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

Daily Market Highlights

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Cattle Current Daily—May 18, 2022

Negotiated cash fed cattle trade and demand were light to moderate in the Southern Plains through Tuesday afternoon with live prices $2 lower at $138/cwt.

In Nebraska, there were a few dressed sales at $226-$227 on slow trade and light demand, but too few to trend. Last week live prices were $144 and dressed prices were $230.

Elsewhere, trade was mostly inactive on light demand, according to the Agricultural Marketing Service. Live prices in the western Corn Belt Monday were $2-$3 lower at $142. Dressed prices last week were $227-$230. Live prices in Colorado last week were $140-$144.

Softer cash prices pressured Feeder Cattle an average of 75¢ lower despite the tiny respite in Corn futures.

Grain and Soybean futures closed mostly higher, though with KC Wheat up another 15¢ to 20¢. 

Corn futures closed mixed, mainly 4¢ lower to 2¢ higher, starting with new-crop contracts.

Soybean futures closed mostly 17¢ to 20¢ higher. 

Recently higher wholesale beef prices helped cap losses in Live Cattle futures, which closed an average of 44¢ lower, except for 27¢ higher in away Aug.

Choice Boxed beef cutout value was 17¢ higher Tuesday afternoon at $260.48/cwt. Select was $2.52 higher at $248.19.

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Major U.S. financial indices closed higher Tuesday, with investors apparently supported by supposed bottom picking and emboldened by retail data. U.S. retail sales grew by 0.9% in April, according to the monthly Advance Sales report from the U.S. Census Bureau.

The Dow Jones Industrial Average closed 431 points higher. The S&P 500 closed 80 points higher. The NASDAQ was up 321 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.80 to $2.19 lower through the front six contracts.

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Despite bearing the brunt of pandemic dining room lockdowns and restrictions, independent restaurants with one to two locations still represent 53% of total restaurants in the U.S., according to The NPD Group (NPD). Based on NPD’s Fall 2021 ReCount® restaurant census, independent restaurant locations declined by 8% or 28,399 units in 2020 but grew by 1% or 2,893 units by late 2021. Independent locations are growing in seven of the nine Census divisions and large urban areas like Los Angeles, Dallas-Fort Worth, and Seattle-Tacoma.

Independent restaurant spending with broadline foodservice distributors also points toward recovery.

Independent operators increased cases of food and supplies ordered from leading broadline distributors by 27% in the 12 months ending March 2022 compared to the same period a year ago. That was 5% more than the pre-pandemic level in the period ending March 2019. 

“The pandemic lockdowns and restrictions were particularly tough for Independent restaurant operators since they have fewer resources and capital than chains to withstand tougher times,” says David Portalatin, NPD food industry advisor. “Some independents didn’t make it, but many did, and they are thriving and contributing to the overall vibrancy of the U.S. foodservice market.” 

Consumer online and physical visits to independent restaurants increased by 12% in the 12 months ending March compared to the same period a year ago and are now 7% below the pre-pandemic level in the 12 months ending March 2019, according to NPD.

During the same period, visits to independent full-service restaurants — representing about 63% of all independent restaurants — were up 19% compared to the year ending March 2021, resulting in a 14% decline from the year ending March 2019 before the pandemic.

Quick-service independent restaurant traffic increased by 5% in the 12 months ending March 2022 compared to a year ago and was up 1% from the pre-pandemic level in the 12 months ending March 2019.

By | May 17th, 2022|Daily Market Highlights|

Cattle Current Daily—May 17, 2022

India’s weekend announcement that it would ban wheat exports shoved nearby KC Wheat limit up 70¢ Monday, leading other grains higher.

Corn futures closed 16¢ to 28¢ higher through new-crop contracts and then mostly 7¢ to 9¢ higher.

Soybean futures closed 10¢ to 13¢ higher through Aug ‘23 and then mostly 1¢ to 4¢ higher.

Surging feed costs pressured Feeder Cattle futures an average of 66¢ lower.

Live Cattle futures closed an average of 69¢ higher, buoyed by oversold conditions, the cash premium and recently higher wholesale beef prices.

Choice Boxed beef cutout value was $1.36 higher Monday afternoon at $260.31/cwt. Select was $1.77 higher at $245.67.

Negotiated cash fed cattle trade was slow on light demand in the western Corn Belt through Monday afternoon with prices steady to $3 lower than last week at $142/cwt. Dressed prices there last week were $227-$230.

Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service. Last week, live prices were $140 in the Southern Plains, $140-$144 in Colorado and $144 in Nebraska where dressed prices were $227-$230.

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Major U.S. financial indices closed flat to lower Monday.

The Dow Jones Industrial Average closed 26 points higher. The S&P 500 closed 15 points lower. The NASDAQ was down 142 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.33 to $3.71 higher.

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“The bleak prospects for pasture and hay production, combined with continued diminishment of hay stocks, suggests that significant and severe impacts on cattle herds are ahead as summer approaches,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Pointing to USDA’s recent Crop production report, Peel explains hay stocks May 1 were 6.9% less year over year and 15.1% less than the average for 2012-2021. He adds hay stocks were 17.7% less than a year earlier in the 17 Plains and Western states.

“In all of these 17 western states, drought continues widespread,” Peel says. “More than 50% of the U.S. beef cow herd is directly threatened by drought. Across the country more than 50% of pastures and range are in poor to very poor condition. That majority of this pasture and range is in these western states.”

Regionally, Peel says hay stocks in the West are 36.6% less than 2020 levels, following two years of drought and are 27.1% less than the 10-year average.

In the Southern Plains region of Kansas, Oklahoma and Texas, he explains May 1 hay stocks were down 12.0% year over year and down 25.3% from the 2012-2021 average.

“Colorado and Nebraska are unique among the 17 western states,” Peel says. “Colorado had hay stocks up 152.2% year over year and up 30.3% over the 10-year average. Nebraska had May 1 hay stocks up 25.0% year over year and 14.1% above the 2012-2021 average. Despite the improvement in hay stocks for these two states, drought conditions persist and pasture and range conditions are diminished in 2022.”

According to the latest USDA Crop Progress report, as of May 15, 22% of the nation’s pasture and range was classified as Good (20%) or Excellent (2%) compared to 25% last year, and 49% was rated Poor (24%) or Very Poor (25%) versus 43% the same week a year earlier.

By | May 16th, 2022|Daily Market Highlights|

Cattle Current Daily—May 16, 2022

Grain futures were mixed Friday, continuing to adjust to the previous day’s bullish World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 4¢ to 10¢ lower. Soybean futures closed 12¢ to 32¢ higher through Sep ‘23 and then fractionally higher to 1¢ higher, except for 63¢ higher in spot May. 

Softer Corn prices helped Feeder Cattle futures regain a little lost ground Friday, closing an average of 84¢ higher (20¢ to $1.50 higher), except for 40¢ lower in the back contract.

Live Cattle futures closed an average of 39¢ lower, except for 42¢ higher in spot Jun, challenged by sluggish wholesale beef prices.

However, Choice Boxed beef cutout value was $1.75 higher Friday afternoon at $258.95/cwt. Select was 46¢ lower at $243.90. Week to week, Choice boxed beef cutout value was $4.51 higher but Select was $1.16 lower.

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

For the week, live prices were $140/cwt. in the Southern Plains, $144 in Nebraska and $144-$145 in the western Corn Belt. Dressed prices were $227-$230.

Estimated total cattle slaughter last week was the same as the prior week at 657,000 head. Year-to-date estimated total cattle slaughter of 12.3 million head was 71,000 head more than the previous year. Total estimated year-to-date beef production of 10.28 billion lbs. was 91.1 million lbs. more than the same time last year.

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At least for the day, investors on Wall Street seemed to think it was time to expand ownership in stocks, pushing major U.S. financial indices sharply higher.

The Dow Jones Industrial Average closed 466 points higher. The S&P 500 closed 93 points higher. The NASDAQ was up 434 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.85 to $4.36 higher through the front six contracts, apparently buoyed by snug supplies and chatter about Shanghai reopening.

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Although western pasture and range conditions showed year-over-year improvement the first two week of this year’s growing season, nationwide conditions declined, say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

“More than 50% of U.S. pasture and range is rated Poor to Very Poor compared to just under 50% last year. Western pastures are rated under 40% Poor and Very poor compared to more than 50% a year ago,” say LMIC analysts. “Great Plains and Southern Plains states are showing more severe conditions at this time. Great Plains pasture and range conditions are currently rated 60-55% Poor and Very Poor in the first two weeks of the (rating) year, needing additional feed to support normal stocking densities. The five-year average indicates that the start of year typically only shows about a 10% rating of Poor and Very Poor.”

LMIC analysts note the starkest deterioration is in the Southern Plains, where 57% and 50% of pasture and ranges was classified as Poor or Very Poor the first two weeks, compared to about 30% at the same time last year and about 15% for the five-year average.

By | May 15th, 2022|Daily Market Highlights|

Cattle Current Daily—May 13, 2022

Grain futures marched higher Thursday, buoyed by the latest monthly World Agricultural Supply and Demand Estimates (see below), led by Kansas City Wheat, which closed 63¢ to 69¢ higher in the front five contracts.

Corn futures closed mostly 8¢ to 16¢ higher, while Soybean futures closed 3¢ to 10¢ higher through Aug ‘23 and then mostly unchanged to 4¢ lower.  

Cattle futures stepped lower beneath the weight of the outlook for continued higher feed prices.

Feeder Cattle futures closed an average of $2.88 lower ($1.27 to $3.50 lower). Live Cattle futures closed an average of $1.30 lower (50¢ lower at the back to $2.07 lower toward the front).

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.

So far this week, live prices are steady in the Southern Plains at $140/cwt., $2 lower in Nebraska at $144 and steady to $2 lower in the western Corn Belt at $144-$145. Dressed prices are $2 lower in Nebraska at $232 and $2-$3 lower in the western Corn Belt at $227-$230. Live prices in Colorado last week were at $142-$148.

Choice Boxed beef cutout value was $2.12 higher Thursday afternoon at $257.20/cwt. Select was $2.18 higher at $244.36.

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Major U.S. financial indices continued to waver Thursday, with inflation worries and concerns about economic growth.

The Dow Jones Industrial Average closed 103 points lower. The S&P 500 closed 5 points lower. The NASDAQ was up 6 points.

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USDA’s Economic Research Service (ERS) increased both forecast beef production and fed steer prices slightly for this year, in the latest monthly World Agricultural Supply and Demand Estimates.

ERS increased the annual average five-area direct fed steer priced for this year by 60¢ to $140.10/cwt. That was based on current prices and expectations of tighter supplies in the second half of this year. Average prices are projected at $140 in the second quarter, $136 in the third quarter and $145 in the fourth quarter.

The average annual price next year is forecast to be $153, lifted by tighter supplies.

ERS increased expected beef production slightly for this year, compared to the previous month, to 27.84 billion lbs. That would be 106 million lbs. less than last year (-0.4%).

“Beef production is raised, with more cattle placed in feedlots sooner than normally expected due to drought conditions, supporting higher annual fed cattle slaughter,” say ERS analysts. “Additionally, cow slaughter is forecast higher.”

Beef production next year is forecast at 25.95 billion lbs., which would be 1.89 billion lbs. less (-6.8%) compared to this year.

Total red meat and poultry production this year is projected to be 106.38 billion lbs., slightly more than the previous month’s estimate. The total would be 431 million lbs. less than last year (-0.4%). Total red meat and poultry production next year is forecast to be 105.34 billion lbs., which would be 1.04 billion lbs. less than this year (-0.97%) less than this year.

Turning to crops, ERS analysts emphasize, “Russia’s recent military invasion of Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally. The May WASDE represents an ongoing assessment of the short-term impacts as a result of this action.”

Corn

The 2022-23 U.S. corn outlook is for lower production, domestic use, exports, ending stocks, and higher prices.

The season-average corn price received by producers is projected at $6.75/bu., up 85¢ from a year ago. If realized, it would be the highest average price since $6.89 in 2012-13.

Soybeans

The 2022-23 outlook for U.S. soybeans is for higher supplies, crush, exports, and ending stocks compared with 2021-22.

The 2022-23 U.S. season-average soybean price is forecast at $14.40/bu., compared with $13.25 in 2021-22. Soybean meal prices are forecast down $20 per short ton from 2021-22 to $400/short ton and soybean oil prices are forecast down 5¢ to average 70¢/lb., as oilseed and product supplies rebound in foreign markets.

Wheat

The outlook for 2022-23 U.S. wheat is for reduced supplies, exports, domestic use stocks, and higher prices.

The projected 2022-23 season-average farm price is a record high $10.75/bu., up $3.05 from last year’s revised price.

By | May 12th, 2022|Daily Market Highlights|

Cattle Current Daily—May 12, 2022

Cattle futures were mixed Wednesday, with Feeder Cattle pressured by a surge in Corn futures

prices, while Live Cattle was supported by the discount to cash.

Feeder Cattle futures closed an average of $1.19 lower (35¢ lower at the back to $1.85 lower toward the front).

Live Cattle futures closed an average of 47¢ higher (10¢ to $1.17 higher), except for an average of 6¢ lower in three contracts.

Negotiated cash fed cattle trade was slow on moderate demand in the Texas Panhandle, Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are steady in the Southern Plains at $140/cwt. and $2 lower in Nebraska at $144. Dressed prices in Nebraska are $2 lower at $230.

Live prices last week were $142-$148 in Colorado and $144-$147 in the western Corn Belt, where dressed prices were $230-$232.

Choice Boxed beef cutout value was 16¢ lower Wednesday afternoon at $255.08/cwt. Select was 17¢ lower at $242.18.

Corn and Soybean futures rose on South American wonderments and likely positioning ahead of Thursday’s World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 15¢ to 17¢ higher through Jly ‘23 and then mostly 4¢ to 5¢ higher.

Soybean futures closed 11¢ to 20¢ higher through Aug ‘23 and then mostly 2¢ higher.  

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Major U.S. financial indices closed sharply lower Wednesday, pressured by higher inflation than investors expected.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% in April on a seasonally adjusted basis after rising 1.2% in March, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 8.3% before seasonal adjustment.

The Dow Jones Industrial Average closed 362 points lower. The S&P 500 closed 65 points lower. The NASDAQ was down 373 points.

West Texas Intermediate Crude Oil futures on the CME closed $4.62 to $5.95 higher through the front six contracts, apparently fueled by a day of increased fears about shortages.

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Choosing to consume beef or plant-based proteins designed to mimic the real thing is not an either/or proposition, according to a new study from agricultural economists1 at Kansas State University and Purdue University.

The analysis — Benchmarking U.S. consumption and perceptions of beef and plant-based proteins — comprised two separate studies. One documents factors affecting beef and plant-based consumption. The other focuses on factors motivating consumers to include beef and/or plant-based proteins in their diets.

“An interesting insight comes from evaluating beef and plant-based consumption together. Of the 6% of respondents who ate plant-based proteins, 58% also ate beef during the prior day. In other words, 4% of respondents ate both beef and plant-based proteins in the same day,” according to the study. “This indicates beef and plant-based protein consumption are not necessarily exclusive of each other. More participants ate both proteins than ate plant-based protein only and not beef.”

Around 6% of all respondents consumed plant-based proteins (patties and crumbs specifically) at least once during the previous day, while 53% ate beef at least once.

The fact that some consumers already consume beef and plant-based proteins in the same day could motivate development of blended products, according to the researchers.

“Blending may be an attractive consideration for the beef industry if these proteins (plant) become much cheaper to produce and consumers perceive them as close alternatives to animal-derived meat. Blending products could decrease the price of these hybrid products, increasing the quantity demanded of both traditional beef and plant-based proteins,” according to the study. “In this way, plant-based proteins could compete with imports of lean beef destined for blending into ground products and thus fulfill a market segment for U.S.-produced products.”

Keep in mind, alternative protein market share is exceptionally small, relative to beef, as demonstrated in a number of studies.

“Current consumer preferences do not support projected major demand changes, especially since whole muscle products such as steaks and roasts are currently only available from animal sources,” say researchers.

1Researchers included agricultural economists: Glynn Tonsor and Ted Schroeder, Kansas State University (K-State); Jayson Lusk, Purdue University; Hannah Taylor, USDA-ERS, who was with K-State when the study was conducted. 

By | May 11th, 2022|Daily Market Highlights|

Cattle Current Daily—May 11, 2022

Negotiated cash fed cattle trade was light to moderate on moderate demand in the Southern Plains through Tuesday afternoon, according to the Agricultural Marketing Service. Prices were steady to $1 lower in the Texas Panhandle at $139-$140/cwt. And steady in Kansas at $140.

Elsewhere, trade ranged from limited on light demand to a standstill. Live prices last week were $146 in Nebraska, $142-$148 in Colorado and $144-$147 in the western Corn Belt. Dressed prices were $230-$232.

Cattle futures lost more ground Tuesday, as cash fed cattle prices ran out of steam in the South and Corn futures rose.

Feeder Cattle futures closed an average of $1.83 lower (87¢ lower to $2.37 lower).

Live Cattle futures closed an average of 93¢ lower (25¢ to $1.27 lower), except for 7¢ higher in the back contract.

Choice Boxed beef cutout value was $3.05 lower Tuesday afternoon at $255.24/cwt. Select was 78¢ lower at $242.35.

Corn and Soybean futures were supported by the sluggish planting pace.

Corn futures closed mostly 3¢ to 8¢ higher. Soybean futures closed 5¢ to 10¢ higher through Jly ‘23 and then fractionally higher to 4¢ higher. 

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Major U.S. financial indices closed mixed Tuesday as investors grasped for some stability and waited for the release of the Consumer Price Index Wednesday.

The Dow Jones Industrial Average closed 84 points lower. The S&P 500 closed 9 points higher. The NASDAQ was up 114 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.74 to $3.33 lower through the front six contracts. Pressure included continued concerns about COVID lockdowns in China. That was $8.24 to $10.01 lower in those contracts over the last two sessions.

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Feeder cattle loans grew in size and the number of months before maturity on those loans increased over recent years, according to Elliott Dennis, Extension livestock economist the University of Nebraska-Lincoln. He provides insights about the impact of rising interest rates on cattle loans, in the most recent issue of In the Cattle Markets.

“Between 2000 and 2009, the average number of months before maturity on feeder cattle loans was 8.82 months. Between 2010 and 2019 that increased to 10.74 months. Now, between 2020 and present it has increased slightly to 10.92 months,” Dennis says. “At the same time, the average loan size and total feeder cattle loan volume have increased. The average loan size over the last 10 years has been about $80,000.”

Ultimately, of course, higher interest rates mean raising cattle with borrowed money gets more expensive.

Dennis explains feeder livestock interest rates are primarily tracked by the Kansas City and Dallas Federal Reserve Districts.

“Interest rates in these two primary cattle feeding areas are different from each other and reflect different supply and demand of money and relative production risks,” Dennis explains. “In 2022:Q1, the Dallas Federal Reserve feeder cattle interest rates were 5.42%. This rate has been relatively unchanged since 2020:Q2 fluctuating between 5.23-5.42%. In 2022:Q1, the Kansas City Federal Reserve feeder cattle interest rates were 3.92%. This rate has been much more variable, oscillating between 2.90-5.03% since 2020:Q2.”

Further, Dennis points to the inverse relationship between feeder cattle interest rates and average pastureland values over time. Generally, speaking, he says the cost of owning pastureland increases as the cost to raise feeder cattle decreases and visa vera.

“Lower interest rates cheapen the cost to raise feeder cattle. These lower costs create more economic incentives for (a) new producers to enter the market, (b) existing producers to increase the intensity of their operations, or (c) some combination of (a) and (b). Ultimately, this means that the demand for feeder cattle is passed down from feedlots to cow-calf/stocker producers who then expand by competing for a limited land base, raising land prices,” Dennis explains.

“…The potential for higher interest rates this year could raise the cost of production in the short term for cattle producers by making debt more expensive. However, it does ease some of the longer-term pressure of rising land values which landowners capitalize into pasture rental rates,” Dennis says.

By | May 10th, 2022|Daily Market Highlights|

Cattle Current Daily—May 10, 2022

Cattle futures weakened Monday, pressured by recently waning wholesale beef values and sharply lower outside markets, but supported by lower Corn futures.

Feeder Cattle futures closed an average of 44¢ lower, except for 25¢ higher in spot May.

Live Cattle futures closed an average of 37¢ lower, except for 80¢ and 2¢ higher in the front two contracts.

Corn futures closed mostly 9¢ to 13¢ lower, while Soybean futures closed mostly 20¢ to 34¢ lower, pressured my optimism the forecast will enable rapid planting progress.

As of May 8, 22% of corn was planted, which was 42% less than last year and 28% less than average, according to the latest USDA Crop progress report. Twelve percent of soybeans were in the ground, which was 27% less than last year and 12% less than the average.

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

Live prices last week were steady at $140/cwt. in the Southern Plains and at $146 in Nebraska. Prices were $2 lower to $3 higher in Colorado at $142-$148; steady to $1 lower in the western Corn Belt at $144-$147. Dressed prices were steady in Nebraska at $232, but steady to $2 lower in the western Corn Belt at $230-$232.

The weighted average five-area direct fed steer price last week was 8¢ higher at $143.42. The average steer price in the beef was $1.62 lower at $230.69.

Although lower week to week, Choice Boxed beef cutout value was $4.57 higher through Monday afternoon at $259.01/cwt. Select was 81¢ lower at $244.25.

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Wall Street’s selloff continued Monday as investors try to recalibrate value in the face of inflation and the Fed’s plans to battle inflation.

The Dow Jones Industrial Average closed 653 points lower. The S&P 500 closed 132 points lower. The NASDAQ was down 521 points.

West Texas Intermediate Crude Oil futures on the CME closed $5.50 to $6.68 lower through the front six contracts.

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Currently, there are no broad-based indications of weakening beef demand, but some red flags could be ready to unfold, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

“In the last three weeks, Choice boxed beef values have dropped below year-ago levels, which were surging higher at this time in 2021,” Peel explains in his weekly market comments. “Beef demand is not likely to repeat last year’s levels, but current levels are still relatively high compared to recent years. Comparisons to last year will look weaker for boxed beef and many wholesale cut values but that is not really a valid comparison to judge beef demand in 2022.”  

Peel points out beef demand was exceptionally strong over the last 12 months, driven by pent-up, post-pandemic demand and exports.

“A bellwether indicator of summer grilling demand is strip loin prices, which typically and reliably increase seasonally going into summer,” Peel says. “So far this year, strip loin prices have increased only modestly and have actually weakened since mid-April. This may indicate some demand weakness and bears watching in the coming weeks. Relative weakness in some chuck product prices may be related to slower growth in export demand. The ground beef market continues very strong due to fundamental demand.”

Potential demand headwinds include near record-high retail beef prices and inflation that is weighing on consumer wallets.

“However, all proteins are higher priced and the ratio of retail beef price to retail broiler chicken and pork prices is actually lower now compared to six months ago,” Peel says. “Still, we watch for indications that consumers are ‘trading down’ from the most expensive beef cuts to cheaper value cuts,” Peel says.

For perspective, according to the Livestock Marketing Information Center (LMIC), retail beef prices were $7.67/lb. in March, up $1.20 or 18.6% from a year earlier.

Retail pork prices were record high at $4.84/lb. in March, which was 16.1% or 67¢ higher than last year.

The retail broiler price in March was the second highest on record at $1.72/lb., an increase of 11.7% or 18¢ from a year earlier. The retail broiler composite price was record high at $2.32/lb., up 15.5% (+31¢) year over year.

By | May 9th, 2022|Daily Market Highlights|

Cattle Current Daily—May 9, 2022

Corn futures closed mostly 11¢ to 18¢ lower on Friday, which helped lift Feeder Cattle futures an average of 77¢ higher (32¢ higher toward the front to $1.37 higher at the back), except for 77¢ lower in spot May. Soybean futures closed 20¢ to 25¢ lower. 

On the other hand, Live Cattle futures closed an average of 50¢ lower (25¢ lower toward the back to $1.02 lower in spot Jun), except for 35¢ higher in the back contract. They sagged with lower wholesale beef prices and waning cash momentum.

Week to week on Friday, Choice boxed beef cutout value was $6.34 lower at $254.44/cwt. Select was $2.91 lower at $245.06. That’s $13.47 lower for Choice over the last two weeks and $9.71 lower for Select.

Estimated total cattle slaughter last week of 657,000 head was 8,000 head more than the previous week and 18,000 more than the same week last year. Estimated total year-to-date cattle slaughter of 11.66 million head was 61,000 head more (+0.5%) than the same time last year. Estimated total year-to-date beef production of 9.74 billion lbs. was 81.6 million lbs. more (+0.8%) year over year.

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, with too few transactions to trend.

Last week, live prices were steady at $140/cwt. in the Texas Panhandle and at $146 in Nebraska. Prices were steady to $2 lower in Kansas at $138-$140, $2 lower to $1 higher in Colorado at $142-$146 and $1 higher to $1 lower in the western Corn Belt at $146. Dressed prices were steady in Nebraska at $232 and steady to $2 lower in the western Corn Belt at $230-$232.

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Follow-through bearishness pressured major U.S. financial indices lower Friday, despite a bullish jobs report.

Total non-farm payroll increased by 428,000 in April, according to the U.S. Bureau of Labor Statistics. That left the unemployment rate unchanged at 3.6%. Average hourly earnings for all employees on non-farm payrolls increased 10¢ in April to $31.85.

The Dow Jones Industrial Average closed 98 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 173 points.

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Recent rains continued to provide slight improvement to the nationwide drought last week. As of May 5, 63.9% of the nation was experiencing either abnormally dry conditions or some degree of drought, compared to 64.1% the previous week and 65.6% the previous year, according to the U.S. Drought Monitor. However, the Drought Severity Coverage Index (DSCI) for the week was 5 points higher than the previous year at 181. Of course, that’s another way of saying it’s been way too dry for way too long.

The same week, approximately 56% of the nation’s cattle inventory was in areas experiencing drought. Looking at primary cattle states, that included 85% of the cattle in Texas, 79% in Kansas, 98% in Nebraska, and 100% in Oklahoma. At the same time, approximately 41% of the nation’s hay acreage was in areas experiencing drought.

As for other crops in areas experiencing drought (approximate percentage of production): 23% of corn; 14% of soybean; 69% of winter wheat; 71% of barley; 90% of sorghum.

“There may be some relief in the 7-day forecast for the Southern Plains, however it is likely insufficient to provide substantial relief,” says Aaron Smith, crop marketing specialist at the University of Tennessee, in his weekly market comments.

Plenty of eyes will be on Thursday’s monthly World Agricultural Supply and Demand Estimates, which will include the first glimpse of 2022-23 crop expectations.

“Will the USDA modify U.S. planted acres and Ukraine production? Both could have significant impacts on commodity markets, even when accounting for market expectations.” Smith says.

According to Smith, the relative change in prices from February 1 to May 5 favors increased corn and cotton planted acres over soybeans. “However, with the drought in the Southern Plains and fertilizer prices increasing 2-16% over the same 3-month time period, the acreage estimates continue to be uncertain,” he says.

By | May 8th, 2022|Daily Market Highlights|

Cattle Current Daily-May 6, 2022

Cattle futures sagged Thursday with higher Corn futures and lower wholesale beef values helping stall recent momentum. Sharply lower outside markets also clouded optimism.

Feeder Cattle an average of $1.14 lower, from 47¢ lower at the back to $1.92 lower in spot May.

Live Cattle futures closed an average of 73¢ lower, from 12¢ lower to $1.12 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.

So far this week, like prices are steady at $140/cwt. in the Southern Plains and at $146 in Nebraska. Prices are $2 lower to $1 higher in Colorado at $142-$146 and $1 higher to $1 lower in the western Corn Belt at $146. Dressed prices are steady in Nebraska at $232 and steady to $2 lower in the western Corn Belt at $230-$232.

Choice Boxed beef cutout value was $4.56 lower Thursday afternoon at $255.18/cwt. Select was $1.87 lower at $245.81.

Net U.S. beef export sales for the week ending April 28 were 14,600 metric tons, according to the weekly U.S. export sales report. That was 28% more than the previous week and 1% more than the prior four-week average. Increases were primarily for Japan, South Korea, Taiwan, China and Canada.

Corn futures closed mostly 1¢ to 3¢ higher. Soybean futures closed mostly 4¢ to 5¢ higher. 

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Major U.S. financial indices dropped like the proverbial rock Thursday, following what was apparently a relief rally during the previous session, in the wake of the Fed’s 50-basis point increase in the lending rate. Stocks tied to tech and economic growth led the decline.

Weekly initial unemployment insurance claims were 200,000, according to the U.S. Department of Labor. That was 19,000 more than the previous week and more than expected.

The Dow Jones Industrial Average closed 1,063 points lower. The S&P 500 closed 153 points lower. The NASDAQ was down 647 points.

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U.S. beef exports set another new value record in March, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 126,285 metric tons (mt) in March, up 1% from a year ago, the third most on record, while value climbed 33% to a record $1.07 billion. First-quarter exports increased 6% to 353,852 mt. Value in the first quarter was 41% more than last year at just over $3 billion.

“Global demand for U.S. beef has eclipsed anything I have seen in many years in the meat business,” says Dan Halstrom, USMEF President and CEO. “While this momentum is fueled by mainstay markets such as South Korea, Japan and Taiwan, demand is also very strong in China/Hong Kong and key Latin American markets, while exports to the Middle East have rebounded impressively.”

March beef export value equated to $472.73 per head of fed slaughter, up 36% from a year ago. The first quarter average was $474.10 per head, up 41%. Exports accounted for 14.7% of total March beef production, up from 14.5% a year ago, while the ratio for muscle cuts was steady at 12.7%.

Halstrom cautions that first-quarter results do not fully reflect the impact of recent COVID-19 lockdowns in China that slowed product movement and forced many restaurants to suspend or limit service. These obstacles are likely to have a greater impact on April and May export data. He notes that while beef demand has been very resilient, inflation represents a potential headwind.

“Consumers throughout the world have shown how much they value the quality of U.S. beef, but disposable income is under increasing pressure as they pay more for energy and other daily needs,” Hailstorm says. He adds that pork, beef and lamb exporters continue to face logistical obstacles and delays when moving product overseas. The situation is especially challenging for chilled meat shipments to key Asian markets.

By | May 5th, 2022|Daily Market Highlights|

Cattle Current Daily—May 5, 2022

Negotiated cash fed cattle trade and demand were moderate in the Texas Panhandle through Wednesday afternoon with prices steady at $140/cwt. Trade in Nebraska was moderate on moderate to good demand, also at steady prices of $146 on a live basis and $232 in the beef.

Elsewhere, trade was slow on light to moderate demand, with too few transactions to trend. However, there were some early live sales at $140 in Kansas and at $145-$146 in the North.

Last week, live prices were $140 in Kansas, $146-$147 in Colorado and $145-$147 in the western Corn Belt, where dressed prices were $232.

The weighted average five-area direct fed steer price in April was $141.66/cwt., which was $20.78 higher than a year earlier (+17%). The average steer price in the beef was $36.55 higher (+16%) at $228.86.

Choice Boxed beef cutout value was 19¢ higher Wednesday afternoon at $259.74/cwt. Select was 34¢ higher at $247.68.

Cattle futures held their ground in the face of firmer Corn futures.

Live Cattle futures closed narrowly mixed, from an average of 26¢ lower to an average of 13¢ higher.

Feeder Cattle futures closed an average of 42¢ higher except for an average of 28¢ lower in three contracts, amid light trade.

Corn futures closed mainly fractionally higher to 1¢ higher. Soybean futures closed 6¢ 10¢ higher. 

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Major U.S. financial indices closed sharply higher Wednesday, apparently fueled by optimism the Fed can slow inflation while maintaining economic growth, based on comments from Federal Reserve Chair, Jerome Powell, suggesting incremental rate increases will be no more than 50 basis points each time. On Wednesday, the Federal Reserve raised the lending rate 0.5%, as widely expected.

The Dow Jones Industrial Average closed 932 points higher. The S&P 500 closed 124 points higher. The NASDAQ was up 401 points.

Crude oil futures stepped higher with announced plans from the European Union (EU) for a phased ban of crude oil imports from Russia to the EU over the next six months, as well as an embargo on imports of Russian refined oil products in about the same length of time.

West Texas Intermediate Crude Oil Futures closed $4.54 to $5.40 higher through the front six contracts.

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Higher food and energy costs weighed on restaurant industry recovery in the first quarter, according to The NPD Group (NPD).

Online and physical visits to restaurants declined 2% year over year in the first quarter, compared to a 3% increase last year when stimulus payments and relaxed pandemic restrictions provided a boost. Consumer restaurant spending, which reflects higher costs, as opposed to increased visits, was up 4% in the quarter.

Online and physical visits to quick service restaurants (QSRs) declined by 2% in the first quarter compared to a 6% increase the previous year. Consumer spending at QSRs was 2% more year over year.

Conversely, full service restaurant (FSR) traffic increased by 2% in the first quarter, compared to last year’s 7% decline. FSR spending was up 10% versus the same quarter a year ago when spending fell by 6%.

“With the first quarter behind us, I’m optimistic that seasonal demand and the improving on-premises trends can help get the restaurant industry’s recovery back on track,” says David Portalatin, NPD food industry advisor.

By | May 4th, 2022|Daily Market Highlights|

Cattle Current Daily—May 4, 2022

Follow-through support lifted Cattle futures for a second consecutive day, helped along by another down day for Corn.

Feeder Cattle futures closed an average of $1.13 higher, (5¢ higher toward the back to $2.20 higher toward the front), except for unchanged in the back two contracts.

Live Cattle futures closed an average of 61¢ higher, from 12¢ higher at the front to $1.00 higher at the back.

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

Last week, live prices were steady in the Southern Plains at $140/cwt, $2 higher ion Colorado at $145-$147, steady to $2 higher in Nebraska at $146 and steady to $1 higher in the western Corn Belt at $145-$147. Dressed prices were $2 higher at $232.

Choice Boxed beef cutout value was $3.00 lower Tuesday afternoon at $259.55/cwt. Select was 89¢ lower at $247.34.

As mentioned, Corn and Soybean futures continued to soften Tuesday despite slow planting progress.

Corn futures closed mostly 6¢ to 7¢ lower, while Soybean futures closed 10¢ to 15¢ lower through Mar ‘23 and then mostly 2¢ to 4¢ lower.

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Major U.S. financial indices eased higher Tuesday, as investors await the Fed’s next interest rate decision Wednesday.

The Dow Jones Industrial Average closed 67 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 27 points.

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Agricultural producer sentiment increased in April, but remains significantly lower year over year, according to the Purdue University/CME Group Ag Economy Barometer. It rose 8 points in April to 121, which was 32% less than last year.

The Index of Current Conditions improved 7 points to 120. The Index of Future Expectations improved 9 points to 122.

“Rising prices for major commodities, especially corn and soybeans, appear to be leading the change in producers’ improved financial outlook,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “However, it’s hard to overstate the magnitude of the cost increases producers say they are facing.”

Producers continue to say higher input costs are their top concern. In April, 42% of producers said higher input costs were their biggest concern, which was more than twice as many who chose government policies (21%) or lower output prices (19%). In April, 60% of survey respondents said they expect input prices to rise by 30% over the next 12 months.

When asked specifically for their expectations for 2023 crop input prices compared to prices paid for 2022 crop inputs, 36% of respondents said they expect prices to rise 10% or more, while 21% of crop producers said input price increases of 20% or more are likely. The war in Ukraine added a new level of uncertainty for producers. Sixty percent of survey respondents said the biggest impact of the war on U.S. agriculture will be on input 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 April 18-22.

By | May 3rd, 2022|Daily Market Highlights|

Cattle Current Daily—May 3, 2022

Cattle futures rallied Monday, helped along by lower Corn futures, oversold conditions, expanding open interest and opening the books on a new month.

Feeder Cattle futures closed an average of $5.04 higher.

Live Cattle futures closed an average of $1.67 higher (97¢ higher toward the back to $2.55 higher in new spot Jun).

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 steady in the Southern Plains at $140/cwt, $2 higher in Colorado at $145-$147, steady to $2 higher in Nebraska at $146 and steady to $1 higher in the western Corn Belt at $145-$147. Dressed prices were $2 higher at $232.

Choice Boxed beef cutout value was $1.77 higher Monday afternoon at $262.55/cwt. Select was 26¢ higher at $248.23.

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Grain futures tumbled to start the week, pressured by needed moisture in the Corn Belt, although it could further delay planting. As of May 1, according to USDA’s latest Crop Progress report, 14% of corn was planted, which was 28% less than last year and 19% less than average.

Corn futures closed mostly 7¢ to 10¢ lower.

Soybean futures closed 22¢ to 39¢ lower in the front six contracts and then mostly15¢ to 19¢ lower. Eight percent of soybeans were in the ground, which was 14% less than last year and 5% less than the average.

National pasture and range conditions are beginning the season in expectedly tough shape with 18% rated as Good (17%) or Excellent (1%) compared to 22% a year earlier. Conversely, 56% was rated as Poor (27%) or Very Poor (29%), compared to 47% a year earlier.

Also of note, 27% of winter wheat was rated in Good (24%) or Excellent (3%) condition, compared to 48% a year earlier. 42% was rated Poor (21%) or Very Poor (22%) compared to 19% at the same time last year.

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Major U.S. financial indices closed higher Monday, finding some firmness following the previous session’s massive downturn, but amid volatile two-sided trading as investors try to peg value.

The Dow Jones Industrial Average closed 84 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 201 points.

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“Through mid-April, beef cow slaughter was up 16.9% year over year; a surprisingly strong rate of cow slaughter for this time of year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “This likely reflects continuing drought impacts carried over from last year, combined with very strong cull cow prices and limited forage prospects going forward. The fast pace of cow slaughter thus far implies the likelihood of significant beef cow herd liquidation in 2022.”

Peel explains the current pace of beef cow slaughter suggests an annual beef herd culling rate of 13.8%, a record in data back to 1986. Culling at that level suggests the beef cow inventory would likely decrease by 4% year over year and decline below 29 million head Jan. 1, 2023. That would be the largest annual beef cow herd decrease since the mid-1980s.

However, Peel says it’s unlikely the pace of culling so far this year will continue throughout 2022.

By way of comparison, he explains if beef cow slaughter averaged 9% more year over year — the same as last year and unlikely at this point — it would imply an annual culling rate of just less than 13%, still a record. The 2023 beef cow herd would be roughly 29.2 million head, down about 3% year over year.

On the other hand, if beef cow slaughter ended up 13% more year over year, net beef herd culling would be more than 13%, resulting in a Jan. 1 beef cow inventory of approximately 29.0 million head (3.5% less year over year).

“Dramatic and immediate improvement in drought conditions could allow the industry to avoid these rather dire results,” Peel says. “The next few months will likely have impacts on the cattle industry for several years. Drought conditions that result in the levels of liquidation described above would also prevent retention of replacement heifers. This implies that, if conditions do not improve until late this year or into next year, better conditions in 2023 would, at best, allow the industry to stabilize inventories and lay the groundwork to begin recovery in 2024 at the earliest.”

By | May 2nd, 2022|Daily Market Highlights|

Cattle Current Daily—May 2, 2022

Cattle futures bounced around last week, but never outran the shadow of the unexpectedly large March feedlot placements suggested by the latest Cattle on Feed report that came out the previous Friday.

Sagging wholesale beef values and worries that elevated retail beef prices are beginning to chip at demand added pressure to Live Cattle futures, which closed an average of $2.90 lower week to week on Friday. They closed an average of 84¢ lower on Friday, except for $3.40 higher in expiring Apr.

Choice boxed beef cutout value was $7.13 lower week to week on Friday at $260.78/cwt. Select was $6.80 lower at $247.97.

However, negotiated cash fed cattle prices were steady to higher amid snugger supplies before the anticipated summer bulge.

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

Live prices last week were steady in the Southern Plains at $140/cwt.; steady to $1 higher in the Northern Plains at $144-$146 and in the Western Corn Belt at $145-$147. Dressed prices were $2 higher at $232.

Through Thursday, the weighted average direct fed steer price was 31¢ higher on a live basis at $143.31/cwt. The average steer price in the beef was 42¢ higher at $232.32.

Estimated total cattle slaughter last week of 656,000 head was 9,000 head fewer than the previous week but 3,000 head more than the same week last year. Year-to-date total estimated cattle slaughter of 11.01 million head is 51,000 head more than the same time last year. Total estimated year-to-date beef production through last week was 9.20 billion lbs., which was 706,000 lbs. more (+0.77 %) than a year earlier.

Feeder cattle futures closed an average of $1.87 lower on Friday and an average of $7.73 lower week to week, as Corn futures gained an average of 25.6¢ in the front six contracts during the same time.

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Major U.S. financial indices tumbled Friday, led by tech stocks and growing uncertainty about domestic and global economic growth, challenged by high inflation and COVID hotspots.

The Dow Jones Industrial Average closed 939 points lower. The S&P 500 closed 155 points lower. The NASDAQ was down 536 points.

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“The main conclusion is that there is no relationship between price discovery and the volume of negotiated cash trade. There is no clear overall problem that price discovery is somehow deficient in regional fed cattle markets. Mandating cash trade does not address a price discovery problem that is observed today or since the beginning of Livestock Mandatory Reporting.”

That was one of the insights Stephen Koontz, agricultural economist at Colorado State University provided in testimony during last week’s Senate hearing to review the Cattle Price Discovery and Transparency Act of 2022, and the Meat and Poultry Special Investigator Act of 2022.

Koontz’s insights are based on a bevy of research during his career exploring cash price discovery in cattle markets.

“It is also important to recognize what price discovery is not – price discovery is not higher prices,” Koontz explained. “Price discovery is the market moving quickly and clearly to the appropriate price level. At times this is a lower fed cattle price and other times a higher price. It is a common misconception that better price discovery implies better prices for the individual contemplating the issue. And there is no scientific evidence that improved price discovery has value not already revealed in price nor will improve prices to producers.”

On the other hand, mandating minimum levels of regional cash fed cattle trade, thereby reducing the use of alternative marketing arrangements, would come at a heavy cost, likely borne mostly by cow-calf producers.

“Mandating minimum cash trade is substantially costly. Costs are at least hundreds of millions of dollars and more likely billions of dollars. These costs will be leveled on cowcalf producers nationwide and consumers of beef both domestically and internationally,” Koontz explained. “Primary research which discovered these costs is almost 20 years old – but the economic concepts are foundational and the costs today are likely substantially higher. There is no research which can attribute higher cattle prices to mandated cash trade. Likewise, my preliminary work has revealed to me that price discovery is not improved with mandated cash trade. The price discovery we currently have in regional fed cattle markets is not deficient. And the costbenefit of mandated cash trade is clear.”

By | May 1st, 2022|Daily Market Highlights|

Cattle Current Daily—April 29, 2022

Feeder Cattle futures firmed Thursday, closing an average of 87¢ higher, except for 27¢ lower in expiring Apr. They were helped along by the mainly narrowly mixed close in Corn futures. 

The overall continued decline in wholesale beef prices and weaker weekly exports helped pressure Live Cattle Live futures an average of 47¢ lower, except for unchanged in almost-spent spot Apr.

Choice Boxed beef cutout value was 69¢ higher Thursday afternoon at $262.60/cwt. Select was $1.26 lower at $251.06.

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

So far this week, live prices are steady in the Southern Plains at $140/cwt.; steady to $1 higher in the Northern Plains at $144-$146 and in the Western Corn Belt at $145-$147. Dressed prices are $2 higher at $232.

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Major U.S. financial indices surged Thursday, fueled by tech stocks and positive quarterly corporate earnings reports. That was despite news from the Bureau of Economic Analysis (BEA) that real gross domestic product (GDP) decreased at an annual rate of 1.4% in the first quarter of this year, according to the advance estimate. In the fourth quarter, real GDP increased 6.9%.

According to BEA, the decline reflected decreases in private inventory investment, exports, federal government spending, and state and local government spending, while imports, which are a subtraction in the calculation of GDP, increased.

The Dow Jones Industrial Average closed 614 points higher. The S&P 500 closed 103 points higher. The NASDAQ was up 382 points.

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The Creighton University Rural Mainstreet Index (RMI) declined to 62.0 in April from 65.4 a month earlier but remained above growth-neutral for the 17th consecutive month. The RMI results from a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

“The region recorded a 34% gain in farm commodity prices over the past 12 months, but low short-term interest rates and healthy farm income have underpinned the Rural Mainstreet Economy,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heifer College of Business.

Among highlights from the latest survey:

The region’s farmland price index for April climbed 2 points to 80.0, marking the 19th straight month the index was above growth neutral. For the past several months, the RMI survey registered the strongest, most consistent growth in farmland prices since the survey was launched in 2006.

Russia’s invasion of Ukraine, along with accompanying global trade tensions and surging inflation, pushed the business confidence index to its lowest level since the beginning of the pandemic in Spring 2020. The index, which reflects bank CEO expectations for the economy six months out, plummeted to 39.1 from 54.0 in March.

This month bankers were asked to forecast the impact of President Biden’s emergency waiver on the summer production of E-15 ethanol. Fewer than 4 of 10 bankers (39.1%) expect President Biden’s emergency waiver on the summer production of E-15 ethanol to have a positive impact. More than half (56.5%) expect the waiver to have little or no impact.

By | April 28th, 2022|Daily Market Highlights|

Cattle Current Daily—April 28, 2022

Another day of higher Corn futures weighed heavily on Feeder Cattle futures, Wednesday, which closed an average of $3.35 lower ($2.57 to $4.20 lower), except for unchanged in expiring Apr

After 12¢ and 10¢ higher in the front two contracts, Corn futures closed mostly fractionally higher to 6¢ higher, pushed along by Soybean futures, which closed 20¢ to 22¢ higher through Jan ‘23.  

Technical pressure and looming large supplies pressured Live Cattle futures an average of $1.03 lower, replacing early-week bullishness tied to stronger weekly cash prices.

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

So far this week, live prices are steady in the Southern Plains at $140/cwt.; steady to $1 higher in the Northern Plains at $144-$146 and in the Western Corn Belt at $145-$147. Dressed prices are $2 higher at $232.

Choice Boxed beef cutout value was $2.26 lower Wednesday afternoon at $261.91/cwt. Select was $3.91 lower at $252.32.

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Major U.S. financial indices closed little changed Wednesday, as investors appeared to take a breath and wait for further direction from corporate earnings reports.

The Dow Jones Industrial Average closed 61 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 1 point.

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Both the U.S. Senate and House of Representatives held hearings this week regarding the Cattle Price Discovery and Transparency Act of 2022, which would mandate regional minimum levels of negotiated cash fed cattle trade. A team of America’s foremost livestock economists assessed the proposed bill ahead of the hearings. Here are some of the highlights from their report:

  • “There is no research evidence of any significant or persistent fed cattle price discovery problem at this time. This legislation is attempting to solve a problem that does not exist. As such, this legislation offers zero benefits for fed cattle markets and imposes many millions of dollars of additional cost, added risk, and lost value. The exact cost will depend on details of implementation, but the cost is minimally hundreds of millions of dollars resulting in lower feeder cattle prices and higher consumer beef prices.”
  • “The incentives to reduce risks and transactions costs for producers and packers associated with quality and timing of sales and deliveries to plants will still exist with implementation of this bill. As such, forcing “minimum thresholds” will increase these risks and transactions costs for both producers and packing plants utilizing AMAs at a level beyond whatever the prescribed minimums, that cannot be objectively justified, turn out to be if this bill is implemented.”
  • “There is no academic literature that indicates any analysis pointing toward benefits that can be quantified with these minimum thresholds. Benefits of reduced AMA use (alternatively, higher negotiated cash trade) are generally speculative. As noted, evidence that higher negotiated trade will positively impact prices, reduce marketing margins, or improve price discovery is lacking. However, many market participants clearly see negotiated cash trade as a good in and of itself. To the extent the industry desires greater cash market engagement, lower cost means of achieving this outcome are available.”
By | April 27th, 2022|Daily Market Highlights|

Cattle Current Daily—April 27, 2022

Steady to stronger negotiated cash fed cattle prices helped Live Cattle futures closed an average of 65¢ higher.

Negotiated cash fed cattle trade was moderate through Tuesday afternoon  in Nebraska and the Southern Plains, according to the Agricultural marketing Service.

So far this week, live prices are steady in the Southern Plains at $140/cwt. and steady to $1 higher in Nebraska at $145-$146. Dressed prices are unevenly steady at $232 in Nebraska.

Feeder Cattle futures closed an average of $1.18 lower, pressured by Corn futures, which were up mostly 3¢ to 9¢, supported by slow planting progress. Soybean futures closed mostly 1¢ to 11¢ higher.

Choice Boxed beef cutout value was $2.43 lower Tuesday afternoon at $264.17/cwt. Select was 29¢ lower at $256.23.

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Major U.S. financial indices fell Tuesday on mixed corporate earnings, news of Russia cutting energy supplies to Poland and Bulgaria, continued Covid lockdowns in China and uncertainty over the Fed’s ability to rein in inflation without the economy weakening.

The Dow Jones Industrial Average closed 809 points lower. The S&P 500 closed 121 points lower. The NASDAQ was down 514 points.

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“Every producer wants fair market value for the animals we raise and produce and many of us achieve that true value through value-based alternative marketing arrangements. Accordingly, I do not support a government mandate, of any kind,” said Shawn Tiffany, Kansas Livestock Association president-elect. That was during Tuesday’s Senate Committee on Agriculture, Nutrition, and Forestry hearing to discuss transparency and oversight within cattle marketing, specifically the Cattle Price Discovery and Transparency Act.

The Cattle Price Discovery and Transparency Act would mandate regional minimums for cash fed cattle trade. Tiffany testified in opposition to a government mandate as it could result in fewer marketing opportunities and less incentive for producers to invest in genetics and innovative production techniques that lead to higher-quality beef.

“Regardless of how well intentioned the concept of helping producers obtain fair market value for their animals, the end result will be fewer marketing options for U.S. producers,” Tiffany explained.

By | April 27th, 2022|Daily Market Highlights|

Cattle Current Daily—April 26, 2022

Friday’s bearish Cattle on Feed report took Cattle futures down a peg on Monday.

Feeder Cattle futures closed an average of $1.78 lower ($1.25 to $2.57 lower), and Live Cattle futures closed an average of $1.83 lower (72¢ lower toward the back to $3.35 lower in spot Apr).

Negotiated cash fed cattle trade opened the week at steady money of $140/cwt. in the Texas Panhandle on moderate 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 $1 higher in the Southern Plains at $140/cwt., $4 higher in Nebraska at $144-$146, $3-$4. higher in Colorado at $144-$145  and $3 higher in the western Corn Belt at $145-$146. Dressed prices were $4 higher at $230.

The weighted average five-area direct steer price last week was $2.00 higher on a live basis at $143.02/cwt. The average dressed steer price was $6.40 higher at $232.29.

Corn futures closed mostly 7¢ to 14¢ higher, but Soybean futures closed 10¢ to 12¢ lower through Jan ‘23 and then mostly 3¢ to 9¢ lower.

 Wholesale beef prices were mixed with Choice Boxed beef cutout value $1.31 lower Monday afternoon at $266.60/cwt. , while Select was $1.75 higher at $256.52.

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Major U.S. financial indices clawed back some of the previous session’s steep losses on Monday, amid another volatile day of trade and supported by positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 238 points higher. The S&P 500 closed 24 points higher. The NASDAQ was up 165 points.

West Texas Intermediate Crude Oil futures closed $2.68 to $3.53 lower through the front six contracts, apparently pressured by slowing economic growth that could be compounded by the recent COVID outbreak in China.

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“The unexpectedly large March feedlot placement total may indicate unusual movement of feeder cattle out of the country. It is possible that some heifers originally designated as replacements on Jan. 1 are already being diverted to feedlots,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

As noted in the last issue of Cattle Current, according to the latest monthly Cattle on Feed report (feedlots with 1,000 head or more capacity), March feedlot placements were slightly less (-8,000 head) than a year earlier at 1.99 million head. However, pre-report expectations expected a decrease of about 8%, based on auction totals and other data.

Peel notes the largest increase in placements occurred in Nebraska (+6.8%), while placements were even with the previous year in Kansas and Colorado. Placement were lower year over year in Texas (-6.5%) and Iowa (-10.7%).

“As May approaches and widespread drought conditions persist, cattle industry impacts are expected to accelerate in the coming weeks,” Peel says. “However, there are indications that drought is already impacting cattle markets significantly.”

By | April 25th, 2022|Daily Market Highlights|

Cattle Current Daily—April 25, 2022

Heading into the new week, the primary focus is likely reaction to Friday’s monthly Cattle on Feed report for feedlots with 1,000 head or more capacity.

On the surface, it confirms the severity and duration of the current drought, with March placements about 8% more than expected, following surging placements the previous month. Beneath the surface, though, there likely will be some head scratching about how they square with USDA numbers at the beginning of the year suggesting the feeder supply outside of feedlots was 676,000 head fewer (-2.6%) than last year.

March placements of 1.99 million head were 8,000 less year over year — fractionally less — which was about 8% more than expectations ahead of the report.

In terms of placement weights, 35% went on feed weighing 699 lbs. or less, 53% weighing 700-899 lbs. and 12% weighing 900 lbs. or more.

Marketings in March of 2.0 million head were 41,000 head fewer (-2.0%) than the previous year, about even with pre-report expectations.

Cattle on feed April 1 of 12.11 million head were 208,000 head more (+1.7%) than the previous year. That’s the most for the date since the data series began in 1996 and slightly more than expectations ahead of the report.

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Cattle futures softened to end an otherwise positive week.

Perhaps there was some profit taking, but pressure in Live Cattle mirrored the logical response to numbers revealed in the monthly Cattle on Feed report. Presumably, however, the report was not released until after trading hours.

Feeder Cattle futures closed mixed, from an average of 53¢ lower to an average of 36¢ higher, while Live Cattle futures closed an average of 97¢ lower (20¢ lower at the back to $1.65 lower in spot Apr).

Week to week, though — from the previous Thursday through Friday — Feeder Cattle futures an average of $2.15 higher, except for 25¢ lower in waning spot Apr, and Live Cattle futures closed an average of $1.41 higher.

For much of the week, Cattle futures received support from a reprieve in the relentless surge of Corn futures prices and mostly from stronger cash fed cattle prices.

Negotiated cash fed cattle prices last week were $1 higher on a live basis in the Southern Plains at $140/cwt., $4 higher in Nebraska at $144-$146 and $3 higher in the western Corn Belt at $145-$146. Dressed prices were $4 higher at $230.

Through Thursday, the weighted average five-area direct steer price was $1.98 higher on a live basis at $143.00/cwt. The average dressed steer price was $6.03 higher at $231.90.

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Major U.S. financial indices plunged Friday on disappointing quarterly corporate earnings reports and follow-through pressure from the previous day tied to inflation and hawkish comments from the Fed suggesting a stronger response via interest rate hikes.

The Dow Jones Industrial Average closed 981 points lower. The S&P 500 closed 121 points lower. The NASDAQ was down 335 points.

By | April 24th, 2022|Daily Market Highlights|

Cattle Current Daily—04-22-22

A hard break in Corn futures and likely positioning ahead of Friday’s monthly Cattle on Feed report gave Feeder Cattle futures more room to run, up an average of $2.32.

Corn futures closed mostly 9¢ to 16¢ lower on leaner weekly export sales and ethanol production, as well as likely profit taking.

Soybean futures closed 1¢ to 5¢ higher, helped along by vegetable oil prices.

Feeder Cattle support also came from stronger cash fed cattle prices this week that helped Live Cattle futures close an average of $1.05 higher.

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

So far this week, negotiated cash fed cattle prices are $1 higher on a live basis in the Southern Plains at $140/cwt., $4 higher in Nebraska at $144-$146 and $3 higher in the western Corn Belt at $145-$146. Dressed prices are $4 higher at $230.

Choice Boxed beef cutout value was $1.35 higher Thursday afternoon at $270.17/cwt. Select was 85¢ lower at $255.68.

Carcass weights continue higher year over year. For the week ending April 9, the average dressed steer weight was 12 lbs. heavier at 912 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 11 lbs. heavier at 840 lbs. The same week, 78,681 beef cows were slaughtered, which was 20.8% more year over year.

Net U.S. beef export sales of 15,000 metric tons (mt) were 13% less than the previous week and 27% less than the prior four-week average, according to the U.S. Weekly Export Sales for the week ending April 14. Increases were primarily for Japan, South Korea, China, Canada, and Taiwan.

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Major U.S. financial indices closed sharply lower Thursday, pressured by inflation concerns and rising Treasury yield rates. Earlier in the session, indices were sharply higher on positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 368 points lower. The S&P 500 closed 65 points lower. The NASDAQ was down 278 points.

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Recent widespread winter storms eased drought conditions a bit last week. According to the latest U.S. Drought Monitor, 65.82% of the nation is classified from abnormally dry (D0) to exceptional drought (D4), compared to 67.44% a week earlier and 64.68% a year earlier when drought was already prevalent in some regions.

However, areas affected by Extreme (D3) or exceptional drought expanded from 19.37% the previous week to 20.24%; it was 21.14% at the same time last year.

In the High Plains, except for North Dakota and areas of bordering states, “…windy, dry weather raised dust, resulting in fast-spreading wildfires, and led to a broad increase in the coverage of abnormal dryness (D0) and moderate to extreme drought (D1 to D3),” according to the U.S. Drought Summary (USDS).

USDS analysts say a classic La Niña regime developed in the West during recent weeks, bringing moisture to northern California and the Pacific Northwest, eastward to the northern Rockies.

“At the same time, dry, often windy weather has affected the nation’s southwestern quadrant. As a result, deterioration has been observed in parts of the Southwest, particularly in New Mexico,” analysts say.

By | April 21st, 2022|Daily Market Highlights|

Cattle Current Daily—April 21, 2022

Another day of stronger cash trade added lift to Cattle futures an average of $1.60 higher.

So far this week, negotiated cash fed cattle prices are $1 higher on a live basis in the Southern Plains at $140/cwt., $4 higher in Nebraska at $144-$146 and $3 higher in the western Corn Belt at $145-$146. Dressed prices are $4 higher at $230.

Through Wednesday afternoon, trade was slow on light demand in Nebraska at $146 and in the western Corn Belt at $145, but too few to trend, according to the Agricultural Marketing Service.

Choice Boxed beef cutout value was $1.11 lower Wednesday afternoon at $268.82/cwt. Select was $2.68 lower at $256.53.

Mainly firm Corn futures continued to add support to Feeder Cattle, which closed an average of $1.47 higher.

Corn futures closed mostly fractionally higher to 1¢ higher, except for 11¢ and 10¢ higher in the front two contracts.

Soybean futures closed 12¢ to 30¢ higher in the front four contracts and then mostly 7¢ to 9¢ higher.

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Major U.S. financial indices closed mixed Wednesday with pressure in tech stocks but mostly positive quarterly corporate earnings reports in other sectors.

The Dow Jones Industrial Average closed 249 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 166 points.

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Global economic recovery from the pandemic declined considerably due to Russia’s invasion of Ukraine, according to the latest semiannual World Economic Outlook from the International Monetary Fund (IMF).

IMF projects global economic growth to slow from an estimated 6.1% last year to 3.6% this year, which is 0.8% less than the organization’s expectations in January.

“The economic effects of the war are spreading far and wide—like seismic waves that emanate from the epicenter of an earthquake—mainly through commodity markets, trade, and financial linkages,” according to the report. “Because Russia is a major supplier of oil, gas, and metals, and, together with Ukraine, of wheat and corn, the current and anticipated decline in the supply of these commodities has already driven their prices up sharply.”

Compared to its January projection, IMF increased expected inflation in advanced economies this year 1.8% to 5.7%. Inflation expectations for emerging and developing economies grew 2.8% to 8.7%.

“The war in Ukraine will amplify economic forces already shaping the global recovery from the pandemic,” say IMF analysts. “The war has further increased commodity prices and intensified supply disruptions, adding to inflation. Even before Russia invaded Ukraine, broad price pressures had led central banks to tighten monetary policy and indicate increasingly hawkish future stances. As a result, interest rates had risen sharply and asset price volatility had increased since the start of 2022—hitting household and corporate balance sheets, consumption, and investment. The prospect of higher borrowing costs has also increased the cost of extended fiscal support. These changes are occurring faster than previously expected even as many parts of the global economy—particularly countries with low vaccination rates—must contend with continued strain on health care systems because of the pandemic.”

By | April 20th, 2022|Daily Market Highlights|

Cattle Current Daily—April 20, 2022

Negotiated cash fed cattle trade jumped out to an early and positive start Tuesday with prices $1 higher in the Southern Plains at $140/cwt. on moderate trade and demand, according to the Agricultural Marketing Service.

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

Last week, live prices were at $140-$142 in the Northern Plains and at $142-$143 in the western Corn Belt. Dressed prices were $225-$227 in Nebraska and $226 in the western Corn Belt.

Choice Boxed beef cutout value was $1.15 lower Tuesday afternoon at $269.93/cwt. Select was 25¢ lower at $259.21.

Stronger cash fed cattle prices helped Live Cattle futures close an average of 49¢ higher, except for 15¢ lower in the back two contracts.

Softer front-month Corn futures helped give Feeder Cattle a reprieve, closing an average of 69¢ higher, except for 2¢ land 5¢ lower in two contracts.

Corn futures closed 1¢ to 9¢ lower through new-crop contracts and then 1¢ to 5¢ higher.

Soybean futures closed mixed; fractionally lower to 1¢ higher through Nov ’22 and then mostly 7¢ to 9¢ higher.

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Major U.S. financial indices rallied Tuesday on mainly positive quarterly corporate earnings reports, a day of lower energy prices and positive news on the housing front.

Privately‐owned housing units authorized by building permits in March were 1.87 million, which was 0.4% more than the previous month and 6.7% more than the previous year, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

Privately‐owned housing starts in March were 1.79 million, which was 0.3% more than the previous month and 3.9% more than the previous year.

The Dow Jones Industrial Average closed 499 points higher. The S&P 500 closed 70 points higher. The NASDAQ was up 287 points.

West Texas Intermediate Crude Oil futures on the CME closed $4.58 to $5.65 lower through the front six contracts.

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“Beef heifer retention was lower coming into 2022, which suggests continued contraction in beef cow numbers. It is still early in the year, but beef cow slaughter through the end of March points to another year of heavy culling,” says Kenny Burdine, Extension livestock economist at the University of Kentucky. “The combination of dry weather and strong cull cow prices are likely to keep cows moving and encourage producers to pull the trigger a little sooner on those cows as they approach the end of their productive lives. This is definitely something to watch as we move through the current year, and it is hard to imagine that we won’t be discussing another decrease in beef cow numbers at the start of 2023.”

Burdine provides a perspective in the latest Cattle Market Notes Weekly. Year to date, through the end of March, he explains beef cow slaughter is 17% more than last year. Even if you adjust for paltry slaughter numbers during last year’s February ice storm, he notes beef cow slaughter is still more than 14% higher year over year.

By | April 19th, 2022|Daily Market Highlights|

Cattle Current Daily—April 19, 2022

Cattle futures closed lower Monday as Corn futures continued to rally 12¢ to 23¢ higher through old-crop and new-crop contracts, perhaps also buoyed by the slow planting pace.

According to the latest USDA Crop progress report, 4% of the corn is in the ground compared to 7% last year and the five-year average of 6%.

Feeder Cattle futures closed an average of $2.36 lower, while Live Cattle futures closed an average of 69¢ lower, except for 2¢ higher in the back contract.

For much of last week, Cattle futures got a boost from stronger negotiated cash fed cattle prices that were $1-$4 higher on a live basis, depending on the region at $139-$143/cwt. Dressed prices were $3-$5 higher at $225-$227.

On Monday, negotiated cash fed cattle trade ranged from inactive on light demand to a standstill, according to the Agricultural Marketing Service.

The five-area direct weighted average steer price last week was $141.02/cwt., which was $2.20 more than the previous week. The average steer price in the beef was $3.46 higher at $225.89.

Choice Boxed beef cutout value was $1.54 lower Monday afternoon at $271.08/cwt. Select was 56¢ higher at $259.46.

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Major U.S. financial indices edged lower in a volatile session Monday, as investors considered inflation, surging commodity markets and quarterly corporate earnings reports due out this week.

The Dow Jones Industrial Average closed 39 points lower, The S&P 500 closed fractionally lower. The NASDAQ was down 18 points.

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Reduced production and high prices will likely mean fewer U.S. beef exports this year, although exports are expected to remain at historically high levels.

Last year, U.S. beef exports comprised 12.3% of domestic production at 3.45 billion lbs. This year, USDA’s Economic Research Service (ERS) projects exports at 3.3 billion lbs., which would be 11.9% of production.

Globally, beef production is expected to grow this year and global beef trade is projected to continue at record levels, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

Specifically, in his weekly market comments, Peel says beef production this year is expected to grow in Brazil, China, India, Australia and Mexico. Projections anticipate reduced production in the U.S., Canada, the European Union (E.U.) and Argentina.

“Brazil is projected to be the largest beef exporting country again in 2022 with exports forecast to increase 12.1% year over year,” Peel says. “Brazil has been the largest beef exporting country for the last five years consecutively and the largest in 14 of the last 20 years after first becoming the largest exporting country in 2004. Brazil is projected to account for 22% of global beef exports this year.”

By way on contrast, Peel explains the U.S. is expected to be the second-largest global beef exporter this year. India is third largest and Australia will likely rank fourth. These four countries would represent about 60% of global beef exports this year, according to Peel.

On the other side of the scale, Peel says the U.S. is projected to be the second largest beef importer in the world behind China/Hong Kong. Much of the beef imported to the U.S. is lean trim used in ground beef blends.

“Although global beef trade is summarized in terms of total quantities, it is important to recognize that beef consists of many different products and most beef exports and imports are specific products moving between specific destinations for specific uses,” Peel says. “Trade in beef products helps balance both the overall quantity of beef and the preferred mix of beef products in various markets. Beef trade adds value for both exporters and importers and increases the total value of the global beef industry.”

By | April 18th, 2022|Daily Market Highlights|

Cattle Current Daily—April 18, 2022

Futures and equity markets were closed Friday, in observance of Good Friday. Through Thursday, from the previous Friday, Cattle futures were able to claw back some losses, supported by stronger cash sales and the continued seasonal increase in Choice wholesale beef value.

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

Live prices last week were $1 higher in the Southern Plains at $139/cwt., $2 higher in Nebraska at $140-$142, $3 higher in the western Corn Belt at $143 and $2-$4 higher in Colorado at $140-$142. Dressed prices were $4 higher at $226.

“It is not surprising that finished cattle prices increased this week as the April market tends to be strong and the highlight of the spring,” says Andrew P. Griffith, agricultural economist at the University of Tennessee (UT). “However, pessimism has started to set in due to the failure of the market to break out of its narrow trading range. As was said last week, it will still be difficult for finished cattle prices to exceed the high price experienced in February, but there is more of a chance now than last week. The hope is that prices push higher and even challenge the $145 price mark, which would be $2 higher than the $143 price in February.”

Estimated total cattle slaughter last week of 634,000 head was 37,000 head fewer than the previous week and 7,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 9.69 million head was 50,000 more than last year. Year-to-date estimated beef production of 8.1 billion lbs. was 61.8 million lbs. more than in 2021.

Choice boxed beef cutout value was $2.15 higher week to week on Friday at $272.62/cwt. Select was $1.43 lower at $258.90.

Live Cattle futures closed an average of $1.97 higher from the previous Friday through Thursday ($1.42 higher at the back to $2.85 higher at the front).

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Calf and feeder cattle prices sold mixed but with mainly more week-over-week strength through the gut of the country, based on weekly auctions monitored by Cattle Current.

As mentioned in Cattle Current last week, optimism remains for higher prices in the latter half of this year.

USDA’s Economic Research Service (ERS) increased the anticipated annual feeder steer price this year to $163/cwt., in the latest monthly Livestock, Dairy and Poultry Outlook.

“With higher placements in the first quarter, it is likely that calves that might have remained on pastures later in the year were pulled forward. As a result, from last month, tighter anticipated feeder cattle supplies in second-half 2022 will likely support elevated prices,” say ERS analysts.

The projected third-quarter average feeder steer price (basis 750-800 lbs. Oklahoma City) was raised $4 to $165; the fourth-quarter price was bumped $6 higher to $172.

In the meantime, though, an assortment of challenges continues to cap price potential, including higher feedlot placements last month, apparently induced by drought, and continued heavy beef production on the back of heavier fed cattle carcass weights and increased non-fed volume.

From the previous Friday through Thursday last week, Feeder Cattle futures closed an average of 97¢ higher (32¢ to $2.40 higher), gaining back about a third of the previous week’s losses. 

That was despite Corn futures closing an average of 17.9¢ higher through the front six contracts during the same period, about 50¢ higher over the last two weeks.

“Russia’s invasion of Ukraine, drought in the Southern Plains and Western U.S., high fertilizer prices, strong export demand, and the recent USDA Prospective Plantings report have all provided fuel to the rally,” explains Aaron Smith UT crop marketing specialist, in his weekly market comments. “The December contract has closed up 16 of the last 20 trading days. Prices are rapidly approaching the August 2012 high of $8.43 ¾. Prices will not go up forever, but right now there appears to be little that can slow the ascent in the short term.”

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CF Industries Holdings, Inc. (CF Industries) — a leading global manufacturer of hydrogen and nitrogen products — provided perspective to customers last week regarding ongoing supply chain disruptions that are adding an extra layer of heft to input prices.

CF Industries informed customers it serves by Union Pacific (UP) rail lines that railroad-mandated shipping reductions would result in nitrogen fertilizer shipment delays during the spring application season and that it would be unable to accept new rail sales involving Union Pacific for the foreseeable future.

UP shipping restrictions stem from efforts by that railroad to ease congestion, according to a letter to customers from Kenny Rocker, UP executive Vice President, marketing and sales.

“Over the last few weeks, our network has experienced some setbacks – including numerous service interruptions, crew shortages in select areas and delays to our network – as we have seen our operating inventory continue to climb over the past 60 days. This additional inventory has led to more congestion in yards, an imbalance of our resources, and further slowdown of our operational performance,” Rocker explains.

Among steps taken to ease congestion, Rocker cites the addition of 50 locomotives since January with 100 more to come, heavy recruitment and current training of 450 employees and asking come customers, like CF Industries, to voluntarily reduce their rail car inventories.

“If we do not see reductions to the operating inventory through their voluntary efforts, then we will begin metering traffic after April 18,” according to Rocker.

According to CF Industries, UP told it to reduce shipments by nearly 20% and that noncompliance will result in the embargo of its facilities by the railroad.

“The timing of this action by Union Pacific could not come at a worse time for farmers,” says Tony Will, CF Industries president and chief executive officer. “Not only will fertilizer be delayed by these shipping restrictions, but additional fertilizer needed to complete spring applications may be unable to reach farmers at all. By placing this arbitrary restriction on just a handful of shippers, Union Pacific is jeopardizing farmers’ harvests and increasing the cost of food for consumers.”

CF Industries believes it will still be able to fulfill delivery of product already contracted for rail shipment to Union Pacific destinations, albeit with likely delays. The company intends to engage directly with the federal government to ask that fertilizer shipments be prioritized so that spring planting is not adversely impacted.

CF Industries ships to customers via Union Pacific rail lines primarily from its Donaldsonville Complex in Louisiana and its Port Neal Complex in Iowa. The rail lines serve key agricultural areas such as Iowa, Illinois, Kansas, Nebraska, Texas and California. Products that will be affected include nitrogen fertilizers such as urea and urea ammonium nitrate as well as diesel exhaust fluid, an emissions control product required for diesel trucks. CF Industries is the largest producer of urea, urea ammonium nitrate and diesel exhaust fluid in North America. Its Donaldsonville Complex is the largest single production facility for the products in North America.

By | April 16th, 2022|Daily Market Highlights|

Cattle Current Daily—April 15, 2022

Cattle futures edged lower Thursday, amid light trade and likely positioning ahead of the holiday weekend — the CME is closed Friday in observance of Good Friday.

Live Cattle futures closed an average of 18¢ lower, except for 5¢ higher in the spot month and unchanged in Dec.

Feeder Cattle futures closed an average of 26¢ lower.

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

Soybean futures closed mixed, mostly 4¢ lower to 1¢ higher, except for 6¢ higher and fractionally higher in the front two contracts.

Negotiated cash fed cattle trade ranged from mostly inactive on light 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 $1 higher in the Southern Plains at $139/cwt., $2 higher in Nebraska at $140-$142, $3 higher in the western Corn Belt at $143 (a few up too $145) and $2-$4 higher in Colorado at $140-$142.

Dressed prices are $4 higher at $226; a few up to $231.

Choice Boxed beef cutout value was 50¢ lower Thursday afternoon at $271.86/cwt. Select was 34¢ lower at $259.71.

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Major U.S. financial indices closed lower Thursday, led by tech stocks, amid rising Treasury yield rates and fretting over steep inflation.

The Dow Jones Industrial Average closed 113 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 292 points

West Texas Intermediate Crude Oil futures (CME) closed $1.65 to $2.70 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) increased the anticipated annual feeder steer price this year to $163/cwt., in the latest monthly Livestock, Dairy and Poultry Outlook.

“With higher placements in the first quarter, it is likely that calves that might have remained on pastures later in the year were pulled forward. As a result, from last month, tighter anticipated feeder cattle supplies in second-half 2022 will likely support elevated prices,” say ERS analysts.

The projected third-quarter average feeder steer price (basis 750-800 lbs. Oklahoma City) was raised $4 to $165; the fourth-quarter price was bumped $6 higher to $172.

Based on elevated beef cow slaughter, it appears calf numbers will be less than previously thought going forward. Through the first quarter of this year, weekly, federally inspected (FI) beef cow slaughter averaged 18% higher year over year, while dairy cow slaughter declined 3%.

“Typically, cow slaughter would display this volume in the fourth quarter. However, higher feed costs, drought conditions plaguing much of the nation, and historically high prices for cull cows have cow-calf producers making further cuts to their herds,” say ERS analysts. “The macroeconomic situation has also changed from last year with higher fuel prices, feed costs, and operating costs that may be affecting producer decisions as well.”

Total FI non-fed cattle slaughter in the first quarter was the most since the mid-1980s.

ERS analysts point out 69% of the country was experiencing some level of drought the week of March 29, compared with about 63% the same week last year. That’s the widest drought coverage since about 67% in April 2013.

Spun another way, ERS analysts say 61% of the nation’s cattle inventory is in areas experiencing drought, compared to 35% at the same time last year.

“Based on the economic and environmental factors noted, expectations for cow and bull slaughter were raised in each quarter of 2022,” say ERS analysts. “Despite the highest cow slaughter volume typically occurring at the end of the year, the volume in fourth-quarter 2022 will likely not surpass the first quarter. The 2022 price forecast for live cutter cows was raised to $79/cwt. This is 22% above the 2021 average of $64.91 and the highest price since 2015.”

By | April 14th, 2022|Daily Market Highlights|

Cattle Current Daily—April 14, 2022

Negotiated cash fed cattle prices continued to gain ground Wednesday on slow trade and moderate demand, according to the Agricultural Marketing Service.

So far this week, live prices are $1 higher in the Southern Plains at $139/cwt., $2 higher in Nebraska at $140-$142, $3 higher in the western Corn Belt at $143 (a few up to $145) and $2-$4 higher in Colorado at $140-$142.

Dressed prices are $4 higher at $226; a few up to $231.

Choice Boxed beef cutout value was $1.11 lower Wednesday afternoon at $272.36/cwt. Select was $1.34 lower at $259.37.

Cash market strength helped Cattle futures once again.

Live Cattle futures closed an average of 53¢ higher (35¢ to $1.00 higher).

Feeder Cattle futures closed an average of 57¢ higher (30¢ to $1.02 higher).

That was despite Corn futures closing mostly 4¢ to 7¢ higher.

Soybean futures closed 4¢ to 5¢ higher in the front three contracts and then 1¢ to 2¢ lower.

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Major U.S. financial indices closed higher Wednesday, apparently buoyed by initial quarterly corporate earnings that beat expectations. That was despite the Consumer Price Index the previous day indicating the steepest inflation in four decades. It was also despite Wednesday’s monthly Producer Price Index registering the highest historical 12-month increase of 11.2%.

The Dow Jones Industrial Average closed 344 points higher. The S&P 500 closed 49 points higher. The NASDAQ was up 272 points

West Texas Intermediate Crude Oil futures (CME) closed $2.75 to $3.65 higher through the front six contracts.

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Consumers grew more comfortable preparing more meals at home through the pandemic and now health and wellness are becoming more significant drivers of their eating choices, according to America’s Health Pulse: Closing the Gap Between Wants and Needs, a new report from the NPD Group (NPD). Specifically, consumers are focusing more on customized diets, nutrient intake, and functional foods.

Wellness now directly impacts 21% of all eating occasions, amounting to billions of occasions annually, according to the report. With most meals sourced from home — a behavior established long before the pandemic — NPD expects wellness as a consumption driver to remain elevated into the foreseeable future.

Although consumers seek wellness overall, NPD analysts say they are homing in on specific areas. For example, the COVID-19 pandemic brought a new focus on the food-as-medicine movement. Concern over the highly contagious and potentially deadly virus led many to consider their food choices to help build immunity. The importance of strong immunity remains a top wellness focus from a holistic standpoint rather than specifically fighting the virus. Additionally, the aging boomer population is looking to food as medicine to find remedies to either cure or manage health conditions.  

Consumers customize their health and wellness eating goals with a variety of tools. These tools include social media and following social media influencers, personalized eating and fitness plans from healthcare providers or trainers, apps and technology-enabled exercise equipment, and forecasting health using genetic markers. 

“The pattern of consumer attention to health and wellness shows increasing awareness and adaptation across the board,” says Darren Seifer, NPD food and beverage industry analyst. “This means consumers no longer think of health and wellness as an add-on, but as an integrated part of how they live their lives; that, in turn, opens opportunity for brands to become a permanent solution.”

By | April 13th, 2022|Daily Market Highlights|

Cattle Current Daily—April 13, 2022

Negotiated cash fed cattle prices gained $1 in Kansas at $139/cwt. on active trade and good demand through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend there were also some early trades $2 higher in Nebraska and the western Corn Belt at $142.

Choice Boxed beef cutout value was $1.36 higher Tuesday afternoon at $273.47/cwt. Select was 42¢ higher at $260.71.

Stronger cash trade helped boost Cattle futures.

Live Cattle futures closed an average of 75¢ higher (62¢ to $1.50 higher), also supported by increasing open interest the past couple of days.

Feeder Cattle futures closed an average of 55¢ higher (22¢ to $1.10 higher) except for 15¢ lower and unchanged in the back two contracts.

That was despite another day of higher Corn futures.

As if they needed more help, Corn futures climbed 11¢ to 14¢ higher through Jly ‘23, boosted by President Biden’s announcement that the higher-blend 15% ethanol gas (E15) could be sold through the summer in an effort to curb rising fuel costs. Previously, E15 sales were prohibited during the summer months.

Soybean futures closed 14¢ to 22¢ higher.

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Major U.S. financial indices softened further Tuesday with the highest inflation since 1981, according to the latest Consumer Price Index (CPI) for all urban consumers from the U.S. Bureau of Labor Statistics. It increased 1.2% in March after rising 0.8% in February, up 8.5% over the last 12 months.

The Dow Jones Industrial Average closed 87 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 40 points

West Texas Intermediate Crude Oil futures (CME) closed $4.71 to $6.31 higher through the front six contracts.

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“With declining beef production and increased prices, 2022 will likely see a contraction of about 4% year over year in exports,” says Brenda Boetel, livestock economist at the University of Wisconsin-River Falls. “Although exports will be lower, they are still historically high and continue to be a supportive factor for cattle prices. The bigger trade concern currently for cattle is the indirect effects from decreased trade opportunities for poultry due to highly pathogenic avian influenza (HPAI) and the decreased export potential for pork due to lower imports from China.”

In the latest issue of In the Cattle Markets from the Livestock Marketing Information Center (LMIC), Boetel explains current HPAI impacts so far are less than the outbreak in 2014-15 when about 12% of the layer hens were lost and more than 50 countries imposed import restrictions on U.S. poultry leading to a 14% decline in broiler exports and a 4% decline in domestic broiler prices. She notes export restrictions today are different than in 2015, confined to regions of infection rather than the entire nation.

“If HPAI continues to expand, though the impact on trade will grow and hence the potential to impact beef prices will continue to increase,” Boetel explains. “Beef is the highest priced animal protein in the U.S., and given the expected decline in production due to lower numbers and continued strong trade, we will likely see continued increases in retail beef prices. Additional supplies of poultry or pork on U.S. grocery shelves will put downward pressure on those prices and will eventually transfer to cattle prices.”

By | April 12th, 2022|Daily Market Highlights|

Cattle Current Daily—April 12, 2022

Live Cattle futures closed an average of 66¢ higher Monday, receiving support from the major, performance-depressing winter storm moving toward the Northern Plains, and thoughts by some that cash cattle can crawl higher this week.

In the meantime, negotiated cash fed cattle trade ranged from limited on light demand to a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Live prices last week were at $138/cwt. in the Southern Plains and Colorado, at $138-$140/cwt. in Nebraska and at $140 in the western Corn Belt at $140. Dressed prices were $222.

Choice Boxed beef cutout value was $1.64 higher Monday afternoon at $272.11/cwt. Select was 4¢ lower at $260.29.

Strength in the Live pit helps drag Feeder Cattle futures an average of 34¢ higher, except for 25¢ lower in Aug.

Corn futures closed mostly 2¢ to 4¢ higher Monday, except for 4¢ and 2¢ lower in the front two contracts.

Incidentally, 32% of the winter wheat crop was rated as Good (29%) or Excellent (3%) in USDA’s Crop Progress report for the week ending April 10. That was 21% less than the same time last year. 36% was rated Poor (18%) or Very Poor (18%) compared to 17% the previous year.

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Major U.S. financial indices sank Monday as traders positioned ahead of Tuesday’s monthly Consumer Price Index and the beginning of corporate earnings season.

The Dow Jones Industrial Average closed 75 points lower. The S&P 500 75 closed points lower. The NASDAQ was down 299 points

West Texas Intermediate Crude Oil futures (CME) closed $2.80 to $3.97 lower through the front six contracts.

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Beef demand, especially demand for ground beef continues to boost cutter cow values.

For perspective, analysts with the Livestock Marketing Information Center (LMIC) say national cutter cow values were $75/cwt. to start the second quarter — the highest since late 2015 — and up from $52 at the beginning of the year.

“The five-year average of 2016-2020 averaged a cutter cow price of $55/cwt. nationally across all weights,” LMIC analysts explain, in the latest Livestock Monitor. “Other cow quality grade values have improved, as well. For instance, they note values for premium white cows, those fed a concentrated diet before heading to slaughter, are 25% higher than last year. Breaker (75% lean) cow prices are 29% higher year over year and prices for boner cows (85% lean) are up 14%.

Cow cutout values mirror the trajectory of cull cow prices.

“Last week, the boxed cow cutout was $230/cwt., 31% ahead of the five-year average and 21% higher than last year,” says LMIC analysts. “Strong demand for beef has helped support these numbers, as well as consumers buying more ground beef, seasonally. The cutout offers a snapshot of all the quality grades. 

“More specifically, trimmings from lean cows are fed into the ground 90% lean beef markets, which have seen higher prices since the summer of 2021. Lean 90% ground beef averaged $363/cwt., compared to the five-year average of $222. These prices are expected to remain elevated through summer because of time of year and the relative value of other beef products in the meat case.”

By | April 11th, 2022|Daily Market Highlights|

Cattle Current Daily—April 11, 2022

Corn and soybean futures climbed again Friday with confirmation of ending stock expectations in the World Agricultural Supply and Demand Estimates (see below).

Corn futures closed mostly 5¢ to 11¢ higher.

Soybean futures closed 35¢ to 43¢ higher in the front three contracts and then 18¢ to 29¢ higher.

Cattle futures traded in a narrow range, capped by grain market strength and signs of weakening beef prices.

Feeder Cattle futures closed narrowly mixed Friday, from an average of 34¢ lower to an average of 9¢ higher. Week to week on Friday, they closed an average of $2.97 lower ($1.25 to $6.75 lower), with most of the pressure in nearby contracts.

Live Cattle futures closed narrowly mixed, from an average of 16¢ lower to an average of 24¢ higher. Week to week on Friday, they closed an average of 83¢ lower, except for an average of 50 higher in three contracts.

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

Live prices last week were steady to $1 lower in the Southern Plains at $137-$138/cwt., steady in Nebraska at $138-$140 and generally $1-$3 lower in the western Corn Belt at $140. Dressed prices were steady at $222.

Estimated total cattle slaughter last week of 676,000 head was 37,000 head more than the previous week and 3,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 9.1 million head is 61,000 more than the same time last year. Estimated total year-to-date beef production of 7.6 billion lbs. is 72.9 million lbs. more than the same time last year.

Choice Boxed beef cutout value was 93¢ lower Friday afternoon at $270.47/cwt. Select was 89¢ lower at $260.33.

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Major U.S. financial indices closed mixed Friday with weekly losses as investors wrestled with higher inflation and interest rates.

The Dow Jones Industrial Average closed 137 points higher. The S&P 500 closed 11 points lower. The NASDAQ was down 186 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.98 to $2.23 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) left the expected five-area direct fed steer price this year unchanged from the previous month at $139.50/cwt., in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). That would be $17.10 more than in 2021. Prices are projected to be $139.25 in the first quarter, $139 in the second, $136 in the third and $143 in the fourth.

That’s with beef production estimated to be 140 million lbs. more than the previous month at 27.7 billion lbs., with higher expected first-quarter placements supporting increased fed cattle slaughter and with more expected non-fed cattle slaughter. The total would be 367 million lbs. less (-1.3%) than last year.

Projected total red meat and poultry production of 106.2 billion lbs. would be 624 million lbs. less (-0.58%) than last year.

Corn

ERS increased the expected 2021-22 season-average farm price for corn by 15¢ to $5.80/bu., based on observed prices to date. Ending stocks were unchanged at 1.44 billion bu. With an anticipated increase in corn used for ethanol production offsetting a reduction in feed and residual use.

Soybeans

ERS left the 2021-22 season-average farm price for soybeans unchanged at $13.25/bu. and the soybean meal price unchanged at $420/short ton, but increased the soybean oil price 2¢ to 70.0¢/lb. A lower soybean meal export forecast is offset by slightly higher domestic disappearance. Soybean ending stocks are projected at 260 million bushels, down 25 million from last month.

Wheat

ERS increased the season-average farm price for wheat 10¢ to $7.60/bu. Based on NASS prices reported to date and expectations for cash and futures prices for the remainder of 2021-22. That would be the highest price since 2012-13. That’s with projected stable supplies, lower domestic use, reduced exports and higher ending stocks.

By | April 10th, 2022|Daily Market Highlights|

Cattle Current Daily—April 8, 2022

Oversold conditions helped Cattle futures claw back a little more of recent losses.

Feeder Cattle futures closed an average of $1.57 higher, except for an average of 59¢ lower in the front two contracts.

That was with Corn futures gaining on likely positioning ahead of tomorrow’s month World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 3¢ to 9¢ higher.

Soybean futures closed mostly 22¢ to 26¢ higher.

Live Cattle futures closed an average of 62¢ higher, except for 12¢ lower in nearby Jun.

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

So far this week, live prices are steady to $1 lower in the Southern Plains at $137-$138/cwt., steady in Nebraska at $138-$140. Prices are $140 in the western Corn Belt, compared to the previous week’s $139-$143. There were also some live sales reported in Colorado for the first time in a long while at $138. Dressed prices so far this week are steady at $222.

Choice Boxed beef cutout value was 36¢ higher Thursday afternoon at $271.40/cwt. Select was 17¢ higher at $261.22.

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Major U.S. financial indices edged higher Thursday as investors wrestled with figuring out longer-term impacts of higher inflation and interest rates.

The Dow Jones Industrial Average closed 87 points higher. The S&P 500 closed 19 points higher. The NASDAQ was up 8 points.

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U.S. beef exports continued at a steamy pace in February, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 108,501 metric tons (mt) in February, up 5% from a year ago. Value of exports climbed 35% to $904.4 million, led by growth in key Asian and Latin American markets. Through the first two months of the year, exports increased 9% to 227,567 mt, while value soared 46% to $1.93 billion.

“Broad-based growth has become a recurring theme for U.S. beef exports, as international demand has never been higher and global supplies remain tight,” says USMEF President and CEO Dan Halstrom. “We anticipated a lift from COVID-related foodservice restrictions being eased in many destinations. This materialized late last year and in early 2022, although conditions still vary by country. While lockdowns in China and Hong Kong are certainly a setback for foodservice demand, those are the main exceptions as most countries have shifted to more of a living-with-COVID approach.”

February beef export value equated to $445.95 per head of fed slaughter, up 29% from a year ago. The January-February average was $474.87 per head, up 45%.

Pork exports trended lower year-over-year, as larger shipments to Mexico and Japan did not offset the continued decline in demand from China/Hong Kong.

February pork exports were 198,539 mt, down 17% from a year ago, while export value fell 14% to $541.3 million. Through February, exports were also down 17% in volume (407,347 mt) and 14% in value ($1.1 billion).

Going forward, Halstrom notes the sharp increase in European hog prices last month could lead to more opportunity for U.S. pork exports.

“Rarely have we seen so many outside forces creating headwinds for U.S. meat exports and such uncertainty in the global marketplace,” Halstrom says. “Yet consumer demand for high-quality beef, pork and lamb has proven resilient, and USMEF sees opportunities for further growth in both established and emerging markets.”

By | April 7th, 2022|Daily Market Highlights|

Cattle Current Daily—April 7, 2022

Slightly lower nearby Corn futures prices helped Feeder Cattle futures recover some lost ground Wednesday, closing an average of 86¢ higher, except for 55¢ lower in the back contract.

Corn futures closed unchanged to 3¢ lower through July ’23 and then fractionally higher to 2¢ higher.

Soybean futures closed mostly 6¢ to 12¢ lower.

Live Cattle futures closed an average of 57¢ higher (17¢ to $1.05 higher), supported by recently blooming wholesale beef prices.

However, Choice Boxed beef cutout value was 49¢ lower Wednesday afternoon at $271.04/cwt. Select was $1.85 lower at $261.05.

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

So far this week, prices are generally steady on a live basis at $138/cwt. in the Southern Plains and Colorado, $138-$140 in Nebraska and $140 in the western Corn Belt. Dressed prices are steady at $222.

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Major U.S. financial indices closed lower Wednesday, apparently due at least in part to the Fed’s recent hawkish comments regarding inflation and interest rates.

The Dow Jones Industrial Average closed 144 points lower. The S&P 500 closed 43 points lower. The NASDAQ was down 315 points.

CME Crude Oil futures on the CME were $3.90 to $5.73 lower through the front six contracts.

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“Cattle feeders who use distiller’s grains, primarily in the wet form, are closely watching ethanol production numbers, given the potential for ethanol plant slowdowns,” says Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln. “Over the past two years, distiller’s grain prices (as a percentage of corn price on a dry matter basis) have been very volatile due to both more movement in the corn market and ethanol idling.”

In the latest issue of In the Cattle Markets, Dennis explains current weekly ethanol production is near pre-COVID levels, even with higher corn prices.

“Since oil and ethanol are highly correlated, one would expect ethanol plants to continue to be profitable even at higher corn prices. However, Iowa State University Ethanol Profitability Tracker indicates the relative price increase in ethanol ($/gal.) have not been sufficiently high compared to the cost of corn ($/bu.). Net returns are calculated to be -$0.28/gal. of ethanol, its lowest level since last winter in the last run-up in grain prices,” according to Dennis.

Dennis points out distillers’ grains generally are fed up to a 40% inclusion but the level and type of distiller’s grain used can vary, given local availability. Obviously, he explains increasing prices for corn and distillers grains increase feedlot cost of gain.

Prior to USDA’s cattle-bearish Prospective Plantings report, Dennis notes CME Live Cattle futures were trending higher. “Since the release, Live Cattle prices have eroded between $2-4/cwt. with larger declines occurring in more nearby months. This is further narrowing profit margins,” he says.

By | April 6th, 2022|Daily Market Highlights|

Cattle Current Daily—April 6, 2022

Soybean and corn futures gained Tuesday with stronger demand and bearish weather conditions in South America. Corn futures closed 3¢ to 9¢ higher. Soybean futures were up 7¢ to 28¢.

That weighed on Cattle futures once again, with Feeder Cattle an average of $2.26 lower and Live Cattle down an average of $1.21. So far today, they’re gaining some of that back.

Negotiated cash fed cattle prices continued mainly steady Tuesday with live prices at $138-$140/cwt. in Nebraska and dressed prices at $222, on moderate trade and demand, according to the Agricultural Marketing Service.

So far this week, live prices are steady in the Southern Plains at $138 and $140 in the western Corn Belt.

Choice Boxed beef cutout value was $3.49 higher Tuesday afternoon at $271.53/cwt. Select was $1.20 higher at $262.90.

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Major U.S. financial indices lost ground Tuesday. Federal Reserve Governor Lael Brainard spoke at a conference where she indicated the central bank is ready to implement additional tightening to tackle inflation. Brainard noted the effects of inflation are worse for working families, who spend proportionally much more of their income on basic necessities – up to 77% for lower income families.

The Dow Jones Industrial Average closed 281 points lower. The S&P 500 closed 58 points lower. The NASDAQ was down 328 points.

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Agricultural producer sentiment slipped last month, according to the Purdue University/CME Group Ag Economy Barometer. It was down 12 points from the previous month and 26% less year over year at 113. That was the lowest since March 2020.

The Index of current conditions was 19 points lower at 113; 44% less than a year earlier. The Index of Future Expectations was 9 points lower at 113, which was 31% less than the same time last year.

“Concern about the war’s impact on input prices and input availability on their farming operations was paramount in the minds of producers responding to the March survey and was a major factor in this month’s decline in sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The March survey provided the first opportunity to ask producers how they expect the war in Ukraine to affect U.S. agriculture. Producers overwhelmingly said they expect input prices to be most affected (63% of respondents), followed by crop prices (33% of respondents), and livestock prices (3% of respondents). Responding to a related question, 19% of respondents chose “availability of inputs” as their primary concern this year, which was equal to the percentage of producers who chose “lower crop and/or livestock prices” as their biggest concern.

Relative to input prices, 57% expect them to increase by 20% or more and 36% think input prices will rise by 30% or more. Just more than 25% say they’ve had difficulty purchasing crop inputs for the 2022 crop season. Producers report that supply chain problems persist across a wide range of inputs with herbicides, fertilizer, and farm machinery parts posing the most problems.

Agricultural Producers continue to say that they expect their operation’s financial performance to decline in 2022 compared to 2021. The March Farm Financial Performance Index, which asks producers whether they expect their farm’s financial performance in 2022 to be better than, worse than or about the same as in 2021, was up slightly (4 points) at a reading of 87, but remains 30% lower than a year earlier.

“When producers think about how their farm will fare financially in 2022, it’s clear they do not expect commodity price strength to offset the dramatic rise in farm production costs they are experiencing,” Mintert says.

By | April 6th, 2022|Daily Market Highlights|

Cattle Current Daily—April 5, 2022

Feeder Cattle futures were pressured sharply lower by rising feed costs once again Monday.

Feeder Cattle futures closed an average of $2.29 lower ($1.50 lower toward the back to $3.65 lower toward the front).

Corn futures closed mostly 7¢ to 15¢ higher

Soybean futures closed mostly 22¢ to 31¢ higher.

Live Cattle futures, closed an average of 55¢ lower, except for 17¢ higher in away Apr.

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

Live prices were at $138/cwt. In the Southern Plains, $138-$140 in Nebraska and $139-$143 in the western Corn Belt at $139-$143. Dressed prices were $222.

The five-area direct average steer price was 37¢ higher at $139.32/cwt. The average steer price in the beef was 15¢ higher at $222.61.

Choice boxed beef cutout value was 90¢ higher Monday afternoon at $268.04/cwt. Select was 82¢ lower at $261.70.

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

The Dow Jones Industrial Average closed 103 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 271 points.

West Texas Intermediate Crude Oil futures on the CME closed an average of $3.78 higher.

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Declining beef and pork production may offset increased broiler production and lead to a decrease in total meat production in 2022, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his week market comments. He explains the current forecast from the Livestock Marketing Information Center (LMIC) pegs Beef production this year at 27.39 billion lbs., which would be 2.2% less than last year.

LMIC forecasts total red meat and poultry production at 106.25 billion lbs., which would be slightly less than last year.

If realized, Peel says it would be the first decrease in total meat production since 2014, following seven consecutive years of increasing production. 

“High feed prices will impact all livestock industries and may moderate meat production going forward,” Peel explains. “Feed costs increased significantly in 2021 and will push even higher in the coming months. Beef will be additionally impacted by drought conditions and reduced production of pasture and hay. Drought may impact the timing of beef production with drought liquidation potentially increasing beef production temporarily but leading to a larger decline in beef supplies later.”

 

By | April 5th, 2022|Daily Market Highlights|

Cattle Current Daily—April 4, 2022

Grain markets Friday continued to adjust to the previous day’s Prospective Plantings report.

Soybean futures closed 5¢ to 35¢ lower across the board on more planted acres than expected.

New-crop Corn futures mostly gained again Friday, mostly 4¢ to 7¢ higher on fewer anticipated acres.

Rising feed costs once again helped pressure Feeder Cattle futures an average of $1.61 lower, except for 18¢ higher in spot April.

Cash calves and feeder cattle sold mixed last week, based on weekly auctions monitored by Cattle Current — mainly higher early, driven by demand for grass-suited cattle and then with more pressure later in the week with another bounce higher in Corn and full-to-the-brim feedlots.

“Feedlots will have plenty of cattle to market for another few months, but tighter placements are ahead and feedlot production will decline in the second half of the year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “If drought conditions persist, feedlots may perhaps continue to borrow against the future with early-weaned calves available through the spring and summer before facing the full reality of tighter feeder cattle supplies. On the other hand, if drought conditions abate, higher cattle prices might result in increased heifer retention by the end of the year, thereby squeezing feeder supplies even more and more quickly.”

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

Live prices last week were steady in the Southern Plains at $138/cwt., steady to $2 higher in Nebraska at $138-$140/cwt. And $1-$2 higher in the western Corn Belt at $140-$143. Dressed prices were $1 higher in Nebraska at $222 and steady to $3 lower in the western Corn Belt at $222.

Estimated total cattle slaughter last week of 639,000 head was 20,000 head fewer than the previous week. Estimated year-to-date total cattle slaughter of 8.39 million head was 29,000 head more.

Estimated year-to-date beef production of 7.03 billion lbs. was 47.4 million lbs. more.

Live Cattle futures, closed an average of 64¢ lower, except for 10¢ to 30¢ higher in the back two contracts, challenged by volatile markets and the looming bulge in second-quarter fed cattle supplies amid limited shackle space once again.

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Major U.S. financial indices edged higher Friday, despite a slightly gloomier jobs report than anticipated.

Total non-farm payroll employment increased by 431,000 month-to-month in March, according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 140 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 41 points.

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Wholesale beef prices continue their seasonal push higher.

Choice boxed beef cutout value was $12.42 higher week to week on Friday at $267.14/cwt. Select was $13.41 higher at $262.52.

Beyond seasonal beef prices, consumers will continue to face sharp increases in retail meat prices.

“Relative to 2019, beef retail prices are projected to be 26% higher this year, with pork up 21% and chicken 18% more expensive,” according to the 2022 Agricultural Outlook from the Food and Agricultural Policy Institute (FAPRI) at the University of Missouri. “To this point consumers have continued to spend their dollars on meat, particularly higher-value products, but the risk of some consumers being priced out of the market is increasing. With energy and other goods taking a larger share of consumer finances, recent meat demand strength could be tested given projected price levels.”

Although meat prices have driven the trend toward higher food inflation, FAPRI analysts explain prices for other food products are also increasing.

“Even if food inflation slows in the months ahead, the annual rate for 2022 is likely to be the highest since 2008,” says Patrick Westhoff, FAPRI director. “Higher farm commodity and energy prices caused by the Ukraine war could make it more difficult for consumer food price inflation to return to normal levels in the near term.

By | April 3rd, 2022|Daily Market Highlights|

Cattle Current Daily—April 1, 2022

Corn futures closed sharply higher and Soybean futures closed sharply lower Thursday, all fueled by the Prospective Plantings and quarterly Grain Stock reports from USDA (see below).

Corn futures closed 20¢ to 27¢ higher in new-crop contracts.

Soybean futures closed 36¢ to 49¢ lower through Sep ‘23 and then 23¢ to 27¢ lower.

The sharp bounce higher in Corn futures helped push Feeder Cattle futures an average of $2.25 lower, except for 7¢ lower in expiring Mar.

Sharply lower outside markets helped pressure Live Cattle an average of 49¢ lower, except for unchanged in away Apr.

Negotiated cash fed cattle trade was slow to moderate on good demand in Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service.

Live prices were steady to $2 higher than last week in Nebraska at $138-$140/cwt. Dressed prices were $1 higher at $222.

In the western Corn Belt, live prices were $1-$2 higher at $140-$143. Dressed prices there last week were $221-$225.

So far this week, live prices are steady in the Southern Plains at $138.

Choice Boxed beef cutout value was $1.35 higher Thursday afternoon at $268.39/cwt. Select was $4.88 higher at $262.34.

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Major U.S. financial indices sank Thursday, with the end of the month and quarter, and as 2-year and 10-year Treasury yields inverted, which some view as signal of coming recession.

The Dow Jones Industrial Average closed 550 points lower. The S&P 500 closed 72 points lower. The NASDAQ was down 221 points.

West Texas Intermediate Crude Oil futures on the CME closed $4.26 to $7.54 lower through the front six contracts.

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USDA’s Prospective Plantings report drove grain markets Thursday with significantly fewer corn acres than many expected and significantly more soybean acres.

Corn planted area for all purposes in 2022 was estimated at 89.5 million acres, down 4% or 3.87 million acres from last year. Planted acreage is expected to be down or unchanged in 43 of the 48 estimating States.

Corn stocks in all positions on March 1, of 7.85 billion bu. were 2% more than a year earlier, according to USDA’s quarterly Grain Stocks report. Of the total stocks, 4.08 billion bu. were stored on farms, up 1% from a year earlier. Off-farm stocks of 3.77 billion were 3% more than the previous year.

Soybean planted area for 2022 was estimated at a record 91.0 million acres, up 4% from last year. Compared with last year, planted acreage is up or unchanged in 24 of the 29 estimating States.

Soybeans stored in all positions on March 1 totaled 1.93 billion bu., up 24% year over year. Soybean stocks stored on farms were estimated at 750 million bu., up 26% from a year ago. Projected off-farm stocks of 1.18 billion bu. were 22% more than last March.

All wheat planted area for 2022 was estimated at 47.4 million acres, up 1% from 2021. If realized, this represents the fifth lowest all wheat planted area since records began in 1919.

All wheat stored in all positions March 1 totaled 1.02 billion bu., down 22% from a year earlier. On-farm stocks were estimated at 174 million bu., down 39% from last March. Off-farm stocks of 850 million bushels were 17% less. 

All hay harvested area this year is projected at 50.33 million acres, which would be 404,000 fewer acres than last year.

By | March 31st, 2022|Daily Market Highlights|

Cattle Current Daily—March 31, 2022

Cattle futures closed mostly lower Wednesday, under pressure from higher grain futures prices, but they retained the majority of the previous day’s gains.

Feeder Cattle futures closed an average of 92¢ lower (50¢ to $1.32 lower), giving back about a third of what was gained in the previous session.

Live Cattle futures closed an average of 47¢ lower, except for an average of 6¢ higher in three contracts.

Rising Grain futures prices on the day were likely due in part to Russia’s continued bombardment on Ukraine, despite optimism surrounding ceasefire talks a day earlier.

Corn futures closed mostly 3¢ to 5¢ higher, except for 11¢ higher in the front two contracts.

Soybean futures closed mostly 13¢ to 21¢ higher.

Negotiated cash fed cattle trade was moderate on moderate demand in the Southern Plains through Wednesday afternoon at steady money of $138/cwt., according to the Agricultural Marketing Service.

Elsewhere, trade ranged from slow on light demand to limited on light demand with too few transactions to trend. There were a few early live trades in Nebraska at $138-$140. Live prices there last week were $138; $221 in the beef. Live and dressed prices in the western Corn Belt last week were $138-$142 and 221-$225, respectively.

Choice Boxed beef cutout value was $2.04 higher Wednesday afternoon at $266.54/cwt. Select was $2.62 higher at $257.46.

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Major U.S. financial indices softened Wednesday, pressured by tech stocks and another day of higher oil prices. West Texas Intermediate Crude Oil futures (CME) closed $3.43 to $3.67 higher in the front six contracts.

The Dow Jones Industrial Average closed 65 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 177 points.

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Depending on your particular leanings, details released earlier this week regarding a previously announced modification to the Cattle Price Discovery and Transparency Act does little to appease opponents or proponents.

For those opposed, regional mandates remain, dictating specific levels of cash trade, thereby also dictating how many cattle producers can market by various means.

On the other hand, those in favor of mandates likely are disappointed at the relatively innocuous penalty proposed for packers who violate the mandated cash minimum.

According to Senator Deb Fischer’s (R-Neb.) office, who introduced the modified bill with fellow Senators, Chuck Grassley (R-Iowa), Jon Tester (D-Mont.) and Ron Wyden (D-Ore.), the updated bill would:

Require the Secretary of Agriculture to establish five to seven regions encompassing the continental U.S. and then establish minimum levels of fed cattle purchases made through approved pricing mechanisms. Approved pricing mechanisms are fed cattle purchases made through negotiated cash, negotiated grid, at a stockyard, and through trading systems that multiple buyers and sellers regularly can make and accept bids.

Establish a maximum penalty for covered packers of $90,000 for mandatory minimum violations. Covered packers are defined as those packers that during the immediately preceding five years have slaughtered five percent or more of the number of fed cattle nationally.

The bill also includes provisions to create a publicly available library of marketing contracts, mandating box beef reporting to ensure transparency, expediting the reporting of cattle carcass weights, and requiring a packer to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days. The contract library would be permanently authorized and specify key details about the contents that must be included in the library like the duration of the contract and provisions in the contract that may impact price such as schedules, premiums and discounts, and transportation arrangements.

As debate continues, surely all on both sides recognize price improvements and narrowing packer margins as cattle markets continue to rebalance and normalize following the extreme shocks of the past few years. Markets reacted as economics expected them to during the shocks and are now in the aftermath.

“Supply and demand has already driven the cattle markets back into balance without the radical government interference and convoluted mandates called for in the latest draft of the Grassley-Fischer bill. “Make no mistake, the bill still contains government mandates directing how producers market their cattle,”says Meat Institute President and CEO Julie Anna Potts. “If this bill becomes law, there will be cattle producers who want alternative marketing arrangements but will instead be forced to sell on the cash-market, and the industry will turn back time to the days of commodity cattle, or worse, to government-controlled markets.”

Potts shared an observation made by Stephen Koontz, agricultural economist at Colorado State University, during the recent American Farm Bureau Federation Annual Convention: “Mandated cash trade is not going to get you better price discovery. It’s going to put a $50 cost on calves impacted.” Ultimately, the cost likely would be borne by cow-calf producers.

By | March 30th, 2022|Daily Market Highlights|

Cattle Current Daily-March 30, 2022

Continuing optimism about a ceasefire between Russia and Ukraine helped drag grain futures sharply lower again Tuesday.

Corn futures closed 7¢ to 22¢ lower through Jly ‘23 and then 2¢ to 7¢ higher.

Soybean futures closed 12¢ to 23¢ lower through Jly ‘23 and then mostly 6¢ to 10¢ lower.

The continued break in grains helped boost Cattle futures.

Feeder Cattle futures closed an average of $2.62 higher (60¢ to $4.32 higher).

Live Cattle futures closed an average of 86¢ higher.

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

Live prices last week were at $138/cwt. in the Southern Plains and Nebraska and at $138-$142 in the western Corn Belt. Dressed prices were $221 in Nebraska and $221-$225 in the western Corn Belt.

Choice Boxed beef cutout value was 63¢ higher Tuesday afternoon at $264.50/cwt. Select was $1.48 lower at $254.84.

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Major U.S. financial indices closed higher Monday, apparently buoyed by signs of optimism regarding peace talks between Russia and Ukraine.

The Dow Jones Industrial Average closed 338 points higher. The S&P 500 closed 56 points higher. The NASDAQ was up 264 points.

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RaboResearch analysts expect higher corn, soybean and wheat prices to continue along a higher plane, according to a new report.

While the sudden shutdown of trade in the Black Sea region has sent corn and wheat prices to their highest in a decade, the 10-year outlook for all major crops has shifted up to a new price level, according to the report, which cites transformative geo-political changes, continued increases in demand and limited acreage availability as the drivers.

RaboResearch analysts explain the war in Ukraine effectively closed trade routes shipping agricultural products grown from the Black Sea region to other parts of the world. Continuing conflict will cut supplies of corn and wheat available to the global market. RaboResearch expects the U.S. to increase its exports to help fill the gap, which should increase prices paid to farmers. According to their analysis, a 200 million bushel increase in exports for each commodity would increase the 2022-23 average on-farm price for corn by approximately 13% and wheat by approximately 50%.

Figuring an increase of 200 million bu., and accounting for local basis, RaboResearch estimates the 2022-23 average on-farm price for corn at $5.77/bu.; $10.50 for wheat.

This year’s report is the first annual outlook from the organization to incorporate the expected expansion of U.S. soybean crush capacity into the 10-year acre and price estimates. Fueled by the growing demand for soybean oil as an ingredient for renewable diesel, RaboResearch analysts say crush capacity expansion is an important transformation driving long-term commodity prices to a higher level.

By | March 29th, 2022|Daily Market Highlights|

Cattle Current Daily—March 29, 2022

All things considered, Monday’s action in Cattle futures might be considered a victory of sorts, given the bearish placements in the latest Cattle on Feed report, although it tightens cattle supplies further down the line.

Feeder Cattle futures closed an average of 29¢ lower amid light trade.

Live Cattle futures closed an average of 44¢ lower.

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

Live prices last week were at $138/cwt. in the Southern Plains and Nebraska and at $138-$142 in the western Corn Belt. Dressed prices were $221 in Nebraska and $221-$225 in the western Corn Belt.

The five-area direct average steer price was 15¢ lower at $138.95/cwt. The average steer price in the beef was 22¢ lower at $221.46.

Choice Boxed beef cutout value was $1.23 higher Monday afternoon at $263.87/cwt. Select was $4.18 higher at $256.32.

Grain futures softened Monday, led by wheat and soybeans, apparently with more optimism regarding a resolution to Russia’s war on Ukraine.

Soybean futures closed 16¢ to 46¢ lower.

Corn futures closed 2¢ to 5¢ lower through Jly ‘23 and then 3¢ lower to 3¢ higher.

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Major U.S. financial indices closed higher Monday, led. By tech stocks and perhaps emboldened by continued peace talks between Russia and Ukraine.

The Dow Jones Industrial Average closed 94 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 185 points.

West Texas Intermediate Crude Oil futures (CME) closed $5.50 to $7.94 lower in the front six contracts.

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“Feedlots will have plenty of cattle to market for another few months, but tighter placements are ahead and feedlot production will decline in the second half of the year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “If drought conditions persist, feedlots may perhaps continue to borrow against the future with early-weaned calves available through the spring and summer before facing the full reality of tighter feeder cattle supplies. On the other hand, if drought conditions abate, higher cattle prices might result in increased heifer retention by the end of the year, thereby squeezing feeder supplies even more and more quickly.”

Noting the 9.3% increase in February feedlot placements revealed in Friday’s Cattle on Feed report, Peel says the bulge will likely be offset by sharply lower placements in March.

By | March 28th, 2022|Daily Market Highlights|

Cattle Current Daily—March 28, 2022

Total cattle slaughter for this year surpassed the previous year’s year-to-date total last week.

Estimated total cattle slaughter last week of 659,000 head was 15,000 more than the previous week and 10,000 head more than the same time last year. Estimated total year-to-date cattle slaughter of 7.76 million head was 2,000 head more year over year.

Estimated year-to-date beef production of 6.51 billion lbs. was 20.9 million lbs. more (+0.3%) than the same time last year.

Those numbers speak to apparently mostly recovered packing capacity and the massive numbers of cattle on feed. Judging by the latest Cattle on Feed report (see below), increased production will continue in the near term.

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

Live prices last week were steady in the Southern Plains and Nebraska at $138/cwt. and steady to $1 lower in the western Corn Belt at $139-$142. Dressed prices were steady in Nebraska at $221 and steady to $1 lower in the western Corn Belt at $221.

Feeder Cattle futures closed an average of 88¢ lower Friday (35¢ to $1.17 lower), pressured by grain futures and perhaps some prescient trepidation about the Cattle on Feed report (see below).

Corn futures closed mostly 2¢ to 3¢ higher, while Soybean futures closed mostly 3¢ to 7¢ higher.

Live Cattle futures closed an average of 45¢ higher in the front four contracts and then an average of 12¢ lower, except for 12¢ higher in away Apr.

Choice Boxed beef cutout value was 23¢ higher Friday afternoon at $262.64/cwt. Select was 45¢ lower at $252.14. Week to week, Choice was $4.48 higher and Select was $1.49 higher. 

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Major U.S. financial indices closed the week mainly higher Friday.

The Dow Jones Industrial Average closed 153 points higher. The S&P 500 closed 22 points higher. The NASDAQ was down 22 points.

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Cattle markets likely will start the week on a dour note, pressured by USDA’s monthly Cattle on Feed report issued Friday (feedlots with 1,000 head or more capacity).

February placements of 1.85 million head were a staggering 9.3% more (+157,000 head) year over year. That was 3% more than average analyst estimates ahead of the report, underscoring expanding drought impacts.

In terms of placement weights, 37.1% went on feed weighing 699 lbs. or less, 52.6% weighing 700-899 lbs. and 10.3% weighing 900 lbs. or more.

Marketings in February of 1.82 million head were 4.9% more (+86,000 head) than the prior year, which was 0.6% more than estimated ahead of the report.

Cattle on feed March 1 of 12.16 million head were 1.4% more (+163,000 head) than the same time last year. That was 0.3% more than expectations and the most on feed for the date since the data series began in 1996.

By | March 27th, 2022|Daily Market Highlights|

Cattle Current Daily—March 25, 2022

Cattle futures gained a little ground Thursday with softer Corn futures. Positioning ahead of Friday’s Cattle on Feed report could have also played a role.

Feeder Cattle futures closed an average of 57¢ higher except for unchanged in the back contract.

Live Cattle futures closed an average of 32¢ higher.

Grain futures backed up a pace, pressured in part by bearish weekly U.S. export sales and perhaps some skittishness over next week’s Planting Intentions report.

Corn futures closed 4¢ to 9¢ lower through Jly ’23 and then mostly 1¢ to 5¢ higher.

Soybean futures closed 13¢ to 18¢ lower through Jan ’23 and then unchanged to 10¢ lower.

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

So far this week, live prices are steady in the Southern Plains and Nebraska at $138/cwt. and steady to $1 lower in the western Corn Belt at $139-$142. Dressed prices are steady in Nebraska at $221 and steady to $1 lower in the western Corn Belt at $221.

Choice Boxed beef cutout value was 81¢ higher Thursday afternoon at $262.41/cwt. Select was 65¢ lower at $252.59.

Net U.S. beef export sales of 27,500 MT (2022) for the week ending March 17 were a marketing-year high, according to the U.S. Export Sales report. Sales were 40% more than the previous week and 29% more than the prior four-week average.

Increases were primarily for South Korea, China, Japan, Hong Kong and Taiwan.

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Major U.S. financial indices continued what has become the daily back and forth seesaw, to the upside this time. Positive news included the fewest weekly initial unemployment insurance claims since September 1969 at 187,000.

The Dow Jones Industrial Average closed 349 points higher. The S&P 500 closed 63 points higher. The NASDAQ was up 269 points.

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A new agreement should further enhance U.S. beef exports to Japan.

United States Trade Representative (USTR) Katherine Tai and United States Secretary of Agriculture Tom Vilsack announced yesterday that the United States and Japan reached an agreement to increase the beef safeguard trigger level under the U.S.-Japan Trade Agreement. The new three-trigger safeguard mechanism will allow U.S. exporters to meet Japan’s growing demand for high-quality beef and reduce the probability that Japan will impose higher tariffs in the future.

U.S. beef exports to Japan exceeded 320,000 metric tons in 2021 and set a new value record at $2.38 billion. But U.S. beef was subject to a higher tariff than its competitors for 30 days, from mid-March to mid-April, after imports exceeded the safeguard volume, according to the U.S. Meat Export Federation (USMEF).

“USMEF greatly appreciates the efforts of USTR and USDA to adjust Japan’s safeguard on U.S. beef. The U.S.-Japan Trade Agreement was a tremendous breakthrough for the U.S. meat industry, including the significant reduction in Japan’s tariffs on U.S. beef, but the playing field has not been entirely level due to this safeguard. The changes announced today reduce the potential impact of the safeguard and make it less disruptive for U.S. exporters and their customers in Japan,” explains Dan Halstrom, USMEF president and CEO.

“This is a win-win for American ranchers and Japanese consumers,” says United States Ambassador to Japan, Rahm Emanuel. “It ensures certainty for years and shows American beef can compete and win anywhere anytime.”

By | March 24th, 2022|Daily Market Highlights|

Cattle Current Daily—March 24, 2022

Negotiated cash fed cattle prices were steady Wednesday at $138/cwt. on a live basis in the Southern Plains (slow trade and light demand) and Nebraska (moderate trade and good demand), according to the Agricultural Marketing Service. Dressed prices were also steady in Nebraska at $221.

Trade was limited on light demand in the western Corn Belt with a few dressed sales at $221, but too few to trend. Last week, prices were $140-$142 on a live basis and $222 in the beef.

Choice Boxed beef cutout value was $1.63 higher Wednesday afternoon at $261.60/cwt. Select was $1.35 higher at $253.24.

Cattle futures mainly batted on either side of steady, pressured by rising feed costs, steady cash and lower outside markets, but supported by strengthening wholesale beef prices.

Feeder Cattle futures closed an average of 40¢ higher (2¢ to $1.20 higher) except for unchanged to 22¢ lower in three contracts.

Live Cattle futures closed an average of 25¢ higher except for unchanged in spot Apr and 7¢ lower toward the back.

Corn futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed 10¢ to 227¢ higher through Nov ’22 and then mostly 5¢ to 6¢ higher.

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Major U.S. financial indices closed sharply lower Wednesday, as oil and other commodity prices continued to climb. 

The Dow Jones Industrial Average closed 448 points lower. The S&P 500 closed 55 points lower. The NASDAQ was down 186 points.

West Texas Intermediate Crude Oil futures (CME) were $3.62 to $5.66 higher in the front six contracts.

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Consumers are more comfortable shopping and dining in person, although some pandemic behaviors appear to be lasting, according to a recent RaboResearch report. Among the highlights:

Foodservice demand is demonstrating excellent resilience with increased food traffic at dine-in establishments.

Where consumers previously grabbed breakfast on-the-go, they now pop out for lunch while at home, and there are somewhat fewer evening dinners and drinks, so long as people are working from home.

Consumption of food at home has sustained strong demand above pandemic levels, bolstered by higher average spend (inflation included), the return of in-person shopping (to 2019 levels), and structurally higher online grocery orders.

Inflation is driving consumers to discount grocers, driving growth in share of traffic. On the opposite end, foot traffic at premium and natural stores remains far from the good old times.

Online groceries seem to have reached a steady cap of 2.8 orders per month per active client, still significantly above pre-pandemic levels but below the levels of the initial months of hoarding. The average order amount is 16% higher than pre-pandemic, as clients add more items to their virtual carts.

By | March 23rd, 2022|Daily Market Highlights|

Cattle Current Daily—March 23, 2022

Grain and Soybean futures extended the previous session’s gains Tuesday with Corn futures closing mostly 2¢ to 6¢ higher and Soybean futures closing 5¢ to 7¢ higher.

Stronger Grain futures continued to cap Cattle futures.

Feeder Cattle futures closed an average of 40¢ lower, except for 22¢ higher in spot Mar.

Live Cattle futures closed an average of 39¢ lower.

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

Live prices last week were at $138/cwt. in the Southern Plains and Nebraska and at $140 in the western Corn Belt. Dressed prices were at $221 in Nebraska at $222 and in the western Corn Belt.

Choice Boxed beef cutout value was $1.47 higher Tuesday afternoon at $259.97/cwt. Select was 61¢ lower at $251.89.

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Major U.S. financial indices rebounded Tuesday, helped along by bank stocks with rising interest rates.

The Dow Jones Industrial Average closed 254 points higher. The S&P 500 closed 50 points higher. The NASDAQ was up 270 points.

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Although short-run fed cattle supplies are less than a year ago, Matthew Diersen, risk and business management specialist at South Dakota State University says packer forward contracting of cattle is also less.

“Seasonally, this is the time of year when packers tend to try to have a larger share of cattle forward contracted for delivery. As a result, April through June tends to have larger shares contracted than other months,” Deirsen says, in the latest issue of In the Cattle Markets. “As of March 14, 2022, feedlots had contracted 235,000 cattle for delivery in April and 139,000 head for June. A year ago at this time of year, there had been 271,000 head contracted for April and 170,000 for June. Thus, the contracting pace is running behind last year’s levels. In other words, packers do not have as many cattle lined up even though short-run supplies of cattle on feed are similar to a year ago.”

By | March 22nd, 2022|Daily Market Highlights|

Cattle Current Daily—March 22, 2022

Grain and Soybean futures pressed higher Monday with support from higher crude oil prices and the lingering Russian war on Ukraine.

Corn futures closed 12¢ to 18¢ higher through Sep ‘23 and then mostly 6¢ to 8¢ higher.

Soybean futures closed mostly 20¢ to 24¢ higher.

Loftier grain futures helped pressure Feeder Cattle futures an average of $1.12 lower, while the upturn on wholesale beef prices helped Live Cattle to a mixed close, from 36¢ lower across the front half to an average of 28¢ higher.

Negotiated cash fed cattle 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.

Live prices last week were at $138/cwt. in the Southern Plains and Nebraska and at $140 in the western Corn Belt. Dressed prices were at $221 in Nebraska at $222 and in the western Corn Belt.

The five-area direct average steer price last week was 80¢ higher at $139.10/cwt. The average steer price in the beef was $1.57 higher at $221.68.

Choice Boxed beef cutout value was 34¢ higher Monday afternoon at $258.50/cwt. Select was $1.85 higher at $252.50.

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Major U.S. financial indices pivoted Monday to close lower, following Federal Reserve Chair, Jerome Powell’s hawkish inflation comments at the 38th Annual Economic Policy Conference of the National Association for Business Economics.

“We will take the necessary steps to ensure a return to price stability. In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well,” Powell explained. “…“The median projection that accompanied last week’s 25 basis point rate increase shows the federal funds rate at 1.9% by the end of this year and rising above its estimated longer-run normal value in 2023. The latest FOMC statement also indicates that the Committee expects to begin reducing the size of our balance sheet at a coming meeting. I believe that these policy actions and those to come will help bring inflation down near 2% over the next three years.”

The Dow Jones Industrial Average closed 201 points lower. The S&P 500 closed 1 point lower. The NASDAQ was down 55 points.

West Texas Intermediate Crude Oil futures on the CME closed $4.75 to $7.42 higher in the front six contracts.

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“The pre-war (Russia-Ukraine) highs in February may be the seasonal spring peak in calf and stocker prices, although another run at spring peaks could happen in the next month. Moreover, a strong uptrend in feeder prices is reflected in Feeder futures prices at this time, which may offset typical seasonal patterns,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel explains the value of stocker gain appears to have decreased significantly since last fall, but current prices don’t reflect the unfolding transition in feeder cattle markets.

“The current price for August Feeder futures is about $181/cwt., compared to about $158/cwt. for nearby March. The August futures price would suggest an Oklahoma cash price for 800-lb. steers of $179-$180/cwt. in August, well above the current price of $159/cwt. In that case, the value of 300 lbs. of gain from April to August is roughly $1.45/lb.,” according to Peel.

By way of contrast, he says the value of adding 300 lbs. to a 5-weight steer in November was $1.24/lb., roughly in line with increased cost of feedlot gain last year. However, current Oklahoma auction prices suggest the value of stocker gain is about $0.73/lb., for putting 300 lbs. on a 500-lb. steer.

“Running the current August Feeder futures price for 800 lb. steers though a feedlot budget finishing in January 2023 results in a fed breakeven price of $162-$165/cwt., depending on the feedlot cost of gain. Current Live futures for February 2023 are at roughly $153/cwt. These discrepancies suggest that more transition is yet to come,” Peel says. “Either the Feeder futures are too high or the Live futures are too low, or perhaps some of both. The take-home message is that imbalances in feeder markets, and between feeder and fed markets, likely mean more transition as markets rebalance. Markets are volatile and likely to remain so. Cattle producers at all levels may see opportunities to price cattle or lock in margins but markets are expected to continue to be very dynamic and such opportunities may be fleeting.”

See Peel’s overview of the market situation here.

By | March 21st, 2022|Daily Market Highlights|

Cattle Current Daily—March 21, 2022

Softer feed futures prices, late-week firmness in cash trade and higher outside markets helped support Cattle futures Friday.

Corn futures closed 2¢ to 12¢ lower in old-crop contracts and then mostly 1¢ lower to 1¢ higher.

Soybean futures closed fractionally lower to 3¢ lower through Jan ’23 and then mostly 11¢ to 13¢ higher.

Feeder Cattle futures closed an average of $1.25 higher (45¢ higher in spot Mar to $1.57 higher).

Live Cattle futures closed an average of 66¢ higher, from 35¢ to $1.15 higher.

Negotiated cash fed cattle trade ranged from slow on light demand to mostly inactive on light demand with too few transactions to trend in any region, according to the Agricultural Marketing Service.

Live prices last week were steady in the Southern Plains and Nebraska at $138/cwt. They were steady to $2 higher in the western Corn Belt at $140. Dressed prices were $1 higher in Nebraska at $221 and steady to $3 higher in the western Corn Belt at $222.

Estimated total cattle slaughter last week of 644,000 head was the same as a week earlier but 15,000 head more than the same week last year. Total estimated year-to-date cattle slaughter of 7.1 million head is just 2,000 head fewer than the same time last year. Total estimated year-to-date beef production is 13.3 million lbs. more at 5.96 billion lbs.

The seasonal turn in wholesale beef prices was also supportive.

Choice Boxed beef cutout value was $1.11 higher Friday afternoon at $258.16/cwt. Select was 3¢ lower at $250.65.

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Major U.S. financial indices continued to scale higher Friday, extending the mid-week relief rally, as investors apparently grew more comfortable with the Fed trajectory for interest rates, as well as potential fallout from Russia’s attack on Ukraine.

The Dow Jones Industrial Average closed 274 points higher. The S&P 500 closed 51 points higher. The NASDAQ was up 279 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.21 to $1.72 higher in the front six contracts.

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Elevated prices for beef middle meats and Australia’s shift to more grain-fed production could further underpin slaughter bull and slaughter cow prices going forward, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

“Higher beef prices will certainly result in some consumers reducing the quantity of steaks purchased and increase the quantity of ground beef purchased,” Griffith explains. “The shift in Australia production to include more grain-finished beef will likely reduce the supply of lean grinding beef, which is a commodity commonly imported by the United States. A reduction in this supply will increase the price of imports that in turn should increase the price of grinding beef from cows. Not to be undersold, it should also increase the value of 50-50 trimmings from finished cattle.”

Currently, Griffith notes slaughter cow and slaughter bull prices increased $8/cwt., from January to February and are likely to be another $4-$6 higher by the end of March.

“The increase in March will not likely be the end of such increases as the seasonal tendency is for slaughter cow and bull prices to continue increasing through June,” Griffith says.

As noted in the previous issue of Cattle Current beef prices and high inflation appear to be shifting some consumer buying decisions.

“There is some evidence of consumers shifting purchases to more ground beef and fewer steaks in response to high retail prices. There is also evidence of some shifting to less expensive Select beef cuts and away from higher priced Choice and Prime,” explains David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets from the Livestock marketing Information Center.

For perspective, Anderson says, “Both the cow beef cutout and wholesale 90% lean beef for ground beef are well above a year ago, at $229 and $284/cwt., respectively. Wholesale middle meat prices have dropped in recent weeks. For example, both wholesale ribeye and strip loin prices have fallen below year-ago levels.”

By | March 19th, 2022|Daily Market Highlights|

Cattle Current Daily—March 18, 2022

Grain futures rebounded from the previous session’s hard break. Kansas City Wheat set the pace — up mainly 24¢ to 32¢ — as traders apparently grew less confident in the Russia ceasefire chatter. Soybeans also received support from stronger oil prices.

Corn futures closed 20¢ to 24¢ higher in old-crop contracts and then mostly 11¢ to 14¢ higher.

Soybean futures closed 14¢ to 21¢ higher in old-crop contracts and then mostly 8¢ to 12¢ higher.

Higher grain futures weighed on Feeder Cattle futures, which closed an average of $1.13 lower.

Live Cattle futures edged an average of 13¢ higher, except for 7¢ lower in Feb.

Negotiated cash fed cattle trade waddled from the blocks at steady money of $138/cwt. on a live basis in the Southern Plains and Nebraska through Thursday afternoon, according to the Agricultural Marketing Service. That was on moderate demand and light trade in the Southern Plains; slow trade and light demand in Nebraska.

Elsewhere, trade was limited on light demand with too few transactions to trend.

Live prices in the western Corn Belt last week were at $138-$140. Dressed prices there were $219-$222; $220 in Nebraska.

Choice Boxed beef cutout value was $1.03 lower Thursday afternoon at $257.05/cwt. Select was 41¢higher at $250.68.

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Major U.S. financial indices closed sharply higher again Thursday, amid what some analysts term a relief-rally, in this case tied to confirmation of what was mainly expected in the Fed announcement the previous day, relative to interest rates.

The Dow Jones Industrial Average closed 417 points higher. The S&P 500 closed 53 points higher. The NASDAQ was up 178 points.

CME WTI Crude Oil futures closed $6.41 to $8.06 higher in the front six contracts.

West Texas Intermediate Crude Oil futures on the CME closed $6.41 to $8.06 higher in the front six contracts as Russia continued its attack on Ukraine.

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“Cow and calf prices have taken divergent paths in recent weeks due to the uncertainty of war, rising feed costs, record cattle on feed, and shifting consumer purchases,” says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets from the Livestock marketing Information Center.

Anderson notes the price for mid-7-weight steers dropped about $9 over the last two weeks to $156/cwt., though still significantly higher than $138 a year earlier (Southern Plains). At the same time, he says cull cow prices reached $75/cwt. in the Southern Plains last week, which was $20 higher than early February. He adds 85-90% lean cull cows averaged about $46 a year earlier. The five-year average price for the first week of March was about $59.

“Cow prices are increasing in spite of large cow slaughter. Weekly cow slaughter during the first two weeks of February totaled at least 145,000 head per week. That was the largest weekly slaughter since the first week of December 2012,” Anderson says. “It was the biggest two consecutive weeks since the fall of 2011. Beef cow slaughter has been extremely large, rivaling peak fall slaughter levels. This large beef cow slaughter is coinciding with seasonally large dairy cow slaughter, which typically peaks early in the year.”

Anderson explains higher prices in tandem with increased volume speaks to consumer demand.

“Both the cow beef cutout and wholesale 90% lean beef for ground beef are well above a year ago, at $229 and $284/cwt., respectively,” Anderson says. “Wholesale middle meat prices have dropped in recent weeks. For example, both wholesale ribeye and strip loin prices have fallen below year-ago levels. There is some evidence of consumers shifting purchases to more ground beef and fewer steaks in response to high retail prices. There is also evidence of some shifting to less expensive Select beef cuts and away from higher priced Choice and Prime.”

By | March 17th, 2022|Daily Market Highlights|

Cattle Current Daily—March 17, 2022

Kansas City Wheat futures plummeted Wednesday (limit-down 85¢ in the front two contracts) on apparently more positive ceasefire talks between Ukraine and Russia. Corn and Soybean futures went along for the ride.

Corn futures closed mostly 14¢ to 28¢ lower.

Soybean futures closed mostly 6¢ to 9¢ lower.

That helped Feeder Cattle futures close an average of 37¢ higher (2¢ to 90¢ higher) except for 2¢ lower in May and 20¢ lower in the back contract.

Live Cattle futures closed an average of 69¢ lower (10¢ lower toward the back to $1.50 lower in spot Apr), except for unchanged in the back contract.

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service (AMS). Country chatter suggested some early bids at steady money.

Live prices last week were at $138/cwt. in the Southern Plains and Nebraska and at $138-$140 in the western Corn Belt. Dressed prices were $220 in Nebraska and $219-$222 in the western Corn Belt.

Choice Boxed beef cutout value was 18¢ higher Wednesday afternoon at $258.08/cwt. Select was $1.43 higher at $250.27.

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Major U.S. financial indices closed sharply higher again Wednesday, amid a volatile session as investors reacted to the Fed’s decision to raise interest rates for the first time in about three years. Although the increase was widely anticipated, intimation the Fed will continue raising interest rates to nearly 2% (1.9% median projection) by the end of the year caught some off guard.

For now, the Federal Open Market Committee decided to raise the target range for the federal funds rate to 0.25% to 0.50% and expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting.

The Dow Jones Industrial Average closed 518 points higher. The S&P 500 closed 95 points higher. The NASDAQ was up 487 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.20 to $1.40 lower in the front six contracts.

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USDA’s Economic Research Service revised the expected average feeder steer price for this year slightly lower to $160.50/cwt., in the latest monthly Livestock, Dairy and Poultry Outlook. The price is basis steers weighing 750-800 lbs. selling at Oklahoma City.

“The first-quarter forecast was lowered $2 from last month to $156/cwt., but the second-quarter forecast was raised by $1 to $159 on tightening feeder cattle supplies and higher forecast fed cattle prices,” ERS analysts say. “However, due to higher anticipated feed prices in the second half of 2022, the feeder steer forecasts for the third and fourth quarters were reduced by $1 to $161 and $166, respectively.”

ERS analysts note first-quarter feedlot placements are expected to be less year over year, although deteriorating pasture conditions and wheat prices could encourage more rapid placements than projected.

“Fed cattle marketings are expected to be slightly higher in the second half of 2022 than the previous month’s forecast, reflecting a larger number of placements in the first quarter as well as higher feed prices likely encouraging feedlot operators to be as current as possible in cattle marketings,” say ERS analysts.

By | March 16th, 2022|Daily Market Highlights|

Cattle Current Daily—March 16, 2022

Kansas City Wheat futures charged higher 47¢ to 53¢ in old-crop contracts. Corn futures closed mostly 1¢ to 2¢ lower, though, and Soybean futures closed 9¢ to 14¢ lower through Sep ‘23.

That helped Cattle futures hold on to most of the previous session’s strong gains.

Feeder Cattle futures closed mixed from an average of 33¢ lower to an average of 25¢ higher.

Live Cattle futures closed unchanged to an average of 47¢ higher, from (2¢ to $1.10 higher).

Wholesale beef prices continued to show signs of the seasonal bloom. Choice Boxed beef cutout value was $2.39 higher Tuesday afternoon at $257.90/cwt. Select was $1.10 lower at $248.84.

Negotiated cash fed cattle trade remained stuck at the gate.

Live prices last week were at $138/cwt. in the Southern Plains and Nebraska and at $138-$140 in the western Corn Belt. Dressed prices were $220 in Nebraska and $219-$222 in the western Corn Belt.

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Major U.S. financial indices closed sharply higher Tuesday, buoyed by declining crude oil prices and a slightly more positive inflation gauge than some expected.

The Producer Price Index (PPI) for final demand rose 0.8% in February, compared to the previous month, but the core PPI — less food, energy and trade services — rose just 0.2%, according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 599 points higher. The S&P 500 closed 89 points higher. The NASDAQ was up 367 points.

West Texas Intermediate Crude Oil futures on the CME closed $3.83 to $6.57 lower in the front six contracts.

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U.S. beef exports maintained their blistering pace in January, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports for the month totaled 119,066 metric tons (mt), up 13% year over year, while value soared 57% to $1.03 billion. That was the third-highest value total on record — trailing only August and November of last year. Export value per head of fed slaughter set a new record, exceeding $500 for the first time.

“This is a truly remarkable run for U.S. beef exports, and the momentum is not limited to our large Asian markets,” says USMEF President and CEO Dan Halstrom. “Regions such as Central America and the Caribbean contributed significantly to January export growth, and export value made strong gains in the Middle East.”

U.S. pork exports were 16% less year over year in January and value was 14% less at $555.6 million, challenged by China’s recovering domestic production, as well as logistics.

Port congestion and shipping costs, for instance, are weighing on the U.S. pork industry’s ability to serve some markets, according to Halstrom.

“Australia, for example, has been a very reliable destination for U.S. hams for further processing, but shipping raw material to Oceania is becoming cost-prohibitive. The low price of European pork is also impacting demand in other further-processing markets such as Southeast Asia and Taiwan,” Halstrom explains. “This underscores the importance of our Western Hemisphere markets, where the U.S. industry continues to pursue new strategies for increasing pork consumption and expanding demand. It is also a reminder that the U.S. industry must continue to strive for market diversification, so we are well-prepared for shifts in the competitive landscape.”

By | March 15th, 2022|Daily Market Highlights|

Cattle Current Daily—March 15, 2022

Cattle futures rallied higher Monday, helped along by sharply lower nearby Corn futures prices, as well as the nascent seasonal increase in wholesale beef prices.

Feeder Cattle futures closed an average of $3.08 higher from $2.07 higher at the back to $4.42 toward the front.

Live Cattle futures closed an average of $1.65 higher, from $1.17 higher in the back contract to $3.02 higher in spot Apr.

Weakness in grain futures was apparently tied to a risk-off mentality across many commodities, including Crude Oil, as well as reports China is releasing some of its state-owned soybean stocks to combat domestic inflation.

Expiring spot Corn futures closed 36¢ lower, but mostly other contracts were mainly 1¢ to 3¢ lower.

Soybean futures closed 7¢ to 8¢ 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.

Live prices last week were at $138/cwt. in the Southern Plains and Nebraska and at $138-$140 in the western Corn Belt. Dressed prices were $220 in Nebraska and $219-$222 in the western Corn Belt.

The five-area direct average fed steer price was $2.30 less last week at $138.30/cwt. The average steer price in the beef was $4.50 less at $220.01.

Early chatter anticipated cash fed cattle prices trading steady to a touch higher this week.

Choice Boxed beef cutout value was 80¢ higher Monday afternoon at $255.51/cwt. Select was 83¢ higher at $249.94.

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Major U.S. financial indices closed steady to lower Monday, as investors digested more ceasefire talks between Russia and Ukraine, and awaited the Fed’s interest rate decision this week.

The Dow Jones Industrial Average closed 1 points higher. The S&P 500 closed 31 points lower. The NASDAQ was down 262 points.

West Texas Intermediate Crude Oil futures on the CME closed $4.13 to $6.32 lower in the front six contracts.

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Despite the recent, volatile surge in feed costs, feedlot returns should remain positive for most of this year, according to the Livestock Marketing Information Center (LMIC). Specifically, analysts there peg feedlot breakevens for a steers place at 750 lbs. to be $129-$133/cwt. for cattle already on feed — closeouts now through August — below anticipated fed cattle prices.

“One of the large risks for cattle feeders will be feeder cattle prices moving forward,” say LMIC analysts, in the latest Livestock Monitor. “The LMIC bases its cattle feeding returns on cash prices of raising a 750-lb. steer to slaughter weight. So far, 700-800 lb. steer prices have been limited in their upward mobility. The opposite has been true for lighter weight calves, whose prices across different regions of the country have ranged from $187-230/cwt. for 400-600-lb. animals. At those prices, and current grain prices, putting a 500-lb. animal on feed that was bought north of $185/cwt. would need a breakeven fed cattle price of $160 or higher.”

Noting increased year-over-year January feedlot placements of cattle weighing less than 699 lbs., LMIC analysts explain, “Our assessment is that some of the price increase is linked to the availability of feeder cattle supplies after so many months of strong placements. Additionally, feedlots are flush with cash from the last couple of months of closeouts, and even though it does not appear that these expensive lightweight cattle will be profitable, cattle feeders may be using them for other strategies such as keeping pens full to maintain cash flow.”

Cattle feeding returns were positive for most of the last 12 months, with gains surging to $200 per head in the fourth quarter of last year, according to LMIC. The organization calculated returns at just less than $100 per head in February.

“Returns faded in the last two months due to increasing total costs. Feeder steers were 13% higher at the time of purchase compared to those that came out in November when closeouts were in the black $200 per head,” LMIC analysts explain. “Feed costs have also continued to rise and are expected to do so for the coming months with ongoing concerns in the grain space related to the Ukraine and Russia conflict. For closeouts in February, feed costs increased 7% from November closeouts. In the wake of Ukraine/Russia, the grain markets look to challenge last year’s highs again. This will likely erode some profitability, however closeouts through the next couple of months had lower feeder cattle input costs at time of placement, which should offset some of the rising feed costs for the next four months.”

By | March 14th, 2022|Daily Market Highlights|

Cattle Current Daily—March 14, 2022

Cattle futures stepped higher Friday, helped along by higher wholesale beef prices, stronger Lean Hog futures and moderating feed futures.

Live Cattle futures closed an average of 50¢ higher, from 10¢ higher in the back contract to $1.40 higher in spot Apr. Week to week, they closed an average of $1.17 higher (42¢ to $1.80 higher), recovering about half of the previous week’s losses.

Negotiated cash fed cattle trade ranged from mostly inactive on very 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 lower in the Southern Plains and Nebraska at $138/cwt. and $2-$4 lower in the western Corn Belt at $138-$140. Dressed prices were $4-$5 lower in Nebraska at $220; $3-$5 lower in the western Corn Belt at $219-$222.

“Cattle feeders should be experiencing strong profit margins with cattle coming off feed in today’s market, but the budget for placing cattle on feed is changing,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “A month ago, cattle feeders were faced with strengthening feeder cattle prices and what now seems like relatively low feed prices. However, the sudden increase in feed grain prices has resulted in higher feed cost expectations, which has resulted in bidding lower prices for cattle to be placed in the near term.”

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Based on weekly auctions monitored by Cattle Current, calf and feeder cattle prices were mainly lower last week.

Feeder Cattle futures closed an average of $1.46 higher on Friday. That helped lift them to an average of 63¢ higher week to week on Friday (7¢ to $1.37 higher), barely denting the average $5.85 decline the previous week.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 1¢ to 10¢ lower through Jan ‘23, and then mostly 1¢ to 3¢ higher.

Week to week Corn futures closed an average of 7.9¢ lower through the front three contracts, and then an average of 24.2¢ higher in the next three. During the same period, Soybean futures closed an average of 26.1¢ higher through the front six contracts (14¢ lower in spot Mar to 43.6¢ higher in near Sep).

“Markets are trying to find where values should be,” explains Aaron Smith, crop marketing specialist at the University of Tennessee, in his weekly market comments. “There continues to be a large amount of uncertainty regarding commodity prices, due to the Ukraine-Russia conflict and political responses by external nations. Futures markets have been very volatile, and are likely to continue to be volatile, as traders try to determine value between commodities and across time.”

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Wholesale beef prices showed signs of turning the seasonal corner higher. Choice boxed beef cutout value was 38¢ higher week to week on Friday at $254.71/cwt. Select was 70¢ higher at $249.11.

Estimated total cattle slaughter of 644,000 head last week was 10,000 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 6.46 million head is just 22,000 head fewer. Estimated year-to-year beef production of 5.42 billion lbs. is 8.5 million lbs. less year over year.

“Monthly retail meat prices for February were recently released by USDA. The retail price of beef remains elevated with the Choice retail beef price coming in near $7.62/lb., which is a marginal decline from January and $1.20/lb. higher than one year ago,” Griffith says.

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Major U.S. financial indices continued lower Friday, pressured by higher energy prices, lingering uncertainty tied to Russia’s war on Ukraine and declining consumer confidence.

The closely monitored University of Michigan Consumer Sentiment index declined to 59.7 in March from 62.8 the previous month and 84.9 a year earlier, as consumer incomes lose ground with higher inflation.

The Dow Jones Industrial Average closed 229 points lower. The S&P 500 closed 55 points lower. The NASDAQ was down 286 points.

West Texas Intermediate Crude Oil futures on the CME closed $3.31 to $3.81 higher in the front six contracts.

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Potentially, Livestock Mandatory Reporting (LMR) received yet another reprieve Thursday of last week when the U.S. Senate passed the Fiscal Year 2022 Omnibus Appropriations package. The $1.5 trillion bill would fund the U.S. government through the end of its fiscal year (Sept. 30). The U.S. House of Representatives approved the bill the previous day.

So, if President Biden signs the bill, as expected, LMR will be funded through the end of the government fiscal year. According to the National Cattlemen’s Beef Association (NCBA), the bill also provides funding for, among other things: the Electronic Logging Device exemption for livestock haulers, important EPA regulatory relief and a Cattle Contract Library pilot program.

A cattle contract library — specifics of alternative marketing arrangement contracts packers utilize — is viewed by many as a step toward increased market transparency and price discovery. Others believe the fine points of the one outlined in the bill could do more harm than help.

“Congress and the Administration say they value transparency in the beef and cattle market yet they bury this rider without debate in a giant spending bill and direct USDA to create the pilot program without any feedback from beef companies or cattle producers,” says Julie Anna Potts, president and CEO of the North American Meat Institute (Meat Institute). “There will be no opportunity for companies to provide valuable perspective on what information should be included or how it should be reported.”

The law is vague and provides no guardrails for the type or amount of data and leaves program development up to the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS), Potts explains. She adds the law contains a provision enabling AMS to promulgate the rules without a comment period as normally required by law.

By | March 13th, 2022|Daily Market Highlights|

Cattle Current Daily—March 11, 2022

Feeder Cattle futures tumbled lower Thursday, pressured once again by surging Corn futures, tied to strong weekly U.S. export sales.

Feeder Cattle futures closed an average of $3.17 lower.

Corn futures closed 15¢ to 22¢ higher through Jly ‘23, and then mostly 6¢ to 9¢ higher.

Soybean futures closed mostly 15¢ to 22¢ higher.

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.

So far this week, live prices are $2 lower in the Southern Plains and Nebraska at $138/cwt. and $2-$4 lower in the western Corn Belt at $138-$140. Dressed prices are $4-$5 lower in Nebraska at $224-$225; $3-$5 lower in the western Corn Belt at the same money.

Lower cash prices pressured Live Cattle futures an average of 70¢ lower, from 2¢ lower in the back contract to $1.67 lower in spot Apr.

Choice Boxed beef cutout value was $1.24 higher Thursday afternoon at $253.94/cwt. Select was $2.58 higher at $247.37.

On another positive note, net U.S. beef export sales for the week ending March 3 of 27,500 metric tons were a marketing year high, up 16% from the previous week and 36% higher than the prior four-week average, according to USDA data. Increases were primarily for China, Japan, South Korea, Canada and Taiwan. 

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Major U.S. financial indices closed lower Thursday, with continued volatility and uncertainty stemming from Russia’s war on Ukraine. Inflation was a touch higher than expected, too. Through February, the Consumer Price Index (all items) increased 7.9% over the last 12 months, according to the U.S. Bureau of Labor Statistics. That’s the steepest increase for the date since 1982.

The Dow Jones Industrial Average closed 112 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 125 points.

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The U.S. restaurant industry’s recovery stalled in January after 10 consecutive months of traffic gains over steep pandemic-related declines, according The NPD Group (NPD).

Physical and online visits to U.S. restaurants were down 2% in January compared to an 8% decline at the same time last year. Consumer spending at restaurants was 4% higher, though, reflecting higher food and operational costs. Total restaurant traffic, online and physical, is down 10% from the pre-pandemic level in January 2020, according to NPD’s continual tracking of the U.S. foodservice industry.

Online and physical visits to quick service restaurants represent the bulk of industry traffic and historically have led the industry out of challenging times. However, they were 3% less year over year in January and 7% less than January 2020. Full service restaurant traffic increased 2% year over year but was 21% less than two years ago, before the pandemic.

Dine-in traffic increased by 40% in January, compared to a year earlier but were 46% less than the pre-pandemic level in January 2020. 

“No one ever said the road to recovery would be smooth and steady. Right now, we’re experiencing a dip in the road due to the omicron variant and stimulus money expiring,” says David Portalatin, NPD Food Industry Advisor. “Looking ahead, we should expect volatility. February restaurant numbers will be compared to a rough February last year because of extreme weather. My advice is don’t get too discouraged by January or too elated if February seems great. Just stay the course because we’re on a steady path of gradual improvement.”

By | March 10th, 2022|Daily Market Highlights|

Cattle Current Daily—March 10, 2022

Cattle futures ran out of steam Wednesday, although the latest World Agricultural Supply and Demand Estimates continue to paint a positive fundamental picture (see below).

Feeder Cattle futures closed an average of 43¢ lower, except for 2¢ higher in spot Mar.

Live Cattle futures closed an average of 90¢ lower, except for 5¢ higher in the back contract.

Cattle futures were helped by lower Grain and Soybean futures as traders apparently were satisfied with the level of risk premium.

Negotiated cash fed cattle trade and demand were moderate in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Live trade was steady with the previous day and $2 lower than last week at $138/cwt. Dressed trade was $4-$5 lower at $220.

Trade was limited on light demand in Kansas with live prices at $138; steady with the previous day and $2 lower than last week.

Elsewhere, trade ranged from limited on light demand to mostly inactive with very light demand and too few transactions to trend. Live prices in the Texas Panhandle so far this week are $2 lower at $138. Trade was unestablished in the western Corn Belt where live prices last week were $142 and dressed prices were $224-$225.

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Major U.S. financial indices closed sharply higher, buoyed by lower Crude Oil futures and cooling commodity prices, at least for the day.

The Dow Jones Industrial Average closed 653 points higher. The S&P 500 closed 107 points higher. The NASDAQ was up 460 points.

West Texas Intermediate Crude Oil Futures (CME) closed $12.19 to $15.00 lower in the front six contracts.

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“Fed cattle prices are raised on firm packer demand and declining inventories of fed cattle,” say analyst with USDA’s Economic Research Service (ERS), in the latest World Agricultural Supply and Demand Estimates (WASDE).

ERS projects the annual five-area direct fed steer price the year $17.10 higher than last year at $139.50/cwt. That’s $2.00 more than the previous month’s projection.

Forecast prices are $140 in the first quarter, $139 in the second, $136 in the third and $142 in the fourth quarter.

Estimated beef production this year of 27.57 billion lbs. would be 367 million lbs. less (-1.3%) than last year. “The beef production forecast is raised from the previous month on higher fed and non-fed cattle slaughter,” according to ERS.

Estimated total red meat and poultry production this year of 106.47 billion lbs. would be 324 million lbs. less (-0.3%) than the prior year.

“Russia’s recent military action in Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally,” say ERS analysts. “The March WASDE represents an initial assessment of the short-term impacts as a result of this action.”

By | March 9th, 2022|Daily Market Highlights|

Cattle Current Daily—March 9, 2022

Volatility continued Tuesday, but Cattle futures managed to extend gains amid two-sided trading, supported by an initial drop in Corn futures and eventually higher outside markets.

Feeder Cattle futures closed an average $1.07 higher (65¢ to $1.40 higher), except for 57¢ lower in spot Mar.

Live Cattle futures closed average 79¢ higher (17¢ higher at the back to $1.57 higher toward the front), except for unchanged in away Jun.

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains through Tuesday afternoon, according to the Agricultural Marketing Service. Live prices were $2 lower in a light test at $138/cwt.

Trade was limited on light demand in Nebraska. Live price so far this week are $2 lower at $138. Dressed prices last week were $224-$225.

In the western Corn Belt, trade was mostly inactive on light demand. Live prices last week were $142 and dressed prices were $224-$225.

Choice Boxed beef cutout value was $2.27 lower Tuesday afternoon at $252.44/cwt. Select was $5.28 lower at $244.94.

Wheat futures tapped the brakes Tuesday, helping Corn to a narrowly mixed close.

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

Soybean futures closed 14¢ to 30¢ higher through Jan ‘23 and then mostly 1¢ lower to 2¢ higher.

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Major U.S. financial indices closed lower Tuesday, after trading higher earlier, in another volatile session driven by Russia’s war on Ukraine, worries about the economic impact and inflation.

The Dow Jones Industrial Average closed 184 points lower. The S&P 500 closed 30 points lower. The NASDAQ was down 35 points.

West Texas Intermediate Crude Oil Futures (CME) were up another $1.91 to $4.30 through the front six contracts with spot Mar closing at 123.70.

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Lighter-weight feedlot placements in recent months, and the incentive to place more at light weights, will likely widen the Choice-Select spread this summer, according to Brenda Boetel, Extension livestock economist at the University of Wisconsin-River Falls.

In the latest issue of In the Cattle Markets (ICM) from the Livestock Information Center, she explains the Choice-Select spread is typically narrowest January to March as the demand for Choice middle meats is the least of the year, while Choice supply is usually most plentiful. The spread usually widens heading into summer as the Choice supply declines, due to harvesting lighter-weight cattle, while grilling demand for Choice middle meats increases.

Although the highest percentage of cattle placed on feed at weights lighter than 700 lbs. usually occurs in November, Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln pointed out in the previous ICM that feedlots want to place lighter cattle currently, amid higher feed prices, due to cattle performance and ultimately total feed consumed. He ran the numbers and concluded, “…assuming Average Daily Gain and Average Feed Conversion are constant, the only way to reduce total feed costs would be to reduce harvest weights.” And cattle placed at lighter weights tend to finish at lighter weights.

“This has two broad industry implications for the quantity and quality of beef production,” Dennis explained. “First, total quantity of beef production will likely decrease, putting upward pressure on boxed beef and thus retail beef prices in deferred months. Second, smaller carcass weights are associated with more cattle grading USDA Select. As more cattle grade USDA Select, the Choice-Select

spread will widen providing incentives to feed cattle longer to heavier harvest weights.”

The Choice-Select spread was almost $4.50/cwt. wider than the 2019-2021 average when the year began, according to Boetel.

“Seasonally, the Choice-Select spread will widen until late June/early July due to the supply/demand considerations for Choice and for Select beef,” Boetel explains. “However, given the higher percentage of lightweight cattle placed on feed since November, as compared to the 2019-2021 average lightweight percentage placed on feed, the Choice-Select spread will likely widen more than average. How wide the spread becomes is dependent on corn prices when cattle are placed, the percentage of cattle grading Choice, total amount of beef production, as well as beef demand.

“If we hold all those factors affecting Choice-Select spread at a constant level and allow only the percentage of beef grading Choice to change, the impact of a 1% change in cattle grading Choice, can have almost a 9% change in the spread. This means that since the average 2016-2020 spread was as wide as $22.45 in June, a decrease of 1% in Choice graded beef could widen that spread by another $2, providing some incentives to feed cattle longer and to heavier weights.”

By | March 8th, 2022|Daily Market Highlights|

Cattle Current Daily—March 8, 2022

Cattle futures reversed direction to the upside Monday, despite sharply lower outside markets and grain market strength tied to Russia’s attack on Ukraine. Positioning and bottom-picking likely explain much of the move, while underscoring the unaltered, positive supply fundamentals.

Feeder Cattle futures closed an average $1.86 higher ($1.12 to $2.55 higher).

Live Cattle futures closed average $1.44 higher (50¢ to $2.15 higher).

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

Live prices last week were at $140/cwt. in the Southern Plains and Nebraska; $142 in the western Corn Belt. Dressed prices were at $224-$225.

Wholesale beef prices added support with Choice Boxed beef cutout value 38¢ higher Monday afternoon at $254.71/cwt. and  Select $1.81 higher at $250.22.

Wheat futures continued to lead Corn futures mostly higher Monday. Kansas City Wheat futures were mostly 39¢ to 85¢ higher Monday, as rationing continues due to the war in Eastern Europe

Corn futures closed 9¢ to 18¢ higher, except for 3¢ and 7¢ lower in the front two contracts.

Soybean futures closed mostly 10¢ to 14¢ lower.

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Major U.S. financial indices closed sharply lower Monday, pressured by Russia’s war on Ukraine and worries about the impact on domestic and global economic growth.

The Down Jones Industrial Average closed 797 points lower. The S&P 500 closed 127 points lower. The NASDAQ was down 482 points.

West Texas Intermediate Crude Oil Futures (CME) were up another $2.96 to $3.72 through the front six contracts.

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Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides perspective about the market impacts stemming from Russia’s attack on Ukraine, in his weekly market comments.

“Both Ukraine and Russia are major grain producing and exporting countries. With the reality of current disruptions of grain movement from the Black Sea region and the uncertainty of what could happen, crop prices have soared, pushing high feed prices much higher,” Peel explains. “Just a few more weeks will determine whether crop planting in the Ukraine will be possible. All crop markets are higher, but the uncertainty is focused on the near term, pushing old crop futures higher relative to new crop contracts in the fall.”

Peel also points out Russia is a major oil producing and oil exporting country. Potential disruptions to global energy markets are contributing to sharply higher energy prices.

“Russia is also a major producer and exporter of fertilizer. These will add to inflationary pressures for production costs and are a threat to beef demand as higher gas prices directly impact consumers,” he says.

Then, there’s the domestic drought.

“In just a few weeks, the drought will begin to impact forage production and producers will face rapidly worsening production conditions and additional management and marketing challenges,” Peel says. “The supply fundamentals of the industry will continue to be supportive with cattle numbers decreasing and beef production declining this year. Beef demand has been strong up to this point, but clearly, there are more concerns about demand and input prices going forward. A war situation like this has no analog in recent history and there is no way to anticipate when or even if the situation will stabilize in the foreseeable future.”

By | March 7th, 2022|Daily Market Highlights|

Cattle Current Daily—March 7, 2022

Concerns about less corn and wheat exports from Ukraine and Russia, due to the war, continued to underpin futures prices Friday. As time wears on, there is also concern about fertilizer exports from the region.

Corn futures closed 5¢ to 8¢ higher, except for 10¢ to 29¢ higher from near Jly to next Mar.

Soybean futures closed mostly 7¢ to 8¢ lower.

Cattle futures sagged beneath the weight of escalating feed prices Friday.

Feeder Cattle futures closed an average of $2.47 lower (90¢ at the back to $3.27 lower toward the front).

Live Cattle futures closed an average of $1.53 lower (80¢ to $2.62 lower).

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

For the week, live prices were $2 lower in the Southern Plains at $140/cwt., $2-$4 lower in Nebraska at $140 and $1 lower in the western Corn Belt at $143. Dressed prices were $2-$3 lower at $224-$225.

The average five-area direct fed steer price was $2.64 lower week to week on Thursday at $140.76/cwt. The average steer price in the beef was $2.40 lower at $224.62.

Choice Boxed beef cutout value was 2¢ lower Friday afternoon at $254.33/cwt. Select was 62¢ higher at $248.41.

Estimated total cattle slaughter last week of 658,000 was 11,000 head more than the previous week but 8,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 5.83 million head is just 17,000 head fewer than the same time last year.

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Major U.S. financial indices closed lower Friday, amid continued pressure from Russia’s war on Ukraine, and despite a more positive jobs report than expected.

Total non-farm payroll employment rose by 678,000 in February, according to the U.S. Bureau of Labor Statistics, pushing the unemployment rate down to 3.8%. Average hourly earnings for private non-farm employees was static at $31.58.

The Down Jones Industrial Average closed 179 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 224 points.

West Texas Intermediate Crude Oil Futures (CMW) were up a staggering $7.31 to $8.01 through the front six contracts.

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Fundamental changes are transforming the beef supply chain from a just-in-time delivery model toward a just-in-case approach. Managing the costs associated with these changes may result in a shift of the historical live cattle and retail beef price ratio, according to a recent RaboResearch report.

“While a cattle producer has little or no control over what happens in the beef supply chain post-harvest, it will be important for livestock producers to be aware of changes occurring throughout the supply chain,” says report author, Don Close, senior animal protein analyst with Rabo AgriFinance. “Any changes, any inventory building, any additional controls and inspections could have a direct impact on the total cost of beef to the end user, which could change historical norms for live-to-wholesale and live-to-retail price spreads.”

Meat processors, distributors and retailers are striving to build supply resiliency into the beef supply chain and reduce the risk of another round of empty grocery store shelves in the future, according the report, which explores these major drivers:

  1. Automation in packing plants to increase the efficiency of their labor force
  2. Packaging that extends shelf life, is more durable for grocery delivery and meets sustainability expectations
  3. Government and investor-led sustainability demands, which may require more documentation and verification methods throughout the supply chain
  4. The transportation system’s technology and infrastructure overhaul that reduces carbon emissions and the risk for backlogs

The area of change with the greatest potential direct impact on cattle producers is meatpacking plants’ embedding more automation into their facilities, according to Rabo AgriFinance analysts. The report notes that the initial introduction of advanced technology will not serve as a replacement for labor, but will serve to make labor more efficient. However, the transformation toward greater automation will require a workforce with different skill sets or extensive retraining.

“The challenge of finding and retaining a ready workforce has increased labor costs to the tipping point where investments into technology, robotics and software advancements become economical,” Close explains. “Anything that de-risks packers from becoming a dam that slows the flow of market-ready cattle is a win for cattle producers.”

By | March 6th, 2022|Daily Market Highlights|

Cattle Current Daily—March 4, 2022

After a day’s reprieve, wheat soared higher, boosting front-month Corn and Soybean futures. K.C. Wheat was 75¢ higher in the front four contracts.

Corn futures closed 9¢ to 22¢ higher in the front three contracts and then mostly 4¢ to 11¢ lower.

Soybean futures closed 2¢ to 4¢ higher in the front two contracts and then mostly 8¢ to 11¢ lower.

Stouter feed prices took Cattle futures down another peg.

Feeder Cattle futures closed an average of $1.68 lower, erasing much of the headway made in the previous session.

Live Cattle futures closed an average of 72¢ lower (12¢ to $1.75 lower), except for 15¢ higher in the back contract.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on light demand 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 $140/cwt., $2-$4 lower in Nebraska at $140 and $2 lower in the western Corn Belt at $142. Dressed prices are $2-$3 lower at $224-$225.

Choice boxed beef cutout value was $1.37 lower Thursday afternoon at $254.35/cwt. Select was $3.55 lower at $247.79.

U.S. beef export sales continue strong, according to USDA’s U.S. Export Sales report for the week ending Feb. 24. Net sales of 23,800 metric tons for 2022 were 64% more than the previous week and 23% more than the prior four-week average. Increases were primarily for South Korea, China, Japan, Taiwan and Canada.

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Major U.S. financial indices closed lower Thursday, as investors appeared skittish about Friday’s monthly employment report, as well as Russia’s war on Ukraine.

The Down Jones Industrial Average closed 96 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 214 points.

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“With both revenues and costs rising, cattle producers must adjust cattle production and marketing to maximize profits,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Economists model this decision mathematically resulting in the rule that profit maximization is the point at which marginal revenues equal marginal costs. This balance occurs when the value of the last unit produced equals the additional cost of producing that last unit. Of course, cattle producers don’t use mathematical models to maximize profits but should use marginal thinking to adjust to changing market conditions. Marginal decision-making means that production is adjusted at the margin, i.e. with minor modifications and tweaks to production systems rather than major changes.”

Peel explains the unique circumstances of each individual operation will determine whether the net impact of higher revenues and higher costs poses the need to cut back slightly on production, hold steady, or increase production. 

“There are short and long-run considerations and risks to be considered as well,” Peel says. “Care should be taken that short term efforts to manage higher costs should not, for example, jeopardize herd health by cutting vaccination programs or skimping on nutrition and risking decreased future herd productivity. “Markets are extremely volatile now and likely to remain so for the foreseeable future. Producers should consider the use of risk management to protect revenues and potentially use forward pricing or other means to manage input costs.”

By | March 3rd, 2022|Daily Market Highlights|

Cattle Current Daily—March 3, 2022

Feeder Cattle futures rebounded from some of the steep, recent losses Wednesday, helped along by static to lower Corn futures prices and sharply higher outside markets. Feeder Cattle futures closed an average of $2.44 higher ($2.02 to $3.20 higher.

Live Cattle futures closed an average of 71¢ higher, except for an average of 45¢ lower in the front three contracts. 

Corn futures closed mostly 8¢ to 16¢ lower.

Soybean futures closed 20¢ to 30¢ lower.

Negotiated cash fed cattle trade started the week $2 lower in the Southern Plains at $140/cwt. Trade was slow on light to moderate demand, according to the Agricultural Marketing Service.

Trade was limited on light demand in Nebraska with a few live trades at $140, but too few to trend. Live prices last week were $142-$144 and dressed prices were $227.

Trade was also limited on light demand in the western Corn Belt. Prices last week were $144 on a live basis and $227 in the beef.

Choice boxed beef cutout value was 96¢ lower Wednesday afternoon at $255.72/cwt. Select was 18¢ lower at $251.34.

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Major U.S. financial indices closed sharply higher Wednesday, basically erasing losses from the previous session.

Positive news included the labor front. Private-sector non-farm employment increased by 475,000 jobs from January to February according to the February ADP®National Employment ReportTM.

“Hiring remains robust but capped by reduced labor supply post-pandemic. Last month large companies showed they are well-poised to compete with higher wages and benefit offerings, and posted the strongest reading since the early days of the pandemic recovery,” says Nela Richardson, ADP chief economist, “Small companies lost ground as they continue to struggle to keep pace with the wages and benefits needed to attract a limited pool of qualified workers.”

The Down Jones Industrial Average closed 596 points higher. The S&P 500 closed 80 points higher. The NASDAQ was up 219 points.

Gains came despite another surge in crude oil prices. West Texas Intermediate Crude Oil futures (CME) closed $4.28 to $7.19 higher through the front six contracts.

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Farmland prices are rising sharply as a result of high yields and strong commodity prices, as well as other factors, according to R.D. Schrader, president of Schrader Real Estate and Auction Company.

“A lot of things are falling into place to create one of the most positive land markets in recent years,” Schrader says. “The high yields and strong commodity prices are a powerful combination we haven’t seen in several years. In addition, many investors see the U.S. farmland market as a safe haven.”

Speaking at the company’s State of the Farmer’s Economy Update, Schrader explained prices for high quality farmland have risen by up to 24% in some parts of the Midwest.

“We’re seeing factors we’ve never seen before, including the use of Midwest farmland for wind and solar leases, pipelines, carbon wells and others,” explains Steve Slonaker, a farm manager, appraiser and auction manager. “Since we have little or no history on which to base our assessments, this makes the picture more complicated for everyone buying, selling or leasing farmland.”

By | March 2nd, 2022|Daily Market Highlights|

Cattle Current Podcast—March 2, 2022

Grain and soybean futures continued to dominate market narrative Tuesday, blasting another leg higher, fueled by the Russian attack on Ukraine and the fallout from everything from export disruptions to financial turmoil.

Corn futures closed 30¢ to 42¢ higher in the front three contracts and the mostly 13¢ to 15¢ higher. Spot Mar was 80¢ higher over the last two sessions, closing Tuesday at a staggering $7.39’6

Soybean futures closed 41¢ to 61¢ higher in the front six contracts and then mostly 38¢ to 39¢ higher. The front two contracts are up more than $1.00 over the past two sessions.

Kansas City HRW futures closed 50¢ to 57¢ higher in the front five contracts; more than $1 higher in the front contracts over the last two sessions.

Those runaway feed futures prices hammered Cattle futures, especially Feeder Cattle once again. Feeder Cattle closed an average of $1.63 lower (65¢ to $2.55 lower) for an average of $4.14 lower over the last two sessions.

Live Cattle futures closed mixed, from an average of 54¢ lower in the front three contracts to an average of 19¢ higher.

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

Last week, live prices were $142/cwt. on a live basis in the Southern Plains, $142-$144 in Nebraska and $144 in the western Corn Belt. Dressed prices were $227 in Nebraska and $226-$227 in the western Corn Belt.

Choice boxed beef cutout value was 83¢ lower Tuesday afternoon at $256.68/cwt. Select was $1.89 lower at $251.52.

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Major U.S. financial indices closed fled lower Tuesday with intensified concern surrounding the fallout from Russia’s military invasion in Eastern Europe.

The Down Jones Industrial Average closed 597 points lower. The S&P 500 closed 67 points lower. The NASDAQ was down 218 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.09 to $7.69 higher through the front six contracts.

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Agricultural producer sentiment increased month to month in February, according to the Purdue University/CME Group Ag Economy Barometer.

Specifically, the overall Ag Economy Barometer rose 6 points to 125. The Index of Current Conditions declined 1 point to 132. The Index of Future Expectations increased 10 points to 122.

Although the readings are static to positive, the Barometer’s Farm Financial Performance Index continues to underscore producer concerns about rising input costs. That index was unchanged in February, but declined 27% from late 2021 to 2022, indicating producers expect financial performance in 2022 to be worse than in 2021.

“These survey responses suggest that concerns about the spike in production costs and supply chain issues continue to mostly outweigh the impact of the commodity price rally that’s been underway this winter,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Higher input costs have consistently been the number one concern identified by farmers over the past six months, according to results from the Ag Economy Barometer survey. In February, 47% of respondents cited input costs as their primary concern.

Tight machinery inventories continue to be a problem. In February, more than 40% of producers said low farm machinery inventories were holding back their investment plans. While plans for farm building and grain bin construction were more optimistic month to month, 56% said their plans for new construction were below the previous year.

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 14-18, 2022, days prior to Russia’s invasion of Ukraine.

By | March 1st, 2022|Daily Market Highlights|

Cattle Current Daily—March 1, 2022

Grain and soybean futures ricocheted sharply higher Monday, driven once again by uncertainty stemming from the military assault in Eastern Europe.

Corn futures closed 24¢ to 38¢ higher through Jly ‘23 and then mostly 16¢ to 19¢ higher.

Soybean futures 29¢ to 54¢ higher through Sep ‘22 and the mostly 19¢ to 20¢ higher.

The spike weighed on Cattle futures, especially Feeder Cattle.

Feeder Cattle futures closed average of $2.51 lower.

Live Cattle futures closed an average 32¢ lower, except for $1.22 higher in spot Feb.

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

Last week live prices were generally steady in the Southern Plains at mostly $142/cwt., steady to $2 higher in Nebraska at $142-$144, and steady to $2 higher in the western Corn Belt at $144. Dressed prices were $1 higher in Nebraska at $227 and steady to $1 higher in the western Corn Belt at $226-$227.      

Choice boxed beef cutout value was 76¢ lower week to week on Monday afternoon at $257.51/cwt. Select was $2.00 lower at $253.41.

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Major U.S. financial indices closed mixed Monday after another volatile session tied to uncertainty about the Russian attack on Ukraine and the economic sanctions taken by the U.S. and other countries against Russia.

The Down Jones Industrial Average closed 166 points lower. The S&P 500 closed 10 points lower. The NASDAQ was up 56 points.

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“Replacement prices across regions will be a key indicator this summer to help determine where carrying capacity exists and if we should start to see regions of the U.S. expanding the beef herd,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

Albeit slowly, the folks at LMIC say their data — a range of replacement auction data covering 16 areas — indicates, where possible, producers are adding breeding stock, prompted by the level of feeder cattle prices.

For instance, Medium and Large 1 bred cows, averaged across all trimesters and all ages, are running about $100 per head higher year over year at auctions in Nebraska and Missouri. Beef cow herds (Jan. 1) declined in those states last year but are near Iowa and Minnesota where the state herds expanded.

“Medium and Large 1-2 are only about $45 per head higher. West Plains, MO bred heifers (1-9 months) Medium and Large 1-2 are up 21% and medium and large 2s are up 13% from January of last year,” say LMIC analysts. “Across most of the bred cow categories, prices are seeing double digit percentage increases, with the exception of bred cows over 8 years old. Open stock cow prices are higher as well. Under 2-years-old Medium and Large 1-2 are up 19% from last year, 2-8 year olds are up 9%. Medium and Large 2 open stock cows (2-8 years) are up 11%. In Joplin, MO bred cows Medium and Large 1-2 are up 16% across all ages and trimesters. Open stock cows are up 35% across all types.”

Similarly, the Jan. 1 Cattle report indicated pockets of beef cow herd expansion in the Pacific Northwest. Looking at some of the nearest auctions in Montana, LMIC analysts say, “…bred heifers appear to be about 15% higher, bred cows (Medium and Large 1) are mixed with later trimesters commanding only a slightly higher price than last year. Stock cows are averaging about $2/cwt. higher across all age groups.”

By | February 28th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 28, 2022

The volatile market whipsaw unleashed by Russia’s attack on Ukraine continued in futures and equities Friday.

Grain and soybean futures closed sharply lower, shoved around by massive open interest, a more positive South American weather outlook and USDA projecting more corn and wheat acres to be planted than expected. In its Grains and Oil Seeds Outlook presented at the annual Agricultural Outlook Forum, USDA forecast 92.0 million acres of corn and 88.0 million acres of soybeans.

Soybean futures closed 34¢ to 71¢ lower through Jan ‘23 and the mostly 19¢ to 29¢ lower.

Corn futures closed 24¢ to 35¢ lower through Jly ‘23 and then mostly 20¢ lower.

Softer Corn futures benefitted Feeder Cattle futures, which closed an average of 96¢ higher (65¢ to $1.15 higher) Friday. However, they closed an average of $3.74 lower week to week on Friday ($2.22 to $6.10 lower). 

Based on weekly auctions monitored by Cattle Current, calves and feeders sold widely mixed last week but with distinctly lower undertones related to pressure from grain prices as well as weather disruptions in some areas.

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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.

For the week, live prices were generally steady in the Southern Plains at mostly $142, $2 higher in Nebraska at $144 and steady to $3 higher in the western Corn Belt at $144-$145. Dressed prices were $1 higher in Nebraska at $227 and steady to $1 higher in the western Corn Belt at $226-$227.

The five-area direct weighted average steer price was $1.15 higher on a live basis at $143.40/cwt. and 92¢ higher in the beef at $227.02.

Total estimated cattle slaughter of 647,000 head was 13,000 head fewer than the previous week. Total estimated year-to-date cattle slaughter of 5.14 million head was just 19,000 head fewer than a year earlier.

Live Cattle futures closed an average 33¢ lower Friday (15¢ lower toward the back to $1.25 lower in spot Feb), except for 55¢ higher in the back contract. Week to week on Friday, they were an average of $2.64 lower ($1.30 to $3.97 lower).

Wholesale beef price continue their seasonal decline.

Choice boxed beef cutout value was $7.58 lower week to week on Friday at $258.27/cwt. Select was $7.22 lower at $255.41.

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Major U.S. financial indices closed higher Friday with follow-through support from the momentum that reversed the steep decline during the previous day’s session. Part of that seemed to extend from oversold conditions. 

The Down Jones Industrial Average closed 834 points higher. The S&P 500 closed 95 points higher. The NASDAQ was up 221 points.

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Logic suggests markets should view Friday’s monthly Cattle on Feed report as neutral with numbers close to pre-report expectations.

Placements in January (feedlots with 1,000 head or more capacity) were 1.999 million, which was 25,000 less (-1.2%) than the previous year.

In terms of placement weights, 43.3% went on feed weighing 699 lbs. or less, 48.0% weighing 700-899 lbs. and 8.8% weighing 900 lbs. or more.

Marketings in January of 1.773 million were 56,000 head less (-3.1%) than a year earlier.

Cattle on feed Feb. 1 of 12.199 million were 93,000 head more (+0.8%) year over year. That’s the most for the data since the date series began in 1996.

The February report also provides perspective on how many cattle were on feed Jan. 1 in feedlots with less than 1,000 head capacity, and how many cattle those feedlots marketed last year.

Cattle and calves on feed in feedlots with 1,000 head or more capacity Jan. 1 represented 81.9% of all cattle and calves on feed in the United States. It was 81.6% a year earlier.

Marketings of fed cattle for feedlots with capacity of 1,000 head or more during 2021 represented 87.2% of total cattle marketed from all feedlots in the United States, compared to 87.0% in 2020.

By | February 27th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 25, 2022

Cattle futures fell hard Thursday as outside markets initially plummeted in response to Russia’s invasion of Ukraine, although they did close off of session lows.

Feeder Cattle futures closed an average of $2.91 lower, from $1.90 to $4.47 lower.

Live Cattle futures closed an average of $2.05 lower, from $1.12 to $2.52 lower.

So far this week, though, negotiated cash fed cattle prices are firm to higher with live prices steady in the Southern Plains at $142/cwt., $2 higher in Nebraska at $144 and steady to $3 higher in the western Corn Belt at $144-$145. Dressed prices are $1 higher in Nebraska at $227 and steady to $1 higher in the western Corn Belt at $226-$227.

Trade was slow on light demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service.

Choice Boxed beef cutout value was 76¢ lower Thursday afternoon at $260.88/cwt. Select was $4.68 lower at $258.96.

Grain and soybean futures were widely volatile as traders came to grips with the war in eastern Europe, as well as U.S. baseline projections released as part of the annual Agricultural Outlook Forum (see below).

Corn futures closed 4¢ to 9¢ higher in the front three contracts and then 6¢ to 15¢ lower.

Soybean futures closed mostly 23¢ to 36¢ lower.

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Although major U.S. financial indices managed to close higher Thursday, they plumbed sharply lower during the session amid fears and uncertainty stemming from Russia’s military aggression in neighboring Ukraine.

The Down Jones Industrial Average closed 92 points higher. The S&P 500 closed 63 points higher. The NASDAQ was up 463 points.

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USDA expects more moderate feed prices later this year and slightly less total red meat and poultry production.

“In the first part of the year, steer and heifer slaughter will likely remain near last year’s levels, as current feedlot inventories are marketed. As the year progresses, however, marketings will decline as feedlot numbers diminish,” according to analysts with USDA’s World Agricultural Outlook Board (WAOB). “Additionally, cow slaughter is expected to decline due to lower inventories and expectations that any response to improving returns or forage will likely be manifest in producers retaining cows later in the year. Heavier cattle weights, which is a function of expected demand for higher-grading fed cattle as well as a decreasing proportion of cows in the slaughter mix during 2022, will only partly offset lower slaughter numbers.”

That’s from the Livestock and Poultry Outlook presented during this year’s Agricultural Outlook Forum.

Commercial beef production for this year is forecast to be 2% less than last year at 27.38 billion lbs. Total red meat and poultry production is projected to decrease fractionally to 106.6 billion lbs. Although fractional, WAOB analysts note the decline would be the first decline since 2014.

“Feed prices during 2022 are likely to be slightly lower than 2021. Corn prices in the first part of 2022 are expected to be above a year ago reflecting a forecast 2021-22 crop year average of $5.45/bu. However, prices later in the year are expected to be below 2021, reflecting a decline in the season-average price to $5.00/bu. for 2022-23,” say WAOB analysts. “Soybean meal prices in the first part of 2022 will reflect a 2021-22 crop year average of $410 per ton and prices in the fourth quarter are expected to reflect a market year forecast of $375 for 2022-23.”

By | February 24th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 24, 2022

It was deja vu all over again Wednesday as Wheat and Soybean futures blasted higher, carrying Corn along for the ride and weighing on Cattle futures.

Chicago wheat was 27¢ to 32¢ higher through May ’23. Soybean futures closed 19¢ to 40¢ higher in the front five contracts and then mostly 4¢ to 6¢ higher. Corn futures closed 5¢ to 9¢ higher through Jly ‘23 and then 1¢ to 2¢ higher.

Feeder Cattle futures closed average 85¢ lower (20¢ lower at the back to $1.45 lower in spot Mar).

Live Cattle futures closed an average 61¢ lower (25¢ to $1.27 lower).

Negotiated cash fed cattle trade ranged from a standstill to limited on light demand through Wednesday afternoon, according to the Agricultural Marketing Service. However, some private reports from the North suggested higher prices for the day.

Prices last week were $142/cwt. on a live basis in Nebraska and the Southern Plains and $142-$144 in the western Corn Belt. Dressed prices were at $226.

Choice Boxed beef cutout value was 76¢ lower Wednesday afternoon at $260.88/cwt. Select was $4.68 lower at $258.96.

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Major U.S. financial indices dredged lower Wednesday with follow-through pressure from the Russia-Ukraine turmoil. 

The Down Jones Industrial Average closed 464 points lower. The S&P 500 closed 79 points lower. The NASDAQ was down 344 points.

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Creighton University’s Rural Mainstreet Index (RMI) edged higher in February to 61.5, from 61.1 the previous month — above growth neutral for the 15th consecutive month. The RMI is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

“Strong grain prices, the Federal Reserve’s record-low short-term interest rates, and growing agricultural exports have underpinned the Rural Mainstreet Economy,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The region’s farmland price index decreased to 78.8 from January’s 88.5 and December’s record high of 90.0. February’s reading represented the 17th consecutive month the index was above growth neutral.

The February farm equipment-sales index slipped to 72.0 from 72.4 in January — the 15th straight month above growth neutral.

This month, bankers were asked to project corn and soybean prices six months down the road. On average, bank CEOs expect corn prices per bushel to decline by 2.6% and soybean prices per bushel to drop by 2.3% over the next six months.

By | February 23rd, 2022|Daily Market Highlights|

Cattle Current Daily—02-23-22

Grain futures surged Tuesday, led by Wheat futures, fueled by the tensions in Eastern Europe, with Chicago wheat was 40¢ to 48¢ higher through the front six contracts.

Corn futures closed 12¢ to 20¢ higher in the front four contracts and then mostly 7¢ to 8¢ higher.

Soybean futures closed 24¢ to 33¢ higher in the front four contracts and then mostly 12¢ to 14¢ higher.

Higher Corn prices weighing on Feeder Cattle futures, which closed average of 94¢ lower (37¢ lower at the back to $1.72 lower toward the front).

Recently stronger cash prices helped Live Cattle fade the heat. They closed an average 26¢ higher Tuesday.

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

Prices last week were $142/cwt. on a live basis in Nebraska and the Southern Plains and $142-$144 in the western Corn Belt. Dressed prices were $2 higher at $226.

Tuesday was one of those rare occasions where the Choice-Select spread was negative, with Choice Boxed beef cutout value $2.45 lower in the afternoon at $261.64/cwt., while Select was $1.80 higher at $263.64.

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Major U.S. financial indices sank Tuesday in response to U.S. economic sanctions on Russia after that nation recognized breakaway regions in Ukraine and sent military assistance to them.

The Down Jones Industrial Average closed 480 points lower. The S&P 500 closed 44 points lower. The NASDAQ was down 166 points.

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“The fall run of calves has persisted because of the lack of forage and price of it and other feedstuffs,” says Stephen Koontz, agricultural economist at Colorado State University. “Dry weather in the Northern Plains and in the Mountain West, as well as deteriorating wheat pasture conditions, are pushing animals to the feeding sector…Feeder cattle movements are reasonably strong through January and February. Prices, likewise, remain strong as cattle feeding organizations are more aggressively chasing available animals and lighter animals.”

At the same time, the beef packing pace increased in recent weeks, helping work through long-fed cattle Koontz explains, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center (LMIC). 

“Federally inspected daily fed steer and heifer slaughter has been remarkable during February,” Koontz says. “…Daily slaughter in February has routinely been greater than 90,000 head and some days pushing 96,000. I anticipate the March Cattle on Feed report, which shows February marketings and placements, will reveal a drop in the number of cattle on feed over 120 or over 150 days.”

By | February 22nd, 2022|Daily Market Highlights|

Cattle Current Daily—Oct. 22, 2022

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

Prices last week were $142/cwt. on a live basis in Nebraska and the Southern Plains and $142-$144 in the western Corn Belt. Dressed prices were at $226.

The five-area average weighted direct fed steer price last week was $1.88 higher at $142.36/cwt. The average steer price in the beef was $2.00 higher at $226.04.

Equity and futures markets were closed Monday in observance of President’s Day.

As mentioned in the previous day’s Cattle Current, Live Cattle futures were an average of 75¢ higher (37¢ to $1.37 higher) week to week on Friday, except for 30¢ lower in near Apr.

Feeder Cattle futures closed an average of $1.24 higher (15¢ to $1.80 higher) week to week on Friday except for 80¢ lower in spot Mar.

Choice boxed beef cutout value was $1.76 lower Monday afternoon at $264.09/cwt. Select was 79¢ lower at $261.84.

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As mentioned at the outset, equity markets were closed Monday, giving investors and traders an extra day to dwell on the inflation concerns and political tensions in eastern Europe that drove markets lower amid a volatile ride last week.

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Drought will be an obvious key factor to whether the nation’s beef cow herd continues to contract this year and by how much.

“Widespread drought in 2022 could result in much more pronounced cow herd liquidation and relocation than previously and the scenario will be all about what we have to do,” explained Derrell Peel, extension livestock marketing specialist at Oklahoma State University, in his market comments last week, offering one drought scenario.

This week, Peel consider the outlook if drought subsides.

“The cyclical peak in the beef cow herd inventory was in 2019 and the industry has been in liquidation for three years, significantly enhanced by drought in 2021 and to a minor extent in 2020. If drought is not a limitation in 2022, will cattle producers continue herd liquidation? The answer will be determined by what cattle producers want to do and can do relative to cow culling and heifer retention,” Peel says. “Higher cattle prices and expectations of continued higher prices may have producers interested in slowing liquidation, holding cattle numbers steady or even expanding.  However, the extent to which higher prices leads to expectations of higher profitability (and a desire to expand the herd) will be tempered by higher feed and other input costs.”  

Peel points out, herd rebuilding will be the first step for producers emerging from drought.

“The overall beef cow culling rate in 2021 was 11.55%, the highest since 2011. In drought areas, producers who culled heavily last year may be able to sharply reduce culling this year if forage conditions improve,” Peel says. “In other areas, producers may hold cow culling to a minimum. After increasing sharply in 2021, beef cow slaughter could drop by as much as 10-15% year over year in 2022. This would result in a beef cow-culling rate between 10% and 10.5%. An even lower culling rate might be possible…the average culling rate in the last herd expansion from 2014-2018 was 8.7%…but it doesn’t seem likely that expansion signals are that strong yet.”

Moreover, Peel points to the 3.3% year-over-year reduction in beef replacement heifers Jan. 1, which limits herd expansion opportunities this year.

“It appears to me that the most aggressive 2022 scenario is for the industry to hold the beef cow herd to a low level of liquidation…perhaps a 0.5% or less reduction in beef cows,” Peel says. “Achieving herd expansion is likely not feasible and even holding the herd to zero change stretches the numbers to unlikely levels. If the industry does try to minimize herd liquidation in 2022 and prepare for later herd expansion, the reduction in cow and heifer slaughter could result in a larger decrease in beef production this year than is currently forecast.”

Peel expects the most likely reality this year lies in between severe-drought and no-drought scenarios, with continued drought in some regions.

“The result could be modest levels of additional beef cow herd liquidation in 2022, perhaps less severe than 2021 but still significant continued reduction in the beef cow inventory. It is likely that cattle numbers will continue to tighten in 2022,” Peel says.

By | February 22nd, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 21, 2022

Negotiated cash fed cattle trade was limited on light demand in the western Corn Belt through Friday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few live sales at $144/cwt.

Elsewhere, trade was mostly inactive on light demand.

For the week, live prices were $2 higher in Nebraska and the Southern Plains at $142 and $1-$2 higher in the western Corn Belt at $142-$143. Dressed prices were $2 higher at $226.

Total estimated cattle slaughter last week was 663,000 head, which was 4,000 head more than the previous week and 114,000 head more than the same week last year. Total estimated year-to-date cattle slaughter of 4.49 million head is just 110,000 head fewer.

Feeder Cattle futures closing mixed, from an average of 42¢ lower in three contracts to an average of 44¢ higher.

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

Choice Boxed beef cutout value was $3.74 lower Friday afternoon at $265.85/cwt. Select was $2.22 lower at $262.63.

Net U.S. beef export sales of 23,000 metric tons (2022) were 18% more than the previous week and 38% more than the prior four-week average, according to USDA’s U.S. Export Sales report for the week ending Feb. 10.

Increases were primarily for South Korea, Japan, Canada, Mexico, and China.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed 3¢ to 9¢ higher.

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Major U.S. financial indices continued to erode Friday as worries grew about Russia invading Ukraine.

The Dow Jones Industrial Average closed 232 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 168 points.

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U.S. restaurants continue to claw back from the ravages of the pandemic, but the industry will likely remain changed going forward.

“Restaurants and their patrons have found themselves in a ‘new normal.’ Given emergent technology, changing consumer behavior and dining preferences, and the extraordinary challenges of the last two years, the industry is unlikely to ever completely return to its pre-pandemic state,” says Hudson Riehle, senior vice president of the Research and Knowledge Group at the National Restaurant Association (NRA). “While recovery speed varies across the industry by segment, the constant innovation and sustained flexibility of restaurant operators are creating a new future for the restaurant industry. There will continue to be ample opportunities for growth in 2022 and beyond.”

Earlier this month, NRA released its 2022 State of the Restaurant Industry report, which measures the restaurant industry’s continued recovery and examines the status of current and emerging trends across key categories including technology and off-premises business, operations, workforce, food and menus, and more.

Among highlights from the report:

  • More than half of restaurant operators said it would be a year or more before business conditions return to normal. Food, labor, and occupancy costs are expected to remain elevated, and continue to impact restaurant profit margins in 2022.
  • 96% of operators experienced supply delays or shortages of key food or beverage items in 2021 – and these challenges will likely continue in 2022.
  • 60% of full-service operators say their menu contains fewer offerings now than it did before the pandemic.
  • Roughly 50% of restaurant operators in the full-service, quick-service, and fast-casual segments expect recruiting and retaining employees to be their top challenge in 2022.
  • 51% of adults say they aren’t eating at restaurants as often as they would like, which is an increase of six percentage points from before the pandemic. 
  • 51% of adults say purchasing takeout or delivery food is essential to the way they live, including 72% of millennials and 66% of Gen Z adults.
  • 57% of adults say they would likely participate in a meal subscription program if it was offered by one of their favorite restaurants. Eight in 10 millennials and Gen Z adults say they would use this option.
By | February 20th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 18, 2022

Feeder Cattle futures lost ground Thursday, closing an average of 81¢ lower amid lighter trade and firming Corn futures.

Live Cattle futures paddled in place awaiting more direction. Other than 27¢ higher in spot Feb, they closed an average of 21¢ lower.

Corn futures closed 2¢ to 4¢ higher. 

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

Negotiated cash fed cattle trade was slow on light demand in Nebraska through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live sales at $142.00-$142.50/cwt., but too few to trend.

Elsewhere, trade was limited in light demand. Although too few to trend, there were a few live trades in the Texas Panhandle at $142.

In established trade so far this week, live prices are $2 higher in Nebraska and the Southern Plains at $142 and $1-$2 higher in the western Corn Belt at $142-$143. Dressed prices are $2 higher at $226.

Choice Boxed beef cutout value was 3¢ lower Wednesday afternoon at $269.59/cwt. Select was $1.23 lower at $264.85.

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Major U.S. financial indices closed sharply lower Thursday with renewed concerns about the potential for Russia to invade Ukraine, as well as inflation worries.

The Dow Jones Industrial Average closed 622 points lower. The S&P 500 closed 94 points lower. The NASDAQ was down 407 points.

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Beef imports to the U.S. totaled 3.35 billion lbs. last year, near 2020 levels, according to livestock economists, in the latest Cattle Market Notes Weekly (CMNW).

“While cumulative imports lagged behind the previous year for most of 2021, strong fourth-quarter imports led to an annual year-over-year increase of just under 6 million lbs.,” say analysts with USDA’s Economic Research Service (ERS), in the recent monthly Livestock, Dairy and Poultry Outlook. “Fourth-quarter 2021 imports totaled 863 million lbs., 25% higher year over year. This was the second-highest fourth-quarter import level, behind 2004.”

“Canada (28%), Mexico (20%), and New Zealand (15%) were the primary sources of beef imports,” according to CMNW. “Australia, typically a top-two import source, was only the fourth largest at 12% followed by Brazil at 11%. Together, these five countries accounted for 87% of total beef imports. Imports from Australia were down 38% percent from 2020, however, their herd is expected to further rebuild in 2022 amid improving rainfall conditions.”

CMNW is authored by Josh Maples at Mississippi State University, James Mitchell at the University of Arkansas and Kenny Burdine at the University of Kentucky.

ERS projects U.S. beef imports this year slightly higher at 3.37 billion lbs. based on sustained strong domestic demand.

On the other side of the equation, ERS analysts say, “Although demand is expected to remain relatively strong in 2022, U.S. beef exports are forecast to decline 5% to 3.270 billion lbs. because of greater expected exportable supplies from Oceania and South America. U.S. exports are expected to pull almost 12% from production in 2022, second only to 2021.”

By | February 17th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 17, 2022

Negotiated cash fed cattle trade was moderate to active on good demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were $2 higher at $142/cwt.

Although too few transactions to trend, live prices in Nebraska were $2-$3 higher at $142-$143 on slow trade and light to moderate demand. Dressed sales were $2 higher at $226.

Also too few to trend, there were a few live sales in the western Corn Belt steady to $3 higher at $141-$143. Dressed prices last week were $224.

Even so, Cattle futures mainly paddled in place.

Live Cattle futures closed an average of 18¢ higher.

Feeder Cattle futures closed an average 43¢ lower (10¢ to $1.27 lower) except for unchanged and 27¢ higher in the back two contracts.

Choice Boxed beef cutout value was 75¢ lower Wednesday afternoon at $269.62/cwt. Select was $1.74 lower at $266.08.

Corn futures closed 4¢ to 9¢ higher through May ’23 and then mostly 1¢ higher.

Soybean futures closed mostly 23¢ to 36¢ higher through Jan ’23 and then mostly 10¢ higher.

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Major U.S. financial indices mainly settled sideways Wednesday.

The Fed is maintaining the federal funds rate at 0% to 0.25% for the time being. But, according to a prepared statement:

“With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate. The Committee decided to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March. Beginning in February, the Committee will increase its holdings of Treasury securities by at least $20 billion per month and of agency mortgage‑backed securities by at least $10 billion per month. The Federal Reserve’s ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to house-holds and businesses.”

The Dow Jones Industrial Average closed 54 points lower. The S&P 500 closed 3 points higher. The NASDAQ was down 15 points.

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USDA’s Economic Research Service publishes estimates of the wholesale and retail values of beef, pork, and poultry on its Meat Price Spreads data page. The graph below compares annual average values for composite Choice beef and pork, and broilers for the years 2020 and 2021. The wholesale value of Choice beef increased 61¢/lb., while the retail value increased 71¢. Pork and broiler retail values increased less than their wholesale values. Pork’s wholesale value increased 54¢/lb. while the retail value increased 48¢. The wholesale broiler value increased 17¢/lb. and its retail value 10¢.

By | February 16th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 16, 2022

Higher outside markets and lower Corn futures, both due in part to less geopolitical tension in Eastern Europe, helped fuel gains in Cattle futures Tuesday.

Live Cattle futures closed an average of 52¢ higher.

Feeder Cattle futures closed an average $1.47 higher.

Corn futures closed 10¢ to 17¢ lower through the front four contracts and then mostly 5¢ to 8¢ lower.

Soybean futures closed mostly 9¢ to 18¢ lower through Jan ’23 and then 3¢ lower to 3¢ 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 at $140/cwt. in the Southern Plains and Nebraska; $140-$142 in the western Corn Belt. Dressed trade was at $224.

Choice Boxed beef cutout value was $3.59 lower Tuesday afternoon at $270.37/cwt. Select was 93¢ lower at $267.82.

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Easing tensions between Russia and Ukraine, at least for the day, seemed to be the primary driver behind sharply higher major U.S. financial indices Tuesday.

The Dow Jones Industrial Average closed 422 points higher. The S&P 500 closed 69 points higher. The NASDAQ was up 348 points.

Crude Oil futures (WTI-CME) were $3.10 to $3.39 lower through the front six contracts.

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USDA’s Economic Research Service (ERS) increased expectations for feeder cattle prices this year, in the latest Livestock Dairy and Poultry Outlook.

Although projected prices were reduced $1 to $158/cwt. in the first quarter, they were increased $2 for the remainder of the year to $158 in the second quarter, $162 in the third quarter and $167 in the fourth quarter. The estimated annual price for feeder steers (750-800 lbs., Oklahoma City) increased $1.25 to $161.25.

ERS analysts note, prices at Oklahoma National Stockyards in January were $23.84 more (+17.8%) than a year earlier at $157.78.

As noted in Cattle Current recently, ERS also increased the projected five-area direct average fed steer prices for this year to $137.50.

“Compared to last year, beef cattle producers are indicating their intentions to retain 3% fewer heifers for beef cow replacement, with the largest reductions in Texas (-110,000 head) and Montana (-50,000 head),” say ERS analysts, referring to the Jan. 1 inventory. “The number of heifers expected to calve during the year is also down 3%. The lower number of heifers retained implies that the national herd is unlikely to expand. A similar pattern is reflected on the dairy side, with milk cow numbers down 1% and heifers for milk-cow replacement down 3%.” 

There were 719,000 fewer beef cows at the beginning of this year than the previous year, according to the Cattle report. Deepest liquidation occurred in South Dakota (-189,000), Texas (-160,000), Missouri (-94,000), and Montana (-90,000 head).

“Poor pasture and range conditions were the primary causes of this contraction in the West and Plains regions,” ERS analysts say. “Hay stocks Dec. 1, 2021, were also down 6% from a year ago, and tight supplies in parts of the country may have influenced producers’ ability to maintain cow herds.”

By | February 15th, 2022|Daily Market Highlights|

Cattle Current—Daily Feb. 15, 2022

Last week’s stouter packing pace and higher cash prices helped Cattle futures edge higher Monday.

Feeder Cattle futures closed an average 57¢ higher except for unchanged in the back contract.

Live Cattle futures closed an average of 28¢ higher except for unchanged in Dec.

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

Last week, live prices were at $140/cwt. in the Southern Plains and Nebraska; $140-$142 in the western Corn Belt. Dressed trade was at $224.

The five-area direct weighted average steer price last week was 72¢ higher than the previous week at $140.48/cwt. on a live basis. The average steer price in the beef was $2.25 higher at $224.04.

Choice Boxed beef cutout value was 56¢ lower Monday afternoon at $273.96/cwt. Select was 92¢ higher at $268.75.

Corn futures closed mostly 3¢ to 5¢ higher.

Soybean futures closed mostly 1¢ to 13¢ lower through near Nov and then mostly 2¢ to 4¢ higher.

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Major U.S. financial indices continued lower Monday amid continued jitters about steeper inflation and tensions between Russia and Ukraine.

The Dow Jones Industrial Average closed 171 points lower. The S&P 500 closed 16 points lower. The NASDAQ was fractionally lower.

Crude Oil futures (WTI-CME) were $1.08 to $2.36 higher through the front six contracts.

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“Significant drought in 2022 will have more noticeable impacts on cow markets, will change the timing of feeder cattle and ultimately feedlot production, and will have more implications for the industry in subsequent years,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “There is potential for the drought to push cattle inventories significantly lower than planned and set up a market reaction similar to 2014-15 in the next couple of years.”

In his weekly market comments, Peel explains the Climate Prediction Center’s drought outlook suggests drought may persist in regions of the west and northern plains that have been in drought, although there has been some improvement in the Northwest. As well, developing drought in the Southern Plains could expand to the Central Plains.

“Widespread drought in 2022 could result in much more pronounced cow herd liquidation and relocation than previously and the scenario will be all about what we have to do,” Peel says. “There will be little flexibility in regions that were in drought in 2020 and 2021. For example, Dec. 1 hay stocks in the four-state region of Montana, Wyoming, North and South Dakota were down 40.2% year over year. By April or May this predominantly spring-born calving region could be faced with significant additional liquidation of cows or cow-calf pairs on top of the 8.0% herd liquidation in this region since 2020. This region represents 15.1% of the national beef cow herd.”

Drought has gripped the four-state region of Colorado, New Mexico, Arizona and Utah since 2020, as well with 11.6% beef cow herd liquidation in the past two years, according to Peel. He adds the region represents 5.3% of the nation’s beef cow herd and could see additional liquidation if drought persists this year.

“Drought has expanded sharply in Texas and Oklahoma over the winter; a region that has seen just 1.1% herd liquidation since 2020,” Peel says. “Much of that was general cyclical liquidation rather than drought induced. Dec. 1 hay stocks in these two states were up 18.7% year over year. The Southern Plains region should emerge from winter with a bit more flexibility, and with more fall calving, might not face critical herd liquidation and de-stocking decisions as quickly as some other regions.  Nevertheless, cow culling could accelerate sharply in the region by mid-summer. These two states represent 21.9% of the total beef cow herd.”

Finally, Peel says beef cow numbers declined 3.3% the past two years in Kansas and Nebraska, where 10.8% of the beef cow herd exists and where drought impacts have been marginal so far. Although Dec. hay stocks were 4.9% higher in the region year over year, should drought develop significantly, he says it would likely prompt significant herd liquidation in the Central Plains by the summer.

“Drought in all of the above regions could impact over 53% of the total beef cow herd…roughly 16 million cows,” Peel says.

By | February 14th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 14, 2022

Cattle futures continued to soften Friday, perhaps with some follow-through profit taking and with surging Corn futures and sharply lower outside markets.

Feeder Cattle futures closed an average 60¢ lower.

Live Cattle futures closed mixed from an average of 49¢ lower to an average of 35¢ higher.

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

For the week, live prices were steady to $1 higher in the Southern Plains at $140/cwt., steady to $2 higher in Nebraska at $140 and $1-$2 higher in the western Corn Belt at $141-$142. Dressed trade was $2-$4 higher at $224.

Choice Boxed beef cutout value was 37¢ lower Friday afternoon at $274.52/cwt. Select was $1.12 lower at $267.83.

Total estimated cattle slaughter last week of 659,000 head was 20,000 head more than the previous week and 53,000 head more than the previous year. Year-to-date estimated total cattle slaughter of 3.83 million head is 120,000 head fewer (-3.0%) than the same period last year.

Corn futures closed 9¢ to 10¢ higher through Jly ‘23 and then most 4¢ higher.

Soybean futures closed mostly 9¢ to 11¢ higher.

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Major U.S. financial indices continued to scale lower Friday with follow-through pressure from the previous day’s report of steeper inflation, as well as growing fears about Russia invading Ukraine, which fueled a surge in crude oil prices.

The Dow Jones Industrial Average closed 503 points lower. The S&P 500 closed 85 points lower. The NASDAQ was down 394 points.

Crude Oil futures (WTI-CME) were $1.75 to $3.22 higher through the front six contracts.

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“Cattle producers and traders appear to be extremely optimistic as it relates to cattle prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. He notes input prices are the key concern currently.

“The question to answer is how expensive it is going to be to feed cattle in 2022. Animals can either be fed with purchased feed or with pasture and hay, which is dependent on fertilizer. It is clear purchased feed remains elevated near $270 per ton while a unit of nitrogen is likely to cost $1,” Griffith says. “The failure to apply fertilizer will likely result in reduced hay and pasture yields. The decision becomes to purchase feed, purchase fertilizer, reduce the stocking rate, or overgraze pastures.”

For cow/calf producers, Griffith says current cull cow prices may provide some of the solution.

“Slaughter cow prices are strong and continue to increase, which means this may be a good year for producers to market older cows, poor temperament cows, and low producing cows,” Griffith explains. “The salvage value and reduced pressure on pasture from marketing these animals may prove to be extremely valuable. Looking into the next few months, calf and slaughter cow prices are expected to continue increasing as will feeder cattle prices. There is no way to know if prices will reach or exceed levels being predicted by the futures market, but the futures market is offering some hedging opportunities for those interested.”

By | February 13th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 11, 2022

Cattle futures started the session with optimism but eroded as the day wore on with likely pressure from profit taking and lower outside markets.

Live Cattle futures closed an average of 77¢ lower.

Feeder Cattle futures closed an average of $1.23 lower (82¢ to $1.87 lower).

Negotiated cash fed cattle trade was light to moderate on moderate demand in Nebraska through Thursday afternoon, according to the Agricultural Marketing Service. Dressed trade was $2 higher at $224/cwt. Live prices a day earlier were steady to $2 higher at $140.

Trade in the western Corn Belt was limited on light demand. There were a few live sales at $141-$142, but too few to trend. Prices last week were $140 on a live basis and $220-$222 in the beef.

In the Southern Plains, trade was limited on light demand. Live prices a day earlier were at $140.

Choice Boxed beef cutout value was 97¢ lower Thursday afternoon at $274.82/cwt. Select was $3.10 lower at $268.95.

Corn futures closed mostly 3¢ to 5¢ lower.

Soybean futures closed 10¢ to 20¢ lower in the front five contracts and then 5¢ to 15¢ lower.

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Major U.S. financial indices caved Thursday beneath the weight of steeper inflation than expected and fears of more aggressive rate increases by the Fed.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6% in January on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 7.5% before seasonal adjustment. That’s the stoutest 12-month increase since the period ending February 1982.

The Dow Jones Industrial Average closed 526 points lower. The S&P 500 closed 83 points lower. The NASDAQ was down 304 points.

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U.S. beef exports shattered previous volume and value records in 2021, surpassing $10 billion for the first time, according to year-end data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

December beef exports totaled 121,429 metric tons (mt), up 1% from a year earlier, while value climbed 33% to $991.8 million – the third largest month on record. These results pushed 2021 volume to 1.44 million mt, up 15% from a year ago and 7% above the previous record set in 2018. Export value soared to $10.58 billion, up 38% from 2020 and shattering the previous record (2018) by 27%.

“The beef export results are truly remarkable, especially considering the COVID-related obstacles in the global foodservice sector and all the supply-side and logistical challenges faced by the U.S. industry,” says Dan Halstrom, USMEF President. “Obviously, our large Asian markets accounted for much of the growth, but it really takes broad-based global demand to reach these impressive levels. So this success story is not just about Korea, Japan and China – but also a strong performance in Taiwan, excellent growth in Central and South America and a rebound in Mexico and Southeast Asia.”

Beef export value per head of fed slaughter equated to a record $407.22 in 2021, up 35% from the previous year. Exports accounted for 15% of total beef production and 12.8% for muscle cuts only, up significantly from the respective 2020 ratios of 13.5% and 11.3%.

Japan was once again the leading volume destination for U.S. beef exports in 2021 at 320,737 mt, up 5% from 2020 and the second largest of the post-BSE era. Export value climbed 22% to a record $2.376 billion, but finished a close second to South Korea.

Beef exports to Korea, Japan and China/Hong Kong each exceeded $2 billion, setting new volume and value records in Korea and China/Hong Kong and the value record in Japan. Exports also set a new value record in Taiwan and reached new heights in Central America, Colombia and Indonesia. Global exports of U.S. beef variety meat also set a new value record of $1.09 billion, up 24% year-over-year.

By | February 10th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 10, 2022

Cattle futures extended gains Wednesday, supported by firmer cash prices and the beef supply and price outlook provided by the World Agricultural Supply and Demand Estimates (see below).

Live Cattle futures closed an average of $1.04 higher (30¢ higher at the back to $1.65 higher toward the front).

Feeder Cattle futures closed an average of 71¢ higher.

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were steady in the Texas Panhandle at $140/cwt. and steady to $1 higher in Kansas at $140.

Elsewhere, trade was limited on light demand with too few transactions to trend. Last week, live prices were $140 on a live basis in Nebraska and the western Corn Belt. Dressed prices were $222 in Nebraska and $220-$222 in the western Corn Belt.

Choice Boxed beef cutout value was $1.67 lower Wednesday afternoon at $275.79/cwt. Select was $1.79 lower at $272.05.

Corn futures closed 10¢ to 14¢ higher in old-crop contracts and then mostly 6¢ to 9¢ higher.

Soybean futures closed 20¢ to 25¢ higher in the front eight contracts and then mostly 14¢ higher.

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Major U.S. financial indices closed sharply higher Wednesday, led by tech stocks and on positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 305 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 295 points.

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USDA’s Economic Research Service (ERS) left corn prices unchanged and raised expectations for fed cattle prices in the monthly World Agricultural Supply and Demand Estimates (WASDE).

ERS increased the expected annual average five-area direct fed steer price 50¢ from the previous month to $137.50/cwt., on firm packer demand.

Prices are projected at $139 in the first quarter, $136 in the second quarter, $135 in the third quarter and $140 in the fourth quarter.

Beef production this year is projected to be 27.4 billion lbs., slightly higher than the previous month. The total would be 562 million lbs. less (-2.0.%) than last year.

“The beef production forecast is raised from the previous month as larger expected placements during first-half 2022 are marketed in the latter half of the year,” explain ERS analysts. “However, the increase in fed cattle slaughter is partly offset by lower non-fed cattle slaughter.”

Total red meat and poultry production this year is forecast to be 106.6 billion lbs., which would be 183 million lbs. less than last year (-0.2%).

Corn

U.S. corn supply and use (2021-22) was unchanged from the previous month.

The season-average farm price was unchanged at $5.45/bu.

Soybeans

The 2021-22 U.S. soybean outlook is for increased soybean crush and lower ending stocks.

The U.S. season-average soybean price was forecast at $13.00/bu., up 40¢ from last month, partly reflecting the impact of drought in South America. The soybean meal price was forecast at $410.00/short ton, up $35. The soybean oil price forecast was raised 1¢ to 66.0¢/lb.

Wheat

The outlook for 2021-22 U.S. wheat was for stable supplies, lower domestic use, reduced exports, and higher ending stocks.

Projected 2021-22 ending stocks were raised 20 million bu. to 648 million but they still would be 23% lower than last year. The projected season-average farm (SASP) price for wheat was raised 15¢/bu. to $7.30 on NASS prices reported to date and expectations for cash and futures prices for the remainder of 2021-22. This would be the highest SAFP since 2012-13.

By | February 9th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 9, 2022

Cattle futures closed higher Tuesday, helped along by lower Corn and Soybean futures, as well as some betting that negotiated cash fed cattle prices will edge higher again this week.

Feeder Cattle futures closed an average of $1.51 higher in the front three contracts, then an average of 40¢ higher.

Live Cattle futures closed narrowly mixed, from 23¢ lower to 40¢ higher.

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

Last week, live sales were at $140/cwt. in the Texas Panhandle, $139-$140 in Kansas $138-$140 in Nebraska and $140 in the western Corn Belt. Dressed trade was at $222 in Nebraska and at $220-$222 in the western Corn Belt.

Choice Boxed beef cutout value was $1.50 lower Tuesday afternoon at $277.46/cwt. Select was $1.20 lower at $273.84.

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

Soybean futures closed 2¢ to 12¢ lower through Jan ’23, then fractionally to 3¢ higher.

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Major U.S. financial indices rose Tuesday, carried higher by positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 372 points higher. The S&P 500 closed 38 points higher. The NASDAQ was up 179 points.

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U.S. agricultural exports last year were the highest on record, in terms of value, according to data released by the U.S. Commerce Department Tuesday.

Exports of U.S. farm and food products totaled $177 billion, topping 2020 by 18% and eclipsing the previous record (2014) by 14.6%.

“These record-breaking trade numbers demonstrate that U.S. agriculture is incredibly resilient as it continues to provide high-quality, cost-competitive farm and food products to customers around the globe…” says Tom Vilsack, U.S. Secretary of Agriculture. “This is a major boost for the economy as a whole, and particularly for our rural communities, with agricultural exports stimulating local economic activity, helping maintain our competitive edge globally, supporting producers’ bottom lines, and supporting more than 1.3 million jobs on the farm and in related industries such as food processing and transportation.”

U.S. agricultural exports were record high last year to six of the 10 leading U.S. markets, including China, Mexico, Canada, South Korea, the Philippines and Colombia

China remained the top export destination, with a record $33 billion in purchases, up 25% from 2020, while Mexico inched ahead of Canada to capture the number two position with a record $25.5 billion, up 39% from the previous year.

“It’s clear that our international trading partners are responding favorably to a return to certainty from the United States,” Vilsack explains. “…We’re strengthening relationships with our trading partners and holding those partners accountable for their commitments. We’re addressing transportation and infrastructure challenges through the work of the Administration’s Supply Chain Task Force and calling out ocean carriers that are putting profits above their responsibility to serve both importers and exporters. And we’re expanding opportunities for agricultural exports by knocking down trade barriers and partnering with industry on marketing and promotion efforts worldwide.”

By | February 8th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 8, 2022

The five-area direct average steer price last week was $2.81 higher at $139.66/cwt. The average steer price in the beef was $3.79 higher at $221.79.

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

Last week, live sales were at $140 in the Texas Panhandle, $139-$140 in Kansas $138-$140 in Nebraska and $140 in the western Corn Belt. Dressed trade was at $222 in Nebraska and at $220-$222 in the western Corn Belt.

Live Cattle futures closed an average of 27¢ lower, except for unchanged to 7¢ higher in the back three contracts.

Choice Boxed beef cutout value was 85¢ lower at $278.96/cwt. Select was $1.01 lower at $275.04

Feeder Cattle futures closed an average of 63¢ lower, under pressure from Corn futures, which closed 14¢ to 15¢ higher in the front three contracts and then mostly 5¢ to 7¢ higher.

Soybean futures closed mostly 14¢ to 28¢ higher.

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Major U.S. financial indices closed mixed Monday, amid mixed quarterly earning reports and pressured most by tech stocks. 

The Dow Jones Industrial Average closed 1 point higher. The S&P 500 closed 16 points lower. The NASDAQ was down 82 points.

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Barring significant drought-spawned early feedlot placements or some other market disruption, feedlot inventories should be noticeably lower as this year continues, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

In fact, Peel says the ratio of feedlot inventories to feeder cattle supplies — a measure of how intensively the feeder cattle supply is being used — was record low Jan. 1 at 57.5%.

“Stated another way, there are only 1.74 head of feeder cattle available to replace the cattle currently in feedlots,” Peel says. He explains feedlot inventories peaked in February last year, on a monthly basis, but peaked in June last year when considering the 12-month moving average of feedlot inventories, which allows month to month comparisons without seasonality. 

Recent-month placements consisted mostly of light-weight cattle as feedlots sought to maintain inventory.

“Feedlots have been borrowing against the future to hold feedlot inventories as high as possible to this point, and the ability to do that will decrease in the next few months,” Peel says. “The estimated supply of feeder cattle, calculated from Jan. 1 inventories of steers over 500 lbs, other (non-replacement) heifers over 500 lbs., and calves under 500 lbs., with current feedlot inventories subtracted was at 25.54 million head, down 2.6% year over year.”

By | February 7th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 7, 2022

Cattle futures closed narrowly mixed Friday, closing out a dynamically positive week, fueled by the bullish Cattle inventory report.

Week to week on Friday, Feeder Cattle futures closed an average of $5.17 higher ($4.57 higher toward the back to $6.47 higher in spot Mar). The CME Feeder Cattle Index closed $1.51 higher week to week on Thursday at $160.17/cwt.

During the same period, Live Cattle futures closed an average of $3.28 higher and open interest grew by about 15,000 contracts.

On Friday, however, Feeder Cattle futures closed an average of 28¢ lower, except for an average of 32¢ higher in the back two contracts.

Live Cattle futures closed an average of 27¢ higher, except for 15¢ lower in near Jun and unchanged in the back contract.

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

For the week, Live sales were $3 higher in the Texas Panhandle at $140, $3-$4 higher in Kansas at $139-$140, $2-$3 higher in Nebraska at $138-$140 and $2-$3 higher in the western Corn Belt at $140. Dressed trade was $4 higher at $222.

Estimated total cattle slaughter last week of 639,000 head was 4,000 head fewer than the previous week and 13,000 head fewer than the same week last year. So far this year, estimated total cattle slaughter of 3.16 million head is 185,000 head fewer (-5.5%) than the same time last year.

Corn futures closed mostly 5¢ higher through Jly ’23 and then 1¢ to 2¢ higher.

Soybean futures closed 9¢ to 11¢ higher in the front four contracts and then 3¢ to 6¢ higher through Aug. ’23, followed by mostly 1¢ lower.

Week to week on Friday, Corn futures closed an average of 11.6¢ lower in old-crop contracts and Soybean futures closed an average of 68.8¢ higher through the front six contracts.

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Major U.S. financial indices closed mixed Friday, although tech stocks, such as Amazon, blossomed on strong quarterly earnings.

The monthly Employment Situation Summary also revealed stronger results than expected.

Total non-farm payroll employment rose by 467,000 in January, according to the U.S. Bureau of Labor Statistics. The unemployment rate was little changed at 4.0%.

Average hourly earnings in January for all employees on private non-farm payrolls increased by 23¢ to $31.63. Over the past 12 months, average hourly earnings have increased by 5.7%. 

The Dow Jones Industrial Average closed 21 points lower. The S&P 500 closed 23 points higher. The NASDAQ was up 219 points.

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La Niña remains firmly in control of the ocean-atmosphere system, and that is unlikely to change this spring, said meteorologist Matt Makens, during the CattleFax Outlook Seminar in Houston last week.

Barring any change to the La Niña outlook or sudden warming in the Gulf of Alaska, Makens explained that likely means dryness continues across the Southwest and South with warm temperatures. The Northern Plains and Corn Belt are expected to have wetness farther east this spring and drier conditions for this summer, with temperatures closer to normal versus last year.

With that weather outlook in mind, CattleFax expects planted corn acres this coming season to be 91.8 million, with a trend-line yield of 180 bu./acre. CattleFax expects soybean acres to remain near steady at 87.2 million acres.

“Exceptional demand from China is leading U.S. corn exports to new records and expanded interest could easily push exports higher in 2022,” according to Mike Murphy, CattleFax vice president of research and risk management services.

Murphy noted that weather is likely to continue influencing hay prices with much of the Central Plains and the West battling some level of dryness or drought. He explains, on-farm hay stocks Dec. 1 were 6% less year over year at 79 million tons.

“Expect current-year hay prices to average near $186/ton, $10 higher than 2021 prices due to tighter supplies and stronger demand,” Murphy said.

By | February 6th, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 4, 2022

Negotiated cash fed cattle trade was moderate on moderate demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service (AMS).

Live sales in the Texas Panhandle were $3 higher at $140 and $3-$4 higher in Kansas at $139-$140. Earlier in the week, live trade was $2-$3 higher in Nebraska at $138-$140 and in the western Corn Belt at $140. Dressed trade was $4 higher at $222.

Cattle futures closed mixed to a touch lower Thursday on likely profit taking from the recent run-up.

Feeder Cattle futures closed an average of 21¢ lower (5¢ to 55¢).

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

Choice Boxed beef cutout value was $1.69 lower Thursday afternoon at $281.46/cwt. Select was $3.10 lower at $276.47.

Soybean futures closed mostly fractionally higher to 3¢ higher.

Corn futures closed 1¢ to 5¢ lower.

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Tech stocks sent major U.S. financial indices on downward plunge Thursday. Meta stock, the parent company of Facebook fell 26% on missed fourth-quarter earnings.

Spot Crude oil futures (WTI-CME) added pressure as it rose to more than $90 for the first time since 2014 amid ongoing geopolitical turmoil.

The Dow Jones Industrial Average closed 518 points lower. The S&P 500 closed 112 points lower. The NASDAQ was down 539 points.

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Wholesale beef demand will likely slow in the coming year, but cutout value should hold steady near an average of $280/cwt., says Kevin Good, CattleFax vice president of industry relations and analysis.

During the CattleFax Outlook Seminar in Houston this week, Good explained global protein demand continues to rise, and U.S. beef exports are expected to grow by 5% this year to 3.7 billion lbs., supported in part by tightening global protein supplies.

Likewise, CattleFax sees continued domestic consumer beef demand strength this year.

Good explains inflation is also driving beef prices to a higher trading range. The USDA All-Fresh Beef Retail Price should average near $7.15/lb. this year, ultimately resulting in more margin in the system.

While U.S. median household income increased last year, historically high inflation is affecting low-to-middle income Americans the most, Good says. 

By | February 3rd, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 3, 2022

Stronger cash prices, the early-week, bullish Cattle report, the performance-depressing widespread winter storm and improved packer production helped Cattle futures take another step higher Wednesday.

Feeder Cattle futures closed an average of $2.17 higher ($1.55 to $3.175 higher).

Live Cattle futures closed an average of $1.14 higher (83¢ to $1.65 higher).

Negotiated cash fed cattle trade in Nebraska and the Western Corn Belt was moderate through Wednesday afternoon, according to the Agricultural Marketing Service. In Nebraska, live sales traded $3-$4 higher at $140/cwt. and dressed sales traded $4 higher at $222. In the Western Corn Belt, live sales traded $3 higher at $140-$141 and dressed prices were $4 higher at $222.

Trade in the Southern Plains was mostly inactive on light demand. Last week, live sales were $137 in the Texas Panhandle and $136 in Kansas.

Choice Boxed beef cutout value was $2.29 lower Wednesday afternoon at $283.15/cwt. Select was 65¢ lower at $279.57

Corn futures closed mostly down 2¢ to 12¢.

Soybean futures closed 1¢ to 16¢ higher through March ’23, then down 2¢ to 9¢.

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Follow-through support carried Major U.S. financial indices higher again on Wednesday.

The Dow Jones Industrial Average closed 224 points higher. The S&P 500 closed 71 points higher. The NASDAQ was up 42 points.

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CattleFax provided a strongly optimistic cattle price forecast during its Outlook Seminar in Houston Wednesday.

With cattle numbers declining, front-end fed cattle marketing approaching pre-civid levels and beef demand continuing strong, CattleFax projects the average fed steer price this year $18 higher year-over-year at $140/cwt. with a range of $130-$155. The organization forecasts the average feeder steer price (800 lbs.) at $172 with a range of $158-$184, and the average calf price (550 lbs.) at $205 with a range of $180-$230.

Moreover, CattleFax forecasts utility cows at an average of $75/cwt. with a range of $65 to $85. Bred cows are expected to bring an average $1,850/head with a range of $1,700 to $2,000 for load lots of quality, running-age cows.

The feeder cattle and calf supply will be 675,000 head fewer than last year, totaling 25.5 million head, according to CattleFax. Fed cattle slaughter will decline 400,000 head to 25.7 million head. Commercial beef production will contract over the next several years starting with a 2% decline in 2022.

Kevin Good, vice president of industry relations and analysis at CattleFax, pointed out U.S. beef cow inventories fell more than 700,000 head from last year and are nearly 1.6 million less than the cyclical peak. This year, the beef cow herd will be near 30.1 million head.

“Drought, market volatility and processing capacity challenges affected 30-40% of the cow herd over the last year. Without an improvement in weather and profitability, at least 250,000 more head will be liquidated in 2022,” Good says.

By | February 2nd, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 2, 2022

Cattle futures extended gains Tuesday after a struggle for follow-through support from the bullish Cattle report and thoughts that packer interest will improve this week.

Live Cattle futures closed an average of 72¢ higher (28¢ to 90¢).

Feeder Cattle futures closed an average of 70¢ higher (55¢ to 93¢ higher).

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

Last week, live prices were at $137/cwt. in the Texas Panhandle, at $136 in Kansas $137 in Nebraska and at $137-$139 in the western Corn Belt. Dressed trade was steady at $218.

Choice Boxed beef cutout value Tuesday afternoon was $4.96 lower at $285.44/cwt. Select was $3.05 lower at $280.22.

Corn futures closed 4¢ to 9¢ higher in the front six contracts.

Soybean futures closed 12¢ to 38¢ higher.

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Major U.S. financial indices closed Tuesday with the best three-day rally since 2020, as investors seemed to speculate the Federal Reserve will not stymie growth as it seeks to cool inflation.

The Dow Jones Industrial Average closed 273 points higher. The S&P 500 closed 31 points higher. The NASDAQ was up 106 points.

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Agricultural producer sentiment weakened in January as measured by the Purdue University/CME Group Ag Economy Barometer. The index declined 6 points from the previous month to 119, its second-lowest reading since July 2020. The Index of Current Conditions fell 13 points to a reading of 133, while the Index of Future Expectations was down 2 points to a reading of 112.

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 Jan. 17-21, 2022.

“Rising farm input costs and ongoing supply chain disruptions appear to be contributing to producers’ weaker perception of current conditions and expectations of their farm’s financial performance in 2022 when compared to last year,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Disruptions in the supply chain for many farm inputs, coupled with strong demand, are pushing production costs higher. In January, 57% of survey respondents said they expect farm input prices to rise by 20% or more in 2022 and 34% of producers said they expect prices to rise by 30% or more.

Beyond higher prices, 28% of survey respondents said they have had difficulty purchasing crop inputs from suppliers for the 2022 season. In a follow-up question posed to those experiencing difficulty in procuring crop inputs, respondents reported difficulty in purchasing a broad spectrum of crop inputs including herbicides, insecticides, fertilizer, and farm machinery parts.

By | February 1st, 2022|Daily Market Highlights|

Cattle Current Daily—Feb. 1, 2022

Monday’s big news was the Cattle report from USDA, with the Jan. 1 cattle inventory. Herd contraction was expected, but numbers are less than many expected.

Beef cows of 30.125 million head were 718,500 head fewer (-2.3%) than the same time last year. That is the fewest numbers since 2015 and was the largest year-over-year decline since 1996-97, according to David Anderson, Extension livestock economist at Texas A&M University. He adds the report included a significant revision of 314,000 fewer head in the previous year’s beef cow inventory.

Although drought contributed to the decline in beef cows, Anderson adds calf prices, relative to costs, also has forced some culling.

Beef heifers held for replacement of 5.611 million head were 191,600 head fewer (-3.3%) than the previous year.

“That is the fewest replacement heifers held back since Jan. 1, 2014,” Anderson says, in the latest issue of In the Cattle Markets. “While fewer replacements would be needed with a smaller cow herd, a reduction this large indicates some expectations of more herd contraction.”

The calculated feeder supply outside of feedlots of 25.537 million head was 676,000 head fewer (-2.6%) than last year.

Dairy cows of 9.375 million head were 67,400 head fewer (-0.7%)

All cattle and calves of 91.902 million head were 1.888 million head fewer (-2.0%).

“The inventory report indicates that we are headed towards less beef production and higher prices,” Anderson says. “A cow herd of this size should also lead to some expectations of calf prices approaching the rarified air of the years following the Texas 2010-2012 drought. The current drought and its development over the coming months will dictate a lot about the cow herd over this year. But, good beef demand should also pull prices higher on top of available supplies.”

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Cattle futures closed higher with likely positioning ahead of the aforementioned  bullish Cattle report.

Live Cattle futures closed an average of $1.18 higher (88¢ to $1.42).

Feeder Cattle futures closed an average of $2.64 higher ($1.75 to $3.40 higher).

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

Last week, live prices were at $137/cwt. in the Texas Panhandle, at $136 in Kansas $137 in Nebraska and at $137-$139 in the western Corn Belt. Dressed trade was steady at $218.

Choice Boxed beef cutout value was 2¢ lower Monday afternoon at $290.40/cwt. Select was 14¢ lower at $283.27.

Corn futures closed mixed, from 10¢ lower to 4¢ higher.

Soybean futures closed 13¢ to 20¢ higher through Aug ’23 and then 2 higher to 3¢ lower.

By | February 1st, 2022|Daily Market Highlights|

Cattle Current Daily—01-31-22

Judging by estimated weekly cattle slaughter, the beef packing pace continues to improve but remains hindered.

Total cattle slaughter last week of 643,000 head was 7,000 head more than the previous week but 13,000 head less than the same week last year.

Oversold conditions and higher wholesale beef prices helped Cattle futures regain some ground Friday.

Choice Boxed beef cutout value was $1.31 higher Friday afternoon at $290.42/cwt. Select was $4.31 higher at $283.41.

Live Cattle futures closed an average of 89¢ higher, except for unchanged in the back contract.

Feeder Cattle futures closed an average of 71¢ higher (12¢ to $1.37 higher).

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

For the week, live prices were steady in the Texas Panhandle at $137/cwt., $1 lower in Kansas at $136, steady to $1 lower in Nebraska at $137 and steady in the western Corn Belt at $137-$139. Dressed trade was steady at $218.

Keep in mind, USDA will release Jan. 1 cattle inventory numbers Monday afternoon.

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Resurgent tech stocks helped major U.S. financial indices close sharply higher Friday.

The Dow Jones Industrial Average closed 564 points higher. The S&P 500 closed 105 points higher. The NASDAQ was up 417 points.

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South American weather and the tension between Russia and Ukraine continued to bolster grain prices and market volatility last week.

In his weekly comments, Aaron Smith, crop marketing specialist at the University of Tennessee points out Brazil and Argentina account for 58% of global soybean exports and 40% of global corn exports.

As for political tension in eastern Europe, Smith explains, “Russia has increased its share of global wheat exports from less than 10% in the early 2000s to approximately 20% and has been the top global supplier of wheat in recent years. For the 2021-22 marketing year, Ukraine is projected to provide 12% of global exports of wheat and 16% of global exports of corn…Conflict between the two countries could restrict supplies and disrupt logistics in the region, causing importing countries to seek supplies elsewhere.”

Soybeans received another boost Friday from worries over reduced global palm oil exports. Soybean futures closed 11¢ to 21¢ higher through Jan ‘23 and then mostly fractionally higher to 4¢ lower. Soybean futures closed an average of 45.5¢ higher through the front six contracts week to week on Friday. Those contracts were an average of 80.9¢ higher over the last two weeks.

Corn futures closed 10¢ higher in the front three contracts on Friday and then mostly 2¢ higher. They were an average of 18.9¢ higher through the front three contracts week to week.

By | January 30th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 28, 2022

Cattle futures mostly eased lower in light trade Thursday as traders awaited more concrete direction from the packing pace.

Feeder Cattle futures closed an average of 82¢ lower except for 20¢ higher in expiring Jan.

Live Cattle futures closed an average of 43¢ lower, except for 20¢ higher in the back contract.

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

So far for the week, live prices are steady in the Texas Panhandle at $137/cwt., $1 lower in Kansas at $136, steady to $1 lower in Nebraska at $137 and steady in the western Corn Belt at $137-$139. Dressed trade is steady at $218.

Choice Boxed beef cutout value was 35¢ lower Thursday afternoon at $289.11/cwt. Select was 62¢ lower at $279.10.

The average dressed steer weight the week ending Jan. 15 was 922 lbs., according to the latest weekly Actual Slaughter Under Federal Inspection report. That was 6 lbs. lighter than the previous week and 3 lbs. lighter than the previous year. The average dressed heifer weight of 851 lbs. was the same as a week earlier and 1 lb. heavier than the same time last year.

Net U.S. beef export sales for 2022 totaled 14,300 metric tons the week ending Jan. 20, according to the weekly U.S. Export Sales report. Sales were primarily for South Korea, Japan, Mexico, China, and Indonesia.

Grain exports helped underpin prices.

Net U.S. corn export sales (2021-22) were 29% more than the previous week and 84% more than the prior four-week average.

Net U.S. soybean export sales were up 53% from the previous week and 77% from the prior four-week average.

Net U.S. wheat export sales were 78% higher than the previous week and up noticeably from the prior four-week average.

Corn futures closed mostly 3¢ to 6¢ lower.

Soybean futures closed 2¢ to 8¢ higher through Jan ‘23 and then mostly 1¢ lower.

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Major U.S. financial indices drifted lower Thursday, as investors pondered a tighter-fisted Fed and despite stronger quarterly economic growth than expected.

“Real gross domestic product (GDP) increased at an annual rate of 6.9% in the fourth quarter of 2021, following an increase of 2.3% in the third quarter,” according to the U.S. Commerce Department. “The acceleration in the fourth quarter was led by an upturn in exports as well as accelerations in inventory investment and consumer spending.”

The Dow Jones Industrial Average closed 7 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 189 points.

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A Congressional bill intended to increase transparency in the beef supply chain may hinder pricing innovations that have contributed to beef demand growth over the last 20 years and translate into lower prices for cattle producers, according to a recent analysis by the Fryar Price Risk Management Center of Excellence at the University of Arkansas (UA).

Specifically, researchers analyzed the Cattle Price Discovery and Transparency Act (CPDTA), which was introduced in March last year and then subsequently re-introduced in the U.S. House and Senate last fall.

The bill includes elements widely supported by cattle producers, such as increasing the level of price reporting and creating a publicly available library of marketing contracts between packers and producers. However, the bill also mandates minimum levels of negotiated cash fed cattle trade, an element that continues to divide the industry.

Cash cattle trade lessened over time as cattle feeders and packers increased the use of Alternative Marketing Agreements (AMAs), which enable further differentiation and value segregation of beef carcasses. AMAs enable paying more for cattle that produce beef of higher value to the consumer — clearer pricing signals. At the same time, AMA participants reduce transaction costs and price risk.

For comparison, the analysis explains negotiated cash fed cattle trade usually revolves around a single price paid for all cattle in a pen. That means the average price discounts cattle of higher value and rewards cattle below the pen average.

“By privileging an average pricing system in the sector, the legislation makes it less likely that innovations such as AMAs will be pursued. Innovations that might further reduce transactions costs and/or support further production changes to more closely align the beef end product with consumer tastes and preferences could be beneficial to maintaining and even growing beef demand in the future,”

says John Anderson, director of the Fryar Price Risk Management Center of Excellence. He coauthored the analysis report.

“If AMA use in the Southern Plains is restricted, the most likely immediate outcome is that transaction costs … between feeders and packers will likely go up,” Anderson says. “The lion’s share of this increase will most likely be borne by cow/calf and stocker producers in the form of lower feeder cattle prices.”

On a related note, the American Farm Bureau Federation (AFBF) recently revised policy, no longer supporting mandated levels of cash fed cattle trade.

“We support the majority of this legislation (CPDTA), but we cannot support mandatory cash sales,” says AFBF President Zippy Duvall. “We are committed to working with the sponsors of the bill to make revisions to ensure it aligns with the priorities outlined by our membership.”

By | January 27th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 27, 2022

Cattle futures closed higher Wednesday on apparent technical support and the notion that packer production is gaining.

Live Cattle futures closed an average of $1.11 higher.

Feeder Cattle futures closed an average of 95¢ higher (17¢ higher in waning spot Jan to $1.30 higher toward the back).

Negotiated cash fed cattle trade was slow on light demand in the Texas Panhandle through Wednesday afternoon, according to the Agricultural Marketing Service. Live sales were steady at $137/cwt.

Trade was slow on moderate demand in Kansas at $136-$137, mostly $1 lower at $136.

In Nebraska and the western Corn Belt, trade was limited on light demand. So far this week, in both regions, live sales are steady to $2 lower at $137 and dressed trade is steady at $218.

Wholesale beef prices continued to falter, suggesting the seasonal top may have been breeched. Choice Boxed beef cutout value was $2.92 lower Wednesday afternoon at $289.46/cwt. Select was $3.60 lower at $279.72.

Soybean futures surged on South American weather and dragged Corn futures along.

Soybean futures closed 21¢ to 32¢ higher through the front five contracts and then mostly 5¢ to 15¢ higher.

Corn futures closed 3¢ to 7¢ higher through the front six contracts  and then mostly 1¢ lower.

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Major U.S. financial indices closed narrowly mixed Wednesday, continuing the volatile seesaw of late, but in reverse order this time: gaining early and losing late in the session.

Part of the give and take likely had to do with the statement from the Federal Reserve.

“With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” said Federal Reserve Chair, Jerome Powell, in a statement. The timing and degree remain uncertain.

The Dow Jones Industrial Average closed 129 points lower. The S&P 500 closed 6 points lower. The NASDAQ was up 2 points.

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“Currently, levels indicate that 2022 will see continued herd contraction and the USDA Cattle report Jan. 31 will likely see the inventory of cows that have calved and beef heifers held as replacements decrease from 36.97 million head to approximately 36.75 million head,” says Brenda Boetel, Extension livestock economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets.

Boetel is referring to the percentage of heifers on feed currently (38.8%) and the average on-feed percentage (38%) for 2019-2021.

“In January 2014, at the most recent cattle cycle inventory low, the percentage of heifers on-feed inventory was 35.5%. This percentage will decrease during the initial phases of herd rebuilding as heifers will be held back as replacements, and the percentage will increase during herd contraction.”

Boetel adds that deferred live cattle prices will likely receive most of the pressure from increased feedlot placements revealed in the latest Cattle on Feed report, which were led by light weights.

 

By | January 26th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 26, 2022

Negotiated cash fed cattle trade was slow on light demand through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend in any region, there were some live sales in the Southern plains and Nebraska at $137/cwt. Early dressed trades were $218.

Last week, live prices were at $137/cwt. in the Southern Plains, $137-$138 in Nebraska and at $137-$139 in the western Corn Belt. Dressed prices were $218.

Cattle futures continued to lose ground Tuesday, unable to escape the uncertain packing pace and volatile outside markets.

Lower wholesale beef prices on the day, perhaps signaling a near seasonal top, added to Live Cattle angst. Live Cattle futures closed an average of 22¢ lower, except for an average of 29¢ higher in three contracts at either end of the board.

Choice Boxed beef cutout value was $1.12 lower Tuesday afternoon at $292.38/cwt. Select was $1.47 lower at $283.32.

Nearby Corn futures prices beyond the $6.00 mark added pressure to Feeder Cattle futures, which closed an average of $1.14 lower, except for 7¢ higher in spot Jan.

Corn futures closed mostly 2¢ to 8¢ higher.

Soybean futures closed mostly 11¢ to 13¢ higher after 4¢ to 9¢ higher in the front four contracts.

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Major U.S. financial indices closed lower Tuesday but a canyon away from session lows for the second consecutive day of a massive sell-off followed by a frantic comeback. Underlying forces appeared the same — inflation, rising interest rates and the standoff between Russia and Ukraine.

The Dow Jones Industrial Average closed 66 points lower. The S&P 500 closed 53 points lower. The NASDAQ was down 315 points.

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Creighton University’s Rural Mainstreet Index (RMI) declined in January, but remained above growth neutral the for the 14th consecutive month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

The region’s overall reading for January fell 5.6 points from the previous month to 61.1. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Solid grain prices, the Federal Reserve’s record-low short-term interest rates, and growing agricultural exports have underpinned the Rural Mainstreet Economy,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Bankers overwhelmingly named rising farm input prices, such as fertilizer, as the top threat this year to agricultural producers in their respective areas. Disruption of farm input deliveries and rising interest rates ranked second and third.

“Inflation is a serious problem here. Gasoline prices have nearly doubled since November 2020,” says Jim Eckert, president of the Anchor State Bank in Anchor, Illinois. “Food prices are up well above what’s claimed by the government. Poor fiscal policy in D.C. is sinking all ships!”

“Increased input costs have raised our average farmer break even points, but current commodity prices still produce moderate gains in all areas of financial statements,” according to Jim Brown, CEO of Hardin County Savings Bank, Eldora, Iowa.

On average, bank CEOs expect the Federal Reserve to raise short-term interest rates by 0.70% (70 basis points) this year. Approximately 18.5% of bankers expect four or more one-quarter percentage point rate hikes in 2022.

Still, Brown says, “Our loan reviews show an increase in working capital, net worth and lower leverage in almost every case.”

The region’s farmland price index decreased to 88.5 from December’s record high of 90.0. January’s reading was the 16th straight month the index was above growth neutral.

By | January 25th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 25. 2022

As expected, significantly higher feedlot placements revealed in Friday’s monthly Cattle on Feed report cast a pall over Cattle futures Monday, darkened by wildly volatile outside markets. However, they recovered some lost ground by the end of the session.

Feeder Cattle futures closed an average of $1.46 lower (92¢ to $2.05 lower).

Live Cattle futures closed an average of $1.03 lower (25¢ to $2.02 lower).

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

Last week, live prices were at $137/cwt. in the Southern Plains, $137-$138 in Nebraska and at $137-$139 in the western Corn Belt. Dressed prices were $218.

The five-area direct average steer price last week was 89¢ higher on a live basis at $137.50/cwt. The average steer price in the beef was 7¢ lower at $217.92.

Choice Boxed beef cutout value was $1.09 higher Monday afternoon at $293.50/cwt. Select was $2.46 higher at $284.79.

Corn futures closed mostly 2¢ higher, riding the coattails of Wheat futures, which remain bolstered by the geopolitical tension in eastern Europe.

Soybean futures closed mostly 7¢ to 13¢ lower on rains in South America.

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Major U.S. financial indices started out Monday rampaging lower as investors continued to flee risk amid uncertainty surrounding how quickly the fed will raise interest rates and by how much, as well as the tensions brewing between Russia and Ukraine. By the end of the session, however, they reversed course, presumably on perceived bargain buying.

The Dow Jones Industrial Average closed 99 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 86 points.

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“Although cattle numbers are generally declining, feedlots will try to maintain inventories as long as possible,” says Derrell Peel Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. In part, he was explaining the 6.5% (+119,000 head) year-over-year increase in December feedlot placements revealed in the monthly Cattle on Feed report.

“Producers may have helped feedlots with large December placements as rising feeder prices encouraged later and larger auction totals…at least in some regions,” Peel says. “In Oklahoma, for example, feeder cattle auction totals for the three weeks of December sales were up 22.4% year over year.”

Peel points out lighter cattle made up the lion’s share of increased placements with those weighing less than 700 lbs. up 9.5% compared to the previous year, while cattle going on feed weighing more than 800 lbs. were just 1.8% more.

“Feeder cattle supplies are expected to tighten considerably in 2022,” Peel says. “Declining cattle numbers are projected to reduce cattle slaughter by 2.5-3.0% in 2022 and lead to a 2.5% decrease in beef production for the year. However, drought could change the timing by forcing more liquidation and slaughter sooner and delaying the decrease in production until later.”

For annual perspective, Peel says total fed steer and heifer slaughter (federally inspected) was 25.97 million head last year with heifer slaughter of 9.83 million head comprising 37.8% of fed slaughter, the largest percentage since 2004. 

“Total cow slaughter was 6.67 million head and accounted for 20.1% of total slaughter, the highest percentage since 2011,” Peel says. “Beef cow slaughter totaled 3.562 million head, up 9.0% year over year.”

By | January 24th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 24, 2022

Despite sharply lower outside markets, a bounce higher in grain prices and the ongoing slower beef packing pace, cash cattle and futures prices held their own last week.

Negotiated cash fed cattle trade was 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 steady to $1 higher in the Texas Panhandle at $137, $1-$2 higher in Kansas at $137. Prices were steady to $1 higher in Nebraska at $137-$138 and $1 lower in the western Corn Belt at $137. Dressed prices were steady at $218.

Cattle futures leaked lower Friday amid stagnant cash prices and bearish outside markets.

Live Cattle futures closed an average of 63¢ lower (25¢ to $1.07 lower), except for unchanged and 5¢ higher in the back two contracts. Week to week, they closed mixed, from an average of 19¢ lower in the front four contracts to an average of 52¢ higher.

Choice Boxed beef cutout value was 57¢ lower Friday afternoon at $292.41/cwt. Select was 15¢ higher at $282.33. Week to week, though, Choice was $8.10 higher and Select was $8.36 higher.

Estimated total cattle slaughter last week was 636,000 head, which was 18,000 head more than the previous week, but 26,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 1.87 million head is 161,000 head fewer (-7.9%) than last year. Estimated year-to-date beef production is 147.5 million lbs. less (-8.6%) at 1.57 billion lbs.

Net U.S. beef export sales were 12,800 metric tons for the week ending Jan. 13, according to the weekly U.S. Export Sales report. Sales were primarily for China, Japan, South Korea, Mexico, and Taiwan.

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Based on weekly auctions monitored by Cattle Current, calf and feeder cattle prices trended widely mixed last week. Impaired travel conditions due to winter weather and wobbly futures prices applied pressure, while the optimistic outlook ahead provided lift, especially for grass-suited cattle.

Feeder Cattle futures closed an average of 90¢ lower (52¢ to $1.65 lower). Week to week, they closed an average of $1.82 lower through the front five contracts and then unchanged to $1 higher.

Although soybean futures closed lower Friday, on likely profit taking, South American weather and geopolitical tensions continue to provide lift.

Soybean futures closed mostly 6¢ to 11¢ lower except for fractionally higher in a few contracts. Week to week on Friday, however, they closed an average of 35.4¢ higher.

Corn futures closed 2¢ to 5¢ higher through Jly ’23 and then fractionally higher. They closed an average of 12.5¢ higher through the front six contracts week to week on Friday.

Exports continued to add lift to grain prices, according to the weekly U.S. Export Sales report. For the week ending Jan. 13.

Net U.S. wheat export sales 44% more than the previous week and 62% more than the prior four-week average. Net U.S. corn export sales were up noticeably from the previous week and up 48% from the prior four-week average. And, Net U.S. export soybean sales were 9% less than the previous week, but 12% more than the prior four-week average.

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Major U.S. financial indices closed sharply lower Friday, led by tech stocks, with continued pressure from treasury bond yields, inflation and pending monetary tightening.

The Dow Jones Industrial Average closed 450 points lower. The S&P 500 closed 84 points lower. The NASDAQ was down 385 points.

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Markets will likely view the latest monthly Cattle on Feed report negatively, with placements significantly higher than average expectations.

Feedlots with 1,000 head or more capacity placed 1.96 million head in December, which was 110,000 head more (+6.0%) than a year earlier. Average expectations were for an increase of 2.5%. Placements were the highest for the month since the series began in 1996.

In terms of placement weights, 50% went on feed weighing less than 700 lbs. (26% less than 600 lbs.), 40% weighing 700-899 lbs. and 10% weighing 900 lbs. or more.

Marketings in December of 1.86 million head were 4,000 head more (+0.21%) than the previous year, which was in line with pre-report expectations.

Cattle on feed Jan. 1 of 12.04 million head were 70,000 head more (+0.58%) more than a year earlier and the second highest for the date since the series began in 1996. Heifers and heifer calves on feed (4.68 million head) were 2% more year over year.

By | January 23rd, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 21, 2022

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.

So far this week, live prices are steady to $1 higher in the Texas Panhandle at $137and $1-$2 higher in Kansas at $137. Prices are steady to $1 higher in Nebraska at $137-$138. Although too few to trend, there were a few live trades in the western Corn Belt at $137, which was $1 lower. Dressed prices are steady at $218.

Cattle futures softened Thursday after follow-through support early in the session.

Live Cattle futures closed narrowly mixed, from an average of 17¢ lower in the front five contracts; unchanged to an average of 14¢ higher the rest of the way.

Feeder Cattle futures closed an average of 37¢ lower, except for unchanged to 75¢ higher in the back three contracts.

Choice Boxed beef cutout value was $1.38 higher Thursday afternoon at $292.98/cwt. Select was $1.75 higher at $282.18.

The average dressed steer weight the week ending Jan. 8 was 928 lbs., according to USDA’s Actual Slaughter Under Federal Inspection Report. That was the same as a week earlier but 5 lbs. heavier than the previous year. The average dressed heifer weight was 851 lbs., which was 4 lbs. lighter than the previous week and the same as a year earlier.

Weather in South America and tension between Russia and Ukraine continued to dominate grain market commentary Thursday.

Soybean futures closed 27¢ to 34¢ higher through the front four contracts and then mostly 9¢ to 15¢ higher.

Corn futures closed mostly 2¢ to 4¢ lower.

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Major U.S. financial indices rallied early in Thursday’s session but gave up the gains and more by the end of the day as investors come to grips with inflation and monetary tightening.

Seasonally adjusted initial unemployment insurance claims were 286,000 for the week ending January 15, according to the U.S. Department of Labor. That was 55,000 more than the previous week’s revised level. The four-week moving average was 231,000, an increase of 20,000 from the previous week’s revised average.

The Dow Jones Industrial Average closed 313 points lower. The S&P 500 closed 50 points lower. The NASDAQ was down 186 points.

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Retail beef prices moderated the last couple of months but continue at inflationary levels.

“December beef prices, all fresh and Choice, both declined for the second month in a row from record levels set in October. In December, the all fresh beef price was $7.35/lb., down 2.7% from the record price but 18.0% higher than a year ago,” say analysts with the Livestock Marketing Information Center (LMIC). “The December Choice beef price was $7.66/lb., down 3.0% from the October record price but 21.8% above a year ago. The round and sirloin in December were $7.34 and $11.05/lb., respectively, which was the third highest price for both cuts. Ground beef prices moved slightly lower from the prior month to $4.60/lb., which was the fourth highest on record and 16.5% above the prior year.”

In the latest Livestock Monitor, LMIC analysts explain the Food Consumer Price Index (CPI) in December was 6.3% higher year over year, the steepest annual increase since October 2008. The overall CPI was 7.0% higher, the most in about four decades.

“The Meat CPI rose 14.8% from a year ago, which slowed slightly from the prior month’s rate but is still at levels only seen during the pandemic and the late 1970’s,” LMIC analysts say.

The LMIC folks add that December pork prices were $4.74/lb., which was 15.0% more than a year earlier. The broiler composite retail price was record high at $2.22/lb., which was 10.4% more than the prior year.

By | January 20th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 20, 2022

Improving packer production — 117,000 head Tuesday — helped boost Live Cattle futures an average of $1.11 higher on Wednesday.

The uptick in Live Cattle, helped boost Feeder Cattle futures an average of 73¢ higher, except for 50¢ lower in spot Jan, despite surging Corn futures prices.

Grain futures surged on Wednesday, led by soybeans on weather concerns in South American and wheat based on mounting tension between Russia and Ukraine.

Soybean futures closed mostly 18¢ to 30¢ higher. 

Corn futures closed mostly 7¢ to 11¢ higher. 

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

So far this week, live prices are steady to $1 higher in the Texas Panhandle at $137, $1-$2 higher in Kansas at $137. Prices are steady in Nebraska at $137 and in the western Corn Belt at $138. Dressed prices are steady at $218.

Choice Boxed beef cutout value was $2.11 higher Wednesday afternoon at $291.60/cwt. Select was $2.04 higher at $280.43.

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Major U.S. financial indices continued to step lower Wednesday amid worries about inflation, higher input costs and higher interest rates.

The Dow Jones Industrial Average closed 339 points lower. The S&P 500 closed 44 points lower. The NASDAQ was down 166 points.

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USDA’s Economic Research Service (ERS) increased the projected annual feeder steer price (750-800 lbs., Oklahoma City) for this year to $160/cwt., in the latest monthly Livestock, Dairy and Poultry Outlook. That’s $1 higher than the previous month’s estimate and would be $13.05 more than last year’s annual estimate. ERS analysts note the feeder steer price for the week ending Jan. 10 was $156.65/cwt., up 14.2%, or $19.13.

Feeder steer prices are projected at $159 in the first quarter, $156 in the second quarter, $160 in the third quarter and $165 in the fourth quarter.

On the other end of the scale, the five-area direct average fed steer price in December was $30.31 more (+27.8%) than a year earlier at $139.36/cwt. From August through December the average price was $14.91 (+12.0%) more than the same period a year earlier, according to ERS. The trend continued into the new year with the average price the week ending Jan. 9 up $27.14 (+24.4%) from a year earlier at $138.41.

As mentioned in Cattle Current recently, based on expected continued packer demand strength, ERS increased the forecast annual five-area direct average fed steer price for this year to $136.75/cwt.

The average fed steer price was forecast at $139 in the first quarter, $136 in the second quarter, $134 in the third quarter and $138 in the fourth quarter.

Keep in mind the more optimistic price projections come with slightly higher expectations of beef production.

“Given the anticipated rise in fourth-quarter net placements, fed cattle marketings and fed cattle slaughter expectations are raised in the second quarter, and coupled with a stronger expected pace of marketings in the second half of the year, the beef production forecast is raised for 2022. The forecast for 2022 beef production was raised to 27.165 billion lbs., up 165 million lbs. from last month,” say ERS analysts.

By | January 19th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 19, 2022

Uncertainty about the pace of packer production continued to weigh on Live Cattle futures Tuesday, as wholesale beef prices continue to climb for the same reason. Sharply lower outside markets added to bearish sentiment.

Live Cattle futures closed an average 37¢ lower.

Choice Boxed beef cutout value was $1.63 higher Tuesday afternoon at $289.49/cwt. Select was $1.34 higher at $278.39.

Feeder Cattle futures drifted lower with the lack of support from the Live side. They closed an average 62¢ lower (20¢ lower at the back to $1.25 lower at the front).

Negotiated cash fed cattle trade was slow on light to moderate demand in Nebraska through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, early trade was steady at $137/cwt. on a live basis and $128 in the beef.

Elsewhere, trade ranged from mostly inactive on light demand to a standstill.

Last week, live prices were at $136-$137 in the Texas Panhandle, $135-$136 in Kansas and $138 in the western Corn Belt, where dressed trade was at $218.

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Major U.S. financial indices closed sharply lower Tuesday as investors fretted over anemic bank earnings and higher treasury bond yield rates.

The Dow Jones Industrial Average closed 543 points lower. The S&P 500 closed 85 points lower. The NASDAQ was down 386 points.

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Hay production and stocks continue lower, according to the most recent USDA Crop Production  report.

All hay stocks Dec. 1 of 79.0 million tons was 5.0 million tons less (-6.0%) than the same time a year earlier.

“Drought stricken Western states saw the most notable declines in hay stocks,” say analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor (LMIC). “Oregon, Montana, North Dakota, South Dakota, and Arizona all posted declines in hay stocks over 40% from the prior year. Minnesota was down 35% while Wyoming, Utah, and California reported declines between 20%-27%. Nevada, Colorado, New Mexico, Texas, Oklahoma, and Nebraska all posted 4%-28% increases from a year ago.”

In terms of production, LMIC analysts explain, all hay acres in 2021 declined 2.9% to nearly 50.7 million acres, which was the lowest since 1974.

“Alfalfa hay prices have been over $200 per ton for the last five months while other hay prices have averaged in the upper $140-per-ton range for the last several months,” say LMIC analysts. “Although recent alfalfa and other hay prices are not at record levels, they are still near some of the highest on record. Hay supplies will continue to be lower, especially in the Western U.S., and hay prices are expected to remain elevated which will likely limit livestock producer profitability in the near term.”

By | January 18th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 18, 2022

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. There were too few transactions to trend.

Last week, live prices were at $136-$137/cwt. in the Texas Panhandle, $135-$136 in Kansas, $137 in Nebraska and $138 in the western Corn Belt. Dressed trade was at $218.

Choice Boxed beef cutout value was $3.55 higher Monday afternoon at $287.86/cwt. Select was $3.08 higher at $277.05.

Futures and equity markets were closed Monday in observance of Martin Luther King Day.

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When Jan. 1 cattle inventory numbers are released by USDA at the end of this month, odds are they will show continued contraction of the U.S. beef cow herd; the degree is up in the air, though.

“The general feeling among analysts seems to be that the herd likely decreased 1.5-2.0% in 2021, with some possibility that the decrease was over 2%,” said Derrell Peel, Extension livestock marketing specialist at Oklahoma State University in his mid-January market comments, “The level of beef cow slaughter in 2021 was up 9.1% year over year, leading to a culling rate of 11.44% for the year, the highest since 2011. In 2011, the beef cow herd decreased 2.04%. However, the net change in the beef cow herd in 2021 also depends on what happened with beef replacement heifers.”

At the beginning of last year, beef replacement heifers represented 18.7% of the beef cow herd, according to Peel. 

“This level of replacement heifers indicates neither significant herd liquidation nor does it suggest aggressive expansion,” Peel says. “In the last two decades, the beef replacement heifer percentage has varied from a low of 16.6% in 2011 (liquidation) to a high of 21.0% in 2016 (expansion) and has averaged 18.2%.”

Last year, Peel explains the inventory of replacement heifers was higher than in 2011, as was the inventory of heifers calving.

“This likely means that some of the additional cow culling in 2021 was offset by more bred heifers entering the herd,” Peel explains. “The heifer calves portion of the replacement heifers from one year ago may well have been diverted to feeder markets but many of the sizable inventory of bred heifers likely entered the herd somewhere. All of this discussion is complicated by the drought conditions in 2021, which impacted what producers had to do as opposed to what they would like to do.”

Most likely, Peel says the inventory of beef replacement heifers will be significantly lower.

By | January 17th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 17, 2022

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

For the week, live prices were $1-$2 lower in the Texas Panhandle at $136-$137/cwt. and $135-$136 in Kansas. They were $1-$3 lower in Nebraska at $137 and steady to $3 lower in the western Corn Belt at $137-$138. Dressed trade was $2 lower at $218.

Week to week through Thursday, the five-area direct average steer price was $2.00 lower on a live basis at $136.58/cwt. The average price in the beef was $2.00 lower at $217.99.

Estimated total cattle slaughter last week was 621,000 head, just 1,000 head more than the previous week and 31,000 head fewer than the same week last year.

Live Cattle futures closed an average of 59¢ higher, except for unchanged and 37¢ lower in the back two contracts, supported by climbing wholesale beef prices.

Choice Boxed beef cutout value was $1.84 higher Friday afternoon at $284.31/cwt. Select was $1.21 higher at $273.97.

Feeder Cattle futures closed narrowly mixed, from an average of 23¢ lower to an average of 5¢ higher with pressure from front-month Corn futures.

Corn futures closed fractionally higher to 8¢ higher in the front six contracts, and then mostly 5¢ to 6¢ lower. 

Soybean futures closed 8¢ to 13¢ lower. 

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Major U.S. financial indices closed mixed Friday with primary pressure apparently from lower than expected earnings for bank stocks and less retail growth last month. 

Advance estimates of U.S. retail and food services sales for December 2021, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $626.8 billion, a decrease of 1.9% from the previous month, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 200 points lower. The S&P 500 closed 3 points higher. The NASDAQ was up 86 points.

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“Average returns to cattle feeding in the Southern Plains, as calculated by LMIC (Livestock Marketing Information Center) jumped to $200 per steer in December, capping off the year with two months of returns well over $100. This boosted the 2021 average for the year solidly in positive territory, about $40 per head for the year,” say LMIC analysts in the latest Livestock Monitor.

Positive returns stemmed from the significant rally in fed cattle prices, given the increased input costs.

“LMIC assumes a six-month feeding window for a 750-lb. steer. Feeder cattle averaged $143.35/cwt. in June. LMIC estimated total production costs for feeding those animals increased 32% from last year (excluding cost of the feeder), from just under $500 in December 2020 to over $600 in December of 2021. Over that same time period the value of that fed steer rose 26%.”

Heading into 2022, LMIC analysts note that increasing feeder cattle prices will challenge cattle feeding returns, but they expect returns to be mostly positive.

For recent perspective, LMIC estimates a fed steer breakeven price of $133.03/cwt. for steers placed in December weighing 700-800 lbs. and costing $161.42 (Dodge City).

“Currently, LMIC forecasts for the Apr-May-Jun quarter are above that level at $135-139/cwt., but the summer quarter is below that level at $126-$131. It seems likely that cattle feeding returns will likely be positive for most of 2022, but that there may be some negative months in the third quarter that will keep the annual average in check,” LMIC analysts say.

By | January 16th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 14, 2022

Feeder Cattle futures gained Thursday, closing an average $1.33 higher, helped by declining front-month Corn futures.

Live Cattle futures edged higher, supported by climbing wholesale beef prices, despite the sluggish packing pace. They closed an average 40¢ higher, except for unchanged in the back contract.

Choice Boxed beef cutout value was $2.93 higher Thursday afternoon at $282.86/cwt. Select was $1.78 higher at $272.76.

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

So far this week, live prices are $1-$2 lower in the Texas Panhandle at $136-$137/cwt. and $135-$136 in Kansas. They’re $1-$3 lower in Nebraska at $137 and steady to $3 lower in the western Corn Belt at $137-$138. Dressed trade is $2 lower at $218.

Corn futures closed 3¢ to 11¢ lower through the front four contracts, and then mostly 1¢ to 2¢ higher. 

Soybean futures closed 11¢ to 26¢ lower through the front six contracts, and then mostly 2¢ to 3¢ higher.

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Major U.S. financial indices closed lower Thursday with most of the pressure in tech stocks.

Despite strong quarterly corporate earnings reports, weekly jobless claims came in more than expected.

The advance figure for seasonally adjusted initial unemployment insurance claims was 230,000 for the week ending Jan. 8, according to the U.S. Department of Labor. That was 23,000 more than the previous week. The four-week moving average increased, too.

Although less than some feared, another closely-watched inflation barometer underscored the run-up in prices.

The Producer Price Index (PPI) for final demand increased 0.2% in December, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. This rise followed advances of 1.0% in November and 0.6% percent in October. On an unadjusted basis, final demand prices moved up 9.7% in 2021, the largest calendar-year increase since data were first calculated in 2010.

The PPI measures the average change over time in the selling prices received by domestic producers for their output.

Prices for final demand less foods, energy, and trade services rose 0.4% in December, following a 0.8% increase in November. In 2021, the index for final demand less foods, energy, and trade services moved up 6.9%, following a 1.3% advance in 2020.

The Dow Jones Industrial Average closed 176 points lower. The S&P 500 closed 76 points lower. The NASDAQ was down 381 points.

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USDA’s Foreign Agricultural Service (FAS) estimates global beef production this year at 58.2 million metric tons (mt) in the latest Livestock and Poultry World Markets and Trade. That’s slightly more than projected in the previous quarterly report (Oct.). It would be 585,000 mt more than 2021 (+1.0%).

“Brazil beef production is lowered 2% for 2021 due to disrupted sales to China in the fourth quarter. In September, Brazil reported detection of atypical bovine spongiform encephalopathy (BSE), causing China to temporarily restrict beef imports, leading to delayed slaughter of cattle over this time period,” according to the report. “In Australia, 2022 production is higher than previously forecast with herd rebuilding well underway and some slaughter deferred in December under adverse weather impacting transportation.”

FAS analysts note China’s beef supply is expected to be down nearly 1% this year with steady imports but lower projected domestic production. “Imports continue to make up an increasing share of consumption as the Chinese diet evolves and as domestic product struggles to compete on both price and quality,” they say.

In the meantime, net U.S. beef export sales for the week ending Jan. 6 were primarily to Japan, Mexico, South Korea, China and Egypt, according to the weekly U.S. Export Sales report.

By | January 13th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 13, 2022

Negotiated cash fed cattle trade was slow on light demand in Kansas through Wednesday afternoon, with live trade $1 lower than the previous day and $3 lower than the previous week at $135/cwt.

Although too few transactions to trend, dressed trade in Nebraska was $2 lower at $218. Live prices there last week were $138-$140.

Trade was limited on light demand in the Texas Panhandle, where live prices last week were $138 and in the western Corn Belt where prices were $138-$140. Dressed trade in the western Corn Belt last week was at $220.

Softer cash prices in the North, after weakness in the South, helped pressure Cattle futures Wednesday.

Feeder Cattle futures closed an average of 62¢ lower (10¢ to $1.35 lower).

Live Cattle futures closed an average of 55¢ lower (17¢ to $1.10 lower), except for unchanged to 37¢ higher in the back three contracts.

Choice Boxed beef cutout value was $1.71 higher Wednesday afternoon at $279.93/cwt. Select was $2.35 higher at $270.98

Soybean futures closed mostly 10¢ to 13¢ higher, likely supported by the World Agricultural Supply and Demand Estimates.

Corn futures closed mostly fractionally higher to 6¢ higher, except for 1¢ to 2¢ lower in the front three contracts.

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Major U.S. financial indices managed to eke out gains Wednesday, despite confirmation of the steamiest inflation in about four decades.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5% in December on a seasonally adjusted basis after rising 0.8% in November, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 7.0% before seasonal adjustment, the largest 12-month increase since the period ending June 1982.

The Dow Jones Industrial Average closed 38 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 34 points.

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USDA’s Economic Research Service (ERS) increased the 2022 average expected fed steer price $2 to $137/cwt., compared to the previous month’s projection, in the latest World Agricultural Supply and Demand Estimates (WASDE). For reference, the projected annual price for 2021 was $122.40.

Average prices are forecast at $139 in the first quarter, $136 in the second quarter, $134 in the third quarter and $138 in the fourth quarter.

That’s with beef production this year forecast at 27.17 billion lbs., which would be 785 million lbs. less (-2.8%) than last year.

Total red meat and poultry production is projected at 106.67 billion lbs., which would be 168 million lbs. less (-0.16%) than last year.

By | January 12th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 12, 2022

Negotiated cash fed cattle trade was very limited on light demand in the Southern Plains through Tuesday afternoon. Early live sales were mostly $1 lower in the Texas Panhandle at $137/cwt. and mostly $1-$3 lower in Kansas at $135-$137. 

Trade was mostly inactive on light demand in Nebraska and the western Corn Belt. Prices in those regions last week were $138-$140 on a live basis and $220 in the beef.

Choice Boxed beef cutout value was $2.18 higher Tuesday afternoon at $278.22/cwt. Select was $2.13 higher at $268.63.

Cattle futures found some traction Tuesday with support from higher outside markets and healthier looking packer processing, for a day at least.

Feeder Cattle futures closed an average of 57¢ higher (10¢ to $1.15 higher), except for 67¢ lower in the back contract.

Live Cattle futures closed an average of 52¢ higher (12¢ to $1.42 higher), except for 5¢ lower toward the back.

Corn and Soybean futures paddled in place ahead of Wednesday’s World Agricultural Supply and Demand Estimates.

Soybean futures closed mostly unchanged to fractionally mixed after 1¢ to 2¢ higher in the front four contracts.

Corn futures closed mostly fractionally mixed.

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Major U.S. financial indices rallied back on Tuesday, supported by a slightly lower treasury yield rate and led by tech stocks as it appeared investors took advantage of the recent sell-off to take a stake.

The Dow Jones Industrial Average closed 183 points higher. The S&P 500 closed 42 points higher. The NASDAQ was up 210 points.

CME WTI Crude Oil futures closed $2.63 to $2.99 higher through the front six contracts.

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“Cattle continue the move into the New Year with optimism,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “Some related markets have shown short periods of weakness but the underlying perspective of a comprehensive look at cattle and beef markets is strength.”

Although prices were wobbly in recent days, Koontz points out, “The weekly five-area weighted average fed price fell to $138.41 in the second week of January, but this market peaked in the first week of December at $140.44, and the last time this market was in the $140s was the first week of May 2017. USDA Choice boxed beef cutout values were $262.14 for the second week of January, and this is down from the peaks in late August and early June approaching $350, but these are valuations from a market which was rarely above $250 outside of the pandemic shutdown period. Similarly, beef animal hide and offal values fell to $13.62/cwt. of live animal from $16 peaks, but these valuations have spent the last five years at or below $12.”

Koontz adds any weakening in consumer retail prices for animal protein is from record-high levels.

“These high retail prices — albeit flawed, as in not capturing actual purchase price discounts — combined with strong volumes of protein production clearly indicate very strong demand by domestic consumers. We are approaching two-years into the pandemic and the overall domestic economy is clearly signaling strength.”

Nearer term, Andrew P. Griffith, agricultural economist at the University of Tennessee, says in his weekly market comments, “Both slaughter cattle and lightweight calf prices would typically be expected to seasonally increase as the market approaches spring calving and the spring stocker grazing season, which seems certain to occur. However, the price increase is shaping up to be stronger than the seasonal tendency. Lightweight calf prices could easily push as high as $180/cwt. by the end of March and early April while slaughter cow prices may push the $75/cwt. price mark.”

By | January 11th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 11, 2022

Inflation jitters weighed on most commodities and outside markets Monday. Cattle futures were also pressured by recently slower packer processing and fears of back-logging cattle.

Live Cattle futures closed an average 86¢ lower (17¢ lower at the back to $1.47 lower toward the front), amid heavy trade .

Feeder Cattle futures closed an average 81¢ lower (5¢ lower at the back to $1.42 lower).

Negotiated cash fed cattle 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 steady in the Texas Panhandle at $138/cwt., but steady to $2 lower at $136-$138 in Kansas and at $138-$140 in Nebraska and the western Corn Belt. Dressed trade was also steady to $2 lower at $220.

The five-area direct average steer price was $1.18 lower on a live basis last week at $138.41/cwt. The average price in the beef was 91¢ lower at $219.98.

Choice Boxed beef cutout value was $4.22 higher Monday afternoon at $276.04/cwt. Select was $5.40 higher at $266.50/cwt.

As for grains, Soybean futures softened to start the week with rains forecast for South America.

Soybean futures closed 21¢ to 26¢ lower through Nov ‘22 then 14¢ to 19¢ lower through Sep ’23 and mostly 4¢ lower across the rest of the board.

Corn futures closed fractionally mixed to 7¢ lower through May ’23 and then mostly 4¢ to 5¢ higher.

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Major U.S. financial indices continued to sag Monday, beneath the weight of concerns surrounding higher forthcoming interest rates. However, they clawed back some earlier-session losses by the end of the trading day.

The Dow Jones Industrial Average closed 162 points lower. The S&P 500 closed 6 points lower. The NASDAQ was up 6 points.

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“Beef and cattle trade is projected to be generally supportive in 2022,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his latest weekly marketing comments. “Beef exports are forecast to pull back slightly in the coming year but lower imports are also forecast. After more than a year of extremely rapid growth, the China/Hong Kong market for U.S. beef was growing at a slower pace at the end of 2021, but continued growth is expected and could push China/Hong Kong above South Korea or possibly Japan in the foreseeable future.”

As mentioned in the last issue of Cattle Current, U.S. beef exports continued at a record pace through November in terms of both volume and value.

Beef exports to China/Hong Kong were on pace to exceed $2 billion in 2021. Through November, exports to the region nearly doubled from a year ago to 219,264 mt (up 98%) and increased 125% in value to $1.9 billion, according to the U.S. Meat Export Federation (USMEF). Direct exports to China, bolstered by greatly improved market access achieved in the U.S.-China Phase One Economic and Trade Agreement, increased more than 400% from a year ago to 172,257 mt, valued at $1.43 billion (up 502%).

However, Japan will finish 2021 as the leading volume destination for U.S. beef exports, but is in a neck-and-neck race with South Korea on export value, according to USMEF data.

For January through November, U.S. beef exports to Korea were record high at 258,552 mt valued at $2.17 billion – up 13% and 36% respectively. 

During the same period, exports to Japan were 6% above last year’s pace at 297,354 mt. Export value reached $2.16 billion, up 22% and exceeding $2 billion for the first time since 2018. Growth to Japan has been in the chilled beef category and in tongues, skirts and other variety meat.

“Beef by-products, which are mostly exported, had significantly higher value in 2021, averaging nearly 54% higher year over year,” Peel says. “By-product value increases were led by sharply higher tallow prices, both edible and inedible, (up 71% and 95%, respectively) and hide prices (up 62% year over year). Prices were also higher for liver, tongue, tripe and cheek meat. Weekly by-product values peaked in November and declined to the end of the year but were still 51% higher year over year in late December.”

By | January 10th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 10, 2022

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

For the week, live prices were steady in the Southern Plains at $138/cwt., but steady to $2 lower at $138-$140 in Nebraska and the western Corn Belt. Dressed trade was also steady to $2 lower at $220.

Cattle futures closed narrowly mixed Friday, with support from higher wholesale beef prices, but with continued concern about slower cattle harvest.

Estimated cattle slaughter last week of 620,000 head was 32,000 head fewer than the same week last year.

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

Live Cattle futures closed an average 20¢ higher, except for an average of 29¢ lower in three contracts.

Choice boxed beef cutout value was $3.26 higher Friday afternoon at $271.82/cwt. Select was 46¢ higher at $26.10.

Grain futures gained Friday with ongoing bearish weather in South America and expectations to see corn and soybean estimates in that region trimmed when the monthly World Agricultural Supply and Demand Estimates come out Wednesday.

Soybean futures closed 19¢ to 24¢ higher through the front six contracts and then mostly 11¢ to 14¢ higher.  

Corn futures closed mostly 3¢ higher through Sep ’23 and then mostly 7¢ to 8¢ higher.

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Major U.S. financial indices continued to decline Friday. Pressure included rising treasury yield rates and a monthly jobs report that was less robust than expected.

The non-farm payroll increased 199,000 in December, according to the U.S. Bureau of Labor Statistics. Average hourly earnings for all employees on private non-farm payrolls increased by 19¢ in December to $31.31. Average hourly increased by 4.7% over the previous 12 months.

The Dow Jones Industrial Average closed 4 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 144 points.

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U.S. beef export value reached another new high in November, topping $1 billion for the second time in 2021, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports for the month of 123,641 metric tons (mt), were 7% more than a year earlier and the fourth largest monthly volume in the post-BSE era. Export value was a record $1.05 billion, up 49% year-over-year and exceeding the previous high set in August 2021.

For January through November, U.S. beef exports were on a record volume pace at 1.32 million mt, up 16% from a year ago. Beef export value, which had already set a new annual record through October, increased more than $2.5 billion from a year ago, soaring 39% to $9.59 billion.

Beef export value per head of fed slaughter equated to a record $480.67 in November, up 42% from a year ago. The January-November average was $402.09, up 35%.

Through November, U.S. pork export value was $7.5 billion, up 7% from a year ago and rapidly approaching the annual record of $7.71 billion set in 2020.

“With one month of results still to be tabulated, it’s very gratifying to see red meat exports setting new annual records and achieving remarkable growth over a wide range of markets,” says USMEF President and CEO Dan Halstrom. “It is important, however, that we do not take this success for granted or allow it to detract from the challenges facing U.S. agriculture. Global demand for U.S. red meat has never been stronger, but labor and transportation obstacles and high input costs across the supply chain make it increasingly difficult to satisfy this demand. USMEF greatly appreciates the effort by lawmakers, maritime regulators and other officials to address the persistent congestion at U.S. ports, but this continues to be a costly and frustrating situation for U.S. exporters and their international customers.”

By | January 9th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 7, 2022

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

For the week, live prices are steady in the Southern Plains at $138/cwt., but steady to $2 lower at $138-$140 in Nebraska and the western Corn Belt. Dressed trade is also steady to $2 lower at $220.

Cattle futures inched higher Thursday, although skittishness remains concerning recently slower cattle harvest amid anecdotal reports of increasing health challenges among workers.

Live Cattle futures closed an average 34¢ higher, except for an average of 12¢ lower in two contracts. 

Feeder Cattle futures closed an average 69¢ higher, except for 32¢ lower in Sep.

Choice boxed beef cutout value was $1.63 higher Thursday afternoon at $268.56/cwt. Select was $1.03 higher at $260.64/cwt.

Soybean futures closed 3¢ to 7¢ lower through Aug ‘22 and then mostly 7¢ to 14¢ higher. 

Corn futures closed 1¢ to 4¢ higher at either end of the board and fractionally mixed to 8¢ higher in the middle.

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Major U.S. financial indices eased lower Thursday, with follow-through pressure from Fed minutes the previous day indicating a faster pullback in economic stimulus.

The Dow Jones Industrial Average closed 170 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 19 points.

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Higher commodity prices, favorable financial conditions and the desire for an inflation hedge all contributed to resurgent prices for quality farmland, according to Farmers National Company (FNC).

“What started as a gradual strengthening of sales prices last fall escalated into aggressive bidding the past five months to generate new highs in prices paid for farmland in many areas,” says Randy Dickhut, FNC senior vice president of real estate operations. “Prices for good quality farmland are up 15 to 35% depending on the location.” 

Most areas of the Grain Belt experienced an increase in the amount of land sold during the last 12 months, starting with additional sale activity last fall, according to FNC.

“Non-operating landowners became more active sellers of land during 2021 with the higher prices drawing their attention as well as the potential threat of tax law changes,” Dickhut explains.

Higher prices also were driven by the increased use of competitive bidding sales methods, according to FNC. In addition to the traditional public auction approach, various online auction methods are becoming commonplace.

By | January 6th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 6, 2022

Negotiated cash fed cattle trade was slow to moderate on moderate demand in Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service. Dressed trade in Nebraska was $2 lower at $220/cwt. Although too few to trend, there were some early live sales at $138, compared to $140 last week.

There were some early live sales in the western Corn Belt steady at $140 and a few in the beef steady to $2 lower at $220, but too few of either to trend.

Trade in the Southern Plains was limited on light demand. A light test sold steady on a live basis at $138.

Cattle futures closed mixed Wednesday, supported by moderating grain futures price gains but pressured by the weaker cash outlook. 

Live Cattle futures closed an average of 41¢ lower, except for an average of 32¢ higher in two contracts.

Feeder Cattle futures closed an average 32¢ higher, except for unchanged to an average of 36¢ lower in the front three contracts.

Choice boxed beef cutout value was 11¢ higher Wednesday afternoon at $266.93/cwt. Select was 38¢ higher at $259.61/cwt.

Soybean futures closed 4¢ to 6¢ higher through Aug ‘23 and then 2¢ to 3¢ higher.

Corn futures closed 4¢ to 7¢ lower through the front four contracts and then mostly 1¢ lower.

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Major U.S. financial indices closed sharply lower Wednesday, apparently fueled by the Fed’s most recent minutes suggesting stimulus tapering could accelerate and rate hikes could be coming sooner than anticipated. Queasiness relates to whether the Fed will begin reducing its balance sheet — taking liquidity from the market — once the bond buying program ends.

Positive news on the day included the closely-watched ADP®National Employmentreport coming in significantly stronger than the trade expected with 807,000 private sector jobs added from November to December.

“December’s job market strengthened as the fallout from the Delta variant faded and Omicron’s impact had yet to be seen,” says Nela Richardson, ADP chief economist. “Job gains were broad-based, as goods producers added the strongest reading of the year, while service providers dominated growth. December’s job growth brought the fourth quarter average to 625,000, surpassing the 514,000 average for the year. While job gains eclipsed 6 million in 2021, private sector payrolls are still nearly 4 million jobs short of pre-COVID-19 levels.”

The Dow Jones Industrial Average closed 392 points lower. The S&P 500 closed 92 points lower. The NASDAQ was down 522 points.

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Agricultural producer sentiment grew more positive last month, according to the Purdue University/CME Group Ag Economy Barometer. It climbed 9 points month to month in December to 125, only the second increase since last May.

The Index of Current Conditions and the Index of Future Expectations also increased with stronger current conditions responsible for the barometer’s rise. December’s Index of Current Conditions rose 18 points to a reading of 146, while the Index of Future Expectations rose 4 points to a reading of 114.

“Excellent crop yields this fall combined with strong crop prices provided many producers with their most positive cash flow in recent years. That combination helps explain the year-end rise in the financial index as well as the barometer overall,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

December marked the second consecutive month that producers reported stronger financial performance for their operations. The Farm Financial Performance Index rose 7 points to 113 in December, which is the index’s highest reading since May and 21% higher than readings obtained just before the pandemic’s onset.

Agricultural producers expressed concern about rising production costs and the availability of production inputs. When asked about the biggest concerns for their operation in the upcoming year, 47% of respondents selected higher input cost from a list that included lower crop and/or livestock prices, environmental policy, farm policy, climate policy and COVID’s impact. More than half (57%) of producers said they expect farm input prices in the upcoming year to rise by more than 20% compared to a year earlier. Nearly four out of 10 respondents said they expect input prices to rise by more than 30%.

Producers were also asked if they’ve had any difficulty purchasing crop inputs from their suppliers for the 2022 season. Nearly four out of 10 (39%) said they’ve experienced some difficulties. In a follow-up question, producers who indicated they were experiencing difficulties in making purchases were asked which crop inputs they’ve had trouble purchasing. Responses were varied, which could be an indication of problems across the supply chain, and included difficulties in purchasing fertilizer (31%), herbicides (28%), farm machinery parts (24%) and insecticides (17%).

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. The latest survey was conducted December 8-14, 2021.

By | January 5th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 5, 2022

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

Last week, live prices were at $138/cwt. in the Southern Plains and $140 in Nebraska and the western Corn Belt. Dressed trade was at $220-$222.

Surging corn futures took Cattle futures down a peg Tuesday, especially Feeder Cattle.

Feeder Cattle futures closed an average of $1.99 lower (70¢ lower toward the back to $3.57 lower in spot Jan).

Live Cattle futures closed an average of 77¢ lower (5¢ to $1.52 lower).

Choice boxed beef cutout value was 79¢ higher Tuesday afternoon at $266.82/cwt. Select was 33¢ higher at $259.23/cwt.

Bearish South American weather lit a fuse beneath soybeans, leading other grain futures along for the ride.

Soybean futures closed 27¢ to 34¢ higher through Aug ‘22 and then 12¢ to 18¢ higher in the next four contracts; mostly 2¢ higher the rest of the way.

Corn futures closed 10¢ to 20¢ higher through the front four contracts and then mostly 4¢ to 8¢ higher.

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Major U.S. financial indices closed mixed Tuesday, with most of the pressure coming from tech stocks. 

The Dow Jones Industrial Average closed 214 points higher. The S&P 500 closed 3 points lower. The NASDAQ was down 210 points.

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“The pandemic has significantly altered how our economy functions, with the greatest impact coming from what we consume. Through October, in 2021 Americans spent 18% more on goods and about 1% less on services than they did in 2019. Compounded by a labor shortage, it is easy to see why supply chains have become one of the biggest economic challenges of the pandemic — demand has significantly exceeded the capacity of our existing system,” according to the 2022 Year Ahead Report from CoBank’s Knowledge Exchange.

CoBank analysts expect the U.S. farm economy to continue struggling with the ongoing supply chain dysfunction and cost inflation issues that emerged in the summer of 2021. They say historically strong prices will be more than offset by increases in cost structure for nearly all crop production including row crops, fruits and vegetables, and hay. They do not anticipate any significant pullback in farm-level costs until the third quarter of this year, at the earliest.

Moreover, according to the report, “Wage rates and overall labor costs are expected to remain firmly higher in 2022 as the industry seeks solutions to reduced labor availability. Automation capital expenditures at the plant level will continue in earnest despite the rapidly rising costs of machinery and equipment. Most processors view this as a necessary cost of doing business moving forward.”

However, CoBank analysts also explain, “Livestock producer margins should continue to be generally favorable overall, with the effect of shrinking beef cattle supplies finally showing up in higher prices at the producer level.”

By | January 4th, 2022|Daily Market Highlights|

Cattle Current Daily—Jan. 4, 2022

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

Last week live prices were at $138/cwt. in the Southern Plains and $140 in Nebraska and the western Corn Belt. Dressed trade was at $220-$222.

The five-area direct average steer price last week of $139.59/cwt. on a live basis was $3.95 higher than the previous week. The average steer price in the beef was $3.58 higher at $220.89.

Year-to-date estimated total cattle slaughter through Dec. 27 was 32.66 million head, according to USDA. That was 958,000 head more (+3.0%) than a year earlier. Total estimated beef production of 27.05 billion lbs. was 694.4 million lbs. more (+2.6%).

Cattle futures eased lower Monday awaiting cash direction.

Live Cattle futures closed an average of 38¢ lower, not counting newly minted away-Jun.

Feeder Cattle futures closed an average of 45¢ lower.

Choice boxed beef cutout value was 77¢ higher Monday afternoon at $266.03/cwt. Select was 67¢ higher at $258.90/cwt.

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

Soybean futures closed 12¢ to 16¢ higher through Sep ‘23 and then 7¢ to 8¢ higher.

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Major U.S. financial indices climbed higher Monday, buoyed by tech stocks.

The Dow Jones Industrial Average closed 246 points higher. The S&P 500 closed 30 points higher. The NASDAQ was up 187 points.

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“During December the price for 500-600-lb. steers in South Dakota briefly averaged above $190/cwt. for a couple of weeks, a level last observed in early 2016,” says Matthew Diersen, risk and business management specialist at South Dakota State University, in the latest issue of In the Cattle Markets. “The value of calves depends on the expectations for their ultimate value as finished animals. Thus, the price of calves expected in 2022 depends on where the trade thinks the price of fed cattle will be in mid-2023. The LMIC (Livestock Marketing Information Center) projections have the price of fed cattle higher in 2022 than in 2021 with a further increase expected in 2023. That bodes well for calf price expectations and the LMIC projections are for higher calf prices in 2022, but prices can still fluctuate.”

On the other side of the equation, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University stresses the need to focus on feed cost management in order to capitalize on the optimistic revenue outlook.

“In part, marketing forage involves considering cattle production and marketing alternatives that represent higher value for forage,” Peel explains, in his weekly market comments. “For cow-calf producers, this includes considerations for marketing calves at weaning or retaining calves for backgrounding/stocker production as well as marketing cull breeding animals.

“The market environment in 2022 may provide more possibilities with reduced cattle numbers favoring weaned calf production and marketing, yet at the same time, higher grain prices and elevated feedlot cost of gain increase the value of added forage-based weight gain on feeder cattle. Producers will have more options and potential to add value, and planning now can improve returns to cattle and forage production later.”

You can watch Peel share his market outlook for next year here.

 

By | January 3rd, 2022|Daily Market Highlights|

Cattle Current Daily, Jan. 3, 2022

Negotiated cash fed cattle prices gained last week amid holiday-lightened trade. For the week, based on USDA reports available through Thursday, live prices were $2 higher in Nebraska at $140/cwt., $3 higher in the Texas Panhandle at $138 and $5 higher in the western Corn Belt at $140. Dressed prices of $220-$222 were $3-$4 higher in Nebraska and $3-$5 higher in the western Corn Belt.

Live Cattle futures traded sideways amid light trade on Friday. They closed narrowly mixed, from an average of 16¢ lower in the front three contracts to an average of 33¢ higher.

Feeder Cattle futures were traded lightly, too, but had the benefit of further erosion in front-month Corn futures. They closed an average of 81¢ higher (5¢ higher at the back to 95¢ higher toward the front), except for 35¢ lower in Sep.

Stronger cash prices and stabilizing wholesale beef prices enabled Cattle futures to gain from Monday through Friday.

Live Cattle futures closed an average of $1.06 higher (42¢ to $1.60 higher). Feeder Cattle futures closed an average of $4.15 higher during the same period ($2.37 higher at the back to $6.67 higher toward the front). The CME Feeder Cattle Index closed $5.99 higher week to week on Thursday at $165.21/cwt.

Choice boxed beef cutout value was 78¢ higher on Thursday at $265.26, compared to Monday. Select was $3.05 higher at $258.23.

Grain futures lost ground throughout the week, due in part to rains in South America.

Corn futures closed an average of 17¢ lower on Friday through the front six contracts, compared to Monday, except for fractionally lower in spot Mar. During the same period, Soybean futures closed an average of 28¢ lower through the front six contracts,

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Major U.S. financial indices eased lower again Friday as investors closed out positions for the year, amid lighter holiday trade.

The Dow Jones Industrial Average closed 59 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 96 points.

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Restaurant customers can expect to see health taking center stage on restaurant menus in 2022, according to the National Restaurant Association’s (NRA) recent annual What’s Hot Culinary Forecast. It details topics, trends, and products expected to drive restaurant menus in the coming year across a variety of categories.

For instance, after demand for comfort food surged during the height of the pandemic, consumers are refocusing on better-for-you options, with foods that are believed to have immunity-boosting qualities and plant-based sandwiches making up three of the Top 10 Trends for 2022. The report adds plant-based proteins are growing in popularity on menus and less expensive cuts of protein, such as thighs instead of wings, will have a greater presence in the year to come.

Moreover, according to NRA, sustainability will continue to influence menus and how restaurants make decisions across the board. From reusable and recyclable packaging to zero-waste options, restaurants are continuing to prioritize sustainable initiatives. As consumers continue to utilize off-premises options in all dayparts, restaurants are looking to translate their dine-in experience outside the four walls of the restaurant with thoughtful packaging that maintains food quality, retains temperature, and is tamper-proof.

“In addition to a return to health-focused menu offerings and more eco-friendly, improved off-premises packaging, all of which rated high in the top trends, we’re expecting operators to look across their menus for transformative opportunities,” said Hudson Riehle, senior vice president of Research for the Association. “Look for trends that fuse the traditional meal daypart items with other dayparts and an increasing popularity of snacking and its allied items. Also, with the popularity of cocktails-to-go during the pandemic, restaurants will look to expand both alcoholic and non-alcoholic craft beverage options.”

By | January 2nd, 2022|Daily Market Highlights|

Cattle Current Daily—Dec. 31, 2021

Negotiated cash fed cattle trade was limited on light demand in the Texas Panhandle through Thursday afternoon, but early live sales were $3 higher than last week at $138/cwt.

Elsewhere, trade was mostly at a standstill.

Earlier in the week, live prices in Nebraska and the western Corn Belt were at $140/cwt., which was $5 higher in Nebraska and $2 higher in the western Corn Belt. Dressed prices of $220-$222 were $3-$4 higher in Nebraska and $3-$5 higher in the western Corn Belt.

Cattle futures were narrowly mixed Thursday, as some traders checked out for the year. The weekly U.S. Export Sales report for the week could have added some pressure to Live Cattle. Net U.S. beef export sales for the week ending Dec. 23 were 48% less than the prior week and 55% less than the previous four-week average.

Live Cattle futures closed an average of 36¢ lower.

Feeder Cattle futures closed an average of 46¢ higher (5¢ higher at the back to 95¢ higher toward the front), except for 35¢ lower in Sep.

Choice boxed beef cutout value was 45¢ lower Thursday afternoon at $265.26/cwt. Select was $1.14 higher at $258.23/cwt.

Grain futures closed lower Thursday with rains in South America and position squaring.

Corn futures closed 9¢ to 10¢ lower in the front four contracts and then mostly 5¢ to 6¢ lower.

Soybean futures closed 20¢ to 30¢ lower in the front six contracts and then mostly 5¢ to 7¢ lower.

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Major U.S. financial indices eased lower Thursday, likely due mostly to some month-end and year-end position squaring ahead of what will be a long weekend for some. Positive news on the day included fewer initial jobless claims than expected. Weekly initial unemployment insurance claims for the week ending Dec. 25 were 198,000, which were 8,000 less than previous week, according to the U.S. Department of Labor. That was the lowest level since Oct. 25, 1969.

The Dow Jones Industrial Average closed 90 points lower. The S&P 500 closed 14 points lower. The NASDAQ was down 26 points.

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Some aspects of the U.S. restaurant industry are beginning to improve after being hampered by the pandemic, according to the NPD Group (NPD).

“The increased mobility this fall contributed to year-over-year gains at key restaurant dayparts, although visits are not fully back to pre-pandemic levels,” says David Portalatin, NPD food industry advisor.

In the last three months, ending in November, online and physical visits to restaurants for breakfast increased by 11% compared to a 10% decline during the same period a year ago. From a pre-pandemic view, breakfast traffic is now at the same level as the September through November period in 2019. Morning snack visits improved 6% over the last three months compared to a 7% decline last year and a 1% decline for the same period in 2019. Lunch improved by 4% in the reported period compared to a year ago when visits were down by 11%, but are still 7% below pre-pandemic levels, according to NPD’s continual tracking of the U.S. foodservice industry. 

“We’re in a steady state for the next several months, perhaps with a bump up or down here and there, but we expect to lag pre-pandemic traffic levels through 2022 slightly,” Portalatin says.

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

Cattle Current Daily—Dec. 30, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Wednesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. So far this week live prices in those regions are at $140/cwt., which is $5 higher in Nebraska and $2 higher in the western Corn Belt. Dressed prices of $220-$222 are $3-$4 higher in Nebraska and $3-$5 higher in the western Corn Belt.

Trade in the Southern Plains was at a standstill. Live prices there last were $135.

Cattle futures, especially Feeder Cattle, climbed higher Wednesday, buoyed by cash market gains and higher wholesale beef prices.

Feeder Cattle futures closed an average of $1.79 higher (97¢ to $2.82 higher with most strength in the front months).

Live Cattle futures closed an average of $1.01 higher (65¢ higher to $1.37 higher).

Choice boxed beef cutout value was $1.05 higher Wednesday afternoon at $265.71/cwt. Select was $1.00 higher at $257.09/cwt.

Corn futures closed mostly 2¢ to 4¢ higher after fractionally mixed in the front three contracts. 

Soybean futures closed mostly 2¢ to 8¢ higher through Jan ‘23 and then 6¢ to 13¢ higher.

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Major U.S. financial indices closed narrowly mixed again Wednesday with holiday-lightened trade and little news to shove it one direction or the other.

The Dow Jones Industrial Average closed 90 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 15 points.

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Creighton University’s Rural Mainstreet Index (RMI) remained above growth neutral in December for the 12th consecutive month.

“Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. USDA data show that 2021 year-to-date agriculture exports are more than 20.7% above the same period in 2020. This has been an important factor supporting the Rural Mainstreet economy,” says Ernie Goss, Ph.D., Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The RMI stems from a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. It slipped one point month to month in December to 66.7. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Seven of 10 bankers described their local economy as expanding, while only 6.7% indicated that their local economy was in a modest economic downturn,” says Goss.

More specifically, Todd Douglas, CEO of First National Bank in Pierre, South Dakota, explains, “With the paycheck protection program (PPP) monies, and good commodity prices, even with some areas of reduced yields due to lack of moisture, agriculture borrowers should be in good shape for 2022.”

The region’s farmland price index rose to a record high of 90.0 in December, up from 85.5 in October. The index has been above growth neutral for 15 consecutive months. Bank CEOs say annual cash rents for non-irrigated, non-pasture farmland soared to $262 from $218 one month prior to the pandemic in February 2020.

Jeff Bonnett, CEO of Havana State Bank in Havana Illinois, cautions, “Inflation is real and affecting folks in our service areas.”

“Yields and prices ended being up over projections for 2021 but it appears land costs and all crop inputs will be up significantly in 2022,” says Steve Simon, CEO of South Story Bank & Trust in Huxley, Iowa.

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

Cattle Current Daily—Dec. 29, 2021

Although it was slow trade and light demand, negotiated cash fed cattle prices began the week $2 higher on a live basis at $140/cwt. in the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Dressed prices there last week were at mainly $217.

Elsewhere, trade ranged from a standstill to limited on light demand with too few transactions to trend. Last week, live prices were at $135/cwt. in the Southern Plains and Nebraska. Dressed trade was at $217-$218.

The stronger cash outlook and recently higher boxed beef prices helped Live Cattle futures firm. They closed an average of 24¢ higher (from 5¢ higher to $1.17 higher in almost-spent Dec).

Choice boxed beef cutout value was 18¢ higher Tuesday afternoon at $264.66/cwt. Select was 91¢ higher at $256.09/cwt.

Lower Corn futures prices helped Feeder Cattle close an average of $1.19 higher.

Corn futures closed lower on likely profit taking. Prices were 8¢ to 10¢ lower through May ‘23 and then mostly 4¢ to 5¢ lower.

Soybean futures paused from steep gains in the previous session, closing mostly 3¢ to 4¢ lower.

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Major U.S. financial indices closed narrowly mixed Tuesday

The Dow Jones Industrial Average closed 95 points higher. The S&P 500 closed 4 points lower. The NASDAQ was down 89 points.

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Consumer food prices continue to charge higher.

The Consumer Price Index (CPI) for all items in November was 6.8% higher year over year, according to the U.S. Bureau of Labor Statistics.

“Although the rate of growth is the fastest in nearly four decades, it is still below levels seen during the late 1970s and early 1980s, which were well above 6% and several months recorded double digit growth,” according to analysts with the Livestock Marketing Information Center (LMIC) in a mid-December Livestock Monitor.

The Food CPI was 6.1% higher year over year, apparently driven by surging meat and poultry prices.

“The Meat CPI continued its double-digit growth with November 16.0% above last year. During the pandemic the Meat CPI grew 16.7%, which is still below growth rates of the late 1970s which reached into the 20% range for several months. The Poultry CPI grew 8.4%, which was just below increase of 8.7% in June 2020 during the pandemic,” say LMIC analysts.

Although less startling, the annual year-to-date average monthly CPI was significantly higher through November compared to history.

The year-to-date Consumer Price Index (CPI) for all food increased an average of 3.6% through November, according to the December Food Price Outlook from USDA’s Economic Research Service (ERS). Food-at-home prices were up an average of 3.1% and food-away-from-home prices were 4.2% higher.

“Of all the CPI food-at-home categories tracked by the USDA-ERS, the beef and veal category has had the largest relative price increase (8.7%) and the fresh vegetables category the smallest (0.9%). No food categories have decreased in price in 2021 compared with 2020,” according to ERS analysts.

In 2022, ERS analysts project food-at-home prices to increase 1.5% to 2.5% and food-away-from-home prices to increase between 3.0% to 4.0%.

By way of comparison, food-at-home prices increased 3.5% in 2020 and 0.9% in 2019. The 20-year average is 2.0%.

“November Choice retail beef prices were $7.85 per pound which eased slightly (5 cents) from the prior month’s record high of $7.90. Prices for ground beef, roast, round, and sirloin all remained elevated at in November at $4.72, $7.27, $7.40, and $11.51 per pound, respectively,” according to LMIC analysts. “Retail pork prices continued to climb in November reaching $4.82 per pound, which marks the eighth consecutive month that retail pork prices set a new record. Boneless hams reached a record of $4.94 per pound while bacon and chops remain elevated at $7.27 and $4.43, respectively. The broiler composite retail price hit a record of $2.21 per pound, the fifth consecutive month for a record price.”

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

Cattle Current Daily—Dec. 28, 2021

Cattle futures closed mixed amid light trade to start the week with front-month Feeder Cattle under the most pressure from increasing Corn futures.

Feeder Cattle futures closed mixed, from an average of 57¢ lower across the front half of the board to an average of 17¢ higher.

Live Cattle futures closed narrowly mixed (from an average of 19¢ lower to an average of 19¢ higher.

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

Last week, live prices were at $135/cwt. in the Southern Plains and Nebraska, and at $138 in the western Corn Belt. Dressed trade was at $217-$218.

The five-area direct weighted average steer price last week was $1.55 lower at $135.64. It was $1.12 lower in the beef at $217.30.

Choice boxed beef cutout value was $1.54 higher Monday afternoon at $264.48/cwt. Select was $2.23 higher at $255.18/cwt.

Nearby Corn and Soybean futures climbed on Monday, presumably in response to the continued hot and dry weather forecast in South America.

Corn futures closed 9¢ through the front three contracts and then mostly 2¢ to 3¢ higher.

Soybean futures closed 26¢ to 30¢ higher through the front five contracts and then mostly 7¢ to 10¢ higher.

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Major U.S. financial indices bounced higher Monday, buoyed by optimistic early reports of holiday spending.

Holiday retail sales, excluding automotive, increased 8.5% year over year during the holiday season Nov. 1 through Dec. 24, according to Mastercard SpendingPulseTM, which measures in-store and online retail sales across all forms of payment. Online sales grew 11.0% compared to the same period last year.

“Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves,” says Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “Consumers splurged throughout the season, with apparel and department stores experiencing strong growth.”

The Dow Jones Industrial Average closed 351 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 217 points.

Higher oil prices added support. West Texas Intermediate Crude Oil futures on the CME were $1.72 to $1.78 higher in the front six contracts.

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More lighter-weight cattle placed in feedlots in November — compared to previous months in 2021 — speaks to several unfolding realities, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

As noted in the last Cattle Current, November feedlot placements were 3.6% more year over year, according to the latest USDA Cattle on Feed report. Peel points out the increase was comprised of cattle weighing less than 700 lbs., which were 7.0% more than the previous year. Cattle placed on feed at weights heavier than 700 lbs. were 0.7% less.

“Placements of lightweight cattle are typically high in November with seasonally large numbers of spring-born calves. However, the increase may be somewhat exaggerated this year for several reasons,” Peel explains. “Drought limitations are likely contributing to increased placements, the result of reduced opportunities for backgrounding calves this winter. Additionally, drought may also be causing fewer heifers to be held as replacements and further increasing lightweight placements.

“Finally, feedlots may be placing more lightweight cattle simply because overall feeder supplies are declining. As feeder supplies decrease, feedlots will, for a few months, be able to hold feedlot inventories by placing smaller cattle, essentially borrowing against future feeder supplies. Lightweight placements will also add more days on feed and further extend feedlot inventories for a period of time. However, as 2022 proceeds, smaller feeder cattle supplies will result in more pronounced decreases in feedlot inventories.”

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

Cattle Current Daily—Dec. 24 to 27, 2021

Markets head into what will be a long holiday weekend for many on a positive note.

Cattle futures gained again Thursday with traders apparently content to position on the plus side heading into the long weekend. Although trade was holiday-light, open interest in Live Cattle expanded the last two days. Higher outside markets added support.

Feeder Cattle futures closed an average of $1.25 higher (72¢ higher at the back to $1.82 higher toward the front).

Live Cattle futures closed an average of $1.22 higher (70¢ higher toward the back to $2.25 higher toward the front).

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

For the week, live prices are $1 lower in the Texas Panhandle at $135/cwt. and $1-$3 lower in Kansas and Nebraska at $135. Dressed trade in Nebraska is steady to $1 lower at $217-$218. Last week, live prices were at $138 in the western Corn Belt and dressed trade was at $217-$218.

Choice boxed beef cutout value was $1.08 higher Thursday afternoon at $262.94/cwt. Select was $2.12 higher at $252.95/cwt.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 3¢ to 7¢ higher through Sep ‘22 and then mostly 6¢ lower.

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Major U.S. financial indices rolled higher Thursday. Apparently FDA’s emergency use authorization of the Pfizer COVID treatment pill and Thursday’s authorization of an antiviral pill from Merck added confidence.

The Dow Jones Industrial Average closed 196 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 131 points.

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Logic says markets should view the latest monthly Cattle on Feed report (1,000 head and more capacity) as neutral to a touch friendly.

Cattle feeders placed 1.97 million head in November, which was 68,000 head more (+3.6%) than a year earlier. That was in line with pre-report expectations.

In terms of placement weights, 53.3% went on feed weighing 699 lbs. or less, 35.5% weighing 700-899 lbs. and 11.2% weighing 900 lbs. or more.

Marketings in November of 1.87 million head were 94,000 head more (+5.3%) than a year earlier. That was a touch more than pre-report expectations.

Cattle on feed Dec. 1 of 11.98 million head were 51,000 head fewer (-0.4%) than the same time last year.

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

Cattle Current Daily—Dec. 23. 2021

Negotiated cash fed cattle trade ranged from limited on light demand to slow on moderate demand through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, various reports suggested prices were a touch higher than earlier in the week, supported by the bounce in futures.

So far this week, live prices are $1 lower in the Texas Panhandle at $135/cwt. and $1-$3 lower in Kansas and Nebraska at $135. Dressed trade in Nebraska is steady to $1 lower at $217-$218. Last week, live prices were at $138 in the western Corn Belt and dressed trade was at $217-$218.

Cattle futures extended recent gains Wednesday amid lighter pre-holiday trade.

Feeder Cattle futures closed an average of 58¢ higher (10¢ to 95¢ higher).

Live Cattle futures closed an average of 66¢ higher.

Choice boxed beef cutout value was 47¢ higher Wednesday afternoon at $261.86/cwt. Select was 91¢ higher at $250.83/cwt.

Corn futures closed 3¢ to 4¢ higher through Sep ‘22, and then mostly 1¢ higher.

Soybean futures closed 15¢ to 22¢ higher through Sep ‘22 and then mostly 7¢ to 8¢ higher.

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Major U.S. financial indices extended gains Wednesday. Support included the Food and Drug Administration’s emergency use authorization of the COVID treatment pill from Pfizer.

The Dow Jones Industrial Average closed 261 points higher. The S&P 500 closed 47 points higher. The NASDAQ was up 180 points.

CME West Texas Intermediate Crude Oil futures closed $1.05 to $1.64 higher in the front six contracts. That makes for a gain of about $3.50-$4.00 in those contracts over the last two trading sessions.

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Beef in freezers continues lower year over year, according to the latest USDA Cold Storage report. Beef in cold storage Nov. 30 was 4% more than the previous month but 4% less year over year.

Pork in cold storage was 8% less than the previous month and 3% less than the same time last year.

Total red meat supplies in freezers were 2% less than the previous month and 4% less than the prior year.

Total frozen poultry supplies were 17% less month to month and 18% less year over year.

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

Cattle Current Daily—Dec. 22, 2021

Cattle futures bounced back Tuesday from recently oversold conditions, with more optimistic outside markets, despite softer cash prices and the shorter harvest schedule through the remainder of the year.

Feeder Cattle futures closed an average of $1.75 higher.

Live Cattle futures closed an average of 99¢ higher (85¢ to $1.17 higher).

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on light demand through Tuesday afternoon, according to the Agricultural Marketing Service. Although there were too few transactions for a trend, some live sales traded at $135/cwt. in the Texas Panhandle and Nebraska.

Last week, live prices were $2-$4 lower in Kansas and Nebraska at $136-$138/cwt. They were $4 lower in the Texas Panhandle at $136 and steady to $2 lower in the western Corn Belt at $138. Dressed prices were $2 lower in Nebraska at $218 and steady to $3 lower in the western Corn Belt at $217-$218.

Choice boxed beef cutout value was 99¢ lower Tuesday afternoon at $261.39/cwt. Select was 75¢ lower at $249.92/cwt.

Corn futures closed 4¢ to 8¢ higher through Jly ‘23, and then mostly 1¢ to 2¢ higher.

Soybean futures closed 10¢ to 19¢ higher through Sep ‘22 and then fractionally lower to 5¢ higher.

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Major U.S. financial indices recovered a chunk of last week’s losses Tuesday, buoyed by positive quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 560 points higher. The S&P 500 closed 81 points higher. The NASDAQ was up 360 points.

CME West Texas Intermediate Crude Oil futures closed $2.27 to $2.51 higher in the front six contracts.

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Heading into Thursday’s monthly Cattle on Feed report, analysts expect to see the Dec. 1 feedlot inventory a touch less than a year earlier.

“Placements are expected to be up around 4.5% from last year. Other than last year, that would be the smallest November placements since 2016,” says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets. “Fewer feeder cattle were imported from Mexico during the month while slightly more were imported from Canada. Placements in the expected range would follow the normal pattern of declining sharply from October’s placements.”

On the other end, November feedlot marketings are projected to be about 4.5% more year over year, due in part to one more slaughter day, according to Anderson.

“The combination of marketings and placements leaves the number of cattle on feed slightly below last year,” Anderson says. “On-feed inventories typically increase from November to December and the December inventory is often the highest for the year. December 2021 should be an exception to that with on-feed inventories in February being larger.”

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

Cattle Current Daily—Dec. 21, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska through Monday afternoon. Although too few transactions to trend, there were some live trades in the region at $135/cwt. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.

Last week, live prices were $2-$4 lower in Kansas and Nebraska at $136-$138/cwt. They were $4 lower in the Texas Panhandle at $136 ad steady to $2 lower in the western Corn Belt at $138. Dressed prices were $2 lower in Nebraska at $218 and steady to $3 lower in the western Corn Belt at $217-$218.

Cattle futures trended lower Monday with softer cash prices, holiday-limited harvest schedules on the books and no support from outside markets.

Live Cattle futures closed an average of 34¢ lower, except for 10¢ higher in away Feb.

Feeder Cattle futures closed an average of 75¢ lower (2¢ lower at the back to $1.20 lower toward the front), except for 5¢ higher in Oct.

Choice boxed beef cutout value was 63¢ lower Monday afternoon at $262.38/cwt. Select was $2.39 higher at $250.67.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 2¢ to 6¢ higher.

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Major U.S. financial indices extended losses Monday, closing sharply lower amid growing uncertainty related to surging Covid-omicron infections.

The Dow Jones Industrial Average closed 433 points lower. The S&P 500 closed 52 points lower. The NASDAQ was down 188 points.

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“Rapidly expanding drought conditions are threatening winter wheat grazing in the Southern Plains. Dwindling forage supplies may already be causing some wheat pasture removals and could be contributing to the strong December feeder cattle auction volumes,” says Derrell Peel, Extension livestock making specialist at Oklahoma State University, in his weekly market comments.

According to the Dec. 16 U.S. Drought Monitor, 74% of the nation was abnormally dry or in some degree of drought compared to 67% a year earlier. Moreover, 55% was experiencing some degree of drought (D1-D4) compared to 49% last year.

“Without additional moisture very soon, more wheat pastures will have to be de-stocked. Current forecasts show little chances for precipitation in the region into January,” Peel says. “La Niña conditions are expected to persist through the winter, shifting the drought focus back to the Southwest and Southern Plains and potentially improving drought conditions in California and the Pacific Northwest.” 

In the meantime, Peel notes the recent, heady price run.

“Optimism building in feeder cattle markets in the second half of the year has been enhanced and consolidated with the fed cattle market breaking out and moving sharply higher in the last two months of the year,” Peel explains. “Fed cattle prices have increased roughly 12% since late October and are about 29% higher compared to one year ago in December.”

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

Cattle Current Daily—Dec. 20, 2021

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

Last week, live prices were $2 lower in Kansas at $138/cwt. and $4 lower in the Texas Panhandle at $136. Dressed prices were $2 lower in Nebraska at $218.

Estimated total cattle slaughter last week was 657,000 head, which was 11,000 head fewer than the prior week. Year-to-date estimated total cattle slaughter of 32.17 million head was 886,000 head more (+2.8%) than the same period last year. Estimated year-to-date before production of 26.64 billion lbs. is 628 million lbs. more (+2.4%) than last year.

Cattle futures limped lower Friday, pressured by softer cash prices and pre-holiday positioning. Increasing carcass weights amid declining wholesale beef prices added weight.

The average dressed steer weight the week ending Dec. 4 was 928 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 2 lbs. heavier than the previous week, 6 lbs. heavier than two weeks earlier and the same week a year earlier. The average dressed heifer weight was 4 lbs. heavier than the previous week at 851 lbs. and 1 lb. heavier than the same week last year.

Feeder Cattle futures closed an average of $1.78 lower (95¢ lower at the back to $2.62 lower toward the front).

Live Cattle futures closed an average of 61¢ lower.

Choice boxed beef cutout value was 4¢ higher Friday afternoon at $263.01/cwt. Select was 14¢ higher at $248.28.

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

Soybean futures closed 6¢ to 10¢ higher in the front five contracts and then mostly unchanged to fractionally lower.

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Major U.S. financial indices closed lower again Friday with pressure from escalating Covid infections and the outlook for tighter monetary policy.

The Dow Jones Industrial Average closed 532 points lower. The S&P 500 closed 48 points lower. The NASDAQ was down 10 points.

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The U.S. economy is poised to slow next year relative to 2021, but economic growth will continue at a pace that is well above average, according to analysts with CoBank’s Knowledge Exchange (CKE). They explain consumers have powered the economic recovery since mid-2020 and that will continue in the coming year. Consumer spending is expected to rise another 4% to 5% in 2022 and GDP is expected to grow by roughly 4.5%, according to CKE’s comprehensive year-ahead outlook report from.

The CoBank 2022 outlook report examines several key factors that will shape agriculture and market sectors that serve rural communities throughout the U.S.

“The COVID-19 omicron variant is shaping up to be the wild card of early 2022 and it could delay the rebalancing of the U.S. economy,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange. “If omicron disrupts the services industry, the majority of consumer spending will again revert to goods, compounding supply chain and inflation problems. However, at this early stage, we expect omicron to have only a modest impact on the economy.”

Among report highlights:

If the global economy is to perform well in 2022, it will do so despite three significant headwinds: a persistent pandemic, monetary tightening in the U.S. and slowing growth in China.

The pandemic has significantly altered how our economy functions, with the greatest impact coming from what we consume. Through October, in 2021 Americans spent 18% more on goods and about 1% less on services than they did in 2019. Compounded by a labor shortage, it is easy to see why supply chains have become one of the biggest economic challenges of the pandemic—demand has significantly exceeded the capacity of our existing system. Fortunately, we have likely experienced the worst of the bottlenecks, which should diminish in the coming year.

The Fed will want to extend the economic recovery as long as possible before raising interest rates. But it will also be cognizant that the longer inflation remains elevated the higher the likelihood that it leads to a perpetuating cycle of higher prices and higher wages.

The U.S. farm economy will continue to struggle with the ongoing supply chain dysfunction and cost inflation issues that emerged in the summer of 2021. Historically strong prices will be more than offset by increases in cost structure for nearly all crop production including row crops, fruits and vegetables, and hay. CoBank economists do not anticipate any significant pullback in farm-level costs until Q3, at the earliest.

The Bureau of Labor and Statistics’ Consumer Price Index for all meats, poultry, fish, and eggs hit an all-time high in October, up 12% year over year. As restaurant and grocery prices adjust, consumer-level meat inflation is likely to continue well into the new year. While higher retail prices could limit consumption growth, tighter cattle supplies, ongoing broiler breeder issues and sow herd reductions should support favorable processor margins through at least the first half of 2022. Although beef exports have been robust during the second half of 2021, the collective U.S. protein opportunity to China may have already peaked.

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

Cattle Current Daily—Dec. 17, 2021

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

So far this week, live prices are $2 lower in Kansas at $138/cwt. and $4 lower in the Texas Panhandle at $136. Dressed prices are $2 lower in Nebraska at $218.

Last week, live prices were at $140 in Colorado and $138-$140 in Nebraska and the western Corn Belt. Dressed prices in the western Corn Belt were $218-$220.

Cattle futures were narrowly mixed Thursday with lackluster trade.

Live Cattle futures closed an average of 28¢ higher, except for 5¢ lower in Jun.

Feeder Cattle futures closed mixed, from an average of 35¢ lower in five contracts to and average of 31¢ higher.

Choice boxed beef cutout value was $2.71 higher Thursday afternoon at $262.97/cwt. Select was 69¢ higher at $248.14.

Corn futures closed mostly 3¢ to 6¢ higher, boosted by positive weekly U.S. export sales.

Soybean futures closed 10¢ to 14¢ higher through the front four contracts and then mostly 5¢ higher.

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Major U.S. financial indices closed lower Thursday with hard pressure on tech stocks.

The Dow Jones Industrial Average closed 29 points lower. The S&P 500 closed 41 points lower. The NASDAQ was down 385 points.

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Domestic beef demand is the strongest it has been in three decades. Beef gained about 8% market share over the last two decades and U.S. beef exports through November 2021 were on a record pace in terms of volume and value.

Kevin Good, CattleFax analyst and vice president of industry relations, says this is all a result of listening to the consumer.

Good was speaking to members of the American Hereford Association (AHA), guests and allied industry partners during an educational forum at the organization’s recent Annual Membership Meeting and Conference.

“Think about grade, think about consistency. They are the driving points,” Good said. He explained, “Today, we have a much better product than we had in the past and our customers are rewarding us with more dollars.”

For perspective, 72.7% of all beef cattle graded Choice in 2020 and 10.2% graded Prime, according to USDA’s Estimated National Grading Summary. Just 10 years earlier, 60.1% were Choice and 3.4% were Prime. Through October this year, 72.6% were Choice and 10.1% were Prime.

Whether regarded as the proverbial chicken or egg, Good pointed out carcass quality increased as the industry applied premiums and discounts in order to get what consumers wanted.

“There will be a time when we produce 20-30% prime in the national herd, and it’s not that far away,” Good predicted. “As we think about what our customer is demanding, let’s remember that last year, with COVID, we couldn’t sell Prime through restaurants, it went through retail. Every major retail chain in the U.S. now has a premium product offering. Consumers want it, so we’re going to have to provide it.”

Good also shared price expectations for 2022, as cow numbers and fed cattle supplies decline and more leverage returns to producers. Currently, CattleFax projects calves to average $205/cwt., compared to $170 in 2021; yearlings to average $168, compared to $140 in 2021; fed steers to average $140, compared to $121 in 2021.

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

Cattle Current Daily—Dec. 16, 2021

Negotiated cash fed cattle prices lost some ground Wednesday. Live prices in the Texas Panhandle were $4 lower at $136/cwt., on slow trade and light demand, according to the Agricultural Marketing Service. Although too few to trend, there some early dressed sales in Nebraska $2 lower at $218.

Cattle futures sagged lower, pressured by softer cash prices and reports of reduced production at some plants due to weather.

Live Cattle futures closed an average of $1.05 lower (60¢ to $1.78 lower).

Feeder Cattle futures closed an average of $1.41 lower (83¢ to $1.93 lower).

Choice boxed beef cutout value was 46¢ lower Wednesday afternoon at $260.26/cwt. Select was  $1.35 lower at $247.45.

Corn futures closed 4¢ to 5¢ lower through Jly ’22, then down 1¢ to 2¢.

Soybean futures closed fractionally higher to 3¢ higher through Jly ’22, and then mostly 2¢ to 4¢ lower.

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Major U.S. financial indices closed higher Wednesday with a late-session surge.

The increase came amid news confirming the Fed will maintain its current lending rate but accelerate tapering of its bond buying program in light of higher inflation that appears to be more than transitory.

The Dow Jones Industrial Average closed 383 points higher. The S&P 500 closed 75 points higher. The NASDAQ was up 327 points.

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USDA’s Economic Research Service (ERS) increased the price outlook for next year in the latest Livestock, Dairy and Poultry Outlook.

ERS forecast next year’s annual average feeder steer price (basis 750-800 lbs. Oklahoma City) $3.50 higher than the previous month’s estimate at $159.00/cwt. The 2021 estimated annual average increased $1.25 to $146.80. So, next year’s annual average price is projected to be $12.20 more than in 2021.

The 2021 fourth-quarter forecast was revised $5 higher to $159 based on current price strength and improved prospects for winter grazing.

As for fed cattle, the average five-area direct fed steer price in November was $133.39/cwt., which was $9.06 higher than the previous month; $24.54 higher year over year.

ERS projected the average fourth-quarter fed steer price $5 higher at $133, based on continued demand strength and tighter supplies. The 2022 annual forecast also increased $5.00 to $135.00.

The forecast for 2021 beef production was raised on higher expected slaughter of fed cattle and slightly heavier carcass weights. December’s beef production forecast was 10 million lbs. more than the previous month at 27.895 billion lbs. Beef production for next year is forecast to be 27 billion lbs.

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

Cattle Current Daily—Dec. 15, 2021

As the week wears on, cash fed cattle price prospects appear steady to softer, given reduced packer production the next two holiday weeks, along with declining wholesale beef prices.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on light demand through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few live trades in Kansas at $138/cwt., but too few to trend.

Live prices last week were at $138-$140/cwt. in the Southern Plains and Colorado; $138-$140 in Nebraska and the western Corn Belt. Dressed prices were $220 in Nebraska and $218-$220 in the western Corn Belt.

At the same time, wholesale beef prices continue to decline with Choice boxed beef cutout value $2.50 lower Tuesday afternoon at $260.72/cwt. Select was  $4.84 lower at $248.80.

All of that was enough for Live Cattle futures to drift an average of 32¢ lower.

Feeder Cattle futures closed an average of 41¢ lower Tuesday, also pressured by Corn futures closing 2¢ to 5¢ higher, while Soybean futures closed 11¢ to 13¢ higher through Sep ’23 and then mostly 9¢ higher — both rebounding from the previous day’s losses.

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Major U.S. financial indices closed lower Tuesday, pressured in part by a higher Producer Price Index (PPI) than anticipated. The final demand PPI was 0.8% higher month to month in November. It was 9.6% higher during the previous 12 months ending in November — the steepest increase since 12-month data were first calculated in November 2010, according to the U.S. Bureau of Labor Statistics (BLS).

“The Producer Price Index is a family of indexes that measures the average change over time in the selling prices received by domestic producers of goods and services,” according to BLS. “PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI), which measure price change from the purchaser’s perspective.”

The Dow Jones Industrial Average closed 106 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 175 points.

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The latest monthly Meat Demand Monitor (MDM) points toward continued domestic beef demand strength. 

“Responses in November again suggest consumer expectations of price increases (beef and pork). These consumer expectations and realized prices continue to align with broader discussions around food (and non-food) inflation,” according to the MDM report. “It should be carefully noted these higher expected prices reflect both supply-side factors (e.g. higher production costs) and demand strength…It should further be noted the majority (83%) indicate having either the same, or

more than normal amounts of meat on hand, indicating both ongoing demand strength and supply availability.”

The MDM — funded in part by the National Beef Checkoff and the National Pork Checkoff — tracks U.S. consumer preferences, views, and demand for meat with separate analysis for retail and food service channels. More than 2,000 respondents are surveyed, reflecting the national population.

Beef market share at the grocery store was 32% in November, according to the MDM. It was 21% for pork. For restaurants, market share was 41% for beef and 15% for pork.

“Taste, Freshness, Safety, and Price remain most important when purchasing protein. Price decreased most in importance from last month following its increase in October,” according to the report.

The MDM also asks consumers various ad hoc questions each month. In November, 75% of respondents self-declared as regular consumers of products derived from animal products — the highest percentage since the data series began in 2020. As for other categories, 11% of respondents indicated they are Flexitarian/Semi-Vegetarian; 9% indicated they are either Vegan Vegetarian or Vegetarian.

The MDM is coordinated and published by Kansas State University.

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

Cattle Current Daily—Dec.14, 2021

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

Live prices last week live prices were at $138-$140/cwt. in the Southern Plains and Colorado; $138-$140 in Nebraska and the western Corn Belt. Dressed prices were $220 in Nebraska and $218-$220 in the western Corn Belt.

Choice boxed beef cutout value was $1.32 lower Monday afternoon at $263.22/cwt., but Select was $1.40 higher at $253.64

Long-term optimism helped boost Live Cattle futures an average of 46¢ higher on Monday.

Feeder Cattle futures closed an average of 84¢ higher (20¢ higher at the back to $1.37 higher). They received a boost from softer Corn futures, which were down on a drop in Soybean futures based on  bullish South American production weather.

Corn futures closed 4¢ to 8¢ lower.

Soybean futures closed 18¢ to 23¢ lower through Nov ’22 and then mostly 12¢ to 15¢ lower.

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Major U.S. financial indices continued there almost daily seesaw action Monday, to the down side this time. Apparently investors started the week more anxious about everything from inflation to the potential impact of the new COVID variant.

The Dow Jones Industrial Average closed 320 points lower. The S&P 500 closed 45 points lower. The NASDAQ was down 217 points.

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“Decreased net cattle imports are adding to declining cattle inventories in the U.S. and generally tighter cattle numbers at the end of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Numerous factors, both short term and long term, are affecting the development of live cattle trade in North America.”

According to Peel, factors affecting current live cattle trade include structural development in cattle feeding and packing in Canada and Mexico, drought conditions, feed supplies and prices and exchange rates.

“For the first 10 months of the year, total U.S. cattle imports from Mexico are down 23.4% year over year, following a decrease of 32.4% in October compared to last year,” Peel says. “Cattle imports from Canada are down 9.0% for the year-to-date compared to last year but were up 9.2% percent year over year in the month of October. Total cattle imports are down 18.7% year over through October with the one-month total down 18.5%.”

On the other end of the trade, Peel says U.S. cattle exports increased significantly to Canada and Mexico over the last four years. He explains cattle exports to Canada were 70.7% higher year to date through October. Exports to Mexico, though still relatively small in actual numbers are up 215.2%.

“In total, cattle exports so far in 2021 are up 81.2% year over year, equal to 31.3% of imports, and contributing to a 35.0% decrease in net cattle imports for the first 10 months of the year,” Peel says.

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

Cattle Current Daily—Dec. 13, 2021

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

Live prices last week were $2 lower in the Southern Plains at $140/cwt. and steady to $2 lower at $138-$140 in Nebraska and the western Corn Belt. Dressed prices were steady at $220.

Cattle futures drifted a touch higher Friday.

Feeder Cattle futures closed and average of 62¢ higher (22¢ to $1.05 higher).

Live Cattle futures closed an average of 28¢ higher.

Choice boxed beef cutout value was 1¢ lower Friday afternoon at $264.54/cwt. Select was 56¢ higher at $252.24

Cattle futures drifted a touch higher Friday.

Feeder Cattle futures closed and average of 62¢ higher (22¢ to $1.05 higher).

Live Cattle futures closed an average of 28¢ higher.

Corn futures closed fractionally lower to 1¢ lower.

Soybean futures closed 1¢ to 3¢ higher through Nov ‘22 and then fractionally higher. 

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Major U.S. financial indices closed higher Friday despite the steamy inflation illustrated in the latest Consumer Price Index. Through November, the all-items index was up 6.8% over the last 12 month — the most since 1982 — according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 216 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 113 points.

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The steady to softer prices this week are likely due to the lower boxed beef prices and a shift in the cuts being purchased.

“Fed cattle prices are not likely to push higher prior to the end of the year as there will be two consecutive weeks of reduced slaughter and beef production, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, the market is expected to find support in January with more support arriving with the spring and summer grilling season. April Live Cattle futures is pricing finished cattle near $142, but there may be more upside potential than what the futures market is expecting if domestic and international demand remain strong.”

Griffith explains last week’s softer cash prices likely stem from from lower wholesale beef prices, losing some ground to shifting buyer demand.

“As the Choice Select spread has narrowed considerably the past several weeks, it would appear beef buyers are attempting to secure some of their winter beef needs to stock shelves for January and February,” Griffith says. “There may still be one more run on high-quality beef for the holiday season, but the bulk of most product moved will be for post-holiday consumption. As the shift occurs, the Choice-Select spread will continue narrowing. At this time, the narrowing will primarily occur in the form of Choice prices declining more quickly than Select prices declining.”

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

Cattle Current Daily—Dec. 10, 2021

So far this week, fed cattle prices are steady to $2 lower.

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

Prices in the Southern Plains were at $140/cwt., which was steady with the prior day but $2 lower than last week.

Although too few to trend, there were a few live sales in the western Corn Belt at $138-$140 and a few in the beef at $220. Prices there last week were $140 and $220, respectively.

Trade in Nebraska was slow on moderate demand. Dressed prices were steady with last week at $220. Although too few to trend, there were some live trades at $138-$140, compared to $140 last week.

Trade in Colorado was mostly inactive on very light demand. Live prices last week were $142.

Choice boxed beef cutout value was 44¢ higher Thursday afternoon at $264.55/cwt. Select was $1.41 lower at $251.68.

Cattle futures softened amid the subdued cash trade.

Live Cattle futures closed an average of 62¢ lower.

Feeder Cattle futures closed an average of 55¢ lower, except for 67¢ higher in spot Jan.

Corn futures closed 3¢ to 4¢ higher through near Jly and then mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 3¢ to 4¢ higher.

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Major U.S. financial indices softened Thursday amid some likely retrenching and despite positive employment news.

Weekly initial unemployment insurance claims for the week ending Dec. 4 were 184,000, which was 43,000 less than the previous week and the least since Sept. 6, 1969.

The Dow Jones Industrial Average closed fractionally lower. The S&P 500 closed 33 points lower. The NASDAQ was down 269 points.

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USDA’s Economic Research Service (ERS) raised the fed cattle price forecasts for this year and next year based on current price strength and expectations of continued demand strength.

In the latest World Agricultural Supply and Demand Estimates, ERS forecast this year’s annual average five-area direct fed steer price $1.25 higher than last month at $122.56/cwt. Next year’s average price was projected $5 higher than the previous month at $135. Prices were forecast at $138 in the first quarter, $134 in the second quarter and $132 in the third quarter.

Corn

The 2021-22 U.S. corn supply use and outlook was unchanged, as was the projected season-average price of $5.45/bu.

Soybeans

U.S. soybean supply use and outlook was unchanged, but soybean oil production was raised on a higher extraction rate.

The 2021-22 U.S. season-average soybean and soybean oil price forecasts were unchanged at $12.10/bu. and 65¢/lb., respectively. Soybean meal price was projected $5 higher $330/short ton.

Wheat

The outlook for 2021-22 U.S. wheat was for slightly lower supplies, unchanged domestic use, reduced exports and higher ending stocks.

The projected season-average farm price was raised 15¢/bu. to $7.05 on current NASS prices and expected cash and futures prices for the remainder of 2021-22. That would be the highest season-average farm price since 2012-13.

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

Cattle Current Daily—Dec. 9, 2021

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 $142/cwt. in the Southern Plains and Colorado; $140 in Nebraska and the western Corn Belt. Dressed prices were $220.

The lack of cash direction and lower wholesale beef prices helped pressure Live Cattle futures. They closed an average of 45¢ lower.

Choice boxed beef cutout value was $3.92 lower Wednesday afternoon at $264.11/cwt. Select was $2.59 lower at $253.09.

Feeder Cattle futures stepped lower amid lackluster trade and the absence of cash direction. They closed an average of $1.45 lower.

Corn futures closed mostly fractionally mixed as traders readied for Thursday’s monthly World Agricultural Supply and Demand Estimates.

Soybean futures closed 9¢ to 12¢ higher.

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Major U.S. financial indices mainly edged higher Wednesday, as investors appeared to be waiting for more direction from the weekly jobless claims report Thursday and the next read on inflation Friday, in the monthly Consumer Price Index report.

The Dow Jones Industrial Average closed 35 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 100 points.

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U.S. beef export value soared in October, up 48% year over year to $956.9 million, the second highest monthly level on record, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Beef export volume was 7.5% more at 115,709 metric tons (mt).

Through the first 10 months of the year, beef export volume totaled 1.19 million mt, up 17% from a year ago. Export value increased 38% to $8.53 billion, surpassing the full-year record of $8.33 billion established in 2018.

Beef export value per head of fed slaughter equated to $439.46 in October, up 55% from a year ago. The January-October average was $394.14, up 34%.

U.S. pork exports were 7% less year over year in October at 226,206 mt  while export value slipped 3.5% to $618.8 million. For January through October, pork exports were slightly higher than the same period last year for volume. Pork export value was 8% higher at $6.84 billion.

“USMEF has always prioritized market diversification, and this is more critical than ever now that the red meat industry faces unprecedented transportation challenges and rising input costs,” says Dan Halstrom, USMEF president and CEO. “Exports (U.S. red meat) will likely reach about $18 billion in 2021, which is a remarkable achievement. While global demand is tremendous and we are cautiously optimistic about further growth in 2022, supply chain pressures are not easy to overcome and are a growing concern for exporters and their international customers.”

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

Cattle Current Daily—Dec. 8, 2021

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

Last week, live prices were $142/cwt. in the Southern Plains and Colorado; $140 in Nebraska and the western Corn Belt. Dressed prices were $220.

Cattle futures drifted amid lackluster trading interest Tuesday.

Live Cattle futures closed an average of 19¢ lower, except for 5¢ higher in spot Dec.

Feeder Cattle futures closed an average of 56¢ lower (22¢ lower in spot Jan to $1.17 lower in the back contract).

Choice boxed beef cutout value was $4.50 lower Tuesday afternoon at $268.03/cwt. Select was $2.17 lower at $255.68.

Corn futures closed mostly 2¢ higher.

Soybean futures closed 7¢ to 11¢ lower through the front five contracts and then mostly 2¢ to 3¢ higher.

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

The Dow Jones Industrial Average closed 492 points higher. The S&P 500 closed 95 points higher. The NASDAQ was up 461 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.40 to $2.56 higher through the front six contracts; about $5.00 higher in the past two sessions.

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Agricultural producer sentiment is declining as production costs increase, according to the latest Purdue University/CME Group Ag Economy Barometer.

Month to month, the Ag Economy Barometer slipped 5 points to 116 in November with pessimism increasing for both current and future conditions. The Index of Current Conditions declined 7 points in November to a reading of 128 and the Index of Future Expectations fell 4 points to 110. All three measures were the lowest for this year.

“Farmers are facing sharp rises in production costs coinciding with fluctuating crop and livestock prices, the prospect of changing environmental and tax policy, uncertainty over COVID-19, as well as a host of other issues, all of which are negatively impacting farmer sentiment” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

In November, 43% of survey respondents said they expect farm input prices to rise by more than 16% in the upcoming year. This compares with the actual average rate of farm input price inflation over the past decade of less than 2%.

Somewhat surprisingly, given the concerns about rising input costs, 52% of corn/soybean producers expect cash rental rates to rise in 2022, compared to 43% in October. This marks the highest percentage of producers reporting that they expect rental rates in 2022 to rise since the May 2021 survey.

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

Cattle Current Daily—Dec. 7, 2021

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

Last week, live prices were $142/cwt. in the Southern Plains and Colorado; $140 in Nebraska and the western Corn Belt. Dressed prices were $220.

Cattle futures closed mostly higher Monday, buoyed by higher outside markets, recently stronger cash prices and prospects of higher money this week.

Feeder Cattle futures closed an average of 91¢ higher.

Live Cattle futures closed an average of 40¢ higher, except for an average of 13¢ lower in two contracts toward the back.

Choice boxed beef cutout value was $1.83 lower Monday afternoon at $272.53/cwt. Select was 79¢ lower at $257.85.

Corn futures closed mainly fractionally lower to mostly fractionally higher.

Soybean futures closed 2¢ to 5¢ lower through the front six contracts and then mostly unchanged to fractionally mixed.

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Investors started the week, apparently unafraid of the new COVID variant’s impact on the global economy. According to various reports, on Sunday, Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases said preliminary reports suggest omicron is less severe than the preceding delta variant. Major U.S. financial indices rocketed higher Monday

The Dow Jones Industrial Average closed 646 points higher. The S&P 500 closed 53 points higher. The NASDAQ was up 139 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.95 to $3.23 higher through the front six contracts.

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“Drought in the wintertime is generally not a major cattle market issue with limited exceptions, such as the winter wheat crop (winter wheat grazing). However, the extent and level of drought in the U.S. at this time is troubling because of the potential for drought to extend into the next growing season, at least in some regions,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. 

Peel points out dry conditions have lingered in some areas since last year.

“Many beef cattle operations have already made significant adjustments and will have very little flexibility if the current drought extends into 2022. This could result in another severe round of cow liquidation in the first half of next year,” Peel says. “A decade ago, severe drought caused the unplanned liquidation of some 2 million beef cows and affected cattle markets for several years, arguably up to the current time. It is possible it could happen again.”

Based on the U.S. Drought Monitor at the end of November, 69% of the U.S. was abnormally dry or worse with more than 53% in some degree of drought (D1-D4). At the same time last year, 67% of the nation was abnormally dry or worse and 48% was in some degree of drought.

“Beef cow slaughter is up 8.6% for the year to date and includes some drought liquidation but from exactly where is unclear,” Peel says.

He created an ad-hoc index that incorporates the Drought Severity and Coverage Index, as well as the number of beef cows in the West and High Plains regions where current drought has ben most severe. With drought impacts heavily weighted, Peel says the index suggests the most significant impact on the U.S. beef cow herd this year came from North Dakota, Montana, California and South Dakota.

“The annual Cattle report, due out Jan. 31, 2022, will reveal exactly where and how much beef cow inventories changed along with other cattle inventory data,” Peel says.

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

Cattle Current Daily—Dec.6, 2021

Widely volatile outside markets, stemming from worries about the potential impact of the new COVID variant (omicron), pressured Cattle futures last week, despite another solid gain in cash prices. Yet, buoyant cash prices and fundamental strength continued to provide optimism.

For the week, negotiated cash fed cattle prices were $2 higher on a live basis at $142/cwt. in the Southern Plains and Colorado. They were steady to $4 higher in Nebraska at $140 and steady to $5 higher in the western Corn Belt at $140. Dressed prices were $3 higher in Nebraska at $220; $3-$7 higher in the western Corn Belt at $220.

Total estimated cattle slaughter last week of 676,000 head was 110,000 head more than the previous holiday-shortened week and 7,000 more than the same week last year. Year-to-date estimated total cattle slaughter of 30.8 million head was 872,000 head more (+2.9%) than the same period last year. Estimated total year-to-date beef production of 25.52 billion lbs. was 610.9 million lbs. more (+2.5%) than a year earlier.

“Fed cattle prices have increased nearly $18/cwt. since the first week of October. Compare that to October 2020 when it took until the first week of April for the market price to increase $18 and reach the spring price peak,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Cattle feeders should be satisfied with the way prices have been moving the past two months, but upside potential looks to be minimal moving from today through the spring. In other words, the market may hold its own the next several weeks or months, but pushing much higher will be a challenge. There should be price support moving into the spring as demand will seasonally increase exiting the winter. However, the market has probably already experienced it largest gains from fall to spring.”

Live Cattle futures closed an average of 36¢ lower on Friday, except for 2¢ higher in spot Dec. Week to week, they closed an average of 95¢ lower week to week on Friday (10¢ to $2.25 lower) except for 12¢ higher in away Dec.

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Calf and feeder cattle prices last week were mainly higher to sharply higher, based on weekly auctions monitored by Cattle Current.

“…demand remains strong while buyers are trying to make quick work of purchasing cattle as there is an expectation that prices will continue strengthening,” Griffith says. “There is no doubt a fire has been lit under the cattle markets as calf prices are following feeder cattle prices and feeder cattle prices are following finished cattle prices.”

Feeder Cattle futures closed an average of $1.18 lower on Friday, amid some likely profit taking from the previous day’s session as well as week-end positioning. Week to week, though, they closed broadly mixed, from an average of $1.31 lower in the front three contracts (2¢ to $3.02 lower) to an average of 54¢ higher (20¢ to $1.07 higher).

The CME Feeder Cattle Index was $3.63 higher week to week on Friday at $161.58.

After fractionally lower in spot Dec, Corn futures closed an average of 9.5¢ lower in the next five contracts week to week on Friday.

Week to week on Friday, Soybean futures closed an average of 11.2¢ lower through the front six contracts.

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Wholesale beef prices continued lower last week, although there could be another holiday bump or two along the way.

Choice boxed beef cutout value was $5.65 lower week to week on Friday at $274.36/cwt. Select was $3.64 lower at $258.64. Steer byproduct value declined 72¢ to $14.24/cwt., with likely pressure from global economic concerns related to the new COVID variant.

Despite the sizable price decline in boxed beef prices since the last week of August, and the increase in fed cattle prices, Griffith says packer profitability remains strong.

“There is no reason at this time to expect beef demand to soften, which should continue supporting wholesale beef prices and the cattle complex,” Griffith says. “There may still be a little more holiday buying that needs to take place, but most holiday purchases will have been completed at this point. The expectation moving forward will be for a strong restocking of the beef counter following consumer holiday purchasing and some of the focus shifting from middle meats to end cuts as winter establishes a hold on the market.”

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Volatility continued in equity markets Friday. Besides the seesawing uncertainty through the week, tied to the COVID variant, pressure came from significantly fewer new jobs than the trade expected.

Employment increased 210,000 from October to November, according to the Employment Situation Summary from the U.S. Bureau of Labor Statistics. Average hourly earnings increased by 8¢ to $31.03.

The Dow Jones Industrial Average closed 59 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 295 points.

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Supply chain disruptions and inflation continue helping propel fertilizer prices to record and near-record highs.

“According to the USDA Agricultural Marketing Service (AMS) Illinois Production Cost Report (a bi-weekly report) the average price for anhydrous ammonia last week was $1,434.38/ton, the highest on record according to data going back to 2008 and a more than three-fold increase from the same week a year ago,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Since the start of the year, anhydrous ammonia prices have increased 186.5% or $934 per ton, and since late-September prices have jumped 82.0% or $646.”

Although less drastic, price increases for other fertilizer prices are steep, too.

Citing the AMS report, compared to a year earlier, LMIC analysts say the average price for urea (46-0-0) jumped 155% ($557) to $915/ton, liquid nitrogen (28% spread) is up 166% ($351) to $564 per ton, and potash is 127% ($439) higher at $785 per ton. Diesel prices are 60% higher at $2.87/gal.

“Depending on how fertilizer prices react in the coming months may drive producer decisions on how many corn and soybean acres to plant,” LMIC analysts say. “Producers are likely to actively consider ways to minimize fertilizer costs, which will include crop planting decisions. Extension educators have been recommending producers have soil tests conducted to determine if fertilizer is needed and plan application needs as necessary.”

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

Cattle Current Daily—Dec. 3, 2021

Negotiated cash fed cattle prices took another step higher Thursday.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Dec. 2, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Among the key points in the OECD Economic Outlook:

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

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

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

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

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

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

Cattle Current Daily—Dec. 1, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 30, 2021

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

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

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

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

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

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

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

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

Corn futures closed mostly 5¢ to 9¢ lower.

Soybean futures closed 9¢ to 11¢ lower.

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 29, 2021

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

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

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

Corn futures closed mostly 4¢ to 5¢ higher.

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 25 and 26, 2021

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

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

Cash bullishness added fuel to the rally in Cattle futures.

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

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

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

Corn futures closed mostly 1¢ to 2¢ lower.

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 24, 2021

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

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

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

Feeder Cattle futures closed an average of $1.46 higher.

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 23, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 22, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 19, 2021

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

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

Stronger cash prices helped push Cattle futures higher.

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

Live Cattle futures closed an average of 70¢ higher.

Lower grain futures prices added support.

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

Soybean futures closed mostly 11¢ to 15¢ lower.

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 18, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 17, 2021

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

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

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

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

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

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

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

Early indications suggest prices no worse than steady this week.

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 16, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 15, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Nov. 12, 2021

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

So far this week, live prices are $2-$3 higher in the Southern Plains at $131-$132/cwt., $2 higher at $132 in Nebraska and the western Corn Belt. Dressed prices are $3-$5 higher at $207.

Choice boxed beef cutout value was 38¢ lower Thursday afternoon at $285.14/cwt. Select was 67¢ higher at $267.29.

Live Cattle futures wavered in place Thursday, while a break in the Corn rally helped Feeder Cattle breathe higher.

Live Cattle futures closed narrowly mixed from unchanged to an average of 17¢ lower.

Feeder Cattle futures closed an average of 68¢ higher (42¢ to $1.02 higher).

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed 2¢ to 8¢ higher through Sep ’22 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed narrowly mixed Thursday as investors appeared to be digesting direction amid increasing inflation.

The Dow Jones Industrial Average closed 158 points lower. The S&P 500 closed 2 points higher. The NASDAQ was up 81 points.

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“After three Congressional hearings featuring the testimony of industry experts and a major economic analysis of the beef supply chain out of Texas A&M, Senators continue to ignore market fundamentals and are attempting to guarantee higher prices for livestock producers,” according to Julie Anna Potts, President and CEO of the North American Meat Institute.

Potts was referring to new bipartisan compromise legislation — the Cattle Market Price Discovery and Transparency Act — announced by U.S. Senator Deb Fischer (R-Neb.) earlier this week.

Among other things, the law would establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades based on regional average 18-month trade levels.

“If this bill becomes law, there will be cattle producers who want alternative marketing arrangements, but will instead be forced to sell on the cash market, and the industry will turn back time to the days of commodity cattle,” Potts says.

She offers relevant statements made by expert agricultural economists during the aforementioned Congressional hearings.

For instance, in Senate testimony, Glynn Tonsor, agricultural economist at Kansas State University explained, “Stated directly – without contemporary use of alternative marketing agreements I believe cattle prices would be lower as production efforts would not align as well with consumer demands.”

In House testimony, Jayson Lusk, agricultural economist at Purdue noted, “Even if 100 percent of cattle were being sold on the cash market, it doesn’t mean prices would have been any higher than what we recently observed.”

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

Cattle Current Daily—Nov. 11, 2021

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

Live prices were $2-$3 higher in the Southern Plains at $131-$132/cwt., $2 higher in Nebraska at $132 and $1-$2 higher in the western Corn Belt at $131-$132. There were too few dressed trades for a trend: $202-$204 last week.

Live Cattle futures were unable to capitalize on the stronger cash price, however. They closed narrowly mixed, from an average of 11¢ lower in five contracts to an average of 11¢ higher. Part of the pressure was likely due to lower wholesale beef prices.

Choice boxed beef cutout value was $2.28 lower Wednesday afternoon at $285.52/cwt. Select was $4.00 lower at $266.62.

Feeder Cattle futures closed an average of $1.26 lower with weight from resurgent grain futures.

Corn futures closed 13¢ to 14¢ higher in the front four contracts and then mostly 6¢ to 8¢ higher.

Soybean futures closed mainly 3¢ to 5¢ higher.

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Major U.S. financial indices closed lower Wednesday with weaker tech stocks and renewed inflation concerns.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9% in October on a seasonally adjusted basis after rising 0.4% in September, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 6.2% before seasonal adjustment.

The Dow Jones Industrial Average closed 240 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 263 points.

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Increasing feedlot cost of gain is pushing cattle out of the feedlot sooner, based on Kansas State University’s (KSU) Focus on Feedlots (FF) data.

In September, compared to a year earlier, analysts with the Livestock Marketing Information Center (LMIC) say the FF data indicates steers were on feed for an average of 159 days, compared to 175 days the previous year and 165 days for the five-year average (2015-19).

Likewise, heifers were on feed for an average of 169 days in September, versus 176 days last year and 160 days for the five-year average.

“Although average days on feed is lower, feedlots show cattle on feed over 120 days in October was up 3.3% from last year and 7.6% above the five-year average,” say LMIC analysts, in the latest Livestock Monitor.

Since the beginning of this year, those analysts explain average cost of gain for steers is up 32.8% ($27/cwt.) and heifer cost of gain is up 37.2% ($32). Average cost of gain in September was $109.29/cwt. for steers and $118.34 for heifers, the priciest in about eight years.

“It is also worth noting that the KSU Feedlot average cost of gain data does not include the cost of feeder, yardage, and interest costs,” LMIC analysts say. “Higher average cost of gain is primarily due to rising feed costs for corn, up 47.7% ($2.25) and ground alfalfa hay, up 31.2% ($43) since the start of the year. The higher cost of gain will also motivate cattle feeders to market cattle quicker.”

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

Cattle Current Daily—Nov. 10, 2021

Cattle futures drifted lower Tuesday with traders apparently waiting for further cash direction.

Live Cattle futures closed narrowly mixed, from an average of 27¢ lower in four contracts to an average of 14¢ higher.

Feeder Cattle futures closed an average of 60¢ lower.

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

Last week, prices were at $128-$130/cwt. in the Southern Plains and the western Corn Belt; $130 in Nebraska. Dressed prices were $202-$204.

Early on, bets seem to favor steady to higher prices this week.

Choice boxed beef cutout value was 85¢ lower Monday afternoon at $287.80/cwt. Select was $2.02 higher at $270.62/cwt.

Grain futures, especially Soybeans firmed Tuesday with friendlier projections than expected in the monthly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed mostly 3¢ higher.

Soybean futures closed mostly 19¢ to 23¢ higher.

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Major U.S. financial indices closed lower Tuesday, with seemingly more attention paid to inflation indicators.

The Dow Jones Industrial Average closed 112 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 95 points.

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USDA’s Economic Research Service (ERS) increased the projected annual five-area direct average steer price for this year by $1.25 to $121.31/cwt., in the latest World Agricultural Supply and Demand Estimates (WASDE), based on continued firm demand.

That’s with beef production this year projected to be 53 million lbs. more than the previous month to 27.88 billion lbs. on higher expected slaughter of fed cattle and heavier carcass weights.

The annual average price for next year was forecast $1 higher at $130.

Beef production next year was estimated to be 885 million lbs. less than this year (-3.17%).

Projected average steer prices were projected at $128 in the fourth quarter this year.

Next year, the five are direct average steer price was forecast at $132 in the first quarter, $129 in the second quarter and at $127 in the third quarter.

ERS projected total red meat and poultry production this year 171 million lbs. more than the previous month at 106.73 billion lbs. Total red meat and poultry production next year was forecast to be 463 million lbs. less than this year (-0.43%) at 106.27 billion lbs.

Corn

Corn production was forecast 43 million bu. more than the previous month to 15.06 billion bu., with average yield forecast 0.5 bu./acre more at 177.0bu./acre. Corn used for ethanol production was increased 50 million bu. With use rising slightly more than supply, corn ending stocks were lowered 7 million bu.

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

Soybeans

ERS lowered projected soybean production by 23 million bu. to 4.42 billion bu., but they also reduced expected exports. With use falling more than supply, soybean ending stocks were raised 20 million bu.

The U.S. season-average soybean price for 2020-21 was forecast 25¢ lower to $12.10/bu. Projected soybean meal and oil prices were unchanged at $325.00 per short ton and 65.0¢/lb., respectively.

Wheat

The forecast for 2021-22 U.S. wheat was for lower supplies, higher domestic use, reduced exports, and slightly higher ending stocks, compared to the previous month.

Supplies were reduced 10 million bu. on lower anticipated imports. Total domestic use was projected 2 million bushels higher. Exports were lowered 15 million bu. Projected 2021-22 ending stocks were raised 3 million bu. to 583 million, which would leave the lowest U.S. ending stocks since 2007-08.

The projected 2021-22 season-average farm price for wheat was raised 20¢ to $6.90/bu.

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

Cattle Current Daily—Nov. 9, 2021

Cattle futures edged higher Monday as traders adjusted to last week’s strong rally.

Live Cattle futures closed an average of 23¢ higher (5¢ to 40¢) except for unchanged in Feb ’22.

Feeder Cattle futures closed an average of 62¢ higher, except for 30¢ and 38¢ lower at either end of the board.

Grain futures, especially Soybeans added support, under pressure from apparent positioning ahead of Tuesday’s monthly World Agricultural Supply and Demand Estimates.

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

Last week, live prices were at $128-$130/cwt. in the Southern Plains and the western Corn Belt; $130 in Nebraska. Dressed prices were $202-$204.

Choice boxed beef cutout value was 89¢ lower Monday afternoon at $288.65/cwt. Select was $1.08 higher at $267.52/cwt.

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Major U.S. financial indices closed higher again with the S&P 500 closing above 4,700 for the first time. Corporate earnings and other positive economic data seem to be overriding inflationary concerns for now.  

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 11 points.

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“The long-awaited improvement in fed cattle markets appears to have arrived with fed cattle prices jumping roughly $5/cwt. the past two weeks,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

He explains the improvements include working through backlogged feedlot placements resulting from supply chain disruptions last year and the Tyson fire in August of 2019.

“Those dynamics pushed the cyclical peak in feedlot production into 2021. The fed cattle market problems are the result of this peak feedlot production constrained by packing industry capacity limitations,” Peel explains. “Long-term reductions in packing industry infrastructure combined with chronic labor limitations, which predate but were made worse by COVID-19, added months to the time needed to improve the fed cattle market situation.”   

As the backlog of cattle finally clears, he explains cattle and beef markets will be able to realign and rebalance.

“The industry will be better positioned to capitalize on the optimism that has been building in recent months,” Peel says. “Tighter supply and continued strong demand will take markets to higher levels.  Strong wholesale and retail prices have been pulling on the industry most of this year. The trade picture continues to improve with the latest data showing additional growth in beef exports and reduced beef imports. On the supply side, feeder cattle markets, already higher year over year, are increasingly supported by cyclically reduced feeder cattle supplies and poised to benefit even more from higher fed cattle prices.”

Plenty of challenges remain, but mostly from the input side of the equation as feed and fertilizer prices escalate.

“Drought continues to be a major factor in many regions and will not only directly impact producers in those regions but will also determine the trajectory of the industry in the coming years. Higher crop and feed ingredient prices are a particular challenge for feedlots but also for cow-calf and stocker producers, most especially those struggling with drought-reduced feed and forage availability,” Peel says. He adds that pervasive labor issues and supply chain disruptions will continue to impact input and output markets in the coming months.

But, barring any new black swans, fundamentals should be driving cattle prices.

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

Cattle Current Daily—Nov. 8, 2021

Negotiated cash fed cattle prices ended last week $3-$4 higher on a live basis at $130/cwt. in all major cattle feeding regions. Dressed trade was $4 higher at $204.

Trade was slow to moderate on moderate to good demand through Friday afternoon, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 68¢ lower Friday afternoon at $289.54/cwt. Select was 70¢ lower at $267.52/cwt.

Total estimated cattle slaughter last week of 650,000 head was 18,000 fewer than the previous week, according to the Agricultural Marketing Service. Year-to-date estimated cattle slaughter of 28.25 million head is 847,000 head more (+3.1%) than the same time last year. Total year-to-date estimated beef production of 23.37 billion lbs. is 610,000 lbs. more (+2.7%) than a year earlier.

Cattle futures closed higher Friday with support from cash prices breaking higher.

Live Cattle futures closed an average of 95¢ higher (50¢ higher at the back to $1.27 higher toward the front).

Feeder Cattle futures closed an average of $1.16 higher (77¢ to $1.45 higher toward the front).

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Major U.S. financial indices closed higher Friday, buoyed by a stronger employment situation than expected.

Total non-farm payroll employment increased by 531,000 in October and the unemployment rate edged 0.2% lower to 4.6%, according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 203 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 31 points. 

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U.S. beef exports remained on a record pace through September, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Beef exports posted one of the best months on record in September, with value climbing nearly 59% above last year at $954.1 million, the second highest monthly total on record. Volume for the month was 20% higher than a year earlier at 123,628 metric tons (mt), the fourth largest on record.

September beef export value equated to $447.46 per head of fed slaughter, up 63% from a year ago.

Through the first three quarters of 2021, beef exports increased 18% from a year ago to 1.08 million mt, valued at $7.58 billion – up more than $2 billion (36%) from the same period last year. Compared to the record year of 2018, January-September exports were 7% higher in volume and up 24% in value. For January through September, U.S. beef export value averaged $389.08 per head (up 32%).

U.S. pork exports are on a record pace, too. For January through September, exports were 1% above last year’s record pace at 2.24 million mt, while value climbed 9% to $6.23 billion.

“Facing significant logistical headwinds and higher costs, these outstanding results are really a testament to the loyalty and strong demand from our international customers and to the innovation and determination of the U.S. industry,” says USMEF President and CEO Dan Halstrom.

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

Cattle Current Daily—Nov. 5, 2021

Cattle futures on Thursday paused from the week’s rally, but stronger cash prices and indicators of feedlot marketing currentness suggest there’s room to roam higher.

For instance, the dressed steer weight the week ending Oct. 23 was 918 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 4 lbs. lighter than the previous week and 13 lbs. lighter year over year. The average dressed heifer weight of 842 lbs. was 2 lbs. heavier week to week but 5 lbs. lighter year over year.

Live Cattle futures closed an average of 43¢ lower (12¢ lower toward the back to $1.02 lower in spot Dec).

Feeder Cattle futures closed an average of 87¢ lower (47¢ lower at the back to $1.15 lower in spot Nov).     

That was despite another day of lower Corn futures which were down mostly 2¢ to 4¢. Weakness came in the face of increased net U.S. corn export sales the week ending Oct. 28, according to USDA’s weekly U.S. Export Sales report. Net U.S. export sales of 1.22 million metric tons for 2021-22 were 37% more than the previous week and 10% more than the prior 4-week average.

U.S. net soybean exports of 1.86 million metric tons were 58% more than the previous week and 19% more than the prior four-week average, but Soybean futures closed 19¢ to 22¢ lower through Sep ‘22 and then mostly 14¢ to 17¢ lower, pressured by oil prices and chatter about a potential record crop in Brazil.

Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Thursday afternoon. So far this week, the only established sales are $2 higher in the Southern Plains at $128/cwt., according to the Agricultural Marketing Service

Last week, live prices were at $124-$126/cwt. in the Texas Panhandle, at $126 in Kansas, $127 in Nebraska and at $126-$127 in the western Corn Belt. Dressed trade was at $200.

Choice boxed beef cutout values were $1.73 higher Thursday afternoon at $290.22/cwt. Select was 50¢ higher at $268.22/cwt.

Net U.S. beef export sales for the week ending Oct. 28 of 16,700 metric tons were 13% less than the prior week but 15% more than the previous four-week average. Increases were primarily for South Korea, China, Japan, Taiwan, and Canada.

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Major U.S. financial indices were mixed Thursday, as investors await the monthly employment report due out Friday.

Positive news included initial weekly unemployment insurance claims of 269,000 for the week ending Oct. 30, according to the U.S. Department of Labor. That was the fewest since March 14 last year and fewer than expected.

The Dow Jones Industrial Average closed 33 points lower. The S&P 500 closed 19 points higher. The NASDAQ was up 128 points.

CME WTI Crude Oil futures closed 94¢ to $2.05 lower in the front six contracts, with follow-through pressure from the previous session.

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Beef and pork demand indexes reflected strength in the second quarter but weakened during the summer months as rising wholesale beef prices started to dampen retail enthusiasm, according to the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

“The third-quarter all-fresh beef demand index fell from 124 last year to 121 this year, but 2021 was the second highest level behind 2020,” according to LMIC analysts. “The pork demand index for the third quarter posted a significant reduction falling from 124 last year (a record) to 100…Record retail price levels will likely be a headwind to demand in the near term, but meat demand indexes are still showing relatively strong levels.”

As mentioned previously in Cattle Current, retail prices in September were record high for beef, pork and broilers. According to LMIC, the all-fresh beef retail price was 17.8% more year over year in September at $7.40/lb. Retail pork prices were 16.4% higher at $4.72/lb. and the broiler composite price was 8.0% higher at $2.16/lb.

The September Consumer Price Index (CPI) was 5.4% more year over year.

“The meat index reported a jump of 12.6% over last year, while the poultry index increased 6.1% from a year ago,” say LMIC analysts. “The September CPI and retail price data also provide the information needed to calculate third-quarter demand indexes. Livestock Marketing Information Center demand indexes use a base year of 2000. Demand indexes, although not exact, do give an indication as to relative changes. Given the record levels for beef, pork, and broiler prices, the third-quarter demand indexes showed a slight pull back from the second quarter and a year ago.”

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

Cattle Current Daily—Nov. 4, 2021

Negotiated cash fed cattle trade ended up fully $2 higher in the Southern Plains on Tuesday at $128/cwt. on a live basis. That and rallying Cattle futures seem to have bolstered cattle feeder resolve to hold packers’ feet to the fire this week.

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

Live prices last week were at $124-$126/cwt. in the Texas Panhandle, at $126 in Kansas, $127 in Nebraska and at $126-$127 in the western Corn Belt. Dressed trade was at $200.

The stronger cash outlook and follow-through fundamental support helped Cattle futures take another step higher Wednesday.

Live Cattle futures closed an average of $1.01 higher (17¢ higher toward the back to $1.70 higher in spot Dec), amid heavy trade and expanding open interest.

Feeder Cattle futures closed an average of $1.35 higher (37¢ higher toward the back to $2.20 higher toward the front). They were helped along by Corn futures closing 8¢ to 9¢ lower through Jly ‘22. Corn futures were down on likely profit taking, harvest pressure and chatter about yields coming in at the top of range expectations.

Choice boxed beef cutout value was $1.11 higher Wednesday afternoon at $288.49/cwt. Select was $1.59 higher at $267.72/cwt.

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Major U.S. financial indices closed higher Wednesday, buoyed by comments from the Fed suggesting no plan to increase interest rates any time soon.

“In light of the substantial further progress the economy has made toward the Committee’s goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities,” according to the statement issued by the FOMC.

Addressing the press in making the statement, Federal Reserve Chair, Jerome Powell, explained, “Our decision today to begin tapering our assets purchases does not imply any direct signal regarding our interest rate policy. We continue to articulate a different and more stringent test for the economic conditions that would need to be met before raising the federal funds rate.”

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 161 points.

CME WTI Crude Oil futures closed $2.37 to $3.05 lower in the front six contracts, apparently pressured by news that the EU and Iran will resume nuclear pact talks, would could eventually lead to lifting restrictions on Iranian oil exports.

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Agricultural producer sentiment weakened in October, according to the Purdue University/CME Group Ag Economy Barometer. It declined 3 points to 121, marking the third consecutive month of declining sentiment.

“Recent weakness in farmer sentiment appears to be driven by a wide variety of issues, with concerns about input price rises topping the list,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Rapid run-ups in input prices, especially fertilizer for crop production, are giving rise to concerns among producers’ about their operating margins weakening. Livestock producers are also concerned about a cost-price squeeze, especially in the pork and dairy sectors.”

The Index of Current Conditions was down 5 points to 140, while the Index of Future Expectations fell 2 points to 114.

Rising input costs are also dampening expectations for farmland cash rental rates. In October, the percentage of corn and soybean producers expecting higher year-over-year farmland rental rates in 2022 dipped 7% from the previous month to 43%. Despite these concerns, producers remain bullish about farmland values. The Long-Term Farmland Value Expectations Index set a new record high in October at 161, which was 2 points higher than a month earlier. The short-term index rose 1 point to 156.

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

Cattle Current Daily—Nov. 3, 2021

Feeder Cattle futures blasted higher Tuesday, more than gaining back the previous session’s steep declines. Corn futures were down for the day, but more than anything, Feeder Cattle were likely falling back into fundamental line after what appeared to be a technical-based, algo-fueled late-session selloff the previous day.

Feeder Cattle futures closed an average of $3.80 higher ($3.17 to $4.40 higher).

Live Cattle rallied on the stronger cash outlook and higher wholesale beef values after being anchored by Feeder Cattle the previous day.

Live Cattle closed an average of $1.56 higher (95¢ to $1.97 higher).

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

Live prices last week were at $124-$126 in the Texas Panhandle, $126 in Kansas, $127 in Nebraska and $126-$127 in the western Corn Belt. Dressed trade was at $200. Early indications point to steady, but likely higher prices this week.

Corn futures closed lower mostly 3¢ to 5¢ lower.

Soybean futures closed mostly 6¢ to 9¢ higher.

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Major U.S. financial indices closed higher again Tuesday on continued positive quarterly corporate earnings reports.

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

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Overall pasture conditions are finishing the growing season similar to last year, but poorer in the severest drought areas.

Based on the USDA Crop Progress report for the week ending Oct. 17, the Livestock Marketing Information Center (LMIC) reported 34% of pasture and range was classified as Poor or Very Poor in the Great Plains region (CO, KS, MT, NE, ND, SD, WY). That was 12% more than a year earlier. The region is home to 29% of the nation’s beef cows, according to LMIC.

“Pasture conditions in Montana are the most severe of any state in the country, with 65% of pastures rated Very Poor (moderating from 69% the prior week),” say LMIC analysts, in the latest Livestock Monitor. “Within the same region, Nebraska had 13% of its pastures rated Very Poor compared to 30% very poor rating in the same week a year ago.”

In Oklahoma and Texas — representing 22% of the nation’s beef cow herd — 34% of the pastures were rated as Good or Excellent, which was 10% more than a year earlier, according to LMIC. Analysts there say, “Notable in this region was the condition of pastures this past spring when 14% were rated Very Poor, the worst spring rating since 2014 for that region.”

LMIC analysis the middle of October indicated 23% of the beef cow herd was in states with 40% of the pastures rated Good to Excellent, unchanged from a year earlier. States where 40% of the pastures were rated Poor or Very Poor accounted for 25% of the beef cow herd, down from 33% a year earlier.

Most recently, national pasture and range conditions held about steady for the week ending Oct. 31, according to the latest Crop Progress report.

26% of pasture and range was rated as Good (23%) or Excellent (3%), which was 2% more than the previous week but 6% more than a year earlier. On the other end of the scale, 42% was rated as Poor (20%) or Very Poor (22%), which was 1% less than the previous week and 1% less than a year earlier.

87% of winter wheat was planted, which was 1% less than a year earlier but 1% more than average. 67% was emerged, which was 3% less than a year earlier and 1% less than average. 45% was in Good (40%) or Excellent (5%) condition, which was 2% more than a year earlier. 21% was in Poor (14%) or Very Poor (7%) condition, which was 2% more year over year.

74% of corn was harvested, compared to 81% last year and 66% for the five-year average.

79% of soybeans were harvested, compared to 86% last year and 81% for average.

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

Cattle Current Daily—Nov. 2, 2021

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

Live prices last week were steady to $2 higher in the Texas Panhandle at $124-$126/cwt., $2 higher in Kansas at $126, $2-$3 higher in Nebraska at $127 and $2 higher in the western Corn Belt at $126-$127. Dressed trade was $4 higher at $200.

The five-area average direct fed steer price last week was $1.90 higher than the previous week at $126.29/cwt. on a live basis. The average steer price in the beef was $4.06 higher at $199.89.

Choice boxed beef cutout values were $1.86 higher Monday afternoon at $287.58/cwt. Select was $1.02 higher at $264.39.

Feeder Cattle futures closed an average of $2.22 lower, battered by rising Corn and Wheat futures.

Corn futures were 10¢ higher through the front four contracts and then mostly 5¢ to 7¢ higher.

K.C. Wheat futures were mostly 18¢ to 21¢ higher.

Weakness in Feeder Cattle helped pressure Live Cattle futures an average of 38¢ lower.

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Major U.S. financial indices edged higher Monday, buoyed by energy prices.

The Dow Jones Industrial Average closed 94 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 97 points.

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Winter wheat pasture prospects improved with October rains, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“While wheat for grain-only is still being planted or is newly planted, wheat for forage or dual purpose has progressed significantly with recent rains,” Peel says. “Driving across Oklahoma recently I observed wheat in stages from planting to barely emerged to several inches tall.  Most wheat pasture will not be ready for grazing until December, later than usual, but I have heard reports that some wheat grazing may begin by mid-November.”

Overall, however, Peel says ongoing drought conditions are slightly worse year over year.

“Although there have been some regional changes in drought situation, the overall picture has not changed much. The country started this growing season with the worst average pasture and range conditions on record and is ending the year in the same condition,” Peel explains. “The reemerging La Niña increases the chances for moisture in the northern half of the country and Canada but simultaneously increases the odds of drier conditions redeveloping in the Southwest. In any event, not much will change regarding forage supplies in the next 6-7 months.”

On the upside, cattle prices should continue to improve, according to Peel, as cattle numbers shrink cyclically.

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

Cattle Current Daily—Nov. 1, 2021

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

Live prices last week were $2 higher in the Southern Plains at $126/cwt., $2 higher in the western Corn Belt at $126-$127 and $2-$3 higher in Nebraska at $127. Dressed trade was $4 higher at $200.

Total estimated cattle slaughter last week was 668,000 head, which was 7,000 more than the previous week and 28,000 more than the same week last year. Total estimated year-to-date cattle slaughter of 27.60 million head was 847,000 head more (+3.17%) than the same time last year. Total estimated beef production of 22.83 billion lbs. was 616.2 million lbs. more (+2.77%) than a year earlier.

Cattle futures closed lower Friday, likely mostly due to week-end and month-end position squaring, given improving fundamentals.

Live Cattle futures closed an average of 94¢ lower, except for $2.87 higher in expiring Oct and 12¢ higher at the back.

Feeder Cattle futures closed an average of 96¢ lower (35¢ to $1.45 lower).

Corn futures closed 4¢ to 5¢ higher through near Jly and then mostly 1¢ higher.

Soybean futures closed 2¢ to 3¢ higher through Jan ‘23 and then mostly  fractionally higher to 1¢ higher.

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Major U.S. financial indices closed higher Friday, despite Apple and Amazon missing quarterly earnings estimates.

The Dow Jones Industrial Average closed 89 points higher. The S&P 500 closed 8 points higher. The NASDAQ closed 50 point higher.

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“It’s a challenging time for crop producers to manage input price risk. Input prices for fertilizer, crop protection (chemicals), machinery, fuel, labor, rent, and insurance are up substantially compared to last year at this time,” says Aaron Smith, crop marketing specialist at the University of Tennessee, in his weekly market comments. “Additionally, availability and timeliness of delivery are a major concern.”

Fertilizer prices underscore the dramatic increase in the cost of crop production.

“All three major nutrients—nitrogen, phosphorus and potassium—used in the production of primary row crops in the U.S. have experienced varying degrees of upward price pressure since late 2020,” say members of the Ag CEO Council (ACC). “Since mid-2020, nitrogen prices have climbed from approximately $450 per ton to $750 per ton, phosphorus prices from $400 per ton to more than $700 per ton and potassium prices from over $300 per ton to over $600 per ton.” That’s in a recent letter from the ACC to Michael Shapiro, Deputy Assistant Secretary for Economic Policy, in response to a request for comments to President Biden’s Executive Order on America’s Supply Chains.

According to the Ag CEO Council, supply chain disruptions, higher crop prices and escalating natural gas prices are all drivers of increasing fertilizer cost.

“The primary feedstock and process fuel for ammonia production is natural gas. The recent doubling of the Henry Hub natural gas price is increasing the cost of ammonia production – the building block for all nitrogen fertilizers,” according to the ACC letter.

ACC members explain multiple trade actions continue to affect both phosphorus and potassium prices. That includes U.S. tariffs on phosphorous imports from Morocco and Russia, in response to unfair subsidization from those countries, as well as China banning phosphorous exports through June of next year.

“Most common fertilizers have more than doubled compared to last year. As such, producers are seeking strategies to reduce input costs,” Smith says. “Two recommendations, as a starting point, are soil sampling (know what you’ve got) and crop selection (know current relative cost and revenue relationships for commodities produced on your farm). Unfortunately, there is no ‘silver bullet’ to mitigate rising input costs and availability concerns. So, producers will need to be creative in their approach and con-sider numerous strategies.”

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

Cattle Current Daily—Oct. 29, 2021

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

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

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

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

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

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

So far this week, live prices are $2 higher in the Southern Plains at $126/cwt., $2 higher in the western Corn Belt at $126-$127 and $2-$3 higher in Nebraska at $127. Dressed trade is $4 higher at $200.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Oct. 28, 2021

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

Live prices were $2 higher in the Southern Plains at $126/cwt., $2 higher in the western Corn Belt at $126-$127 and $2-$3 higher in Nebraska at $127. Dressed trade was $4 higher at $200.

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

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

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

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

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

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

Soybean futures closed mostly 2¢ to 3¢ higher.

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

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

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

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

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

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

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

Cattle Current Daily—Oct. 27, 2021

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

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

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

Soybean futures closed mostly fractionally higher to 2¢ higher.

Live Cattle futures closed an average of $1.48 higher.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Oct. 26, 2021

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

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

Live Cattle futures closed an average of 92¢ higher.

Corn futures closed mostly marginally higher.

Soybean futures closed 9¢ to 16¢ higher.

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Oct. 25, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Oct. 22, 2021

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

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

Cattle futures closed mixed Thursday.

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

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

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

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

Corn futures closed mostly 4¢ to 7¢ lower.

Soybean futures closed mostly 18¢ to 21¢ lower.

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

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

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Slaughter data continues to suggest beef cow herd liquidation.

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

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

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

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

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

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

Cattle Current Daily—Oct. 21, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Oct. 20, 2021

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

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

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

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

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

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

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 6¢ to 8¢ higher.

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

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

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

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

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

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

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

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

Cattle Current Daily—Oct. 19, 2021

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

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

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

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

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

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

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

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

Soybean futures closed mostly 1¢ to 3¢ higher.

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

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

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

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

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

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

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

Cattle Current Daily—Oct. 18, 2021

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

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

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

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

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

Corn futures closed mostly 7¢ to 9¢ higher.

Soybean futures closed mostly 9¢ to 11¢ higher.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Oct. 15. 2021

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

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

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

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

Feeder Cattle futures closed an average of 84¢ higher.

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

Corn futures closed mostly 1¢ to 3¢ higher.

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

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

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

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

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Open interest in Cattle futures continues to dwindle.

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

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

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

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

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

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

Cattle Current Daily—Oct. 14, 2021

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

Trade in other regions was slow on light demand.

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

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

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

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

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

Corn futures closed mostly 6¢ to 10¢ lower.

Soybean futures closed mostly 4¢ to 7¢ lower.

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—Oct. 13. 2021

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

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

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

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

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

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

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

Corn futures closed mostly 5¢ to 10¢ lower.

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

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

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

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

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

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

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

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

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

Corn

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

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

Soybeans

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

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

Wheat

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

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

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

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

Cattle Current Daily—Oct. 12, 2021

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

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

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

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

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

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

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

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 9¢ to 14¢ lower.

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