10% tariff on an additional $300 billion worth of Chinese imports, beginning Sept. 1. Until then, markets rebounded sharply higher after the previous session’s steep decline.

West Texas Intermediate Crude oil futures on the CME tumbled $4.55 to $4.63 for the remaining 2019 contracts.

The Dow Jones Industrial Average closed 280 points lower. The S&P 500 closed 26 points lower. The NASDAQ was down 64 points.

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Participating in Beef Quality Assurance (BQA) programs yields a variety of benefits, everything from records that enable improved decision making to proven animal health practices and monitoring that help ensure animal well being. Never mind the verification of quality, safe production it provides consumers.

Recent research also indicates buyers are willing to pay more for calves and feeders at video auction if those cattle come from BQA-certified producers.

Bottom line, buyers paid an average premium of $16.80 per head for cattle in lots with BQA included in the lot description. That’s based on 8,815 video lot records of steers and heifers sold in nine western states through Western Video Market from 2010 to 2017.

The study—Effect of Mentioning BQA in Lot Descriptions of Beef Calves and Feeder Cattle Sold Through Video-based Auctions on Sale Price—was conducted by Colorado State University’s departments of Animal Sciences and Agricultural and Resource Economics.

“This study was a first of its kind opportunity to utilize advanced data analysis methods to discover if there was a true monetary value to participate in BQA,” says Chase DeCoite, director of Beef Quality Assurance. “Study results clearly show that participation in BQA and BQA certification can provide real value to beef producers. It means that the initiatives within the industry are rewarding cattlemen and women who take action to improve their operations and our industry.”

CSU’s statistical analysis determined a $2.71/cwt. premium when BQA was mentioned in the lot description. That premium is relative to the average weight of cattle in the study, which is how researchers arrived at the premium of $16.80 per head. If you figure the per-head premium is constant, it implies higher weight-based premiums at lighter weights and vice versa, according to researchers. For instance, $3.73/cwt. at 450 lbs. versus $2.24 at 750 lbs.

“In addition to the BQA mention, our study controlled for other factors–such as lot characteristics, cattle attributes, and value-added practices like age/source verification and natural certification–that also influenced beef calf and feeder cattle sale prices. Importantly, the BQA premium existed even after accounting for these influential variables,” says Daniel Mooney, CSU assistant professor of agricultural and resource economics.

Mooney adds that results of the study emphasize the importance of transferring information from sellers to buyers, as well as the importance of collecting BQA certification information during the auction process.

“The value of a seller being BQA Certified can really only be captured when information is shared between seller and buyer, which is consistently done via the sale of cattle by video auction companies,” explains Jason Ahola, CSU professor of animal sciences. “By sharing the BQA status of the owner or manager of a set of cattle, the buyer can access information that is generally otherwise difficult to find in traditional marketing channels. This was a big reason for us to conduct the study, as it became clear that data on sellers’ BQA status were available on a large number of cattle sold through video auctions as well as other traits associated with the cattle. This information affected the ultimate selling price of the cattle.”

Even without documentation of a premium in the past, the results also suggest that over time many producers have proactively chosen to highlight and emphasize their participation in BQA when marketing their cattle.

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

Cattle Current Daily—Aug. 1, 2019

Cash fed cattle trade wobbled from the blocks Wednesday, with hints of slightly lower prices in the South and steady to higher prices in the North.

For instance, there were four lots (475 head) offered for 1-9 day delivery in the weekly Fed Cattle Exchange auction. One lot (133 Kansas heifers) sold for a weighted average price of $111/cwt. Country trade there last week was at $112.

By late afternoon, USDA’s Agricultural Marketing Service also reported early negotiated cash fed cattle sales at $111 in the Southern Plains, but too few transactions to trend.

Conversely, at the fat auction in Tama, IA, Choice steers and heifers traded $1.50-$1.75 higher. For instance, 209 Ch 2-4 steers weighing an average of 1,324 lbs. at $119.03.

Likewise, slaughter steers sold $2-$3 higher at Sioux Falls Regional in South Dakota; $1 higher for heifers.

AMS reported cash trades in the western Corn Belt at $185 on a dressed basis, which was steady to $3 higher than last week. Buyers paid $185 in Nebraska, which was $2 more than the bulk of the previous week’s trade.

Another day of limit-down pressure in Lean Hog futures cast a pall over Cattle futures Wednesday, likely helped along by month-end position squaring. At least part of the pressure on Lean Hogs stems from the lack of progress in trade talks with China.

Live Cattle futures closed an average of $1.02 lower (65¢ lower to $1.42 lower).

Feeder Cattle futures closed an average of $1.25 lower.

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

Choice boxed beef cutout value was 49¢ lower Wednesday afternoon at $213.54/cwt. Select was $1.44 lower at $189.69.

Favorable weather and the aforementioned sluggish trade talk between the U.S. and China helped pressure Grain futures Wednesday.

Corn futures closed 9¢ to 11¢ lower through Jul ’20 and then mostly 3¢ to 4¢ lower.

Soybean futures closed 10¢ to 15¢ lower through Sep ’20 and then mostly 8¢ to 9¢ lower.

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Major U.S. financial indices closed sharply lower Wednesday, following a mostly flat session ahead of the announcement from the Federal Open Market Committee (FOMC), regarding interest rates.

As expected, the FOMC reduced interest rates (25 basis points).

“In light of the implications of global developments for the economic outlook, as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 2.0 to 2.25%,” according to an FOMC statement. “This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective are the most likely outcomes, but uncertainties about this outlook remain. As the Committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective.”

Apparently, it was a news conference following the announcement, and interpretation that this may be the only cut, that sent investors fleeing.

The Dow Jones Industrial Average closed 333 points lower. The S&P 500 closed 32 points lower. The NASDAQ was down 98 points.

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“We have to remember that only 4% of the world’s consumers live in this country,” says Randy Blach, CattleFax CEO. “Currently 14% of beef and beef by products are exported. More than 20% of the value of every fed steer is generated by exports. We need to have more outlets for not only our beef, but our poultry and pork.”

Through January of this year, U.S. beef exports equated to an average of $309.33 per head of fed slaughter, according to data released by USDA and compiled by the U.S. Meat Export Federation.

Blach was sharing insights at the Cattle Industry Summer Business Meeting near Denver on Tuesday. With record meat consumption expected next year, he emphasized the importance of opening export markets and resolving trade issues.

Here and abroad, Blach explains increased beef quality expands opportunity. Today, upwards of 80% of the U.S. fed beef supply grades Prime and Choice each week. Production of beef achieving those grades increased 50% during the last 15 years. Along the way, he says beef captured an additional 7% of market share of meat spending from poultry and pork.

By way of reference, the combined percentage of carcasses grading Prime and Choice each week so far this year ranges from 77.11% (week ending June 28) to 83.20% (week ending Mar. 29), according to USDA’s National Steer and Heifer Estimated Grading Percent Report.

More specifically, the percentage of carcasses grading Prime ranges from 6.87% (July 19) to 10.10% (Mar. 22). Carcasses grading Choice ranged from 69.59% (May 24) to 73.88% (Feb. 8). The range for carcasses grading in the upper two-thirds of Choice is 30.14% (May 31) to 35.46% (Mar. 22).

“It’s a great, great success story,” Blach says. “We have to continue to be the highest quality protein provider, delivering products we can stand behind that consumers love.”

By | July 31st, 2019|Daily Market Highlights|

Cattle Current Daily—July 31, 2019

Follow-through pressure on Lean Hog futures pressured Live Cattle futures once again on Tuesday. Other than 35¢ higher at the back, Live Cattle futures closed an average of 31¢ lower.

Conversely, lower grain futures boosted Feeder Cattle. Feeder Cattle futures closed an average of 88¢ higher, across a range of 52¢ to $1.30 higher.

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

Choice boxed beef cutout value was 77¢ higher Tuesday afternoon at $214.03/cwt. Select was $1.37 higher at $191.13.

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Despite crop development lagging significantly behind the average, Corn futures closed mostly 5¢ to 6¢ lower through Jul ’20 and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 7¢ lower through Mar ’20 and then mostly 2¢ to 4¢ lower.

According to the most recent Crop Progress report, for the week ending July 28, only 58% of corn was silking, which was 42% less than last year and 25% less than average. 13% was at the dough stage, compared to 35% last year and 23% for average. 58% was in Good or Excellent condition, which was 14% less than last year.

Similarly, 57% of soybeans were blooming, which was 28% less than the previous year and 22% less than average. 21% were setting pods, which was 37% less than last year and 24% less than a year earlier. 54% were rated in Good or Excellent condition, compared to 70% a year earlier.

By the way, forage conditions continue strongly positive compared to last year, with

64% of the nation’s pasture and range was rated in Good or Excellent condition, compared to 41% last year. 10% was rated as Poor or Very Poor, compared to 29% a year earlier. States with 20% or more rated as Poor or Very Poor include: AZ (35%); CA (40%); NM (39%); OR (23%); WA (22%).

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Major U.S. financial indices edged lower Tuesday, despite another round of positive quarterly earnings reports from heavyweights such as Proctor & Gamble and Merck. Pressure came from comments made by President Trump, which some investors, apparently, feared would stall trade negotiations with China.

The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 7 points lower. The NASDAQ was down 19 points.

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“If feedstuff costs do not skyrocket, cattle feeders are expected to generally breakeven or post small profits late this year,” say analysts with the Livestock Marketing Information Center (LMIC). “In the situation where corn cost is already locked-in, November breakeven sales price is in the range of $105.50-106.50/cwt. per cwt., and $111-112 for December.”

LMIC calculated the June closeout at -$60.66 for steers placed on feed in a Southern Plains feedlot weighing 750 lbs.

For the same month, Iowa State University (ISU) calculated a loss of $39.71 per head for yearling-placed cattle; -$100.61 for calf-feds closed out in June. Both of the calculations include a manure credit.

“Neither the LMIC nor ISU estimates are survey-based, but they do provide indications of the direction of change,” say LMIC analysts, in the latest Livestock Monitor. “Of course, in late 2018 and the first several months of 2019 many cattle feeders had much worse results than these calculations, which are based on normal weather. Very muddy feedlot conditions resulted in red ink for many cattle feeders. The baseline production systems and assumptions for the LMIC and ISU are different. Besides using different prices and costs, ISU incorporates, for example, Modified Distillers Grains in the ration, which is a common feedstuff there.”

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

Cattle Current Daily—July 30, 2019

Negotiated cash fed cattle trade ended up steady to $1 higher on a live basis last week at $112/cwt. in the Southern Plains, mostly $115 in Nebraska and $115-$116 in the western Corn Belt. Dressed sales were steady at $182-$185.

Week to week on Monday, the 5-area direct average price for fed steers was $113.68/cwt., 66¢ higher than the previous week.

Softer Lean Hog futures pressured Live Cattle after early-session support Monday. Higher grain futures weighed on Feeder Cattle.

Other than unchanged at either end of the board, Live Cattle futures closed an average of 44¢ lower.

Feeder Cattle futures closed an average of 99¢ lower, across a range of 70¢ lower at the back to $1.42 lower in spot Aug.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 3¢ to 5¢ higher

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

Choice boxed beef cutout value was $1.09 higher Monday afternoon at $213.26/cwt. Select was $1.42 higher at $189.76.

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Major U.S. financial indices basically paddled in place Monday, amid mixed quarterly corporate earnings reports. The backdrop for the week includes the Fed meeting Wednesday and renewed trade negotiations between the U.S. and China.

The Dow Jones Industrial Average closed 28 points higher. The S&P 500 closed 4 points lower. The NASDAQ was down 36 points.

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Weak hide prices continue to weigh on beef byproduct values.

“In the period 2013-2017, hide values (butt-branded, steer) averaged $74.36/piece (animal) and represented 52.3% of total byproduct value,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “In 2018, hides represented 45.6% of byproduct value with an average value of $47.93/piece. In the first half of 2019, hides averaged $34.46/piece and accounted for 36.6% of total byproduct values. The June monthly average hide value was $27.60/piece. The global hide market continues to weaken.”

Overall, Peel says byproduct values declined from about $10.70/cwt. early in 2018 to about $9 by the end of the year.

“Byproducts represented 8.2% of fed cattle prices in 2018 at an average value of $9.60/cwt. on a live-weight basis,” Peel says. “The latest weekly byproducts value was $8.88/cwt for the week of July 26, 2019. For the first 29 weeks of 2019, by-products have averaged $8.78 or 7.2% of fed cattle prices.”

“Hide supplies are larger as a result of increased cattle numbers and slaughter, especially in Brazil and the U.S. Some hides are being salted and stockpiled which may limit value improvement going forward,” Peel explains. “China is the major global buyer of hides and demand in China is hampered by tariffs and trade disruptions and by stronger environmental regulations impacting small tanneries. Hide values are so low that more hides are being rendered in some markets and some hides are not worth marketing in other markets. In Australia, for example some hides are being exported for a loss simply because the cost of environmental regulations to dispose of the hides is a greater loss. Other factors affecting hide values are exchange rates and less demand for leather in luxury cars and footwear, which are using more synthetic materials.”

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

Cattle Current Daily—July 29, 2019

Negotiated cash fed cattle traded at $112/cwt. in the Texas Panhandle on Friday, according to the Texas Cattle Feeders Association. That was $1 more than a week earlier.

Elsewhere, prices were yet to be established through late afternoon, according to reports from the Agricultural Marketing Service. Although too few to trend, there were some early live sales reported in the Western Corn Belt at $115-$116 and a few in the beef at $185. Those prices are at the top of the region’s range the prior week.

Feeder Cattle futures gained on softer corn prices, while Live Cattle treaded water.

Live Cattle futures closed from 5¢ lower to 12¢ higher, amid light trade.

Feeder Cattle futures closed an average of 41¢ higher, across a range of 5¢ higher at the back to 95¢ higher in spot Aug.

Corn futures closed 2¢ to 4¢ lower through Jul ’20 and then 1¢ lower.

Soybean futures closed mostly 1¢ higher through Aug ’20 and then 2¢ to 3¢ 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 40¢ lower Friday afternoon at $212.17/cwt. Select was 84¢ lower at $188.34.

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Major U.S. financial indices closed higher Friday. Lusher quarterly earning reports from companies like Intel and Alphabet provided support. As well, second-quarter U.S. GDP growth was stronger than expected.

Real gross domestic product (GDP) increased at an annual rate of 2.1% in the second quarter of 2019, according to the advance estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.1%.

The Dow Jones Industrial Average closed 51 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 91 points.

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The price Index for beef and veal through June grew slower year over year than food prices in general and overall consumer prices, according to the most recent Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics (BLS).

Compared to the previous year, the beef and veal price index this June was 0.6% higher, while the price index for all meats was up 1.3%. The index for pork prices was 2.0% higher; 0.4% lower for poultry.

More specifically, the food at home index increased 0.9% over the last 12 months, with all six major grocery store food group indexes rising over the span,

ranging from 0.3% (meats, poultry, fish, and eggs) to 2.3% (nonalcoholic beverages).

During the same period, the index for food away from home rose 3.1%, with the index for full service meals rising 3.3%, while the index for limited service meals increased 3.0%.

Over the last 12 months, the all items index increased 1.6%, before seasonal adjustment. Take food and energy away and the index was 2.1% higher year to year.

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

Cattle Current Daily—July 26, 2019

Negotiated cash fed cattle trade continued to be undeveloped through Thursday afternoon.

Cattle futures basically hovered in place, awaiting some cash direction.

Except for unchanged in Oct and 5¢ higher in Dec, Live Cattle futures closed an average of 13¢ lower.

Feeder Cattle futures closed an average of 21¢ higher in five contracts and an average of 11¢ lower in the other three.

Corn futures closed 1¢ to 5¢ lower through Sep ’20 and then fractionally lower.

Soybean futures closed mostly 4¢ to 8¢ lower. 

Wholesale beef values were lower 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 $1.03 lower Thursday afternoon at $212.57/cwt. Select was 24¢ lower at $189.18.

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Major U.S. financial indices closed lower Thursday. An assortment of underwhelming quarterly earnings reports was part of it. There was also chatter that investors feared the Fed might be less aggressive in cutting interest rates at next week’s FOMC meeting, based on recent positive economic news.

For instance, the U.S. Census Bureau announced that durable goods orders in June were up 2% compared to the previous month, which was more than traders expected. Also on Thursday, the European Central Bank left its lending rate unchanged, hinting at a more positive economic outlook for the region.

The Dow Jones Industrial Average closed 128 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 82 points.

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Feedlot marketing remains current, based on the most recent USDA slaughter and carcass grading data.

The average dressed steer weight for the week ending July 13 was 865 lbs., which was 4 lbs. more than the previous week but 2 lbs. lighter year over year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 791 lbs. was 1 lb. lighter than the previous week and 8 lbs. less  year over year. Fed cattle slaughter of 531,743 head for the week was 11,828 head more than the same week a year earlier. Total cattle slaughter of 658,432 was 8,134 head more.

As for grading, 77.72% of carcasses graded Choice and Prime the week ending July 12, according to USDA’s National Steer and Heifer Estimated Grading report. That was 0.91% less than previous week. Carcasses grading in the upper two-thirds of Choice were 0.22% less than the previous week at 31.51%.

For broader monthly perspective, total commercial red meat and pork production was record large for the month of June at 4.37 billion lbs., which was 1% more than the previous year, according to USDA’s monthly Livestock Slaughter report. That was with one less business day in the month this year.

However, beef production in June of 2.2 billion lbs. was 3% less than the previous year, with the month’s 2.80 million head of total cattle slaughter 2% less year over year.

Pork production of 2.13 billion lbs. in June was 6% more than the previous year, with hog slaughter of 9.99 million head 4% more than last year.

For January through June, commercial red meat production of 26.8 billion lbs. was 2% more than the same period a year earlier. Accumulated beef production was up slightly from last year, veal was down 1% and pork was up 4%. Lamb and mutton production was down 1%.

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

Cattle Current Daily—July 25, 2019

There was little to no country trade for negotiated cash fed cattle through Wednesday afternoon, but early signs pointed to steady money or just either side of even.

Slaughter steers sold steady to $1 higher at Sioux Falls Regional in South Dakota. Slaughter heifers sold steady to $2 higher.

At the fat auction in Tama, IA, however, Choice Steers and heifers sold 75¢ to $1 lower: $117.30/cwt. for Ch 2-4 steers at an average of 1,339 lbs.

There were only 378 head offered in the weekly Fed Cattle Exchange auction and no takers.

Cattle futures traded sideways until a bounce in Feeder Cattle.

Except for 15¢ lower in spot Aug and unchanged in Feb, Live Cattle futures closed an average of 10¢ higher.

Feeder Cattle futures closed an average of 34¢ higher.

Corn futures closed mostly fractionally lower.

Soybean futures closed mostly 4¢ to 5¢ higher. 

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

Choice boxed beef cutout value was 18¢ lower Wednesday afternoon at $213.60/cwt. Select was 29¢ lower at $189.42.

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Major U.S. financial indices closed mixed Wednesday, with mixed quarterly earnings reports. For instance, AT&T and UPS beat expectations, while Boeing and Caterpillar disappointed.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed 14 points higher. The NASDAQ was up 70 points.

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This year’s estimated calf crop of 36.3 million head is 102,700 head fewer (-0.3%) than the same period a year earlier, according to last week’s semiannual Cattle report from USDA. That’s with an estimated 26.5 million calves born in the first half of 2019, which would be 100,000 fewer than the same period last year.

“This combined with steer slaughter below a year ago, fewer steers on feed and elevated cow and heifer slaughter indicate that the data is supporting a lot of anecdotal stories over the last couple of years of reproductive problems,” says David Anderson, Extension livestock economist at Texas A&M University, in the most recent issue of In the Cattle Markets. “Reports of reproductive problems have often been attributed to extreme weather events, but also some uncertain factors. This combination of data might also suggest that the calf crop or maybe even the cow herd has been slightly overestimated the last couple of years.”

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

Cattle Current Daily—July 24, 2019

Although increasing Corn futures capped gains, Live Cattle futures closed higher again Tuesday, helped along by resurgent Lean Hogs. Feeder Cattle futures mostly edged higher.

Live Cattle futures closed an average of 47¢ higher.

Except for unchanged in Nov and 5¢ lower in Jan, Feeder Cattle futures closed an average of 5¢ higher.

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

Soybean futures closed 1¢ to 2¢ lower through Aug ’20 and then unchanged to fractionally mixed.

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

Choice boxed beef cutout value was 46¢ higher Tuesday afternoon at $213.78/cwt. Select was 12¢ higher at $189.71.

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Major U.S. financial indices closed higher Tuesday, with announcement that the U.S. and China will resume trade talks in person next week. Better than expected quarterly earnings reports from the likes of Coca-Cola and United Technologies also provided support.

The Dow Jones Industrial Average closed 177 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 47 points.

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Beef burgers are still by far the most popular burger ordered at quick service restaurants (QSRs). There were 6.4 billion beef burgers ordered at QSRs in the year ending May 2019, according to The NPD Group (NPD). Although growth is flat compared to year ago, beef burgers are still the top sandwich ordered at U.S. restaurants, reports NPD’s CREST®service, which continually tracks how U.S. consumers use restaurants.

With that said, there were 228 million servings of plant-based burgers ordered at QSRs in the year ending May, up 10% from a year ago. NPD analysts say the strong year-over-year growth of plant-based burgers is primarily due to increased availability at major QSR chains.

Beef burger buyers, who purchased beef burgers at QSRs an average of 18 times in the year ending April 2019, did give plant-based burgers a try, purchasing them at QSRs two times in the period. Conversely, 95% of plant-based buyers made a beef burger purchase within the past year, according to NPD’s receipt harvesting serving, Checkout.

Although vegetarians and vegans are contributing to the growth in plant-based, they still represent a small (single digits) percentage of the U.S. population and aren’t the primary contributors.

Instead, the NPD folks say the popularity of plant-based foods is being fueled by consumers’ desire to add protein to their diets, concerns for animal welfare and how meat products are brought to market, sustainability, and what they perceive to be healthier nutrition.

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

Cattle Current Daily—July 23, 2019

Neutral Cattle on Feed numbers and neutral to softer overall inventory numbers in the semiannual Cattle report helped Cattle futures rally to start the week. Lower grain prices also helped.

Live Cattle futures closed an average of 54¢ higher.

Feeder Cattle futures closed an average of $2.20 higher.

Grain futures fell, presumably on expectations of more favorable growing weather.

Corn futures closed 7¢ to 9¢ lower through Jul ’20 and then mostly fractionally lower to 1¢ lower.

Soybean futures closed mostly 10¢ to 13¢ 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 10¢ lower Monday afternoon at $213.32/cwt. Select was 8¢ higher at $189.59.

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Major U.S. financial indices edged higher Monday, with quarterly earnings reports from the likes of Amazon and Facebook surpassing expectations.

The Dow Jones Industrial Average closed 17 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 57 points.

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“If both domestic and international demand for U.S. beef continues at current levels, there will be little or no pressure on cattle markets,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “If something should happen to weaken beef demand in the U.S. or in global markets, lower beef and cattle prices could result in some liquidation of cattle inventories.”

In the meantime, Peel says the cattle inventory revealed in Friday’s semiannual USDA Cattle report suggest the nation’s beef cowherd is at a plateau. As mentioned in Monday’s Cattle Current, the 34.0 million head of beef cows and the 103 million total cattle and calves July 1 were the same as a year earlier.

“I contrast a plateau with a more typical cyclical peak inventory that historically has implied a liquidation phase to follow,” Peel explains. “The current inventory levels do not suggest a need for, or an inevitable, liquidation in cattle inventories at this time. Stable cow numbers and calf crop suggest that beef production will show little or no growth going into 2020. Current beef production levels and cattle prices are sustainable until something changes to provoke a new direction in cattle inventories.”

In fact, Peel says the U.S. cattle and beef industry may be the most stable he can ever remember. 

“This is pretty remarkable, given the continued turbulence in external market conditions,” Peel says. “Numerous factors that could destabilize cattle markets should be monitored, including: corn prices and feed market conditions; the impacts of African Swine Fever on global protein markets; U.S. macroeconomic conditions; and exchange rates among others. Additionally, progress or lack thereof on current trade politics or new trade issues that could arise will have a large impact, positive or negative, on the overall climate for beef and cattle markets.”

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

Cattle Current Daily—July 22, 2019

Negotiated cash fed cattle trade ended up mainly steady to $1 lower last week at $111/cwt. in the Southern Plains, $113.00-$113.50 in Nebraska and $114-$116 in the western Corn Belt. Dressed trade was steady at $182-$185.

Cattle futures closed higher Friday, with support from Lean Hogs and perhaps some boost from the potential impact excessive heat will have on production.

Live Cattle futures closed an average of 52¢ higher.

Feeder Cattle futures closed an average of 45¢ higher.

Corn futures closed 5¢ to 6¢ higher through Jul ’20 and then mostly 1¢ higher.

Soybean futures closed 15¢ to 20¢ higher through Sep ’20 and then mostly 13¢ higher.

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

Choice boxed beef cutout value was 8¢ higher Friday afternoon at $213.42/cwt. Select was 90¢ higher at $189.51.

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Major U.S. financial indices closed lower Friday, amid mixed quarterly earnings reports and geopolitical angst stemming from Iran’s seizure of a British oil tanker.

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 60 points.

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There were no surprises in Friday’s monthly USDA Cattle on Feed report (feedlots with 1,000 head or more capacity), with the numbers about dead on with pre-report estimates.

Cattle feeders placed 1.76 million head in June, which was 2.34% (-42,000 head) less than a year earlier. In terms of placement weight, 38.72% weighed less than 699 lbs., 44.48% weighed 700-899 lbs. and 16.80% weighed 900 lbs. or more.

Marketings in June of 1.94 million head were 3.04% (-61,000 head) less than the previous year, keeping in mind there was one less business day this year.

Cattle on feed July 1 of 11.48 million head were 1.75% (+198,000 head) more than last year. This makes the third month in a row that the on-feed number was the largest since the data series began in 1996, according to the Agricultural Marketing Service.

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USDA’s semiannual Cattle report hints at slowing herd expansion and fewer calves year over year.

The nation’s herd of beef cows—34.0 million head—was the same as a year earlier.

All cattle and calves were 103 million head July 1, even with the same time a year ago.

The estimated feeder cattle supply outside feedlots July 1 was 37.1 million head, which is 0.3% more than last year. However, the 4.4 million head of heifers for beef replacement were 200,000 head (-4.5%) less than the previous July.

As well, this year’s estimated calf crop of 36.3 million head was 102,700 (-0.3%) fewer than the same period a year earlier. That’s with an estimated 26.5 million calves born in the first half 2019, which would be 100,000 fewer than the same period last year.

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

Cattle Current Daily—July 19, 2019

Negotiated cash fed cattle trade continued mainly steady to $1 lower on Thursday, with prices so far this week at $111/cwt. in the Southern Plains, $114-$116 in the western Corn Belt and $113.00-$113.50 in Nebraska. Dressed trade so far this week is at $182-$185.

Cattle futures closed lower Thursday, with limited trade, some technical correction and likely positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 72¢ lower.

Feeder Cattle futures closed an average of $1.20 lower.

Sagging corn export sales helped pressure Corn futures 9¢ to 11¢ lower through Jul ’20 and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 1¢ lower to 1¢ higher.

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 77¢ higher Thursday afternoon at $213.34/cwt. Select was 27¢ higher at $188.61.

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Major U.S. financial indices edged higher Thursday, on mixed quarterly earnings and increasing chatter about the Fed cutting interest rates.

The Dow Jones Industrial Average closed 3 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 22 points.

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Carcass weights continued lower year over year for the week ending July 6, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed steer weight was 861 lbs., which was 7 lbs. more than the previous week but 6 lbs. lighter than the same week a year earlier. The average dressed heifer weight was 792 lbs., which was 3 lbs. more than a week earlier but 5 lbs. lighter year over year.

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Heading into Friday’s monthly Cattle on Feed report, a survey of analysts by Urner Barry suggests 2.1% fewer cattle were placed on feed in June than the previous year. That’s the average of estimates that range from 6.8% fewer to 5.7% more, according to the Daily Livestock Report.

The average estimate for marketings is for 3% fewer, keeping in mind one less business day this year.

On average, estimates see the July 1 on-feed inventory being 1.8% more.

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

Cattle Current Daily—July 18, 2019

Fed cattle markets were mixed on Wednesday.

Country trade in Kansas was $1 lower than last week on a live basis at $111/cwt., on moderate trade and demand, according to the Agricultural Marketing Service.

Likewise, $111 bought the 326 head offered in the weekly Fed Cattle Exchange auction: 243 head for delivery at 1-9 days and 83 head for delivery at 1-17 days.

At fat auctions in the north, though, prices were higher.

Slaughter steers and heifers sold fully $1 higher at Sioux Falls Regional in South Dakota: $115.35/cwt. for Ch 2-3 steers at an average of 1,400 lbs.

At the fat auction in Tama, Iowa Ch 2-4 steers sold $3.50-$4.00 higher at $118.50 and an average weight of 1,338 lbs. Choice heifers sold $3 higher.

Feeder Cattle led Cattle futures lower Wednesday, perhaps with some positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 52¢lower.

After 47¢ lower in spot Aug, Feeder Cattle futures closed an average of $1.12 lower.

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed mostly 4¢ to 5¢ 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 36¢ lower Wednesday afternoon at $212.57/cwt. Select was 82¢ lower at $188.34.

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Major U.S. financial indices closed lower Wednesday, on mixed quarterly earnings and ongoing concerns about unresolved trade issues with China.

The Dow Jones Industrial Average closed 115 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 37 points.

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Fed steer prices (5-area direct) declined 15% from the spring peak of $128.96/cwt. to $110.13 for the week ending June 30, according to USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook.

As mentioned recently in Cattle Current, based on recent price data, USDA lowered the expected third-quarter price for fed steers by $3, from the previous month’s forecast to an average of $107. The fourth-quarter price was reduced $4 to $110.

“As the result of lower forecast fed cattle prices and higher feed prices relative to last year in in second-half 2019, feedlots will likely be less willing to bid up prices for feeder cattle,” ERS analysts say. “Based on recent price data, the third-quarter feeder steer price (Oklahoma City) was lowered by $2 to $143/cwt. and the fourth-quarter price forecast was lowered $1 from the prior month to $141.

As a result, this month’s annual price forecast for 2019 was $1 lower at $141. The 2020 annual price forecast was unchanged.”

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

Cattle Current Daily—July 17, 2019

Cattle futures closed lower Tuesday, with little in the way of fundamental news and perhaps some technical pressure.

Live Cattle futures closed an average of 39¢ lower.

Feeder Cattle futures closed an average of 58¢ lower.

Grain markets continued to decline Tuesday, with positive crop weather news and the stronger U.S. dollar.

Corn futures closed 3¢ to 5¢ lower though Jul ’20 and then fractionally lower to 1¢ lower.

Soybean futures closed mostly 10¢ to 14¢ lower.

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 34¢ lower Tuesday afternoon at $212.93/cwt. Select was 5¢ lower at $189.16.

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Major U.S. financial indices edged lower Tuesday, although the nascent quarterly earnings season is mostly positive thus far.

The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 10 points lower. The NASDAQ was down 35 points.

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“Feeder cattle prices are determined by several factors, with feed price and fed cattle price having the greatest impact,” explains Brenda Boetel, Extension agricultural economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “Corn price has typically had an inverse relationship to both fed and feeder cattle prices. This means, as the price of corn increases, the price of feeder cattle decreases. This assumes that all other factors have remained constant, including other feeding costs, as well as fed cattle price.”

As corn price increases, the price premium declines for lighter feeder cattle weights versus heavier ones. Spun differently, the price slide narrows as corn price moves higher.

“This isn’t a new finding. What is new is that the decrease in these beef steer price differentials is at an increasing rate as weight increases, i.e., the premiums for lightweight cattle will decrease faster than has historically been found in economic studies,” Boetel says.

That was among the conclusions drawn from research conducted by Boetel last year with Lee Schultz, a peer at Iowa State University and with Kevin Dhuyvetter, cattle technical consultant with Elanco Animal Health. The study—in the Western Economics Forum—included 66,640 head of beef feeder steers and 59,005 head of dairy feeders.

“Although cattle producers can’t affect the corn price, understanding how changing corn price affects price slides can aid in management and marketing decisions,” Boetel says.

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

Cattle Current Daily—July 16, 2019

Negotiated cash fed cattle trade ended up $2-$3 higher in the Southern Plains last week at $111-$112/cwt. Live sales were steady to either side of even in Nebraska at mostly $112-$114, but $1-$3 higher in the western Corn Belt at $115. Dressed trade was $2-$5 higher at $182-$185.

Cattle futures closed narrowly mixed on Monday, although Feeder Cattle received some support from sharply lower grain futures prices.

Live Cattle futures closed narrowly mixed, from 20¢ lower to 10¢ higher.

Feeder Cattle futures closed an average of 19¢ higher.

Grain markets dove lower Monday with likely profit taking, as well as more favorable weather.

Corn futures closed 9¢ to 13¢ lower though Jul ’20 and then fractionally lower to 6¢ lower.

Soybean futures closed mostly 9¢ to 11¢ lower.

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

Choice boxed beef cutout value was 47¢ higher Monday afternoon at $213.27/cwt. Select was 39¢ lower at $189.21.

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Major U.S. financial indices edged higher Monday, on the cusp of quarterly earnings season.

The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed fractionally higher. The NASDAQ was up 14 points.

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“Uncertainty continues to plague cattle markets with broader trade and political uncertainty augmented by unknown and evolving feed market conditions,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Corn will no doubt be higher on a smaller crop this year but exactly how much higher and smaller remains an unknown.”

Undoubtedly, that uncertainty was part of the damper on a seasonal increase in feeder cattle prices, until last week. With the recent uptick, Peel says feeder markets may be set to increase seasonally over the month, on their way to a typical late-summer price peak.

Although the most recent trade data showed some improvement, Peel adds, “Domestic beef markets continue to struggle under relatively poor summer grilling weather thus far and struggling macroeconomic conditions. Ample supplies of meat are weighing more heavily on the market, as well. In particular, large pork supplies and the failure of anticipated Chinese demand for pork to materialize is pushing pork wholesale values lower, adding to beef wholesale price pressure.”

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

Cattle Current Daily—July 15, 2019

Negotiated cash fed cattle prices were yet to be fully established through Friday afternoon, based on reports from USDA’s Agricultural Marketing Service (AMS), but the trend appeared decidedly higher. The Texas Cattle Feeders Association reported its members trading at $112/cwt., which was $3 more than the previous week. Although too few to trend, early dressed sales were $2-$5 higher at $182-$185 in Nebraska and the western Corn Belt.

Live Cattle futures closed an average of 31¢ higher on Friday (7¢ to 65¢ higher), helped along by recent strength and what looked to be steady to higher cash fed prices for the week. 

Feeder Cattle futures closed an average of 83¢ lower, giving back some of the recent gains, under pressure from higher Grain futures prices. They traded and average of $3.11 higher week to week, though.

Grain markets largely shrugged off the previous day’s monthly World Agricultural Supply and Demand Estimates, given that projections were based on acres from the June 28 Acreage report, which common sense says will change. Between that and potential damage from hot and dry weather, following the interminable rains, grain futures surged on Friday.

After 1¢ higher in expiring spot Jul, Corn futures closed 9¢ to 11¢ higher though Jul ’20 and then mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 10¢ to 14¢ higher.

Wholesale beef values continued to lose seasonal steam. Trade on Friday was  lower on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 97¢ lower Friday afternoon at $212.80/cwt. Select was $1.19 lower at $189.60.

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Major U.S. financial indices closed sharply higher Friday, apparently with lighter trade and follow-through rally support from expectations for a cut in interest rates.

The Dow Jones Industrial Average closed 243 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 48 points.

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Lighter year-over-year carcass weights continue to underscore currentness, while also adding price support. For the week ending June 29, the average dressed steer weight was 854 lbs., which was the same as a week earlier but 11 lbs. lighter than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 1 lb. lighter than the previous week and 3 lbs. lighter than the previous year at 789 lbs.

“One might assume the higher prices (fed cattle) this week means the market has reached its summer low and that may be the case. However, the finished cattle market will continue to be pressured the next several weeks moving through July and August” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Thus, there is a good chance finished cattle prices yo-yo the next several weeks as packers and feedlots jockey for position.”

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

Cattle Current Daily—July 12, 2019

Negotiated cash fed cattle trade was undeveloped through Thursday afternoon, but early sales in Nebraska and the western Corn Belt point to stronger trade this week. Although there were too few transactions to trend, early dressed sales in those regions were $2-$5 higher than last week at $182-$185. Early live sales in the western Corn Belt were $1-$2 higher at $114-$115.

Cattle futures drifted higher, awaiting more concrete cash direction.

Live Cattle futures closed from an average of 15¢ higher.

Other than 2¢ lower in the back two contracts, Feeder Cattle futures closed an average of 42¢ higher.

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

Choice boxed beef cutout value was 65¢ lower Thursday afternoon at $213.77/cwt. Select was 10¢ lower at $190.79.

Corn futures closed 6¢ to 13¢ higher though Jul ’20 and then 1¢ to 2¢ higher. That was despite what most would deem bearish news in the monthly World Agricultural Supply and Demand Estimates (see below).

Soybean futures closed mostly 3¢ to 4¢ higher.

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Major U.S. financial indices closed higher Thursday, led by health care stocks and overall optimism surrounding the previous day’s dovish comments by Federal Reserve Chair, Jerome Powell, regarding interest rates.

The Dow Jones Industrial Average closed 227 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 6 points.

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Beef production for this year was forecast 75 million lbs. less to 27.13 billion lbs., in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). That’s based on lighter carcass weights and reduced third-quarter slaughter. Total beef production would still be 257 million lbs. more than last year.

USDA’s Economic Research Service (ERS) also reduced projected fed cattle prices. The projected annual 5-area Direct fed steer price for this year was lowered by $1.50 to $115.50/cwt. The third-quarter average is forecast at $107. Projections are $110 in the fourth quarter and $124 in first quarter of 2020

Compared to the previous month, total projected red meat and poultry production for this year increased by 350 million lbs. to 104.52 billion lbs., with higher forecast pork and broiler production. That would be 2.172 billion lbs. more than last year.

Corn

Corn production for 2019-20 was projected 195 million bu. higher at 13.9 billion bu., based on increased planted and harvested areas from the June 28 Acreage report. That’s with yield unchanged at 166.0 bu./acre.

The season-average corn price received by producers was lowered 10¢ to $3.70/bu.

In July, USDA’s National Agricultural Statistics Service will collect updated information on 2019 acres planted, and if the newly collected data justify any changes, NASS will publish updated acreage estimates in the August Crop Production report.

Soybeans

Soybean production for 2019-20 was projected at 3.85 billion bu., down 305 million bu., based on lower planted and harvested area in the June 28 Acreage report and on lower projected yields of 48.5 bu./acre. Beginning and ending stocks were lowered, as well.

The 2019-20 season-average price for soybeans was forecast at $8.40/bu., up 15¢ from the previous month. Soybean meal prices were forecast $5 higher at $300 per short ton. The soybean oil price forecast was unchanged at 29.5¢/lb.

Wheat

Forecast 2019-20 U.S. wheat production was raised 18 million bu. to 1,921 million. The all wheat yield was forecast 1.3 bu./acre higher at 50.0 bu. However, anticipated domestic use increased on higher feed and residual use. Ending stocks were projected 72 million bu. lower.

The projected season-average farm price for wheat is $5.20/bu., up 10¢ from the previous month.

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

Cattle Current Daily—July 11, 2019

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon, although there were some steady-money bids reported in the north.

Likewise, there were no sales in the weekly Fed Cattle Exchange auction, which had just 423 head on offer.

Prices were higher at some live fat auctions, though. Ch 2-3 steers weighing an average of 1,385 lbs. brought an average of $113.41/cwt. at Sioux Falls Regional in South Dakota. At Tama, IA, Ch 2-4 steers brought $114.90 at 1,312 lbs.

Cattle futures closed narrowly mixed, with more support in the deferred months as traders repositioned following the previous session’s sharp gains.

Live Cattle futures closed from an average of 26¢ lower across the front half of the board to an average of 7¢ higher across the back half.

Feeder Cattle futures closed from an average of 27¢ lower across the front half of the board to an average of 52¢ higher across the back half, except for unchanged in Jan. 

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 31¢ lower Wednesday afternoon at $214.42/cwt. Select was $1.20 lower at $190.89.

Corn futures closed mainly 1¢ to 2¢ higher.

Soybean futures closed mostly 6¢ to 8¢ higher.

Plenty of folks will be watching for Thursday’s monthly World agricultural Supply and Demand Estimates.

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Major U.S. financial indices closed higher Wednesday, buoyed by broad interpretation of Federal Reserve Chairman, Jerome Powell’s testimony to Congress meaning that a cut to interest rates is on the near horizon.

In prepared testimony to the U.S. House Committee on Financial Services, Powell explained:

“Our baseline outlook is for economic growth to remain solid, labor markets to stay strong, and inflation to move back up over time to the Committee’s 2% objective. However, uncertainties about the outlook have increased in recent months. In particular, economic momentum appears to have slowed in some major foreign economies, and that weakness could affect the U.S. economy. Moreover, a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit. And there is a risk that weak inflation will be even more persistent than we currently anticipate. We are carefully monitoring these developments, and we will continue to assess their implications for the U.S economic outlook and inflation…

“In our June meeting statement, we indicated that, in light of increased uncertainties about the economic outlook and muted inflation pressures, we would closely monitor the implications of incoming information for the economic outlook and would act as appropriate to sustain the expansion. Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook. Inflation pressures remain muted…”

Crude Oil futures (WTI-CME) rallied $2.43 to $2.60 higher for the remaining 2019 contracts on a heavier domestic inventory draw than expected.

The Dow Jones Industrial Average closed 76 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 60 points.

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“Digital purchasing will accelerate in food retailing, just as it has in other retail sectors where we see much higher rates of online purchases,” says David Portalatin, food industry advisor for the NPD group (NPD) and author of Eating Patterns in America. “Still, the brick and mortar grocery store will always be a necessary means of acquiring foods, especially those where consumers place a premium on their sensory assessment to ensure quality, like meats, fruits and vegetables. This gives forward thinking retailers and their vendor partners an opportunity to truly create an omnichannel experience for the consumer and revolutionize the way we think about grocery merchandising.”

According to NPD, 20% of U.S. consumers, ages 18 and above—about 51 million consumers—shopped online for groceries, within 30 days, for the quarter ending February this year. That was 3% more than the quarter ending in November of last year. The figures include consumers ordering online for delivery or in-store pick-up.

Of those who shop online for groceries from brick and mortar or pure-play online grocers, 16% order their food and beverages for delivery. The option to order online and pick-up in store, also known as click-and-collect or BOPUS (buy online pickup in store) is favored by 11% of online grocery shoppers. Seven percent of these shoppers mix it up and do both, according to NPD’s National Eating Trends® Omnichannel Scorecard.

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

Cattle Current Daily—July 10, 2019

Unsurprisingly, negotiated cash fed cattle trade was yet to develop through Tuesday afternoon.

Cattle futures charged higher, though, fueled by limit-up gains in Lean Hog futures and technical support. Feeder Cattle were helped further by lower Corn futures.

Live Cattle futures closed an average of $1.48 higher.

Feeder Cattle futures closed an average of $3.61 higher ($2.65 higher at the back to $4.37 higher toward the front). 

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

Choice boxed beef cutout value was $2.73 lower Tuesday afternoon at $214.73/cwt. Select was $2.32 lower at $192.09.

Corn futures closed mainly 5¢ to 6¢ lower through Jul ‘20, and then 1¢ lower to 1¢ higher.

Soybean futures closed mostly 7¢ to 8¢ higher.

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Tech stocks helped lead major U.S. financial indices to a narrowly mixed close on Tuesday. One way or the other, testimony from Federal Reserve Chair, Jerome Powell—to the House Financial Services Committee on Wednesday—will likely provide a spark. Traders will be looking for clues as to whether or not and when the Fed will cut interest rates.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 3 points higher. The NASDAQ was up 43 points.

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“The nearby, and deferred, contracts for both livestock products (Live Cattle and Feeder Cattle futures) appear to have found a bottom. This strong upward movement appears to be supported by both fundamental and technical information,” says Elliott Dennis, an Extension livestock economist at the University of Nebraska-Lincoln. In the latest issue of In the Cattle Markets, he explains, “Bottoming prices appears to have been driven by projected grain supplies, weather-driven pasture conditions, and wholesale meat demand.”

With that said, in his recent market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee notes the narrow price range between summer and fall Feeder Cattle futures contracts; about 80¢.

“The lack of a price spread means the market is offering an incentive to keep adding weight to cattle if a person can do it fairly inexpensively,” Griffith explains. “Alternatively, if weight cannot be added inexpensively, then the market is not offering much of an incentive. In reality, the feeder cattle market is very stale and can make marketing decisions more difficult than they are naturally. From a stocker operator standpoint, it may be more advantageous to cut one’s losses on the current set of cattle and start a new group…”

There certainly appears to be ample grazing opportunity, with 68% of the nation’s pasture and range rated in Good or Excellent condition as of July 7, according to the most recent USDA Crop progress report. That’s 17% more than last year. Only 8% was rated as Poor or Very Poor, compared to 21% a year earlier.

“High quality pastures should incentivize cow-calf and stockers to retain cattle longer,” Dennis says. “Likewise, with the recent USDA announcement waiving the Nov. 1 grazing requirement on prevent planting acres, the summer grazing window may extend much longer this year. Both signals will likely shift how and when feeder cattle are placed in feedlots. If feedlot placements slow then this should dampen the seasonally low fall feeder cattle prices.”

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

Cattle Current Daily—July 9, 2019

Negotiated cash fed cattle trade ended up steady in the Southern Plains last week at $109/cwt. on a live basis. Prices were $1-$2 higher in Nebraska at $113.00-$113.50 and at $112-$114 in the western Corn Belt. Dressed trade was steady to $2 higher at $180.

Likewise, the 5-area direct weekly average price for steers was $1.11 higher week to week on Monday at $111.24/cwt. on a live basis. Live heifers traded $1.25 higher at $110.82.

Cattle futures closed mainly narrowly mixed on Monday after early follow through support.

Live Cattle futures closed mixed, from an average of 66¢ lower in the front three contracts to an average of 23¢ higher.

Feeder Cattle futures closed narrowly mixed from 17¢ lower to 7¢ higher.

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

Choice boxed beef cutout value was 21¢ lower Monday afternoon at $217.46/cwt. Select was 39¢ lower at $194.41.

Corn futures closed mixed, from fractionally higher to 4¢ higher through Jul ‘20, and then mostly 1¢ to 2¢ lower.

Soybean futures closed 3¢ higher.

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

The Dow Jones Industrial Average closed 115 points lower. The S&P 500 closed 14 points lower. The NASDAQ was down 63 points.

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U.S. beef exports continue to reflect resilience in the face of ongoing trade barriers, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

U.S. beef exports in May were steady year-over-year in volume at 117,541 metric tons (mt), but 1% more in value at $727.6 million—the second-highest on record.

For January through May, beef exports were 3% below last year’s record pace in volume (530,088 mt) but only slightly lower in value at $3.3 billion.

Beef export value per head of fed slaughter averaged $312.85 in May, down slightly from a year ago. For January through May, beef export value averaged $309.33 per head, down 3%.

Korea and Taiwan Set the Pace

Beef exports to South Korea remained on a record pace in May, climbing 11% to 23,004 mt and 13% in value to $165 million. January-May exports to Korea were 11% above last year in volume (101,761 mt) and 15% higher in value ($743.5 million).

Beef exports to Taiwan also strengthened for the second straight month at 5,873 mt in May (up 27% from a year ago), valued at $52.6 million (up 28%). Through May, exports to Taiwan were 11% above last year’s record pace in volume (24,478 mt) and 4% higher in value ($218.2 million).

May export volume to leading market Japan also bounced back, despite the U.S. disadvantage borne by the lack of a trade agreement with that nation.

According to USMEF, all of U.S. pork and beef’s major competitors gained tariff relief in Japan this year through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the economic partnership agreement between Japan and the European Union.

“The explosive growth U.S. beef has achieved in Korea and Taiwan is a testament to the quality of the product and the outstanding customer base the U.S. industry has established over the years,” explains Dan Halstrom, USMEF President and CEO. “That same dynamic is present in Japan, on an even larger scale. But for Japan to remain in the ‘strong growth’ column, it is essential that we have market access comparable to our key competitors.”

Pork Exports Show Signs of Renewed Strength

U.S. pork exports in May were also steady with the previous year at 217,999 mt. Value was 1% higher at 567.8 million—the highest monthly value total since April 2018. For January through May, however, pork exports were 4% below last year in volume (1.035 million mt) and 10% less in value at $2.57 billion.

Although pork exports to Mexico remained slow—the 20% retaliatory duty on most U.S. pork entering that nation wasn’t removed until May 20—exports to China/Hong Kong rebounded, despite the ongoing 50% retaliatory duty on U.S. pork going to China. U.S. pork exports to the region were 33% more year over year for volume (45,422 mt) and 5% more in value at $84 million. Through the first five months of 2019, though, exports to the region trailed last year by 7% in volume (173,642 mt) and 25% in value ($326 million).

“May export results for U.S. pork were very encouraging, especially the renewed momentum in Japan and China/Hong Kong,” Halstrom says. “When exports to Mexico get back on track and trade talks with Japan and China show progress, this will be a very welcome lift for the U.S. pork industry.”

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

Cattle Current Daily—July 8, 2019

Negotiated cash fed cattle traded ended up steady in the Southern Plains at $109/cwt. on a live basis. It was $1-$2 higher at $113.00-$113.50 in Nebraska and at $112-$114 in the western Corn Belt. Dressed trade was steady to $2 higher at $180.

Through Thursday, the weighted average 5-Area Direct price for steers was 59¢ higher than the prior week at $111.17/cwt. on a live basis. The dressed price was 74¢ higher at $180.10.

Cattle futures closed sharply higher Friday, helped along by sluggish trade and higher cash fed cattle prices in the North.

Live Cattle futures closed an average of $1.18 higher (67¢ to $1.77 higher).

Feeder Cattle futures closed an average of $1.41 higher ($1.10 to $2.25 higher in spot Aug).

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

Choice boxed beef cutout value was $1.58 lower Friday afternoon at $217.67/cwt. Select was 56¢ lower at $194.80.

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

Soybean futures closed mostly 10¢ to 14¢ lower.

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Major U.S. financial indices closed lower Friday. Popular thinking ascribed the pressure to a positive monthly employment report, which might make the Fed more reticent to cut interest rates.

Total non-farm payroll employment increased by 224,000 in June, according to the U.S. Bureau of Labor Statistics Employment Situation Summary. The unemployment rate was little changed at 3.7%.

Average hourly earnings in June of $27.90 was 6¢ more than the previous month. Average hourly earnings increased 3.1% over the past 12 months.

Earlier in the week, ADP National Employment report showed private sector, non-farm employment increasing by 102,000 in June, significantly less than the trade expected.

The Dow Jones Industrial Average closed 43 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 8 points.

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The Creighton University Rural Mainstreet Index  (RMI) rose 4.7 points in June to 53.2. That’s the sixth month out of seven the index was above growth neutral. The index ranges between 0 and 100 with 50.0 representing growth neutral, and an RMI below the growth neutral threshold. 50.0, indicating negative growth for the month.

The RMI is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

“Higher agriculture commodity prices and rebuilding from recent floods boosted the Rural Mainstreet Index (RMI) for the month. Furthermore, despite the negatives from the trade war, 69.4% of bankers support either raising, or continuing current tariffs,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. 

At the same time, more than one in four bank CEOs reported rising loan defaults due to farmer financial woes. Almost half of bankers reported that due to crisis-level farm income, farmers in their area have responded by selling the farm, or otherwise leaving the farm.

One of the notable quotes came from Jeff Bonnett, president of Havana National Bank in Havana, IL, who said there are estimates that 15-20 million corn acres were not planted nationwide.

“Based upon this information, corn prices should be in the range of $5.75 to $6.00/bu., or more. What are we missing? Will the true corn acres planted be revealed after the required certification through FSA due by July 15th?”

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

Cattle Current Daily—July 4-5, 2019

Negotiated cash fed cattle trade developed Wednesday on moderate trade and demand. Live prices were steady in the Southern Plains at $109/cwt., steady to $1.50 higher in Nebraska at $111-$113 and $1 higher in the western Corn Belt at $112-$113. Although too few to trend, early dressed sales were steady to higher at $178-$180.

Likewise, 53 Kansas heifers sold for a weighted average price of $109 (1-17 day delivery) in the weekly Fed Cattle Exchange auction. That was out of an offering of 392 head.

Live Cattle futures closed an average of 62¢ higher, from 40¢ higher at the back to $1.35 higher in spot Aug.

Feeder Cattle futures closed sharply lower, though, beaten down by light trade and the surge in grain futures.

Feeder Cattle futures closed an average of $1.52 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 $1.22 lower Wednesday afternoon at $219.25/cwt. Select was 63¢ lower at $195.36.

Corn futures closed mostly 12¢ to 19¢ higher through Jul ‘20, and then mostly 1¢ to 3¢ higher.

Soybean futures closed 9¢ to 10¢ higher though Aug ’20 and then mostly 6¢ higher.

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Major U.S. financial indices closed sharply higher Wednesday—record high for the DJIA and NASDAQ—as investors seemed to think weaker labor data will hasten the Fed’s decision to cut rates.

Private sector, non-farm employment increased by 102,000 in June, according to the closely watched ADP National Employment report. That was about 24% less than the trade expected.

The Dow Jones Industrial Average closed 179 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 61 points.

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“Financial stress for many in agriculture continues to build amid unprecedented uncertainty from trade disputes and weather disasters,” say analysts with CoBank’s Knowledge Exchange Division (KED), in that organization’s Quarterly U.S. Economic Rural Review. “Nearly all sectors of agriculture were affected last quarter by the inundation of spring rains that kept farmers out of fields throughout the U.S. The amount of acreage lost to prevented planting will remain the major unknown in the months ahead for ag commodities markets.”

In fact, the KED folks say elevated corn prices could alter the modest beef cow herd growth previously expected.

On the other side of the ledger, U.S. beef exports and other meat exports could benefit from African Swine Fever in Southeast Asia.

“An expected decline in Chinese pork production will spur a surge of beef, pork, and chicken imports into China as it tries to fill a shortfall in animal protein supply that no single pork-producing country will be able to fill,” say KED analysts.

Among other highlights from the KED Quarterly Review:

Global economic development continues to slide as tariffs drag on global trade and manufacturing.

Despite domestic GDP growth of 3.1% in the first quarter, the pace of investment spending, manufacturing, and demand for capital goods have eased in recent months, and the slowdown trend is widely expected to persist through the remainder of the year.

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

Cattle Current Daily—July 3, 2019

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Feeder Cattle futures continued to rebound, despite slightly higher Corn futures, and helping deferred Live Cattle.

Except for unchanged in Apr, Feeder Cattle futures closed an average of $1.26 higher.

Except for unchanged in spot Aug, Live Cattle futures closed narrowly mixed, from an average of 23¢ lower across the front half of the board to an average of 40¢ higher across the back half.

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

Choice boxed beef cutout value was 75¢ higher Tuesday afternoon at $220.47/cwt. Select was 35¢ higher at $195.99.

Corn futures closed mostly 2¢ to 4¢ higher, perhaps getting some support from crop conditions (see below).

Soybean futures closed 7¢ to 10¢ lower though Jul. ’20 and then mostly 5¢ lower.

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Major U.S. financial indices closed higher on Tuesday after spending most of the session sideways. Tech stocks provided support, countered by threats of more U.S. tariffs on EU imports.

The Dow Jones Industrial Average closed 69 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 17 points.

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Corn futures closed mostly 2¢ to 4¢ higher, perhaps getting some support from crop conditions.

For the week ending June 30, according to USDA most recent Crop Progress report,

56% of the corn crop was in Good or Excellent condition, which was 20% less than last year. 12% was in Poor or Very Poor condition, compared to 6% a year earlier. For this time of year, that’s second worst crop condition for corn since 1995; the worst was in excessively dry 2012.

Soybean futures closed 7¢ to 10¢ lower though Jul. ’20 and then mostly 5¢ lower, pressured by heavy supplies and the lack of trade progress and despite current crop condition also being the second worst since 1995.

54% of the soybean crop was rated in Good or Excellent condition, compared to 71% a year earlier. 11% was in Poor or Very Poor condition, which was 5% more than a year earlier.

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Agricultural producer sentiment rebounded in June with farmers expressing more optimism, according to the most recent Purdue University-CME Group Ag Economy Barometer.

The June barometer was 126, up 25 points from the previous month. It’s based on a mid-month survey of 400 agricultural producers across the U.S.

“This year, farmers faced an extremely wet planting season and uncertainty surrounding trade discussions, however, a crop price rally, coupled with USDA’s announcement of its 2019 Market Facilitation Program (MFP) and Congress’ passage of the Disaster Aid Bill, made farmers more optimistic,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “While this combination provided a boost to a struggling ag economy, it remains a challenging economic environment for farmers.” 

Both of the Ag Barometer’s sub-indices increased. The Index of Current Conditions rose 13 points from May, to a reading of 97. The Index of Future Expectations jumped 33 points, to a reading of 141 in June.

Given historic delays for corn and soybean planting, producers who planted either crop last year were asked whether the MFP announcement affected their decision to take a prevented planting payment this year. Ten percent of corn and soybean producers said the announcement did impact their prevented planting decision. One out of five farmers within that group said they intended to plant more corn, while one out of 10 farmers within that group said they intended to plant more soybeans, because of the MFP program.

Nearly one-third (32%) of corn/soybean farmers in the survey said they intended to take prevented planting payments on some of their corn acres. Of those who intend to take a prevented planting payment, just over half (51%) said they intend to take prevented planting on more than 15% of their intended corn acreage.

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

Cattle Current Daily—July 2, 2019

Negotiated cash fed cattle trade last week ended up mostly steady to higher on a live basis at $109/cwt. in the Southern Plains, $111.00-$111.50 in Nebraska and at $111-$112 in the western Corn Belt. Dressed trade in the North was steady to $3 lower at $178-$180.

Cattle futures closed mostly higher Monday, supported by the bounce in Feeder Cattle, tied to lower Corn futures, as well as higher Lean Hog futures and improved overall market optimism regarding trade negotiations between the U.S. and China.

Except for 17¢ higher in spot Aug, Feeder Cattle futures closed an average of $1.48 higher.

Except for 25¢ lower in spot Aug, Live Cattle futures closed an average of 58¢ higher, (10¢ higher to 95¢ higher at the back).

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

Choice boxed beef cutout value was 6¢ higher Monday afternoon at $219.72/cwt. Select was 8¢ higher at $195.64.

Friday’s bearish Acreage report weighed on grains.

Corn futures closed 6¢ to 9¢ lower through Jul ’20 and then fractionally higher to 3¢ lower. That made for a decline of 19¢-30¢ for the front six contracts in the last two sessions.

Soybean futures closed mostly 10¢ to 14¢ lower though Nov. ’20 and then 8¢ to 9¢ lower.

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Major U.S. financial indices closed higher on Monday, buoyed by news that the U.S. and China agreed to shelve additional tariffs and counter-tariffs for the time being, paving the way to resumed trade talks.

The Dow Jones Industrial Average closed 117 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 84 points.

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“As long as beef demand does not weaken appreciably in the reminder of the year, fed cattle prices are expected to average about equal to 2018 levels for an annual average,” says Derrell Peel, Extension livestock marketing specialist Extension livestock marketing specialist at Oklahoma State University, in is weekly market comments. “Fed prices are expected to be slightly lower year over year in the third quarter before strengthening in the fourth quarter. Feeder prices are generally expected to average 3-5% below 2018 levels for the remainder of the year and for an annual average.”

Part of that has to do with carcass weights continuing to be lighter year over year. If they remain at or below previous-year levels, Peel says beef production for 2019 would be just a little more than 1% higher than last year. 

Peel points out steer carcass weights ebbed to 842 lbs. the last two weeks of May, which was 4 lbs. light than last year’s low. Heifer carcass weights likely reached the low at 779 lbs. in late May, he says, which was 3 lbs. lighter than the low in 2018. He adds that steer and heifer carcass weights typically increase from the recent low to a seasonal peak in the fourth quarter of the year.

“With feed costs destined to be somewhat higher in the second half of the year, feedlots will have some incentive to trim back days on feed suggesting lighter finished and, thus, carcass weights,” Peel says. “However, feedlots do this largely by placing heavier feeder cattle, which need fewer days to finish. Heavier placement weights imply heavier finish weights. Feedlot data shows that every one pound increase in placement weight results in about one-half pound increase in finished weight. Thus, the impact of higher feed prices on carcass weights is unclear but is unlikely to have a major impact.”

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

Cattle Current Daily—July 1, 2019

USDA shocked the market Friday with its latest Acreage report (see below), which sent Corn futures diving hard. That fueled gains in Feeder Cattle futures, which closed an average of 50¢ higher (12¢ higher to $1.05 higher in spot Aug). Prices at the close were well off of session highs with likely week-end and month-end position squaring. 

Live Cattle futures closed mixed, from 71¢ lower across the front half of the board—not counting expiring June—to an average of 13¢ higher across the back half, not counting newly minted Dec ’20.

Negotiated cash fed cattle trade began to develop by late Friday afternoon, but there were too few transactions to trend in any region.

Early live sales in the Southern Plains were at $109/cwt. on a live basis, in the middle of the previous week’s trading range. The Texas Cattle Feeders Association also reported its members trading at $109. Early live sales in Nebraska were steady to higher at $109.00-$111.50. In the western Corn Belt, though, the $109-$112 for early live sales was $1-$3 less than the previous week. Earlier week dressed sales in the latter two regions were at $180, which was steady in Nebraska and steady to lower in the western Corn Belt.

Through Thursday, the 5-area direct weighted average price for steers was $110.58/cwt.

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

Choice boxed beef cutout value was 63¢ higher Friday afternoon at $219.03/cwt. Select was $1.34 lower at $195.56. At $24.10, the Choice-Select spread Friday afternoon was the highest since May of last year.

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Major U.S. financial indices closed higher on Friday, led by stronger prices for shares of the nation’s largest banks, after they passed the federal stress test administered each year.

The Dow Jones Industrial Average closed 73 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 38 points.

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USDA’s Acreage report issued on Friday always was going to raise questions, given the uncertainty borne by late and prevented planting, the timing of the survey process and whatnot. Even so, few expected to see so many corn acres.

USDA estimated corn acreage at 91.7 million acres, up 3% from last year. That’s less than the 92.8 million acres estimated in the March Prospective Plantings report, but more than the 89.8 million acres estimated by the World Agricultural Outlook Board (WAOB ) in the June World Agricultural Supply and Demand Estimates, and about 5 million acres more than average estimates ahead of the report. Keep in mind, the acreage report is based on producer surveys, whereas the WAOB estimate is model-based.

USDA’s Grain Stocks report provided some corn market support, with USDA estimating corn stocks in all positions June 1 at 5.20 billion bu., which was 2% less than the previous year.

Of the total corn stocks, 2.95 billion bu. are stored on farms, up 7% from a year earlier. Off-farm stocks, at 2.25 billion bu., are down 12% from a year ago.

Corn futures closed 13¢ to 21¢ lower through Jul ’20 on Friday and then 2¢ to 6¢ lower.

News was as bullish for soybeans as it was bearish for corn, at least in terms of acreage. USDA estimated 80.0 million acres of soybeans, which would be 10% less than last year and the fewest U.S. acreage since 2013. That’s far less than the 84.6 million acres forecast in the Prospective Plantings report and June WASDE.

Soybean futures closed mostly 10¢ to 12¢ higher.

Soybean stocks were more bearish, with soybeans stored in all positions estimated at 1.79 billion bu., which would be 47% more than a year ago, as a variety of factors, including trade issues and impacts from African Swine Fever weigh on U.S. soybean exports.

On-farm soybean stocks totaled 730 million bu., up 94% from a year ago. Off-farm stocks of 1.06 billion bu., were 26% more than a year ago.

USDA pegs the all wheat planted area at 45.6 million acres, which would be 5% less than last year and just slightly less than the 45.8 million acres estimated in March’s Prospective Plantings report and the June WASDE.

Old crop all wheat stored in all positions June 1 totaled 1.07 billion bu., down 2% from a year earlier. On-farm stocks are estimated at 207 million bu., up 58% from last year. Off-farm stocks of 865 million bu. were 11% less than a year ago.

According to the Agricultural Marketing Service (AMS), USDA will re-survey producers in 14 states next month regarding acres planted to corn, cotton, sorghum and soybeans.

“If the newly collected data justify any changes, NASS will publish updated acreage estimates in the Crop Production report to be released Aug. 12,” AMS analysts explain.

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

Cattle Current Daily—June 28, 2019

Cattle futures held on to most of the previous session’s gains, but closed marginally lower Thursday.

Except for $1.57 higher in expiring Jun, Live Cattle futures closed an average of 30¢ lower.

Feeder Cattle futures closed an average of 48¢ lower.

Grains mainly tread water Thursday, ahead of Friday’s much-anticipated Stocks and Acreage reports from USDA.

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

Soybean futures closed mostly 3¢ to 6¢ lower through Aug ’20 and then unchanged to fractionally 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 67¢ lower Thursday afternoon at $219.03/cwt. Select was $1.66 lower at $196.90.

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Major U.S. financial indices closed narrowly mixed again Thursday, as investors await clues from the meeting scheduled between President Trump and China’s leader at the G20 Summit.

The Dow Jones Industrial Average closed 10 points lower. The S&P 500 closed 11 points higher. The NASDAQ was up 57 points.

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Carcass weights continue pointing to marketing currentness, according to USDA’s most recent Actual Slaughter Under Federal Inspection report.

Dressed steer weights of 849 lbs. for the week ending June 15 were 7 lbs. lighter than a year earlier. Dressed heifer weights were 4 lbs. lighter at 787 lbs.

There were 19,994 head more fed slaughter for the week, compared to a year earlier, and 21,005 head more total slaughter. Beef production for the week of 531.1 million lbs. was 13.3 million lbs. more than the same week a year earlier.

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

Cattle Current Daily—June 27, 2019

Cattle futures rocketed higher Wednesday, led by Feeder Cattle, apparently buoyed by technical buying and the simple fact they were so oversold.

Live Cattle futures closed an average of $1.43 higher ($1.10 higher at the back to $2.12 higher).

Although still a touch lower week to week, Feeder Cattle futures closed an average of $4.22 higher.

Cash fed cattle trade remained undeveloped. There were only 315 head (three lots) offered in the weekly Fed Cattle Exchange auction, and no sales.

Corn futures closed 2¢ to 4¢ lower through Jul ’20 and then fractionally mixed.

Soybean futures closed 6¢ to 9¢ lower through Sep ’20 and then mostly 2¢ to 5¢ lower.

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 6¢ higher Wednesday afternoon at $219.70/cwt. Select was 39¢ lower at $198.56.

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Major U.S. financial indices closed mixed and little changed on Wednesday, following the previous session’s decline.

The Dow Jones Industrial Average closed 11 points lower. The S&P 500 closed 3 points lower. The NASDAQ was up 25 points.

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Over time and in dichotomous terms, depending on one’s perspective, Feeder Cattle futures provide necessary price discovery and a valuable tool to manage price risk. Or, they’re too thinly traded and cash-settled against an index too divorced from daily reality to be of much use to producers.

Researchers at Kansas State University (KSU) tackle the facts in Overview of the CME Group Feeder Cattle Futures Contract by Ted Schroeder, KSU agricultural economist and Justin Bina, a Student Fellow of KSU’s Center for Risk Management Education and Research.

There are no definitive answers.

“Our research provides a better understanding of the issues surrounding the Feeder Cattle futures contract and the contract’s performance over time. However, more extensive research and, especially, discussion with industry users must be conducted to definitively gauge performance of the contract,” say Schroeder and Bina. “Moving forward, increased communication between contract users and CME Group about industry needs and feasibility issues is essential to guarantee successful future use of the contract for price discovery and price risk management purposes.”

The study provides invaluable insight for those conversations. Among the conclusions:

“Cash and nearby futures prices remain highly correlated across time and geographic locations. In addition, basis variation generally decreased in 2014–2018, an era of historically high feeder cattle prices and increased volatility. This implies that the feeder futures contract is a valid price discovery tool and generally tracks cash market conditions across numerous locations.”

“…Feeder Cattle futures trade volume—both front month and deferred contracts—has increased drastically in the last 15 years, but still pales in comparison to similar agricultural products. Discussions with industry users is necessary to determine if the contract should be considered ‘illiquid’ or ‘thinly traded,’ but it appears to be relative to other derivative products in the agricultural complex.”

“Recent volatility in the feeder cattle futures contract is not out of line with certain historical periods, though it has been more sustained in the last five years. Comparison to the other cattle crush inputs shows that feeder cattle volatility is similar across time to that of live cattle and substantially less than corn. However, Feeder Cattle volatility has increased disproportionately since around 2015. Speculative trade activity was assessed to determine its role in increased volatility in Feeder Cattle futures; however, we conclude that volatility does not increase due to an influx of speculative activity, but rather that speculators enter a market as a result of the risk (opportunity) already inherent in that market due to other economic factors.”

By | June 26th, 2019|Daily Market Highlights|

Cattle Current Daily—June 26, 2019

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon. There were a few early dressed sales in Nebraska and the western Corn Belt at $180/cwt., but too few to trend.

A reversal higher in Lean Hog futures and apparent short covering helped Live Cattle futures gain some, while Feeder Cattle continued marginally lower amid light trade.

Except for 2¢ lower in the back contract, Live Cattle futures closed an average of 52¢ higher (10¢ to 82¢ higher).

Except for 25¢ higher in the back contract, Feeder Cattle futures closed an average of 26¢ lower (7¢ to 47¢ lower).

Corn futures closed mixed from 1¢ higher to 3¢ lower. 

Soybean futures closed 3¢ to 8¢ lower.

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

Choice boxed beef cutout value was 10¢ lower Tuesday afternoon at $219.64/cwt. Select was 86¢ lower at $198.95.

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Major U.S. financial indices closed lower Tuesday. Pressure included reports that the Fed may take its time cutting rates, whereas plenty of recent market steam was tied to the notion the central bank would start shaving rates as soon as next month.

More fundamentally, consumer confidence declined to it lowest level this month in almost two years.

“After two consecutive months of improvement, Consumer Confidence declined in June to its lowest level since September 2017 (Index, 120.6),” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

The Conference Board Consumer Confidence Index® declined to 121.5 in June from 131.3 in May. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—decreased from 170.7 to 162.6. The Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—decreased from 105.0 last month to 94.1 this month.

 “The decrease in the Present Situation Index was driven by a less favorable assessment of business and labor market conditions. Consumers’ expectations regarding the short-term outlook also retreated,” Franco explains. “The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence. Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion.”

The Dow Jones Industrial Average closed 179 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 120 points.

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Drought in Canada may continue pushing more feeder cattle into the U.S., according to the Livestock Marketing Information Center (LMIC).

Although much of the U.S. continues to deal with too much moisture, the LMIC folks explain, in the latest Livestock Monitor, producers in Alberta are contending with several seasons of dry conditions, although the province received some rain earlier this month. Similarly, there had been no rain in Saskatchewan since April, until some recent moisture.

“The implications for the U.S. is that at this point it remains likely there will be cattle that move off summer grazing earlier than normal and early weaning of spring-born calves,” LMIC analysts explain. “Canadian feedlots have been showing a higher year-over-year count since May of 2018. Potentially lower feed costs in the U.S. and the exchange rate could factor into more feeder cattle coming south this year.”

Moreover, cattle on feed in Canada is approaching 1 million head, an inventory level seldom eclipsed, according to LMIC.

“There could also be a capacity factor that limits how many of those early removals could end up in Canadian feedlots. Even with timely rainfall, pasture and range conditions remain delicate and support watching,” say LMIC analysts.

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

Cattle Current—June 25, 2019

Follow through pressure in Lean Hogs, higher Corn futures and Friday’s Cattle on Feed report helped pressure Feeder Cattle futures sharply lower on Monday, while Live Cattle were narrowly mixed but mostly lower.

Except for an average of 29¢ higher in the front two contracts, Live Cattle futures closed an average of 28¢ lower.

Feeder Cattle futures closed an average of $2.05 lower ($1.70 to $2.45 lower).

After a profit-taking breather on Friday, grain futures continued higher on Monday with the latest Crop Progress report (see below) documenting the significant delay in development compared to the average.

Corn futures closed 3¢ to 4¢ higher through Jul ‘20 and then mostly 1¢ to 2¢ higher.

Soybean futures closed 5¢ to 6¢ higher through Jan ’21 and then 2¢ to 3¢ higher.

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 8¢ lower Monday afternoon at $219.74/cwt. Select was 26¢ higher at $199.81.

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Major U.S. financial indices closed narrowly mixed Monday, with traders apparently waiting for more direction from trade talks. President Trump and the Chinese leader are scheduled to meet at the G20 Summit that begins later this week. 

The Dow Jones Industrial Average closed 8 points higher. The S&P 500 closed 5 points lower. The NASDAQ was down 26 points.

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“The lack of summer thus far has limited seasonal beef demand,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “After early beef buying in April for Memorial Day, boxed beef cutout values have weakened, averaging 3.8% lower year over year for the last six weeks. The daily boxed beef price last Friday was down 6.2% from the peak price in late April. The weakness has been most pronounced in the high value middle meats, with loin primals averaging 7.9% lower year over year for the last six weeks and rib primals averaging 5.5% lower year over year for the same period. Chuck and round primals have fared somewhat better with round primals down only 1.8% year over year and chuck primals up an average of 1.3% over the last six weeks, compared to the same period last year. Both chuck and round values have showed more strength in the latest weekly data. Encouragingly, the ground beef market is showing a little life with both lean trimmings and 50% trimmings currently priced a bit higher compared to last year.”

Although there will likely be pent up demand for the 4th of July, Peel notes current weather forecasts indicate large swaths of the nation will still be experiencing below normal temperatures.

“Moreover, continued flooding and swollen rivers and lakes in some regions will limit recreational activities for some time yet,” Peel says.

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

Cattle Current Daily—June 24, 2019

Negotiated cash fed cattle prices last week ended up $2-$4 lower on a live basis at $108-$110/cwt. in the Southern Plains, mostly $110 in Nebraska and at $113-$114 in the western Corn Belt. Dressed trade was $3-$4 lower in Nebraska at $180-$183 and $6 lower in the western Corn Belt at $178-$180.

Limit-down moves in Lean Hog futures, lower cash fed cattle prices, the outlook for higher feed prices and perhaps some positioning ahead of the monthly Cattle on Feed report (see below) contributed to further erosion in Cattle futures on Friday.

Live Cattle futures closed an average of 88¢ lower (40¢ to $1.72 lower).

Feeder Cattle futures closed an average of $1.22 lower.

Grain futures ended the week lower on apparent profit taking.

Corn futures closed 6¢ to 7¢ lower through Jul ‘20 and then fractionally higher to 1¢ higher.

Soybean futures closed mostly 10¢ to 13¢ lower. 

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

Choice boxed beef cutout value was 90¢ lower Friday afternoon at $219.82/cwt. Select was $1.93 lower at $199.55.

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Major U.S. financial indices edged lower Friday. 

The Dow Jones Industrial Average closed 34 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 19 points.

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Markets will likely view Friday’s monthly Cattle on Feed report—feedlots with 1,000 head or more capacity—as neutral to slightly bearish.

Placements in May of 2.06 million head were 2.82% less (-60,000 head) than the previous year, whereas expectations ahead of the report were for a decline of about 4%. In terms of placement weight, 32.71% went on feed weighing less than 699 lbs.; 50.33% weighing 700-899 lbs.; 16.95% weighing 900 lbs. or more.

Marketings in May of 2.07 million head were 0.68% more (+14,000 head) than the previous year. Expectations ahead of the report were for an increase of 0.80%.

Cattle on feed June 1 of 11.74 million head were 1.62% more (+187,000 head) more than last year, the most for the month since the data series began in 1996. Heading into the report, expectations were for an increase of 1.30%.

More positive, the monthly Cold Storage report indicates beef in freezers as of May 31 was 6% less than the previous month and 13% less than the previous year. That follows the steep decline of the previous month when supplies were 5% less month to month and 9% less year over year.

Frozen pork supplies were 1% more than the previous month and year.

Total frozen red meat supplies were 2% less than the previous month and 6% less than the prior year.

Total frozen poultry supplies were 2% less than the previous month and 6% less than the previous year.

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

Cattle Current Daily—June 21, 2019

Negotiated cash fed cattle trade developed Thursday at mostly decidedly lower money. Except for mostly steady in Kansas at $110/cwt., live trade was $2-$4 lower at $110 in Nebraska and the Texas Panhandle; $110-$114 in the western Corn Belt. Dressed trade was $3-$4 lower at $180-$183.

Resurgent corn prices—after a couple of days of repositioning—weighed heavy on Cattle futures Thursday.

Live Cattle futures closed an average of 69¢ lower.

Feeder Cattle futures closed an average of $1.47 lower.

Corn futures closed 7¢ to 10¢ higher through Jul ‘20 and then mostly fractionally higher to 1¢ lower.

Soybean futures closed 10¢ to 13¢ higher through Jan ‘21 and then mostly 9¢ higher.

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

Choice boxed beef cutout value was 87¢ lower Thursday afternoon at $220.72/cwt. Select was 76¢ lower at $201.48.

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Major U.S. financial indices closed sharply higher Thursday. Support included follow through optimism that the Fed will cut interest rates, as well as a bounce in energy.

Crude oil prices (WTI-CME) jumped $2.87 to $3.10 on 2019 contracts with reports that Iran shot down a U.S. surveillance drone flying over international waters. Along with recent tanker bombings in the Gulf of Oman, the move could escalate tensions between the U.S. and Iran. By some calculations, about 20% of global oil consumption must move from the Persian Gulf through the Strait of Hormuz to get to open water. Iranian territorial waters lie within the Strait.

The Dow Jones Industrial Average closed 249 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 64 points.

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Commercial red meat production of 4.57 billion lbs. in May was 1% more than the previous year and record-large, according to USDA’s monthly Livestock Slaughter report issued yesterday.

Beef production of 2.33 billion lbs. was up 1% year over year, as was total cattle slaughter of 2.94 million head.

For January through May of this year, commercial red meat production of 22.4 billion lbs. was 2% more than the same period last year.

At 847 lbs., the average dressed steer weight in May was 12 lbs. less than the previous month and 1 lb. less than the previous year. Average dressed heifer weight was 788 lbs., which was 11 lbs. less than the previous month and 2 lbs. lighter than the previous year.

Lower year-over-year carcass weights continued through the first week of June, according to USDA’s Actual Slaughter Under Federal Inspection report. Average dressed weights for both steers (846 lbs.) and heifers (782 lbs.) were 5 lbs. lighter year over year (week ending June 8).

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

Cattle Current Daily—June 20, 2019

Early indications for negotiated cash fed cattle trade this week appeared to be steady to lower on Wednesday.

Although too few transactions to trend, there were some early sales in the western Corn Belt $1-$2 lower than last week at $112-$115/cwt. Dressed sales were steady to $4 lower $180-$184.

Likewise, Choice 2-4 steers traded $2.00-$2.50 lower at the fat auction in Tama, IA: an average of $118.11/cwt. for steers weighing an average of 1,329 lbs.

On the other hand, slaughter steers sold steady to firm at Sioux Falls Regional in South Dakota: $113.98/cwt. for Ch 2-3 at an average of 1,373 lbs.

There were only three lots (315 head) offered in the weekly Fed Cattle Exchange auction, and no sales.

Perhaps cash uncertainty was one reason behind sputtering Cattle futures, despite stronger Lean Hogs and softer Corn. Along with continued fretting over demand and sluggish trade, erosion might also be linked to position squaring.

Live Cattle futures closed an average of 77¢ lower (15¢ lower at the back to $1.07 lower).

Except for 13¢ higher in three away contracts, Feeder Cattle futures closed an average of 37¢ lower, amid extremely light trade.

Corn futures closed 8¢ to 9¢ lower through Jul ‘20 and then mostly 1¢ to 3¢ lower.

Soybean futures closed 8¢ to 11¢ lower through Mar ‘20 and then 5¢ to 6¢ lower.

Incidentally, heading into Friday’s monthly Cattle on Feed report, analysts surveyed for Bloomberg expect May placements to be about 4% less year over year, May marketings to be nearly 1% more and the on-feed inventory June 1 to be a little over 1% more.

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

Choice boxed beef cutout value was $1.06 higher Wednesday afternoon at $221.59/cwt. Select was 44¢ higher at $202.24.

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Major U.S. financial indices edged higher Wednesday. Although the Federal Open Market Committee (FOMC) left interest rates unchanged, markets seemed buoyed by indications that the Fed was leaving the door open to rate cuts.

“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, but uncertainties about this outlook have increased,” according to an FOMC statement. “In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion…”

The Dow Jones Industrial Average closed 38 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 33 points.

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As many folks trying to lease or buy pasture in recent years can attest, the value continues to rise. USDA’s Agricultural Land Values-Final Estimates released yesterday provide some perspective. The average value of pasture increased every year, from $1,290 per acre in 2014 to $1,370 in 2018.

Conversely, average Cropland value in 2018 was $4,050 per acre, $20 less than a year earlier and $40 less than in 2014.

Some examples of average pasture value for the states with the most beef cows: Texas ($1,570); Oklahoma ($1,380); Missouri ($1,920); Nebraska ($975); South Dakota ($1,040); Kansas ($1,320); Montana ($667); Kentucky ($3,000).  

By | June 19th, 2019|Daily Market Highlights|

Cattle Current Daily—June 19, 2019

Cattle futures mostly maintained and extended gains from the previous session on Tuesday, buoyed by a breather in the Corn rally and higher outside markets.

Except for unchanged and 7¢ lower in the front two contracts, Live Cattle futures closed an average of 71¢ higher.

Feeder Cattle futures closed an average of 75¢ higher (32¢ up front to $1.27 higher at the back).

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 $1.29 lower Tuesday afternoon at $220.53/cwt. Select was 71¢ lower at $201.80.

Corn futures closed mostly 4¢ to 6¢ lower through Sep ‘20 and then mostly fractionally mixed.

Soybean futures closed fractionally higher to 1¢ higher through Mar ‘20 and then fractionally lower to 1¢ lower.

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Major U.S. financial indices closed sharply higher Tuesday, apparently based on speculation, more than anything. First, speculating that a China trade deal is within grasp as reports indicate President Trump is scheduled to meet with China’s leader ahead of the G20 Summit scheduled June 28-29. Next, speculation that the Fed will conclude its meeting Wednesday with either a rate cut or language signaling that they will ease rates sooner rather than later. Markets were also buoyed by reports that the European Central Bank stood ready to provide more economic stimulus in an effort to stimulate economic growth.

West Texas Intermediate Crude Oil futures on the CME also bounced higher on hopes of increased demand. Contracts for the remainder of this year closed $1.64-$1.97 higher.

The Dow Jones Industrial Average closed 353 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 108 points.

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“It is a rare year in that corn prices are significantly higher while pasture conditions are in better shape than is usually expected this time of year,” says Josh Maples, Extension agricultural economist at Mississippi State University, in the latest issue of In the Cattle Markets. “This is likely to lead to shifts in how gain is added to feeders this year. Producers may glance at the lower prices offered and decide to push them a little longer on pasture. This could potentially lead to slower feedlot placements and temper 2019 beef production slightly.”

After year-to-year strength in April, Maples points out cash feeder cattle prices followed Feeder Cattle futures lower, due to a number of factors

“The usual peak in March or April is generally followed by a decline into the summer. Add in a bearish April Cattle on Feed report, weaker export totals, and the corn market rally, and there was not much good news for cattle markets in late April and May,” Maples explains. “Large supplies are still a major piece of the market puzzle, also. U.S. cattle slaughter for the first quarter of 2019 was about 1% above a year ago. However, lower cattle dressed weights have helped to moderate beef supplies.”

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

Cattle Current Daily—June 18, 2019

Cattle futures faded early follow through pressure Monday morning to rally back for a positive close.

Except for 20¢ lower in the back contract, Live Cattle futures closed an average of 71¢ higher (27¢ to $1.35 higher).

Feeder Cattle futures closed an average of $1.19 higher after four consecutive sessions of lower money (75¢ to $1.45 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 41¢ lower Monday afternoon at $221.82/cwt. Select was 25¢ lower at $202.51.

Corn futures closed mostly 4¢ to 5¢ higher through Sep ‘20 and then mostly fractionally higher to 1¢ higher.

Soybean futures closed 10¢ to 16¢ higher through Jul ‘20 (16¢ higher in the front four contracts) and then 6¢ to 9¢ higher.

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Major U.S. financial indices edged higher Monday, basically erasing minimal losses from the previous session. Traders are likely content to wait for further direction from the Fed meeting scheduled to take place Tuesday and Wednesday.

The Dow Jones Industrial Average closed 22 points higher. The S&P 500 closed 2 points higher. The NASDAQ was up 48 points.

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“Softening fed cattle prices in 2019 and the prospect of higher feed input costs could delay steers and heifers from entering feedlots,” say analysts with USDA’s Economic Research Service, in the monthly Livestock, Dairy and Poultry Outlook (LDPO) released Monday. “This could incentivize keeping lightweight cattle on pasture longer to add weight, which may lead to a more gradual pace of heavier cattle placed on feed so that feedlots will spend less time feeding them to the appropriate finishing weights. The slower pace of placement will likely be reflected in fewer fed cattle to be marketed for slaughter in early 2020.”

Higher anticipated feed costs and the anticipated slower pace of fed cattle marketings in the fourth quarter are behind the reduction in projected beef production for this year to 27.2 billion lbs., which would still be 332 million lbs. more than last year.

“Lower fed cattle prices have turned feedlot margins negative, and higher forecast feed input prices could make feedlots less willing to bid up prices for feeder cattle for the rest of 2019,” say ERS analysts. “Based on recent price data, the second-quarter 2019 feeder steer price was lowered by $3 to $142/cwt. Faced with continued poor operating margins, the 2019 third and fourth-quarter price forecasts were each lowered $5 from the prior month to $145 and $142/cwt., respectively. As a result, this month’s annual price forecast for 2019 was $4 lower at $142. The 2020 annual price forecast was reduced $5 from last month’s forecast to $145/cwt. as higher forecast feed costs and a lower forecast for fed cattle prices weigh on feedlot margins.”

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

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|