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

Daily Market Highlights

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Cattle Current Daily-Sept. 28, 2023

Cattle futures continued lower Wednesday, with follow-through pressure from outside markets and concerns that beef demand may falter. Stronger Corn futures added weight.

Feeder Cattle futures closed an average of $2.01 lower ($1.07 to $2.70 lower).

Live Cattle futures closed an average of 85¢ lower (30¢ to $1.07 lower), except for 10¢ higher in spot Oct.

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

So far this week, FOB live sales are steady in the Southern Plains at $183/cwt. and steady to $1 lower in Nebraska and the western Corn Belt at $184 in a light test. Dressed delivered prices in Nebraska are $2 lower at $290 (a few up to $291) and steady to $2 lower in the western Corn Belt at $290-$292.

Choice boxed beef cutout value was $1.41 higher Wednesday afternoon at $300.95/cwt. Select was 59¢ lower at $278.51/cwt.

Corn futures closed mostly 3¢ to 4¢ higher.

KC HRW Wheat closed mostly 10¢ to 15¢ lower.

Soybean futures closed mostly 4¢ to 7¢ higher.

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Major U.S. financial indices closed mixed Wednesday after significant early pressure from higher crude oil prices driven by supply concerns and higher bond yields related to fears of persistent inflation.

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed fractionally higher. The NASDAQ was up 29 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.20 to $3.29 higher through the front six contracts. 

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The Rural Mainstreet Index (RMI) sank below growth neutral in September, for the first time since March, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Specifically, the region’s overall reading for September fell to 49.5 from August’s 50.0. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.  

“This is the weakest recorded reading since March of this year. Bankers indicated that the biggest challenge to community bank profitability over the next 12 months will be a downturn in farm income,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Higher interest rates, deposit outflows and a rising regulatory environment continued to constrain the business confidence index to a much weaker 26.8 from 38.9 in August. “This month’s reading is the most negative outlook recorded since July 2022. Over the past 12 months, the regional confidence index has fallen to levels indicating a very negative outlook,” Goss says. “Approximately half of bankers expect economic conditions to worsen in the next six months.”

Even so, the region’s farmland price index climbed to 65.4 from 60.0 in August. This was the 36th straight month that the index has advanced above 50.0.  “Creighton’s survey continues to point to healthy growth in farmland prices, even as farming conditions weaken,” Goss says.

By | September 27th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 27, 2023

Cattle futures closed sharply lower Tuesday, pressured by pessimistic outside markets, demand worries, and likely some month-end and quarter-end position squaring.

Feeder Cattle futures closed an average of $4.56 lower ($1.27 to $5.82 lower).

Live Cattle futures closed an average of $1.88 lower (85¢ lower at the back to $2.85 lower).

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

Last week, FOB live prices were $183/cwt. in the Southern Plains, $184-$185 in Nebraska and $185-$186 in the western Corn Belt. Dressed delivered prices were $292.

Choice boxed beef cutout value was $1.94 lower Tuesday afternoon at $299.54/cwt. Select was $1.35 lower at $279.10/cwt. That’s the first time since May that Choice cutout dropped below $300.

Grain and soybean futures appeared to jockey for some position ahead of Friday’s Grain Stocks report.

Corn futures closed 1¢ lower through Sep ‘24 and then mostly fractionally mixed.

KC HRW Wheat closed 1¢ to 4¢ lower through Jly ‘24 and then mostly fractionally higher.

Soybean futures closed 4¢ to 5¢ higher.

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Major U.S. financial indices closed sharply lower Tuesday, pressured by negative economic news.

Consumer confidence sagged lower than expected. The Conference Board Consumer Confidence Index® declined for a second consecutive month to 103.0 (1985=100), down from an upwardly revised 108.7 in August.

“September’s disappointing headline number reflected another decline in the Expectations Index, as the Present Situation Index was little changed, says Dana Peterson, Chief Economist at The Conference Board. Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline in particular. Consumers also expressed concerns about the political situation and higher interest rates. The decline in consumer confidence was evident across all age groups, and notably among consumers with household incomes of $50,000 or more.”

New residential home sales in August also missed expectations to the downside. Sales of new single‐family houses in August 2023 were at a seasonally adjusted annual rate of 675,000, according to estimates released jointly today by the U.S. Commerce Department. That was 8.7% below the revised July rate of 739,000.

The Dow Jones Industrial Average closed 388 points lower. The S&P 500 closed 63 points lower. The NASDAQ was down 207 points.

West Texas Intermediate Crude Oil futures (CME) closed 32¢ to 71¢ higher through the front six contracts. 

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Placements have decreased year over year for 10 of the last 12 months, with total placements down 897,000 head in the last year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, reflecting on the recent Cattle on Feed report.

“A 12-month moving average of placements shows that the peak annual average monthly placements occurred in December 2019, consistent with the cyclical peak in the calf crop in 2018,” Peel says, in his weekly market comments. “However, pandemic delays from 2020 into 2021and drought-enhanced placements in 2021 and 2022 have kept feedlot placements high until the last few months.” 

Peel explains the current 12-month moving average of placements for August dropped to the lowest level since May of 2017. He says average placements are expected to continue declining for the foreseeable future.

As for the on-feed inventory, the 12-month moving average peaked in September 2022 at 11.836 million head, according to Peel. 

“The September 2023 12-month moving average is 11.507 million head, down 2.8 % from the peak,” Peel says.  “Following the drought a decade ago, the 12-month moving average dropped below 11 million head in April 2013 and remained below that level for 58 months through January 2018. This was the period of rapid herd expansion in the last cattle cycle and a similar situation is likely going forward, beginning in 2024.”

By | September 26th, 2023|Daily Market Highlights|

Cattle Current Podcast—Sept. 26. 2023

Cattle futures basically paddled in place Monday, looking for further direction and amid firmer Corn futures.

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

Live Cattle futures closed mixed, from an average of 15¢ lower to an average of 19¢ higher.

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

Last week, FOB live prices were steady to $1 higher in the Southern Plains at $183/cwt., steady in Nebraska at $184-$185 and steady to $1 higher in the western Corn Belt at $185-$186. Dressed delivered prices were steady at $292.

The weighted average five-area direct fed steer price was 69¢ higher on a live basis at $184.73/cwt. and 15¢ higher in the beef at $291.99.

Choice boxed beef cutout value was $1.85 lower Monday afternoon at $301.48/cwt. Select was 2¢ higher at $280.45/cwt.

Grain and soybean futures strengthened on Monday.

Corn futures closed 2¢ to 4¢ higher.

KC HRW Wheat closed mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 3¢ to 5¢ higher.

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Major U.S. financial indices gained to start the week as investors seemed to ignore rising bond yields on the day.

The Dow Jones Industrial Average closed 43 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 59 points.

West Texas Intermediate Crude Oil futures (CME) closed 4¢ to 35¢ lower through the front six contracts.

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Total pounds of beef in freezers Aug. 31 were 3% more than the previous month but 18% less year than last year, according to the latest USDA Cold Storage report.

Frozen pork supplies were up slightly from the previous month but down 13% from last year.

Total red meat supplies in freezers were up 1% percent from the previous month but down 15% from last year.

Total frozen poultry supplies were down slightly from the previous month but up 1% from a year ago.

By | September 25th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 25, 2023

Cattle futures bounced back from the previous day’s widespread commodity and equity sell-off, supported by stronger-late-week cash fed cattle prices and ongoing bullish fundamentals.

Feeder Cattle futures closed an average of $1.34 higher (82¢ to $1.62 higher).

Live Cattle futures closed an average of $1.48 higher ($1.22 to $2.10 higher).

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

For the week, FOB live prices were steady to $1 higher in the Southern Plains at $183/cwt., steady in Nebraska at $184-$185 and steady to $1 higher in the western Corn Belt at $185-$186. Dressed delivered prices were steady at $292.

Choice boxed beef cutout value was $1.40 higher Friday afternoon at $303.33/cwt. Select was $1.43 higher at $280.43/cwt.

Estimated total cattle slaughter last week of 625,000 head was 7,000 head fewer than the previous week and 46,000 head fewer (-6.9%) than the same week last year. Year-to-date estimated total cattle slaughter of 23.6 million head was 1.1 million head fewer (-4.3%) than the same time last year. Estimated year-to-date beef production of 19.3 billion pounds was 1 billion pounds less (-5.1%) than a year earlier.

Grain and soybean futures firmed on Friday.

Corn futures closed mostly 2¢ higher.

KC HRW Wheat closed mostly 1¢ to 2¢ higher.

Soybean futures closed 1¢ to 3¢ higher.

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Major U.S. financial indices closed lower Friday with follow-through pressure related to a potential government shutdown and projected lingering higher interest rates.

The Dow Jones Industrial Average closed 106 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 12 points.

West Texas Intermediate Crude Oil futures (CME) closed mixed through the front six contracts, from 68¢ lower to 40¢ higher.

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Markets will likely view Friday’s monthly Cattle on Feed report as neutral, although placements were 1% more than expected. Other estimates were in line with pre-report estimates.

For feedlots with 1,000 head or more capacity, August placements of 2.0 million head were 107,000 head fewer (-5.1%) than a year earlier.

In terms of placement weights, 36% went on feed weighing 699 pounds or less, 47% weighing 700-899 pounds and 17% weighing 900 pounds or more.

Marketings in August of 1.9 million head were 120,000 head fewer (-6.0%).

Cattle on feed Sept 1 of 11.1 million head were 248,000 head fewer (-2.2%).

By | September 23rd, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 22, 2023

Cattle futures and other commodity futures closed lower Thursday with the higher dollar and apparent fund selling tied to yesterday’s comments from the Fed suggesting interest rates will stay higher for longer. Wariness over Friday’s Cattle on Feed report could have added pressure.

Feeder Cattle futures closed an average of $2.31 lower (90¢ lower in spot Sep to $2.87 lower).

Live Cattle futures closed an average of $1.80 lower ($1.57 to $2.02 lower).

Negotiated cash fed cattle trade ranged from slow on light to moderate demand to a standstill through Thursdayafternoon, according to the Agricultural Marketing Service.

Dressed delivered prices were steady in Nebraska at $292/cwt. FOB live prices last week were $184-$185.

Elsewhere last week, FOB live prices were $182-$183/cwt. in the Southern Plains and $185 in the western Corn Belt, where dressed delivered prices were $292.

Choice boxed beef cutout value was 67¢ higher Thursday afternoon at $301.93/cwt. Select was 32¢ higher at $279.00/cwt.

Net U.S. beef export sales (2023) of 13,700 metric tons were up noticeably from the previous week and up 15% from the prior four-week average, according to the U.S. Export Sales report for the week ending Sept. 14. Increases primarily for Japan, South Korea, China, Mexico and Canada.

Turning to row crops, grain and Soybean futures closed lower with the pressure from outside markets.

Corn futures closed mostly 4¢ to 7¢ lower.

KC HRW Wheat closed 12¢ to 18¢ lower through May ‘25 and then mostly fractionally lower.

Soybean futures closed mostly 16¢ to 26¢ lower.

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Major U.S. financial indices closed lower Thursday with negative economic news including higher treasury yields and threats of a U.S. government shutdown.

The Dow Jones Industrial Average closed 370 points lower. The S&P 500 closed 72 points lower. The NASDAQ was down 245 points.

West Texas Intermediate Crude Oil futures (CME) closed marginally mixed through the front six contracts.

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The Organization for Economic Cooperation and Development (OECD) expects global economic growth to moderate the rest of this year and next amid tighter monetary policy, according to the OECD Economic Outlook, Interim Report September 2023.

“Further significant stress in financial markets has been avoided so far, after the turbulence due to bank failures earlier in the year. That said, the global economy continues to confront the challenges of elevated inflation, low growth and comparatively weak trade,” says Mathias Cormann, OECD Secretary-General.

Annual GDP growth in the United States is projected at 2.2% in 2023 and 1.3% in 2024, with the slowdown driven by cooler labor markets and the effects of tighter monetary policy. In the euro area, where demand is already subdued, GDP growth is projected to ease to 0.6% in 2023, and edge up to 1.1% in 2024 as the adverse impact of high inflation on real incomes fades. China’s recovery is weaker than expected following the post-pandemic re-opening, with growth projected at 5.1% this year and 4.6% in 2024.

The Outlook highlights a range of downside risks. For instance, according to the report, inflation could continue to prove more persistent than projected, with further disruptions to energy and food markets still possible. A further slowdown in China would dampen growth in trading partners worldwide and could drag down business confidence. Public debt remains elevated in many countries, in the aftermath of significant fiscal support rolled out in response to the COVID-19 pandemic and the energy price crisis.

By | September 21st, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 21, 2023

Cattle futures rebounded Wednesday with thoughts of steady to higher cash fed cattle prices this week and perhaps some early positioning ahead of Friday’s monthly Cattle on Feed report.

Feeder Cattle futures closed an average of $1.48 higher (55¢ to $2.20 higher).

Live Cattle futures closed an average of $1.08 higher (76¢ to $1.37 higher).

Negotiated cash fed cattle trade ranged from slow on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few live trades in Nebraska at $186/cwt.

Last week, FOB live prices were $182-$183/cwt. in the Southern Plains, $184-$185 in Nebraska and $185 in the western Corn Belt. Dressed delivered prices were $292.

Choice boxed beef cutout value was 86¢ lower Wednesday at $301.26/cwt. Select was $3.10 lower at $278.68/cwt.

Corn futures closed mostly 4¢ to 6¢ higher Wednesday, bolstered by trade worries over a commercial cargo vessel in the Black Sea running into a mine.

KC HRW Wheat closed fractionally lower to 2¢ lower through May ‘24 and then fractionally higher to 1¢ higher.

Soybean futures closed 4¢ to 9¢ higher.

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Major U.S. financial indices eased lower Wednesday. Primary news for the day was the Fed’s decision to leave interest rates unchanged for now, as widely anticipated, but with indications of another increase coming yet this year.

The Dow Jones Industrial Average closed 76 points lower. The S&P 500 closed 41 points lower. The NASDAQ was down 209 points.

West Texas Intermediate Crude Oil futures (CME) closed 79¢ to 92¢ lower through the front six contracts.

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Declining beef cow slaughter is helping support 90%-lean beef prices at levels 17.3% higher than last year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly marketing comments.

For perspective on cow numbers, Peel explains beef cow slaughter is falling in the second half of this year after increasing annually from 2015 through 2022 and may end up 15-17% less for the year.

With the related higher cull cow prices in mind, Peel advises producers to keep value factors in mind as they make culling decisions this fall.

“As a rough guide, cows will be about 100 pounds heavier for increases in each grade from Lean to Boner to Breaker. Each grade increase is roughly equivalent to an increase of one body condition score,” Peel says. “Additionally, the live weight of cows will change by roughly 25-30 pounds above and below the weight of average dressing cows for high and low dressing cows. Producers can often impact the value of cull cows by managing the weight and condition of cows before marketing.”

For instance, Peel explains cull cows that are thin (Lean, low dressing) in the fall and are retained and fed until spring may sell as Boner cows at average dressing by March with an increase in value of $400-$600/head due to added weight, grade, and condition.

“Of course, the feasibility of holding cull cows depends on time and management considerations and the availability of surplus feed,” Peel says. “Going forward, many culled cows will likely be screened for the possibility of producing another calf and selling later for slaughter value. Leaving the cull cows with a bull while adding weight after weaning may produce another increment of added value if she can be sold as a bred cow next spring at seasonally high bred cow prices.”

By | September 20th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 20, 2023

Cattle futures closed lower again Tuesday, at a more modest pace, with follow-through pressure from oversold status and awaiting the week’s cash fed cattle trade direction.

Feeder Cattle futures closed an average of 72¢ lower (35¢ to $1.60 lower).

Live Cattle futures closed an average of 56¢ lower.

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

Last week, FOB live prices were $182-$183/cwt. in the Southern Plains, $184-$185 in Nebraska and $185 in the western Corn Belt. Dressed delivered prices were $292.

Choice boxed beef cutout value was $3.20 lower Tuesday afternoon at $302.12/cwt. Select was $1.63 lower at $281.78/cwt.

Corn futures firmed in the front months, buoyed by recent crop ratings. They closed mostly 2¢ to 4¢ higher through Jly ‘25.

KC HRW Wheat closed 1¢ to 4¢ lower.

Soybean futures closed 1¢ lower through Aug ‘24 and then unchanged to fractionally higher.

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Major U.S. financial indices closed lower Tuesday as investors appeared skittish over the Fed’s looming next decision about interest rates.

The Dow Jones Industrial Average closed 106 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 32 points.

West Texas Intermediate Crude Oil futures (CME) closed 9¢ to 28¢ lower through the front six contracts.

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Although less than last year, September estimates suggest corn prices are likely to remain in their current price range, says Kenny Burdine, Extension livestock economist at the University of Kentucky, in the latest Cattle Market Notes Weekly.

“Holding everything else constant, higher corn prices lead to lower feeder cattle prices as greater cost of gain decreases the value of cattle placed into feeding programs. However, higher feed prices also result in higher value of gain as feedlots are incentivized to place heavier cattle,” Burdine explains. “The September report (WASDE) suggests that opportunities to profitability add gain to calves and sell heavier cattle are likely to remain in the coming months. This will be especially true for cow-calf and growing operations that have potential to add gain through forage or alternative feeds. Producers should continue to be diligent about evaluating costs and market conditions as they make decisions about post-weaning and backgrounding programs.”

By | September 19th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 19, 2023

Cattle futures took a breather from the steamy rally and closed lower Monday on likely profit taking.

Feeder Cattle futures closed an average of $2.34 lower ($1.70 lower at the back to $3.52 lower toward the front).

Live Cattle futures closed an average of 84¢ lower (25¢ to $1.40 lower).

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

Last week, FOB live prices were $182-$183/cwt. in the Southern Plains, $184-$185 in Nebraska and $185 in the western Corn Belt. Dressed delivered prices were $292.

Choice boxed beef cutout value was 39¢ lower Monday afternoon at $305.32/cwt. Select was 29¢ higher at $283.41/cwt.

Corn futures closed mostly 3¢ to 4¢ lower.

KC HRW Wheat closed 8¢ to 12¢ lower through Sep ‘25 and then 1¢ higher.

Soybean futures closed 15¢ to 23¢ lower.

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Major U.S. financial indices trickled higher Monday as investors wait for this week’s FOMC meeting. 

The Dow Jones Industrial Average closed 6 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 1 point.

West Texas Intermediate Crude Oil futures (CME) closed mixed, from 15¢ lower to 71¢ higher  through the front six contracts.

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Based on current price strength, USDA’s Economic Research Service left the third-quarter feeder steer price unchanged at $250/cwt. but increased the expected fourth-quarter price by $4 to $259/cwt., in the latest Livestock, Dairy and Poultry Outlook. Prices were raised by $1 in the first and second quarter of next year at $249 and $248, respectively. The annual average price is projected at $225.99 this year and $253.75 next year.

“Over the last four weeks, wholesale boxed beef values have bounced back after retracting from this year’s highs set in June. However, fed cattle prices have not responded similarly,” say ERS analysts. “The August average price for fed steers in the five-area marketing region was $184.85/cwt., nearly flat since June but $41 higher year over year. This situation has allowed packer margins to improve during this time and coupled with expected higher seasonal beef demand and tightening fed cattle supplies, prices are not expected to fall further. As a result, the fed steer price forecast is unchanged at $178.50 and unchanged for next year at $186.”

Commercial beef production was forecast at 26.941 billion lbs. for this year, 40 million lbs. less than last month’s projection, based on a lower production outlook for the second half of the year.

“This is based on a slower expected pace of fed cattle marketing in September that is partially offset by higher expected cow slaughter for the rest of the year,” ERS analysts say. “As a result, the outlook for 2024 production remains unchanged from last month at 25.2 billion lbs.”

By | September 18th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 15, 2023

Cattle futures rallied sharply higher Thursday, despite the lack of weekly cash fed cattle direction as traders seemed to focus on looming tighter fourth-quarter supplies.

Feeder Cattle futures closed an average of $3.24 higher ($1.67 higher in spot Sep to $4.02 higher).

Live Cattle futures closed an average of $2.54 higher, in active trade.

Negotiated cash fed cattle trade ranged from slow on light to moderate demand to a standstill through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few live delivered trades in Nebraska at $186.50/cwt.

The only established trade for the week is $184/cwt. for FOB live prices in the western Corn Belt, the upper end of last week’s range.

Last week, FOB live prices were $180/cwt. in the Southern Plains and $183-$184 in Nebraska. Dressed delivered prices were $290 in Nebraska and $288-$290 in the western Corn Belt.

Choice boxed beef cutout value was $1.18 lower at $306.37/cwt. Select was 33¢ lower at $286.86/cwt.

Corn futures softened mostly fractionally lower to 1¢ lower on likely profit taking.

KC HRW Wheat closed mostly 3¢ to 6¢ lower.

Soybean futures closed mostly 7¢ to 11¢ higher.

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Major U.S. financial indices rose Thursday, buoyed by positive economic data including robust monthly retail sales.

The Dow Jones Industrial Average closed 331 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 112 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.46 to $1.73 higher through the front six contracts.

By | September 14th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 14, 2023

Cattle futures sauntered lower Wednesday with traders awaiting weekly cash fed cattle direction.

Feeder Cattle futures closed an average of $1.03 lower (20¢ to $2.20 lower).

Live Cattle futures closed an average of 32¢ lower, (2¢ to $1.00 lower).

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few live trades in the western Corn Belt at $184/cwt.

Last week, FOB live prices were $180/cwt. in the Southern Plains and $183-$184 in the North.

Dressed delivered prices were $290 in Nebraska and $288-$290 in the western Corn Belt.

Choice boxed beef cutout value was 48¢ lower Wednesday afternoon at $307.55/cwt. Select was $3.41 higher at $287.19/cwt.

Corn futures closed mostly 4¢ to 5¢ higher Wednesday with apparent technical buying and support from wheat.

KC HRW Wheat closed 10¢ to 14¢ higher.

Soybean futures closed mostly 3¢ to 6¢ higher.

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Major U.S. financial indices closed mixed Wednesday.

The Dow Jones Industrial Average closed 70 points lower. The S&P 500 closed 5 points higher. The NASDAQ was up 39 points.

West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 32¢ lower through the front six contracts.

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Even if you take drought recovery out of the equation, there’s no clear indication about how aggressive producers will retain heifers and begin herd rebuilding this fall.

“On one hand, we have the higher feeder cattle prices, current and deferred, which incentivizes the desire to retain cows and heifers to get profits in the future,” explains Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln. “However, there are also atypically seasonal incentives to sell both cull cows and heifers at higher current market values than previously experienced and forgo profits next year.”

Dennis says declining cow numbers and strong ground beef demand are keeping cutter cow and slaughter cow prices significantly higher than both the five-year average and 2022 with general price support for cutter cows at $90/cwt.

“Higher and stronger ground beef prices and boxed beef cutter cow cutout will only keep these prices high or increase them into the fall. These seasonally higher prices should continue to impact the beef cow slaughter rate,” Dennis explains in the most recent issue of In the Cattle Markets from the Livestock Marketing Information Center.

As it is, even though weekly beef cow slaughter rates are declining, beef cow slaughter continues above the five-year average, according to Dennis. He adds heifers, as a percentage of total cattle on feed remains at the highest level in 20 years at about 40%.

Ultimately, Dennis says the tradeoff this fall will be between cashing in on cows and heifers at high prices or chasing after $310 per cwt. values on 500-600 lb. feeder cattle in 2024.

“Producers need to be extremely diligent about calculating how much they can pay for replacement heifers, as well as how much value that heifer has when she is retained rather than sold under current market conditions,” Dennis says. “Understanding what needs to go right and what can go wrong for heifers and bred cows to pay for themselves will be extremely important this fall.”

By | September 13th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 13, 2023

Cattle futures crept mostly higher Tuesday.

Feeder Cattle futures closed an average of 54¢ higher, except for an average of 55¢ lower in the front two contracts.

Live Cattle futures closed an average of 18¢ higher, except for an average of 8¢ lower in two contracts.

Negotiated cash fed cattle trade ranged from mostly inactive to a standstill through Tuesday afternoon with too few transactions to trend according to the Agricultural Marketing Service.

Last week, FOB live prices were $180/cwt. in the Southern Plains and $183-$184 in the North.

Dressed delivered prices were $290 in Nebraska and $288-$290 in the western. Corn Belt.

Choice boxed beef cutout value was $2.08 lower Tuesday afternoon at $308.03/cwt. Select was $1.66 lower at $283.78/cwt.

Corn futures faltered Tuesday, closing mostly 6¢ to 9¢ lower on the monthly World Agricultural Supply and Demand Estimates (see below), which pegged harvested acres and production higher than the trade expected.

KC HRW Wheat closed 4¢ to 7¢ higher.

Soybean futures closed 12¢ to 22¢ lower.

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Major U.S. financial indices eased lower Tuesday, led by tech stocks.

The Dow Jones Industrial Average closed 17 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 144 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.20 to $1.55 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) left expected fed steer prices unchanged for this year, in the September World Agricultural Supply and Demand Estimates (WASDE).

The weighted average five-area direct fed steer price was projected at $184/cwt. in the third quarter and $190 in the fourth quarter for an annual average price of $178.50. The annual average price next year was forecast at $186 with prices in the first and second quarters $188 and $186, respectively.

Beef production was estimated to be 26.9 billion pounds this year, which would be 1.4 billion pounds less (-4.8%) than last year. Beef production for next year was forecasted to be 1.8 billion pounds less (-6.6%) than this year at 25.2 billion pounds.

Estimated beef production for this year was revised slightly lower, compared to the previous month’s WASDE, on a slower pace of marketings in the third quarter. “This decline is only partly offset by higher expected carcass weights in the quarter and higher expected cow slaughter in the third and fourth quarters,” ERS analysts say.

Corn

The 2023/24 U.S. corn outlook was for slightly larger supplies and ending stocks. Corn production for 2023/24 was forecast 23 million bushels higher than the previous month at 15.1 billion bushels, as greater harvested area more than offset a reduction in yield. The national average yield was forecast at 173.8 bushels per acre, down 1.3 bushels. Harvested area for grain was forecast at 87.1 million acres, up 0.8 million.

The forecast season-average corn price received by producers was unchanged at $4.90 per bushel.

 

By | September 12th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 12, 2023

Cattle futures rallied higher Monday, bolstered by higher cash fed cattle prices at the end of last week, as well as the bullish extended outlook.

Feeder Cattle futures closed an average of $2.16 higher (87¢ higher in spot Sep to $2.65 higher toward the back).

Live Cattle futures closed an average of 95¢ higher amid active trade.

Negotiated cash fed cattle trade was mostly inactive on light demand through Monday afternoon with too few transactions to trend according to the Agricultural Marketing Service.

Last week, FOB live prices were $1 higher in the Southern Plains at $180/cwt., $1-$2 higher in Nebraska at $183-$184 and steady to $1 lower in the western Corn Belt at $183-$184.

Dressed delivered prices were steady to $2 lower in Nebraska at $290 and steady to $2 lower in the western. Corn belt at $288-$290.

The weighted average five-area direct fed steer price last week was 22¢ lower at $182.28/cwt. The average dressed steer price was 91¢ lower at $289.48.

Choice boxed beef cutout value was $2.79 lower Monday afternoon at $310.11/cwt. Select was 61¢ lower at $285.54/cwt.

Corn futures firmed Monday, closing 2¢ to 3¢ higher with positioning ahead of Tuesday’s monthly World Agricultural Supply and Demand Estimates.

Soybean futures closed mostly 5¢ to 7¢ higher.

KC HRW Wheat closed mostly 7¢ to 9¢ lower.

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

The Dow Jones Industrial Average closed 87 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 156 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts.

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“Regardless of other fundamentals, the price of replacement female beef animals has moved significantly higher in the last month. These transactions are on the order of 50% higher than this time last year for the same regions,” says Stephen Koontz, agricultural economist at Colorado State University, in a recent issue of In the Cattle Markets from the Livestock Marketing Information Center. “There is not much trade yet and this is a counter-seasonal trade. But there is some evidence of herd building albeit minor.”

In the meantime, Koontz says dwindling cattle numbers and high wholesale beef values make it unlikely for markets to succumb to typical seasonal pressure this fall.

“Boxed beef values are well above $300/cwt and the Choice-Select spread is $25/cwt. These are strong values compared to the current and past year and are also seasonally strong,” Koontz explains. “The crux of the immediate outlook is where will boxed beef values head and how hard will feedlot push? Currently, the feedlot cash return is excellent and has been for the past four months.”

By | September 11th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 11, 2023

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

For the week, FOB live prices were $1 higher in the Southern Plains at $180/cwt. and steady to $1 lower in the western Corn Belt at $183-$184. Prices in Nebraska the previous week were $182.

Dressed delivered prices were steady to $2 lower in Nebraska at $290 and steady in the western Corn Belt at $290.

Choice boxed beef cutout value was $1.24 higher Friday afternoon at $312.90/cwt. Select was 12¢ lower at $286.05/cwt.

Estimated total cattle slaughter for the holiday-shortened week of 559,000 head was 70,000 head fewer than the previous week and 47,000 head fewer year over year. Year-to-date estimated cattle slaughter of 22.4 million head was 986,000 head fewer (-4.2%) than the same period a year earlier. Estimated year-to-date beef production of 18.3 billion pounds was 964.2 million pounds less (-5.0%).

Cattle futures crept higher Friday, supported by the uptick in cash fed cattle prices and softer Corn futures.

Feeder Cattle futures closed an average of 36¢ higher, except for 22¢ lower in spot Sep.

Live Cattle futures closed an average of 42¢ higher, except for an average of 25¢ lower in the front two contracts.

Corn futures closed mostly 1¢ to 2¢ lower.

KC HRW Wheat closed mostly 4¢ to 5¢ lower.

Soybean futures closed 3¢ to 7¢ higher.

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Major U.S. financial indices edged higher Friday, led by recent strength in crude oil.

The Dow Jones Industrial Average closed 75 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 12 points.

West Texas Intermediate Crude Oil futures (CME) closed 57¢ to 64¢ higher through the front six contracts.

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Cash cattle prices are on the cusp of what is typically seasonal weakness, but snug number will likely dilute the impact.

“Cattle prices are trending higher in response to ever tightening cattle and beef supply fundamentals,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University is his marketing comments last week. “The beef cow herd on Jan. 1, 2023 was the lowest since 1962 and is still getting smaller. The projected 2023 U.S. calf crop is 2.5 million head smaller than the recent peak in 2018 and leads to an estimated July 1 feeder cattle supply down 3.6% year over year and the smallest since 2017.   Feedlot inventories have been smaller year over year since September 2022.”

The last week of August, regional calf and feeder cattle prices were 40% higher year over year with regional steer prices (600-700 pounds) ranging from $68.29/cwt. to $83.30 higher year over year, according to USDA’s National Weekly Feeder & Stocker Cattle Summary.

“Cattle prices have advanced quickly; in some ways faster than expected. The highest cattle prices will occur when herd rebuilding begins in earnest,” Peel explains. “The retention of heifers and reduced cow culling will squeeze feeder cattle supplies, cattle slaughter, and beef production to sharply lower levels. This process has not yet started and is expected to proceed rather slowly when it does begin. Herd rebuilding is expected to take three to four years or more… Cattle prices are expected to average higher through at least 2024 and 2025.” 

By | September 10th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 8, 2023

Cattle futures extended gains Thursday.

Feeder Cattle futures closed an average of $1.81 higher.

Live Cattle futures closed an average of 77¢ higher.

Corn futures closed mostly fractionally lower to 1¢ lower.

KC HRW Wheat closed mostly 8¢ to 12¢ lower.

Soybean futures closed 12¢ to 16¢ lower through Aug ‘24 and then 7¢ to 9¢ lower.

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Thursday afternoon with too few transactions to trend, according to the Agricultural Marketing Service. There were a few dressed delivered prices in Nebraska at $290/cwt.

Last week, FOB live prices were $179/cwt. in the Texas Panhandle, $178-$179 in Kansas, $182 in Nebraska and $183-$185 in the western Corn Belt.

Dressed delivered prices were $290-$292 in Nebraska and $290 in the western Corn Belt.

Choice boxed beef cutout value was $1.91 lower Thursday afternoon at $311.56/cwt. Select was $1.44 lower at $286.17/cwt.

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Major U.S. financial indices closed mixed Thursday, following the previous session’s sharp losses tied to investor concerns about the potential for rising interest rates.

The Dow Jones Industrial Average closed 57 points higher. The S&P 500 closed 14 points lower. The NASDAQ was down 123 points.

West Texas Intermediate Crude Oil futures (CME) closed 48¢ to 67¢ lower through the front six contracts.

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U.S. beef exports softened in July, posting the lowest volume since January, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). However, export value per head of fed slaughter still exceeded $400.

July beef exports totaled 103,167 mt, down 18% from a year ago and the lowest in six months. Export value was $810.4 million, down 19% and the lowest since February.

For January through July, beef exports trailed last year’s record pace by 11% in volume (772,343 mt) and 19% in value ($5.81 billion).

“It’s definitely a challenging environment on the beef side, due in part to limited supplies but also persistent headwinds in our key Asian markets,” according to Dan Halstrom, USMEF president and CEO. “Though it’s taking longer than anticipated, we still expect a broader foodservice rebound in Asia. And some bright spots for U.S. beef include sustained demand in Taiwan, especially for alternative beef cuts, and the continued momentum in Mexico. It’s also encouraging to see per-head export value maintaining a high level. This is an important metric for gauging the returns delivered by the international markets, even when our production is trending lower.”

By | September 8th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 6, 2023

Cattle futures basically tread water on Tuesday.

Feeder Cattle futures closed mixed, from an average of 33¢ lower in the front three contracts to an average of 19¢ higher.

Live Cattle futures closed an average of 19¢ higher, except for an average of 11¢ lower in the front two contracts.

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

Last week, FOB live prices were $179/cwt. in the Texas Panhandle, $178-$179 in Kansas, $182 in Nebraska and $183-$185 in the western Corn Belt.

Dressed delivered prices were $290-$292 in Nebraska and $290 in the western Corn Belt.

Choice boxed beef cutout value was 99¢ higher Tuesday afternoon at $315.48/cwt. Select was 75¢ lower at $289.54/cwt.

Corn futures closed 4¢ to 6¢ higher through new-crop contracts and then mostly 1¢ to 2¢ higher, supported by expected reduction in crop ratings.

KC HRW Wheat closed mostly fractionally lower to 2¢ lower.

Soybean futures closed fractionally lower to 7¢ lower through Jly ‘24 and then mostly 5¢ higher.

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Major U.S. financial indices closed lower Tuesday, pressured in part by rising oil prices fueled by Russia and Saudi Arabia extending voluntary production cuts.

The Dow Jones Industrial Average closed 195 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 10 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.14 to $1.31 higher through the front six contracts.

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Agricultural producer sentiment dropped sharply in August, as measured by the monthly Purdue University/CME Group Ag Economy Barometer. The index declined 8 points month to month in August to 115, as the Current Conditions Index fell 13 points to 108. The Future Expectations Index was down 5 points to 119.

“Rising interest rates and concerns about high input prices continue to put downward pressure on producer sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “This month over half (60%) of the producers we surveyed said they expect interest rates to rise in the upcoming year.”

When asked about their top concerns for their farming operations in the next 12 months, producers continue to point to higher input prices (34% of respondents) and rising interest rates (24% of respondents). Even though crop prices weakened significantly this summer, only 20% of respondents chose declining commodity prices as one of their top concerns.

This month’s Ag Economy Barometer survey was conducted from August 14-18, 2023.

By | September 5th, 2023|Daily Market Highlights|

Cattle Current Daily—Sept 4 and 5, 2023

Cattle futures drifted lower Friday on pre-weekend positioning, sluggish trade and steady to softer cash fed cattle prices.

Feeder Cattle futures closed an average of $1.26 lower, except for $3.30 higher in newly minted away Aug.

Live Cattle futures closed an average of 41¢ lower, except for $1.00 higher in new away Feb.

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

Based on the latest established trade for the week, FOB live prices were steady to $1 higher in the Texas Panhandle at $179/cwt., steady to $1 lower in Kansas at $178-$179, $3 lower in Nebraska at $182 and $1-$2 lower in the western Corn Belt at $183-$185.

The five-area direct weighted average fed steer price through Thursday of last week was $182.69/cwt. on a live basis, which was $2.64 less than the previous week. The weighted average steer price in the beef was $2.03 lower at $290.62.

Choice boxed beef cutout value was 70¢ higher Friday afternoon at $314.49/cwt. Select was $1.04 higher at $290.29/cwt.

Estimated total cattle slaughter last week was 629,000 head, which was 3,000 head more than the previous week but 13,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 21.8 million head was 940,000 head fewer (-4.1%) than the same time last year. Estimated year-to-date beef production of 17.8 billion pounds was 925.6 million pounds less (-4.9%) year over year.

Turning to row crops, Grain and Soybean futures closed narrowly mixed Friday with some defensive positioning ahead of the long weekend.

Corn futures closed mostly 1¢ to 2¢ higher.

KC HRW Wheat closed mostly 5¢ lower.

Soybean futures closed mixed but mostly unchanged to 2¢ higher.

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Major U.S. financial indices closed mixed Friday as investors closed the books on August.

The nation’s unemployment rate increased 0.3% in August to 3.8%, according to the U.S. Bureau of Labor Statistics, in the monthly Employment Situation Summary. That was higher than expected ahead of the report.

Total nonfarm payroll employment increased by 187,000 in August.

Average hourly earnings in August for all employees on private non-farm payrolls rose by 8¢ (0.2%) to $33.82. Over the past 12 months, average hourly earnings increased by 4.3%.

The Dow Jones Industrial Average closed 115 points higher. The S&P 500 closed 8 points higher. The NASDAQ was down 3 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.37 to $1.92 higher through the front six contracts with follow through support from tighter supply expectations.

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USDA’s Economic Research Service (ERS) forecasts cash receipts for farm commodities this year to be $41.4 billion less (-7.5%) than last year at $513.6 billion. This includes forecasted declines of $13.9 billion (-23.6%) in milk receipts and $11.6 billion (-12.6%) in corn receipts.

“In addition, production expenses are expected to increase by $14.8 billion (3.3%) to $458.0 billion in 2023,” ERS analysts explain. “Finally, direct Government payments to farmers are projected to fall by $3.5 billion (-21.6%) from 2022 to $12.6 billion in 2023, because of lower supplemental and ad hoc disaster assistance.

ERS forecasts inflation-adjusted U.S. net cash farm income (NCFI) — calculated as gross cash income minus cash expenses — to decrease by $60.5 billion (-28.9%) from 2022 to $148.6 billion in 2023.

More broadly, U.S. net farm income (NFI) — calculated as gross cash income minus cash expenses — is forecast to fall by $48.0 billion (-25.4%) from 2022 to $141.3 billion in 2023.

“NFI is a broader measure of farm sector profitability that incorporates noncash items including changes in inventories, economic depreciation, and gross imputed rental income,” ERS analysts explain. They note the projected decreases in 2023 come after both NCFI and NFI reached all-time highs in 2022.

By | September 3rd, 2023|Daily Market Highlights|

Cattle Current Daily—Sept. 1, 2023

Live Cattle futures closed an average of 76¢ higher.

Feeder Cattle futures closed an average of 88¢ higher, except for lower in expiring Aug.

Live Cattle futures closed an average of 76¢ higher.

Negotiated cash fed cattle prices on Thursday were mainly steady to lower than last week.

Trade was slow on light to moderate demand in the Texas Panhandle with FOB live prices steady to $1 higher at $179/cwt., according to the Agricultural Marketing Service

In Kansas, trade was slow to moderate on moderate demand with FOB live prices steady to $1 lower at $178-$179.

FOB live prices in Nebraska were $2-$3 lower at $182 on moderate trade and demand. There were a few live delivered trades at $186.50. Dressed delivered prices were $2-$3 lower at $290-$292.

In the western Corn Belt, FOB live prices were $1 lower at $184-$185 on slow to moderate trade and moderate demand. There were a few dressed delivered trades at mostly $290 but too few to trend. Prices in the beef last week were $292 in a light test.

Choice boxed beef cutout value was $1.32 lower Thursday afternoon at $313.79/cwt. Select was 28¢ lower at $289.25/cwt.

Net U.S. beef export sales (2023) of 18,200 metric tons (MT) for the week ending Aug. 24 were 59% more than the previous week and 35% more than the prior four-week average. Increases were primarily for China, Japan, South Korea, Taiwan and Mexico.

Grain and Soybean futures closed lower Thursday on likely continued month-end position squaring.

Corn futures closed mostly 2¢ lower.

KC HRW Wheat closed mostly 3¢ to 8¢ lower.

Soybean futures closed mostly 16¢ to 18¢ lower.

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Major U.S. financial indices closed mostly lower Thursday as investors closed the books on August.

The Dow Jones Industrial Average closed 168 points lower. The S&P 500 closed 7 points lower. The NASDAQ was up 15 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.35 to $2.00 higher through the front six contracts, fueled by chatter that Russia will announce more reduction in crude oil exports.

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USDA decreased expected U.S. beef exports for this year and next in the latest Outlook for U.S. Agricultural Trade from the Economic Research Service and Foreign Agricultural Service.

U.S. beef exports for Fiscal year (FY) 2023 were forecast $200 million lower than the previous report at $9.1 billion as a strong U.S. dollar and high prices curb foreign demand. FY 2024 beef exports were forecast $600 million less at $8.5 billion on lower volumes driven by tighter U.S. supplies.

Total U.S. agricultural exports in fiscal year FY 2024 were projected at $172.0 billion, down $5.5 billion from the revised forecast for FY 2023. Less exports of soybeans, soybean meal, and dairy products were the main driver of the reduction.

For economic perspective, world real GDP was projected to grow by 3.0% in both 2023 and 2024, which was 0.2% more than the previous forecast, as global economies and consumer spending have proven resilient in the face of inflationary pressures.

Similarly, projected growth for the United States’ real GDP in 2023 was raised to 1.8% from the previous estimate of 1.6%. Growth in 2024 is expected to moderate to around 1.0%

“The global economic outlook for calendar years 2023 and 2024 remains positive despite several economic challenges,” according to USDA analysts. “These include continued inflation concerns in the United States and elsewhere, uncertainty regarding monetary policies, macroeconomic issues in China, and Black Sea grain trade disruptions due to the Ukraine war.”

By | August 31st, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 1, 2023

Cattle futures closed lower Wednesday with traders awaiting the week’s cash trade.

Feeder Cattle futures closed an average of $1.25 lower

Live Cattle futures closed an average of $1.41 lower, from $2.20 lower in waning spot Aug to 80¢ lower at the back of the board.

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

FOB live prices last week were $178-$179/cwt. in the Texas Panhandle, $179 in Kansas, $185 in Nebraska and $182-$187 in the western Corn Belt. Dressed delivered prices were $292 in Nebraska and $292-$295 in the western Corn Belt.

Choice boxed beef cutout value was 75¢ higher Wednesday afternoon at $315.11/cwt. Select was 15¢ lower at $289.53/cwt.

Grain and Soybean futures closed lower Wednesday with likely month-end position squaring.

Corn futures closed mostly 4¢ to 7¢ lower through Jly ‘24 and then 2¢ higher.

KC HRW Wheat closed mostly fractionally lower to 1¢ lower.

Soybean futures closed mostly 3¢ to 5¢ lower.

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Major U.S. financial indices closed higher again Wednesday despite a more dour employment outlook.

Private sector employment increased by 177,000 jobs in August, according to the August ADP® National Employment Report produced by the ADP Research Institute® in collaboration with the Stanford Digital Economy Lab (“Stanford Lab”). Job growth was less than expected.

“After two years of exceptional gains tied to the recovery, we’re moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede,” says Nela Richardson, ADP chief economist.

The Dow Jones Industrial Average closed 37 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 75 points.

West Texas Intermediate Crude Oil futures (CME) closed 26¢ to 47¢ higher through the front six contracts.

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As with any successful program, you can find detractors of the national Beef Checkoff, but it’s hard to oppose what the program accomplishes each year and over time.

Here are a few recent examples.

*With consumers making more shopping decisions online, e-commerce efforts are essential to driving beef sales. National e-commerce campaigns during the holidays and summer grilling months helped put beef front and center for consumers shopping online. These e-commerce campaigns delivered impressive results, generating more than $22 million in incremental beef sales and reaching nearly 16 million households.

*Research continues to serve as the foundation for all Beef Checkoff-funded initiatives. Nutrition research provides proof that beef has a role in a healthy, sustainable diet. Current projects focus on human clinical trials investigating healthy diets, across the lifespan, where beef is the primary source of dietary protein, and focuses on the impact of cardiometabolic health, strength, and performance, and the benefits of beef in the diets of children and adolescents.

*The National Beef Quality Audit (NBQA), conducted approximately every five years since 1991, is foundational research that provides an understanding of what quality means to the various industry sectors, and the value of those quality attributes. This research helps the industry make modifications necessary to increase the value of its products. The findings from the 2022 NBQA serve to improve quality, minimize economic loss, and aid in advancements in producer education for the U.S. beef industry.

Results from the 2022 NBQA indicate that the beef cattle industry is producing a high-quality product that consumers want more efficiently and the industry’s primary focus across the supply chain remains food safety. In addition, there was an increase in the frequency of Prime and Choice quality grades, with 7.5% of carcasses grading Prime, the highest since audits began. Market sectors also reported that their companies strive to increase their sustainability, and work with the entire beef supply chain to do so.

*Cow-calf producers, stockers and feedyards implement Beef Quality Assurance (BQA) practices on their operations to produce the highest quality cattle and provide consumers with the best possible eating experience. BQA principles don’t end at the farm gate, and cattle haulers can also become BQA Transportation (BQAT) certified through recently updated modules. Since BQAT began in 2017, more than 32,000 certifications have been completed.

By | August 30th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 30, 2023

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

FOB live prices last week were $178-$179/cwt. in the Texas Panhandle, $179 in Kansas, $185 in Nebraska and $182-$187 in the western Corn Belt. Dressed delivered prices were $292 in Nebraska and $292-$295 in the western Corn Belt.

Choice boxed beef cutout value was $2.68 lower Tuesday afternoon at $314.36/cwt. Select was $2.41 lower at $289.68/cwt.

Cattle futures closed narrowly mixed Tuesday with an apparent consolidation breather.

Feeder Cattle futures closed narrowly mixed. from unchanged to an average of 26¢ lower in two contracts to an average of 17¢ higher.

Live Cattle futures closed narrowly mixed, from an average of 11¢ lower in three contracts to an average of 15¢ higher.

Nearby Corn and Soybean futures gave up the ghost late in the session, presumably fueled in part by more positive weekly crop ratings than expected.

Corn futures closed 9¢ lower through Jly ‘24 and then mostly 5¢ lower.

KC HRW Wheat closed 14¢ to 23¢ lower through Jly ‘24 and then mostly 7¢ to 10¢ lower.

Soybean futures closed 8¢ to 13¢ lower through May ‘24 and then mostly fractionally higher to 2¢ higher.

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Renewed optimism for tech stocks fueled major U.S. financial indices higher again on Tuesday.

The Dow Jones Industrial Average closed 292 points higher. The S&P 500 closed 64 points higher. The NASDAQ was up 238 points.

West Texas Intermediate Crude Oil futures (CME) closed 83¢ to $1.06 higher through the front six contracts.

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Between seasonal demand and reduced production, beef packers successfully pushed wholesale beef prices higher the past nine days to levels last seen soon after Independence Day. The price road will likely get tougher from here.

“The last summer grilling holiday of the year is just around the corner and the increasing wholesale beef price the past few weeks is likely due to spot purchases to fill final meat counter needs for the Labor Day holiday weekend,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Griffith explains some of the recent purchases also may be for restocking meat counters following the holiday. After that, he says there is little to support beef prices until consumer holiday demand at the end of the year.

That’s not saying wholesale beef prices are expected to plunge lower or that they won’t stage a rally along the way, but Griffith says the next significant support will likely come heading into December.

“Turkey will dominate the Thanksgiving holiday, and to a lesser degree ham, but ham and beef tend to find more support during Christmas,” Griffith explains. “Thus, beef supply in the last quarter of the year will be important for December prices.”

By | August 29th, 2023|Daily Market Highlights|

Cattle Current Daily—08-29-23

Cattle futures rallied higher Monday, apparently buoyed by increasing open interest and trader focus on fundamentals.

Feeder Cattle futures closed an average of $2.60 higher.

Live Cattle futures closed an average of 76¢ higher (2¢ to $1.12 higher).

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

Last week, FOB live prices were steady in the Southern Plains at $178-$179/cwt., $1-$3 lower in Nebraska at $184-$185 and steady to $3 lower in the western Corn Belt at $185-$186. Dressed delivered prices were steady to $2 lower in Nebraska at $292-$295 and from $3 lower to $2 higher in the western Corn Belt at $292 on a light test.

The five-area direct weighted average steer price last week was $2.29 lower on a live basis at $182.75/cwt. The five-area average steer price in the beef was $1.01 lower at $292.75.

Choice boxed beef cutout value was 86¢ lower Monday afternoon at $317.04/cwt. Select was 58¢ lower at $292.09/cwt.

Turning to the grain complex, Corn futures closed mostly 4¢ to 8¢ higher. KC HRW Wheat closed 10¢ to 16¢ lower through May ‘24 and then 3¢ to 6¢ lower. Soybean futures closed 11¢ to 18¢ higher through Jly ‘24 and then mostly 1¢ to 4¢ higher.

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Major U.S. financial indices extended gains Monday, led by tech stocks.

The Dow Jones Industrial Average closed 213 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 114 points.

West Texas Intermediate Crude Oil futures (CME) closed 1¢ to 27¢ higher through the front six contracts.

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Based on August auction data, prices for replacement females are significantly higher year over year, according to the Livestock marketing Information Center (LMIC).

“Bred cows, 1-3 months along that are classified Medium and Large 1-2, sold on a per head basis, have shown significant uptick across many of the USDA AMS reported August auction data,” say LMIC analysts, in the latest Livestock Monitor. “These cows are generally timing spring-born calves in 2024. Generally speaking, replacement costs have moved substantially higher in the South. The Southeast in particular, has seen upward movement to the tune of 40-60% from a year ago. Kentucky, on the other hand, is one of the few states to see replacement values rise only 21% from last August.”

While data was unavailable for many northern-tier states, LMIC analysts note August replacement prices were 24% year over year at Ozarks Regional Stockyards in West Plains MO and 53% higher at Joplin Regional Stockyards in Missouri. Prices at Oklahoma National Stockyards were 57% higher.

“Bred cows further along in the 4-6 months bred category, which will be calving this year, have seen similar increases,” according to LMIC analysts. “Clovis, NM saw prices jump 29% in August from last year; Colorado was up 21%; West Plains, MO was up 36%; Mississippi was up 11%; and Kentucky, was up 28%.”

“Auction data moved exponentially higher back in 2014 and 2015, however, that expansion effort was propelled by record high profits,” LMIC analysts explain. “Producers are already seeing better calf prices in some areas of the country than they did back then, but costs have increased substantially as well. It is a different environment in which this cattle cycle will turn. Profits are likely to not be as good, and interest rates are substantially higher. While these are not expected to limit expansion, it may be a headwind for some producers.”

By | August 28th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 28, 2023

Steady Corn futures prices, firmer cash fed cattle prices and the recent uptick in wholesale beef prices helped Cattle futures rise on Friday.

Feeder Cattle futures closed an average of 95¢ higher (45¢ to $1.17 higher).

Live Cattle futures closed an average of 69¢ higher.

Negotiated cash fed cattle trade was moderate on moderate demand in the Texas Panhandle through Friday afternoon, according to the Agricultural Marketing Service. FOB live trades were steady at $178-$179/cwt.

Trade in Kansas was slow on light to moderate demand with FOB live prices steady at $179.

Trade in Nebraska was limited on light demand with too few transactions to trend. For the week, live FOB prices were steady to $3 lower at $185. Dressed delivered prices were steady to $2 lower at $292-$295.

In the western Corn Belt, trade was slow on light demand with too few transactions to trend. For the week, FOB live prices were $1-$3 lower at $185. Dressed delivered prices the previous week were $290-$295.

Choice boxed beef cutout value was 27¢ higher Friday afternoon at $317.90/cwt. Select was 76¢ higher at $292.67/cwt. Week to week on Friday, Choice was $1.79 higher and Select was $4.31 higher.

Estimated total cattle slaughter last week of 626,000 head was 10,000 head more than the previous week but 52,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 21.2 million head was 928,000 head fewer (-4.2%) than the same period last year. Estimated year-to-date beef production of 17.3 billion pounds was 917.8 million pounds less (-5.0%) than the same time last year.

Turning to the grain complex, Corn futures closed mostly fractionally lower. KC HRW Wheat closed 1¢ to 2¢ higher. Soybean futures closed 10¢ to 16¢ higher through Aug ‘24 and then mostly 5¢ to 8¢ higher.

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Major U.S. financial indices rebounded Friday with a more positive economic growth outlook from the Fed.

“So far this year, GDP (gross domestic product) growth has come in above expectations and above its longer-run trend, and recent readings on consumer spending have been especially robust,” according to Federal Reserve chair, Jerome Powell, in his presentation to an economics policy symposium on Friday. “In addition, after decelerating sharply over the past 18 months, the housing sector is showing signs of picking back up.”

The Dow Jones Industrial Average closed 247 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 126 points.

West Texas Intermediate Crude Oil futures (CME) closed 78¢ to 83¢ higher through the front six contracts.

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Reduced beef cow numbers in tandem with remarkably steadfast consumer beef demand may compel dairy producers to leverage beef breed genetics in their reproduction programs and capture an additional revenue stream in the process, according to a new report from CoBank’s Knowledge Exchange.

“We expect the adoption of beef genetics in dairy breeding programs will accelerate as producers capitalize on the opportunity for improved margins, particularly given the reduction in beef calf availability,” says Brian Earnest, lead animal protein economist for CoBank. “And while the impact on the overall beef supply will be relatively small, an increase in beef and dairy crossbred calves entering the beef supply chain is something cattle feeders and packers will want to keep an eye on.”

The practice of leveraging beef genetics in dairy reproductive programs, commonly referred to as “beef on dairy” within the industry, has steadily increased in recent years. On average, day-old beef and dairy crossbred calves entering the beef supply chain sell for $100-$300 more than their 100% dairy-bred counterparts.

Increased adoption of beef on dairy crossbreeding will primarily benefit dairy producers, but other sectors of the beef supply chain stand to benefit as well, according to the CoBank report. Animal genetics companies that provide beef semen for artificial insemination of dairy cows can expect continued sales growth.

According to the National Association of Animal Breeders’ Semen Sales Report, U.S. beef semen sales from 2017 to 2022 increased at a rate nearly equal to the rate that U.S. dairy semen sales decreased. The data suggests rising beef semen sales are largely attributable to increased purchases by dairy operators.

By | August 26th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 25, 2023

Negotiated cash fed cattle trade was slow to moderate on light to moderate demand in Nebraska through Thursday afternoon, according to the Agricultural Marketing Service. Dressed delivered prices were $2.00 to $2.50 lower at $292-$292.50/cwt. There were a few FOB live trades at $184-$186 and a few delivered live trades at $189.50, but too few to trend. FOB live prices there last week were $185-$188.

Trade was limited on light to moderate demand in the western Corn Belt where FOB live prices were $1-$3 lower $185. There were a few dressed delivered trades at $292, but too few to trend; $290-$295 last week.

In the Southern Plains, trade ranged from inactive on very light demand to a standstill. FOB live prices last week were $178-$179 in the Texas Panhandle and $179 in Kansas.

Choice boxed beef cutout value was 58¢ higher Thursday afternoon at $317.63/cwt. Select was 32¢ higher at $291.91/cwt.

Cattle futures closed higher Thursday, helped along by increasing open interest.

Feeder Cattle futures closed an average of $1.97 higher ($1.47 to $2.37 higher).

Live Cattle futures closed an average of $1.47 higher ($1.22 to $2.05 higher).

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

KC HRW Wheat closed mostly fractionally lower to 5¢ to lower.

Soybean futures closed mostly 8¢ to 12¢ higher.

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Major U.S. financial indices closed sharply lower Thursday amid renewed worries about high Treasury yield rates.

The Dow Jones Industrial Average closed 373 points lower. The S&P 500 closed 59 points lower. The NASDAQ was down 257 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts.

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Cow-calf production became more specialized from 1996 to 2018, according to a recent report from USDA’s Economic Research Service (ERS), entitled Structure, Management Practices and Production Costs of U.S. Beef Cow-calf Farms.

Increased specialization or decreased diversification was revealed across several measures.

* 78% of beef cattle operations produced only cattle in 2018 versus 66% in 2008 and 43% in 1996.

* 78% of beef cow operations producing other crops produced hay in 2018 versus 63% in 2008.

* 63% of cow-calf operations were cow-calf only in 2018 versus 47% in 2008; 29% were cow-calf and stocker in 2018 versus 44% in 2008.

Although more specialized, technology adoption remains low and static across cow-calf operations as a whole.

* 8% of cow-calf producers utilized artificial insemination in 2018, the same as in 2008. Likewise, 2% of producers utilized embryo transplant and/or sexed semen both years.

* 50% of cow-calf producers kept individual cow-calf production records in 2018, which was 4% more than in 2008. 28% used an on-farm computer for cow-calf information in 2018, versus 20% in 2008.

By | August 24th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 24, 2023

Although sideways, Cattle futures wobbled Wednesday as traders added risk premium back to Corn futures, which closed 9¢ to 11¢ higher through Jly ‘24 and then mostly 3¢ to 5¢ higher.

KC HRW Wheat closed 12¢ to 17¢ higher.

Soybean futures closed 9¢ to 15¢ higher.

Feeder Cattle futures closed an average of 28¢ lower, except for 18¢ higher in May ’24.

Live Cattle futures closed an average of 35¢ higher, except for an average of 16¢ lower in two contracts.

Through mid session today, Cattle futures are stronger.

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

Last week, FOB live prices were $178-$179/cwt. in the Texas Panhandle, $179 in Kansas, $185-$188 in Nebraska and $186-$188 in the western Corn Belt. Dressed delivered prices were $294-$295 in Nebraska and $290-$295 in the western Corn Belt.

Choice boxed beef cutout value was unchanged Wednesday afternoon at $317.05/cwt. Select was $2.08 higher at $291.59/cwt.

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

The Dow Jones Industrial Average closed 184 points higher. The S&P 500 closed 48 points higher. The NASDAQ was up 215 points.

West Texas Intermediate Crude Oil futures (CME) closed 70¢ to 76¢ lower through the front six contracts.

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Frozen beef supplies last month continued significantly lower year over year, according to the most recent USDA Cold Storage report. Total pounds of beef in freezers July 31 were 2% more than the previous month but were 18% less than the same time last year.

Frozen pork supplies were down 3% from the previous month and down 10% from last year.

Total red meat supplies in freezers were down slightly from the previous month and down 14% from last year.

Total frozen poultry supplies were 1% less than the previous month but 4% more year over year.

By | August 24th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 23, 2023

Cattle futures gave back most of what they gained in the previous session, amid sluggish trade and a lack of weekly cash direction.

Feeder Cattle futures closed an average of $1.16 lower (88¢ to $1.43).

Live Cattle futures closed an average of 93¢ lower, (53¢ to $1.25 lower).

Corn futures closed 1¢ to 5¢ lower, with follow-through pressure from last week’s positive crop progress and ratings.

KC HRW Wheat closed unchanged to 1¢ lower.

Soybean futures closed 12¢ to 18¢ lower.

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

Last week, FOB live prices were $178-$179/cwt. in the Texas Panhandle, $179 in Kansas. $185-$188 in Nebraska and $186-$188 in the western Corn Belt. Dressed delivered prices were $294-$295 in Nebraska and $290-$295 in the western Corn Belt.

However, wholesale beef prices were up. Choice boxed beef cutout value was $1.49 higher Tuesday afternoon at $317.05/cwt. Select was $2.18 higher at $289.51/cwt.

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Major U.S. financial indices closed mixed Tuesday, pressured by the recent peak in Treasury-note yields, as well as bank stocks.

The Dow Jones Industrial Average closed 174 points lower. The S&P 500 closed 12 points lower. The NASDAQ was up 8 points.

West Texas Intermediate Crude Oil futures (CME) closed 29¢ to 48¢ lower through the front six contracts.

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Despite slacker Feeder Cattle futures prices recently, Andrew P. Griffith, agricultural economist at the University of Tennessee points out they continue to trade in the same $10 range since the end of June.

“The question now is if the market will trade lower than the established range or does it have the ability to make a run to even higher prices?” Griffith says, in his weekly market comments.  “There is no way of knowing the answer, but the market sure seems to be finding little to no support for higher prices at this time. This would mean it is more likely for feeder cattle to stay in its current trading range or to soften.”

According to Griffith, as strong as market fundamentals are, it’s possible prices have outpaced the support.

 “A good example of this was in 2014 and 2015 when prices ascended rapidly and then descended rapidly through 2016 and 2017,” Griffith says. “This commentary is not saying cattle prices should be higher, lower, or exactly where they are, but it is saying the market is expected to be efficient. This simply means the market will adjust such that price is in line with supply and demand.”

 

 

By | August 22nd, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 22, 2023

Cattle futures closed higher Monday, supported by the bullish Cattle on Feed report and lower Corn futures.

Feeder Cattle futures closed an average of $1.84 higher.

Live Cattle futures closed an average of 74¢ higher, (45¢ to $1.12 higher).

There was no afternoon report from AMS for negotiated cash fed cattle trade.

Based on the latest available report, FOB live prices last week were $1-$3 lower in the Southern Plains at $177-$179, 50¢ to $3 lower in Nebraska at $185-$187.50 and $2 lower in the western Corn Belt at mainly $186. Dressed delivered prices were $1 lower to $2 higher at $294-$297.

The five-area direct weighted average fed steer price last week was $185.04/cwt. on a live basis, which was 84¢ less than the previous week. The five-area direct steer price in the beef was $1.84 lower at $293.76.

Choice boxed beef cutout value was 55¢ lower Monday afternoon at $315.56/cwt. Select was $1.03 lower at $287.33/cwt.

Positive crop progress and conditions weighed on Corn futures Monday.

Corn futures closed 9¢ to 10¢ lower through Jly ‘24 and then mostly 3¢ lower.

Wheat futures were down 7¢ to 12¢ on harvest pressure.

Soybean futures closed 4¢ to 8¢ higher through Aug ‘24 and then mostly 1¢ higher, supported the hot, dry forecast and export news.

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Major U.S. financial indices closed mixed Monday, supported by tech but pressured by increased Treasury-note yields.

The Dow Jones Industrial Average closed 36 points lower. The S&P 500 closed 30 points higher. The NASDAQ was up 206 points.

West Texas Intermediate Crude Oil futures (CME) closed 28¢ to 54¢ lower through the front six contracts.

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Beef imports to the U.S. are higher year over year so far, as expected, with declining U.S. production.

Imports in the first half of 2023 totaled nearly 1.9 billion pounds, about 1% more than the same time last year, according to USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook. Cumulative imports from Australia increased 26% from the same period last year. ERS analysts add that Australia’s exports to the world were up 20% year over year as higher production provided more exportable supplies.

Snubbed to a different post, U.S. imports during the first half of this year were 13.3% of total domestic beef disappearance (production + net trade + net stocks), which was slightly higher than the same time last year. Imports for the full year are expected to be 12.8% of total disappearance, compared to an average of 11.7% for 2018-22.

“That percentage is expected to increase to about 13.8% in 2024 as domestic production declines and imports increase,” say ERS analysts.

On the other side of the fence, U.S. beef export value for the first half of this year was the second highest on record, although 19% less year over year.

By | August 21st, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 21, 2023

Cattle futures finally found some traction on Friday, perhaps fueled by position squaring ahead of the monthly Cattle on Feed report (see below), which turned out to be bullish.

Feeder Cattle futures closed an average of $1.21 higher.

Live Cattle futures closed an average of 53¢ higher, except for unchanged in the back contract.

Packers succeeded in holding cash fed cattle prices steady to mainly lower last week, while also ratcheting wholesale beef prices higher as they restrict production.

Negotiated cash fed cattle trade was slow on light to demand through Friday afternoon, according to the Agricultural Marketing Service. There were some FOB live trades in the Texas Panhandle at $178/cwt. but too few to trend.

For the week, based on the latest established trends, FOB live prices were $1-$3 lower in the Southern Plains at $177-$179, 50¢ to $3 lower in Nebraska at $185-$187.50 and $2 lower in the western Corn Belt at mainly $186. Last week, dressed delivered prices were $1 lower to $2 higher at $294-$297.

Choice boxed beef cutout value was $1.97 higher Friday afternoon at $316.11/cwt. Select was $2.10 higher at $288.36/cwt.

Total estimated cattle slaughter last week of 616,000 head was 13,000 head more than the previous week but 48,000 head fewer than the same week last year. Year-to-date total estimated cattle slaughter of 20.6 million head was 876,000 head fewer (-4.1%) the the same time a year earlier. Year-to-date estimated beef production of 16.8 billion pounds was 876.8 million pounds less (-5.0%).

Hotter, drier weather helped lift grain futures again on Friday.

Corn futures closed mostly 2¢ to 6¢ higher.

KC HRW Wheat closed 14¢ to 20¢ higher through Sep ‘24 and then mostly 10¢ higher.

Soybean futures closed 16¢ to 26¢ higher through Aug ‘24 and then mostly 7¢ to 12¢ higher.

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Major U.S. financial indices closed narrowly mixed Friday, pressured by increased Treasury-note yields and some lackluster earnings reports.

The Dow Jones Industrial Average closed 25 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 26 points.

West Texas Intermediate Crude Oil futures (CME) closed 60¢ to 86¢ higher through the front six contracts.

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If anything, markets will likely view the monthly Cattle on Feed report for feedlots with 1,000 head or more capacity as slightly bullish, based on placement numbers.

Placements in July were 146,000 head fewer (-8.3%) than the previous year at 1.62 million head. That was 2.8% less than pre-report expectations.

In terms of placement weights, 38% went on feed weighing 699 pounds or less, 46% weighing 700-899 pounds and 16% weighing 900 pounds or more.

Marketings in July of 1.73 million head were 97,000 head fewer (-5.3%) than the previous year, which was in line with expectations.

Cattle on feed Aug. 1 of 11.03 million head were 259,000 head fewer (-2.3%) than the previous year, which was slightly less than expectations ahead of the report.

By | August 19th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 18, 2023

Cattle futures continued lower Thursday with follow-through pressure from stronger Corn futures, steady to lower cash fed cattle prices, declining open interest and perhaps some defensiveness ahead of Friday’s monthly Cattle on Feed report.

Feeder Cattle futures closed an average of $1.51 lower.

Live Cattle futures closed an average of 72¢ lower.

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

So far this week, FOB live prices are $1 lower in the Southern Plains at $179/cwt., steady to mostly $2 lower in Nebraska at $185-$188 and steady to mostly $1 lower in the western Corn Belt at mainly $187.

Last week, dressed delivered prices were $295.

Wholesale beef prices continued to trend higher. Choice boxed beef cutout value was $5.15 higher Thursday afternoon at $314.14/cwt. Select was $1.49 higher at $286.26/cwt.

Hotter, drier weather helped Corn futures firm further Thursday; fractionally higher to 4¢ higher.

KC HRW Wheat closed mostly 4¢ to 11¢ lower through May ‘25 and then fractionally higher.

Soybean futures closed 2¢ to 9¢ higher through May ‘24 and then 10¢ to 15¢ higher.

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Major U.S. financial indices closed lower Thursday, supported by rising Treasury-note yields, in response to the Fed’s continued wariness about upside inflation risk.

The Dow Jones Industrial Average closed 290 points lower. The S&P 500 closed 33 points lower. The NASDAQ was down 157 points.

West Texas Intermediate Crude Oil futures (CME) closed 58¢ to $1.01 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) raised the expected feeder steer price for the remainder of this year and next, in the August Livestock, Dairy and Poultry Outlook. That basis 750-800-pound steers selling at Oklahoma City.

Based on recent price strength, ERS increased the forecast price by $9 to $250/cwt. in the third quarter and $255 in the fourth quarter. The 2023 annual average price increased $4.50 to $224.99. Prices for next year were forecast $3 higher in the first and second quarter at $248 and $247, respectively. The 2024 annual average price was also estimated $3 higher at $253.25.

As noted recently in Cattle Current, ERS increased the projected third-quarter five-area direct fed steer price by $6 compared to the previous month to $184/cwt., and the fourth-quarter price by $7 to $190 for an annual average of $178.50, which was $3.20 more than the previous estimate. Projected fed steer prices increased $2 for next year at $188 in the first quarter, $186 in the second quarter and $186 for the 2024 average.

“Second-half 2023 production is forecast to decline 180 million pounds from last month on a slower pace of fed cattle marketings, which is only partially offset by higher expected cow slaughter. This resulted in a temporal shift of marketings from late 2023 to 2024,” ERS analysts explain. “Higher projected placements in late 2023 and early 2024 raises anticipated marketings next year. Projected 2024 production is increased 465 million pounds based on the shift in marketings from 2023 to 2024 and an increase in placements.”

By | August 17th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 17, 2023

Cattle futures continued to edge lower Wednesday, pressured by an uptick in Corn futures and steady to lower cash fed cattle prices.

Feeder Cattle futures closed an average of 32¢ lower.

Live Cattle futures closed an average of 35¢ lower, except for an average of 8¢ higher in two contracts.

Grain futures firmed overnight and through yesterday’s session as traders added some risk premium based on recent Russian attacks in Ukraine

Corn futures closed mostly 3¢ to 6¢ higher.

KC HRW Wheat closed mostly 4¢ to 5¢ higher.

Soybean futures closed mostly 11¢ to 18¢ higher.

Negotiated cash fed cattle trade was mainly limited on light to moderate demand through Wednesday afternoon, according to the Agricultural Marketing Service.

So far this week, FOB live prices are $1 lower in the Southern Plains at $179/cwt. and steady in the western Corn Belt at $188.

Last week, FOB live prices in Nebraska were $188. Dressed prices were $295.

Choice boxed beef cutout value was $1.73 higher Wednesday afternoon at $308.99/cwt. Select was $1.74 higher at $284.77/cwt.

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Major U.S. financial indices closed lower again Wednesday, apparently pressured mostly by minutes from the last Federal Reserve meeting, which indicated future interest rate increases were as likely as not.

“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” according to the minutes. “… “Participants noted the recent reduction in total and core inflation rates. However, they stressed that inflation remained unacceptably high and that further evidence would be required for them to be confident that inflation was clearly on a path toward the Committee’s 2% objective.”

The Dow Jones Industrial Average closed 180 points lower. The S&P 500 closed 33 points lower. The NASDAQ was down 156 points.

West Texas Intermediate Crude Oil futures (CME) closed 98¢ to $1.61 lower through the front six contracts.

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The market for plant-based meats has likely reached a tipping point as the initial period of exceptional sales growth appears to be over, according to a new report from CoBank’s Knowledge Exchange.

“Whatever their reason for purchase, plant-based offerings appear to have fallen short of consumers’ expectations in terms of either cost or performance,” says Billy Roberts, senior food and beverage economist for CoBank. “Market participants should be able to address the cost issues with greater economies of scale and minimized supply chain expenses. However, innovation around taste, texture and mouthfeel will be essential to capture more mass-market consumers.”

For added perspective, the price per share for Beyond Meat, Inc. — the poster child for plant-based fake meat—was trading at $12.28 noon yesterday. It was $35.83 a year earlier and $117.35 two years earlier.

Plant-based meat sales peaked in 2020 when consumers had more discretionary income and were curious about broadening their food spend in the wake of pandemic-era food shortages, according to CoBank. But fewer than half of Americans who tried the products at the time repeated their purchase, per data from consumer research firm Mintel.

Sales of meat alternatives have fallen steadily since 2021 and more sharply over the last year. Volume sales dropped 20.9% for the 52-week period ending July 2, 2023, according to consumer behavior research firm Circana.

Consumers have consistently cited health as a top reason for purchasing plant-based offerings. However, according to the CoBank report, shoppers who initially sought plant-based meats thinking these were healthier options would later voice doubts about the healthfulness of the products, specifically as it relates to their typically complex ingredient legend.

By | August 16th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 16, 2023

Negotiated cash fed cattle trade was slow on light demand in the Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Live FOB prices were steady at $188/cwt. Dressed delivered prices last week were $295/cwt.

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

Last week live FOB prices were $180/cwt. in the Southern Plains and $188 in Nebraska, where dressed delivered prices were $295.

Choice boxed beef cutout value was $1.76 higher Wednesday afternoon at $307.26/cwt. Select was $2.58 higher at $283.03/cwt.

However, Cattle futures edged lower Tuesday, pressured by lower outside markets as much as anything.

Feeder Cattle futures closed an average of 27¢ lower, except for 5¢ higher in the back contract.

Live Cattle futures an average of 56¢ lower. 

Weaker outside markets and improved crop conditions weighed on grain and Soybean futures Tuesday.

Corn futures closed 9¢ to 12¢ lower through Sep ‘24 and then mostly 5¢ to 6¢ lower.

KC HRW Wheat closed 13¢ to 16¢ lower through Mar ‘25.

Soybean futures closed 10¢ to 29¢ lower through Sep ‘24 and then 7¢ to 10¢ lower.

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Major U.S. financial indices closed lower Tuesday, pressured by anemic economic growth in China and weaker U.S. bank stocks tied to a potential downgrade in credit ratings.

The Dow Jones Industrial Average closed 361 points lower. The S&P 500 closed 51 points lower. The NASDAQ was down 157 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.15 to $1.52 lower through the front six contracts.

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Feeder cattle prices are driving feedlot breakevens significantly higher, according to recent estimates from the Livestock Marketing Information Center (LMIC).

For perspective, in order to be profitable, LMIC analysts peg a closeout price exceeding $188/cwt. in January for cattle placed in July. They note it is close to the current level of the February Live Cattle contract.

“Feeder steers in Dodge City have increased since December of last year, jumping from $172 to the $180s, then the $190s, and were at $242/cwt. in July, a 40% increase in eight months. During that time, breakeven prices have increased 27%,” LMIC analysts explain, in the latest Livestock Monitor.

Projected breakevens at the beginning of next year represent a significant departure from apparent feedlot profits this year. LMIC estimated returns were as high as $400 per head earlier this summer. Analysts there estimated July feedlot returns at $300 per head, followed. By positive returns for the remainder of the year.

Keep in mind, estimates do not account for price risk management.

“Through the rest of 2023, breakevens are estimated to be between $150 and $176/cwt.,” LMIC analysts say. “The futures market has most contracts ahead of breakevens by $10 to more than $20/cwt., ensuring that cattle feeding returns will likely be profitable in 2023. LMIC is estimating the average per head return annually will be close to $250 per head, like the 2014 average.”

By | August 15th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 15, 2023

Cattle futures closed lower Monday on lackluster trade and static to declining open interest.

Feeder Cattle futures closed an average of $1.08 lower.

Live Cattle futures an average of 61¢ lower. 

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

Live FOB prices last week were steady at $180/cwt. in the Southern Plains and $188 in the north where dressed delivered prices were steady at $295.

Choice boxed beef cutout value was $2.89 higher Monday afternoon at $305.50/cwt. Select was $3.22 higher at $280.45/cwt.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed mostly 10¢ to 18¢ higher.

KC HRW Wheat closed mostly 9¢ to 15¢ lower.

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Major U.S. financial indices edged higher Monday, supported by tech stocks.

The Dow Jones Industrial Average closed 26 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 143 points.

West Texas Intermediate Crude Oil futures (CME) closed 62¢ to 68¢ lower through the front six contracts.

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Amid tighter feeder cattle supplies and lower feedlot cost of gain, stocker opportunities veer toward lightweight cattle with more incentive to market with less weight gain ahead of the feedlot, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“As cattle numbers continue to tighten this year, the general incentive in the market is to push cattle into feedlots sooner and through the beef production system faster to keep beef production as high as possible,” Peel explains. “Beef production is down about 4.8% year over year thus far in 2023 but is falling more sharply recently with July beef production down 6.7% compared to one year ago.” 

Moreover, Peel says cheaper cost of gain, as corn prices moderate, provide feedlots more opportunity to compete for limited feeder cattle supplies and further enhance the general need to push cattle through the system faster. “A lower feedlot cost of gain generally means feedlots can purchase lighter weight feeder cattle and place them in feedlot earlier,” he says.

As for fall grazing, at least on Oklahoma, Peel says wheat pasture prospects are more promising than in recent years with improved soil moisture and soil temperature conditions for early-planted winter wheat.

“Dynamic cattle and grain market conditions mean that producers will need to carefully and frequently evaluate stocker budget prospects this fall prior to stocker purchase,” Peel says. “Calf prices are moving counter-seasonally higher this summer suggesting that stocker purchase costs will continue to increase this fall. The Oklahoma combined auction price for 450-500 pounds Medium/Large #1 steers in the second week of August reached $302.05/cwt., the highest weekly price since June 2015 and just 6.4% below the record high of $322.56/cwt. in November 2014.”

By | August 14th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 14, 2023

Negotiated cash fed cattle trade was slow on light to moderate demand in Nebraska and the western Corn Belt through Friday afternoon, according to the Agricultural Marketing Service. For the week, FOB live prices were steady in both regions at $188/cwt. and dressed-delivered prices were also steady at $295.

Trade in the Southern Plains ranged from inactive on light demand in Kansas to a standstill in the Texas Panhandle. The previous week, FOB live prices were $180 in the Southern Plains.

Choice boxed beef cutout value was 58¢ higher Friday afternoon at $302.61/cwt. Select was 57¢ lower at $277.23/cwt.

Total estimated cattle slaughter last week of 603,000 head was 10,000 head fewer than the previous week and 42,000 head fewer (-6.5%) than the same week last year. Estimated year-to-date total cattle slaughter of 19.3 million was 830,000 head fewer (-4.0%) than the same time last year. Estimate year-to-date beef production of 16.3 billion pounds was 836.9 million pounds less (-4.9%) than the same time last year.

Cattle futures closed lower Friday on likely profit taking ahead of the weekend.

Feeder Cattle futures closed an average of 32¢ lower.

Live Cattle futures an average of 84¢ lower. 

Grain and Soybean closed lower Friday, pressured by the World Agricultural Supply and Demand Estimates coming in with expected yield cuts (see below).

Corn futures closed mostly 4¢ to 8¢ lower.

KC HRW Wheat closed 11¢ to 13¢ lower through May ‘24 and then mostly 5¢ lower.

Soybean futures closed 10¢ to 14¢ lower.

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Major U.S. financial indices closed mixed on Friday with pressure from another inflation gauge that was higher than expected. The Producer Price Index for final demand increased 0.3% in July (seasonally adjusted), according to the U.S. Bureau of Labor Statistics. On an unadjusted basis, the index for final demand advanced 0.8% for the 12 months ended in July.

The Dow Jones Industrial Average closed 105 points higher. The S&P 500 closed 4 points lower. The NASDAQ was down 93 points.

West Texas Intermediate Crude Oil futures (CME) closed 12¢ to 37¢ higher through the front six contracts.

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USDA’s Economic Research Service (ERS) increased the anticipated fed steer price for the remainder of this year and next, in the August World Agricultural Supply and Demand Estimates.

Based on strong packer demand, ERS increased the projected third-quarter five-area direct fed steer price by $6 compared to the previous month to $184/cwt., and the fourth-quarter price by $7 to $190 for an annual average of $178.50, which was $3.20 more than the previous estimate. Projected fed steer prices increased $2 for next year at $188 in the first quarter, $186 in the second quarter and $186 for the 2024 average.

Beef production for 2023 was lowered on less steer and heifer slaughter and lighter dressed weights, although projected cow slaughter increased. For 2024, forecast beef production increased, reflecting higher expected placements in late 2023 and early 2024. Cow slaughter was also raised for the first part of 2024.

ERS estimated total beef production this year at 26.98 billion pounds, which would be 1.3 billion pounds less (-4.6%) than last year. Beef production in 2024 was forecast at 25.17 billion pounds, which would be 1.81 billion pounds less (-6.7%) than this year’s estimate.

By | August 13th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 11, 2023

Cattle futures continued higher Thursday with ongoing bullish fundamentals and expectations of steady to higher cash trade, given cattle feeders’ recent marketing resolve.

Feeder Cattle futures closed an average of $1.10 higher.

Live Cattle futures an average of 81¢ higher. 

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

Although there were too few transactions to trend in any region, there were some early FOB live trades in the western Corn Belt at $188-$189/cwt and a few in Kansas at $186.

Last week, FOB live prices were $180/cwt. in the Southern Plains and $188 in Nebraska and the western Corn Belt. Dressed prices were $295 in a light test.

Choice boxed beef cutout value was $1.49 lower Thursday afternoon at $302.03/cwt. Select was 97¢ lower at $277.80/cwt.

Net U.S. beef export sales (2023) for the week ending Aug. 3 of 14,800 metric tons were 19% more than the previous week, but 8% less than the prior four-week average. Increases were primarily for South Korea, Japan, China, Mexico and Hong Kong, according to the weekly U.S. Export Sales report.

As for the other side of the ledger, Grain and Soybean futures firmed Thursday with likely positioning ahead of Friday’s widely anticipated World Agricultural Supply and Demand Estimates, with forecast yields top of mind for many.

Corn futures closed mostly fractionally higher to 2¢ higher.

KC HRW Wheat closed 3¢ to 5¢ higher.

Soybean futures closed 8¢ to 10¢ higher, except for old-crop contracts.

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Although gains faded by the end of the session, major U.S. financial indices edged higher Thursday, supported by slightly cooler inflation than expected. The Consumer Price Index for All Urban Consumers rose 0.2% in July on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 3.2% before seasonal adjustment.

The Dow Jones Industrial Average closed 52 points higher. The S&P 500 closed 1 point higher. The NASDAQ was up 15 points.

West Texas Intermediate Crude Oil futures (CME) closed 99¢ to $1.58 lower through the front six contracts.

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U.S. beef exports in June continued to trend lower year over year but with hints of renewed strength.

Beef exports totaled 115,107 metric tons (mt) in June, down 12% from a year ago and slightly below the May volume, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). June export value was $909.5 million, down 13% year-over-year but the highest since October and 4% above the value posted in May.

For January-June, U.S. beef exports were 10% below last year’s record pace at 669,176 mt. Export value was just under $5 billion – down 19% from a year ago but still 8% above the first half of 2021.

Beef export value equated to $407.12 per head of fed slaughter in June, down 9% from a year ago. The first-half average was $394.39, down 17%.

“It was a challenging first half for beef exports, especially when compared to the blistering pace established a year ago,” says Dan Halstrom, USMEF president and CEO. “But we are encouraged to see that exports are still accounting for a consistently high percentage of total beef production, and variety meat exports have held up very well considering the decline in U.S. slaughter. These metrics continue to illustrate the important contribution of exports in maximizing beef carcass value.”

June beef exports to Taiwan were the largest in 14 months, while exports to Mexico continued to build momentum and shipments to Canada, Hong Kong, South Africa and the Dominican Republic posted year-over-year gains. June exports to South Korea, China and Japan were below last year’s large totals, though shipments to Japan improved notably in value from the previous month.

June pork exports totaled 245,964 metric tons (mt), up 12% from a year ago, while export value climbed 6% to $691.4 million. Through the first half of 2023, exports were 14% above last year’s pace at 1.47 million mt, valued at $4.05 billion (up 12%).

By | August 10th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 10, 2023

Weaker corn futures and an uptick in wholesale beef prices helped lift Cattle futures Wednesday.

Feeder Cattle futures closed an average of 77¢ higher.

Live Cattle futures an average of 39¢ higher. 

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

Last week, FOB live prices were $180/cwt. in the Southern Plains and $188 in Nebraska and the western Corn Belt. Dressed prices were $295 in a light test.

Choice boxed beef cutout value was $1.13 higher Wednesday afternoon at $303.52/cwt. Select was $1.98 higher at $278.14/cwt.

Favorable weather, and perhaps skittishness ahead of Friday’s WASDE, pressured grain futures on Wednesday.

Corn futures closed mostly 1¢ to 4¢ lower.

KC HRW Wheat closed mostly 3¢ to 6¢ lower.

Soybean futures closed 1¢ to 4¢ higher through Aug ‘24 and then mostly fractionally higher.

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Major U.S. financial indices closed lower again Wednesday, perhaps defensive pressure ahead of Thursday’s next read on inflation — the monthly CPI. 

The Dow Jones Industrial Average closed 191 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 162 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.03 to $1.48 higher through the front six contracts, supported by chatter about reduced global production.

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Although seasonally lower, wholesale beef prices continue at what some would consider a remarkably high and consistent level.

“Since the middle of April, the weekly comprehensive boxed beef cutout price has only traded outside of an $8 range for a four-week period in June and early July,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The cutout has spent most of its time trading on either side of $300/cwt. and there are no signs it will deviate in the near term.”

Griffith explains the loin and rib primals were the primary price drivers in June, while brisket also demonstrated strength in late June and early July.

“Middle meat prices softened through July, which is the primary reason the cutout fell off its June highs,” Griffith explains. “However, the brisket and short plate also contributed to some of the boxed beef cutout price decline. Alternatively, the chuck, round and flank primal prices have held their own the past month and continue to offer support for the comprehensive cutout.”

Although middle meats may gather added interest heading into Labor Day, Griffith says prices will likely soften again heading into the late summer and the fall months.

By | August 9th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 9, 2023

Firmer Corn futures helped pressure Feeder Cattle futures an average of $1.10 lower Tuesday (55¢ lower at the back to $1.67 lower).

Live Cattle futures narrowly mixed, unchanged to an average of 36¢ lower in the front five contracts and then an average of 49¢ higher. 

Negotiated cash fed cattle trade and demand were at a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $180/cwt. in the Southern Plains and $188 in Nebraska and the western Corn Belt. Dressed prices were $295 in a light test.

Choice boxed beef cutout value was 90¢ higher at $302.39/cwt. Select was $1.15 higher at $276.16/cwt.

Corn futures closed mostly 1¢ to 3¢ higher.

KC HRW Wheat closed mostly 1¢ lower through Jly ‘24 and then mostly 2¢ higher.

Soybean futures closed mostly 5¢ to 8¢ higher.

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Major U.S. financial indices closed lower Tuesday, pressured as one agency downgraded credit in the banking sector.

The Dow Jones Industrial Average closed 158 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 110 points.

West Texas Intermediate Crude Oil futures (CME) closed 75¢ to 98¢ higher through the front six contracts.

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Nationwide, pasture and range conditions eroded some last week, according to the Crop Progress report from USDA’s National Agricultural Statistics Service.

For the week ending Aug. 6, 38% of pasture and range was rated as Good (31%) or Excellent (7%), which was 1% less than the previous week but 14% more than a year earlier. 32% was rated as Poor (18%) or Very Poor (14%), which was 3% more than a week earlier but 17% less than a year earlier. States with more than 40% of pasture and range rated as Poor or Very Poor include: Arizona (47%); Minnesota (53%); Missouri (58%); Nevada (40%); New Mexico (44%); Texas (64%); and Washington (43%).

By | August 8th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 8, 2023

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

Last week, FOB live prices were $1-$2 higher in the Southern Plains at $180/cwt. Live-delivered prices in Kansas were $184.00-$185.50. Live FOB prices were $2 higher in Nebraska at $188 and $1-$3 high in the western Corn Belt at $188. Dressed-delivered prices were $1-$3 higher at $295 in a light test.

The five-area direct weighted average steer price was $1.89 higher last week on a live basis at $186.70/cwt. The weighted average fed steer price in the beef was $1.51 higher at $295.14.

Even so, Cattle futures closed lower Monday on potential profit taking and retrenching.

Live Cattle futures an average of 96¢ lower (55¢ lower at the back to $1.20 lower in spot Aug). 

Feeder Cattle futures closed an average of $2.27 lower.

Choice boxed beef cutout value was 30¢ lower Monday afternoon at $301.49/cwt. Select was $1.47 lower at $275.01/cwt.

Turning to the grain complex, Corn and Soybean futures closed lower Monday on positive weekend rains.

Corn futures closed 1¢ to 2¢ lower through Jly ‘24 and then mostly 1¢ to 2¢ higher.

Soybean futures closed 24¢ to 38¢ lower through Aug ‘24 and then mostly 8¢ to 15¢ lower.

However, KC HRW Wheat closed mostly 10¢ to 11¢ higher.

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Major U.S. financial indices closed higher Monday, supported by positive corporate earnings reports from the likes of Berkshire Hathaway.

The Dow Jones Industrial Average closed 407 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 85 points.

West Texas Intermediate Crude Oil futures (CME) closed 57¢ to 88¢ lower through the front six contracts.

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Despite price levels offering the economic incentive, national herd expansion has yet to lift off. More specifically, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University explains in his weekly market comments that rebuilding is slower than what occurred following the 2011-13 drought that shoved cattle numbers to a cyclical low in 2014.

“Continuing Drought is still an issue in significant regions of cattle country,” Peel says.  “While drought is not likely causing a great deal of additional herd liquidation from a broader market perspective, it surely is preventing herd expansion in those drought-stricken areas.”

Moreover, he explains areas already emerged from drought need two to three years to heal and also to replenish hay supplies.

Similarly, Peel says, “Many cattle operations have suffered from considerable financial stress from drought and high input costs. The short-run need to realize immediate returns from higher cattle prices may be causing continued heifer and cull cow sales for now.”

Next, Peel cites the uncertainty surrounding input costs.

“Record hay prices and elevated supplemental feed costs have had a huge impact in drought regions. Record or near-record high fertilizer, chemical and fuel costs have been a significant challenge for producers, especially in regions of introduced pastures,” Peel says. “Though some input prices have moderated in 2023, input price uncertainty has producers reacting cautiously to higher cattle prices.”

Plus, he points to significantly higher interest cost and a much slower economy than existed during the previous herd expansion.

Perhaps a less obvious reason for expansion reluctance is producer expectations.

“Until enough cow-calf producers anticipate enough returns for a long enough period of time, herd expansion will be tempered,” Peel says. “In the meantime, cattle supplies will continue to tighten. Market prices for calves and feeder cattle will continue to increase as the market provides more price incentives that will eventually strengthen producer expectations and jump-start herd expansion. That process is likely to begin in earnest in the remainder of 2023 and into 2024.”

By | August 7th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 7, 2023

Cattle futures closed higher Friday, helped along by the weekly decline in Corn futures and the hint of higher cash prices.

Live Cattle futures an average of $1.40 higher (92¢ higher at the back to $2.40 higher in spot Aug). 

Feeder Cattle futures closed an average of $1.91 higher.

Negotiated cash fed cattle demand and trade were moderate in the western Corn Belt through Friday afternoon, according to the Agricultural Marketing Service. For the week, live FOB prices were $2-$3 higher at $188/cwt. Dressed delivered prices the previous week were $294-$295.

Elsewhere, trade ranged from mostly inactive on very light demand to limited on light demand.

Although too few to trend, there were a few live delivered sales in Kansas at $184.00-$185.50 and a few live FOB sales in Nebraska at $188.

The previous week, live FOB prices were $178-$179/cwt. in the Southern Plains and $186 in Nebraska, where dressed delivered prices were $292-$295.

Choice boxed beef cutout value was 22¢ lower Friday afternoon at $301.79/cwt. Select was $1.83 lower at $276.48/cwt.

Corn and Soybean futures firmed on Friday but continued to be capped by the favorable weather outlook.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 5¢ to 10¢ higher.

KC HRW Wheat closed mostly 9¢ to 12¢ lower.

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Major U.S. financial indices closed lower Friday. Pressure included a less robust jobs report than expected.

Total non-farm payroll employment rose by 187,000 in July, according to the U.S. Bureau of Labor Statistics. The unemployment rate was little changed at 3.5%.

Average hourly earnings in July for all employees on private non-farm payrolls rose by 14¢ (0.4%) to $33.74. Over the past 12 months, average hourly earnings have increased by 4.4%. 

The Dow Jones Industrial Average closed 150 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 50 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.00 to $1.27 higher through the front six contracts.

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United States farm real estate value — a measurement of the value of all land and buildings on farms, averaged $4,080 per acre for 2023, up $280 per acre (+7.4%) from 2022, according to Land Values-2023 Summary from USDA’s National Agricultural Statistics Service.

United States cropland value averaged $5,460 per acre in 2023, which was $410 more per acre (+8.1%) than the previous year. Regionally, value increased from a low of 2.2% in the Delta states (AR, LA and MS) with an average value of $3,260/acre, to a high of 14.1% in the Northern Plains (KS, NE, ND and SD) with an average value of $4,200 per acre.

United States pasture value averaged $1,760 per acre in 2023, which was $110 more per acre (+6.7%) than the previous year. Regionally, value increased from a low of 2.4% in the Delta states (AR, LA and MS) with an average value of $2,940/acre, to a high of 13.5% in the Northern Plains (KS, NE, ND and SD) with an average value of $1,510 per acre.

By | August 6th, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 4, 2023

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live FOB sales in the western Corn Belt at $188/cwt., but too few to trend.

Last week, live FOB prices were $178-$179/cwt. in the Southern Plains, $186 in Nebraska, and $185-$186 in the western Corn Belt. Dressed delivered prices were $292-$295.

Choice boxed beef cutout value was $1.17 lower Thursday afternoon at $302.01/cwt. Select was 84¢ higher at $278.31/cwt.

Cattle futures on Thursday mainly regained what was lost in the previous session as traders returned the focus to fundamentals rather than the selloff triggered by the downgrading of U.S. credit.

Live Cattle futures an average of 76¢ higher (12¢ to $1.17 higher). 

Feeder Cattle futures closed an average of $1.35 higher.

Corn futures continued lower Thursday with the more favorable production outlook coupled with continued anemic international demand.

Corn futures closed 6¢ to 7¢ lower through May ‘24 and then mostly 2¢ to 3¢ lower.

KC HRW Wheat closed 9¢ to 19¢ lower.

Soybean futures closed mostly 3¢ to 5¢ higher.

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Major U.S. financial indices were little changed but softer again Thursday.  

The Dow Jones Industrial Average closed 66 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 13 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.69 to $2.06 higher through the front six contracts.

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“Most of the decline in beef production compared to a year ago stems from reduced beef cow slaughter, steer slaughter, and lighter slaughter weights,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Beef cow slaughter is down more than 12% while steer slaughter has declined close to 5%. Alternatively, dairy cow slaughter has increased nearly 6% compared to a year ago due to declining milk prices.”

Griffith points out heifer slaughter is less 1% lower year over year, further affirming that fact that heifer retention has yet to begin.

“All of these points should support beef prices remaining elevated in the near term and in the longer term,” Griffith explains. He adds that “It will be interesting to see how imports are adjusting to meet the demand for lean grinding beef, given the production decline domestically.

By | August 3rd, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 3, 2023

Commodity and equity markets saw widespread selling Wednesday on the news that Fitch Ratings downgraded the long-term credit rating for United States.

The lack of weekly cash fed cattle price direction and profit taking may also have pressured Cattle futures.

Live Cattle futures an average of 86¢ lower (50¢ lower at the back to $1.47 lower in spot Aug). 

Feeder Cattle futures closed an average of $1.15 lower (57¢ lower toward the back to $1.80 lower toward the front).

Corn futures closed mostly 2¢ to 8¢ lower.

KC HRW Wheat closed 10¢ to 17¢ lower through Dec ‘24 and then 9¢ lower.

Soybean futures closed mostly 14¢ to 20¢ lower through Jly ‘24 and then mostly 8¢ to 9¢ lower.

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

Last week, live FOB prices were $178-$179/cwt. in the Southern Plains, $186 in Nebraska, and $185-$186 in the western Corn Belt. Dressed delivered prices were $292-$295.

Choice boxed beef cutout value was $2.92 lower Wednesday afternoon at $303.18/cwt. Select was $2.13 lower at $277.47/cwt.

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Major U.S. financial indices closed lower Wednesday, pressured by the aforementioned lowering of the U.S. credit rating. 

The Dow Jones Industrial Average closed 348 points lower. The S&P 500 closed 63 points lower. The NASDAQ was down 310 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.53 to $1.88 lower  through the front six contracts.

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Strong demand and underlying U.S. economic strength are fueling cattle prices even more than snugger cattle supplies and beef production, says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center (LMIC).

“Within the important underlying fundamentals, slaughter weights are seasonally tight, cattle on feed over 120 days are very tight compared to prior years, packer margins and feedlot margins are very strong. These are all bullish signals,” Koontz says. “At some point in the future, we will need to be concerned about competing meat supplies, trade volumes, the strength of the dollar, and interest rates versus inflation. But this summer the cattle and beef market just continue to show dramatic strength. And this is largely due to the underlying strength in the domestic economy.”

Koontz notes cattle markets have the strength to move higher but there are signs of slowing momentum.

By | August 2nd, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 2, 2023

A surge in wholesale beef prices helped lift Live Cattle futures on Tuesday. They closed an average of $1.27 higher on strong volume (50¢ higher at the back to $2.30 higher near the front).

Feeder Cattle futures closed an average of $2.22 higher ($1.65 higher at the back to $2.87 higher in spot Aug).

Choice boxed beef cutout value was $4.32 higher Tuesday afternoon at $306.10/cwt. Select was $1.87 higher at $279.60/cwt.

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

Last week, live FOB prices were $178-$179/cwt. in the Southern Plains $186, in Nebraska, and $185-$186 in the western Corn Belt. Dressed delivered prices were $292-$295.

Corn futures eroded further Tuesday, closing 4¢ to 7¢ lower through Jly ‘24 and then mostly fractionally lower to 2¢ lower.

KC HRW Wheat closed 5¢ to 11¢ lower through Jly ‘24 and then mostly 1¢ higher.

Soybean futures closed mostly 5¢ to 10¢ higher.

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Major U.S. financial indices closed mixed Tuesday.

The Dow Jones Industrial Average closed 71 points higher. The S&P 500 closed 12 points lower. The NASDAQ was down 62 points.

West Texas Intermediate Crude Oil futures (CME) closed 36¢ to 43¢ lower through the front six contracts.

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Agricultural producer sentiment improved slightly in July, according to the Purdue University/CME Group Ag Economy Barometer. It rose 2 points to a reading of 123. The Index of Current Conditions rose 5 points to a reading of 121, while the Index of Future Expectations was up 1 point to 124.

“Producers were slightly more confident about the farming economy in July, despite recent crop price volatility and continued concerns about rising interest rates,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Given the volatility in commodity prices, especially crop prices, this spring and early summer, Ag Barometer analysts say it’s notable that more producers expressed concern about rising interest rates than declining output prices. Producers’ top concern for their farming operations in the upcoming year is still higher input costs, followed by rising interest rates and lower output prices.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between July 10-14.

By | August 1st, 2023|Daily Market Highlights|

Cattle Current Daily—Aug. 1, 2023

Despite another day of lower Corn futures, Feeder Cattle futures paddle in place on Monday, closing an average of 33¢ lower, except for unchanged to an average of 12¢ higher in the front three contracts.

Softer cash fed cattle prices last week and continued erosion in open interest helped cap Live Cattle, which closed an average of 46¢ lower, from 7¢ to 70¢ lower.

Last week, FOB negotiated cash fed cattle were $1-$2 lower at $178-$179/cwt. in the Texas Panhandle on a light test. Likewise, prices were $1-$2 lower in Kansas at $178-$179 on a light test but with a few up to $185. Live-delivered prices in Kansas were $182.50 to $184. In Nebraska, FOB live trades were mostly $2 lower at mainly $186 on a light test, but a few up to $188.50. Live prices in the western Corn Belt were $1-$3 lower at 185-$187. Dressed delivered prices were steady to $3 lower in Nebraska at $292-$295 and steady to $1 lower in the western Corn belt at $294-$295.

Trade ranged from inactive on very light demand to a standstill through Monday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

The weighted average five-area direct fed steer price last week was $1.38 lower on a live basis at $184.81/cwt. The weighted average steer price in the beef was $1.09 lower at $293.63.

Choice boxed beef cutout value was 22¢ lower Monday afternoon at $301.78/cwt. Select was 19¢ higher at $277.73/cwt.

Significantly cooler and wetter weather forecasted for the Corn Belt pushed grain and Soybean futures sharply lower Monday.

Corn futures closed 15¢ to 17¢ lower through Jly ‘24 and then mostly 8¢ to 10¢ lower.

KC HRW Wheat closed 23¢ to 43¢ lower.

Soybean futures closed mostly 31¢ to 50¢ lower.

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Major U.S. financial indices eked out gains Monday as investors closed out the month and geared up for another week of quarterly earnings reports.

The Dow Jones Industrial Average closed 100 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 29 points.

West Texas Intermediate Crude Oil futures (CME) closed 95¢ to $1.22 higher through the front six contracts.

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When national beef cow herd expansion finally begins, the dearth of heifers means rebuilding will likely be a slow process, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“The previous record-high calf prices occurred after heifer retention was well underway and feeder cattle supplies were squeezed to their tightest levels. This process may begin in late 2023 but the tightest feeder supplies will not occur until 2024 at the earliest or possibly into 2025,” Peel says. “With the pipeline of beef replacement heifers and residual other heifers extremely low, heifer retention will likely begin mostly with heifer calves.”

Peel points out the inventory of calves weighing less than 500 pounds on July 1 was 26.3 million head, down 2.6% year over year, according to the semiannual USDA Cattle report. 

“Rapidly rising calf prices in 2023 have not yet provoked any heifer retention and herd rebuilding,” Peel says. “The beef replacement heifer inventory was 4.05 million head, down 2.4% from last year and is the lowest ever in the July Cattle report. Not only are replacement heifer inventories low, but the supply of other heifers that could be used for breeding is also low … The other heifer inventory includes heifers already in feedlots as well as heifers that are part of the estimated feeder supply. The July Cattle report showed an inventory of other heifers at 7.3 million head, down 5.2% year over year.”

By | July 31st, 2023|Daily Market Highlights|

Cattle Current Daily—July 31, 2023

Feedlots and packers continued their standoff on negotiated cash fed cattle trade, which remained largely undeveloped through Friday afternoon. Trade ranged from slow on light demand to a standstill, according to the Agricultural Marketing Service. There were a few FOB live sales in the western Corn Belt at $185-$186/cwt., but too few to trend.

Last week, live prices (FOB) were $180/cwt in the Southern Plains and $188 in Nebraska and the western Corn Belt, where dressed prices (FOB) were $295.

Choice boxed beef cutout value was 86¢ lower Friday afternoon at $302.00/cwt. Select was $2.22 lower at $277.54/cwt.

Further erosion in Corn futures helped Feeder Cattle futures close an average of 77¢ higher Friday.

Live Cattle futures closed narrowly mixed, from an average of 10¢ lower in the back three contracts to an average of 15¢ higher.

Corn futures continued to decline Friday, pressured by more favorable weather in the Corn Belt and less risk premium tied to Ukrainian grain shipments. They closed 11¢ to 12¢ lower through Jly ‘24 and then mostly 6¢ to 9¢ lower.

KC HRW Wheat closed 4¢ to 10¢ lower through Sep ‘24 and then mostly 2¢ lower.

Soybean futures closed mostly 8¢ to 15¢ lower through Jan ‘25 and then mostly 2¢ lower.

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Major U.S. financial indices closed higher Friday with another gauge of cooling inflation.

The Personal Consumption Expenditures (PCE) price index increased 0.2% month to month in June, according to the U.S. Bureau of Economic Analysis. That was in line with expectations. Core PCE, excluding food and energy was slightly less than expected year over year at 4.1%.

The Dow Jones Industrial Average closed 176 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 266 points.

West Texas Intermediate Crude Oil futures (CME) closed 44¢ to 69¢ higher through the front six contracts.

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Estimated total cattle slaughter last week of 619,000 head was 5,000 head fewer than the previous week and 47,000 head fewer (-7.1%) than the same week last year. Year-to-date estimated total cattle slaughter of 18.7 million head was 751,000 head fewer (-3.9%) year over year. Estimated year-to-date beef production of 15.3 billion pounds was 773.8 million pounds less (-4.8% less) year over year.

“Most of the decline in beef production compared to a year ago stems from reduced beef cow slaughter, steer slaughter, and lighter slaughter weights,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Beef cow slaughter is down more than 12% while steer slaughter has declined close to 5%. Alternatively, dairy cow slaughter has increased nearly 6% compared to a year ago due to declining milk prices.”

Griffith points out heifer slaughter is less 1% lower year over year, further affirming that fact that heifer retention has yet to begin.

“All of these points should support beef prices remaining elevated in the near term and in the longer term,” Griffith explains. “It will be interesting to see how imports are adjusting to meet the demand for lean grinding beef, given the production decline domestically. Export data will also help solidify the beef availability picture.”

By | July 29th, 2023|Daily Market Highlights|

Cattle Current Daily—July 28, 2023

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. There were a few FOB live sales in the western Corn Belt at $186/cwt., but too few to trend, according to the Agricultural Marketing Service.

Last week, live prices (FOB) were $180/cwt in the Southern Plains and $188 in Nebraska and the western Corn Belt, where dressed prices (FOB) were $295.

Choice boxed beef cutout value was 48¢ lower Thursday afternoon at $302.86/cwt. Select was 5¢ lower at $279.76/cwt.

Net U.S. beef export sales of 21,400 metric tons (2023) for the week ending July 20 were 2% more than the previous week and 43% more than the prior four-week average. Increases were primarily for South Korea, Japan, China, and Canada.

Eroding front-month Corn futures supported Feeder Cattle futures again on Thursday. They closed an average of 54¢ higher, except for an average of 7¢ lower in two contracts.

Live Cattle futures closed an average of 31¢ lower, except for an average of 13¢ higher in two contracts.

Corn futures closed 4¢ to 7¢ lower through Jly ‘24 and then mostly 1¢ to 2¢ higher.

KC HRW Wheat closed fractionally mixed to 1¢ higher through Sep ’24 and then 3¢ to 6¢ lower.

Soybean futures closed 12¢ to 22¢ lower.

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Major U.S. financial indices closed lower Thursday despite frothier second-quarter domestic economic growth than expected.

Real gross domestic product (GDP) increased at an annual rate of 2.4% in the second quarter of this year, according to the advance estimate from the U.S. Department of Commerce. Real GDP in the first quarter was 2.0%. Gains in the second quarter primarily reflected increases in consumer spending and business investment.

The Dow Jones Industrial Average closed 237 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 77 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.05 to $1.31 higher through the front six contracts.

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Members of the National Cattlemen’s Beef Association (NCBA) passed a directive earlier this week to continue the organization’s advocacy efforts for transparent labeling and inspection of cell-cultured protein products.

“Cattle producers are not afraid of a little competition, and I know that consumers will continue choosing real high-quality beef over cell-cultured imitations,” says NCBA President Todd Wilkinson, a South Dakota cattle producer. “Our priority is ensuring that consumers accurately know the difference between real beef and cell-cultured products through transparent and accurate labeling. We have already been successful at engaging the U.S. Department of Agriculture to conduct robust inspections and oversight to protect food safety.”

Earlier this year, USDA’s Food Safety Inspection Service (FSIS) issued two grants of inspection to companies producing cell-cultured chicken imitation products. These grants of inspection permit companies producing cell-cultured products to sell their products in interstate commerce. While no cell-cultured imitations of beef have received a grant of inspection, several companies are attempting to create them.

By | July 27th, 2023|Daily Market Highlights|

Cattle Current Daily—July 27, 2023

Feeder Cattle futures closed an average of 88¢ higher Wednesday, supported by lower Corn futures.

Live Cattle futures closed narrowly mixed, from an average of 16¢ lower to an average of 33¢ higher.

Sharp volatility continued in grain futures, Wednesday, with traders apparently retrieving a chunk of recent risk premiums.

Corn futures closed 13¢ to 17¢ lower through Jly ‘24 and then 4¢ to 9¢ lower.

KC HRW Wheat closed 18¢ to 47¢ lower.

Soybean futures closed 1¢ to 2¢ lower, except for 30¢ and 18¢ higher in the front two contracts.

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

Last week, live prices (FOB) live prices were $180/cwt in the Southern Plains and $188 in Nebraska and the western Corn Belt, where dressed prices (FOB) were $295.

Choice boxed beef cutout value was 88¢ lower Wednesday afternoon at $303.34/cwt. Select was $2.26 higher at $279.81/cwt.

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Major U.S. financial indices were mixed and little changed Wednesday, as the Fed interest rate hike (0.25%) was widely expected.

The Dow Jones Industrial Average closed 82 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 17 points.

West Texas Intermediate Crude Oil futures (CME) closed 57¢ to 85¢ lower through the front six contracts.

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Frozen beef supplies continue to decline year over year, according to the latest USDA Cold Storage report.

Total pounds of beef in freezers June 30 were 3% less than the previous month and 20% less than last year.

Frozen pork supplies were down 8% from the previous month and down 9% from the previous year.

Total red meat supplies in freezers were down 6% from the previous month and down 14% from last year.

Total frozen poultry supplies were 5% more than the previous month and 10% more than a year earlier.

By | July 26th, 2023|Daily Market Highlights|

Cattle Current Daily—July 26, 2023

Lower Corn futures helped Feeder Cattle futures firm Tuesday and close narrowly mixed, from an average of 15¢ lower to an average of 34¢ higher.

Live Cattle futures closed an average of 75¢ lower, except for 37¢ higher in in the back contract, with pressure tied, in part, to eroding open interest.

Corn futures softened Tuesday with likely profit taking, closing mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 4¢ to 5¢ lower.

KC HRW Wheat closed mostly 4¢ to 6¢ higher through Mar ‘25.

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

Last week, live prices (FOB) live prices were $180/cwt in the Southern Plains and $188 in Nebraska and the western Corn Belt, where dressed prices (FOB) were $295.

Choice boxed beef cutout value was 6¢ higher Tuesday afternoon at $304.22/cwt. Select was 56¢ higher at $277.55/cwt.

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Major U.S. financial indices edged higher Tuesday, amid mixed quarterly corporate earnings.

The Dow Jones Industrial Average closed 26 points higher. The S&P 500 closed 12 point higher. The NASDAQ was up 85 points.

West Texas Intermediate Crude Oil futures (CME) closed 60¢ to 89¢ higher through the front six contracts.

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Rural economic growth continues, at least in one region, according to Creighton University’s Rural Mainstreet Index (RMI). Although it remained above growth-neutral for the fourth consecutive month, the RMI declined from 56.9 in June to 55.6 in July. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. It is based on a survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

“After negative growth during the first quarter of this year, the Rural Mainstreet economy experienced positive but slow economic growth for the second quarter and has now started the third quarter on a healthy note,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The region’s farmland price index rose to 64.6 from 59.3 in June and 56.3 in May. This was the 34th straight month that the index has advanced above 50.0. 

Bankers reported that, on average, non-farm investors secured approximately 17.1% of farmland sales in their area over the past six months. This is almost double the 9.1% reported by bankers in April 2022 when the same question was asked. 

Bank CEOs were asked to comment on the Federal Reserve’s current short-term interest rate policy. More than nine of 10 (92.5%) indicated that the Fed should cease raising rates. Only 7.5% indicated that the Fed should continue to raise short-term interest rates.

“Higher short-term interest rates produced by Federal Reserve’s rate hikes over the past year have posed a significant threat to community banks by expanding the costs of customer deposits while the rates on bank loans have risen little over the same time period,” Goss says.

By | July 25th, 2023|Daily Market Highlights|

Cattle Current Daily—July 25, 2023

Feeder Cattle futures took stepped lower Monday, pressured by sharply higher Corn futures and Friday’s bearish Cattle on Feed report which indicated June feedlot placements were 2.7% more than the previous year and 4.6% more that the average of analyst expectations ahead of the report.

Headlines of Russia bombing Ukrainian ports fueled grain and Soybean futures Monday.

Corn futures closed 27¢ to 33¢ higher through the front five contracts and then 9¢ to 19¢ higher.

KC HRW Wheat closed 46¢ to 58¢ higher through Jly ‘24 and then 32¢ to 40¢ higher.

Soybean futures closed mostly 19¢ to 22¢ higher.

Live Cattle futures faded most of the heat, supported by last week’s stronger cash trade.

Live Cattle futures closed an average of $1.08 higher (32¢ to $1.82 higher), except for an average of $1.24 lower in the front three contracts.

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

Last week, live prices (FOB) were $2 higher in the Southern Plains at $180/cwt., $2 higher in Nebraska at $188 and $3-$4 higher in the western Corn Belt at $188. Dressed prices (FOB) were $3-$5 higher in Nebraska at $295 and steady to $5 higher in the western Corn Belt at $295.

The weighted average five-area fed steer price last week was $1.92 higher at $186.19/cwt. on alive basis. The weighted average dressed fed steer price was $3.38 higher at $294.72.

Choice boxed beef cutout value was $1.42 higher Monday afternoon at $304.16/cwt. Select was 26¢ higher at $276.99/cwt.

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Major U.S. financial indices closed higher Monday, buoyed by energy stocks.

The Dow Jones Industrial Average closed 183 points higher. The S&P 500 closed 18 point higher. The NASDAQ was up 26 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.41 to $1.67 higher through the front six contracts.

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Reflecting on Friday’s semiannual USDA Cattle report, Derrell Peel, Extension Livestock Marketing Specialist at Oklahoma State University notes this is the fifth year of smaller beef cow inventories since the 2018 cyclical peak, with the beef cow herd down 3.0 million head, a five-year decrease of 9.3%.

“Not only did the report show continued cattle liquidation thus far in 2023, but there are also no clear indications that numbers will stabilize and grow anytime soon,” Peel says.  “The current inventory of beef replacement heifers is 4.05 million head, lower than the previous cyclical low of 4.2 million head in 2011 and 2012 and is the lowest in 50 years of available July 1 inventory data.”

Moreover, Peel points out the inventory of heifers in feedlots in the July Cattle on Feed report — unchanged from last year —indicates relatively large numbers of heifers continue to be fed for slaughter rather than retained for breeding. He adds that heifers currently represent 39.9% of total feedlot inventories, the highest proportion of heifers in feedlots since 2001.

“The sharp increase in feeder cattle prices this year represents a growing market incentive for the beef cattle industry to transition from liquidation to herd expansion, but it does not appear that the industry is responding yet,” Peel says. “Feeder cattle prices will continue to increase to jumpstart heifer retention, which will lead to even higher prices as feeder supplies are further squeezed with fewer heifers in the feeder cattle supply.”

By | July 24th, 2023|Daily Market Highlights|

Cattle Current Daily—July 24, 2023

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

For the week, live prices in the Texas Panhandle were $2 higher (compared to two weeks earlier) at $180/cwt. Live prices in Kansas were unevenly steady at $180 (a few up to $187) with live delivered prices at $184-$185. Prices in Nebraska were mostly $2 higher at $188 with a few up to $190. In the western Corn Belt, live prices were mostly $3-$4 higher at $188.

Dressed prices (FOB) in Nebraska were $8-$10 higher at $300.

Choice boxed beef cutout value was 18¢ higher Friday afternoon at $302.74/cwt. Select was $2.02 higher at $276.73/cwt.

Estimated total cattle slaughter last week of 628,000 head was 5,000 head fewer than the previous week and 35,000 head fewer (-5.3%) than the previous year. Year-to-date estimated total cattle slaughter of 18.1 million head was 700,000 head fewer (-3.7%) than the same time last year. Estimated year-to-date beef production of 14.8 billion pounds was 735.5 million pounds less (-4.7%).

As for futures, Live Cattle futures closed an average of 40¢ lower Friday, except for an average of 6¢ higher in two contracts.

Conversely, stronger cash prices and softer Corn futures helped Feeder Cattle futures gain an average of $1.11. They could be challenged Monday, however, with what will likely be considered a bearish Cattle on Feed report (see below).

Corn futures softened again with likely profit taking. They closed 7¢ to 10¢ lower through Dec ‘24 and then 5¢ to 6¢ lower.

KC HRW Wheat closed mostly 14¢ to 15¢ lower.

Soybean futures closed mostly 1¢ to 2¢ lower, except for 6¢ and 2¢ higher in old-crop contracts.

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Major U.S. financial indices closed mixed and little changed Friday.

The Dow Jones Industrial Average closed 2 points higher. The S&P 500 closed 1 point higher. The NASDAQ was down 30 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.10 to $1.42 higher through the front six contracts.

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Markets will likely view Friday’s Cattle on Feed report as bearish with more June placements than expected.

Placements in feedlots with 1,000 head or more capacity were 1.68 million head in June, which was 44,000 head more (+2.7%) than the previous year. That was 4.6% more that the average of analyst expectations ahead of the report.

In terms of placement weights, 39% went on feed weighing 699 pounds or less, 45% weighing 700-899 pounds and 16% weighing 900 pounds or more.

Marketings in June of 1.96 million head were 104,000 head fewer (-5.0%) year over year, which was in line with pre-report estimates.

Cattle on feed July 1 of 11.20 million head were 201,000 head fewer (-1.8%) than the previous year, which was also in line with pre-report estimates.

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National beef cow liquidation continues, and heifer retention has yet to begin, according to Friday’s semiannual USDA Cattle report.

There were 29.4 million beef cows in the U.S. July 1, which was 800,000 head fewer (-2.6%) year over year. The number of beef replacement heifers was 100,000 head fewer (-2.4%) at 4.0 million head. This year’s calf crop was estimated to be 33.8 million head, which would be 664,500 head fewer (-1.9%) than the previous year.

The calculated number of cattle outside feedlots July 1 — calves under 500 pounds, other heifers and steers weighing more than 500 pounds — was 34.4 million, which was 1.3 million head fewer (-3.6%) than the same time last year.

Total cattle and calves in the U.S. July 1 of 95.9 million was 2.7 million fewer (-2.7%) than a year earlier.

By | July 23rd, 2023|Daily Market Highlights|

Cattle Current Daily—July 21, 2023

Cattle futures strengthened during much of Thursday’s session but closed lower, perhaps with some defensiveness ahead of Friday’s Cattle on Feed report, as well as the Semiannual Cattle report. So far, these reversals have represented a breather rather than a top.

Live Cattle futures closed an average of 74¢ lower (35¢ to $1.05 lower).

Feeder Cattle futures closed an average of 71¢ lower (15¢ to $1.70 lower).

Negotiated cash fed cattle trade was slow to moderate in the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. Live prices were $3-$4 higher than last week at $188/cwt.

There were a few live sales in Nebraska at $188 on limited trade and light demand, but too few to trend.

Last week, live prices were $186/cwt. in Nebraska and $175-$184 in Kansas on a light test. Dressed prices were $290-$292 in Nebraska and $290-$295 in the western Corn Belt. Live prices in the Texas Panhandle the previous week were $178.

Choice boxed beef cutout value was $1.03 lower Thursday afternoon at $302.56/cwt. Select was $1.25 lower at $274.71/cwt.

Corn futures closed mostly 4¢ to 5¢ lower on likely profit taking.

KC HRW Wheat closed mixed, from 8¢ lower to 8¢ higher.

Soybean futures closed mixed, mostly 5¢ to 6¢ lower through Mar ’24 and then mostly 2¢ to 4¢ higher.

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Major U.S. financial indices closed mixed Thursday, amid mixed but mainly positive quarterly earnings reports.

The Dow Jones Industrial Average closed 163 points higher. The S&P 500 closed 30 points lower. The NASDAQ was down 294 points.

West Texas Intermediate Crude Oil futures (CME) closed 25¢ to 36¢ higher through the front six contracts.

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Friday’s semiannual USDA Cattle report should provide some insight to the degree of continued beef cow liquidation.

“Since January, slaughter data has indicated a 12% decline in beef cow slaughter,” say USDA Economic Research Service analysts, in the latest Livestock, Dairy and Poultry Outlook. “This is likely a combination of improving pasture conditions, sufficient reductions in animal units per acre on poorer pastures, and the prospect of improved profitability from selling calves. At the same time, dairy cow slaughter is up almost 6% year over year, but not by enough to offset the effect of declining beef cow slaughter on total cow slaughter. However, beef cow retention will likely cap cow slaughter for the foreseeable future.”

While beef cow slaughter is likely to decline more significantly in the second half of the year, it is unlikely to decline enough to come close to stabilizing the beef cow herd this year, according to Derrell Peel, Extension Livestock Marketing Specialist at Oklahoma State University, in his weekly market comments.

“There is no data currently to support the idea that heifer retention is under way, but it may have started with recent improvements in range and pasture conditions,” Peel says. The beef replacement heifer number in the upcoming report will be of keen interest and is likely to show a still smaller number compared to last year but could show a slight increase year over year if heifer retention has begun.”

By | July 20th, 2023|Daily Market Highlights|

Cattle Current Daily—July 20, 2023

Traders continued to add risk premium to grain and Soybean futures Wednesday.

Corn futures closed mostly 9¢ to 18¢ higher.

KC HRW Wheat closed 31¢ to 41¢ higher.

Soybean futures closed mostly 12¢ to 14¢ higher.

Higher Corn futures weighed on Feeder Cattle, which closed an average of 61¢ lower (27¢ to $1.20 lower), except for an average of 10¢ higher in the back two contracts.

However, recent cash strength and cattle feeders’ continued resolve to hold cattle helped push Live Cattle future an average of 43¢ higher (5¢ to 75¢ higher).

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

Last week, live prices were $186/cwt. in Nebraska, $184-$185 in the western Corn Belt and $175-$184 in Kansas on a light test. Dressed prices were $290-$292 in Nebraska and $290-$295 in the western Corn Belt. Live prices in the Texas Panhandle the previous week were $178.

Choice boxed beef cutout value was $1.09 lower Wednesday afternoon at $303.59/cwt. Select was 65¢ lower at $275.96/cwt.

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Major U.S. financial indices continued to gain Wednesday, as quarterly earnings continue to surpass expectations.

The Dow Jones Industrial Average closed 109 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 4 points.

West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 40¢ lower through the front six contracts.

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The all-fresh aggregate retail beef price set a record in June at $7.57 per pound, which was 3¢ more than the previous monthly record established in October 2021, according to the Livestock Marketing Information Center (LMIC).

“Retail fresh beef prices are 3.1% higher than last year at this time,” LMIC analysts say in the latest Livestock Monitor. “Retail pork prices continued to decline, coming in at $4.68 per pound, about 5% lower than last June. Broiler retail prices ticked higher … Retail meat prices appear strong for beef and chicken, but domestic pork demand still seems to be struggling. Adding to pork complications is the new Prop 12 law, which will likely increase the amount of pork on the domestic market outside of California.”

Although the Consumer Price Index (CPI) continues to grow at a slowing pace, LMIC analysts note prices for food continued more than 5% higher year over year. They add that the meat index was only 0.6% higher.

By | July 19th, 2023|Daily Market Highlights|

Cattle Current Daily—July 18, 2023

Cash strength and weaker Corn futures helped lift Feeder Cattle futures Monday.

Feeder Cattle futures closed an average of $1.80 higher.

Live Cattle futures closed narrowly mixed, from an average of 18¢ lower in three contracts to an average of 34¢ higher (7¢ to 75¢ higher).

Apparently, the trade wasn’t buying reports of Russia pulling out of the Black Sea Grain initiative, set to expire on Tuesday without renewal. Grain futures were stronger right after the reports but lost ground throughout the session.

Corn futures closed mostly 6¢ to 8¢ lower.

KC HRW Wheat closed mostly 7¢ to 13¢ lower.

Soybean futures closed mostly 2¢ to 7¢ higher.

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

Last week, live prices were generally $3 higher in Nebraska at $186/cwt., $1-$2 higher in the western Corn belt at $184-$185 and from $3 lower to $6 higher in Kansas at $175-$184. Dressed prices were steady to $2 higher in Nebraska at $290-$292 and steady to $5 higher in the western Corn Belt at $290-$295.

Live prices in the Texas Panhandle the previous week were $178.

The five-area direct weighted average fed steer price last week was $2.21 higher on a live basis at $184.27/cwt. The average fed steer price in the beef was $1.35 higher at $291.34.

Choice boxed beef cutout value was 84¢ higher Monday afternoon at $306.78/cwt. Select was 87¢ lower at $275.74/cwt.

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Major U.S. financial indices closed higher Monday ahead of this week’s bellwether quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 76 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 131 points.

West Texas Intermediate Crude Oil futures (CME) closed 95¢ to $1.27 lower through the front six contracts.

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USDA will release the semiannual Cattle report Friday, which could provide some clues about the pace of further beef cow liquidation this year.

“The report is expected to show that herd liquidation continued in the first six months of the year but may slow in the remainder of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “There is no data currently to support the idea that heifer retention is under way, but it may have started with recent improvements in range and pasture conditions. The beef replacement heifer number in the upcoming report will be of keen interest and is likely to show a still smaller number compared to last year but could show a slight increase year over year if heifer retention has begun.”

Likewise, analysts with USDA’s Agricultural Marketing Service explain preliminary numbers for the first half of the year indicate yearling heifer slaughter was the most in 15 years, while year-to-date beef clow slaughter is the second most in 10 years,

“With that number of females going to market in the first half of the year, it will take a considerable amount of time to turn the tide and have more heifer retention,” AMA analysts say.

Moreover, AMS analysts point out significant drought persists broadly across key the cow-calf states of Kansas and Missouri and Nebraska, as well as parts of Texas.

“The cattle inventory report will show that the beef cow herd continued to decline in the first half of the year. While beef cow slaughter is down thus far — 12.0% less year over year in the first six months of the year — the current pace suggests a herd culling rate over 12% for the year. Beef herd expansion requires a herd culling rate below 10% and likely below 9% for a year or more,” Peel says.

While beef cow slaughter is likely to decline more significantly in the second half of the year, Peel explains, “It is unlikely to drop enough to come close to stabilizing the beef cow herd this year.”

By | July 17th, 2023|Daily Market Highlights|

Cattle Current Daily—July 17, 2023

Negotiated cash fed cattle trade was slow on light to moderate demand in Nebraska and the western Corn Belt through Friday afternoon, according to the Agricultural Marketing Service.

Live prices in the western Corn Belt were $183-$186/cwt., which was $1-$2 higher than the previous week when dressed prices were $290.

Although too few to trend, there were a few live sales in Nebraska at $186 and a few in the beef at $291. Prices the previous week were $183.00-$186.50 and $290, respectively.

Trade in the Southern Plains remained inactive on very light demand. Prices the previous week were $178.

Live Cattle futures closed higher Friday, buoyed by stronger cash prices in the North, dragging Feeder Cattle along.

Live Cattle futures closed an average of $2.02 higher ($1.15 at the back to $3.27 higher in spot Aug).

Feeder Cattle futures closed an average of $1.97 higher.

Choice boxed beef cutout value was 97¢ lower Friday afternoon at 305.94/cwt. Select was $3.57 lower at $276.61.

Estimated total cattle slaughter last week was 633,000, which was 94,000 head more than the previous holiday-shortened week. Estimated year-to-date total cattle slaughter was 17.5 million head, which was 662,000 head fewer (-3.6%). Estimated year-to-date beef production of 15 billion pounds was 709.6 million pounds less (-4.7%).

Turning to the grain complex, Grain and Soybean futures closed higher Friday, supported by the lower U.S. dollar and the looming deadline to extend the Black Sea Grain initiative.

Corn futures closed mostly 7¢ to 13¢ higher.

Soybean futures closed mostly 4¢ to 9¢ higher.

KC HRW Wheat closed mostly 22¢ to 23¢ higher.

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Major U.S. financial indices closed higher to sideways Friday with follow-through support from recent inflation news, as well as a strong start to quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 113 points higher. The S&P 500 closed 4 points lower. The NASDAQ was down 24 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.28 to $1.47 lower through the front six contracts.

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Forecast cattle feeding returns continue to be extremely positive, according to the most recent Historical and Projected Kansas Feedlot Net Returns from Kansas State University.

Net returns for steers in Kansas (July-December) range from a low of $158.96 per head in December to a high of $261.37 in November. Net returns in July were projected to be $172.78. Over the same period, estimated feedlot cost of gain ranges from $139.65/cwt. in July to $110.60 in December.

Keep mind the returns reflect no price risk management.

Returns for heifers follow a similar pattern, ranging from a low of $68.66 per head in December to a high of $203.74 in October. July returns were estimated to be $156.98. During the same period, estimated feedlot cost of gain ranges from $153.59/cwt. in July to $118.45 in December.

By | July 16th, 2023|Daily Market Highlights|

Cattle Current Daily—July 14, 2023

Traders seemed to reconsider their initial reaction to Wednesday’s WASDE, fueling gains in Corn and Soybeans. The looming deadline to extend the Black Sea Grain initiative may have added support.

Corn futures closed mostly 12¢ to 16¢ higher.

Soybean futures closed mostly 29¢ to 43¢ higher.

KC HRW Wheat closed 2¢ to 5¢ higher.

The bounce higher in Corn futures weighed on Cattle futures Thursday, especially Feeder Cattle.

Feeder Cattle futures closed an average of $2.36 lower (57¢ to $1.42 lower).

Live Cattle futures closed an average of 32¢ lower, except for unchanged and 2¢ higher in two contracts.

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

Choice boxed beef cutout value was $4.07 lower Thursday afternoon at 306.91/cwt. Select was 92¢ lower at $280.18/cwt.

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Major U.S. financial indices closed higher Thursday with another favorable inflation reading.

The Producer Price Index for final demand increased 0.1% percent in June, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. Final demand prices declined 0.4% in May and edged up 0.1% in April. On an unadjusted basis, the index for final

demand advanced 0.1% for the 12 months ended in June.

The Dow Jones Industrial Average closed 47 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 219 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.18 to $1.22 higher through the front six contracts.

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USDA’s Foreign Agricultural Service (FAS) increased expected global beef production in the latest quarterly Livestock and Poultry: World Markets and Trade.  Compared to the April report, FAS increased worldwide production to 59.6 million tons, about 1% more.

“Drought has induced more herd liquidation in Argentina, raising its production 6% from the April forecast,” FAS analysts explain. “Similarly, larger feedlot placements and higher cow slaughter are expected to boost U.S. production by 1% from April. New Zealand production is raised 3% as male dairy calves are now marketed for beef. EU production is cut 1% on lower slaughter and lighter weights due to high input costs.

On a related note, net U.S. beef export sales were 42% less than the previous week and down 28% from the prior four-week average, according to USDA’s weekly U.S. Export Sales report for the week ending July 6.

Increases were primarily for Japan, Taiwan, China, South Korea and Mexico.

By | July 13th, 2023|Daily Market Highlights|

Cattle Current Daily—July 13, 2023

Although USDA’s Economic Research Service (ERS) surprised some by making yield adjustments in the latest World Agricultural Supply and Demand Estimates — those usually come later in the growing season — Corn futures fell with higher estimated ending stocks.

Corn futures closed 12¢ to 22¢ lower through Sep ‘24 and then mostly 7¢ to 9¢ lower.

Soybean futures closed mostly 25¢ to 32¢ lower.

KC HRW Wheat closed mostly 7¢ to 16¢ lower.

Even so, Cattle futures closed lower on the day following strong action earlier; perhaps driven by profit taking.

Feeder Cattle futures closed an average of $1.20 lower (57¢ to $1.42 lower).

Live Cattle futures closed an average of $1.48 lower (62¢ to $1.95 lower).

Negotiated cash fed cattle trade was inactive with very light demand in all regions through Wednesday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $178/cwt. in the Southern Plains, $183.00-$186.50 in Nebraska and $182-$184 in the western Corn Belt. Dressed prices were $290.

Choice boxed beef cutout value was $1.14 lower Wednesday afternoon at $310.98/cwt. Select was 86¢ lower at $281.10/cwt.

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Major U.S. financial indices closed higher again Wednesday with another signal of slowing inflation.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2% in June on a seasonally adjusted basis, according to the he U.S. Bureau of Labor Statistics; it increased 0.1% in May.

The Dow Jones Industrial Average closed 86 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 158 points.

West Texas Intermediate Crude Oil futures (CME) closed 75¢ to 92¢ higher through the front six contracts.

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USDA’s Economic Research Service projected the expected third-quarter fed steer price (five-area direct) $5 higher than the previous month to $178/cwt., and the fourth-quarter price $9 higher to $183, in the July World Agricultural Supply and Demand Estimates. The forecast annual price increased $3.60 to $175.30. Next year’s annual price was projected $4 higher at $184.

Price projections increased despite a bump in expected beef production due to higher expected steer, heifer, cow, and bull slaughter.

Specifically, forecast beef production for this year increased 75 million pounds from the previous estimate to 27.16 billion pounds. That would be 1.13 billion pounds less (-4%) than last year. Next year’s beef production was forecast to be a staggering 2.46 billion pounds less (-9.1%) that this year’s projected total at 24.7 billion pounds.

By | July 12th, 2023|Daily Market Highlights|

Cattle Current Daily—July 12, 2023

Cattle futures continued to churn higher Tuesday.

Feeder Cattle futures closed an average of 97¢ higher. Live Cattle futures closed an average of 94¢ higher (40¢ to $1.77 higher).

Corn and Soybean futures closed higher on likely positioning ahead of Wednesday’s World Agricultural Supply and Demand Estimates.

Corn futures closed 1¢ to 3¢ higher.

Soybean futures closed mostly 10¢ to 12¢ higher.

KC HRW Wheat closed mostly 6¢ 8¢ higher.

Negotiated cash fed cattle trade was inactive with very light demand in all regions through Tuesday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $178/cwt. in the Southern Plains, $183.00-$186.50 in Nebraska and $182-$184 in the western Corn Belt. Dressed prices were $290.

Choice boxed beef cutout value was $1.67 lower Tuesday afternoon at $312.12/cwt. Select was $2.09 lower at $280.24/cwt.

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Major U.S. financial indices closed higher again Tuesday with investors apparently expecting to see more data this week suggesting cooling inflation. 

The Dow Jones Industrial Average closed 317 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 75 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.65 to $1.84 higher through the front six contracts.

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Nationwide, pasture and range conditions improved some last week, according to Crop Progress report from USDA’s National Agricultural Statistics Service.

For the week ending July 9, 47% of pasture and range was rated as Good (37%) or Excellent (10%), which was 2% more than the previous week and 19% more than a year earlier. 23% was rated as Poor (15%) or Very Poor (8%), which was 2% less than a week earlier and 23% less than a year earlier. States with more than 40% of pasture and range rated as Poor or Very Poor include: Arizona (54%), Michigan (53%), Missouri (71%) and Texas (44%).

Corn and soybean condition also improved a bit.

22% of corn was silking, which was 8% more than the same time last year and 1% more than the five-year average. 55% of corn was rated, Good (45%) or Excellent (10%) condition, compared to 51% the previous week and 67% the previous year. 14% was rated as Poor (10%) or Very Poor (4%), which was 1% less than previous week but 4% more than a year earlier.

39% of soybeans were blooming, which was 9% more than a year earlier and 4% more than average. 51% of soybeans were rated in Good (44%) or Excellent (7%) condition, which was 1% more than the previous week but 11% less than the same week last year. 15% of soybeans were in Poor (11%) or Very Poor (4%) condition, the same as the previous week and 6% more than the previous year.

46% of winter wheat was harvested, which was 16% less than last year and 13% less than the average. 40% was rated in Good (33%) or Excellent (7%) condition, which was the same as a week earlier and 9% more than a year earlier. 28% was rated Poor (17%) or Very Poor (11%), which was 1% less than the previous week and 5% less than a year earlier. 

By | July 11th, 2023|Daily Market Highlights|

Cattle Current Daily—July 11, 2023

Stellar cash demand for calves and feeder cattle, along with steady to stronger cash fed cattle prices last week helped Cattle futures extend gains Monday.

Feeder Cattle futures closed an average of 65¢ higher (10¢ higher at the back to $1.00 higher).

Live Cattle futures closed an average of 40¢ higher.

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

Last week, live prices were steady to $1 lower in the Southern Plains at $178/cwt., $1.00 to $1.50 higher in Nebraska at $183.00-$186.50 and steady to $2 higher in the western Corn Belt at $182-$184. Dressed prices were steady at $290.

The five-area direct weighted average fed steer price last week was $182.06 on a live basis, up 73¢ from the previous week. The average fed steer price in the beef was 65¢ higher at 289.99.

Choice boxed beef cutout value was $3.11 lower Monday afternoon at $313.79/cwt. Select was $3.30 lower at $282.33/cwt.

Corn and Soybean futures closed higher on likely profit taking and positioning ahead of Wednesday’s World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 4¢ to 5¢ higher.

Soybean futures closed 17¢ to 27¢ higher through Aug ’24 and then mostly 12¢ to 15¢ higher.

KC HRW Wheat closed mostly 3¢ to 7¢ lower.

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Major U.S. financial indices closed higher Monday as investors await further inflation readings this week, as well as the beginning of quarterly stock earnings reports.

The Dow Jones Industrial Average closed 209 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 24 points.

West Texas Intermediate Crude Oil futures (CME) closed 50¢ to 87¢ lower through the front six contracts.

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The U.S. beef industry trend toward tightening cattle supplies, decreased beef production and sharply higher prices are expected to impact international trade of U.S. cattle and beef, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

“Reduced beef supplies and higher prices are projected to lead to reduced beef exports and increased beef imports,” Peel explains in his weekly market comments. “The strength of the U.S. dollar and the impacts of exchange rates may further exaggerate or mute these underlying market forces. The relatively strong dollar in recent months has tended to dampen beef exports and support increased imports. Unique market factors in specific countries will also impact trade flows in particular markets. The most recent trade data confirms that the expected impacts are indeed developing.”

As noted in last Friday’s Cattle Current, U.S. beef exports in May were 14% less year over year for volume and down 19% for value. For January through May, volume was 10% less than the same period last year and value was down 21%.

On the other side of the equation, Peel says total beef imports to the U.S. were up 5.7% year over year in May. He adds that imports for the first five months of the year are 0.6% less than the same time last year.

“Beef imports appear to be reverting to more traditional import patterns with May imports of beef from Australia up 39.1% and imports from New Zealand up 23.2 % for the month,” Peel says. By volume, Peel explains these are the top five importers to the U.S. in this order: Canada, Mexico, Brazil, Australia and New Zealand.

“Beef imports will continue to be supported by higher domestic beef prices and the reduction in U.S. processing beef supplies due to reduced cow slaughter,” Peel says.

By | July 10th, 2023|Daily Market Highlights|

Cattle Current Daily—July 10, 2023

Lower Corn futures and producer leverage demonstrated by the week’s cash fed cattle trade helped push Cattle futures higher on Friday.

Feeder Cattle futures closed an average of $2.58 higher ($1.80 at the back to $3.27 higher toward the front).

Live Cattle futures closed an average of $1.13 higher (42¢ higher near the back to $2.42 higher at the front).

Negotiated cash fed cattle trade ranged from slow with light to moderate demand in the North, to limited on light demand in the South through Friday afternoon, according to the Agricultural Marketing Service.

For the week, live prices were steady to $1 lower in the Southern Plains at $178/cwt., steady to $1 higher in Nebraska at $183-$185 and steady to $3 higher in the western Corn Belt at $183-$184. Dressed prices were steady at $290.

Choice boxed beef cutout value Friday afternoon was $2.97 lower at $316.90/cwt. Select was $4.34 lower at $285.63/cwt.

Estimated total cattle slaughter for the holiday-shortened week of 539,000 head was 108,000 head fewer than the previous week and 49,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 16.8 million head was 3.6% less year over year. Year-to-date estimated beef production of 13.8 billion pounds was 676.9. million pounds less (-4.7%).

Corn and Soybean futures closed lower on a wetter weekend outlook and perhaps some positioning ahead of next week’s World Agricultural Supply and Demand Estimates, which will be USDA’s first opportunity to make adjustments to forecast yields. 

Corn futures closed mostly 6¢ to 12¢ lower.

Soybean futures closed mostly 16¢ to 21¢ lower.

KC HRW Wheat closed 21¢ to 25¢ lower.

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Major U.S. financial indices closed lower again Friday on lingering rate hike fears, despite a weaker jobs report than expected.

Total non-farm payroll employment increased by 209,000 in June, according to the U.S. Bureau of Labor Statistics. The unemployment rate was little changed at 3.6%. In June, average hourly earnings for all employees on private non-farm payrolls rose by 12¢ to $33.58.

The Dow Jones Industrial Average closed 187 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 18 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.57 to $2.06 higher through the front six contracts.

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U.S. beef exports improved month to month in May, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). However, exports remain less than last year’s record totals.

Beef exports totaled 116,159 metric tons (mt) in May, down 14% year over year but up 4% from the previous month. Export value was $874.7 million, down 19% year over year but 2% above April. May exports strengthened to Mexico, Taiwan and South Africa. Export value to Canada was the highest in nearly eight years. Beef variety meat exports were the largest in 12 months at just under 27,000 mt.

“U.S. beef exports face considerable headwinds in 2023, on both the supply and demand side, especially when compared to last year’s massive totals,” says Dan Halstrom, USMEF president and CEO. “To address tighter beef supplies, USMEF has heightened efforts to showcase underutilized cuts, even in our well-established markets. It’s also encouraging to see beef variety meat exports maintain a strong pace, as this is essential for maximizing carcass value.”

Beef export value equated to $399.71 per head of fed slaughter in May, down 21% from a year ago. The January-May average was $391.66, down 19%.

By | July 8th, 2023|Daily Market Highlights|

Cattle Current Daily—July 7, 2023

Feeder Cattle futures continued to adjust lower, down an average of $2.32 amid a bounce in Corn futures.

Live Cattle futures closed an average of 39¢ lower with apparent pressure from sliding seasonal wholesale beef values.

Corn futures bounced back Thursday with a gloomier weather outlook. They closed 12¢ to 18¢ higher through Jly ‘24, and then 6¢ to 7¢ higher.

Soybean futures closed lower on oversold conditions. They were down 15¢ to 24¢ lower through Jan ‘24, and then 7¢ to 12¢ lower.

KC HRW Wheat closed mixed, fractionally lower to 6¢ lower through May ’24 and then 3¢ to 6¢ higher.

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

On light trade, live prices were steady to $1 lower in the Southern Plains at $178/cwt. and unevenly steady in the western Corn Belt at $179-$184, where dressed prices last week were $290.

Last week, live prices in Nebraska were $180-$183 on a live basis and $290 in the beef.

Choice boxed beef cutout value was $2.91 lower Thursday afternoon at $319.87/cwt. Select was $2.72 lower at $289.97/cwt.

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Major U.S. financial indices closed lower Thursday with worries that positive employment data will fuel more interest rate hikes. Private sector employment increased by 497,000 in June, according to the ADP National Employment report. That was significantly more than expected.

The Dow Jones Industrial Average closed 366 points lower. The S&P 500 closed 35 points lower. The NASDAQ was down 112 points.

West Texas Intermediate Crude Oil futures (CME) closed mostly narrowly lower through the front six contracts.

By | July 6th, 2023|Daily Market Highlights|

Cattle Current Daily—July 6, 2023

Cattle futures showed signs of modest correction Wednesday as traders await direction from the week’s cash market.

Feeder Cattle futures closed an average of $2.79 lower ($2.17 to $3.25 lower).

Live Cattle futures closed an average of $1.14 lower (72¢ to $1.87 lower).

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

Last week, live prices were $179/cwt. in the Texas Panhandle, $178 in Kansas, $182-$185 in Nebraska and $180-$183 in the western Corn Belt at $180-$183. Dressed prices were $290.

Choice boxed beef cutout value was $5.56 lower Wednesday afternoon at $322.78/cwt. Select was $1.61 lower at $292.69/cwt.

Wheat futures bounced higher Wednesday amid selling fatigue and concerns about Russia’s sword rattling.

KC HRW Wheat closed 25¢ to 50¢ higher.

Corn and Soybean futures held their own with static week over week crop conditions.

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

Soybean futures closed mostly 1¢ to 8¢ higher through Aug ‘24, and then 11¢ to 13¢ higher.

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Major U.S. financial indices resumed the trading week with softer tones Wednesday.

The Dow Jones Industrial Average closed 129 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 25 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.80 to $2.00 higher through the front six contracts.

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Agricultural producer sentiment improved last month, according to the Purdue University/CME Group Ag Economy Barometer index. It rose 17 points from the May reading to 121 in June. Producers’ perceptions of current conditions was unchanged but they were more optimistic about the future with Index of Future Expectations increasing 25 points to 123.

“Optimism about U.S. agriculture’s future and a more sanguine interest rate outlook help explain producers’ more positive view of the future expressed in June’s survey,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “However, current conditions in the farming economy continue to present a challenge for some producers. This month four out of 10 producers stated that their financial situation has deteriorated compared to a year ago.”

The Farm Financial Performance Index also rose this month, up 10-points from May and was likely a result of a late-May to early-June rally in harvest time prices for corn and soybeans, as well as optimism towards positive returns for cattle producers.

In June, 50% of respondents said they expect “good times” for livestock producers in the next five years, up from 37% in May. Optimism about positive returns for cattle producers, especially cow-calf operations, was likely a key factor behind the positive livestock outlook.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between June 12-16.

By | July 5th, 2023|Daily Market Highlights|

Cattle Current Daily—July 4 and 5, 2023

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

Last week, live prices were $1 lower in the Texas Panhandle at $179/cwt., $2 lower in Kansas at $178, steady in Nebraska at $182-$185 and $2-$4 lower in the western Corn belt at $180-$183. Dressed prices were steady at $290.

The weighted average five-area direct fed steer price last week was $181.33/cwt. on a live basis, which was $1.24 lower than the previous week. The average fed steer price in the beef was 47¢ lower at $289.34.

Choice boxed beef cutout value was 62¢ higher Monday afternoon at $328.34/cwt. Select was 67¢ higher at $294.30/cwt.

Cattle futures mostly held their ground Monday.

Feeder Cattle futures closed an average of 63¢ higher (32¢ to $1.17 higher).

Live Cattle futures closed narrowly mixed, from an average of 17¢ lower in the front four contracts to an average of 34¢ higher.

Corn futures firmed some Monday with likely support from rallying Soybeans.

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

Soybean futures closed mostly 22¢ to 31¢ higher, building on Fridays Acreage report.

KC HRW Wheat closed mostly 1¢ to 6¢ lower.

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Major U.S. financial indices edged higher Monday after the holiday-shortened trading session.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 28 points.

West Texas Intermediate Crude Oil futures (CME) closed 85¢ to $1.02 lower through the front six contracts.

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Saying that cattle markets have been bullish so far this year is an understatement.

In his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University explains Oklahoma auction prices for steer calves weighing less than 600 pounds averaged 41.9% higher year over year in June; 39.7% higher for feeder steers weighing more than 600 pounds. He adds that the five-area fed cattle price averaged 30.3% higher year over year over the past four weeks. 

“The June cattle on feed report showed that feedlot inventories have been lower for nine consecutive months,” Peel says. “The decline in feedlot inventory has been relatively slow with May feedlot placements higher than expected based on lingering drought impacts and strong feeder demand as feedlots attempt to maintain inventories. However, feeder supplies and feedlot numbers will continue to decline as the reality of smaller cattle supplies builds. Increased heifer retention is likely to squeeze feeder supplies more sharply in the second half of the year.”

As it is, Peel points out beef production through the first 24 weeks of this year was 4.9% less than last year’s record pace. So far this year, he says yearling slaughter (steer + heifer) is 3.0% less year over year with steer slaughter down 4.7% and heifer slaughter down 0.4%.

“However, heifer slaughter is down 4.9% year over year in the last four weeks and combines with a 5.9% decrease in steer slaughter to reduce total yearling slaughter 5.5% in the most recent four weeks of data,” Peel explains. “Total cow slaughter is down 4.4% for the year to date with a 12.1% decrease in beef cow slaughter … Bull slaughter is down 8.4% thus far in 2023.”

The primary question about markets in the second half of the year revolves around the extent to which herd rebuilding begins — increased heifer retention and continued reductions in beef cow slaughter, according to Peel. He notes producer expectations and remaining drought conditions will impact the timing of herd rebuilding efforts.

“The upcoming July Cattle on Feed report (with quarterly steer and heifer feedlot inventories) and the July Cattle report are expected to provide important clues as to how cattle market conditions may change in the second half of the year,” Peel says.

By | July 3rd, 2023|Daily Market Highlights|

Cattle Current Daily—July 3, 2023

Cattle futures climbed Friday as Corn futures slid on the bearish Acreage report (see below).

Feeder Cattle futures closed an average of $4.03 higher ($3.15 to $5.20 higher).

Live Cattle futures closed an average of $1.51 higher (65¢ higher at the back to $2.67 higher in new spot Aug).

Week to week on Friday, Feeder Cattle futures were up an average of $11.10 and Live Cattle futures were up an average of $3.68.

Negotiated cash fed cattle trade was mostly slow with light to moderate demand through Friday afternoon, according to the Agricultural Marketing Service.

Although too few to trend, there were a few live trades in the Texas Panhandle at $179/cwt. and at $182-$183 in the western Corn Belt. There were a few dressed trades in Nebraska at $290.

The only established trade for the week was in Kansas where live prices were $2 lower at $178.

Last week, live prices were $180/cwt. in the Southern Plains $182-$185 in Nebraska and $184-$185 in the western Corn Belt. Dressed prices were $290.

Choice boxed beef cutout value was 33¢ lower Friday afternoon at $327.72/cwt. Select was $3.55 lower at $293.63/cwt.

Estimated total cattle slaughter last week of 644,000 head was 5,000 head fewer than the previous week but 3,000 more than the same week last year. Year-to-date estimated total cattle slaughter of 16.3 million head was 580,000 head (-3.4%) less. Estimated year-to-date beef production of 13.34 billion pounds was 635.6 million pounds less (-4.5%).

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Corn futures tumbled Friday, closing 26¢ to 35¢ lower through Jly ’24 and then mostly 4¢ to 10¢ lower after USDA released the Acreage report, showing significantly more corn acres than expected (see below).

USDA estimated corn planted area for all purposes this year at 94.1 million acres, in the Acreage report. That was 5.52 million acres more (+6%) than last year, and 2.1 million acres more than the March Prospective Plantings report. Corn acres would be the third highest planted acreage in the United States since 1944. Projected area harvested for grain of 86.3 million acres would be 9% more than last year.

Conversely, soybean planted area for 2023 was estimated at 83.5 million acres, down 5% from last year and 4 million acres fewer than the Prospective Plantings report.

All wheat planted area for 2023 was estimated at 49.6 million acres, up 9% from last year. The 2023 winter wheat planted area of 37.0 million acres was 11% more than last year but 1% less than the previous estimate.

On Friday, Soybean futures closed 72¢ to 77¢ higher through Jan ‘24 and then 28¢ to 56¢ higher through Aug ‘24.

Week to week on Friday, Corn futures were an average of 86’9¢ lower through the front six contracts, while the front six contracts for Soybean were 34’5¢ higher.

USDA estimated all acres for hay harvested this year at 51.98 million acres, which would be 2.4 million acres more (+4.9%) than last year

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Major U.S. financial indices closed higher Friday, boosted by another gauge of cooling inflation.

The Personal Consumption Expenditures (PCE) price index, excluding food and energy, increased 0.3% month over month in May and 4.6% year over year, which was less than expected.

The Dow Jones Industrial Average closed 285 points higher. The S&P 500 closed 53 points higher. The NASDAQ was up 196 points.

West Texas Intermediate Crude Oil futures (CME) closed 52¢ to 78¢ higher through the front six contracts.

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The quarterly Grain Stocks report issued Friday continued to paint a picture of snugger on-hand supplies.

Corn stocks in all positions on June 1, 2023 totaled 4.11 billion bushels, down 6% year over year. Of the total stocks, 2.22 billion bushels were stored on farms, up 5% from a year earlier. Off-farm stocks of 1.89 billion bushels were 15% less than a year ago.

Soybeans stored in all positions on June 1, 2023 totaled 796 million bushels, down 18% from the same time last year. On-farm stocks totaled 323 million bushels, down 3% from a year ago. Off-farm stocks of 473 million bushels were 26% less than a year ago.

Old-crop all wheat stored in all positions on June 1, 2023 totaled 580 million bushels, down 17% from a year ago. On-farm stocks were estimated at 124 million bushels, up 34% from last year. Off-farm stocks of 456 million bushels were 25% less than a year ago.

By | July 2nd, 2023|Daily Market Highlights|

Cattle Current Daily—June 30, 2023

Cattle futures continued to gain Thursday on Corn weakness.

Feeder Cattle futures closed an average of $1.41 higher (90¢ to $2.12 higher).

Live Cattle futures closed an average of 43¢ higher.

Corn futures closed 6¢ to 9¢ lower.

Soybean futures closed mostly fractionally lower to 4¢ lower, except for gains in the front four contracts.

KC HRW Wheat closed mostly 7¢ to 10¢ lower.

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

There were a few live trades in Nebraska at $182/cwt., but too few to trend.

So far this week, live sales in Kansas are $2 lower at $178.

Last week, live prices were $180/cwt. in the Southern Plains $182-$185 in Nebraska and $184-$185 in the western Corn Belt. Dressed prices were $290.

Choice boxed beef cutout value 15¢ higher Thursday afternoon at $328.05/cwt. Select was 50¢ higher at $297.18/cwt.

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Major U.S. financial indices closed mostly higher Thursday, buoyed by banks’ successful passage of stress testing.

The Dow Jones Industrial Average closed 296 points higher. The S&P 500 closed 19 points higher. The NASDAQ was fractionally lower.

West Texas Intermediate Crude Oil futures (CME) closed 18¢ to 30¢ higher through the front six contracts.

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Per capita red meat and poultry disappearance—often used as a proxy for consumption—is forecast to decline 1% next year, mostly due to an 8% projected decline in per capita disappearance of beef, according to USDA’s Economic Research Service.

For pork, a very slight decrease in pork production, combined with higher expected exports, result in a very small decrease in forecast per capita disappearance next year.

By | June 29th, 2023|Daily Market Highlights|

Cattle Current Daily—June 29, 2023

Feeder Cattle futures maintained upward momentum as Corn futures continued to decline.

Feeder Cattle futures closed an average of $1.32 higher.

Live Cattle futures closed an average of 75¢ higher through Feb ‘24 (32¢ to $1.37 higher) and then unchanged to an average of 48¢ lower.

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

So far this week, live sales in Kansas are $2 lower at $178/cwt.

Last week, live prices were $180/cwt. in the Southern Plains $182-$185 in Nebraska and $184-$185 in the western Corn Belt. Dressed prices were $290.

Choice boxed beef cutout value was $1.33 lower Wednesday afternoon at $327.90/cwt. Select was $1.75 lower at $296.68/cwt.

More rain forecast for the Corn Belt took grain and Soybean futures lower for the second consecutive session.

Corn futures closed 20¢ to 33¢ lower through Jly ‘24 and then 3¢ to 10¢ lower.

Soybean futures closed 28¢ to 44¢ lower through Jan ‘24 and then mostly 22¢ to 24¢ lower.

KC HRW Wheat closed 18¢ to 33¢ lower. 

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Major U.S. financial indices closed mixed Wednesday with pressure the Fed emphasizing more future interest rate hikes are likely in the picture.

The Dow Jones Industrial Average closed 33 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 36 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.61 to $1.86 higher through the front six contracts.

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Many meat and food item prices continue to increase but at a more moderate pace than last year, according to the latest Food Price Outlook from USDA’s Economic Research Service.

For instance, food at home prices were 0.1% higher month to month in May and 5.8% higher year over year. Year-to-date prices were 4.7% more than the same time last year when food at home prices were 11.4% more year over year.

More specifically, beef and veal prices increased 1.5% month to month in May and 1.0% year over year. Year-to-date prices were 0.1% less than the same time last year when prices were 5.3% higher year over year.

“The Choice beef price (May) topped $8.08 per pound while the all-fresh beef retail price exceeded $7.50 per pound,” says Andrew P. Griffith, agricultural economist at the University of Tennessee in his weekly market comments. “The Choice beef price is a historic high and represents a $0.23 per pound increase from April. The all-fresh beef retail price for May was $0.18 per pound higher than April and the third highest monthly price on record and the highest it has been since November 2021.”

By way of contrast, pork prices were 0.1% higher month to month but 2.9% lower year over year. Year-to-date, pork prices were down 1.9%. Poultry prices were 0.2% higher month to month and 2.1% higher year over year. Year-to-date poultry prices were up 2.2%.

By | June 28th, 2023|Daily Market Highlights|

Cattle Current Daily—June 28, 2023

Cattle futures rallied Tuesday, buoyed by declining Corn futures.

Feeder Cattle futures closed an average of $4.02 higher.

Live Cattle futures closed an average of $1.55 higher ($1.22 to $2.05 higher).

Corn futures took a sharp step lower, pressured by more rain forecast in the Corn Belt and despite deteriorating crop conditions displayed in the previous day’s weekly Crop Progress report. Keep in mind Acreage and Grain Stocks reports out Friday.

Corn futures closed mostly 15¢ to 27¢ lower.

Soybean futures closed 20¢ to 29¢ lower through Sep ‘24 and then mostly 17¢ lower.

KC HRW Wheat closed 20¢ to 28¢ lower.

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

Although too few to trend, there were a few live sales in Kansas at $178/cwt.

Last week, live prices were $180 in the Southern Plains $182-$185 in Nebraska and $184-$185 in the western Corn Belt. Dressed prices were $290.

Choice boxed beef cutout value was $3.81 lower Tuesday afternoon at $329.23/cwt. Select was $1.24 lower at $298.43/cwt.

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Major U.S. financial indices rose Tuesday, supported by positive economic news including an unexpected May increase of 1.7% for new manufactured durable goods orders. Consumer Confidence in June was also significantly higher.

The Conference Board Consumer Confidence Index® increased to 109.7 in June, up from 102.5 in May.

“Consumer confidence improved in June to its highest level since January 2022, reflecting improved current conditions and a pop in expectations,” says Dana Peterson, Chief Economist at The Conference Board. “Greater confidence was most evident among consumers under age 35, and consumers earning incomes over $35,000. Nonetheless, the expectations gauge continued to signal consumers anticipating a recession at some point over the next 6 to 12 months.”

The Dow Jones Industrial Average closed 212 points higher. The S&P 500 closed 49 points higher. The NASDAQ was up 219 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.29 to $1.67 lower through the front six contracts.

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Fed cattle supplies are the snuggest in three years, says Stephen Koontz, agricultural economist at Colorado State University, reflecting on Friday’s monthly Cattle on Feed report.

In the latest In the Cattle Markets, Koontz notes cattle on feed more than 150 days were less than the previous month and the prior three years, the same for cattle on feed for 90 days or more.

“Cattle on feed inventories continue to tighten from the peaks in 2022,” Koontz says. “The beginning of June saw an inventory of 11.552 million, roughly even with the beginning of June 2018. And there will be more and more of this to come with the level of heifer and beef cow slaughter. Beef cow slaughter remains down considerably from the prior year, but my assessment is that the industry is finally showing a neutral position and not liquidating nor rebuilding.”

Koontz also points to evidence of continued strong beef demand illustrated by the muted reaction of Live Cattle futures to the Cattle on Feed report, which indicated feedlot placements were about 3% more than expected.

“The boxed beef composite value has rallied to almost $340/cwt., whereas it spent all of 2022 below $295 and much of that year between $255-$275,” Koontz explains. “There is clearly strong beef demand supporting the market. We also see this in a seasonally strong Choice-Select spread.”

By | June 27th, 2023|Daily Market Highlights|

Cattle Current Daily—June 27, 2023

Although Friday’s Cattle on Feed report seemed to bring pressure early in the session, the reaction faded quickly as the day progressed in Cattle futures amid light trade.

Feeder Cattle futures closed an average of 61¢ higher, except for an average of 17¢ lower in the front three contracts.

Live Cattle futures closed narrowly mixed, from an average of 29¢ lower to an average of 13¢ higher.

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

Last week, live prices were $180/cwt. in the Southern Plains, $182-$185 in Nebraska and $184-$185 in the western Corn Belt. Dressed prices were $290.

The weighted average five-area direct fed steer price last week was $2.35 lower on a live basis at $182.57/cwt. The average fed steer price in the beef was $6.26 lower at $289.81.

Choice boxed beef cutout value was 97¢ lower Monday afternoon at $333.04/cwt. Select was 29¢ lower at $299.67/cwt.

Grain and Soybean futures closed mostly higher Monday, balancing weekend rains across much of the Corn Belt with geopolitical tensions in Russia.

Corn futures closed mostly 1¢ to 5¢ higher, except for mostly fractionally mixed from near Sep through near May.

Soybean futures closed 12¢ to 26¢ higher through Aug ‘24 and then mostly 9¢ to 12¢ higher. 

KC HRW Wheat closed mostly 5¢ higher.

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Major U.S. financial indices softened Monday with most pressure from tech stocks.

The Dow Jones Industrial Average closed 12 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 156 points.

West Texas Intermediate Crude Oil futures (CME) closed 21¢ to 27¢ higher through the front six contracts.

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Frozen beef stocks continued to decline last month, according to the latest USDA Cold Storage report. Beef in cold storage May 31 was 6% less than the previous month and 20% less than a year earlier.

Frozen pork supplies were 7% less than the previous month and down 4% year over year.

Total red meat supplies in freezers were 7% less than the previous month and 11% less than the previous year.

Total frozen poultry supplies were up 2% from the previous month and 9% higher year over year.

By | June 26th, 2023|Daily Market Highlights|

Cattle Current Daily—June 26, 2023

Weather forecasts continued to whipsaw grain markets on Friday with Corn and Soybean futures closing sharply lower on the wet weekend outlook for the Corn Belt, as well as overbought conditions.

Corn futures closed mostly 22¢ to 32¢ lower.

Soybean futures closed 18¢ to 29¢ lower through Jly ‘24 (except for 6¢ and 14¢ lower in the front two contracts) and then mostly 6¢ to 8¢ lower.

KC HRW Wheat closed mostly 10¢ to 18¢ lower.

Feeder Cattle futures surged an average of $2.80 higher Friday ($2.20 to $3.27 higher) as Corn futures slid lower.

Live Cattle futures tread water with pressure from the week’s softer cash trade and lower wholesale beef prices. They closed an average of 17¢ higher, except for an average of 23¢ lower in the front three contracts.

Negotiated cash fed cattle trade was inactive on light demand in all regions through Friday afternoon, with too few transactions to trend in any region, according to the Agricultural Marketing Service.

For the week, live prices were $2 lower in the Southern Plains at $180/cwt., $3-$4 lower in Nebraska at $182-$185 and $2-$3 lower in the western Corn Belt at $184-$185. Dressed prices were $6 lower in Nebraska at $290 and $6-$10 lower in the western Corn Belt at $290.

Choice boxed beef cutout value was 46¢ lower Friday afternoon at $334.01/cwt. Select was $3.84 lower at $299.96/cwt. The Choice Select spread was the highest since last October at $34.05.

Estimated total cattle slaughter last week of 649,000 head was 15,000 head more than the previous week, but 16,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 15.6. million head was 587,000 head less (-3.6%) that the same time last year. Year-to-date estimated beef production of 12.8 billion pounds was 638 million pounds less (-4.7%).

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Major U.S. financial indices slid Friday as investors appeared more concerned about domestic and global economic growth.

The Dow Jones Industrial Average closed 219 points lower. The S&P 500 closed 33 points lower. The NASDAQ was down 138 points.

West Texas Intermediate Crude Oil futures (CME) closed 17¢ to 35¢ lower through the front six contracts.

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Although bullish supply fundamentals remain, markets could view Friday’s monthly Cattle on Feed report as slightly bearish with May placements about 3% more than pre-report estimates. Placements in May of 1.9 million head were 86,000 more (+4.6%) year over year. That’s for feedlots with 1,000 head or more capacity.

In terms of placement weights, 34% went on feed weighing 699 lbs. or less, 51% weighing 700-899 lbs. and 15% weighing 900 lbs. or more.

Marketing in May of 1.9 million head were 1.7% more than last year, about even with expectations.

Cattle on feed June 1 of 11.5 million head were 2.9% less than the previous year. That was 0.5% more than estimates ahead of the report.

 

By | June 25th, 2023|Daily Market Highlights|

Cattle Current Daily—June 23, 2023

Cattle futures found some traction Thursday with a let up in Corn futures and perhaps some short covering.

Live Cattle futures closed an average of $1.24 higher (40¢ to $1.72 higher).

Feeder Cattle futures closed an average of $3.07 higher ($2.55 to $3.45 higher).

Corn and Soybean futures took a breather Thursday from the recent steep run-up.

Corn futures closed mostly 7¢ to 8¢ lower.

Soybean futures closed 14¢ to 40¢ lower through Sep ‘24 and then mostly 6¢ lower.

KC HRW Wheat closed mostly 5¢ to 6¢ higher.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on very light demand through Thursday afternoon, with too few transactions to trend in any region, according to the Agricultural Marketing Service.

So far this week, live prices are $2 lower in the Southern Plains at $180/cwt., $3-$4 lower in Nebraska at $182-$185 and $2-$3 lower in the western Corn Belt at $184-$185.

Last week, dressed prices were $296 in Nebraska and $294-$300 in the western Corn Belt.

Choice boxed beef cutout value was 22¢ higher Thursday afternoon at $334.47/cwt. Select was 45¢ lower at $303.80/cwt

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Major U.S. financial indices firmed Thursday with the most support for tech stocks.

The Dow Jones Industrial Average closed 4 points lower. The S&P 500 closed 16 points higher. The NASDAQ was up 128 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.39 to $3.02 lower through the front six contracts, pressured by central banks around the world raising interest rates, as well as concerns about China’s economic growth and demand.

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Current and recent U.S. Drought Monitors paint a clear picture behind the drought premiums added to grain and soybean futures.

For the week beginning June 20, drought existed across 58.5% of the Midwest, compared to 48.7% a week earlier and 32.1% two weeks earlier.

For the same week, 64% of U.S. corn production was in drought areas, compared to 57% a week earlier and 45% two weeks earlier. The same week last year, drought covered 17% of production.

Likewise, 57% of U.S. soybean production was affected by drought the week beginning June 20, compared to 51% a week earlier, 39% two weeks earlier and 11% a year earlier.

For the same week, drought encompassed 27.1% of the Continental U.S. versus 25.0% a week earlier and 34.5% two weeks earlier. Forty percent of U.S. cattle were in areas affected by drought.

 

By | June 22nd, 2023|Daily Market Highlights|

Cattle Current Daily—June 22, 2023

Corn and Soybean futures bounced sharply higher Wednesday, fueled by the eroding crop conditions revealed in the weekly Crop Progress report and spawned by intensifying drought in the Corn Belt.

Corn futures closed mostly 20¢ to 31¢ higher through Sep ‘24 and then mostly 10¢ to 18¢ higher.

Soybean futures closed 23¢ to 37¢ higher through Aug ‘24 and then mostly 15¢ higher.

KC HRW Wheat closed mostly 27¢ to 37¢ higher.

Those gains cast a bearish shadow across Feeder Cattle futures, which closed an average of $3.67 lower ($2.92 to $4.42 lower).

Live Cattle faded most of the heat, supported by current cash premiums and despite lower cash fed cattle prices so far this week and recent sharp declines in wholesale beef values. Live Cattle closed an average of 34¢ lower, except for 12¢ and 5¢ higher in the front two contracts.

Keep in mind the monthly Cattle on Feed report comes out Friday.

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

So far this week, live prices are $2 lower in the Southern Plains at $180/cwt. and $2-$3 lower in the western Corn Belt at $184-$185, where dressed prices last week were $294-$300.

Although too few to trend, there were some live sales in Nebraska at $182-$185. Last week, live prices there were $185-$189 on a live basis and $296 in the beef.

Choice boxed beef cutout value was $2.66 lower Wednesday afternoon at $334.25/cwt. Select was $3.68 lower at $304.25/cwt.

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Major U.S. financial indices closed lower again Wednesday, pressured by hawkish interest rate comments from the Federal Reserve.

“Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” according to FOMC chair, Jerome Powell, in testimony to Congress. “But at last week’s meeting, considering how far and how fast we have moved, we judged it prudent to hold the target range steady to allow the Committee to assess additional information and its implications for monetary policy.”

The Dow Jones Industrial Average closed 102 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 165 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.28 to $1.34 higher through the front six contracts.

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Rural economies are improving, according to the Creighton University Rural Mainstreet Index (RMI). It rose to 56.9 in June, the highest level since May of last year and marking the third consecutive month with a reading above growth neutral (50.0).

“After negative growth during the first quarter of this year, the Rural Mainstreet economy experienced positive, but slow, economic growth for all of the second quarter. Only 3.4% of bankers reported a downturn in economic conditions for the month,” according to Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

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.

Bank CEOs ranked Federal Reserve rate hikes as the greatest challenge in the 12 months ahead with rising bank regulations ranked as a distant second.

“Higher short-term interest rates produced by Federal Reserve rate hikes over the past year have posed a significant threat to community banks by expanding the costs of customer deposits while the rates on bank loans have risen little over the same time period,” Goss says.

By | June 21st, 2023|Daily Market Highlights|

Cattle Current Daily—June 21, 2023

Cattle futures started the trading week lower with pressure from last week’s weaker fed cattle prices, increasing feed costs, lower wholesale beef values and bearish outside markets.

Live Cattle futures closed an average of $1.49 lower ($1.02 to $2.02 lower).

Feeder Cattle futures closed an average of $2.25 lower ($1.47 to $2.77 lower).

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

Last week, live prices were $182/cwt. in the Southern Plains, $185-$189 in Nebraska and $186-$188 in the western Corn Belt. Dressed prices were $296 in Nebraska and $294-$300 in the western Corn Belt.

Choice boxed beef cutout value was $3.23 lower Tuesday afternoon at $336.91/cwt. Select was $2.83 lower at $307.93/cwt.

Corn and Soybean futures retained last week’s sharp gains on Tuesday as new-crop conditions erode (see below).

Corn futures closed mostly 2¢ to 6¢ higher.

Soybean futures closed mostly 1¢ to 7¢ higher.

KC HRW Wheat closed mostly narrowly mixed from 4¢ lower to 1¢ higher.

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Major U.S. financial indices closed lower Tuesday, led by energy stocks. That was despite positive economic news including more housing starts than expected.

Privately‐owned housing starts in May were at a seasonally adjusted annual rate of 1,631,000, according to the U.S. Census Bureau. That was 21.7% more than the revised April estimate of 1,340,000 and 5.7% more than the May 2022 rate of 1,543,000.

The Dow Jones Industrial Average closed 245 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 22 points.

West Texas Intermediate Crude Oil futures (CME) closed 74¢ to $1.28 lower through the front six contracts.

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Nationwide, pasture and range conditions eroded a touch last week, according to the Crop Progress report from USDA’s National Agricultural Statistics Service.

For the week ending June 18, 44% of pasture and range was rated as Good (35%) or Excellent (9%), which was 1% less than the previous week but 11% more than a year earlier. 21% was rated as Poor (14%) or Very Poor (7%), which was 1% more than a week earlier but 21% less than a year earlier. States with more than 40% of pasture and range rated as Poor or Very Poor include: Illinois (42%); Michigan (56%) and Pennsylvania (48%).

Corn and soybean condition continued to deteriorate.

55% of corn was rated, Good (47%) or Excellent (8%) condition, compared to 61% the previous week and 70% the previous year. 12% was as Poor (9%) or Very Poor (3%), which was 4% more than previous week and 6% more than a year earlier.

54% of soybeans were rated in Good (47%) or Excellent (7%) condition, which was 5% less than the previous week and 14% less than the same week last year. 12% of soybeans were in Poor (9%) or Very Poor (3%) condition, versus 9% the previous week and 6% the previous year.

15% of winter wheat was harvested, which was 8% less than last year and 5% less than the average. 38% was rated in Good (32%) or Excellent (6%) condition, the same as a week earlier and 8% more than a year earlier. 29% was rated Poor (18%) or Very Poor (11%), which was 2% less than the previous week and 14% less than a year earlier. 

By | June 20th, 2023|Daily Market Highlights|

Cattle Current Daily—June 20, 2023

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

Last week, live prices were $3-$4 lower in the Southern Plains at $182/cwt., $2-$5 lower in Nebraska at $185-$189 and $2-$4 lower in the western Corn Belt at $186-$188. Dressed prices were $4 lower in Nebraska at $296 and steady to $4 lower in the western Corn Belt at $294-$300.

The five-area direct weighted average fed steer price for the week was $3.83 lower at $184.92 on a live basis. The weighted average in the beef was $3.14 lower at $296.07.

Choice boxed beef cutout value was $2.95 lower Monday afternoon at $340.14/cwt. Select was 9¢ lower at $310.76/cwt.

Futures markets and equity markets were closed Monday in observance of Juneteenth.

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Despite recent week-to-week declines in Cattle futures, Andrew P. Griffith, agricultural economist at the University notes cash prices should remain strong based on fundamentals.

“The cattle supply is unchanged from expectations, but drought concerns across the Plains and much of the Midwest are resulting in higher corn prices, which means a higher cost of gain in the feedlot,” Griffith explains in his weekly market comments. “At the same time, there appears to be continued inflationary concern as consumers are still paying more at the grocery store. Thus, there are some real concerns that could drive the cattle market lower than its current mark.”

Even though prices may decline some, Griffith points out $200/cwt. for a steer weighing 800 pounds would still be an historically high price.

“If drought conditions persist in the Corn Belt and the Plains then there may be much tougher decisions ahead than when to sell a group of calves,” Griffith says. “It cannot not be stressed enough that producers should maintain good culling practices in the cow herd. Just as calf prices are strong, so are slaughter cows. Calf prices will never be high enough to retain a cow that should be culled based on the typical culling criteria.”

By | June 19th, 2023|Daily Market Highlights|

Cattle Current Daily—June 19, 2023

Cattle futures continued to bounce back Friday with another day of higher wholesale beef values and perhaps some positioning ahead of the long weekend.

Live Cattle futures closed an average of $1.26 higher. They were an average of 92¢ higher week to week.

Feeder Cattle futures closed an average of 71¢ higher (42¢ to $1.02 higher). Week to week on Friday, they closed an average of $3.56 lower ($3.20 to $4.07 lower).

That was with Corn and Soybean futures continuing to chug higher, riding the rails of drought worries.

Corn futures closed mostly 13¢ to 24¢ higher through Sep ‘24 and then mostly 9¢ to 11¢ higher. Week to week, they were an average of 58’9¢ higher through the front six contracts.

Soybean futures closed 31¢ to 50¢ higher through Aug ‘24 and then mostly 20¢ higher. Week to week on Friday, there were about $1.20 higher through the front six contracts.

KC HRW Wheat closed mostly 21¢ to 31¢ higher on Friday.

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Negotiated cash fed cattle trade remained largely undeveloped through Friday afternoon.

Although too few to trend, there were some live sales in the Southern Plains at $182/cwt. on limited trade and light demand, according to the Agricultural Marketing Service. Prices there the previous week were $185-$186.

Live prices in the western Corn Belt the previous week were $190 on a live basis and $298-$300 in the beef.

Established regional trade for the week occurred in Nebraska with live prices $5-$6 lower at $185 and dressed prices $4 lower at $296.

The five-area direct weighted average fed steer price was $186.78 on a live basis week to week on Thursday, which was $2.28 lower. The weighted average in the beef was $3.06 lower at $396.08.

Choice boxed beef cutout value was $1.02 higher Friday afternoon at $343.09/cwt. Select was $1.37 higher at $310.95/cwt. Week to week on Friday, Choice was up $10.16 and Select was $5.24 higher.

Estimated total cattle slaughter last week of 634,000 head was 18,000 head more than the previous week but 34,000 fewer than the same week last year. Year-to-date cattle slaughter of 15.0 million was 571,000 head fewer (-3.7%) than a year earlier. Estimated year-to-date beef production of 12.3 billion pounds was 623.5 million pounds less (-4.8%).

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Major U.S. financial indices closed lower Friday with likely profit taking ahead of the three-day weekend.

The Dow Jones Industrial Average closed 108 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 93 points.

West Texas Intermediate Crude Oil futures (CME) closed 96¢ to $1.16 higher through the front six contracts.

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USDA announced last week that it is ramping up efforts to strengthen the substantiation of animal-raising claims.

Animal-raising claims, such as “grass-fed” and “free-range,” are voluntary marketing claims highlighting certain aspects of how the source animals for meat and poultry products are raised. These claims must be approved by USDA’s Food Safety and Inspection Service (FSIS) before they can be included on the labels of meat and poultry products sold to consumers.

“FSIS has received several petitions, comments, and letters from a wide range of stakeholders asking the agency to reevaluate its oversight of animal-raising claims, specifically, how they are substantiated,” according to the announcement. “In addition, the veracity of “negative” antibiotics claims (e.g., “raised without antibiotics” or “no antibiotics ever”) has come into question.”

FSIS, in partnership with USDA’s Agricultural Research Service (ARS), will conduct a sampling project to assess antibiotic residues in cattle destined for the “raised without antibiotics” market. The results of this project will help inform whether FSIS should require that laboratory testing results be submitted for the “raised without antibiotics” claim or start a new verification sampling program.

FSIS will also be issuing a revised industry guideline to recommend that companies strengthen the documentation they submit to the agency to substantiate animal-raising claims. The agency plans to strongly encourage use of third-party certification to verify these claims.

By | June 17th, 2023|Daily Market Highlights|

Cattle Current Daily—June 16, 2023

Live Cattle futures edged higher Thursday, supported by higher wholesale beef values. Live Cattle closed an average of 25¢ higher, except for 10¢ lower in the back contract.

Negotiated cash fed cattle trade ranged from slow with light to moderate demand in the North to mostly inactive with very light demand in the South through Thursday afternoon, according to the Agricultural Marketing Service.

Although too few to trend, there were some early live sales in Nebraska at $185/cwt. and $188 in the western Corn Belt. There were a few dressed sales in Nebraska at $294.00-$296.50.

Last week, live prices were $185/cwt. in the Texas Panhandle, $186 in Kansas, $189-$192 in Nebraska and $190 in the western Corn Belt. Dressed prices were $300 in Nebraska and $298-$300 in the western Corn Belt.

Choice boxed beef cutout value was $3.01 higher Thursday afternoon at $342.07/cwt. Select was 32¢ higher at $309.58/cwt.

Feeder Cattle futures closed an average of $1.53 lower, pressured by significantly higher Corn futures prices and the related stall to improving conditions.

According to the latest weekly U.S. Drought Monitor (beginning June 13), drought conditions existed in 25% of the continental U.S. versus 22% a week earlier. For the same time period, 42% of cattle inventory was affected by the drought, which was 2% more than the previous week and 6% more than two weeks earlier.

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Corn futures roared higher mostly 12¢ to 25¢ higher Tuesday, fueled by expanding drought in the Corn Belt, with 57% of current corn production affected by drought, compared to 45% a week earlier and 34% two weeks earlier.

Corn received added support from the weekly U.S. Export Sales report (week ending June 8). Net U.S. sales for corn exports (2022-23) were 58% more than the previous week and noticeably higher than the prior four-week average.

Soybean futures closed mostly 27¢ to 50¢ higher.

Drought is affecting 51% of soybean production, compared to 39% a week earlier and 28% two weeks earlier.

Kansas City HRW Wheat futures closed 21¢ to 27¢ higher.

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Major U.S. financial indices rallied sharply higher Thursday with investors apparently emboldened that the Fed pausing interest rates could suggest an end to monetary tightening sooner rather than later.

The Dow Jones Industrial Average closed 428 points higher. The S&P 500 closed 53 points higher. The NASDAQ was up 156 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.30 to $2.36 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) raised projected feeder steer prices (750-800 pounds, Oklahoma City) for the remainder of this year, in June’s Livestock, Dairy and Poultry Outlook. Forecast increases were based on recent price strength and improving summer grazing opportunities.

Prices were forecast $5 higher in the second quarter at $209/cwt., $10 higher in the third quarter at $224 and $6 higher in the fourth quarter at $226. The annual average price for this year was projected $6 higher at $227.

For reference, the highest recorded weekly price for feeder steers was $243.58/cwt. in October 2014, according to ERS.

“The ongoing story of tight cattle supplies combined with improving pasture conditions and lower year-over-year feed costs continues to push feeder cattle prices higher,” say ERS analysts. “Demand for limited supplies of feeder cattle remains strong. Feedlots are looking to fill their feedyards to take advantage of lower feed costs and the prospects for higher fed cattle prices, while recent rains have improved the drought situation in a few areas, likely creating some demand for cattle to go on grass.”

ERS projected the feeder steer price in the first quarter of 2024 at $222 with an annual average next year of $226.50.

As reported recently in Cattle Current, ERS raised the projected quarterly five-area direct average fed steer price $5-$9 for the remainder of the year to an annual average of $171.70/cwt.

By | June 15th, 2023|Daily Market Highlights|

Cattle Current Daily—June 15, 2023

Cattle futures closed sharply lower Wednesday, apparently driven by fund selling and likely pressure from outside markets.

Live Cattle futures closed an average of $2.53 lower ($1.97 to $2.95 lower).

Feeder Cattle futures closed an average of $4.35 lower.

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

Last week, live prices were $185/cwt. in the Texas Panhandle, $186 in Kansas, $189-$192 in Nebraska and $190 in the western Corn Belt. Dressed prices were $300 in Nebraska and $298-$300 in the western Corn Belt.

Choice boxed beef cutout value was $1.07 higher Wednesday afternoon at $339.06/cwt. Select was 22¢ lower at $309.26/cwt.

Corn futures closed 1¢ to 4¢ lower through Jly ‘24 and then mostly 1¢ higher.

Soybean futures closed mostly fractionally mixed.

KC HRW Wheat closed mostly 10¢ lower.

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Major U.S. financial indices closed mixed Wednesday after dropping sharply lower following the Federal Reserve’s decision to let current interest rates ride at its meeting this week, as expected. However, the nation’s bank also insinuated more hikes were likely to come later.

“Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy,” according to an FOMC statement. “Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain.”

The Dow Jones Industrial Average closed 232 points lower. The S&P 500 closed 3 points higher. The NASDAQ was up 53 points.

West Texas Intermediate Crude Oil futures (CME) closed 99¢ to $1.15 lower through the front six contracts.

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Rapid escalation of wholesale beef prices since Memorial Day suggests beef demand remains positive, according to David P. Anderson, Extension livestock economist at Texas A&M University.

“Beef production will continue to be lower than a year ago, supporting higher wholesale beef prices. Normally, beef production increases seasonally in the summer months,” Anderson explains, in the latest issue of In the Cattle Markets. “Even though production may increase from current levels, it will be below last year. Reduced beef production combined with positive beef demand has drawn down beef in cold storage dramatically since the first of the year. Since January cold storage beef stocks have declined 86 million pounds, or 16%.”

As mentioned recently in Cattle Current, estimated year-to-date beef production of 11.8 billion pounds last week was 592.5 million pounds less (-4.8%) than a year earlier.

“It would appear beef demand actually changed post-coronavirus, when compared to the previous time period,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “…In the short term, beef supply is being impacted by slaughter rates and slaughter weights. Total steer and heifer slaughter continue to run below year-ago levels, but strong boxed beef prices incentivize growing animals to a larger weight. In recent weeks, cattle dressed weights have been catching up to year-ago weights, and it is likely cattle feeders will attempt to push finished weights higher than last year’s weights. This is about the only way to influence beef production in the short term.”

By | June 14th, 2023|Daily Market Highlights|

Cattle Current Daily—June 14, 2023

Cattle futures faded pressure early in Tuesday’s session to closer higher.

Live Cattle futures closed an average of 70¢ higher (35¢ to $1.02 higher), except for 10¢ lower in the back contract.

Feeder Cattle futures closed an average of $1.12 higher.

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

Last week, live prices were $185/cwt. in the Texas Panhandle, $186 in Kansas, $189-$192 in Nebraska and $190 in the western Corn Belt. Dressed prices were $300 in Nebraska and $298-$300 in the western Corn Belt.

Choice boxed beef cutout value was 56¢ higher Tuesday afternoon at $337.99/cwt. Select was 76¢ lower at $309.38/cwt.

Deteriorating crop conditions helped boosted Corn and Soybean futures Tuesday. 

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 18¢ to 30¢ higher.

KC HRW Wheat closed 2¢ to 4¢ lower through May ‘24, and then 1¢ to 3¢ higher.

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Major U.S. financial indices closed higher again Tuesday with further indications of easing inflation.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1% in May on a seasonally

adjusted basis, after increasing 0.4 percent in April, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 4.0% before seasonal adjustment.

The Dow Jones Industrial Average closed 145 points higher. The S&P 500 closed 30 points higher. The NASDAQ was up 111 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.26 to $2.30 higher through the front six contracts, supported by easing inflation and China’s cut in short-term interest rates, both bullish for demand.

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Cutter cow prices (90% lean) have been more than $90/cwt. on a live basis the past three weeks, the first time since 2015, according to the Livestock Marketing Information Center (LMIC).

“This year started with a price for cutter cows in the mid-$60s and has steadily climbed into midyear,” say LMIC analysts, in the latest Livestock Monitor.

Price spreads serve as another example of how steady demand relative to declining numbers are impacting value.

“The spread in price between cutter cows and other grades of live-priced cows has shrunken considerably this year,” according to LMIC analysts.  “Last year, the average spread between premium whites and cutter cows was just over $10/cwt. This year, the average is just under $4. The same is true for breakers (75% lean) and boners (85% lean). Breaker volumes are up 8% year to date, and the premium to cutters has averaged $6.77 versus the 2022 average of $10.61 per cwt. Boner graded cow volumes are up almost 400% from last year at this time, and the premium to cutters has averaged $4.84 per cwt this year. In 2022, the average was $7.01 per cwt.”

By | June 13th, 2023|Daily Market Highlights|

Cattle Current Daily—June 13, 2023

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

Last week, Live prices were $5-$10 higher in the Texas Panhandle at $185/cwt., $6-$8 higher in Kansas at $186, steady to $9 higher in Nebraska at $189-$192 and $3-$5 higher in the western Corn Belt at $190. Dressed prices were $8-$15 higher in Nebraska at $300 and $8-$10 higher in the western Corn Belt at $298-$300.

The weighted average five-area direct fed steer price last week was $188.75/cwt. on a live basis, which was $6.72 more than the previous week. The average fed steer price in the beef was $9.16 higher at $299.21.

Choice boxed beef cutout value was $4.50 higher Monday afternoon at $337.43/cwt. Select was $4.53 higher at $210.24/cwt.

Last week’s strong gains in cash fed cattle prices and wholesale beef values helped lift Live Cattle futures higher on Monday, dragging Feeder Cattle along.

Live Cattle futures closed an average of $1.24 higher.

Feeder Cattle futures closed an average of 50¢ higher.

Corn futures closed mostly 10¢ to 18¢ higher, apparently driven once again by the latest weather outlook in the Corn Belt — drier this time.

Soybean futures closed mostly 3¢ to 8¢ higher, except for lower in the front two contracts.

KC HRW Wheat closed mostly fractionally mixed through May ‘24, and then 3¢ to 4¢ lower.

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Major U.S. financial indices closed higher Monday with apparent optimism the Fed will skip raising interest rates at this week’s meeting as inflation eases.

The Dow Jones Industrial Average closed 189 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 202 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.66 to $3.05 lower through the front six contracts.

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Barring residual or redeveloping drought in key beef cow states, currently improving drought conditions and the onset of El Niño suggest beef herd liquidation is ending, according to Derrell Peel, extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. Nevertheless, he explains the beef cow herd will likely contract again this year.

“The first step to stabilizing the beef cow herd is the reduction of beef cow slaughter and a lower rate of cow culling,” Peel says. “Following record beef herd culling in 2022, beef cow slaughter is down 11.5% so far in 2023, a sign that herd liquidation is slowing.  However, I suspect that, until recently, the decrease in total beef cow slaughter was masking some continued liquidation in the drought areas of the plains… Beef cow slaughter is expected to decrease more sharply in the second half of the year.”

Definitive indication of herd expansion will come with increased heifer retention, according to Peel.

“Right now, no such signs exist, though I suspect that some heifer retention is beginning,” Peel says. “In fact, heifer slaughter thus far in 2023 is fractionally higher than last year’s elevated level. Of course, the reduced heifer feedlot placement that follows increased heifer retention will show up as lower heifer slaughter only after several months. The July Cattle inventory report may be the first sign that shows an increased inventory of beef replacement heifers. The report will be released July 21, 2023. Heifer slaughter is expected to start declining in the second half of the year.”

In the meantime, Peel notes the low inventory (Jan. 1) of replacement heifers — bred heifers calving this year and heifer calves to breed for calves in 2024.

“The bred heifer inventory is the lowest since 2011 and the inventory of replacement heifer calves is the lowest in the 23 years of data available,” according to Peel. “The number of replacement heifers is not enough to prevent more herd liquidation this year and likely not enough to do more than stabilize the beef cow herd in 2024. The big push for heifer retention will likely begin with weaning heifers this fall. These heifers will be bred in 2024, calve in 2025 and begin to increase beef production in 2026. It doesn’t seem possible to speed up the timeline.”

As herd expansion takes hold, reduced beef cow slaughter and increased heifer retention will pull beef production lower for a time.

“In the last herd expansion that began in 2014, total cattle slaughter in 2015 dropped to the lowest levels since 1963, resulting in the lowest beef production since 1993,” Peel explains. “We can expect analogous reductions in cattle slaughter and beef production in 2024 and 2025 at least. Increased heifer retention will pull feedlot inventories down sharply and keep them low for the expected three years of heifer retention that will be needed for the next herd expansion. With drought seemingly on its heels, the process of herd rebuilding is poised to begin.”

By | June 12th, 2023|Daily Market Highlights|

Cattle Current Daily—June 9, 2023

There was no afternoon negotiated cash fed cattle trade summary from AMS at press time but it sounded like feedlots in the Southern Plains were holding out for more money.

In the North, through Wednesday, dressed sales in Nebraska were $8-$15 higher at $300/cwt. and live sales in the western Corn Belt were $3-$5 higher at $190. Trade in the Southern Plains last week was at $175-$180.

Wholesale beef prices continued higher. Choice boxed beef cutout value was $3.54 higher Thursday afternoon at $328.73/cwt. Select was $2.54 higher at $304.10/cwt.

Both Live Cattle and Feeder Cattle futures closed an average of 90¢ lower, though bullish fundamentals remain.

Corn and Soybean futures closed higher with support from expanded drought coverage in the Corn Belt. Perhaps there was also positioning ahead of Friday’s World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 3¢ to 5¢ higher.

Soybean futures closed mostly 10¢ to 12¢ higher.

KC HRW Wheat closed 14¢ to 18¢ higher, buoyed in part by Russia’s saber rattling over the Black Sea Initiative.

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Major U.S. financial indices closed higher Thursday with no apparent driver behind increased investor optimism.

The Dow Jones Industrial Average closed 168 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 133 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.07 to $1.24 lower through the front six contracts.

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April beef export value per head of fed slaughter was $441.70, the highest since last July, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

However, April beef exports were 10% below last year at 111,416 metric tons, while value fell 18% to $859.5 million.

Beef exports continued to gain momentum in Mexico in April, while exports also increased to South Korea, Europe and Africa. Exports to China/Hong Kong were relatively strong in April but shipments to Japan were down significantly.

Through the first four months of 2023, beef exports were down 8% in volume (437,910 mt) and were 21% lower in value ($3.21 billion) compared to last year’s record pace.

“With U.S. beef supplies tightening, it’s difficult to keep pace with the remarkable export totals posted in the first half of 2022, but exports continue to account for a similar share of production as last year’s record,” says Dan Halstrom, USMEF President and CEO. “The rebound in travel and tourism – which is now gaining momentum in Asia – and related foodservice opportunities continue to support beef demand. In some countries we have also seen a recent easing of the inflationary pressure on consumers’ discretionary income.”

By | June 8th, 2023|Daily Market Highlights|

Cattle Current Daily—June 8, 2023

Negotiated cash fed cattle prices continued higher Wednesday.

Dressed sales in Nebraska were $8-$15 higher at $300/cwt. on light trade and good demand. There were some early live sales at $188-$194, but too few to trend, according to the Agricultural Marketing Service. Live prices there last week were $183-$189.

Live sales in the western Corn Belt continued $3-$5 higher at $190 on light trade and good demand. Although too few to trend, there were some dressed sales at $300. Dressed prices there last week were $288-$292.

Trade in the Southern Plains was very limited on moderate to good demand with too few transactions to establish the market. Last week, live prices were $175-$180 in the Texas Panhandle and $178-$180 in Kansas.

Wholesale beef prices continued higher. Choice boxed beef cutout value was $3.79 higher Wednesday afternoon at $325.19/cwt. Select was $2.12higher at $301.56/cwt.

Even so, Cattle futures closed sharply lower amid likely technical selling and profit taking.

Live Cattle futures closed an average of $2.34 lower (82¢ lower in spot Jun to $2.82 lower).

Feeder Cattle futures closed an average of $3.76 lower ($2.72 lower at the back to $4.27 lower).

Another day and another forecast — wetter this time — pressured Corn and Soybean futures Wednesday.

Corn futures closed mostly 7¢ to 10¢ lower.

Soybean futures closed mostly 8¢ to 10¢ lower.

KC HRW Wheat closed 21¢ to 32¢ lower through Jly 24 and then 13¢ to 16¢ lower.

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Major U.S. financial indices closed mixed Wednesday with investors continuing to look for direction.

The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 16 points lower. The NASDAQ was down 171 points.

West Texas Intermediate Crude Oil futures (CME) closed 79¢ to 83¢ higher through the front six contracts.

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Pasture and range conditions continued to improve last week, according to the Crop Progress report from USDA’s National Agricultural Statistics Service.

For the week ending June 4, 45% of pasture and range was rated as Good (37%) or Excellent (8%), compared to 43% the previous week and 28% a year earlier. 20% was rated as Poor (14%) or Very Poor (6%), versus 22% a week earlier and 43% a year earlier. States with more than 40% of pasture and range rated as Poor or Very Poor include: Kansas (45%), Missouri (47%) and Oregon (46%).

Corn condition slipped a little week to week.

96% of corn was planted, which was 3% more than the previous year and 5% more than the five-year average. 85% was emerged, compared to 76% last year and 77% for average. 64% was rated in Good (53%) or Excellent (11%) condition, compared to 69% the previous week and 73% the previous year. 6% was as Poor (6%) or Very Poor (1%), compared to 4% a year earlier, which was 1% more than previous week and 2% more than a year earlier.

By | June 7th, 2023|Daily Market Highlights|

Cattle Current Daily—June 7, 2023

Negotiated cash fed cattle prices stepped $3-$5 higher in the western Corn Belt Tuesday at $190/cwt. according to the Agricultural Marketing Service. Trade was slow on light to moderate demand. Dressed prices there last week were $288-$292.

There were a few early sales in Nebraska through Tuesday afternoon at $190 on a live basis and $300 in the beef, but too few to trend. Last week, live prices were $183-$189 and dressed prices were $285-$292.

Trade in the Southern Plains was mostly inactive with very light demand. Last week, live prices were $175-$180 in the Texas Panhandle and $178-$180 in Kansas.

Stronger cash fed cattle prices helped lift Cattle futures.

Live Cattle futures closed an average of $1.60 higher (97¢ higher toward the back to $2.67 higher in spot Jun).

Feeder Cattle futures closed an average of $1.27 higher (65¢ higher in spot Aug to $1.57 higher at the back).

Resurgent wholesale beef values added support. Choice boxed beef cutout value was $7.21 higher Tuesday afternoon at $321.40/cwt. Select was $2.71 higher at $299.44/cwt.

Corn futures closed 3¢ to 10¢ higher through Jly ‘24 Tuesday on a more bearish weather outlook.

KC HRW Wheat closed 2¢ to 3¢ lower through May’24 and then 9¢ to 13¢ lower.

Soybean futures closed mostly 3¢ to 5¢ higher.

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Major U.S. financial indices mainly paddled water Tuesday with investors looking for direction.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 46 points.

West Texas Intermediate Crude Oil futures (CME) closed 39¢ to 41¢ lower through the front six contracts.

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Agricultural producer sentiment grew more bearish last month, according to the Purdue University/CME Group Ag Economy Barometer. It fell 19 points in May to 104, the weakest level since July 2022. The Index of Future Expectations was down 22 points to a 98, while the Index of Current Conditions was down 13 points at 116.

Weaker crop prices likely fueled declining producer optimism. In mid-May, compared to a month earlier, new-crop wheat bids for June-Jly delivery were down 50¢ per bushel, soybean bids were $1 per bushel less and Eastern Corn Belt fall delivery bids for corn declined more than 50¢ per bushel.

“Producers are feeling the squeeze from weakened crop prices which has reduced their expectations for strong financial performance in the coming year,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

In May, 38% of respondents said they expected weaker financial performance for their farm this year, compared to 23% who felt that way in April. Higher input cost remains the top concern among producers in the year ahead; however, concern over the risk of lower crop and/or livestock prices is growing.

Producers’ expectations for short-term farmland values fell 13 points to 110 in May, the weakest short-term index reading since August 2020. Just 29% of respondents said they expected farmland values to rise over the next 12 months compared to 54% who felt that way a year earlier.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between May 15-19.

By | June 6th, 2023|Daily Market Highlights|

Cattle Current Daily—June 6, 2023

Cattle futures continued higher Monday, helped along by surging wholesale beef prices and softer Corn futures.

Live Cattle futures closed an average of 47¢ higher.

Feeder Cattle futures closed an average of 68¢ higher.

Corn futures softened a touch Monday, following the previous session’s strong gains, perhaps pressured in part by rain forecast in the Corn Belt.

Corn futures closed mostly 2¢ to 4¢ lower.

KC HRW Wheat closed 4¢ to 10¢ higher.

Soybean futures closed mostly 2¢ to 5¢ lower.

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

Last week, live prices were $175-$180/cwt. in the Texas Panhandle, $178-$180 in Kansas, $183-$189 in Nebraska and $185-$187 in the western Corn Belt. Dressed prices were $285-$292 in Nebraska and $288-$292 in the western Corn Belt.

Choice boxed beef cutout value was $4.26 higher Monday afternoon at $314.19/cwt. Select was $5.80 higher at $296.73/cwt.

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Major U.S. financial indices closed lower Monday, with likely profit taking from last week’s strong gains.

The Dow Jones Industrial Average closed 199 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 11 points.

West Texas Intermediate Crude Oil futures (CME) closed 28¢ to 42¢ higher through the front six contracts.

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Dwindling beef production and resilient wholesale beef demand are lifting cattle prices.

“Tighter supplies of beef and cattle are dominating market fundamentals and will continue to do so,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel points out beef production was 4.8% less year over year for the first 20 weeks of this year, with lighter year-over-year carcass weights magnifying the decline.

“Choice boxed beef prices finished last week at $309.93/cwt., up $6/cwt. from the Friday before Memorial Day,” Peel notes. “Boxed beef prices previously peaked in late April but decreased through May with holiday buying completed. The increase in Choice boxed beef prices into June suggests that post-Memorial Day beef demand remains strong.” 

As cattle slaughter declines, harvest remains weighted toward a higher percentage of females than is typical.

“Total cattle slaughter is down 2.8% so far this year compared to last year, with fed slaughter down 2.4% and total cow slaughter down 4.1% year over year,” Peel says. “However, heifer slaughter remains 0.6% higher year over year for the year to date and total female (heifer plus cow) so far this year accounts for 52.4% of total cattle slaughter.”

Increasing fed cattle, calf and feeder cattle prices are providing economic incentive for herd expansion, and it appears Mother Nature is beginning to cooperate.

“Recent improvement in drought conditions increases the odds that heifer retention will begin in earnest in the second half of the year,” Peel says. “Increased heifer retention, combined with reduced cow culling will increasingly squeeze cattle slaughter for the remainder of the year and into 2024 and beyond.”  

By | June 5th, 2023|Daily Market Highlights|

Cattle Current Daily—June 5, 2023

Negotiated cash fed cattle trade ranged from slow with moderate demand to mostly inactive on light demand through Friday afternoon with too few transactions to trend, according to the Agricultural marketing Service.

For the week, live prices were $5-$9 higher in the Texas Panhandle at $175-$180/cwt., $7-$9 higher in Kansas at $178-$180, $3-$6 higher in Nebraska at $183-$188 and $3-$5 higher in the western Corn Belt at $185-$187. Dressed prices were $5-$6 higher in Nebraska at $285-$292 and $3-$7 higher in the western Corn Belt at $288-$292.

Through Thursday, the five-area direct weighted average fed steer price was $3.64 higher week to week at $181.35. The weighted average dressed steer price was $5.30 higher at $289.66.

Choice boxed beef cutout value was $3.49 higher Friday afternoon at $309.93/cwt. Select was $4.61 higher at $290.93/cwt.

Week to week on Friday, Feeder Cattle futures closed an average of $8.32 higher and Live Cattle futures closed an average of $6.12 higher. On Friday, Live Cattle futures closed an average of 31¢ higher and Feeder Cattle futures closed an average of 25¢ higher.

Grain and soybean futures caught a gear higher Friday, with the latest U.S. drought monitor showing expanding dryness in the Corn Belt. It indicates 34% of U.S. corn and 28% of soybean production was affected by drought June 1.

Corn futures closed mostly 10¢ to 16¢ higher through Jly ‘24 and then 2¢ to 5¢ higher.

Soybean futures closed mostly 12¢ to 18¢ higher.

KC HRW Wheat closed 7¢ to 9¢ higher.

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Major U.S. financial indices surged higher Friday, fueled by Senate passage of the Debt Ceiling bill, as well as a stronger jobs report than anticipated.

Total non-farm payroll employment increased by 339,000 in May, according to the U.S. Bureau of Labor Statistics.  The unemployment rate rose by 0.3% to 3.7%. Average hourly earnings for all employees on private non-farm payrolls in May rose by 11¢ cents to $33.44. Over the past 12 months, average hourly earnings have increased by 4.3%.

The Dow Jones Industrial Average closed 701 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 139 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.48 to $1.64 higher through the front six contracts.

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As welcome as significantly higher cattle prices are to producers, Andrew P. Griffith, agricultural economist at the University of Tennessee cautions the economic incentive for rapid herd expansion could add to eventual downside price pain.

“There is no reason to say the prices represented on the futures market are not attainable. However, if cash prices reach such a level in today’s economic environment, it will likely do more harm to cattle industry participants than good over the next five to eight years,” Griffith says, in his weekly market comments. “The concern here is some repeat performance of 2016 through 2018 following the strong prices in 2014 and 2015.”

It was a classic example of feast or famine.

“There is no way to predict what cattle prices will look like in five years, but the price levels being anticipated the next 12 months scream and shout herd expansion at as fast of a rate as possible,” Griffith says. He explains a moderate pace of herd expansion would support stronger prices for a longer period, whereas rapid expansion sets the stage for a steep price decline.

In the meantime, Griffith notes narrowing to negative packer margins amid high fed cattle prices likely point to increased sector consolidation.

“The packers this will be toughest on are the smaller operations and the new operations that are trying to pay down loans,” Griffith says. “The large and established packers can deal with negative margins a little longer than those who are highly leveraged. Red margins are nothing new in the packing industry, but they are something new to many of the operations that have opened the past couple of years. Beef packers will be competing for a relatively small number of cattle the next couple of years, which could lead to buyouts, consolidation, or straight-out closures … This type of price environment will lead to changes in the cattle industry. What those changes are and how they impact the industry will only be revealed with time.”

By | June 4th, 2023|Daily Market Highlights|

Cattle Current Daily—June 2, 2023

Negotiated cash fed cattle prices roared higher Thursday.

Trade in the Southern Plains was active with very good demand. Live prices were $5-$9 higher in the Texas Panhandle at $175-$180/cwt. and $7-$9 higher in Kansas at $178-$180.

Elsewhere, trade was moderate with very good demand. Live prices were $3-$6 higher in Nebraska at $183-$188 and $3-$5 higher in the western Corn Belt $185-$187. Dressed prices in Nebraska were $5-$6 higher at $285-$292. Last week, dressed prices in the western Corn Belt were $285.

Choice boxed beef cutout value was 60¢ higher Thursday afternoon at $306.44/cwt. Select was 83¢ lower at $286.32/cwt.

The extraordinary ascent of cash fed cattle prices fueled another bounce in Cattle futures.

Live Cattle futures closed an average of $3.65 higher ($2.25 higher at the back to $5.77 higher in spot Jun).

Feeder Cattle futures closed an average of $3.38 higher ($2.47 to $4.20 higher).

Traders appeared to add weather premium to markets Thursday.

Corn futures closed mostly 5¢ to 8¢ higher.

KC HRW Wheat closed 12¢ to 19¢ higher.

Soybean futures closed 18¢ to 29¢ higher though May ‘24 and then mostly 11¢ to 18¢ higher.

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Major U.S. financial indices closed higher Thursday with optimism fueled by U.S. House passage of a debt ceiling bill. 

The Dow Jones Industrial Average closed 153 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 165 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.79 to $2.01 higher through the front six contracts.

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Ranch and farm labor wages increased in the latest semiannual Farm Labor report from USDA’S NASS.

Operators paid their hired workers an average wage of $18.08 per hour during the April 2023 reference week (April 9-15, 2023), up 5% from the April 2022 reference week. Field workers received an average of $17.26 per hour, up 5%, while livestock workers earned $16.48 per hour, up 4%. The field and livestock worker combined wage rate of $16.99 per hour, was up 4% from the 2022 reference week. Hired laborers worked an average of 40.6 hours during the reference week, up 2% year over year.

Ranch and farm operators hired 651,000 workers directly during the reference week, which was 3% more than the previous year.

By | June 1st, 2023|Daily Market Highlights|

Cattle Current Daily—June 1, 2023

Another day of weaker Corn futures and the outlook for steady to stronger cash fed cattle prices this week helped Cattle futures extend gains Wednesday.

Feeder Cattle futures closed an average of $1.46 higher.

Live Cattle futures closed an average of 63¢ higher (25¢ higher in the spot month to $1.10 higher).

Expectations of record production in Brazil helped pressure Corn futures Wednesday.

Corn futures closed mostly 1¢ to 3¢ lower.

KC HRW Wheat closed 2¢ to 6¢ higher in the front three contracts and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 6¢ to 16¢ lower.

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

Last week, live prices were $170-$171/cwt. in the Texas Panhandle, $171 in Kansas, $180-$182 in Nebraska and $182 in the western Corn Belt. Dressed prices were $280-$286 in Nebraska and $285 in the western Corn Belt.

Choice boxed beef cutout value was 88¢ higher Wednesday afternoon at $305.84/cwt. Select was 62¢ lower at $287.77/cwt.

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Major U.S. financial indices closed lower Wednesday with investors focused on continued debt ceiling talks.

The Dow Jones Industrial Average closed 134 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 82 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.29 to $1.37 lower through the front six contracts.

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USDA forecast beef exports for fiscal year (FY) 2023 at $9.3 billion, in the quarterly Outlook for U.S. Agricultural Trade from the Economic Research Service (ERS) and Foreign Agricultural Service (FAS). The total would be $700 million less than February’s projection on weaker unit values for beef muscle cuts more than offsetting firm shipments to Mexico and East Asia.

Total livestock, poultry, and dairy exports were lowered $1.2 billion to $39.3 billion with lower beef and poultry estimates outweighing gains in dairy.

U.S. agricultural exports were forecast at $181.0 billion, down $3.5 billion from the February forecast. This revision was driven by decreases in corn, wheat, beef, and poultry exports.

“Corn exports are forecast $2.1 billion lower to $14.5 billion on lower unit values and volumes as Brazil is poised to harvest a record second crop of corn,” say ERS and FAS analysts.

For overall perspective, the global economic outlook remained mostly unchanged.

“Inflation remains on a slowing trend, but economic growth challenges are materializing as monetary conditions tighten,” explains ERS and FAS analysts. “North America is still projected to grow moderately, with growth in the Eurozone projected to remain at lower levels. World real gross domestic product (GDP) is projected to increase by 2.8% in 2023, unchanged from the previous forecast.”

The quarterly outlook pegs projected growth for the United States’ real GDP in 2023 0.2% higher at 1.6%. 

By | May 31st, 2023|Daily Market Highlights|

Cattle Current Daily—May 31, 2023

Last week’s strong cash fed cattle prices, recent higher wholesale beef prices and Tuesday’s break in Corn futures helped propel Cattle futures higher.

Feeder Cattle futures closed an average of $3.24 higher.

Live Cattle futures closed an average of $1.53 higher.

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

Last week, live prices were $170-$171/cwt. in the Texas Panhandle, $171 in Kansas, $180-$182 in Nebraska and $182 the western Corn Belt Dressed. prices were $280-$286 in Nebraska and $285 in the western Corn Belt.

The weighted average five-area direct fed steer price last week was $2.79 higher at $177.94/cwt. The average fed steer price in the beef was $4.02 higher at $284.36.

Choice boxed beef cutout value was $1.03 higher Tuesday afternoon at $304.96/cwt. Select was $2.85 higher at $287.77/cwt.

Grain and Soybean futures closed sharply lower Tuesday as traders appeared to take back weather premium, as well as profits from last week’s rally. 

Corn futures closed mostly 6¢ to 10¢ lower.

KC HRW Wheat closed 22¢ to 35¢ lower in the front five contracts and then 8¢ to 12¢ lower.

Soybean futures closed 30¢ to 41¢ lower through Aug ’24 and then 21¢ to 26¢ lower.

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Major U.S. financial indices closed little changed Tuesday with investors focusing on continued debt ceiling talks.

The Dow Jones Industrial Average closed 50 points lower. The S&P 500 closed fractionally higher. The NASDAQ was up 41 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.81 to $3.21 lower through the front six contracts, pressured by concerns about global demand.

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“Increasingly tight cattle supplies suggest that margins at all levels above the cow-calf sector will be squeezed in the coming months.  The severity of the squeeze and the timing will vary across beef industry segments,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Stating with the cow-calf sector, Peel explains calf prices are currently about 50% higher year over year. 

“With calf prices increasing faster than feeder cattle prices, stocker margins or value of gain is eroding. However, similar to feedlots, the time lags in stocker production will allow the uptrend in feeder prices to offset part of the high calf purchase prices,” Peel explains. “Calf prices are likely to continue increasing faster than feeder cattle prices in the coming months.”

So far, feedlot returns remain positive, due to long time lags associated with the sector and the recent rise of fed cattle prices to record levels, according to Peel.

“The increase in fed cattle prices is balanced against the price of feeder cattle placed in feedlots roughly six months ago,” Peel says.  “However, it’s just a matter of time before feedlot margins feel the squeeze of rising cattle prices. The prices of feeder cattle currently being placed in feedlots are up about 39% year over year.  Feedlot breakevens for fed cattle will increase sharply by the end of the year.”

As for the packing sector, Peel points out margins are already being squeezed as the 25% year-over increase in fed cattle prices runs ahead of boxed beef prices, which are about 14% higher.

“Additionally, packers will face increased overhead costs as declining cattle numbers will reduce packing plant utilization rates in the coming months,” Peel says.

Finally, comes the retail sector, where Peel says prices have remained mostly static during the last 16 months.

“It appears that retail margins are decreasing as wholesale values are increasing faster than retail prices,” Peel explains.  “The reported retail beef prices reflect only grocery sales and less is known about beef price adjustments in food service and export markets.  The ability of retail beef prices to move higher as limited supplies and rising wholesale prices squeeze retail margins is perhaps the biggest concern in beef markets currently.”

By | May 30th, 2023|Daily Market Highlights|

Cattle Current Daily—May 30, 2023

Live Cattle futures continued to grind higher, closing an average of 49¢ higher (5¢ higher at the front to 92¢ higher at the back), supported by stronger cash prices and wholesale beef values.

Feeder Cattle futures closed an average of 75¢ lower in light trade, pressured by the bounce higher in Corn futures.

Grain and Soybean futures closed higher Friday as traders appeared to add weather premium with the dry, hot outlook in the Corn Belt for the next couple of weeks.

Corn futures closed mostly 10¢ to 18¢ higher.

KC HRW Wheat closed 1¢ to 5¢ higher in the front five contracts and then 13¢ to 15¢ higher.

Soybean futures closed 10¢ to 17¢ higher.

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

For the week, live prices were $1 higher in the Southern Plains at $171/cwt., $2-$4 higher in Nebraska at $180-$182 and $4-$5 higher in the western Corn Belt at $182. Dressed prices were $4-$5 higher in Nebraska at $285-$286 and $3-$5 higher in the western Corn Belt at $285.

Choice boxed beef cutout value was $3.99 higher Friday afternoon at $303.93/cwt. Select was 38¢ higher at $284.92/cwt.

Estimated total cattle slaughter last week of 625,000 head was 17,000 head fewer than the prior week and 16,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 13.2 million head was 441,000 head less (-3.2%). Estimated year-to-date beef production of 10.8 billion pounds was 523.7 million pounds less (-4.6%).

U.S. beef exports appear to regaining some momentum. Net U.S. beef sales (2023) for the week ending May 18 totaled 18,300 metric tons. That was 5% more than the previous week and 15% more than the prior four-week average. Increases were primarily for Japan, South Korea, China, Mexico and Taiwan.

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Major U.S. financial indices closed higher Friday with renewed optimism surrounding debt ceiling talks. Tech stocks continued to add support.

The Dow Jones Industrial Average closed 328 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 277 points.

West Texas Intermediate Crude Oil futures (CME) closed 81¢ to 84¢ higher through the front six contracts.

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Fuel and fertilizer prices remain historically high but are lower year over year, according to analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

“Prices have been elevated for the better part of two years, and although they have been trending lower, they are still well above historic levels,” LMIC analysts say. “Anhydrous Ammonia prices started the year at $1,308.33 per ton, which was 12% below prices at the start of 2022. Through mid-May, Anhydrous Ammonia prices have fallen almost 17% to the most recent price reported of $1,089.58 per ton. Typically, Anhydrous Ammonia prices range from about $520 to $575 per ton during the first five months of the year.”

Likewise, based on USDA’s Illinois Production Cost Report, LMIC analysts offer other examples, compared to a year earlier (May 26): Diesel prices are 29% less at $3.27 per gallon; Liquid Nitrogen prices are 17% less at $535.75 per ton; Urea prices are 31% less at $653 per ton.

“Urea prices still need to move lower to get closer to more typical prices, which are usually around $400 per ton for this time of year,” according to LMIC analysts.

By | May 29th, 2023|Daily Market Highlights|

Cattle Current Daily—May 26, 2023

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

So far this week, live prices are $1 higher in the Southern Plains at $171/cwt., $2-$4 higher in Nebraska at $180-$182 and $4-$5 higher in the western Corn Belt at $182. Dressed prices are $4-$5 higher in Nebraska at $285-$286 and $3-$5 higher in the western Corn Belt at $285.

Choice boxed beef cutout value was $1.64 higher Thursday afternoon at $299.94/cwt. Select was 75¢ higher at $284.54/cwt.

Cattle futures continued to edge higher Thursday, supported by the week’s stronger cash prices.

Feeder Cattle futures closed an average of 25¢ higher, except for unchanged at either end of the board.

Live Cattle futures closed an average of 51¢ higher (25¢ to $1.20 higher in spot Jun).

Corn futures closed mostly 2¢ to 4¢ lower Thursday with likely profit taking and positioning ahead of the long weekend.

KC HRW Wheat closed mostly unchanged to 5¢ higher.

Soybean futures closed mostly 9¢ to 12¢ lower.

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Major U.S. financial indices closed mixed Thursday with gains in tech stocks but overall uncertainty tied to the debt ceiling talks.

The Dow Jones Industrial Average closed 35 points lower. The S&P 500 closed 36 points higher. The NASDAQ was up 213 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.08 to $2.51 lower through the front six contracts.

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Rural economic growth improved last month, according to the Rural Mainstreet Index, which increased from 50.1 in April to 55.8 in May. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. 

“The Rural Mainstreet economy continues to experience slow economic growth,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “Only 11.5% of bankers reported improving economic conditions for the month, with 88.5% indicating no change in economic conditions from April’s slow growth.”

After declining below growth neutral for March, the overall Rural Mainstreet Index expanded above the threshold for a second straight month, according to the May monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

The region’s farmland price index dropped to 56.3 from April’s 64.6. This was the 32nd straight month that the index has advanced above 50.0. 

Bankers reported that non-pasture farmland prices in their area grew by an average of 4.3% over the past 12 months. Respondents expected no price growth over the next 12 months.

The May loan volume index expanded to a strong 75.0 from 62.5 in April. The checking-deposit index plummeted to a second consecutive low of 22.0 from April’s 25.0, while the index for certificates of deposit and other savings instruments declined to 70.0 from April’s 74.0.

“Two consecutive record low checking deposit indices point to higher deposit outflows, even for community banks,” Goss says. 

By | May 25th, 2023|Daily Market Highlights|

Cattle Current Daily—May 25, 2023

Negotiated cash fed cattle trade was slow to moderate on moderate demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Prices were $1 higher at $171/cwt.

In Nebraska, trade was slow to moderate with moderate to good demand. Live prices were $2-$4 higher at $180-$182 and dressed prices were $4-$5 higher at $285-$286.

Although too few to trend, there were some live sales in the western Corn Belt at $180-$182 on slow trade with light to moderate demand. Live prices there last week were $177-$178 on a live basis; $280-$282 in the beef.

Cattle futures blossomed with the higher cash fed cattle prices.

Feeder Cattle futures closed an average of $1.33 higher, (87¢ to $2.17 higher).

Live Cattle futures closed an average of $1.04 higher (60¢ to $1.82 higher).

Choice boxed beef cutout value was $2.44 lower Wednesday afternoon at $298.30/cwt. Select was $2.51 higher at $283.79/cwt.

Corn futures closed mostly fractionally higher to 3¢ higher.

KC HRW Wheat closed mostly 15¢ to 29¢ lower.

Soybean futures closed mostly 2¢ to 4¢ lower.

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Major U.S. financial indices closed lower Wednesday with a negative rating watch for the U.S. AAA rating.

The Dow Jones Industrial Average closed 255 points lower. The S&P 500 closed 30 points lower. The NASDAQ was down 76 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.37 to $1.44 higher through the front six contracts.

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Total pounds of beef in freezers April 30 were down 6% from the previous month and down 16% from last year, according to USDA’s Cold Storage report.

Frozen pork supplies were 6% more than the previous month 6% more than the previous year.

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

Total frozen poultry supplies were up 1% from the previous month and up 9% from a year ago.

By | May 24th, 2023|Daily Market Highlights|

Cattle Current Daily—May 23, 2023

Cattle futures traded mixed Monday, holding their own in the face of higher grain futures.

Feeder Cattle futures closed an average of 36¢ higher, except for an average of 15¢ lower in two contracts.

Live Cattle futures closed mixed, from an average of 38¢ lower (10¢ to 70¢ lower) through Feb and then unchanged to an average of 10¢ higher.

Grain and Soybean futures bounced back some Monday with apparent technical resistance to the downside and perhaps some weather premium with the drier, hotter near-term outlook in parts of the Corn Belt.

Corn futures closed mostly 7¢ to 8¢ higher.

KC HRW Wheat closed fractionally higher to 3¢ higher.

Soybean futures closed mostly 15¢ to 21¢ higher.

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

For the week, live prices were steady in the Southern Plains at $170/cwt., $2 higher in Nebraska at $178 and steady to $3 higher in the western Corn Belt at $177-$178. Dressed prices were steady to $2 higher at $280-$282.

The five-area direct weighted average fed steer price was $1.02 higher last week at $175.15/cwt. The weighted average fed steer price in the beef was $1.36 higher at $280.84.

Choice boxed beef cutout value was $2.80 higher Monday afternoon at $303.90/cwt. Select was 51¢ lower at $283.43/cwt.

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Major U.S. financial indices closed mixed Monday, as investors continued to eye debt ceiling negotiations. 

The Dow Jones Industrial Average closed 140 points lower. The S&P 500 closed fractionally higher. The NASDAQ was up 62 points.

West Texas Intermediate Crude Oil futures (CME) closed 32¢ to 44¢ higher through the front six contracts.

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Beef cow slaughter continues less than last year but the year-to-date decline of 11%, with about five months of the year already gone, suggests the herd will continue to liquidate some more this year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“In 2014, beef cow slaughter dropped just over 18% from the previous year to put the brakes on herd liquidation. I suspect that the ongoing drought is masking continued liquidation in some areas up to this point,” Peel explains. “The low bred heifer inventory combined with the relatively slow reduction in beef cow slaughter makes additional beef cow herd liquidation this year probably unavoidable. In other words, if drought conditions continue to improve, 2024 will probably be the low point of the herd similar to 2014, albeit at even lower beef cow inventories.”

Assuming drought continues to fade, Peel explains, “What all of this means is that heifer retention likely will begin in earnest this fall with heifer calves to be bred in 2024. Modest herd expansion is possible next year with faster herd expansion after 2024.”

By | May 22nd, 2023|Daily Market Highlights|

Cattle Current Daily—May 22, 2023

Negotiated cash fed cattle trade was mostly slow on light to moderate demand through Friday afternoon, according to the Agricultural Marketing Service.

For the week, live prices were steady in the Southern Plains at $170/cwt., $2 higher in Nebraska at $178 and $1-$3 higher in the western Corn Belt at $178. Dressed prices in Nebraska were steady to $2 higher at $280-$282.

Stronger cash fed cattle prices in the North, coupled with erosion in Corn futures helped lift Cattle futures again on Friday.

Feeder Cattle futures closed an average of 64¢ higher (17¢ to 77¢ higher).

Live Cattle futures closed an average of 49¢ higher.

Choice boxed beef cutout value was $2.79 higher Friday afternoon at $301.10/cwt. Select was 33¢ higher at $283.94/cwt.

Estimated total cattle slaughter last week of 642,000 head was 4,000 head fewer than the previous week and 15,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 12.6 million head was 423,000 head fewer (-3.3%) than a year earlier. Estimated year-to-date beef production of 10.3 billion pounds was 513.6 million pounds less (-4.7%).

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As alluded to, market bears continued to pressure the grain complex Friday. Faster than average domestic planting, extension of the Black Sea Grain Initiative and China’s continued cancellation of contracts for U.S. corn all fueled bearishness in grain markets during the week.

Corn futures closed mostly 1¢ lower.

KC HRW Wheat closed 25¢ to 32¢ lower through May ‘24 and then 4¢ to 11¢ lower.

Soybean futures closed mostly 6¢ to 11¢ lower.

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Major U.S. financial indices closed lower Friday, dampened by stalled debt ceiling negotiations.

The Dow Jones Industrial Average closed 109 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 30 points.

West Texas Intermediate Crude Oil futures (CME) closed 25¢ to 39¢ lower through the front six contracts.

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USDA announced confirmation of an atypical case of Bovine Spongiform Encephalopathy (BSE) at a slaughter plant in South Carolina. According to Friday’s announcement, the cow, approximately 5 years old, never entered slaughter channels and at no time presented a risk to the food supply or to human health in the United States. Given the United States’ negligible risk status for BSE, USDA does not expect any trade impacts as a result of the finding.

USDA Animal and Plant Health Inspection Service’s (APHIS) National Veterinary Services Laboratories (NVSL) confirmed the cow was positive for atypical L-type BSE. The animal was tested as part of APHIS’s routine surveillance of cattle that are deemed unsuitable for slaughter.

Atypical BSE generally occurs in older cattle and seems to arise rarely and spontaneously in all cattle populations.

This is the nation’s 7th detection of BSE. Of the six previous U.S. cases, the first, in 2003, was a case of classical BSE in a cow imported from Canada; the rest have been atypical (H- or L-type) BSE.

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Markets will likely view the monthly Cattle on Feed report — feedlots with 1,000 head or more capacity — as neutral.

Placements in April of 1.7 million head were 76,000 head fewer (-4.2%) than a year earlier. That was 0.6% fewer than average estimates ahead of the report.

In terms of placement weights, 35% went on feed weighing less than 600 pounds, 49% weighing 700-899 pounds and 16% weighing 900 pounds or more.

Marketings in April of 1.7 million head were 192,000 head fewer (-10.1%) year over year. That was 0.3% less than pre-report estimates.

Cattle on feed May 1 of 11.6 million head were 414,000 head fewer (-3.4%) than the same time last year, about dead even with expectations.

Year-over-year on-feed numbers May 1 were 10% less in Colorado, 2% less in Kansas, 5% less in Nebraska, 9% less in Oklahoma and 4% less in Texas. Inventory was 5% more in Idaho, 2% more in Iowa and 9% more in Washington.

By | May 21st, 2023|Daily Market Highlights|

Cattle Current Daily—May 19, 2023

Cattle futures stepped higher Thursday, supported by recently lower Corn futures, bullish cash strength for feeder cattle, cattle feeders’ resolve to hold the line on fed cattle prices and perhaps some positioning ahead of Friday’s Cattle on Feed report.

Feeder Cattle futures closed an average of $2.83 higher ($1.55 to $3.35 higher).

Live Cattle futures closed an average of 78¢ higher.

Bearish sentiment continued in the grain complex.

Corn futures closed mostly 1¢ higher.

KC HRW Wheat closed mostly 18¢ to 28¢ lower.

Soybean futures closed mostly 1¢ to 3¢ lower.

Negotiated cash fed cattle trade was slow on light demand in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. Prices were steady at $177/cwt.

Elsewhere, trade was limited on light demand. Although too few to trend, there were some live trades in the western Corn Belt at $178.

Last week, live prices were $170/cwt. in Kansas, mostly $176 in Nebraska and $175-$177 in the western Corn Belt. Dressed prices were $280.

Choice boxed beef cutout value was 16¢ higher Thursday afternoon at $298.31/cwt. Select was 16¢ higher at $283.61/cwt.

Net U.S. beef export sales (2023) were 17,400 metric tons for the week ending May 11, according to the U.S. Export Sales report. That was 5% more than the previous week and 7% more than the prior four-week average. Increases primarily were for Japan, South Korea, China, Mexico and Taiwan.

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Major U.S. financial indices closed higher again Thursday, once again supported by apparent optimism about debt ceiling talks.

The Dow Jones Industrial Average closed 115 points higher. The S&P 500 closed 39 points higher. The NASDAQ was up 188 points.

West Texas Intermediate Crude Oil futures (CME) closed 77¢ to 97¢ lower through the front six contracts.

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USDA’s Economic Research Service (ERS) raised the expected second-quarter feeder steer price by $5 to $204/cwt. That’s basis 750-800 lbs. at Oklahoma City. The increase was based on recent data and forecast declines in season-average corn prices, according to ERS analysts, in the May Livestock, Dairy and Poultry Outlook.

Projected feeder steer prices were unchanged for the third quarter at $214, but $4 lower in the fourth quarter at $220. The average annual price was little changed at $205.37. ERS projected next year’s annual average price at $220.75.

As mentioned recently in Cattle Current, ERS increased forecast fed steer prices (five-area direct) higher for the remainder of this year, in the May World Agricultural Supply and Demand Estimates (WASDE). Prices were projected $3 higher in the second quarter at $172/cwt., and $2 higher in the third and fourth quarters at $164 and $169, respectively. The annual average price estimate increased $2 to $166.50.

Lingering drought in the Central and Southern Plains continues to hold market sway.

“Despite recent rains, for some producers, the very low hay supplies may not be sufficient to offset poor pastures to sustain herds this summer and allow producers to retain breeding stock to rebuild their herds,” ERS analysts say. “As a result, the culling of beef cows continues at a relatively high rate. Based on USDA, Agricultural Marketing Service reports for weekly slaughter under federal inspection, the pace of monthly beef cow slaughter remains relatively high despite dropping to below the pace for the last two years in March and April. This has the potential to weaken the outlook for calf crops in late 2023 and 2024, further reducing potential cattle placements year over year in 2024.”

ERS projects new highs for cattle prices in 2024, as cattle numbers decline.

“The relatively strong pace of beef cow slaughter and relatively large placements of heifers in feedlots in 2022 and into early 2023 will likely yield a smaller year-over-year calf crop in 2023, tightening future cattle supplies,” ERS analysts say. “Further, this will likely lead to fewer cows and bulls in the slaughter mix in 2024, both as absolute numbers are lower and—assuming a return to normal pasture conditions—producers hold back animals for herd expansion.”

ERS projects 2024 beef production 8% less than this year at 24.7 billion pounds.

By | May 18th, 2023|Daily Market Highlights|

Cattle Current Daily—May 18, 2023

Cattle futures closed mostly lower Wednesday, apparently with spillover pressure from apparent long liquidation in grain futures.

Feeder Cattle futures closed an average of 88¢ lower (32¢ to $1.15 lower).

Live Cattle futures closed an average of 27¢ lower, except for an average of 58¢ higher in the front three contracts.

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

Last week, live prices were $170/cwt. in the Southern Plains, mostly $176 in Nebraska and $175-$177 in the western Corn Belt. Dressed prices were $280.

Choice boxed beef cutout value was $1.32 lower Wednesday afternoon at $298.15/cwt. Select was $1.46 lower at $282.89/cwt.

Grain and Soybean futures tumbled Wednesday. At least from a psychologic perspective, widespread selling appeared to be tied to the U.N. Secretary General’s announcement that Russia agreed to extend the Black Sea Grain initiative for another 60 days (see below). As well, private exporters reported the cancellation of sales of 272,000 metric tons of corn for delivery to China during the 2022/2023 marketing year.

Corn futures closed mostly 5¢ to 9¢ lower.

KC HRW Wheat closed mostly 12¢ to 20¢ lower.

Soybean futures closed mostly 15¢ to 19¢ lower.

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Major U.S. financial indices closed higher Wednesday, supported by gains in regional bank stocks and apparent optimism about debt ceiling talks. 

The Dow Jones Industrial Average closed 408 points higher. The S&P 500 closed 48 points higher. The NASDAQ was up 157 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.97 to $2.16 higher through the front six contracts.

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You might recall one reason Russia continues to threaten withdrawing from the aforementioned Black Sea Grain Initiative is that it says economic sanctions imposed by the West — in response to the Russian invasion of Ukraine — are limiting its ability to export agricultural goods.

“Russia complains that its exports of food and fertilizers are hampered by sanctions. Let me be clear: Russia is exporting just fine. It is exporting grain and fertilizer at the same levels, if not higher, than before the full-scale invasion,” said Ambassador Linda Thomas-Greenfield, U.S. Representative to the United Nations, during a Foreign Press Center news briefing last week. “Russia’s threats are about money and power. The more Russia obstructs Ukraine’s exports, the higher prices go, and with Russian exports moving well, they’re making more profits.”

Despite Russia’s claims of export challenges, that nation’s grain and oilseed exports have thrived during the current marketing year, according to analysts with USDA’s Foreign Agricultural Service (FAS).

“Throughout 2022/23, Russia has benefited from large supplies, both beginning stocks and record production,” FAS analysts explain, in a report published last week. “Russia has exported significant quantities of both grains and oilseeds, despite its lack of transparent trade data. Additional sources of data validate the strong export volumes amid low prices.”

In fact, Russian wheat exports are forecast to hit a record 45.0 million tons in 2022/23, up 36% from the prior year and 3.5 million tons above its previous record in 2017/18, according to the report.

“While recent Russian government statements have claimed that economic sanctions have hampered Russia’s ability to export, in the case of grains and oilseeds, the Russian government itself has applied export taxes and quotas that affect its prices and export volumes,” FAS analysts say.

By | May 17th, 2023|Daily Market Highlights|

Cattle Current Daily—May 17, 2023

Feeder Cattle futures closed an average of 35¢ higher, except for 80¢ and 72¢ lower at either end of the board, supported by continued erosion in Corn futures.

Live Cattle futures closed an average of 25¢ lower, awaiting cash direction.

Wheat futures closed mostly 1¢ to 4¢ lower Tuesday with likely profit taking.

Corn futures closed 9¢ to 11¢ lower through Jly ‘24, and then mostly 7¢ lower.

Soybean futures closed mostly 19¢ to 36¢ lower.

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

Last week, live prices were $170/cwt. in the Southern Plains, mostly $176 in Nebraska and $175-$177 in the western Corn Belt. Dressed prices were $280.

Choice boxed beef cutout value was $2.51 lower Tuesday afternoon at $299.47/cwt. Select was 36¢ lower at $284.35/cwt.

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Major U.S. financial indices closed lower amid heightened recession fears, fueled by weaker retail sales than anticipated and a lower annual financial forecast from bellwether, Home Depot. 

The Dow Jones Industrial Average closed 336 points lower. The S&P 500 closed 26 points lower. The NASDAQ was down 22 points.

West Texas Intermediate Crude Oil futures (CME) closed 25¢ lower through the front six contracts.

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Left to their own devices, markets rise and fall, discount and reward and find their way to economic truths, whether or not anyone likes the ride or the destination.

A recent editorial by the Wall Street Journal (WSJ) Editorial Board, and shared by the North American Meat Institute, provides a reminder.

Authors note Tyson Foods last week reported its first quarterly loss since 2009 as meat prices declined.

“Tyson’s stock plunged after it reported anemic sales and downgraded its forecast. The quarterly loss at the largest U.S. meat supplier marks a stunning reversal from 2021 and early last year when it earned record profits amid a run-up in meat prices,” write WSJ authors.

Back then, they also note lawmakers accused beef packers of conspiring to manipulate the market to pad profits.

“Are they now conspiring to lose money?” wonder the authors. “…If markets were ‘distorted,’ the culprit was pandemic transfer payments that were a disincentive to work. As these programs lapsed, hiring became easier. Competition for workers and market share raised supplier costs while pushing down prices and profits. Meat prices fell 0.4% in April and are up only 0.3% over the past 12 months…

“Tyson’s stock has fallen by nearly half over the past year and is trading at the lowest levels since 2015. This doesn’t look like an antitrust conspiracy or market oligopoly…”

By | May 16th, 2023|Daily Market Highlights|

Cattle Current Daily—May 16, 2023

Cattle futures, especially Feeder Cattle, extended gains Monday, closing an average of $1.34 higher (67¢ to $2.07 higher).

Live Cattle futures closed an average of 66¢ higher, except 7¢ lower in spot Jun.

That was with Corn futures closing 5¢ to 7¢ higher through Jly ‘24, on the coattails of Wheat futures (KC HRW), which closed 21¢ to 27¢ higher through May ‘24, fueled by follow-through support from the World Agricultural Supply and Demand Estimates, along with concerns about the Black Sea Initiative.

Soybean futures closed 5¢ to 10¢ higher through Jly ‘24.

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

Last week, live prices were $2 lower in the Southern Plains at $170/cwt., mostly steady to $2 lower in Nebraska at mainly $176 and $1 lower to $3 higher in the western Corn belt at $175-$177. Dressed prices were $1 lower in Nebraska at $280 and steady to $5 lower in the western Corn Belt at $280.

The weighted average five-area direct fed steer price was 20¢ higher on a live basis last week at $174.13/cwt. but $1.46 lower in the beef at $279.48.

Choice boxed beef cutout value was $2.63 lower Monday afternoon at $301.98/cwt. Select was 3¢ higher at $284.71/cwt.

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Major U.S. financial indices closed little changed but higher Monday, with apparent optimism about the debt ceiling talks. 

The Dow Jones Industrial Average closed 47 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 80 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.07 to $1.08 higher through the front six contracts.

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Despite improving moisture conditions in many parts of the country, persistent drought in key cattle states continues to impact the overall industry, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel notes two recent USDA reports underscore forage challenges in the Southern Plains and Central Plains.

One is the weekly Crop Progress report for the week ending May 7.

Peel points out year-over-year pasture and range conditions were significantly worse in Kansas and Oklahoma.

As well, Peel says the recent crop production report paints a dour picture of hay inventory in those same areas.

“For the beginning of the hay crop year, May 1, U.S. hay stocks were down 13.4% year over year and were down 26.4% from the 10-year 2012-2021 average,” Peel says. “Compared to the 10-year average, in Kansas, May 1 hay stocks were down 25.5%; Nebraska was down 51.6%; Oklahoma was down 62.3%; and Texas was down 41.3%.” He adds dry conditions are challenging new hay production in four off the top 10 hay-producing states, which account for about 21% of total U.S. hay production on average: Texas, Nebraska, Kansas and Oklahoma.

“These four states accounted for 9.3 million beef cows on Jan. 1, 2023, just over 32% of the total U.S. beef cow herd and include four of the top 10 beef cow states, Texas (1), Oklahoma (2), Nebraska (4) and Kansas (6),” Peel says. “Delayed, slow and limited pasture and hay growth in these areas is likely still provoking some cattle liquidation. Total beef cow slaughter through April this year is down 11.2% from last year’s elevated level.  However, it is likely that reduced beef cow slaughter in drought-free areas is masking some additional herd liquidation in these worst drought areas … The much-anticipated herd rebuilding and corresponding market conditions in the beef cattle industry cannot begin in earnest until drought conditions ease significantly in these major beef cattle states.”

You can hear more of Peel’s market insights here.

By | May 15th, 2023|Daily Market Highlights|

Cattle Current Daily — May 15, 2023

Cattle futures closed higher Friday, supported by lower corn prices suggested by the monthly World Agricultural Supply Demand Estimates (see below).

Feeder Cattle futures closed an average of $2.20 higher on Friday and an average of $6.53 higher week to week ($2.95 to $8.20 higher).

Live Cattle futures closed an average of $1.02 higher ($1.65 higher toward the front to 12¢ higher at the back). They were an average of $2.27 higher week to week on Friday ($1.82 higher at the back to $2.95 higher toward the front).

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

For the week, live prices were $2 lower in the Southern Plains at $170/cwt., mostly steady to $2 lower in Nebraska at mainly $176 and $1 lower to $3 higher in the western Corn belt at $175-$177. Dressed prices were $1 lower in Nebraska at $280 and steady to $5 lower in the western Corn Belt at $280.

Estimated cattle slaughter last week of 646,000 head was 23,000 head more than the previous week but 15,000 head fewer than the same week last year. Year-to-date estimated cattle slaughter of 11.9 million head was 386,000 head fewer (-3.1%). Estimated year-to-date beef production of 9.8 billion pounds was 483.8 million pounds less (-4.7%).

Choice boxed beef cutout value was $1.11 lower Friday afternoon at $304.61/cwt. Select was 10¢ higher at $284.68/cwt.

USDA’s Economic Research Service increased forecast fed steer prices (five-area direct) higher for the remainder of this year, in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). Prices were projected $3 higher in the second quarter at $172/cwt., and $2 higher in the third and fourth quarters at $164 and $169, respectively. The annual average price estimate increased $2 to $166.50.

“The 2023 cattle price forecast is raised on recent data and tighter supplies expected later in the year,” ERS analysts say. “For 2024, cattle prices are forecast above 2023 on tighter supplies.”

Estimated beef production this year would be 1.4 million pounds less than last year (-4.8%).

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As mentioned, Corn and Soybean futures closed lower Friday with the World Agricultural Supply and Demand Estimates forecasting record or near record production and increased ending stocks for both.

Corn futures closed mostly 2¢ to 4¢ lower, except for fractionally higher to 4¢ higher in remaining old-crop contracts. Week to week, they closed an average of 21’7¢ lower through the front six contracts.

The WASDE 2023/24 U.S. corn outlook was for larger production, greater domestic use and exports, and higher ending stocks. ERS projected the corn crop at a record 15.3 billion bushels, up more than 10% from last year on increases to both area and yield. The yield projection of 181.5 bushels per acre was based on a weather-adjusted trend assuming normal planting progress and summer growing season weather. With beginning stocks up slightly, total corn supplies were forecast at 16.7 billion bushels, the highest since 2017/18.

The season-average farm price was projected at $4.80 per bushel, down $1.80 from 2022/23.

Soybean futures closed mostly 17¢ to 24¢ lower on Friday. They were an average of 50’4¢ lower through the front six contracts lower week to week.

The 2023/24 outlook for U.S. soybeans was for higher supplies, crush, and ending stocks, and lower exports compared with 2022/23. The soybean crop was projected at 4.51 billion bushels, up 5% from last year’s crop mainly on higher yields. With lower beginning stocks partly offsetting increased production, soybean supplies were forecast at 4.75 billion bushels, up 4% from 2022/23.

The 2023/24 U.S. season-average soybean price was forecast at $12.10 per bushel, which would be $2.10 less than 2022/23. Soybean meal prices were forecast $90 less than last year at $365 per short ton. Soybean oil prices were forecast 6¢ less at 58¢ per pound.

KC HRW Wheat closed 20¢ to 35¢ higher through May ‘24, and then 4¢ to 7¢ higher, supported by the WASDE.

U.S. wheat supplies were forecast lower than last year with smaller beginning stocks and only slightly larger production. All wheat production was projected at 1,659 million bushels, up modestly from last year on increased harvested area. All wheat yield was projected at 44.7 bushels per acre, which would be 1.8 bushels lower than last year.

Ending stocks were projected 11% lower than last year and the lowest in 16 years. The projected 2023/24 season-average farm price was $8.00 per bushel, down 85¢ from last year’s record.

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Major U.S. financial indices closed little changed but lower Friday, with continued concerns about regional bank health and overall economic growth.

The Dow Jones Industrial Average closed 8 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 43 points.

West Texas Intermediate Crude Oil futures (CME) closed 83¢ to 88¢ lower through the front six contracts.

By | May 13th, 2023|Daily Market Highlights|

Cattle Current Daily—May 12, 2023

Negotiated cash fed cattle trade ranged inactive on light demand in the Southern Plains to moderate on moderate demand in the North through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early sales in Nebraska at $175-$176/cwt. on a live basis and $280 in the beef, and at $176-$177 and $280 in the western Corn Belt.

On Wednesday, live trade in the Southern Plains was $2 lower at $170.

Last week, live prices were $176-$178 in Nebraska and $172-$178 in the western Corn Belt. Dressed prices were $281 in Nebraska and $280-$285 in the western Corn Belt.

The five-area direct monthly weighted average price for fed steers in April was $177.09/cwt., on a live basis, which was $35.43 (+25.0%) than a year earlier. The weighted average fed steer price in the beef was $285.28, which was $56.42 more (+24.6%) year over year.

Choice boxed beef cutout value was $1.15 lower Thursday afternoon at $305.72/cwt. Select was 4¢ higher at $284.58/cwt.

Net U.S. beef export sales (2023) for the week ending May 4 were 16,600 metric tons. That was 18% less than the previous week, but 16% more than the prior four-week average, according to the weekly U.S. Export Sales report. Increases were primarily for South Korea, Japan, Canada, Mexico and Taiwan.

Cattle futures were Mixed Thursday with Feeder Cattle benefitting from lower Corn futures and Live Cattle stalling with the weaker cash outlook for the week.

Feeder Cattle futures closed an average of 86¢ higher except for $1.25 lower in spot May.

Live Cattle futures closed an average of 31¢ lower (5¢ to 82¢ lower) except for 12¢ higher in Away Aug.

Grain and soybean futures continued under pressure Thursday from the fast pace of domestic planting to positioning ahead of Friday’s monthly World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 5¢ to 7¢ lower.

KC HRW Wheat closed mostly 12¢ to 13¢ lower.

Soybean futures closed mixed, mostly fractionally higher to 4¢ lower.

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Major U.S. financial indices closed mixed Thursday with pressure from regional bank stocks.

The Dow Jones Industrial Average closed 221 points lower. The S&P 500 closed 7 points lower. The NASDAQ was up 22 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.61 to $1.69 lower through the front six contracts.

By | May 11th, 2023|Daily Market Highlights|

Cattle Current Daily—May 11, 2023

Cattle futures gave back some of the previous sessions gains on Wednesday amid likely profit taking and uncertainty about this week’s cash fed cattle direction.

Feeder Cattle futures closed an average of 91¢ lower except for 25¢ higher in the back contract.

Live Cattle futures closed an average of 42¢ lower except for 27¢ higher in the back contract.

Corn futures firmed Wednesday with likely short covering, while Wheat and Soybean futures eroded as traders position ahead of Friday’s World Agricultural Supply and Demand Estimates.

Corn futures closed mostly fractionally higher to 3¢ higher.

KC HRW Wheat closed mostly 1¢ to 10¢ lower.

Soybean futures closed 7¢ to 15¢ lower through Sep ‘23 and then mostly 1¢ to 3¢ lower.

Negotiated cash fed cattle trade was limited on light demand in all regions through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales in the Southern Plains at $170/cwt.

Last week, live prices were $172/cwt. in the Southern Plains, $176-$178 in Nebraska and $172-$178 in the western Corn Belt. Dressed prices were $281 in Nebraska and $280-$285 in the western Corn Belt.

Choice boxed beef cutout value was 51¢ lower Wednesday afternoon at $306.87/cwt. Select was 35¢ lower at $284.54/cwt.

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Major U.S. financial indices closed mixed Wednesday as investors considered lower than expected inflation, but still high inflation.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in April on a seasonally adjusted

basis, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 4.9% before seasonal adjustment.

The Dow Jones Industrial Average closed 30 points lower. The S&P 500 closed 18 points higher. The NASDAQ was up 126 points.

West Texas Intermediate Crude Oil futures (CME) closed 95¢ to $1.15 lower through the front six contracts.

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Record high fed cattle prices and moderating input costs fueled gains in cattle feeding returns last month, according to the Livestock Information Center (LMIC).

“April cattle feeding returns calculated by LMIC soared over $300 per head in April as live steers in the five-area recorded record-breaking highs at mid-month. Live steer prices hit a new daily high of $182.86/cwt., more than $10 higher than the previous daily high of $172.08 recorded in late November 2014,” LMIC analysts say, in the most recent Livestock Monitor. “Nearly all of April recorded prices above that previous record. The monthly simple average calculated in Dodge City (price used in the LMIC calculation) for Choice fed steers was $173.43, equivalent to what feedlots were paying for 700-800-pound steers seven months prior. LMIC calculates a breakeven price at time of placement, which was estimated at $149.96/cwt.”

LMIC analysts note, April’s calculation is based off a feeder steer price that dipped $6 from the month before.

“Seasonally, fed cattle prices should be hitting a bottom, and with higher placements than the industry expected, this fall live cattle market may not be as tight as originally expected,” say LMIC analysts. “Still, cattle feeders are expected to have an excellent year, with no month currently projected to be negative in 2023. LMIC estimates the average returns for cattle feeders will be over $200 per head in 2023. Through April, cattle feeding returns have averaged $175 per head monthly.”

By | May 10th, 2023|Daily Market Highlights|

Cattle Current Daily—May 10, 2023

Sharply lower Corn futures helped Cattle futures regain more lost ground on Tuesday.

Feeder Cattle futures closed an average of $2.94 higher.

Live Cattle futures closed an average of $1.20 higher.

Corn and Soybean futures weakened Tuesday, with pressure from the fast domestic planting pace and renewed hopes for renewal of the Black Sea Initiative. Corn received added pressure from China’s cancellation of sales of 272,000 metric tons.

Corn futures closed 9¢ to 14¢ lower through Jly ‘24, and then mostly 3¢ to 5¢ lower.

Soybean futures closed 13¢ to 18¢ lower through May ‘24 and then 9¢ to 11¢ lower.

KC HRW Wheat closed 1¢ to 15¢ higher through May ‘24 and then 1¢ to 5¢ lower.

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

Last week, live prices were $172/cwt. in the Southern Plains, $176-$178 in Nebraska and $172-$178 in the western Corn Belt. Dressed prices were $281 in Nebraska and $280-$285 in the western Corn Belt.

Choice boxed beef cutout value was $1.18 lower Tuesday afternoon at $307.38/cwt. Select was 23¢ lower at $284.89/cwt.

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Major U.S. financial indices edged lower Tuesday as investors await key inflation data later this week and ponder the outcome of debt ceiling talks. 

The Dow Jones Industrial Average closed 56 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 77 points.

West Texas Intermediate Crude Oil futures (CME) closed 55¢ to 62¢ higher through the front six contracts.

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“Tightening beef supplies, underlying general strength in beef demand and seasonal grilling demand are all pushing wholesale beef prices higher,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Consumer beef demand has continued to be remarkably resilient and wholesale beef prices are likely to go higher yet as beef production continues to decrease going forward.”

For perspective, Peel notes Choice boxed beef prices the first week of May averaged 309.41/cwt., which was 9% higher than the beginning of this year and 20% higher year over year. He explains prices so far this year are following a seasonal pattern — typically a peak in May ahead of grilling season before declining in the second half of the year.

“The May peak in boxed beef price is largely driven by retail grocery demand for Strip Loins and Sirloin cuts that move primarily through retail grocery channels. Chuck Roll prices are also very strong currently, which may be driven by export demand and retail grocery demand, including ground beef,” Peel says. “The most valuable cuts of Tenderloin and Ribeye are not typically seasonally strong this time of year, but both have been higher all year so far in 2023, reflecting continued strong restaurant demand.”

Peel adds ground beef demand typically increases during the summer due to grilling demand as well as increased consumer use of quick-service restaurants.

“The price of 90-percent lean trimmings (mostly cow beef) have been rising all year and are currently moving higher than year-ago levels,” Peel says. “More dramatically, the price of 50-percent lean trimmings has moved sharply higher to a current level that is unprecedented except for a brief spike during the pandemic in 2020.”

By | May 9th, 2023|Daily Market Highlights|

Cattle Current Daily—May 9, 2023

Cattle futures rebounded some Monday, especially Feeder Cattle, supported by lower new-crop Corn futures and overall positive fundamentals.

Feeder Cattle futures closed an average of $1.55 higher (90¢ higher in spot May to $2.02 higher at the back).

Live Cattle futures closed an average of 67¢ higher.

There was no Monday negotiated cash fed trade summary from USDA available at press time.

The weighted average five-area direct fed steer price last week was $3.22 lower on a live basis at $173.93/cwt. The average steer price in the beef was $3.11 lower at $280.94.

Choice boxed beef cutout value was 63¢ lower Monday afternoon at $308.56/cwt. Select was $3.04 lower at $285.12/cwt.

Corn futures closed 4¢ to 6¢ lower after old-crop contracts, perhaps pressured in part by rapid planting progress.

KC HRW Wheat closed 9¢ to 11¢ higher through Dec ‘23 and then 2¢ to 6¢ higher.

Soybean futures closed mostly 4¢ to 8¢ lower through Mar ‘25.

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Major U.S. financial indices closed little changed Monday as investors await key inflation data later this week.

The Dow Jones Industrial Average closed 55 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 29 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.72 to $1.82 higher through the front six contracts.

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Calves and feeder cattle sold from $3/cwt. lower to $3 higher in the North Central and South Central regions last week, according to the Agricultural Marketing Service. They sold $1-$4 higher in the Southeast. Auction volume continued stronger year over year.

Through the first four months of this year, the number of stocker and feeder cattle sold was 4% higher year over year, according to Josh Maples, Extension livestock economist at Mississippi State University, in the latest Cattle Market Notes Weekly. That is based on the weekly AMS National Weekly Feeder and Stocker Cattle Summary.

“On the surface, the stronger receipts totals are at odds with the 2% smaller calf crop in 2022 than in 2021. However, the data are most likely indicating market timing differences instead of changes in total cattle inventory,” Maples explains. “Cattle prices have been significantly stronger this year as compared to a year ago and drought continues to be a key issue in Texas, Oklahoma, Kansas, Nebraska and other areas which is limiting grazing opportunities. These factors have likely led to more cattle moving into feedlots or grow yards earlier than normal. Compared to the 5-year average from 2017-2021, receipts are 1% lower so far in 2023.”

By | May 8th, 2023|Daily Market Highlights|

Cattle Current Daily—May 8, 2023

Cattle futures mostly softened Friday, unable to shake off the week’s lower cash fed cattle prices and growing concerns about domestic and global economic growth.

Feeder Cattle futures closed an average of 84¢ lower (15¢ to $1.72 lower). They were an average of $7.34 lower week to week on Friday. The CME Feeder Cattle Index was $3.74 lower week to week on Thursday at $199.46.

Live Cattle futures closed an average of 17¢ lower, except for an average of 21¢ higher in the front two contracts. They were an average of $3.38 lower week to week on Friday.

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

For the week, live prices were $1 lower in the Southern Plains at $172/cwt., $2 lower in Nebraska at $176 and $2-$8 lower in the western Corn Belt at $172-$178. Dressed prices were $2-$5 lower in Nebraska at $281. The previous week, dressed prices were $285 in the western Corn Belt.

Choice boxed beef cutout value was 33¢ lower Friday afternoon at $309.19/cwt. Select was 67¢ higher at $288.16/cwt.

Estimated total cattle slaughter for the week was 623,000 head, which was 1,000 head less than the previous week and 38,000 head less than a year earlier. Year-to-date estimated total cattle slaughter of 11.3 million head was 384,000 head fewer (-3.3%). Year-to-date estimate beef production of 9.3 billion pounds was 477.6 million pounds less (-4.9%) than the same time last year.

Grain and Soybean futures continued higher Friday, led by wheat, with more support from worries about renewal of the Black Sea Initiative.

KC HRW Wheat closed mostly 26¢ to 34¢ higher through May ‘24 and then 16¢ to 21¢ higher.

Corn futures closed mostly 3¢ to 7¢ higher.

Soybean futures closed 10¢ to 18¢ higher through Jan ‘24 and then 5¢ to 8¢ higher through Mar ’25.

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Major U.S. financial indices closed higher Friday with support from a rebound in regional banks and Apple beating quarterly earnings estimates.

The Dow Jones Industrial Average closed 546 points higher. The S&P 500 closed 75 points lower. The NASDAQ was up 249 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.56 to $2.78 higher through the front six contracts.

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U.S. beef exports in March showed signs of recovery from weakness during the last several months, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). However, volume and value remained less than last year’s record pace.

Beef exports volume was 120,495 metric tons in March, down 5% from a year ago. Export value fell 17% to $892.6 million, but both volume and value were the highest in five months. Through the first quarter, beef exports were down 8% year-over-year to 326,494 mt, valued at $2.35 billion (down 22%).

March beef export value per head of fed slaughter was 16% less than last year at $397.22. Value per head of fed slaughter through the first quarter was $373.42, which was 21% less year over year.

“U.S. beef exports faced considerable headwinds late last year and at the beginning of 2023, but the March results show some encouraging trends,” says Dan Halstrom, USMEF President and CEO. “Most Asian markets showed renewed momentum in March, while exports continued to trend higher to Mexico, the Caribbean and South Africa.”

March beef exports to Mexico were well above last year, while export growth to the Caribbean was highlighted by a record month for the Dominican Republic. Exports also increased year-over-year to the Philippines, while beef variety meat demand strengthened in South Africa and Peru. March exports to South Korea were below last year but were the largest in 10 months, while exports to China/Hong Kong were the largest since October.

U.S. pork exports also were encouraging; the most since May 2021. Export volume for the months was 17% higher year over year and value was up 18%. Through the first quarter, export volume is 14% more than the same time last year and value is 15% higher at $1.96 billion.

By | May 7th, 2023|Daily Market Highlights|

Cattle Current Daily—May 5, 2023

Cattle futures firmed Thursday, albeit narrowly mixed, amid negative outside markets, tied to banking and the week’s lower cash fed cattle prices.

Feeder Cattle futures closed an average of 30¢ higher, except for an average of 22¢ lower in two nearby contracts.

Live Cattle futures closed narrowly mixed, from an average of 12¢ lower in the front three contracts to an average of 22¢ higher.

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

So far this week, live prices are $1 lower in the Southern Plains at $172/cwt., $2 lower in Nebraska at $176 and $2-$8 lower in the western Corn Belt at $172-$178. Dressed prices are $2-$5 lower in Nebraska at $281.

Choice boxed beef cutout value was 43¢ higher Thursday afternoon at $309.52/cwt. Select was 37¢ higher at $287.49/cwt.

Net U.S. beef export sales were 20,100 metric tons the week ending April 27, according to the weekly U.S. Export Sales report. That was up noticeably from the previous week and 59% more than the prior four-week average. Increases primarily were for, Japan South Korea, China Taiwan and Mexico.

Wheat futures (KCH) continued higher Thursday — up mostly 12¢ to 14¢ — with follow-through support from worries about renewal of the Black Sea Initiative.

Corn and Soybean futures eased lower on likely profit taking from the previous session’s strong gains and perhaps some positioning ahead of the weekly U.S. Export Sales report.

Corn futures closed mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 3¢ to 6¢ lower.

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Major U.S. financial indices closed lower on Thursday as investors grew more squeamish about regional bank health.

The Dow Jones Industrial Average closed 286 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 58 points.

West Texas Intermediate Crude Oil futures (CME) closed 4¢ to 18¢ lower through the front six contracts.

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By most every measure, domestic consumer beef demand remains extraordinarily strong in the face of high prices and slowing economic growth.

For instance, in his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee explains most beef items are trading at or above year-ago wholesale prices levels, while pork and poultry prices are significantly lower.

“Pork loin prices have averaged about 10% lower this year compared to last year while wholesale bacon prices have averaged about 45% lower than a year ago. Similarly, chicken breast prices are about 54% lower than 2022,” Griffith says. “These lower prices for competing meat protein products should put pressure on wholesale beef prices if retail prices decline. Despite none of these products being good substitutes for beef, consumers will notice this big difference if it translates to retail.”

By | May 4th, 2023|Daily Market Highlights|

Cattle Current Daily—May 4, 2023

Declining open interest, negative outside markets, technical selling and weaker cash fed cattle prices pressured Cattle futures sharply lower for a second consecutive session Wednesday.

Feeder Cattle futures closed an average of $2.21 lower ($3.75 to $4.08 lower).

Live Cattle futures closed an average of $1.04 lower (60¢ to $1.40 lower).

Negotiated cash fed cattle trade ranged from slow on light demand in Nebraska to limited on light demand on other regions through Wednesday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are $1 lower in the Southern Plains at $172/cwt., $2 lower in Nebraska at $176 and $2-$8 lower in the western Corn Belt at $172-$178. Dressed prices are $2-$5 lower in Nebraska at $281.

Choice boxed beef cutout value was 15¢ lower at $309.09/cwt. Select was $1.54 lower at $287.12/cwt.

On the other side of the coin, grain and Soybean futures plowed higher Wednesday, led by Wheat and fueled by news of an attempted assassination of Russia’s Putin and what that could mean to the Black Sea Initiative.

Corn futures closed mostly 5¢ to 10¢ higher.

KC HRW Wheat closed 25¢ to 56¢ higher.

Soybean futures closed 5¢ to 8¢ higher through Jan’24. And then mostly 7¢ to 12¢ higher.

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Major U.S. financial indices closed lower again on Wednesday with follow-through uncertainty about the health of regional banks, compounded by the Fed’s decision to raise interest rates another 25 basis points.

The Dow Jones Industrial Average closed 270 points lower. The S&P 500 closed 28 points lower. The NASDAQ was down 55 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.52 to $3.06 lower through the front six contracts.

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U.S. agricultural producer sentiment improved modestly in April as measured by the Purdue University/CME Group Ag Economy Barometer. Month to month, it rose 6 points to a reading of 123. Both of the barometer’s sub-indices also increased in April. The Current Conditions Index was up 3 points to 129 and the Future Expectations Index was up 7 points to 120. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between April 10-14.

“Producers held a more optimistic view of the agricultural economy in April,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “A shift in farmers’ expectations regarding the Fed’s future interest rate policy could be a key reason.”

In April, 34% of respondents said they expect the U.S. prime interest rate to remain unchanged or decline over the next year, compared to 25% of producers who felt that way in February. At the same time, two-thirds (66%) of producers expect interest rates to keep rising, compared to 75% of respondents who felt that way in February. However, the biggest shift was a decline in the percentage of respondents who expect rates to rise between 1% to 2% in the next year, down 6 points since February to 37%.

Producers’ expectations for short-term farmland values increased in April following five-straight months of decline. The Short-Term Farmland Value Expectations Index rose 10 points in April to a reading of 123, while the long-term farmland index held steady at a reading of 142. Even with this month’s rise, the short-term index remains 21 points lower than a year earlier and 36 points lower than two years ago.

By | May 3rd, 2023|Daily Market Highlights|

Cattle Current Daily—May 3, 2023

Cattle futures crumbled Tuesday with early cash trade taking another step lower, the packers seeming ability to pull dollars off the market by restricting kills and question marks about a seasonal peak for wholesale beef prices.

Feeder Cattle futures closed an average of $3.90 lower ($3.75 to $4.08 lower).

Live Cattle futures closed an average of $1.76 lower ($1.75 to $1.97 lower).

Negotiated cash fed cattle trade was moderate on moderate demand in the Southern Plains through Tuesday afternoon, according to the agricultural Marketing Service. Prices were $1 lower at $172/cwt.

Although too few transactions to trend, there were some early live sales in Nebraska at $281 and a few live sales in the western Corn Belt at $172-$178.

Live prices last week were $178-$180 in Nebraska and $180 in the western Corn Belt. Dressed prices were $283-$286 in Nebraska and $285 in the western Corn Belt.

Choice boxed beef cutout value was 78¢ lower Tuesday afternoon at $309.24/cwt. Select was $2.34 lower at $288.66/cwt.

Corn futures closed mostly 1¢ to 5¢ lower.

KC HRW Wheat closed 16¢ to 20¢ lower through Sep ‘24, and then mostly 8 to 9¢ lower.

Soybean futures closed 7¢ to 16¢ lower through Jan’24.

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Major U.S. financial indices closed lower Tuesday on fears arising from First Republic Bank’s collapse.

The Dow Jones Industrial Average closed 367 points lower. The S&P 500 closed 48 points lower. The NASDAQ was down 132 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.59 to $4.00 lower through the front six contracts.

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“Global beef production is projected to increase slightly in 2023 with decreased production in the U.S., the largest beef producing country, but continued growth in beef production in Brazil, the number two beef producer as well as number three China.,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Based on the most recent Livestock and Poultry: World Markets and Trade report from the USDA Foreign Agricultural Service, Peel explains, total beef consumption is forecast to decrease in the U.S., the largest beef consuming nation.

“China/Hong Kong is the second largest beef consuming region with continued growth in beef consumption projected in 2023,” Peel says. “Brazil and the E.U. are the third and fourth largest beef consuming countries, both expected to have slight growth in beef consumption this year. The top four beef consuming nations are projected to account for 65% of global beef consumption. India is the number five beef consuming country, followed by Argentina and Mexico.”

By | May 3rd, 2023|Daily Market Highlights|

Cattle Current Daily—May 2, 2023

Cattle futures extended losses on Monday, pressured by last week’s lower cash fed cattle prices and skittishness ahead of this week’s trade.

Feeder Cattle futures closed an average of 92¢ lower (55¢ to $1.27 lower).

Live Cattle futures closed an average of 59¢ lower

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

Live prices last week were $173/cwt. in the Southern Plains, $178-$180 in Nebraska and $180 in the western Corn belt. Dressed prices were $283-$286 in Nebraska and $285 in the western Corn Belt.

The five-area direct weighted average fed steer price last week was $177.15/cwt. on a live basis, which was $1.42 lower. The average fed steer price in the beef was $3.37 lower at 284.05.

Choice boxed beef cutout value was $1.42 lower Monday afternoon at $310.02/cwt. Select was $2.66 higher at $291.00/cwt.

Corn futures closed mostly 2¢ to 3¢ lower on Monday.

KC HRW Wheat closed 11¢ to 19¢ lower through Jly ‘24, and then mostly 8 to 9¢ lower.

Soybean futures closed mostly 10¢ to 15¢ higher.

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Major U.S. financial indices closed little changed but lower Monday as investors await the next Fed meeting. 

The Dow Jones Industrial Average closed 46 points lower. The S&P 500 closed 1 point lower. The NASDAQ was down 13 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.06 to $1.12 lower through the front six contracts.

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Nationwide, steers sold steady to $3/cwt. higher in the Southcentral region last week but steady to $3 lower in other regions, according to the Agricultural Marketing Service. Heifers sold from $1 lower to $2 higher.

According to AMS analysts, “Good demand remains for all weights of steers and heifers, but cattle feeders and backgrounders slowed a little in their pursuit of chasing the feeder market higher.”

In his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee notes cattle cash and futures prices have been chasing each other for three months.

“Markets are just like humans or any animal that has run a sprint. They get tired and need to catch their breath,” Griffith says. “These types of runs also tend to lead to exhaustion, which then results in a period of poor performance. This does not mean cattle market prices are going to make some big decline, but a slower and steadier price increase would indicate more stability in the market. The fundamentals of the cattle market certainly support strong cattle prices since beef demand is strong and domestic beef supply is expected to decline due to a smaller cattle inventory.”

Griffith explains the overall economy is the primary factor that could introduce weakness to the cattle markets.

“As leadership in the financial institution continues to attempt to curtail inflation with higher interest rates, there is no way to know for sure how this will influence consumers.” Griffith says. “It will certainly send some sort of ripple effects through the system.”

By | May 1st, 2023|Daily Market Highlights|

Cattle Current Daily—May 1, 2023

Cattle futures closed lower on Friday amid weaker cash fed cattle prices but ended mostly higher week to week.

Negotiated cash fed cattle trade ranged from slow on light to moderate demand in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Live prices were $173/cwt., which was $2 lower in the Texas Panhandle and steady to $2 lower in Kansas.

Elsewhere, trade ranged from mostly inactive on light demand to limited on light demand.

For the week, live prices were $2-$7 lower in Nebraska at $178 and steady to $3 lower in the western Corn Belt at $180. Dressed prices were $1-$4 lower in Nebraska at $283-$286 and $3 lower in the western Corn Belt at $285.

Choice boxed beef cutout value was 37¢ higher Friday afternoon at $311.44/cwt. Select was 75¢ lower at $288.34/cwt.

Estimated total cattle slaughter last week of 620,000 head was 2,000 head less than the prior week and 25,000 head fewer than the same week last year. Year-to-date estimated cattle slaughter of 10.6 million head was 352,000 head fewer (-3.2%) than the same time last year. Estimated year-to-date beef production of 8.75 billion pounds was 444.8 million pounds (-4.8%) less than a year earlier.

Live Cattle futures closed an average of 11¢ lower, except for 27¢ higher in near Jun and unchanged in Dec. Week to week on Friday, they closed an average of 61¢ higher, except for unchanged to 37¢ lower in three contracts. Funds extended already weighty long positions, according to the weekly CFTC Commitments of Traders report.

Feeder Cattle futures closed an average of 60¢ lower on Friday, except for 20¢ higher in the back contract. Week to week they closed an average of $1.13 higher, except for $1.42 lower in spot May.

Perhaps the main market story last week was price erosion in the grain complex as China cancelled U.S. corn purchases and managed money fled positions as the nation’s price competitiveness declines.

Corn futures closed mostly 2¢ lower in new-crop contracts on Friday. Week to week, they were an average of 22’0¢ lower through the front six contracts, except for 2’8¢ higher in spot May.

KC HRW Wheat closed 8¢ to 11¢ higher, except for 28’4¢ higher in the front month.

Soybean futures closed mostly 7¢ to 8¢ higher, except for 11¢ to 17¢ higher in the front three contracts. Week to week on Friday, they closed from an average of 24’8¢ lower through the front six contracts, except for 5’8¢ lower in spot May.

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Major U.S. financial indices closed higher Friday with follow-through support and positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 272 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 84 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.88 to $2.03 higher through the front six contracts.

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Although the previous Friday’s monthly Cattle on Feed report added pressure in cattle futures early last week, they ended mostly higher week to week with bullish supply fundamentals and price erosion in the grain complex.

As mentioned in Cattle Current last week, March feedlot placements (feedlots with 1,000 head or more capacity) were 4.2% more than analysts expected, although 0.6% less year over year.

Kenny Burdine, Extension livestock Economist at the University of Kentucky expects more placements than anticipated had more to do with timing than a major shift in market fundamentals.

In Cattle Market Notes Weekly, Burdine offers some possible reasons for the higher placement numbers than anticipated.

“First, March is a month when cattle are often moved off of wheat pasture. Continued dry weather in much of the Southern Plains, combined with high wheat prices, likely impacted movement of feeders last month,” Burdine says. “Secondly, live cattle imports from Mexico were higher in March, which would contribute to placement numbers. And finally, there is still a lot of carry on the feeder cattle board, so it is very possible that feedlots are aggressively buying feeders ahead, in anticipation of the rising price levels suggested by deferred feeder cattle futures contracts.”

By | April 30th, 2023|Daily Market Highlights|

Cattle Current Daily—April 28, 2023

Cattle futures gained more ground Thursday, helped along by further erosion in the grain complex, as well as stronger wholesale beef values.

Feeder Cattle futures closed an average of $1.38 higher (62¢ to $1.92 higher).

Live Cattle futures closed an average of 33¢ higher (5¢ to 92¢ higher).

Favorable domestic weather and bullish expectations for Brazilian production continued to pressure grain and Soybean futures on Thursday. Another corn sales cancellation by China (233,000 metric tons) added more weight to Corn futures, which closed 11¢ to 19¢ lower through Jly ‘24 and then mostly 6¢ to 8¢ lower.

KC HRW Wheat closed mostly 12¢ to 18¢ lower.

Soybean futures closed 7¢ to 12¢ lower through Aug ‘24 and then mostly 3¢ lower.

There was no afternoon negotiated cash fed cattle summary from USDA at press time.

Based on the morning report, live and dressed sales Wednesday were steady to $3 lower in the western Corn belt at $180/cwt. and $275, respectively.

Last week, live prices were $175/cwt. in the Texas Panhandle, $173-$175 in Kansas and $180-$185 in Nebraska. Dressed prices in Nebraska were $284-$290.

Choice boxed beef cutout value was $1.49 higher Thursday morning at $310.73/cwt. Select was $2.17 higher at $290.11/cwt.

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Major U.S. financial indices bounced sharply higher Thursday, led by big-name tech stocks. Macro-economic news was a mixed bag with the U.S. economy slowing more than analysts expected in the first quarter and inflation stronger than expected.

Real gross domestic product (GDP) increased at an annual rate of 1.1% in the first quarter of 2023, according to the advance estimate released by the Bureau of Economic Analysis.

The Personal Consumption Expenditures (PCE) price index increased 4.2%. Excluding food and energy prices, the PCE price index increased 4.9%. 

The Dow Jones Industrial Average closed 524 points higher. The S&P 500 closed 79 points higher. The NASDAQ was up 287 points.

West Texas Intermediate Crude Oil futures (CME) closed 27¢ to 46¢ higher through the front six contracts.

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Rural economic conditions improved slightly in April, by one measure, but economic growth continues to be slow or negative, according to Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The Rural Mainstreet Index (RMI) rose from 45.6 to above growth-neutral in April at 50.01. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. It is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

“The Rural Mainstreet economy continues to experience slow, to no, to negative economic growth,” Goss says. “Less than 1% of bankers reported improving economic conditions for the month with 92% indicating no change in economic conditions from February’s slow growth.”

The slowing economy, higher borrowing costs and labor shortages continued to constrain the business confidence index to a weak 38.0, down from 39.1 in March. “Over the past 12 months, the regional confidence index has fallen to levels indicating a very negative outlook,” Goss says.

By | April 27th, 2023|Daily Market Highlights|

Cattle Current Daily—April 27, 2023

Negotiated cash fed cattle trade ranged from limited on light demand in the western Corn Belt to inactive on very light demand through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, there were some early sales in the western Corn Belt at $180/cwt. on a live basis and $285 in the beef.

Last week, live prices were $175/cwt. in the Texas Panhandle, $173-$175 in Kansas $180-$185 in Nebraska and $180-$183 in the western Corn Belt. Dressed prices were $284-$290 in Nebraska and $288 in the western Corn Belt.

Choice boxed beef cutout value was $1.61 higher Wednesday afternoon at $309.24/cwt. Select was 32¢ higher at $287.94/cwt.

Weaker Corn futures, and apparently renewed focus on fundamentals, helped Cattle futures gain on Wednesday.

Feeder Cattle futures closed an average of $1.53 higher, (60¢ to $2.15 higher).

Live Cattle futures closed an average of 60¢ higher, (22¢ higher at the front to $1.05 higher at the back).

Corn futures closed 4¢ to 6¢ lower.

KC HRW Wheat closed mostly 12¢ to 24¢ lower.

Soybean futures closed mixed — fractionally mixed through Sep ’24 and then 3¢ to 4¢ higher. The exception was 9¢ and 2¢ lower in the front two contracts.

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Major U.S. financial indices closed lower again Wednesday with follow-through  pressure from renewed concerns about bank health tied to First Republic Bank. 

The Dow Jones Industrial Average closed 228 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 113 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.30 to $2.77 lower through the front six contracts.

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Although recent weekly cash fed cattle prices eclipsed the previous highs, Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln points out real prices for feeder and fed cattle — adjusted for inflation —remain less than the peaks in 2013-2015.

“The significant rise in cattle prices along the supply chain has been encouraging. But, as in every year, higher prices are nice but wide profit margins are better,” Dennis says, in the latest issue of In the Cattle Markets.

“Previous studies have found that interest rates reduce feeder cattle prices. On average, a 1% increase in the interest rates would decrease feeder cattle prices by 1.14% (Marsh 2001),” Dennis explains. “Ultimately, higher interest rates squeeze profit margins and producers will seek to reduce these impacts.”

Reducing the number of days cattle are on feed by placing cattle at heavier weights is one way producers can ease the impact of higher interest rates, according to Dennis. Increasing operational efficiency is another.

“The interest in and use of precision livestock management has increased in the last five years, ranging from animal health detection such as Cattle Sense in feedlots to virtual fencing in the cow-calf sector,” Dennis explains. “Many other technologies have been and will be available to producers. Some technologies will also help in solving long-run concerns about labor.”

 

 

By | April 26th, 2023|Daily Market Highlights|

Cattle Current Daily—April 26, 2023

Negative outside markets and the lack of cash fed cattle direction helped pressure Cattle futures on Tuesday.

Feeder Cattle futures closed an average of 96¢ lower (47¢ lower at the back to $1.62 lower), except for 17¢ higher in Aug.

Live Cattle futures closed an average of 38¢ lower, except no change in spot Apr.

Grain and Soybean futures were under pressure Tuesday from a variety of geo-political and geo-economic forces including cancellation of recent U.S. corn purchases by China to chatter that the Black Sea Initiative would be extended once again.

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

KC HRW Wheat closed 9¢ to 14¢ lower through May ‘24 and then mostly 1¢ to 5¢ lower.

Soybean futures closed mostly 6¢ to 10¢ lower.

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

Last week, live prices were $175/cwt. in the Texas Panhandle, $173-$175 in Kansas, $180-$185 in Nebraska and $180-$183 in the western Corn Belt. Dressed prices were $284-$290 in Nebraska and $288 in the western Corn Belt.

Choice boxed beef cutout value was 51¢ higher Tuesday afternoon at $307.63/cwt. Select was $1.08 lower at $287.62/cwt.

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Major U.S. financial indices closed sharply lower amid resurgent banking fears fueled by a sell-off in First Republic Bank which issued an alarming quarterly corporate earnings report: deposits of $104.5 billion were 35.5% less year over year; net income was down 32.9% at $269 million.

The Dow Jones Industrial Average closed 344 points lower. The S&P 500 closed 65 points lower. The NASDAQ was down 238 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.69 to $1.88 lower through the front six contracts.

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Total pounds of beef in freezers Mar. 31 were down 4% from the previous month and down 10% from the previous year, according to the latest USDA Cold Storage report.

Frozen pork supplies were 2% more than the previous month and 10% more than last year.

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

Total frozen poultry supplies were 1% more than the previous month and 9% more than a year ago.

By | April 25th, 2023|Daily Market Highlights|

Cattle Current Daily—April 25, 2023

As expected, markets viewed Friday’s Cattle on Feed report as bearish, despite the fact that cattle numbers continue to decline overall and will continue to decline.

Feeder Cattle futures closed an average of 69¢ lower (17¢ lower at the back to $1.65 lower toward the front).

Live Cattle futures closed an average of 31¢ lower, except for 32¢ and 2¢ higher in the front two contracts.

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

Last week, live prices were steady in the Texas Panhandle at $175/cwt., steady to $2 lower in Kansas at $173-$175, $1-$2 lower in Nebraska at $180-$185 and steady to $1 lower in the western Corn Belt at $180-$183.

Dressed prices were steady to $6 lower in Nebraska at $284-$290 and $2 lower in the western Corn Belt at $288.

The weighted average five-area direct fed steer price was $178.57/cwt. on a live basis last week, which was 1.87 lower. The average fed steer price in the beef was $2.35 lower at $287.42.

Choice boxed beef cutout value was 52¢ higher Monday afternoon at $307.12/cwt. Select was 90¢ higher at $288.70/cwt.

Corn futures closed mostly 2¢ to 3¢ higher on Monday, except for fractionally lower to 12¢ lower in the front four contracts.

KC HRW Wheat closed mostly 7¢ to 8¢ lower.

Soybean futures closed 8¢ to 18¢ lower through May ‘24 and then 6¢ to 8¢ lower.

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Major U.S. financial indices closed narrowly mixed Monday, ahead of quarterly corporate earnings reports from bellwether tech companies.

The Dow Jones Industrial Average closed 66 points higher. The S&P 500 closed 3 points higher. The NASDAQ was down 35 points.

West Texas Intermediate Crude Oil futures (CME) closed 89¢ to 94¢ higher through the front six contracts.

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Although futures traders appeared to use Friday’s Cattle on Feed report as a reason to sell, cattle numbers are less year over year and will continue to decline.

Analysts with the Livestock Marketing Information Center (LMIC) point out strong placements of cattle weighing 700-799 pounds and 800-899 pounds likely point to drought forcing cattle from wheat pasture earlier than usual in Kansas, Texas and Oklahoma. In theory, in the latest Livestock Monitor, they say it suggests fewer cattle available to place in April-May. They add that the ratio of heifers on feed remains historically high.

“…Heifers are a strong proportion of the FI slaughter mix and beef cow slaughter continues at a strong pace. The unsaid conclusion is that better cattle prices are yet to come — that should be a question,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “I believe the continued rally is unlikely for the remainder or even a portion of the year. Seasonality is favorable in the spring, but the seasonal peak is likely soon.”

Koontz points out cattle markets have been ruled by a unique environment the past couple of years including supply chain shocks and federal economic stimulus. He explains such factors have diminished.

“In the long-term the cattle market is likely to have substantial strength but in the short-term – within the year – we will see the market get back to business of relative protein prices mattering, disposable income not being substantially better than the prior year, and the surprises in trade news being pessimistic,” Koontz says. “Both inflation and the economy are slowing. And that corn crop is not yet planted.” 

By | April 24th, 2023|Daily Market Highlights|

Cattle Current Daily—April 24, 2023

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

For the week, live prices were steady in the Southern Plains at $175/cwt., $1-$2 lower in Nebraska at $180-$185 and unevenly steady in the western Corn Belt at $182. Dressed prices were $2 lower at $288.

Choice boxed beef cutout value was 39¢ lower Friday afternoon at $306.60/cwt. Select was 94¢ lower at $287.80/cwt.

However, weaker Corn futures helped Feeder Cattle futures ease an average of 44¢ higher Friday, (5¢ to $1.00 higher), except for $1.25 lower in spot Apr. They closed an average of $3.69 higher week to week on Friday (37¢ higher in spot Apr to $5.92 higher).

Live Cattle futures closed mixed, from an average of 18¢ lower to an average of 11¢ higher. They were an average of 78¢ higher week to week on Friday, except for 77¢ lower in spot Apr.

Corn futures closed mostly 7¢ to 9¢ lower.

KC HRW Wheat closed mixed, mostly 1¢ to 2¢ lower through May ’24 and then mostly 3¢ higher.

Soybean futures closed mostly 12¢ to 21¢ lower.

Cattle futures could face some pressure heading into the new week, based on Friday monthly Cattle on Feed report (see below).

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Major U.S. financial indices closed a touch higher Friday, once again amid mixed quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 22 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 12 points.

West Texas Intermediate Crude Oil futures (CME) closed 50¢ to 81¢ higher through the front six contracts.

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Markets will likely view Friday’s monthly Cattle on Feed report as bearish, depending on expectations priced into the market ahead of the report. For feedlots with 1,000 head or more capacity, placements and on-feed numbers were more than analyst estimates.

March placements of 1.99 million head were 13,000 head fewer year over year (-0.6%). That was 4.2% more than expectations.

In terms of placement weights, 35% went on feed weighing 699 pounds or less, 53% weighing 700-899 pounds and 12% weighing 900 pounds or more.

Marketings in March of 1.97 million head were 23,000 head less (-1.2%). That was in line with expectations.

Cattle on feed April 1 of 11.61 million head were 533,000 head fewer year over year (-4.4%), which was 0.8% more than analysts expected.

By | April 23rd, 2023|Daily Market Highlights|

Cattle Current Daily—April 21, 2023

Cattle futures gained ground Thursday, helped along by eroding Corn futures, likely positioning ahead of Friday’s monthly Cattle on Feed report and despite the steady to softer tone of weekly fed cattle prices.

Feeder Cattle futures closed an average of $1.74 higher (35¢ to $2.75 higher).

Live Cattle futures closed an average of 62¢ higher, except for $1.32 lower in spot Apr and 10¢ lower in the back contract.

Traders appeared to pull some weather premium from grain and soybean contracts Thursday, with a more favorable forecast.

Weekly export sales also pressured Corn or Soybeans.

Net 2022-2023 U.S. corn export sales (April 13) were 41% less than the previous week and 79% less than the prior four-week average. Net 2022-2023 U.S. soybean export sales were down 73% from the previous week and 58% from the prior four-week average.

On the other hand, Net U.S. 2023 beef export sales of 19,100 metric tons were up noticeably from the previous week and up 47% from the prior four-week average, according to the latest U.S. Export Sales report. Increases were primarily for South Korea, Japan, Mexico, Taiwan and China.

Negotiated cash fed cattle trade ranged from slow on light to moderate demand to a standstill through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

So far this week, live prices are steady in the Southern Plains at $175/cwt., steady to $2 lower in Nebraska at $182 and unevenly steady in the western Corn Belt at $181-$183. Dressed prices are $2 lower at $288.

Choice boxed beef cutout value was $1.07 higher Thursday afternoon at $306.99/cwt. Select was $2.72 lower at $288.74/cwt.

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

The Dow Jones Industrial Average closed 110 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 97 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.73 to $1.87 lower through the front six contracts.

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Nationwide, drought conditions continued to improve last week. According to the latest U.S. Drought Monitor (April 18), drought existed across 25.8% of the continental United States, compared to 43.9% three months earlier and 55.4% a year earlier.

“The coverage of severe (D2) to exceptional (D4) drought is near to its lowest since July 2020,” according to Drought Monitor analysts.

However, moderate to severe drought continues to persist in the Southern Plains and Central Plains. The worst conditions will likely continue from the tip of Texas and up through Kansas, including eastern New Mexico and eastern Colorado, as well as pockets in the West. That’s according to the U.S. Seasonal Drought Outlook for April 20 through July 31 this year.

Prospects for El Niño developing provide some hope for those in the Central and Southern Plains. The National Weather Service Climate Prediction Center recently issued an El Niño Watch, with a 62% chance of El Niño developing in North America during May-July of this year.

An estimated 41% of the nation’s cattle inventory is in areas currently affected by drought.

By | April 20th, 2023|Daily Market Highlights|

Cattle Current Daily—April 20, 2023

Negotiated cash fed cattle was slow on light demand in the Southern Plains through Wednesday afternoon, where a light test brought steady money with last week at $175/cwt. on a live basis.

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

Live prices last week were $182-$184 in Nebraska and $180-$184 in the western Corn Belt. Dressed prices were $290.

Choice boxed beef cutout value was $1.14 lower Wednesday afternoon at $305.92/cwt. Select was 15¢ lower at $291.46/cwt.

Cattle futures mostly softened Wednesday, with consolidation and awaiting weekly cash fed cattle trade.

Feeder Cattle futures closed an average of 41¢ lower (2¢ lower at the back to $1.25 lower at the front), except for 70¢ and 25¢ higher in Aug and Sep, respectively.

Live Cattle futures closed an average of 87¢ lower (25¢ lower at the back to $1.60 lower toward the front).

Grain futures were pressured Wednesday by Poland’s announcement to allow grain to flow through its country from Ukraine, while maintaining its closure to grain purchases from that nation.

Corn futures closed mostly 3¢ to 8¢ lower.

KC HRW Wheat closed 14¢ to 19¢ lower.

Soybean futures closed 8¢ to 12¢ lower through Sep ‘24 and then 4¢ to 6¢ lower.

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Major U.S. financial indices closed flat again Wednesday amid mixed quarterly earnings reports.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed fractionally lower. The NASDAQ was up 3 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.60 to $1.70 lower  through the front six contracts.

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Odds of the world economy achieving a soft landing of lower inflation and steady growth continue to recede, according to the latest quarterly World Economic Outlook (WEO) from the International Monetary Fund.

“The global economy remains on track for a gradual recovery from the pandemic and Russia’s war in Ukraine. China’s reopened economy is rebounding strongly. Supply chain disruptions are unwinding while the dislocations to energy and food markets caused by the war are receding,” says Pierre-Olivier Gourinchas, IMF economic counsellor and director of the research department. “The massive and synchronized tightening of monetary policy by most central banks is starting to bring inflation back towards its targets. At the same time, serious financial stability-related downside risks have emerged.”

The current WEO predicts a bottom in global economic growth this year at 2.8% before inching higher to 3% next year. Expected global inflation declines but slower than originally anticipated, from 8.7% last year to 7% this year and 4.9% next year.

“Inflation is much stickier than anticipated even a few months ago,” Gourinchas says. “While global inflation has declined, this reflects mostly the sharp reversal in energy and food prices, but core inflation, excluding energy and food prices, has still not peaked in many countries. It is expected to decline to 6.2% this year, still well above target.”

“Risks to the outlook are heavily skewed to the downside, with the chances of a hard landing having risen sharply,” according to the WEO Executive Summary. Financial sector stress could amplify and contagion could take hold, weakening the real economy through a sharp deterioration in financing conditions and compelling central banks to reconsider their policy paths.”

By | April 19th, 2023|Daily Market Highlights|

Cattle Current Daily—April 19, 2023

Cattle futures eased higher Tuesday, with follow-through support.

Feeder Cattle futures closed an average of 65¢ higher.

Live Cattle futures closed an average of 25¢ higher (10¢ higher at the back to 72¢ higher at the front).

Corn futures closed mostly 1¢ to 4¢ higher.

KC HRW Wheat closed 6¢ to 8¢ lower through May ‘24 and then mostly 1¢ lower.

Soybean futures closed mostly 5¢ to 8¢ higher.

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

Live prices last week were $175/cwt. in the Southern Plains, $182-$184 in Nebraska and $180-$184 in the western Corn Belt. Dressed prices were $290.

Choice boxed beef cutout value was $1.08 higher Tuesday afternoon at $307.06/cwt. Select was $2.29 higher at $291.61/cwt.

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Major U.S. financial indices closed little changed on Tuesday amid mixed quarterly earnings reports.

The Dow Jones Industrial Average closed 10 points lower. The S&P 500 closed 3 points higher. The NASDAQ was down 4 points.

West Texas Intermediate Crude Oil futures (CME) closed 3¢ to 7¢ higher through the front six contracts.

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USDA’s Economic Research Service (ERS) increased the projected second-quarter feeder steer price (750-800 pounds, Oklahoma City) by $6/cwt. to $199, based on recent price data. In the latest monthly Livestock, Dairy and Poultry Outlook, ERS forecast prices at $214 in the third quarter and $224 in the fourth quarter for an annual average of $205.12, which would be about $37 higher year over year.

As reported recently in Cattle Current, ERS projected the weighted average five-area direct fed steer price $6 higher in the second quarter and $3 higher in the third and fourth quarters: $169/cwt. in the second, $214 in the third and $224 in the fourth quarter. The average annual price was projected to be $164.50, about 14% more year over year.

“Despite an increase in expected fed cattle marketings in 2023 from last month, supplies will remain tighter than last year,” ERS analysts say. “The recent surge in prices may be attributed to stronger demand in the North, where packing capacity is the greatest but market-ready supplies may be relatively tighter.”

The same goes for the current price differential between North and South. For example, ERS analysts explain, based on price data for the week ending April 9, the total all-grades price for Nebraska steers averaged $175.37/cwt., which was $5.42 more than reported prices in Texas.

“The difference in prices likely reflects, in part, the relative availability of fed cattle in the South. Nebraska has a relatively smaller supply of market-ready cattle, despite poor winter weather conditions possibly pushing Nebraska feedlots to keep cattle on feed longer to achieve the desired carcass grades,” ERS analysts explain. “According to the Midwest Regional Climate Center’s Accumulated Winter Season Severity Index, many locations in the Northern Plains experienced extreme winter weather this year, and this likely decreased feedlot performance, lowering cattle out-weights. As a result, packers likely had to increase prices paid for fed cattle in Nebraska relative to southern markets.”

By | April 18th, 2023|Daily Market Highlights|

Cattle Current Daily—April 18, 2023

Cattle futures rose Monday, buoyed by strong cash prices across the board.

Last week, the weekly weighted average five-area direct fed steer price was $7.34 higher on a live basis at $180.44/cwt. The average fed steer price in the beef was $11.12 higher at $289.77.

Regionally, negotiated cash fed cattle prices last week were $5 higher in the Southern Plains at $175/cwt. on a live basis, $7-$8 higher in Nebraska at $182-$184 and $6-$7 higher in the western Corn Belt at $180-$184. Dressed prices were $5-$10 higher at $290.

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

Those prices were helped along by the recent seasonal bump higher in wholesale beef values.

Choice boxed beef cutout value was $3.36 higher Monday afternoon at $305.98/cwt. Select was $5.45 higher at $289.32/cwt. Week to week on Monday, Choice was up $13.07 and Select was up $10.92.

Cash calf and feeder cattle prices followed a similar trajectory last week, with steers and heifers selling $5-$9/cwt. higher nationwide, except for $9-$15 higher in the North Central region, according to AMS.

Feeder Cattle futures closed an average of $1.31 higher on Monday (55¢ higher at the back to $2.85 higher toward the front).

Live Cattle futures closed an average of 93¢ higher.

That was with Grain and soybean futures closing higher Monday, with Support including cool-to-cold, wet weather on the cusp of planting season, as well as Poland’s decision to prohibit grain exports from Ukraine, which slows global grain flow.

Corn futures closed mostly 4¢ to 6¢ higher.

KC HRW Wheat closed mostly 9¢ to 13¢ higher.

Soybean futures closed mostly 10¢ to 18¢ higher in the front six contracts, and then 7¢ to 9¢ higher.

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Major U.S. financial indices closed higher Monday, with investors apparently betting on recent readings of cooling inflation and spending leading to less restrictive monetary policy, at least for the day.

The Dow Jones Industrial Average closed 100 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 34 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.30 to $1.69 lower through the front six contracts.

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Domestic consumer beef demand resilience continues.

“It does not appear that consumer beef buying behavior has changed significantly thus far with higher retail beef prices,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “There is little indication of consumers trading down…i.e. switching to lower value products and away from more expensive beef cuts.”

For price perspective, Peel explains all fresh retail beef prices were $7.23 per pound in February, down 1.8% year over year.

“Retail beef prices have been mostly steady since late 2021.  The 12-month moving average of monthly retail beef prices has been above $7.25/lb. since April 2022,” Peel says. “This indicates strong beef demand given record beef production in 2022 and the highest beef consumption per capita at 58.9 pounds (unchanged from 2021) since 2010.  Retail all-fresh beef prices averaged $7.30/lb. in 2022, the highest on record and up 5.1% over 2021 average retail prices. The highest monthly price ever was in October 2021 at $7.55/lb.” 

Peel notes middle meats continue to lead wholesale beef prices higher with tenderloins and ribeyes 12-15% higher year over year. He explains Chuck and Round wholesale values vary across a wide range of products, while Brisket values are weaker compared to last year.

“Both 90% and 50% lean beef trimmings have advanced significantly thus far in 2023, pushing ground beef prices higher. Higher ground beef prices are probably partly due to stronger demand but are mostly due to decreasing supplies of processing beef,” Peel says.

Higher beef prices stem from strong consumer demand, as well as declining beef production. As noted in Cattle Current, estimated year-to-date cattle slaughter of 9.4 million head last week was 284,000 head fewer (-2.9%) than the same period a year earlier. Estimated year-to-date beef production of 7.7 billion pounds was 373.2 million pounds less (-4.6%).

“Carcass weights for all classes of cattle are lower year over year with average cattle carcass weights down 15.2 pounds year over year,” Peel says. “Steer carcass weights have averaged 14.7 pounds lighter this year with heifers averaging 19.2 pounds lighter and cow carcass weights smaller by 11.6 pounds compared to one year ago.”

By | April 17th, 2023|Daily Market Highlights|

Cattle Current—April 17, 2023

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

Live prices last week were $5 higher in the Southern Plains at $175/cwt., $8-$9 higher in Nebraska at $182-$186 and $6-$7 higher in the western Corn Belt at $180-$184. Dressed prices were $5-$10 higher at $290.

Choice boxed beef cutout value was $2.20 higher Friday afternoon at $302.62/cwt. Select was 49¢ higher at $283.87/cwt. Week to week on Friday, Choice was $11.64 higher and Select was $8.09 higher.

Estimated total cattle slaughter last week of 613,000 head was 10,000 head more than the previous week but 25,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 9.4 million head was 284,000 head fewer (-2.9%) than the same period a year earlier. Estimated year-to-date beef production of 7.7 billion pounds was 373.2 million pounds less (-4.6%).

Cattle futures finished mostly lower on Friday, weighed down by surging Corn futures.

Feeder Cattle futures closed an average of 88¢ lower (42¢ to $1.12 lower), except for 72¢ and 10¢ higher in the front two contracts.

Live Cattle futures closed an average of 43¢ lower, except for 12¢ higher in away Jun.

Week to week on Thursday, though, Feeder Cattle futures closed an average of $3.52 higher and Live Cattle futures closed an average of $1.41 higher.

Corn futures closed mostly 5¢ to 6¢ higher as traders appeared to apply some weather risk premium.

KC HRW Wheat closed mostly 29¢ to 33¢ higher powered by lingering drought, as well as resurgent rhetoric from Russia that it will withdraw from the Black Sea Initiative if the West fails to meet specific conditions.

Soybean futures closed mostly 10¢ to 12¢ lower, pressured by bullish Brazilian production expectations.

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Major U.S. financial indices softened Friday with pressure including weaker retail sales than expected.

Advance estimates of U.S. retail and food services sales for March 2023, were 1% less than the previous month but 2.9% higher year over year, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 143 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 42 points.

West Texas Intermediate Crude Oil futures (CME) closed 36¢ to 39¢ lower through the front six contracts.

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“It was not that long ago that many cattle market analysts debated and held fast to the notion that live cattle prices would not reach and exceed $170 this spring. The market is now trading at $180, and most of those same analysts are smart enough to now be asking the question of just how high is this market going to go,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “There is no reason to put a limit on price expectations at this point because finished cattle prices have already surpassed what most people thought they would do this spring. The continued price run is hard to fathom as prices dance around $180. One would think that upside potential is waning at this point, but it is doubtful there will be much weakness through the summer and fall months, either.”

Griffith notes the expected seasonal increase in wholesale beef prices should provide underpinning.

“Wholesale beef prices should be supported the next six weeks as many retailers are purchasing for the summer grilling season and the unofficial kickoff to summer that is the Memorial Day weekend,” Griffith says. “Not only is the market being supported by the upcoming grilling season, but the start of baseball season tends to support beef movement as lots of hamburgers and hotdogs are consumed at baseball fields, regardless of whether it is 5-year-old children playing or it is the Atlanta Braves. There is likely room in the wholesale beef market for prices to continue escalating.

By | April 16th, 2023|Daily Market Highlights|

Cattle Current Daily—April 14, 2023

Tighter fed cattle supplies, compounded by weather-reduced tonnage kept the hammer down on negotiated cash fed cattle prices Thursday. Trade ranged from moderate with good demand in Nebraska to mostly inactive on light demand through Thursday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are $5 higher in the Southern Plains at $175/cwt., $7-$8 higher in Nebraska at $182-$184 and $7 higher in the western Corn Belt at $181-$184. Dressed prices are $5-$10 higher at $290.

Choice boxed beef cutout value was $1.94 higher Thursday afternoon at $300.42/cwt. Select was $1.57 higher at $283.38/cwt.

Cattle futures mostly edged lower Thursday with likely repositioning amid the strong rally.

Feeder Cattle futures closed an average of 50¢ lower, except for 5¢ and 45¢ higher in two contracts.

Live Cattle futures closed an average of 58¢ lower, except for $1.22 higher in spot Apr.

Corn futures closed fractionally lower to 3¢ lower.

KC HRW Wheat closed mostly 12¢ to 18¢ lower.

Soybean futures closed mostly 3¢ to 5¢ higher.

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Major U.S. financial indices closed higher Thursday with a another closely watched inflation gauge lower than expected.

The Producer Price Index for final demand declined 0.5% in March, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. Final demand prices were unchanged in

February and increased 0.4% in January. On an unadjusted basis, the index for final demand advanced 2.7% for the 12 months ended in March.

The Dow Jones Industrial Average closed 383 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 236 points.

West Texas Intermediate Crude Oil futures (CME) closed 74¢ to $1.10 lower through the front six contracts.

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All things being equal, analysts with the Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI-MU) see commodity prices mostly moderating and returning to a more historical semblance of normalcy.

“What goes up, generally comes back down in agricultural markets,” says Pat Westhoff, FAPRI-MU director Pat Westhoff. “Projected prices for most crops, poultry and dairy products all retreat in 2023 from recent peaks, and so do some production expenses…Net farm income is likely to fall back from the record levels of 2022 and consumer food price inflation is also likely to slow in 2023.” 

The projections Westhoff refers to come from the recently released FAPRI-MU annual U.S. Baseline Outlook report. The report includes projections for agricultural and biofuel markets and serves as a point of reference for evaluating alternative scenarios for agricultural policy.

Among some of the highlights…

In 2023, most projected livestock sector prices fall as supplies rebound and demand growth slows. The one major exception is cattle, where drought-reduced inventories reduce the number of animals available for slaughter.

If weather conditions allow crop yields to return to trend-line levels in 2023, prices for corn, soybeans, wheat, cotton and many other crops are likely to fall. Over the next 10 years, average nominal crop prices are much lower than they have been in 2022/23, but they remain above the average of 2017/18 to 2021/22.

Consumer food price inflation jumped to 9.9% in 2022 as farm commodity prices rose, labor and other costs increased, supply chain problems continued, and consumer demand was strong. Price increases have slowed in recent months, and the projected annual increase in consumer food prices is 4.4% in 2023 and under 2% in 2024.

By | April 13th, 2023|Daily Market Highlights|

Cattle Current Daily—April 13, 2023

Cattle futures continued to gain Wednesday with prospects for record-high cash fed cattle prices increasing again this week.

Feeder Cattle futures closed an average of $1.26 higher (12¢ to $1.80 higher).

Live Cattle futures closed an average of 78¢ higher (37¢ to $1.97 higher).

Choice boxed beef cutout value was $3.38 higher Wednesday afternoon at $298.48/cwt. Select was 23¢ lower at $281.81/cwt.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly a standstill through Wednesday afternoon. Although too few to trend, there were some early live sales in the western Corn Belt at $181/cwt.

Last week, live prices were $170/cwt. in the Southern Plains and $174-$177 in Nebraska and the western Corn Belt. Dressed prices were $275-$280.

Corn futures closed mostly 1¢ to 3¢ lower.

KC HRW Wheat closed mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 3¢ to 9¢ lower, except for nearby contracts.

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Major U.S. financial indices softened Wednesday with recessionary concerns, although inflation was lower last month than the trade expected.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1% in March on a seasonally adjusted basis, after increasing 0.4% in February, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 5.0% before seasonal adjustment.

However, investors appeared to focus more on cautionary comments from the Federal Open Market Committee (FOMC).

“Given their assessment of the potential economic effects of the recent banking sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years,” according to FOMC minutes released Wednesday.

The Dow Jones Industrial Average closed 38 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 102 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.26 to $1.73 higher through the front six contracts.

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“From a seasonal standpoint, lightweight calf prices tend to soften after April, but it is highly unlikely lightweight calf prices will soften this summer and may even be higher during the fall of 2023 than the current time period,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Likewise, Griffith notes feeder-weight cattle prices continue to gain amid narrowing supplies.

“The CME feeder cattle index has gained about $10/cwt. since the last day of February and the futures market is predicting further gains,” Griffith says. “The futures market may be a bigger story than the strength in local cash markets. The April Feeder cattle contract has traded between $193 and $200 since the beginning of March. It appears to have a direction towards higher prices, but recent volatility in the futures market makes it tough to say prices are definitely going to increase to predicted levels. It seems certain cattle prices are destined to continue increasing given supply and demand fundamentals, but meeting the current expectations of the futures market is not as certain. This is especially true looking into the summer and fall months that are trading between $222 and $228/cwt.” 

On the other side of the demand equation, Choice boxed beef cutout value is knocking at $300/cwt.

“There remain questions as to the consumer’s willingness to continue paying high prices for beef, and if those consumers are willing to pay more than they are currently paying,” Griffith says. “As has been mentioned before, there is no reason to doubt the consumer’s willingness to continue purchasing beef until the consumer demonstrates some sort of pushback on the market.”

By | April 12th, 2023|Daily Market Highlights|

Cattle Current Daily—April 12, 2023

Feeder Cattle futures closed an average of $1.86 higher ($1.17 to $2.62 higher), helped along by weaker Corn futures and cash strength.

Live Cattle futures closed an average of 57¢ higher, supported by cash strength and rising wholesale beef values.

Choice boxed beef cutout value was $2.19 higher Tuesday afternoon at $295.10/cwt. Select was $3.64 higher at $282.04/cwt.

Negotiated cash fed cattle trade was at a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $170/cwt. in the Southern Plains and $174-$177 in Nebraska and the western Corn Belt. Dressed prices were $275-$280.

Grain and Soybean futures seemed to bow to weather and outside markets more than the monthly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed mostly 1¢ to 3¢ lower.

KC HRW Wheat closed mostly 8¢ to 10¢ lower.

Soybean futures closed mostly 2¢ to 4¢ higher.

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Major U.S. financial indices closed little changed Tuesday as investors awaited key inflation data Wednesday.

The Dow Jones Industrial Average closed 98 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 52 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.56 to $1.79 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) increased the expected annual five-area direct fed steer price for this year by $2.50 to $164.50/cwt. In the latest World Agricultural Supply and Demand Estimates (WASDE), ERS projected the second-quarter price $6 higher than the previous month at $169. Expected prices for the third and fourth quarters were raised by $3 to $162 and $167, respectively.

That was with beef production forecast 110 million pounds more than the previous month (+0.4%) at 26.77 billion pounds. The total would be 1.5 billion pounds less (-5.3%) than last year.

Corn — This month’s 2022/23 U.S. corn outlook was for reduced imports and food, seed, and industrial (FSI) use, with unchanged ending stocks. With supply and use falling by the same amount, ending stocks were unchanged at 1.34 billion bushels.

The season-average farm price was unchanged at $6.60 per bushel.

Soybeans — U.S. soybean supply and use forecasts for 2022/23 were unchanged relative to last month. Soybean and soybean meal prices also were unchanged at $14.30 per bushel and $465 per short ton, respectively. The soybean oil price was projected 2¢ lower at 64¢ cents per pound.

Wheat — The outlook for 2022/23 U.S. wheat was for slightly higher supplies, reduced domestic use, unchanged exports, and increased ending stocks. Projected 2022/23 ending stocks were raised 30 million bushels to 598 million, still 14% below last year.

The 2022/23 season-average farm price was forecast 10¢ per bushel lower at $8.90, based on NASS prices reported to date and expectations for cash prices for the remainder of 2022/23.

By | April 11th, 2023|Daily Market Highlights|

Cattle Current Daily—April 11, 2023

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

For the week, live prices were $3-$5 higher in the Southern Plains at $170/cwt., $5-$6 higher in Nebraska at $174-$177 and $4-$7 higher in the western Corn Belt at $174-$177. Dressed prices were $5-$8 higher at $275-$280.

The five-area weighted average direct fed steer price (FOB) last week was record high at $173.10/cwt. on a live basis, which was $4.36 higher than the previous week. The average fed steer price in the beef was $8.29 higher at $278.65.

Choice boxed beef cutout value was $1.93 higher Monday afternoon at $292.91/cwt. Select was $2.62 higher at $278.40/cwt.

Cattle futures continued to rise Monday, on the back of the last two-week’s surge in cash prices.

Feeder Cattle futures closed an average of 61¢ higher (22¢ to $1.27 higher).

Live Cattle futures closed 44¢ higher.

Corn futures gained Monday with some likely positioning ahead of Tuesday’s monthly World Agricultural Supply and Demand Estimates.

Corn futures closed 5¢ to 10¢ higher through Jly ‘24, and then mostly 2¢ higher.

KC HRW Wheat closed 11¢ to 33¢ higher.

Soybean futures closed mostly fractionally mixed to 1¢ higher.

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Major U.S. financial indices closed mixed Monday as investors returned from the holiday weekend and grappled with the prospects of recession as Fed monetary policy battles inflation.

The Dow Jones Industrial Average closed 101 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 3 points.

West Texas Intermediate Crude Oil futures (CME) closed 72¢ to 96¢ lower through the front six contracts.

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Historically high fed cattle prices are unlikely to fade as much as seasonal trends indicate, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

“In a steady market, fed prices would typically peak seasonally about now and move lower through the third quarter before increasing to the end of the year,” Peel explains, in his weekly market comments. “This sort of typical pattern is currently priced into the Live Cattle futures with futures prices decreasing from the nearby April (currently just over $171/cwt.) to June (about $163/cwt.) and August ($162/cwt.) before increasing in the October contract ($166/cwt.) and December ($171/cwt.). At this time, Live Cattle futures prices do not exceed nearby levels until the February 2024 contract (currently $174/cwt.).”

However, Peel notes the strong uptrend in fed cattle prices in 2021 and 2022 offset seasonal trends.

“There is good reason to expect the uptrend to continue in 2023. The seasonality priced into the markets now may fade as markets trend higher going forward,” he says. “Feedlot inventories are just beginning to fall with ever tighter feeder cattle supplies and are likely to continue decreasing at least through 2023, pushing fed prices higher. Fed prices may increase more slowly or plateau briefly in the summer months but are not likely to have a typical seasonal decline going forward.”   

For current perspective, the five-area weighted average direct fed steer price last week was record high at $173.10/cwt. on a live basis, which was $4.36 higher than the previous week. The average fed steer price in the beef was $8.29 higher at $278.65.

You can hear more of Peel’s market insights here.

By | April 10th, 2023|Daily Market Highlights|

Cattle Current Daily—April 10, 2023

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

For the week, live prices were $3-$5 higher in the Southern Plains at $170/cwt., $4-$5 higher in Nebraska at $172-$177 and $5-$7 higher in the western Corn Belt at $175-$177. Dressed prices were $5-$8 higher at $275-$280.

Choice boxed beef cutout value was $1.33 higher Friday afternoon at $290.98/cwt. Select was 85¢ lower at $275.78/cwt. Week to week on Friday, Choice was $8.91 higher and Select was $5.06 higher.

Estimated total cattle slaughter last week was 603,000 head, which was 48,000 head fewer than the previous week and 62,000 head fewer than the same week last year. Total estimated year-to-date cattle slaughter of 8.8 million head was 253,000 head less (-2.8%) than the same period last year. Estimated year-to-date beef production of 7.24 billion pounds was 342 million pounds less (-4.5%).

Futures markets were closed on observance of Good Friday. Week to week on Thursday, Live Cattle futures closed an average of $1.67 higher (85¢ higher at the back to $3.52 higher at the front). That was an average of $6.14 higher over the past two weeks.

Feeder Cattle futures closed an average of $2.15 higher week to week on Thursday (72¢ higher at the front to $3.55 higher at the back). That was an average of $8.94 higher over the past two weeks.

Equity markets were closed for Good Friday.

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USDA estimated acreage for principal crops almost 6 million acres more for this year compared to last, in the recent Perspective Plantings report. If those expectations are fulfilled and Mother Nature allows trend line yields, then increased production should moderate feed prices. However, other factors could keep the price floor higher, say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

“LMIC estimates the season average price will be $5.45 per bushel in 2023/2024. The current marketing year, LMIC has adjusted exports lower,” LMIC analysts say. “Troubles with the South American crop are expected to not allow U.S. corn prices to come down meaningfully. LMIC forecasts a $6.95 per bushel season average price for this marketing year. Omaha corn price has been over $7 per bushel for 22 weeks this season and only briefly dipped below $6.50 for a week.”

As for hay, USDA-estimated acres were slightly lower than LMIC projections ahead of the report.

“Original forecasts were for a 3% increase in hay acres, driven by other hay. Forecasts were revised to a 2.4% increase for the 2023/2024 marketing year,” LMIC analysts say. “Prices remain elevated and continue to be tweaked as we enter the tail end of the 2022/2023 marketing year. Alfalfa prices are projected at $270 per ton nationally this year and $235 per ton next year. Other hay prices are estimated at $170 per ton this year and $155 per ton next year.”

By | April 8th, 2023|Daily Market Highlights|

Cattle Current Daily—April 7, 2023

Cattle futures took another strong step higher Thursday, buoyed by another week of significant cash gains.

Feeder Cattle futures closed an average of $2.96 higher, also helped along by a break in Corn futures

Live Cattle futures closed an average of $1.76 higher (85¢ to $2.80 higher) with added support from recently higher wholesale beef prices.

Negotiated cash fed cattle trade ranged from slow to moderate on moderate demand to a standstill through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

So far this week, live prices are $3-$5 higher in the Texas Panhandle at $170/cwt., $4-$5 higher in Nebraska at $172-$177 and $2-$7 higher in the western Corn Belt at $172-$177. Dressed prices are $5-$8 higher at $275-$280.

Choice boxed beef cutout value was $1.03 higher Thursday afternoon at $289.65/cwt. Select was $1.53 lower at $276.63/cwt.

Corn futures closed 3¢ to 9¢ lower through Jly ‘24, and then mostly fractionally higher, with pressure including a more favorable weather outlook.

KC HRW Wheat closed 1¢ to 3¢ higher through May ‘24 and then mostly fractionally lower to 1¢ lower.

Soybean futures closed 6¢ to 18¢ lower through Jan ‘24 and then mostly 2¢ to 5¢ lower.

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Major U.S. financial indices mostly edged higher Thursday with initial weekly unemployment insurance claims higher than expected, another potential sign of a slowing economy.

The advance figure for seasonally adjusted initial claims was 228,000 the week ending April 1, according to the U.S. Department of Labor. That was 18,000 less than the previous week’s level, which was revised 48,000 higher.

The Dow Jones Industrial Average closed 2 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 91 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts, from 10¢ lower to 9¢ higher.

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U.S. beef exports were lower year-over-year in February but improved from the previous month, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 105,057 metric tons (mt ) in February, down 3% from a year ago, while export value dropped 16% to $757.8 million. For the first two months of the year, exports were down 9% from last year’s large volume to just under 206,000 mt, while export value dipped 24% to $1.46 billion. February exports to Japan and South Korea increased slightly from a year ago, though value trended lower. Through February, beef exports trended significantly higher year-over-year to Mexico, the Caribbean, the European Union and South Africa.

“On the beef side, it was encouraging to see a modest rebound compared to January,” says Dan Halstrom USMEF President and CEO. “With Asian markets continuing to ease indoor mask mandates and eliminate travel restrictions, we expect to see a continued boost in restaurant traffic and foodservice demand as the year progresses.”

By | April 6th, 2023|Daily Market Highlights|

Cattle Current Daily—April 6, 2023

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

Last week, live prices were $165-$167/cwt. in the Texas Panhandle; $167 in Kansas, $168-$172 in Nebraska and $170 in the western Corn Belt. Dressed prices were $270-$272.

Choice boxed beef cutout value was 68¢ higher Wednesday afternoon at $288.62/cwt. Select was 21¢ higher at $278.16/cwt.

Cattle future closed narrowly mixed Wednesday, awaiting weekly cash direction.

Feeder Cattle futures closed an average of 34¢ lower.

Live Cattle futures closed an average of 11¢ higher, except for 80¢ higher in spot Apr and unchanged in the back contract.

Corn futures closed mostly 1¢ to 3¢ higher, except for unchanged to 1¢ lower in old-crop contracts

KC HRW Wheat closed mostly 11¢ to 14¢ lower.

Soybean futures closed 3¢ to 6¢ lower through Sep ‘24 and then fractionally higher to 6¢ higher.

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Major U.S. financial indices closed mostly lower Wednesday with more economic data suggesting the domestic economy is losing steam.

Private sector employment increased by 145,000 jobs in March and annual pay was up 6.9% year-over-year, according to the March ADP® National Employment ReportTM.

“Our March payroll data is one of several signals that the economy is slowing,” says Nela Richardson, ADP chief economist. “Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down.”

The Dow Jones Industrial Average closed 80 points higher. The S&P 500 closed 10 points lower. The NASDAQ was down 129 points.

West Texas Intermediate Crude Oil futures (CME) closed 6¢ to 10¢ lower through the front six contracts. 

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Record U.S. beef and export values last year generated significant returns to the U.S. corn and soybean industries, according to an independent study conducted by World Perspectives, Inc. and released by the U.S. Meat Export Federation (USMEF). U.S. beef and pork exports contributed an estimated total economic impact of 15% per bushel to the value of corn and 13% per bushel to soybeans.

“For every bushel of corn we marketed in 2022, a little over $1 was attributed to red meat exports and with soybeans, pork exports contributed $1.94 per bushel,” says USMEF Chair Dean Meyer, who produces corn, soybeans, cattle and hogs near Rock Rapids, Iowa. “Pork and beef exports bring critical support to our bottom lines.”

Corn and soybean growers support the international promotion of U.S. pork, beef and lamb by investing a portion of their checkoff dollars in market development efforts conducted by USMEF.

“We are a major exporter of corn and soybeans but this study reminds us of the value of our indirect exports of corn and soybeans through pork and beef,” says Dave Juday, senior analyst for World Perspectives. “The contributions of pork and beef exports to the per-bushel value of U.S. corn and soybeans in 2022 were the highest estimates we’ve seen to date. And that was critically important, as corn and soybean farmers worked to maintain margins with higher input costs across the board.”

By | April 5th, 2023|Daily Market Highlights|

Cattle Current—April 5, 2023

Cattle future closed lower Tuesday, amid retrenching and a risk-off atmosphere in commodities and equites tied to growing concerns about recession.

Feeder Cattle futures closed an average of 59¢ lower (10¢ to $1.00 lower).

Live Cattle futures closed an average of 73¢ lower (17¢ lower to $1.00 lower toward the front).

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

Last week, live prices were $2-$4 higher in the Texas Panhandle at $165-$167/cwt., $4 higher in Kansas at $167, $4-$7 higher in Nebraska at $168-$172 and $4-$6 higher in the western Corn Belt at $170. Dressed prices were $5-$7 higher at $270-$272.

Wholesale beef prices extended gains Tuesday. Choice boxed beef cutout value was $2.85 higher Tuesday afternoon at $287.94/cwt. Select was $3.77 higher at $277.95/cwt.

Corn futures closed 3¢ to 9¢ lower.

KC HRW Wheat closed 1¢ to 3¢ lower.

Soybean futures closed mostly 8¢ to 12¢ lower.

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Major U.S. financial indices closed lower Tuesday as investors grappled with the inflationary force of higher Crude Oil prices in tandem with signs the economy is slowing.

On the last business day of February, the number and rate of job openings decreased 632,000 to 9.9 million and 6.0%, respectively, according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 198 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 63 points.

West Texas Intermediate Crude Oil futures (CME) closed 20¢ to 29¢ higher through the front six contracts. 

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Agricultural producer sentiment weakened again in March, according to the Purdue University/CME Group Ag Economy Barometer. It declined 8 points from the previous month to 117. Both of the barometer’s sub-indices declined 8 points in March, leaving the Current Conditions Index at 126 and the Future Expectations Index at 113.

“Rising interest rates and weaker prices for key commodities including wheat, corn, and soybeans from mid-February through mid-March were key factors behind this month’s lower sentiment reading,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Although the March survey did not include any questions directly related to the bank closures, during an open-ended comment question posed at the end of each survey, multiple respondents voiced concerns about the banking sector’s problems and its potential to hurt the economy. These problems also likely weighed on producer sentiment.”

The Farm Financial Performance Index remained unchanged from February at a reading of 86. Producers point to higher input costs and rising interest rates as their number one concern for the year ahead. Notably, concern about higher input cost has been falling since last summer’s peak.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between March 13-17, which coincided with the demise of Silicon Valley Bank and Signature Bank.

By | April 4th, 2023|Daily Market Highlights|

Cattle Current Daily—April 4, 2023

Cattle future closed lower Monday, especially Feeder Cattle, as traders retrenched following the previous session’s new contract highs.

Feeder Cattle futures closed an average of 91¢ lower (5¢ lower at the back to $2.10 lower toward the front).

Live Cattle futures closed an average of 35¢ lower, except for an average of 10¢ higher in two contracts.

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

Last week, live prices were $2-$4 higher in the Texas Panhandle at $165-$167/cwt., $4 higher in Kansas at $167, $4-$7 higher in Nebraska at $168-$172 and $4-$6 higher in the western Corn Belt at $170. Dressed prices were $5-$7 higher at $270-$272.

The weekly weighted average five-area direct fed steer price was $4.33 higher on a live basis last week at $168.74/cwt. The weekly average steer price in the beef was $5.30 higher at $270.36.

Wholesale beef prices continued to gain Monday. Choice boxed beef cutout value was 3.02 higher in the afternoon at 285.09/cwt. Select was $3.46 higher at $274.18/cwt.

As for grains and soybeans, Corn futures closed narrowly mixed, mostly 1¢ lower to 1¢ higher.

KC HRW Wheat closed mostly 1¢ to 2¢ lower through Mar ‘24, and then 1¢ higher.

Soybean futures closed 13¢ to 19¢ higher through Aug ‘24, and then mostly 8¢ to 9¢ higher.

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Major U.S. financial indices closed mostly higher Monday with carryover support from the previous session and despite the prospect of higher inflation, associated with higher crude oil prices spurred by the announced production cuts by OPEC+ nations.

The Dow Jones Industrial Average closed 327 points higher. The S&P 500 closed 15 points higher. The NASDAQ was down 32 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.76 to $4.75 higher through the front six contracts. 

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Assuming drought conditions improve significantly, bred cow and heifer prices will likely increase dramatically, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. He adds the price jump could come as early as this fall and into 2024.

As it stands currently, though, Peel notes lingering drought conditions appear to be keeping bred cow prices relatively lower than would be expected heading into April’s typical seasonal increase.

Currently (last week), Peel says 1,100-1,200-pound, second-trimester, 5-8-year-old Medium/Large No. 1 cows, sold for $1,332 per head in Oklahoma. Younger cows — 2-4 years old — in second to third trimester averaged $1,300-$1,500. Based on prior research and current broader market conditions, he explains bred cow values would likely be $100-$300/head higher without drought impacts.

“The prior research also provides insights into the range of values for bred cows. The base cow described above assumes average quality. Variations from low to high quality decrease or increase value of the cow by roughly 15%, about $200 per head less for low quality, to $200/head more for high quality cows compared to average quality,” Peel says. “On average, the value of bred cows is highest at ages 3-5 and begins to drop sharply after age 7. Bred cow value is higher for later stages of gestation, with bred cows valued roughly $150/head more in the third trimester compared to the first trimester.”

All told, Peel says current bred cow values could range from less than $1,000 per head to nearly $2,000 across a wide range of quality, age, stage of gestation, and hide-color factors. 

By | April 3rd, 2023|Daily Market Highlights|

Cattle Current Daily—April 3, 2023

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

For the week, live prices were $2-$4 higher in the Texas Panhandle at $165-$167/cwt., $4 higher in Kansas at $167, $4-$7 higher in Nebraska at $168-$172 and $4-$6 higher in the western Corn Belt at $170. Dressed prices were $5-$7 higher at $270-$272.

Estimated total cattle slaughter last week of 651,000 head was 25,000 head more than the previous week and 12,000 more than the same week last year. Estimated year-to-date total cattle slaughter of 8.19 million head was 193,000 head fewer (-2.3%) than the same period last year. Estimated year-to-date beef production of 6.75 billion pounds was 282 million pounds less (-4.0%).

The week’s significantly higher cash fed cattle prices continued to push Cattle futures higher Friday.

Feeder Cattle futures closed an average of $1.03 higher.

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

Cattle futures received added support from wholesale beef prices. Choice boxed beef cutout value was $2.87 higher Friday afternoon at $282.07/cwt. Select was $2.26 higher at $270.72/cwt.

Corn futures closed mostly fractionally lower to 4¢ lower, except for 11¢ and 8¢ higher in the front two contracts. The Perspective Plantings report (see below) applied pressure.

KC HRW Wheat closed 2¢ to 6¢ higher through May ‘24, and then 4¢ to 6¢ lower.

Soybean futures closed 10¢ to 31¢ higher through Aug ‘24, and then mostly 2¢ to 3¢ higher, helped along by the Grain Stocks report (see below).

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Major U.S. financial indices closed higher Friday, buoyed by less increase than expected in the Personal Consumptions Expenditures index (PCE), closely watch by the Fed as an inflation gauge.

The PCE increased 0.3% in February, according to the U.S. Bureau of Economic Analysis. The trade expected an increase of 0.4%.

The Dow Jones Industrial Average closed 415 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 208 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.24 to $1.32 higher through the front six contracts. 

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U.S. farmers intend to plant 4% more corn acres this year than last, according to the Perspective Plantings report issued Friday.

Corn planted area for all purposes in 2023 was estimated at 92.0 million acres, which would be 3.42 million acres more than last year. That was 1.1 million acres more than expectations ahead of the report.

It’s worth noting that 800,000 acres of the added year-over-year corn acres are in North Dakota, where winter looks to linger for a while.

Soybean planted area for 2023 was estimated at 87.5 million acres, up slightly from last year, but 740,000 acres fewer than average expectations ahead of the report.

All wheat planted area for 2023 was estimated at 49.9 million acres, up 9% from 2022 and about 1 million acres more than expectations ahead of the report. Projected 2023 winter wheat planted area was 13% more than last year at 37.5 million acres.

USDA estimated harvested acres of all hay this year to be 50.6 million acres, which would be 1.1 million acres (+2.2%) more than last year.

Stocks Tighten

Overall, corn and soybean stocks were snugger than expectations ahead of the report.

Corn stocks in all positions on March 1, 2023 totaled 7.40 billion bushels, down 5% percent from a year earlier, according to the Grain Stocks report. Of the total stocks, 4.11 billion bushels were stored on farms, which was 1% more year over year.

Soybeans stored in all positions on the same date totaled 1.69 billion bushels, down 13% from a year earlier. Soybean stocks stored on farms were estimated at 750 million bushels, down slightly from a year ago.

All wheat stored in all positions on March 1 totaled 946 million bushels, down 8% from a year ago. On-farm stocks were estimated at 227 million bushels, which was 30% more than a year earlier.

By | April 2nd, 2023|Daily Market Highlights|

Cattle Current Daily—March 31, 2023

Cash fed cattle prices jumped Thursday with moderate trade and good demand in all regions, according to the Agricultural Marketing Service.

Live prices were $2-$4 higher in the Texas Panhandle at $165-$167/cwt., mostly $4 higher in Kansas at $167, $5-$6 higher in Nebraska at $169-$171 and mostly $4-$5 higher in the western Corn Belt at $170. Dressed prices were mostly $5 higher at $270, with a few up to $275 in Nebraska and a few up to $276 in the western Corn Belt.

Choice boxed beef cutout value was $1.09 lower Thursday afternoon at $279.20/cwt. Select was 44¢ lower at $268.46/cwt.

Stronger cash prices pulled Cattle futures higher.

Feeder Cattle futures closed an average of $1.58 higher, (from 95¢ higher in expiring Mar to $1.92 higher).

Live Cattle futures closed an average of $1.03 higher (80¢ to $1.72 higher).

Corn futures closed mostly 3¢ to 4¢ lower through Jly ‘24, and then mostly 1¢ lower.

KC HRW Wheat closed mostly 1¢ higher.

Soybean futures closed mostly fractionally lower to 3¢ lower.

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Major U.S. financial indices closed higher again Thursday. Support included an increase in weekly unemployment insurance claims, which some viewed as another prompt for the Fed to ease monetary tightening.

Initial claims were 198,000 for the week ending March 25, which was 7,000 more than the previous week, according to the U.S. Department of Labor. The four-week moving average of 198,250 was 2,000 more than the previous four-week average. 

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 87 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.22 to $1.40 higher through the front six contracts. 

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Retail beef prices are historically high but have risen relatively less than competing meat proteins.

“The all fresh retail beef price in February was nearly $7.23 per pound, which is a slight increase from January but 6¢ lower than February of the previous year,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This compares to a price of $6.30 per pound in February 2021 and $5.94 per pound in 2020. Thus, the all fresh retail beef price was 22% higher in February 2023 than it was in February 2020.”

By way of comparison, compared to three years earlier, Griffith says February retail prices were 23% more for pork and 39% more for broilers. Across the same period, he notes a dozen eggs cost 191% more and a gallon of milk is 30% higher.

“These prices demonstrate some of the pressure placed on consumers for staple proteins,” Griffith says. “How consumers shift expenditures of disposable income will determine demand for each of the items.”

By | March 30th, 2023|Daily Market Highlights|

Cattle Current Daily—March 30, 2023

Cattle futures took another step higher Wednesday, helped along by more positive outside markets.

Feeder Cattle futures closed an average of $1.48 higher, except for 27¢ lower in expiring spot Mar.

Live Cattle futures closed an average of 68¢ higher (27¢ to 95¢ higher).

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

Last week, live prices were $163/cwt. in the Southern Plains, $164-$165 in Nebraska and $164-$166 in the western Corn Belt. Dressed prices were $265.

Choice boxed beef cutout value was 34¢ lower Wednesday afternoon at $280.29/cwt. Select was $1.46 lower at $268.90/cwt.

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

KC HRW Wheat closed 2¢ to 15¢ lower.

Soybean futures closed 4¢ to 9¢ higher in the front three contracts, and then mostly 2¢ to 5¢ lower.

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Major U.S. financial indices closed higher Wednesday, supported by stronger tech stocks and more confidence in the banking sector.  

The Dow Jones Industrial Average closed 323 points higher. The S&P 500 closed 56 points higher. The NASDAQ was up 210 points.

West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 29¢ lower through the front six contracts. 

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Rural economic growth declined last month, according to the Creighton University Rural Mainstreet Index (RMI). The March index declined to 45.6 from 50.1 in February. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. It was above growth neutral the previous three months.

“The Rural Mainstreet economy continues to experience slow, to no, to negative economic growth. Less than 1% of bankers reported improving economic conditions for the month with 92% indicating no change in economic conditions from February’s slow growth,” according to Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

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. It represents approximately 200 rural communities — average population of 1,300.

“Over the past 12 months, the regional confidence index has fallen to levels indicating a very negative outlook,” Goss says. The slowing economy, higher borrowing costs and labor shortages constrained the business confidence index to a weak 39.1 from 44.4 in February.

Among survey highlights:

  • After advancing by more than 9% for 2022, bank CEOs expect farmland prices to expand by only 1% over the next 12 months.
  • Only 13.6% of bankers tightened credit standards for farm loans this year.
  • Bank savings deposits rose to a record level.
By | March 29th, 2023|Daily Market Highlights|

Cattle Current Daily—March 29, 2023

Cattle futures closed narrowly mixed Tuesday following the previous session’s strong showing.

Feeder Cattle futures closed an average of 26¢ lower, except for an average of 10¢ higher in two contracts.

Live Cattle futures closed an average of 26¢ higher, except for unchanged in the back contract.

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

Last week, live prices were $1 lower in the Southern Plains at $163/cwt., steady to $1 higher in Nebraska at $164-$165 and steady to $2 higher in the western Corn Belt at $164-$166. Dressed prices were $1 higher at $265.

Wholesale beef prices seem to be finding some seasonal footing. Choice boxed beef cutout value was 27¢ higher Tuesday afternoon at $280.63/cwt. Select was 64¢ higher at $270.36/cwt.

Short covering, stronger export inspections and a reduced outlook for harvested acres in Brazil helped Soybean close mostly 9¢ to 25¢ higher.

KC HRW Wheat closed 10¢ to 12¢ higher.

Corn futures closed mostly fractionally lower to 2¢ lower, except for mostly 2¢ higher in new-crop contracts.

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Major U.S. financial indices edged lower Tuesday, pressured in part by rising bond yields. 

The Dow Jones Industrial Average closed 37 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 52 points.

West Texas Intermediate Crude Oil futures (CME) closed 36¢ to 41¢ higher through the front six contracts. 

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Although still mostly positive between now and November, projected cattle feeding returns faded a bit from the previous month as cost of gains increased and anticipated fed cattle prices declined, according to Historical and Projected Kansas Feedlot Net Returns from Kansas State University.

Projected fed steer returns range from $8.47 per head in July to $146.15 in May. Returns are negative for September (-$9.31) and November (-$53.50). Feedlot cost of gain ranges from $114.08/cwt. in November to $143.35 in March.

Projected fed heifer returns follow a similar path, ranging from $6.44 in March to $101.24 per head in May. Returns are negative for July (-$11.42) and November (-$96.86). Feedlot cost of gain ranges from $125.62/cwt. in November to $164.24 in March.

The calculation process does not reflect any price risk management.

By | March 28th, 2023|Daily Market Highlights|

Cattle Current Daily—March 28, 2023

Whether it was oversold conditions or grass fever, Cattle futures found firm traction amid active trade to start the week.

Feeder Cattle futures closed an average of $2.80 higher ($2.42 to $3.82 higher).

Live Cattle futures closed an average of $1.89 higher ($1.45 to $2.27 higher).

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

Last week, live prices were $1 lower in the Southern Plains at $163/cwt., steady to $1 higher in Nebraska at $164-$165 and steady to $2 higher in the western Corn Belt at $164-$166. Dressed prices were $1 higher at $265.

The five-area direct weighted average fed steer price last week was 17¢ higher on a live basis at $164.41/cwt. The average fed steer price in the beef was $1.24 higher at $265.06.

Choice boxed beef cutout value was 48¢ higher Monday afternoon at $280.36/cwt. Select was 97¢ higher at $269.72/cwt.

Grain and Soybeans futures continued higher Monday with less skittish outside markets and perhaps some early positioning ahead of Friday’s stocks and planting intentions reports.

Corn futures closed 5¢ to 9¢ higher through Jly ‘24 and then mostly 1¢ to 2¢ higher.

KC HRW Wheat closed 11¢ to 13¢ higher.

Soybean futures closed mostly 12¢ to 15¢ higher.

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Major U.S. financial indices closed with a firmer feel Monday, buoyed by recently beleaguered and volatile regional bank stocks.

The Dow Jones Industrial Average closed 194 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 55 points.

Geopolitical tensions and more positive outside markets helped lift Crude Oil futures Monday. Texas Intermediate Crude Oil futures (CME) closed $3.30 to $3.55 higher through the front six contracts. 

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Beef production the last four weeks averaged 6.4% less year over year, stemming from fewer cattle slaughtered and lighter carcass weights, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments

“Steer slaughter is down 5.3% year over year in the last month and steer carcass weights have averaged 903 pounds, down 16 pounds from one year ago. Heifer slaughter has finally begun to decrease and is down 1.6% in the past month, with heifer carcass weights at 830 pounds, down 20 pounds year over year,” Peel says. “Cow slaughter is down 6.8% year over year in the last four weeks, including a 0.9% increase in dairy cow slaughter and a 13.6% year over year decrease in beef cow slaughter. Cow carcass weights have averaged 646 pounds the last month, 11 pounds lower than the same period last year.  Bull slaughter is down 14.6% from one year ago. Bull carcass weights have averaged 854 pounds in the last four weeks, down 26 pounds compared to one year ago.”

Amid declining production and resilient beef demand, Peel explains Choice boxed beef cutout value over the last month averaged $258.13/cwt., which was 11% more year over year.

“Beef production is expected to drop more sharply for the remainder of the year, adding even more supply pressure to support prices,” Peel explains. “Current estimates for 2023 have beef production decreasing in a range from 4.5% to 6.0% lower year over year. The decrease will depend, in part on whether continued drought causes additional herd liquidation and temporarily moderates declining beef production and resulting in a smaller decrease.”

You can find more of Peel’s market insights here.

By | March 27th, 2023|Daily Market Highlights|

Cattle Current Daily—March 27, 2023

Negotiated cash fed cattle trade was mostly inactive on light demand through Friday afternoon, with too few transactions to trend in any region, according to the Agricultural Marketing Service.

For the week, live prices were $1 lower in the Southern Plains at $163/cwt., steady to $1 higher in Nebraska at $164-$165 and steady to $2 higher in the western Corn Belt at $164-$166. Dressed prices are $1 higher at $265.

Choice boxed beef cutout value was $2.90 lower Friday afternoon at $279.88/cwt. Select was 14¢ lower at $268.75/cwt.

Estimated total cattle slaughter last week was 626,000 head, which was 5,000 head fewer than the previous week and 31,000 head fewer than the same week last year. Total estimated year-to-date cattle slaughter of 7.5 million head was 202,000 head fewer (-2.6%) than the same period a year earlier. Total estimated year-to-date beef production of 6.2 billion pounds was 282.9 million pounds less (-4.3%).

Cattle futures were mixed as declining open interest continued.

Live Cattle futures closed an average of 53¢ higher (30¢ to 85¢ higher), except for 20¢ lower in away Jun.

Feeder Cattle futures closed an average of 76¢ lower (20¢ to $1.05 lower), except for 62¢ higher in spot Mar. Pressure included a surge in Corn Futures — 11¢ to 12¢ higher in old-crop contracts and then mostly 4¢ to 8¢ higher — lifted by flash export corn sales to China.

Chatter about Russia limiting wheat exports buoyed Kansas City Wheat futures, which closed 20¢ to 28¢ higher.

Soybean futures firmed but the overall outlook remains bearish with reports from South America that Brazil’s crop is expected to override any deficits in Argentina.

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Major U.S. financial indices closed higher Friday amid another volatile trading session as investors try to make sense of overall banking health.

The Dow Jones Industrial Average closed 132 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 36 points.

West Texas Intermediate Crude Oil futures (CME) closed 66¢ to 71¢ lower through the front six contracts. 

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Although the Choice-Select spread continues to decline seasonally it remains higher year over year, as does the percentage of carcasses grading Choice and higher.

“The Choice-Select spread started the year on a high note of $27/cwt., a continuation of

the 2022 trends that capped off the year above $30,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Since the opening week of 2023, the Choice-Select spread has fallen almost every week and bottomed around $10/cwt. two weeks ago. The first quarter is only a few weeks shy of completion and the spread has averaged $15/cwt. over 11 weeks, even though the spread has been rapidly shrinking. Last year, the spread averaged just under $7/cwt., similar to the five-year average.”

LMIC analysts explain the spread is usually narrowest in the first quarter, widens through the second quarter before declining and then maintains a spread of approximately $15 through the last two quarters of the year. Last year, they say the spread followed the five-year average until June and then stayed at high levels through the remainder of the year with considerable volatility. From June through December last year, the average Choice-Select spread ranged between $20 and $32/cwt.

“Today’s spreads are still large for this time of year, but we are approaching the time of year where they should be widening. Starting at a higher base may give the summer peak in the spread more height,” according to LMIC analysts. “The feed cost structure and tightening cattle supplies may encourage shorter days on feed over the summer which may curb the availability of Choice product. This spring, the percent of beef grading Choice has been similar to 2022 and in recent weeks has been a higher proportion, topping 75%, compared to a five-year average of 73%.”

By | March 25th, 2023|Daily Market Highlights|

Cattle Current Daily—March 24, 2023

Negotiated cash fed cattle trade was mostly inactive on light demand through Thursday afternoon, with too few transactions to trend in any region, according to the Agricultural Marketing Service.

So far this week, live prices are $1 lower in the Southern Plains at $163/cwt., steady to $1 higher in Nebraska at $164-$165 and steady to $2 higher in the western Corn Belt at $164-$166. Dressed prices are $1 higher at $265.

Choice boxed beef cutout value was $1.48 higher Thursday afternoon at $282.78/cwt. Select was 93¢ lower at $268.89/cwt.

Net U.S. beef export sales gained ground for the week ending Mar. 16, according to the U.S. Export Sales report. Net sales of 18,600 metric tons (mt) were 5% more than the previous week and 59% more than the prior four-week average. Increases primarily were for South Korea, Japan, China, Taiwan and Hong Kong.

Cattle futures wavered in their range-bound path Thursday.

Feeder Cattle futures closed mixed, from an average of 21¢ lower in three contracts to an average of 33¢ higher.

Live Cattle futures closed an average of 26¢ lower, except for an average of 7¢ higher in the back two contracts.

Corn futures closed mostly 1¢ to 2¢ lower through Jly ‘24 and then mostly 1¢ higher.

KC HRW Wheat closed 4¢ to 8¢ higher through May ’24 and then mostly 1¢ higher.

Soybean futures closed 9¢ to 29¢ lower.

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Major U.S. financial indices closed slightly higher Thursday amid volatile trading.

The Dow Jones Industrial Average closed 75 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 117 points.

West Texas Intermediate Crude Oil futures (CME) closed 73¢ to 94¢ lower through the front six contracts. 

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Total pounds of beef in freezers Feb. 28 were 6% less than the previous month and 6% less year over year, according to USDA’s latest Cold Storage report.

Frozen pork supplies were up slightly from the previous month and up 9% from last year.

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

Total frozen poultry supplies were up 3% from the previous month and up 10% from a year ago.

By | March 23rd, 2023|Daily Market Highlights|

Cattle Current Daily—March 23, 2023

Negotiated cash fed cattle trade was moderate to active on good demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Market Service, with live prices $1 lower at $163/cwt.

Trade was moderate on good demand in Nebraska where live prices were steady at $164 and dressed prices were $1 higher at $265.

In the western Corn Belt, trade was slow on moderate demand. Although too few to trend, early live sales were $165.00-$165.50 and early dressed sales were $265. Prices there last week were $164-$165 and mostly $264, respectively.

Choice boxed beef cutout value was $1.38 higher Wednesday afternoon at $281.30/cwt. Select was $1.73 lower at $269.82/cwt.

Futures traders continued their commodities selling mode Wednesday with bearish outside markets.

Feeder Cattle futures closed an average of 51¢ lower.

Live Cattle futures closed an average of 39¢ lower.

Corn futures closed mostly 1¢ to 3¢ lower through Jly ‘24 and then mostly fractionally higher.

KC HRW Wheat closed 7¢ to 12¢ lower.

Soybean futures closed mostly 18¢ to 25¢ lower.

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Major U.S. financial indices closed lower Wednesday. Although the Fed’s decision to increase interest rates by 25 basis points was expected, apparently investors continue to gauge the stance hawkish, in light of recent bank troubles.

The Dow Jones Industrial Average closed 530 points lower. The S&P 500 closed 65 points lower. The NASDAQ was down 190 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.11 to $1.25 higher through the front six contracts. 

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Food inflation at retail and foodservice last year exceeded levels reached during the Great Recession. Food inflation for the 12 months ending February 2023 was 10.2% at home and 8.4% away from home, according to Circana, formerly known as IRI and the NPD Group. Of the $2.9 trillion in consumer retail spending Circana tracks, food and foodservice spending represents the largest share, nearly $1.5 trillion.

Although the rate of away-from-home inflation isn’t as high as at home, foodservice costs are more than four times those of at-home eating occasions, with the absolute dollar gap widening, according to Circana food and beverage and foodservice industry analysts, at the company’s recent Growth Summit. 

David Portalatin, Circana food and foodservice industry advisor, explained to Growth Summit attendees that higher food costs have had an impact on discretionary spending, assome of the declines in discretionary retail spending last year were due to the need to fund higher spending on food and beverage. 

When faced with higher prices, Circana analysts say consumers will use multiple tactics to reduce or reallocate at- and away-from-home food spending. Those tactics include trading down to private label, buying in bulk, using more leftovers, or choosing a quick-service restaurant over a full-service restaurant.

“One of the behaviors consumers have historically used to manage higher food costs is trading down,” says Cara Loeys, Circana principal of CPG client engagement. “Consumers gravitate to larger pack sizes in the grocery store for a lower price per volume. They’ve also traded from premium to mainstay and value brands to get as much as possible without spending more. These behaviors are a correction from the pandemic when consumers, flushed with cash, purchased premium grocery items.”

While 2022 was about value pricing to manage budgets, Portalatin explains that 2023 will be about the other attributes that play into value.

“Price will always be important, but consumers define value differently. For example, consumers who visit a restaurant aren’t necessarily looking for the cheapest meal,” Portalatin explains. “They’re looking for the menu items they crave or foodservice outlets that offer quality and variety and enable them to treat themselves.”

By | March 22nd, 2023|Daily Market Highlights|

Cattle Current Daily—March 22, 2023

Cattle futures firmed in cautious trade Tuesday, helped along by more optimistic outside markets.

Feeder Cattle futures closed an average of 38¢ higher, except for an average of 9¢ lower in the back two contracts.

Live Cattle futures closed mixed, from an average of 44¢ higher in the front three contracts to an average of 25¢ lower.

Lower grain and Soybean futures helped.

Corn futures closed mostly 2¢ to 4¢ lower.

KC HRW Wheat closed mostly 5¢ to 8¢ lower.

Soybean futures closed mostly 13¢ to 19¢ lower.

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

Last week, live prices were mainly $1 lower in the Southern Plains and Nebraska at $164/cwt., and steady to $2 lower in the western Corn Belt at $164-$165. Dressed prices were $1 lower at $264.

Choice boxed beef cutout value was $1.10 lower Tuesday afternoon at $279.92/cwt. Select was $2.39 lower at $271.55/cwt.

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Major U.S. financial indices closed higher again Tuesday, supported by comments from U.S. Treasury Secretary, Janet Yellen that the federal government was ready to provide more support to smaller lenders if needed.

In prepared remarks at Tuesday’s American Bankers Association Washington, D.C. Summit, Yellen explained actions taken to protect FDIC-insured deposits at recently failed lenders, Silicon Valley Bank and Signature Bank.

“The situation is stabilizing. And the U.S. banking system remains sound. The Fed facility and discount window lending are working as intended to provide liquidity to the banking system. Aggregate deposit outflows from regional banks have stabilized,” Yellen explained.

Apparently, investors are also speculating the banking fiasco will bring a close to monetary tightening sooner rather than later.

The Dow Jones Industrial Average closed 316 points higher. The S&P 500 closed 51 points higher. The NASDAQ was up 184 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.55 to $1.85 higher through the front six contracts. 

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Despite softer Cattle futures trade and mixed cash prices last week, calf prices at auction remain on an upward trajectory, buoyed by demand for summer-grazing cattle, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. He explains value of gain on forage should be strong through the spring and summer, given the high cost of feedlot gain.

“Feeder cattle prices are likely to continue increasing as the CME Feeder Cattle Index price has gained $8 to $9/cwt. since the beginning of February. However, the increase in the cash price of feeder cattle has slowed, which may be part of the reason feeder cattle futures experienced weakness,” Griffith says. “Feeder cattle prices will increase further moving through spring, summer, and fall, but their ability to reach current expectations in the futures market is uncertain.”

On the other side of the equation, Griffith says the anticipated hole in cattle supplies will come eventually but likely later than expected as there is little evidence of additional heifer retention currently.

“Cattle on feed numbers will slowly dwindle as heifer retention picks up and as fewer calves are born, which is certain to be the case this year,” Griffith says. “There remains upside potential in the finished cattle market this spring, but there may not be enough to meet my lofty expectations of $170 cattle.”

By | March 21st, 2023|Daily Market Highlights|

Cattle Current Daily—March 21, 2023

Cattle futures leaked lower Monday amid recently declining open interest and uncertainty about the health of the banking structure, and despite Friday’s friendly Cattle on Feed report.

Feeder Cattle futures closed an average of 46¢ lower, except for an average of 20¢ higher in the back two contracts.

Live Cattle futures closed an average of 41¢ lower, except for an average of 22¢ higher in the back two contracts.

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

Last week, live prices were mainly $1 lower in the Southern Plains and Nebraska at $164/cwt., and steady to $2 lower in the western Corn Belt at $164-$165. Dressed prices were $1 lower at $264.

The five-area direct weighted average steer price last week was $1.23 lower on a live basis at $164.17. The average steer price in the beef was $1.50 lower at $263.82.

Choice boxed beef cutout value was $2.33 lower Monday afternoon at $281.02/cwt. Select was $1.50 higher at $273.94/cwt.

Corn futures closed mostly 1¢ to 2¢ lower through Jly ‘24 and then mostly 1¢ higher.

KC HRW Wheat closed 6¢ to 8¢ lower.

Soybean futures closed mostly 1¢ to 4¢ lower.

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Major U.S. financial indices closed higher Monday, apparently buoyed by the forced takeover of troubled Credit Suisse over the weekend, though plenty of questions remain for the banking sector.

The Dow Jones Industrial Average closed 382 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 45 points.

West Texas Intermediate Crude Oil futures (CME) closed 79¢ to 90¢ higher through the front six contracts. 

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Considering declining feedlot supplies before herd rebuilding begins, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says 2012-17 appear to provide a useful analog to help understand how low feedlot inventories may decline and when they might turn the corner to higher levels.

“The current state of cattle inventories, especially the cow herd size, replacement heifer inventories and expected calf crops are generally analogous to the previous period beginning in late 2012,” Peel explains, in his weekly market comments. “In fact, the current situation reflects a more severe depletion of female inventories compared to the 2012-2017 period. Based on the analog period, feedlot inventories will likely decline from the feedlot inventory (12-month) moving-average peak (MA) in September 2022 to a level similar to the 2014 low in the coming months and remain relatively low for the next four years or longer.”

Peel points out feedlot inventories declined year over year for six consecutive months through March 1. Specifically, he explains the MA peaked in September 2022 at 11.8 million head. It was11.63 million head in Friday’s Cattle on Feed report, the lowest level since October 2020.

“The previous multi-year low in the feedlot inventory MA was in October 2014, after drought-forced herd liquidation in 2011-2013. The current beef cow herd is slightly smaller that the 2014 herd level,” Peel explains. “The beef cow herd is likely to drop a bit more in 2023. It is reasonable to expect that average feedlot inventories will drop close to the 2014 low of 10.375 million head or possibly even lower at some point in the coming months … The smallest calf crop of the next few years will be in 2024 at the earliest.  Feedlot inventories will decline through 2023 with the low in 2024 or beyond.”

By | March 20th, 2023|Daily Market Highlights|

Cattle Current Daily—March 20, 2023

Cattle futures closed mixed Friday amid some likely positioning ahead of the ultimately friendly Cattle on Feed report (see below), lower cash fed cattle prices and uncertain outside markets.

Feeder Cattle futures closed mixed, from an average of 49¢ lower in the front three contracts to an average of 16¢ higher. They closed an average of $1.84 lower week to week on Friday, giving back about half of the previous week’s gains.

Live Cattle futures closed narrowly mixed, from an average of 22¢ lower in the front three contracts to an average of 6¢ higher.

Corn futures closed mostly fractionally higher to 2¢ higher.

KC HRW Wheat closed 10¢ to 16¢ higher through May ‘24 and then 6¢ to 7¢ higher.

Soybean futures closed 8¢ to 15¢ lower, pressured by declining Oil futures.

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

For the week, live prices were mainly $1 lower in the Southern Plain and Nebraska at $164/cwt., and steady to $2.50 lower in the western Corn Belt at $164.00-$164.50. Dressed prices were $1 lower in Nebraska at $264 and $1-$2 lower in the western Corn Belt at $263-$264.

Choice boxed beef cutout value was 60¢ lower Friday afternoon at $283.35/cwt. Select was 68¢ lower at $272.44/cwt.

Estimated total cattle slaughter last week of 631,000 head was 3,000 head fewer than the previous week and 5,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 6.1 million head was 169,000 head fewer (-2.4%). Estimated year-to date beef production of 5.7 billion lbs. was 250.6 million pounds less (-4.2%) less than the same time last year.

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So much for market confidence provided by the infusion of uninsured deposits to First Republic Bank last Thursday. Major U.S. financial indices sank lower again on Friday as investors grappled with the recent spate of banking woes, tied in part to devalued bond assets as interest rates continue higher.

The Dow Jones Industrial Average closed 384 points lower. The S&P 500 closed 43 points lower. The NASDAQ was down 86 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.29 to $1.61 lower through the front six contracts. 

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Markets likely will view USDA’s monthly Cattle on Feed Report as neutral to a touch bullish with about 1% fewer placements than analysts expected ahead of the report, but also slightly fewer marketings. The report is for feedlots with 1,000 head or more one-time capacity.

Placements in February of 1.73 million head were 134,000 head less (-7.2%) than last year. In terms of placements weights, 38% went on feed weighing 699 pounds or less, 51% weighing 700-899 pounds and 10% weighing 900 pounds or more.

Marketings in February of 1.74 million head were 90,000 head fewer (-4.9%) than a year earlier.

Cattle on feed March 1 of 11.65 million head were 548,000 head fewer (-4.5%) than the same time last year.

By | March 19th, 2023|Daily Market Highlights|

Cattle Current Daily—March 17, 2023

Stronger outside markets helped Cattle futures recover some recent losses Thursday.

Feeder Cattle futures closed an average of $1.63 higher.

Live Cattle futures closed an average of 39¢ higher, except for 2¢ lower in the back contract.

Weekly U.S. beef export sales also provided some support. Net U.S. beef export sales for the week ending March 9 were 17,700 metric tons (mt), according to USDA’s Export Sales report. That was noticeably higher than the previous week and 24% more than the previous four-week average.

Corn futures closed mostly 1¢ to 2¢ higher.

KC HRW Wheat closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly fractionally lower to 1¢ lower.

Negotiated cash fed cattle trade was limited on light demand in all regions through Thursday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are mainly $1 lower in the Southern Plains and Nebraska at $164/cwt., and $1-$2 lower in the western Corn Belt at $163-$165. Dressed prices are $1 lower at $264.

Choice boxed beef cutout value was 32¢ lower Thursday afternoon at $283.95/cwt. Select was 87¢ lower at $271.76/cwt.

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Major U.S. financial indices bounced back Thursday. Presumably, much of the support was due to First Republic Bank (FRB) — the fourteenth largest bank in the U.S. and apparently another one on the cash ropes — receiving $30 billion in uninsured deposits from some of the nation’s largest banks.

“Their collective support strengthens our liquidity position, reflects the ongoing quality of our business, and is a vote of confidence for First Republic and the entire U.S. banking system…” according to Jim Herbert, FRB executive chairman and Mike Roffler, FRB president and CEO, in a statement.

The Dow Jones Industrial Average closed 371 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 283 points.

West Texas Intermediate Crude Oil futures (CME) closed 74¢ to 84¢ higher through the front six contracts. 

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With Choice boxed beef cutout value hovering around $285/cwt. and beef production declining, Andrew P. Griffith, agricultural economist at the University of Tennessee says, the question is how much resistance $300 will pose.

“The $250 price point has proven to be a strong support price, and it is difficult to believe Choice boxed beef will be rangebound between $250 and $300 per hundredweight,” Griffith explains in his weekly market comments. “The immediate thought is that Choice boxed beef has greater potential to exceed $300 than to decline below $250. This will primarily be supply-driven, compared to being demand-driven. The consumer has done about everything possible to demonstrate strong demand for beef. Thus, the declining quantity of beef available will be what pushes prices higher.”

For perspective, Griffith points out the market topped at just less than $350 on two occasions in 2021.

“This likely means it will be difficult to push past that mark in 2023. It is probably safer to assume the market will do well to challenge $325 in the next 12 months,” Griffith says.

By | March 16th, 2023|Daily Market Highlights|

Cattle Current Daily—March 16, 2023

Too many black swans in too little time tends to make folks cautious. That seems to be as apt an explanation as any for eroding Cattle futures and then cash fed cattle prices in the face of such positive market fundamentals.

In this case, the next feared black swan appears to be a potential contagion of bank failures. Silcon Valley Bank failed last week. Signal bank followed suit quickly after — the third largest bank failure in U.S. history, according to various sources. Then came speculation/news yesterday that Credit Suisse, across the pond, was on the ropes with its largest investor unwilling to provide more funding.

Major U.S. financial indices fell sharply before regaining some lost ground later yesterday when the Swiss Financial Market Supervisory Authority (FINMA) and Swiss National Bank (SNB) — the nation’s central bank — issued a joint statement, saying in part: “The Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank assert that the problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets … In addition, the SNB will provide liquidity to the globally active bank if necessary.”

By the time the statement was issued, the die was cast for Cattle futures.

Feeder Cattle futures closed an average of $2.04 lower.

Live Cattle futures closed an average of $1.15 lower.

Corn futures closed mostly 2¢ lower.

KC HRW Wheat closed fractionally higher to 2¢ higher.

Soybean futures closed mostly 12¢ to 13¢ lower.

Negotiated cash fed cattle trade ranged from limited on moderate demand in the Southern Plains to moderate on moderate demand in Nebraska to light on moderate demand through Wednesday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are mainly $1 lower at $164/cwt. in the Southern Plain and Nebraska, where dressed sales were $1 lower at $264.

Although too few to trend, there have been some sales in the western Corn Belt at $164.00-$164.50 on a live basis and $263-$264 in the beef. Prices there last week were $164-$167 and $265, respectively.

Choice boxed beef cutout value was $1.64 lower Wednesday afternoon at $284.27/cwt. Select was $1.93 lower at $272.63/cwt.

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As mentioned above, worries about failing banks cast a pall over major U.S. financial indies Wednesday.

The Dow Jones Industrial Average closed 280 points lower. The S&P 500 closed 27 points lower. The NASDAQ was up 5 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.63 to $3.75 lower lower through the front six contracts. 

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Americans are buying more fresh meat than before the COVID-19 pandemic and are seeking value in terms of price, convenience and better-for attributes in meat purchases, according to the 18th annual Power of Meat report released by the Meat Institute and FMI—The Food Industry Association.

Self-described “meat eaters” comprise 78% of Americans, compared to just 7% who describe themselves as vegan or vegetarian. Shoppers spend more than $15 in the meat department per trip and average nearly one trip to the meat department per week (up nearly 5% since 2019). While 50% of shoppers get their meat from a supermarket, many turn to supercenters (35%), club stores (4%) and hard discounters (5%) for their meat purchases.

Despite rising food and beverage prices over the past year, consumers did not significantly change the amount of meat they buy (down just 2.5% by volume compared to 2021). Product quality and appearance continue to be the top factors driving meat purchase decisions, followed by price per pound and total package price.

To save money, a large majority of consumers (76%) report they made changes to the amount, type, cut, and/or brand of meat they purchase or changed where they shop. Consumers’ top strategies to save money include: buying only the amount needed (42%), looking for coupons (35%), and stocking up when meat is on sale (35%). Seventeen percent said they buy less meat with organic, grass-fed, or other claims. Only 16% of meat shoppers said they cook more meatless meals to save money. Of the 33% of Americans who said they are looking to eat less meat or chicken, 52% cite cost as the reason (up from 16% in 2020).

By | March 15th, 2023|Daily Market Highlights|

Cattle Current Podcast—March 15, 2023

Cattle futures closed mainly lower Tuesday, pressured in part by the lack of cash direction for fed cattle and firmer nearby Corn futures.

Feeder Cattle futures closed an average of 71¢ lower (32¢ to $1.32 lower).

Live Cattle futures closed an average of 40¢ lower, except for an average of 24¢ higher in the back two contracts.

Corn futures gained Tuesday, with support from further erosion in Argentina’s crop.

Corn futures closed mostly 1¢ to 2¢ higher.

KC HRW Wheat closed mostly 9¢ to 17¢ higher.

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

Last week, live prices were $164-$167/cwt. but mostly $165. Dressed prices were $265.

Choice boxed beef cutout value was $1.05 higher Tuesday afternoon at $285.91/cwt. Select was 94¢ higher at $274.56/cwt.

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Major U.S. financial indices closed higher Tuesday, finding some footing after the recent selloff due to the closure of Silcon Valley Bank. Support included the monthly Consumer Price Index meeting trader expectations.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in February on a seasonally adjusted basis, after increasing 0.5% in January, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 6.0% before seasonal adjustment, which was the smallest 12-month increase since the period ending September 2021.

The Dow Jones Industrial Average closed 336 points higher. The S&P 500 closed 63 points higher. The NASDAQ was up 239 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.16 to $3.47 lower through the front six contracts, with continued pressure from worries that banking woes will further slow economic growth.  

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USDA’s Economic Research Service (ERS) increased expected average feeder steer prices (basis 750-800 lbs., Oklahoma City) by $1 in the first quarter to $183/cwt. and by $1 in the second quarter to $193, in the March Livestock, Dairy and Poultry Outlook. Prices are forecast at $214 in the third quarter and $224 in the fourth quarter for an annual average of $204, which would eclipse the record-high average of 2014.

“The outlook for feeder calf prices is improved, given existing tight supplies of cattle, a projection for lower market-year average corn prices, and higher expected fed cattle prices, as well as recent price data,” according to ERS analysts.

As mentioned recently in Cattle Current, ERS forecast the annual average weighted average five-area direct fed steer price at $162/cwt. Support includes historically high seasonal composite boxed beef cutout values, underpinned by declining cattle numbers and lighter winter carcass weights.

“For the week ending February 18, steer and heifer carcass weights were lower by 15 and 21 pounds, respectively, from the same period last year,” ERS analysts say. “Further, cow and bull carcass weights are down 10 and 30 pounds, respectively. The anticipated share of cows in the slaughter mix is raised in 2023, which will contribute to lighter expected average carcass weights. The results have lowered the outlook for cattle weights the rest of year.”

By | March 14th, 2023|Daily Market Highlights|

Cattle Current Daily—March 14, 2023

Cattle futures softened further Monday. Aside from taking a pause and potentially profits from last week’s up-move in Feeder Cattle, and steady money for fed cattle, perhaps traders also were wondering about the floor for recently lower wholesale beef prices. As much as anything, though, bearish outside markets, tied to the failure of Silcon Valley Bank and worries about wider repercussions cast a pall over equity and commodity markets.

Feeder Cattle futures closed an average of 53¢ lower (32¢ to $1.17 lower).

Live Cattle futures closed an average of 41¢ lower.

Corn futures closed mostly fractionally lower to 3¢ lower through Jly ‘24 and then 3¢ higher.

KC HRW Wheat closed 1¢ to 3¢ higher.

Soybean futures closed 13¢ to 18¢ lower through Aug ‘24 and then mostly 7¢ lower.

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

Last week, live prices were steady at $165/cwt., except for $1 lower to $2 higher in the western Corn Belt at $164-$167. Dressed prices were steady to $3 higher in the western Corn Belt at $265 and steady in Nebraska at $265.

The five-area direct weighted average steer price last week was 38¢ higher at $165.40/cwt. The weighted average steer price in the beef was 89¢ higher at $265.32.

Choice boxed beef cutout value was 5¢ lower Monday afternoon at $284.86/cwt. Select was $2.08 higher at $273.62/cwt.

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Major U.S. financial indices closed mixed after a volatile session Monday as investors continued to assess fallout from the failure of Silicon Valley Bank (SVP).

The Dow Jones Industrial Average closed 90 points lower. The S&P 500 closed 5 points lower. The NASDAQ was up 49 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.76 to $1.88 lower through the front six contracts. 

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Nationwide, steers sold $2-$6/cwt. higher, according to the Agricultural Marketing Service. Heifers traded $1-$4 higher in the North Central and South Central regions, except for $1 lower in the South Central region for heifers at 800 lbs. Heifers in the Southeast sold $7-$10 higher.

First-quarter cattle prices are higher than originally forecast by the Livestock Marketing Information Center (LMIC), but those analysts caution there could be some correction depending on how weather and forage develop heading into spring.

In the latest Livestock Monitor, LMIC analysts note steers weighing 500-600 lbs. last week sold for $250/cwt. in Montana, $242 in South Dakota and at a combined auction average of $226 in Texas, the highest price of the year.

“These auction prices, by our estimation, are very high, given the spring forage situation is very much unknown, and hay is expensive,” LMIC analysts say. “The big concern in the short term is how spring shapes up. Will all of the country have great early grass growth? Are these buyers able to source and feed reasonably priced feedstuffs until grass shows up? The outlook for the spring contains the probability that La Niña may not withdraw until summer, which may point to a cool wet spring in the Northern Plains and continued dryness in the Southern Plains.”

At the same time, LMIC analysts point out Dec corn futures prices are significantly lower than current cash prices.

By | March 13th, 2023|Daily Market Highlights|

Cattle Current Daily—March 13, 20-23

Cattle futures closed lower for the second consecutive day on Friday as Corn futures gained and cash fed cattle prices remained steady to cloudy.

Feeder Cattle futures closed an average of 1.72¢ lower. However, they were $3.66 higher week to week.

Live Cattle futures closed an average of 76¢ lower.

Corn futures closed 4¢ to 6¢ higher.

KC HRW Wheat closed mostly 18¢ to 20¢ higher.

Soybean futures closed mostly 1¢ to 4¢ lower through Sep ‘24 and then mostly 3¢ higher.

Negotiated cash fed cattle trade was slow on moderate demand in Kansas, Nebraska and the western Corn Belt through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was very limited on light demand.

For the week, live prices were mostly steady at $165/cwt., except for steady to $1 higher in the western Corn Belt at $165-$166. Dressed prices were steady to $3.50 higher in Nebraska at $265.00-$268.50 and steady in the western Corn Belt at $265.

Choice boxed beef cutout value was 31¢ higher Friday afternoon at $284.91/cwt. Select was $4.51 lower at $271.54/cwt.

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Major national financial indices closed lower Friday, pressured by news that Silicon Valley Bank (SVB), in Santa Clara, Calif. was shuttered by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.

Apparently, as a tech-focused lender, SVB ran into a massive cash crunch between clients, such as venture groups, making more withdrawals than anticipated, while increasing interest rates devalued the bank’s bond assets. Silicon Valley Bank had 17 branches in California and Massachusetts.

According to the FDIC, this was the first closure of an FDIC-insured institution since October of 2020.

The Dow Jones Industrial Average closed 345 points lower. The S&P 500 closed 56 points lower. The NASDAQ was down 199 points.

West Texas Intermediate Crude Oil futures (CME) closed 88¢ to 96¢ higher through the front six contracts.

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The U.S. restaurant industry continues to recover from the impact of Covid restrictions and pandemic-related closures, according to The NPD Group (NPD). Although still less than pre-pandemic counts, the number of restaurants in the U.S. grew by 18,000 locations, according to NPD’s fall 2022 restaurant census, which includes restaurants open as of September 30, 2022. Total foodservice traffic, restaurants and retail foodservice combined, was up 2%, and restaurant visits were up 3% in January over visit losses due to the omicron variant last year. Foodservice consumer spending rose 7% in the month compared to a year ago.  

In January, dine-in visits at restaurants were up 24% over a gain of 41% in January 2022. Even with the increases, dine-in or on-premises traffic is still recovering from the steep pandemic-related declines in 2020.

Off-premises — primarily drive-thru and delivery — was a default beneficiary of pandemic restrictions, and visits for both order modes remain up, 9% and 88%, respectively, versus three years ago. Traffic at morning meal, including breakfast and A.M. snack periods, has fully recovered from pandemic declines. Restaurant visits at breakfast and A.M. snack increased 13% in January compared to a year ago, and are up 3% versus three years ago, according to NPD.

“Although the pandemic is still informing the foodservice industry narrative, there are areas of meaningful growth and recovery,” says David Portalatin, NPD food industry advisor. “Consumers still need and want foodservice experiences and convenience, and we see the light at the end of this long tunnel peek through.”

By | March 12th, 2023|Daily Market Highlights|

Cattle Current Daily—March 10, 2023

Cattle futures closed lower Thursday with likely profit taking, the lack of weekly cash fed cattle direction and outside market bearishness.

Feeder Cattle futures closed an average of 90¢ lower.

Live Cattle futures closed an average of 66¢ lower, except for 60¢ higher in the back contract.

Weekly beef export sales offered no support. According to USDA’s weekly U.S. Export Sales report, net U.S. beef export sales for the week ending March 2 were 5,600 metric tons, a marketing-year low. The total was 31% less than the prior week and 67% less than the previous four-week average (see below).

Negotiated cash fed cattle trade got underway in the Texas Panhandle Thursday at steady money of $165/cwt. on slow trade and light demand.

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

Last week, live prices were $165/cwt. Dressed prices were $265 in Nebraska and $262-$265 in the western Corn Belt.

Choice boxed beef cutout value was 18¢ lower Thursday afternoon at $284.60/cwt. Select was $2.07 lower at $276.05/cwt.

Corn futures closed 12¢ to 16¢ lower through old-crop contracts. and then mostly 3¢ to 4¢ lower.

KC HRW Wheat closed mostly 18¢ to 22¢ lower.

Soybean futures closed mostly 8¢ to 11¢ lower.

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Major U.S. financial indices closed strongly lower Thursday amid likely positioning ahead of Friday’s monthly federal jobs report, as investors fret strong gains would tip the Fed’s hand toward higher interest rates for longer.

However, weekly initial unemployment insurance claims (week ending March 4) were higher than expected at 211,000, according to the U.S. Department of Labor. That was 21,000 more than the previous week’s revised level.

The Dow Jones Industrial Average closed 543 points lower. The S&P 500 closed 73 points lower. The NASDAQ was down 237 points.

West Texas Intermediate Crude Oil futures (CME) closed 94¢ to 97¢ lower through the front six contracts.

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U.S. beef exports are off to a slower start than the last two record-breaking years, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). January volume fell 15% year-over-year to 100,942 metric tons (mt) valued at $702.3 million (down 32%).

Beef inventories swelled in some key markets near the end of last year, contributing to a challenging environment for U.S. beef, according to USMEF.

January beef exports were down substantially in most Asian destinations compared to the large year-ago totals. The decline was especially sharp in South Korea, where volume dipped 36% to 18,896 mt and value fell 52% to $151.5 million.

However, U.S. beef export shipments increased sharply to Mexico, the Dominican Republic, the Philippines and Africa.

“While beef exports are off to a slow start in 2023, we remain optimistic that post-COVID foodservice demand will strengthen in additional markets as the year progresses,” explains Dan Halstrom, USMEF president and CEO.

January beef exports equated to $331.27 per head of fed slaughter, down 34% from a year ago.

By | March 9th, 2023|Daily Market Highlights|

Cattle Current Daily—March 9, 2023

Cattle futures gained Wednesday, buoyed by the friendly World Agricultural Supply and Demand Estimates (WASDE), which weighed on Corn and underscored the higher price outlook for cattle (see below).

Feeder Cattle futures closed an average of $1.84 higher.

Live Cattle futures closed an average of 30¢ higher, except for 52¢ lower in spot Apr.

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

Last week, live prices were $165/cwt. Dressed prices were $265 in Nebraska and $262-$265 in the western Corn Belt.

Choice boxed beef cutout value was $3.15 lower Wednesday afternoon at $284.78/cwt. Select was 63¢ higher at $278.12/cwt.

Corn futures closed mostly 8¢ to 9¢ lower.

KC HRW Wheat closed mostly 2¢ to 9¢ lower.

Soybean futures closed mostly 1¢ to 2¢ lower.

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Major U.S. financial indices closed narrowly mixed Wednesday with carry-over pressure from the bearish outlook on tighter monetary policy.

The Dow Jones Industrial Average closed 58 points lower. The S&P 500 closed 5 points higher. The NASDAQ was up 45 points.

West Texas Intermediate Crude Oil futures (CME) closed 83¢ to 92¢ lower through the front six contracts.

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The latest monthly World Agricultural Supply and Demand Estimates favor cattle and beef prices.

USDA projected the annual five-area direct weighted average fed steer price for this year at $162/cwt., which was $3 more than the previous estimate. Prices are forecast to be $161 in the first quarter, $163 in the second quarter, $159 in the third quarter and $164 in the fourth quarter.

USDA estimated beef production for this year at 26.7 billion pounds, which was 170 million pounds more than the previous estimate. It would be 1.62 billion pounds less (-5.7%) than last year.

“Slaughter projections are raised through the first three quarters of the year on higher cow slaughter and increased placements of cattle in feedlots in the first quarter of 2023, which will likely be marketed in the third quarter,” according to analysts with the Economic Research Service.

By | March 8th, 2023|Daily Market Highlights|

Cattle Current Daily—March 8, 2023

Cattle futures closed mixed Tuesday as bullish fundamentals battled with some likely positioning ahead of Wednesday’s monthly World Agricultural Supply and Demand Estimates.

Feeder Cattle futures closed an average of 62¢ higher (5¢ to 95¢ higher).

Live Cattle futures closed narrowly mixed, from an average of 30¢ lower to an average of 12¢ higher.

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

Last week, live prices were $165/cwt. Dressed prices were $265 in Nebraska and $262-$265 in the western Corn Belt.

Choice boxed beef cutout value was $2.27 lower Tuesday afternoon at 287.93/cwt. Select was $1.02 higher at $277.49/cwt.

Corn futures closed 2¢ to 5¢ lower through Jly ‘24, and then fractionally lower to 1¢ lower.

KC HRW Wheat closed narrowly mixed, mostly 1¢ lower to 1¢ higher.

Soybean futures closed 12¢ to 15¢ lower in the front three contracts, and then mostly 2¢ to 5¢ lower.

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Major U.S. financial indices closed sharply lower Tuesday, pressured by Federal Reserve Chair Jerome Powell’s hawkish comments during his semiannual monetary report to Congress.

“…the latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell explained. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes. Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time.”

The Dow Jones Industrial Average closed 574 points lower. The S&P 500 closed 62 points lower. The NASDAQ was down 145 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.63 to $2.88 lower through the front six contracts, pressured by lower Chinese imports and overall bearish market sentiment.

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U.S. agricultural producer sentiment waned month to month in February, according to the latest Purdue University/CME Group Ag Economy Barometer, which slipped 5 points to a reading of 125.

The Index of Current Conditions fell 2 points to 134 and the Index of Future Expectations declined 6 points to 121.

“Increased concern over the risk of falling output prices, rising interest rates, and uncertainty over the future growth of U.S. agricultural exports is weighing on producers’ minds,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Producers’ expectations for their farms’ financial performance in 2023 compared to 2022 weakened in February. The Farm Financial Performance Index declined 7 points to a reading of 86. Farmers continue to point to concerns about higher input costs (38% of respondents), rising interest rates (24% of respondents), and lower output prices (18% of respondents), as their biggest concern for the year ahead.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between February 13-17.

By | March 7th, 2023|Daily Market Highlights|

Cattle Current Daily—March 7, 2023

Feeder Cattle futures rallied an average of $2.11 higher Monday, helping Live Cattle futures close an average of 65¢ higher, underpinned by bullish fundamentals and last week’s stronger cash.

Last week, negotiated cash fed cattle prices were $1-$2 higher on a live basis at $165/cwt. Dressed prices were $3 higher in Nebraska at $265 and steady to $3 higher in the western Corn Belt at $262-$265.

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

Choice boxed beef cutout value was 88¢ higher Monday afternoon at 290.20/cwt. However, Select was 39¢ lower at $276.47/cwt.

Corn futures closed mostly fractionally lower to 2¢ lower.

KC HRW Wheat closed mostly 10¢ to 18¢ lower.

Soybean futures closed 5¢ to 7¢ higher., except for 10¢ to 11¢ higher in the front four contracts.

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

The Dow Jones Industrial Average closed 40 points higher. The S&P 500 closed 2 points higher. The NASDAQ was down 13 points.

West Texas Intermediate Crude Oil futures (CME) closed 68¢ to 78¢ higher through the front six contracts.

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Rising cash prices and Cattle futures underscore declining beef production, which will continue for a prolonged period.

“The decrease in cattle numbers since the 2018 peak calf crop has finally worked through the system,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Cattle slaughter and beef production are expected to decrease for the balance of 2023 and beyond. With continuing drought conditions, it is not clear exactly how cattle and beef market timing will develop going forward, but the question is not one of whether beef production will fall, but rather how fast and how much it will fall in 2023.”

Peel uses Oklahoma auction prices to provide perspective on recent price gains. He explains the average Oklahoma auction price last week for steers weighing 500 pounds was $239.66/cwt., the highest since September 2015. The average price for feeder steers weighing 825 pounds was $181, the highest since October 2015. The five-area direct fed steer price was $165.09, the highest since April 2015.

“Cattle prices are expected to continue trending higher in 2023 and new record cattle prices will happen, if not in 2023, at some point in the next two or three years,” Peel says. “Higher cattle prices will push wholesale and retail beef prices against beef demand, which remains strong but somewhat muted currently. There will be resistance to higher beef prices, but the reality of decreasing beef supplies will ultimately push beef prices higher.”

You can find more of Peel’s insights here.

By | March 6th, 2023|Daily Market Highlights|

Cattle Current Daily—March 6, 2023

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Friday afternoon, with too few to trend, according to the Agricultural Marketing Service (AMS).

For the week, the only established trade reported by AMS was live prices of $164.50-$165.00/cwt. in the western Corn Belt, which was 50¢ to $1 higher. Dressed prices there the previous week were $260-$262.

Elsewhere the previous week, live prices were mostly at $164/cwt. and dressed prices were $262.

However, various private sources suggested more trade developing in other regions on Friday at $1-$2 higher. For instance, the Texas Cattle Feeders Association reported its members trading steers and heifers about $1 higher at $165.40) and $165.25, respectively.

Through Thursday, the weighted average five-area direct fed steer price was $1.19 higher at $164.84/cwt. The average steer price in the beef was $2.61 higher at $262.54.

Cattle futures gained Friday, supported by stronger cash fed cattle prices.

Feeder Cattle futures closed an average of $1.76 higher ($1.22 to $2.17 higher).

Live Cattle futures closed an average of $1.12 higher.

Choice boxed beef cutout value was 82¢ higher Friday afternoon at 289.32/cwt. Select was 72¢ lower at $276.86/cwt.

Corn futures closed 4¢ to 7¢ higher in old-crop contracts, mostly 1¢ to 3¢ lower.

KC HRW Wheat closed 5¢ to 9¢ lower.

Soybean futures closed mostly 5¢ higher.

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Major U.S. financial indices closed higher Friday as rates eased for the benchmark 10-year treasury note.   

The Dow Jones Industrial Average closed 387 points higher. The S&P 500 closed 64 points higher. The NASDAQ was up 226 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.47 to $1.52 higher through the front six contracts.

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Year-over-year beef production continues to decline, supporting cattle and beef prices.

Total cattle slaughter last week of 629,000 head was 11,000 more than the previous week but 30,000 head fewer than the same week last year. Estimated year to-date total cattle slaughter of 5.7 million was 153,000 fewer (-2.6%) than the same time last year. Estimated year-to-date beef production of 4.7 billion pounds was 219.2 million pounds less (-4.5%) than a year earlier.

“Cattle slaughter the first two months of the year is down relative to the same two months a year ago. Heifer slaughter is up ever so slightly while steer slaughter is down 2.2% and beef cow slaughter is down 5.7% compared to last year,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Heifer slaughter rates are sure to begin running lower than year-ago rates as we move through the year due to extremely high rates a year ago and the desire to retain females for breeding. This factor alone will assist cattle feeders in maintaining leverage for the foreseeable future. It means cattle feeders are likely to hold out for higher prices each week until packers are willing to raise bids. The supply is only going to get tighter moving through the next couple of years.”

Widespread moisture is helping improve heifer retention prospects. According to the Feb. 28 U.S. Drought Monitor, 55% of the continental United States was abnormally dry or experiencing drought, versus 73% a year earlier — 38% were experiencing drought versus 59% at the same time last year.

By | March 5th, 2023|Daily Market Highlights|

Cattle Current Daily—March 3, 2023

Stable Corn futures and strong cash trends helped Feeder Cattle futures lean mostly higher Thursday. They were up an average of 22¢, except for 17¢ lower and unchanged in two contracts.

Live Cattle futures closed an average of 74¢ lower (40¢ to $1.15 lower) with traders awaiting cash direction.

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

Although too few to trend, there were a few live sales in the western Corn Belt at $165/cwt. — $164.50 to $165.00 on Wednesday. Dressed prices there last week were $260-$262.

Elsewhere, last week, live prices were mostly at $164/cwt. and dressed prices were $262.

Choice boxed beef cutout value was 67¢ higher Thursday afternoon at 288.50/cwt. Select was $1.15 higher at $277.58/cwt.

Weekly beef export sales offered no support to Cattle futures. For the week ending Feb. 23, net U.S. beef export sales were 8,100 metric tons (mt.), according to the latest USDA U.S. Export Sales report. That was 48% less than the previous week and 62% less than the prior four-week average. Increases were primarily for Japan, Taiwan, China and Mexico.

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

KC HRW Wheat closed mostly 6¢ to 7¢ higher.

Soybean futures closed 8¢ to 15¢ higher through Jan ’24 and then mostly 4¢ to 6¢ higher.

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Major U.S. financial indices closed higher Thursday, fueled in part by comments made by one region Federal Reserve president who suggested the Fed could hold future interest rate hikes at 25 basis points.

The Dow Jones Industrial Average closed 341 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 83 points.

West Texas Intermediate Crude Oil futures (CME) closed 47¢ to 57¢ higher through the front six contracts.

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U.S. agricultural exports in fiscal year (FY) 2023 were projected at $184.5 billion in the latest quarterly Outlook for U.S. Agricultural Trade from USDA’s Economic Research Service (ERS) and Foreign Agriculture Service (FAS). The projection was $5.5 billion less than the previous report’s estimate. The largest year-over year decreases are expected for corn, sorghum, and soybeans.

Beef and veal exports were forecast $300 million less at $10.0 billion on weaker unit values for fresh and frozen beef muscle cuts and softening demand in East Asia.

Total, livestock, poultry, and dairy exports were projected $900 million less at $40.5 billion.

“The global economic outlook for 2023 has moderately improved since the last forecast in November 2022, as downside risks of recession have lessened,” according to ERS/FAS analysts. “Inflation has begun to ease globally, particularly in the United States, but remains elevated. Economic growth is expected to remain steady but at a slower pace than in recent years. World real gross domestic product (GDP) is projected to increase by 2.8% in 2023…”

Projected growth for U.S. real GDP in 2023 was raised 0.4% to 1.4%.

By | March 2nd, 2023|Daily Market Highlights|

Cattle Current Daily—March 2, 2023

Cattle futures took a breather Wednesday on likely profit taking and awaiting weekly cash direction.

Feeder Cattle futures closed an average of 61¢ lower.

Live Cattle futures closed narrowly mixed, from an average of 42¢ lower to unchanged to an average of 2¢ higher.

Wholesale beef prices declined on Wednesday for the first time in a while. Choice boxed beef cutout value was $1.12 lower in the afternoon at 287.83/cwt. Select was $2.82 lower at $276.43/cwt.

By all accounts, negotiated cash fed cattle trade remained stuck in the gate Wednesday. There was no afternoon USDA summary available at press time.

Last week, live prices were mostly at $164/cwt. in all regions. Dressed prices were $260-$262.

Grain and Soybean futures found some footing Wednesday.

Corn futures closed mostly fractionally lower to 1¢ lower, except for 3¢ to 11¢ higher in old-crop contracts.

KC HRW Wheat closed 1¢ to 5¢ higher through Sep ’24 and then fractionally lower to 2¢ lower.

Soybean futures closed 10¢ to 15¢ higher through May ’24 and then mostly 4¢ to 5¢ higher.

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Major U.S. financial indices closed narrowly mixed Wednesday, pressured once again by rising bond yields. 

The Dow Jones Industrial Average closed 5 points higher. The S&P 500 closed 18 points lower. The NASDAQ was down 76 points.

West Texas Intermediate Crude Oil futures (CME) closed 64¢ to 69¢ higher through the front six contracts.

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Although beef stocks in cold storage Jan. 31 were 2% less than the previous month, they were 1% more year over year and remain historically large, according to David Anderson, Extension livestock economist at Texas A&M University.

“Cold storage stocks of beef tend to peak in December-January and reach a low in June-July,” Anderson explains in the latest In the Cattle Markets from the Livestock Marketing Information Center. “The seasonal decline in stocks has been, on average, about 82 million pounds over the last five years. In 2022, there was very little seasonal decline and supplies grew to 544 million pounds by the end of the year.”

Beef in cold storage at the end of last month was 533 million pounds, according to Anderson

“Putting this level of stocks in context is that 533 million pounds is about 1.6 pounds per person, which is not a lot different than per capita stocks over the last several decades,” Anderson explains. “Per capita cold storage stocks were over 2 pounds back in the early to mid-1970s when the U.S hit peak cattle numbers and beef demand began to decline.”

Keep in mind domestic beef production was record large last year,

Total red meat supplies in freezers Jan. 31 were up 5% from the previous month and up 9% from last year, according to USDA’s Cold Storage report. Frozen pork supplies were 13% higher month to month and 19% more year over year. Total frozen poultry supplies on the same date were 3% more than the previous month and 13% more than the same time last year.

By | March 1st, 2023|Daily Market Highlights|

Cattle Current Daily—March 1, 2023

Cattle futures continued higher Tuesday, supported by further downward correction in Corn futures and another day of higher wholesale beef values.

Feeder Cattle futures closed an average of 70¢ higher.

Live Cattle futures closed an average of 47¢ higher, except for $2.50 higher in expiring Feb.

Choice boxed beef cutout value was 61¢ higher Tuesday afternoon at 288.95/cwt. Select was even at $279.25/cwt.

Negotiated cash fed cattle trade ranged from limited on very light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few early live trades in the western Corn Belt at $165/cwt., but too few to trend.

Last week, live prices were mostly at $164/cwt. in all regions, which was $2 higher in the Southern Plains, $3-$4 higher in Nebraska and $2-$4 higher in the western Corn Belt. Dressed prices were $3 higher in Nebraska at $260 and $3-$5 higher in the western Corn belt at $260-$262.

Erosion in grain and Soybean futures continued Tuesday as it appears export demand concerns and the promising domestic production outlook have funds on the defensive.

Corn futures closed 11¢ to 13¢ lower through old crop contracts, and then mostly 6¢ lower.

KC HRW Wheat closed 2¢ to 7¢ lower through Jly ‘24 and then mostly 6¢ higher.

Soybean futures closed mostly 22¢ to 32¢ lower through Aug ’24 and then 17¢ to 19¢ lower.

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Major U.S. financial indices closed lower Tuesday as traders closed out the month. Rising bond yield rates applied pressure.

The Dow Jones Industrial Average closed 222 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 11 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.13 to $1.38 higher through the front six contracts.

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The National Cattlemen’s Beef Association (NCBA) is calling on Secretary of Agriculture Tom Vilsack to take immediate action to indefinitely suspend beef imports from Brazil until that nation makes systemic reforms and takes necessary steps to restore confidence in the nation’s ability to participate in the global beef supply.

The move is based on Brazil’s delayed reporting of confirmation of another case of atypical bovine spongiform encephalopathy (BSE) to the World Animal Organization for Animal Health (WOAH). According to the report, 35 days elapsed between when the case was first identified on Jan. 18, 2023, and the date it was confirmed on Feb. 22, 2023.

It’s not the first time Brazil failed to report BSE confirmation in a timely manner.

NCBA representatives say the unacceptable delay is in clear violation of WOAH reporting requirements.

“We have seen Brazil repeatedly fail to meet the 24-hour requirement for reporting of animal diseases listed by WOAH. In order to protect the safety and security of the U.S. herd, and American cattle producers, we demand USDA take immediate steps to block further beef imports from Brazil,” says NCBA president and South Dakota cattleman Todd Wilkinson. “Furthermore, we expect USDA to keep the border closed to Brazil until they can demonstrate that they are willing and able to play by the trade rules that govern all other nations. If they can’t play by the rules, they don’t deserve access. Secretary Vilsack needs to act now, rather than kicking the can down the road.”

On Monday, NCBA sent a letter to USDA, demanding immediate action. NCBA is also supportive of bipartisan Senate legislation to suspend Brazilian beef imports pending a review of Brazil’s standards.

By | February 28th, 2023|Daily Market Highlights|

Cattle Current Daily—Feb. 28, 2023

Wholesale beef prices and consumer resilience maintain their strong trends. Choice boxed beef cutout value was $1.06 higher Monday afternoon at 288.34/cwt. Select was $2.17 higher at $279.25/cwt.

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

Last week, live prices were mostly $164/cwt. in all regions, which was $2 higher in the Southern Plains, $3-$4 higher in Nebraska and $2-$4 higher in the western Corn Belt. Dressed prices were $3 higher in Nebraska at $260 and $3-$5 higher in the western Corn belt at $260-$262.

The weighted average five-area direct fed steer price last week was $2.55 higher on a live basis at $163.72/cwt. The average steer price in the beef was $4.19 higher at $260.97.

Softer Corn futures helped lift Feeder Cattle futures an average of 76¢ higher on Monday (10¢ higher in spot Mar to $1.35 higher in the back contract).

Live Cattle futures closed an average of 18¢ lower, except for an average of 9¢ higher in three away contracts.

Corn futures closed mostly fractionally lower, except for 5¢ to 7¢ lower in old-crop contracts.

KC HRW Wheat closed 12¢ to 18¢ lower through May ‘24 and then 4¢ to 6¢ lower.

Soybean futures closed fractionally lower to 10¢ lower through May ’24 and then fractionally higher to 1¢ higher.

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Major U.S. financial indices eased higher Monday, helped along by a slight decline in treasury yield rates.

The Dow Jones Industrial Average closed 72 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 72 points.

West Texas Intermediate Crude Oil futures (CME) closed 64¢ to 76¢ lower through the front six contracts.

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Supposing drought abates in much of the country, even with prices encouraging herd rebuilding, scant beef heifer numbers suggest expansion is unlikely this year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel points out the current beef cow herd is the smallest in 61 years. The 5.16 million beef heifers Jan. 1 were 5.8% less year over year; they declined 5.5% the previous year. He explains beef replacement heifers represented 17.9% of the Jan. 1 beef cow herd, the smallest proportion since 2012. For perspective, Peel explains beef replacements reached a cyclical peak level of 21.0% of the beef cow herd.

“Heifers diverted from breeding to feeding contributed to the 4.0% year-over-year increase in 2021 and the 4.8% year-over-year increase in 2022 in heifer slaughter. All of which contributes to the limited number of replacement heifers available in 2023,” Peel says. “The numbers suggest that beef cow herd expansion is not possible in 2023 … More likely in 2023 is increased retention of heifer calves and breeding of yearling heifers that will fuel herd expansion beginning in 2024. If that happens, both beef cow and heifer slaughter will decrease sharply in 2023.”

By | February 27th, 2023|Daily Market Highlights|

Cattle Current Daily—Feb. 27, 2023

Through Friday afternoon’s report, weekly negotiated cash fed cattle trade had yet to be established in the Southern Plains. Prices were higher in other regions, though. Live prices were $3-$4 higher in Nebraska at $163-$164/cwt. and $2-$4 higher in the western Corn Belt at $164, where dressed prices were $3 higher at $260. Dressed trade in Nebraska the previous week was at $257. The prior week, live prices were $162 in the Southern Plains.

Choice boxed beef cutout value was 63¢ lower Friday afternoon at 287.28/cwt. Select was $1.21 higher at $277.08/cwt.

Estimated total cattle slaughter last week of 618,000 head was 9,000 head fewer than the previous week and 33,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter was 121,000 head fewer (-2.3%) than last year. Estimated year-to-date beef production of 4.1 billion lbs. was 181.1 million pounds less (-4.2%).

Cattle futures took a breather Friday amid likely profit taking and positioning ahead of what turned out to be a neutral-to-positive Cattle on Feed report (see below).

Feeder Cattle futures closed narrowly mixed, from an average of 20¢ lower to an average of 16¢ higher. They were an average of $3 higher week to week.

Live Cattle futures closed an average of 25¢ lower, except for an average of 5¢ higher in the front two contracts. Week to week, there were an average of 70¢ higher.

Wheat futures dragged the grain complex lower Friday on chatter about a potential ceasefire between Russia and Ukraine.

KC HRW Wheat closed 19¢ to 22¢ lower.

Corn futures closed 8¢ to 10¢ lower through Jly ‘24 and then 3¢ to 5¢ lower.

Soybean futures closed mostly 7¢ to 14¢ lower.

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Major U.S. financial indices closed lower Friday, pressured by another reading of too-hot inflation. The personal consumption expenditures index (PCI) — closely watched by the FOMC — was higher than the trade expected. Excluding food and energy the PCI was 0.6% higher month to month in January and 4.7% higher year over year.

The Dow Jones Industrial Average closed 336 points lower. The S&P 500 closed 42 points lower. The NASDAQ was down 195 points.

West Texas Intermediate Crude Oil futures (CME) closed 66¢ to 93¢ higher through the front six contracts.

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Markets will likely view Friday’s monthly Cattle on Feed report as neutral to a touch friendly with slightly fewer placements and cattle on feed than estimated ahead of the report.

Feedlots with 1,000 head or more capacity placed 1.9 million head in January, which was 3.6% less than the previous year.

In terms of placement weights, 43% went on feed weighing 699 lbs. or less; 49% weighing 700-899 lbs.; 8% weighing 900 lbs. or more.

Cattle feeders marketed 1.8 million head in January, which was 4.2% more than last year.

Cattle on feed of Feb. 1 of 11.7 million head were 505,000 head fewer (-4.1%).

The latest report also includes summary data for the past two years.

Last year, 12.8% of fed cattle marketings came from feedlots with less than 1,000 head of capacity (3,325,000) versus 22,590,000 for +1,000 of 22,590,000. Total marketings were 25,915,000

Total fed cattle marketings in 2022 were 73,000 head more (+0.3%) year over year.

There were 1,000 fewer feedlots with less than 1,000-head capacity last year (24,000) than the year before. They marketed 5,000 head more than the previous year (3.32 million head).

There were 27 fewer feedlots with 1,000 head or more capacity. They marketed 68,000 head more than the previous year. Feedlots with 16,000 head or more capacity grew or remained the same — 265 feedlots in 2021 versus 273 in 2022.

By | February 26th, 2023|Daily Market Highlights|

Cattle Current Daily—Feb. 24, 2023

Cattle futures — especially Feeder Cattle — gained Thursday with sharply lower nearby Corn futures, as well as likely positioning ahead of Friday’s Cattle on Feed report.

Feeder Cattle futures closed an average of $1.55 higher.

Live Cattle futures closed an average of 25¢ higher.

Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Thursday afternoon. Although too few to trend, there were some early live sales in Nebraska at $164/cwt.

Last week, prices on a live basis were $162 in the southern Plains, $159-$161 in Nebraska and $160-$162 in the western Corn Belt. Dressed prices were $257 in Nebraska and $254-$257 in the western Corn Belt.

Choice boxed beef cutout value was unchanged Thursday afternoon at 287.91/cwt. Select was $2.23 higher at $275.87/cwt.

Corn futures closed lower Thursday with much of the pressure likely stemming from the Grains and Oilseeds Outlook shared at USDA’s Agricultural Outlook Forum, which projected 2023/24 production to be the second largest in history (see below).

Corn futures closed 13¢ to 15¢ lower through old-crop contracts and then 4¢ to 7¢ lower through new-crop.

KC HRW Wheat closed 10¢ to 14¢ lower through near Jly and then 3¢ to 7¢ lower.

Soybean futures closed mostly 7¢ to 8¢ lower.

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Major U.S. financial indices eased higher Thursday.

The Dow Jones Industrial Average closed 108 points higher. The S&P 500 closed 21 points higher. The NASDAQ was up 83 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.30 to $1.44 higher through the front six contracts.

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USDA projects 2023/24 U.S. corn production about 10% more year over year at 15.085 billion bushels, in the Grains and Oilseeds Outlook shared at USDA’s Agricultural Outlook Forum. That would be the second highest production in history and go a long way in shoring up depleted stocks. Much of the gain comes with a projected yield of 181.5 bushels per acre, based on a weather-adjusted trend assuming normal planting progress and summer growing season weather.

“Ending stocks are projected at 1.887 billion bushels, up 620 million from a year ago and resulting in stocks relative to use at 13.0%, which if realized would be the highest since 2019/20,” according to the Outlook. “The season-average corn price received by producers is forecast down $1.10 to $5.60 per bushel.”

The Livestock and Poultry Outlook (LPO) at the same Forum underscored bullish cattle price expectations.

USDA projects the five-area direct weighted average fed steer price for 2023 at a record $159.00/cwt. That would be about $15 more than the previous year and would eclipse the previous record price established in 2014.

“Feeder cattle prices are projected to jump higher in 2023 as feedlots bid on increasingly tighter cattle supplies,” according to the LPO. “Improved pasture conditions, assumed with normal weather, and tighter calf supplies will likely result in increased competition for lighter-weight cattle with stocker operations. Feeder steer prices for 750–800

pound calves are forecast to average $203.00/cwt., compared to $165.94 in 2022 and nearly equal to record prices in 2014.”

By | February 23rd, 2023|Daily Market Highlights|

Cattle Current Daily—Feb. 23, 2023

Feeder Cattle futures gained on lower Corn futures, closing an average of 83¢ higher.

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

Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Wednesday afternoon.

Last week, prices on a live basis were $162 in the southern Plains, $159-$161 in Nebraska and $160-$162 in the western Corn Belt. Dressed prices were $257.

Choice boxed beef cutout value was 71¢ higher Wednesday afternoon at 287.91/cwt. Select was $2.80 higher at $273.64/cwt.

Wheat led the grain complex lower Wednesday with favorable domestic moisture, as well as chatter than the Baltic Sea export opening will be extended.

KC HRW Wheat closed 14¢ to 28¢ lower. Corn futures closed 3¢ to 6¢ lower through Jly ‘23 and then mostly fractionally lower to 1¢ lower. Soybean futures closed 5¢ to 9¢ lower through Sep ’23 and then mostly fractionally lower to 2¢ higher.

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Major U.S. financial indices closed narrowly mixed but maintained the losses from the previous session and the bearish tone, underscored by hawkish Federal Reserve minutes. In part, according to minutes from the most recent FOMC meeting:

“Participants noted that inflation data received over the past three months showed a welcome reduction in the monthly pace of price increases but stressed that substantially more evidence of progress across a broader range of prices would be required to be confident that inflation was on a sustained downward path.”

The Dow Jones Industrial Average closed 84 points lower. The S&P 500 closed 6 points lower. The NASDAQ was up 14 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.01 to $2.41 lower through the front six contracts.

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Cutter cow values of $77.47/cwt. the week ending Feb. 10 were the highest since October 2015, according to the Livestock Marketing Information Center (LMIC).

“Cow and bull harvest estimates in the middle of February indicate levels slipped 4% in the last 12 slaughter days from last year,” LMIC analysts explain, in the latest Livestock Monitor. “January total cow slaughter was largely above a year ago, however, the majority of the increase came from higher numbers of dairy cows, which are averaging more than 5,000 head higher per week than last year. Beef cow slaughter has been on either side of last year’s tallies.” At the time, they said cutter cow numbers were 24% higher year over year.

“Other grades of cows have not seen nearly the price spike that cutters have. Boners (85% lean) are still below last year’s summer levels at $79.76/cwt., as are breakers (75% lean) at $82.17,” LMIC analysts say. “Premium whites are ahead of last year at this time and were $79.10.”

By | February 22nd, 2023|Daily Market Highlights|

Cattle Current Podcast—Feb. 22, 2023

Historically strong February wholesale beef values and dwindling beef production, compounded by reduced feedlot performance due to winter weather, helped Cattle futures move higher Tuesday, despite bearish outside markets.

Live Cattle futures closed an average of 54¢ higher (22¢ to $1.17 higher).

Feeder Cattle futures closed an average of 58¢ higher.

Choice boxed beef cutout value was $4.31 higher Tuesday afternoon at 287.20/cwt. Select was $2.79 higher at $270.84/cwt.

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Tuesday afternoon. Although too few to trend, there were a few live trades in Nebraska at $161/cwt. and a few in the western Corn Belt at $164.

Last week, prices on a live basis were $162 in the Southern Plains, $159-$161 in Nebraska and $160-$162 in the western Corn Belt. Dressed prices were $257.

Corn futures closed mostly 1¢ to 3¢ higher.

KC HRW Wheat closed 2¢ to 3¢ lower.

Soybean futures closed 18¢ to 21¢ higher through Aug. ’23 and then mostly 10¢ to 13¢ higher.

By | February 21st, 2023|Daily Market Highlights|

Cattle Current Daily—Feb. 22, 2023

Historically strong February wholesale beef values and dwindling beef production, compounded by reduced feedlot performance due to winter weather, helped Cattle futures move higher Tuesday, despite bearish outside markets.

Live Cattle futures closed an average of 54¢ higher (22¢ to $1.17 higher).

Feeder Cattle futures closed an average of 58¢ higher.

Choice boxed beef cutout value was $4.31 higher Tuesday afternoon at 287.20/cwt. Select was $2.79 higher at $270.84/cwt.

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Tuesday afternoon. Although too few to trend, there were a few live trades in Nebraska at $161/cwt. and a few in the western Corn Belt at $164.

Last week, prices on a live basis were $162 in the Southern Plains, $159-$161 in Nebraska and $160-$162 in the western Corn Belt. Dressed prices were $257.

Corn futures closed mostly 1¢ to 3¢ higher.

KC HRW Wheat closed 2¢ to 3¢ lower.

Soybean futures closed 18¢ to 21¢ higher through Aug. ’23 and then mostly 10¢ to 13¢ higher.

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Major U.S. financial indices dove lower Tuesday with investors apparently rattled by higher bond yield rates.

The Dow Jones Industrial Average closed 697 points lower. The S&P 500 closed 81 points lower. The NASDAQ was down 294 points.

West Texas Intermediate Crude Oil futures (CME) closed 12¢ to 19¢ lower  through the front six contracts.

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The Creighton University Rural Mainstreet Index (RMI) climbed above the growth neutral threshold 50.0 in February, for the third consecutive month. The index is based on a survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.

“The Rural Mainstreet economy continues to experience slow economic growth. Only 7.4% of bankers reported improving economic conditions for the month with 85.2% indicating no change in economic conditions from January’s slow growth,” says Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The slowing economy, higher borrowing costs and labor shortages continued to constrain the business confidence index to a weak 44.4, but up from 40.4 in January. “Over the past 11 months, the regional confidence index has fallen to levels indicating a very negative outlook,” Goss explains.

The region’s farmland price index decreased to 63.5 from January’s 66.0. This was the 29th straight month that the index has advanced above 50.0. 

By | February 21st, 2023|Daily Market Highlights|

Cattle Current Daily—Feb . 21, 2023

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

Prices on a live basis last week were $1-$2 higher in the Southern Plains at $162/cwt., $1-$2 higher in Nebraska at $159-$161 and steady to $2 higher in the western Corn Belt at $160-$162. Dressed prices were $3 higher at $257.

The weighted average five-area direct fed steer price last week was $1.55 higher on a live basis at $161.17/cwt. The weighted average steer price in the beef was $2.87 higher at $256.78.

Choice boxed beef cutout value was $1.85 higher Monday afternoon at $282.89/cwt. Select was $2.16 higher at $268.05/cwt.

CME Agriculture futures and equity markets were closed Monday in observance of President’s Day

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Tighter cattle supplies continue to drive strong auction demand.

“…cattle buyers are in fierce competition as they pull cattle from a smaller calf crop that will be even smaller this year,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Cow-calf producers are going to have some opportunistic decisions to make the next few years as they will be inclined to retain heifers to grow the beef herd. However, those same heifers will be highly valued in the marketplace.”

Griffith notes shorter supplies continue to tilt leverage from packers to feedlots, as evidenced by the gains the past couple of weeks.

“Cattle feeders have gained significant leverage over the packer due to a reduced number of animals coming off feed and reduced weights,” Griffith explains. “This has left packers in need of inventory to meet obligations. This may seem like unfamiliar territory to cattle feeders since it has been several years since they did hold considerable leverage. However, cattle feeders will maintain this leverage for the next couple of years as the cattle industry works to rebuild beef cow inventory. The question on most people’s mind is how quickly and to what level can cattle feeders raise prices. At the rate they are going, they have and may continue to exceed industry expectations.”

By | February 20th, 2023|Daily Market Highlights|

Cattle Current Daily — Feb. 20, 2023

Negotiated cash fed cattle trade was slow to moderate on light to moderate demand in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Live sales were mostly $2 higher in the Texas Panhandle at $162/cwt. and $1-$2 higher in Kansas at $162.

Elsewhere, trade was slow on light to moderate demand with too few transactions to trend.

For the week, live sales were steady to $3 higher in Nebraska at $160 and $2 higher in the western Corn Belt at $162. Dressed prices in both regions were $3 higher at $257.

Choice boxed beef cutout value was $1.49 higher Friday afternoon at $281.04/cwt. Select was $3.25 higher at $265.89/cwt.

Estimated total cattle slaughter last week of 627,000 head was 3,000 head fewer than the previous week and 43,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 4.4. million head was 86,000 head less (-1.9%). Estimated year to date beef production of 3.6 billion lbs. was 141 million pounds less (-3.7%).

Stronger cash fed cattle prices helped Live Cattle futures gain Friday.

Live Cattle futures closed an average of 38¢ higher.

Feeder Cattle futures closed narrowly mixed, from an average of 19¢ lower to an average of 15¢ higher.

Corn futures closed mostly 2¢ higher through Jly ‘24 and then mainly unchanged to 1¢ lower.

KC HRW Wheat closed mostly 5¢ to 8¢ higher.

Soybean futures closed mostly 1¢ to 2¢ higher.

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Major U.S. financial indices managed to close mixed Friday after a volatile session pressured by the week’s reports of still-strong inflation and high bond yield rates.

The Dow Jones Industrial Average closed 129 points higher. The S&P 500 closed 11 points lower. The NASDAQ was down 68 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.05 to $2.20 lower through the front six contracts.

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Total land in farms continued to decrease last year, down 1.9 million acres from the previous year at 893.4 million acres, according to USDA’s latest Farms and Land in Farms Summary.

One way USDA looks at land in farms is relative to categories of sales class. Producers in the sales class of $100,000 to $249,000 accounted for most of the decrease in land in farms last year — 1.62 million acres.

The average farm size for 2022 was 446 acres, up from 445 acres the previous year, according to the report. Average farm size increased only for those in the $1 million or more sales class category. Average farm size was unchanged or declined for all other sales class categories.

However, the number of farms increased for all sales classes except the $1,000-$9,999 and $10,000-$99,999 sales classes. The total number of farms in the United States was estimated to be 9,350 farms year over year at 2,002,700.

“In 2022, 30.0% of all farmland was operated by farms with less than $100,000 in sales, while 41.2% of all farmland was operated by farms with sales of $500,000 or more,” according to NASS analysts.

Last year, 50.8% of all farms had less than $10,000 in sales and 81.4% of all farms had less than $100,000 in sales. In 2022, 7.5% of all farms had sales of $500,000 or more.

By | February 18th, 2023|Daily Market Highlights|

Cattle Current Daily—Feb. 17, 2023

Profit taking appeared to the order of the day in Cattle futures on Thursday, despite positive weekly beef exports.

Net 2023 U.S. beef export sales of 28,100 metric tons (MT) the week ending Feb. 9 were 72% more than the previous week and 34% more than the prior four-week average, according to USDA’s weekly U.S. Export Sales report. Increases were primarily for Japan, South Korea, China, Mexico, and Hong Kong.

Live Cattle futures closed an average of 40¢ lower, except for 22¢ higher in spot Feb.

Feeder Cattle futures closed an average of 60¢ lower (40¢ to $1.10 lower).

Negotiated cash fed cattle trade ranged from slow on light demand to mostly inactive on very light demand through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. There were a few live trades reported in Nebraska at $160/cwt.

So far this week, live prices are steady to $2 higher at $159-$160 in Nebraska and $160-$162 in the western Corn Belt. Dressed prices in both regions last week were $254.

In the Southern Plains last week, live prices were $160 in the Texas Panhandle and $160-$161 in Kansas.

Choice boxed beef cutout value was $3.88 higher Thursday afternoon at $279.55/cwt. Select was $1.45 higher at $262.64/cwt.

Corn futures closed mostly fractionally lower to 1¢ lower.

KC HRW Wheat closed mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 4¢ to 8¢ higher.

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Major U.S. financial indices closed lower Thursday with another gauge of higher inflation than expected.

The Producer Price Index for final demand increased 0.7% in January, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. On an unadjusted basis, the index for final demand rose 6.0% for the 12 months ended January 2023. That was more than expected.

As well, initial weekly unemployment insurance claims came in less than expected at 194,000.

The Dow Jones Industrial Average closed 431 points lower. The S&P 500 closed 57 points lower. The NASDAQ was down 214 points.

West Texas Intermediate Crude Oil futures (CME) closed 9¢ to 17¢ lower through the front six contracts.

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USDA Agricultural Projections to 2032, released Wednesday, suggest some relief in feed costs.

“Corn prices are expected to fall steadily from a near-record peak of $6.80 per bushel in 2022/23 to $5.70 per bushel in the first year of the projection period,” according to USDA analysts. “Corn continues a downward trend through 2026/27 before leveling off at $4.30 per bushel through the remainder of the projection period.”

Similarly, USDA forecasts soybean prices to fall to $13.00 per bushel in the first year of the projection period, which would be $1 less than the 2022-2023 peak. Soybean prices continue to decline through the first half of the projection period and level at $10.30 per bushel during the second half.

“Wheat prices are expected to drop from a record $9.20 per bushel in 2022/23 to $8.00 in the first year of the projection period, still the second highest price on record,” USDA analysts say. “Prices continue to fall through 2026/27 before settling at $5.70 per bushel through 2032/33.”

In terms of global economic growth, USDA projects global real GDP growth to decrease in the short term due to higher price inflation and resulting tighter monetary policy. Global real GDP growth is projected to average 2.8% annually during the projection period.

“During the projection period, U.S. real GDP growth is projected at an annual average of 1.8%,” say USDA analysts. “The positive average projected for 2023–2032 continues beyond the initial recovery from COVID-19 but is lower due to the uncertainties ahead. The expected trend is for there to be lower long-term growth rates in the United States compared to previous decades.”

By | February 16th, 2023|Daily Market Highlights|

Cattle Current Daily—Feb. 16, 2023

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales in Nebraska at $159/cwt. and a few in the western Corn Belt at $162. Elsewhere, trade was at a standstill.

Live prices last week were $160/cwt. in the Texas Panhandle, $160-$161 in Kansas, $157-$160 in Nebraska and $160 in the western Corn Belt. Dressed prices were $254.

Choice boxed beef cutout value was $3.61 higher Wednesday afternoon at $275.67/cwt. Select was $2.41 higher at $261.19/cwt.

Weaker Corn futures helped Feeder Cattle futures gain marginally, closing an average of 36¢ higher.

Live Cattle futures continued sideways, closing narrowly mixed, from an average of 6¢ lower to an average of 7¢ higher,

Grain and Soybean futures weakened Wednesday with pressure including positive harvest weather in South America.

Corn futures closed 2¢ to 6¢ lower through Jly ‘24 and then mostly unchanged to fractionally lower.

KC HRW Wheat closed 9¢ to 12¢ lower.

Soybean futures closed mostly 4¢ to 8¢ lower.

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Major U.S. financial indices closed higher Wednesday, buoyed by strong retail sales.

Advance estimates of U.S. retail and food services sales for January 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were up 3.0% from the previous month, and up 6.4% year over year, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 38 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 110 points.

West Texas Intermediate Crude Oil futures (CME) closed 33¢ to 47¢ lower through the front six contracts.

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USDA Agricultural Projections to 2032, released Wednesday, suggest cattle prices will peak this year in the near term.

USDA projects Feeder steer prices (750-800 lbs., Oklahoma City) to peak this year at $200.75/cwt., then decline to $174.53 in 2026. Forecast prices increase for the remainder of the projection period to $191.32 in 2032.

Projected fed steer prices (five-area direct weighted average) follow a similar pattern with a peak this year at $153.50, declining to $137.82 in 2026 and then increasing gradually to $148.73 in 2032.

“As producers respond to higher cattle prices, U.S. cattle inventories are expected to expand in 2025, and cattle prices are projected to decline through 2026,” USDA analysts explain. “For the remainder of the period, steer prices are expected to gradually rise reflecting strong global demand for U.S. beef and relatively tight supplies for the domestic market.”

That’s with the estimated beef cow inventory reaching the low point in 2024 at 28.7 million head and then growing gradually to 31.3 million head in 2032. The total cow inventory is forecast to ebb at 38.1 million head in 2023 and then grow gradually to 40.8 million head in 2032.

Beef production is expected to decline this year and next, reflecting tighter cattle supplies.

“Higher cattle prices in 2023 will likely incentivize heifer retention, after which modest herd growth is expected through the end of the projection period,” USDA analysts say. “Increasing slaughter weights will further support production gains as the herd expands. Beef production is expected to increase during the projection period, starting in 2025 at year-over-year rates that average almost 1.0%.”

By | February 15th, 2023|Daily Market Highlights|

Cattle Current Daily—Feb. 15, 2023

Cattle futures took a breath Tuesday and wobbled narrowly lower awaiting cash direction.

Live Cattle futures closed an average of 27¢ lower.

Feeder Cattle futures closed an average of 47¢ lower.

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

Live prices last week were $160/cwt. in the Texas Panhandle, $160-$161 in Kansas, $157-$160 in Nebraska and $160 in the western Corn Belt. Dressed prices were $254.

Wholesale beef prices continued their recent upward trend. Choice boxed beef cutout value was $2.11 higher Tuesday afternoon at $272.06/cwt. Select was $2.57 higher at $258.78/cwt.

Profit taking seemed to be the main order of the day in the grain complex.

Corn futures closed 1¢ to 2¢ lower through Dec ‘23 and then mostly unchanged.

KC HRW Wheat closed mostly 3¢ to 6¢ lower.

Soybean futures closed mostly 2¢ to 6¢ lower.

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Major U.S. financial indices closed mixed Tuesday with pressure from a steamier inflation reading than expected.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.5% in January on a seasonally adjusted basis, after increasing 0.1% in December, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 6.4% before seasonal adjustment.

The Dow Jones Industrial Average closed 156 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 68 points.

West Texas Intermediate Crude Oil futures (CME) closed 86¢ to $1.09 lower through the front six contracts.

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USDA’s Economic Research Service (ERS) left the projected annual average feeder steer price for this year unchanged at $203/cwt., in the February Livestock, Dairy and Poultry Outlook. That was based on current price strength and narrowing supplies, as indicated in the January Cattle report.

Average feeder steer prices (750-800 lbs., Oklahoma City) were forecast to be $182/cwt. in the first quarter, $192 in the second quarter, $214 in the third quarter and $224 in the fourth quarter.

As mentioned recently in Cattle Current, ERS increased the projected five-area direct fed steer price to $158/cwt. in the first quarter of this year and to $159 in the second quarter with an annual average price of $159.

“Based on the January Cattle on Feed data, greater than expected market-ready supplies of fed cattle Jan. 1 increased the anticipated pace of marketings in first-quarter