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

Daily Market Highlights

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Cattle Current Daily—Sept. 17, 2021

Cattle futures managed to close marginally lower to narrowly mixed Thursday.

Feeder Cattle futures closed narrowly mixed, from an average of 34¢ lower in four contracts to an average of 56¢ higher.

Live Cattle futures closed an average of 38¢ lower, except for an average of 6¢ higher in two contracts.

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and mostly inactive on light demand in the North through Thursday afternoon, according to the Agricultural Marketing Service.

For the week, prices are steady to unevenly steady in the Southern Plains and Nebraska with live prices at $124/cwt. in the Texas Panhandle, $123-$124 in Kansas and $125 in Nebraska. Live prices in the western Corn Belt are $1-$3 lower at $123-$124. Dressed traded is unevenly steady at $200.

Choice boxed beef cutout value was $1.82 lower Thursday afternoon at $318.00/cwt. Select was $3.62 lower at $280.27.

Net U.S. beef export sales for the week ending Sept. 9 were 15,300 metric tons, according to USDA’s weekly U.S. Export Sales report. That was 23% more than the previous week and 24% more than the prior four-week average. Increases were primarily for Japan, South Korea, China, Mexico, and Canada.

Corn futures closed mostly 3¢ to 4¢ lower.

Soybean futures closed fractionally higher to 1¢ higher through May ‘22 and then mostly 1¢ to 4¢ lower.

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Major U.S. financial indices mainly hovered in place Thursday amid investor caution. Weekly initial unemployment insurance claims for the week ending Sept. 11 were 332,000, which was 20,000 more than the previous week and a tad gloomier than expected.

The Dow Jones Industrial Average closed 63 points lower. The S&P 500 closed 6 points lower. The NASDAQ was up 20 points.

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Price projections in the latest monthly Livestock, Dairy and Poultry Outlook from USDA’s Economic Research Service (ERS) continue to be optimistic, especially heading into 2022.

ERS sees the 2022 annual average feeder steer price (basis 750-800 lbs., Oklahoma City) at $155.00/cwt., which would be $9.12 more than this year’s estimate and $19.55 more than the 2020 average. Prices are projected at $154 in the third quarter and $155 in the fourth quarter for an annual average of $145.88. Prices are forecast at $153 in the first quarter next year and at $151 in the second.

ERS projects the 2022 annual average five-area direct fed steer price at $128.25/cwt., which would be $6.07 more than this year’s projection and $19.74 more than 2020. Prices are projected at $124 in the third quarter and $131 in the fourth quarter for an annual average of $122.18. Prices are forecast at $133 in the first quarter next year and at $128 in the second.

“Cow slaughter is expected to be higher during the second half of the year, partly offsetting declines in steer and heifer slaughter. But, coupled with lighter expected dressed weights, the forecast for 2021 beef production was reduced to 27.74 billion lbs., down 130 million lbs. from last month,” according to ERS analysts.

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

Cattle Current Daily—Sept. 16, 2021

Negotiated cash fed cattle trade was slow on light to moderate demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were generally steady at $124/cwt. in the Texas Panhandle and $123-$124 in Kansas.

Prices were unevenly steady in Nebraska at $125 on a live basis and $200 in the beef.

There were too few transactions to trend in the western Corn Belt.

Choice boxed beef cutout value was $3.07 lower Wednesday afternoon at $319.82/cwt. Select was $6.73 lower at $283.89.

Cattle futures retreated Wednesday but held on to most of the previous session’s gains. Resurgent Corn futures added pressure to Feeder Cattle.

Feeder Cattle futures closed an average of $1.20 lower (2¢ at the back to  to $2.15 lower toward the front).

Live Cattle futures closed an average of 59¢ lower (10¢ lower at the front to $1.10 lower at the back), except for 5¢ higher in spot Oct.

Corn futures closed 11¢ to 13¢ higher through new-crop contracts and then mostly 3¢ to 6¢ higher.

Soybean futures closed 8¢ to 12¢ higher through Nov ‘22 and then mostly 4¢ to 6¢ higher.

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Major U.S. financial indices rose Wednesday, supported by tech and energy stocks.

The Dow Jones Industrial Average closed 236 points higher. The S&P 500 closed 37 points higher. The

NASDAQ closed 123 points higher

Crude Oil futures (WTI-CME) closed $1.65 to $2.15 higher through the front six contracts.

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“…while the four-firm concentration in fed cattle beef packing has remained relatively constant since 1994, the CPI (Consumer Price Index) for beef has been variable over that same period; sometimes above and sometimes below the overall consumer price index. If concentration is causing the recent rise in consumer prices for meat and poultry products, why did concentration not cause inflation five or 10 years ago?,” wonders Julie Anna Potts, president and CEO of the North American Meat Institute, in a letter sent Tuesday to Agriculture Secretary Tom Vilsack.

The letter was in response to a White House press briefing last week where the primary focus was climbing consumer food prices. Brian Deese, National Economic Council (NEC) director and Secretary Vilsack unveiled what they called a study. You’d be hard-pressed to find a credible economist able to connect the dots and conclusions. The abbreviated bottom line is that industry consolidation is at the root of higher red meat and poultry prices.

“…Just four large conglomerates control the majority of the market for each of these three products, and the data show that these companies have been raising prices while generating record profits during the pandemic…The dynamic of a hyper-consolidated pinch point in the supply chain raises real questions about pandemic profiteering. During the pandemic, wholesale prices for beef rose much faster than input prices for cattle. That means that the prices the processors pay to ranchers aren’t increasing, but the prices collected by processors from retailers are going up.”

There’s neither time nor space to start filling in the fictional holes and inferential leaps.

Good luck getting profit data from privately owned companies, which represent a fair bit of beef packing capacity. Never mind what gross packing margins have and don’t have to do with profitability.

Few would argue that food retail prices are increasing. As mentioned in yesterday’s Cattle Current, beef and veal values were 9.6% higher year over year in pandemic-ravaged 2020, according to according to the Consumer Food Price Index from ERS. Year over year in July, those values were 6.5% higher; 4.2% higher year to date compared to the same time last year.

Everything from increased labor costs and supply chain disruptions to inflation and derived demand contribute to increasing consumer prices and the price imbalance between industry sectors.

“Before the administration attempts to recreate the animal agriculture industry, it is prudent to look back and acknowledge the benefits that flow from the food supply chains as they exist, which ERS described as ‘efficient,’ Potts explained in her letter. “In 2020, according to ERS, Americans spent an average of 8.6 percent of their disposable personal incomes on food. Indeed, Americans spend less of their disposable personal income on food than any other country in the world. This remarkable drop is attributable largely to systematic efficiencies that allow food processors to offer food to consumers at lower prices.”  

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

Cattle Current Daily—Sept. 15, 2021

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

Last week, live prices were at $123-$124/cwt. in the Southern Plains and $124-$127 in the North. Dressed trade was at $198-$203.

Cattle futures were finally oversold and cheap enough to generate buying interest Tuesday. Support included the fact that the JBS plant in Grand Island — offline Monday due to a fire on the rendering side — was reportedly back up and running.

Feeder Cattle futures closed an average of $2.96 higher ($2.57 to $3.45 higher).

Live Cattle futures closed an average of $2.16 higher ($1.65 to $2.82 higher).

Choice boxed beef cutout value was $3.04 lower Tuesday afternoon at $322.89/cwt. Select was $1.54 lower at $290.62.

Corn futures closed 3¢ to 7¢ higher across the front half of the board and then fractionally higher to 3¢ higher.

Soybean futures closed 1¢ to 2¢ lower, except for 4¢ higher in spot Sep.

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Major U.S. financial indices weakened after a respite the previous day and despite the fact that the closely watched Consumer Price Index (CPI) was slightly less than the trade expected month over month and year over year. The CPI for All Urban Consumers (CPI-U) increased 0.3% in

August on a seasonally adjusted basis after rising 0.5% in July, according to the U.S. Bureau of Labor Statistics. The unadjusted index for all items was 5.3% more than 12 months earlier.

The Dow Jones Industrial Average closed 292 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 67 points.

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Wholesale beef prices continue to decline, while retail beef prices edge higher.

Although wholesale beef prices remain elevated, Choice boxed beef prices continue downward, from a recent summer high in of $348.03/cwt. in August to $322.89 yesterday afternoon. Likewise, Select declined from $319.59 to $290.62.

Conversely, the most recent summary of retail beef prices, published by USDA’s Economic Research Service (ERS) yesterday shows the Choice beef price increasing steadily from $6.48/lb. in March to $7.64 in August. During the same period, the all fresh retail beef price increased from $6.38/lb. to $7.14.

According to the Consumer Food Price Index from ERS, beef and veal values were 9.6% higher year over year in pandemic-ravaged 2020. Year over year in July, those values were 6.5% higher; 4.2% higher year to date compared to the same time last year.

By way of comparison, the Consumer Food Price Index for all food was 3.4% higher year over year in 2020, 3.4% higher year over year in July and 2.4% higher year to date.

Year over year in July, food-at-home (grocery store or supermarket food purchases) CPI increased 2.6%, while food-away-from-home (restaurant purchases) increased 4.6%, according to the ERS Food Price Outlook.

Year to date, ERS analysts say, “Of all the CPI food-at-home categories tracked by USDA-ERS, the fresh fruits category has had the largest relative price increase (4.9%) and the fresh vegetables category the smallest (0.4%). No food categories have decreased in price in 2021 compared to 2020.”

As for the overall consumer price index, according to the latest update from the U.S. Bureau of Labor Statistics, the unadjusted index for all items was 5.3% higher over the last 12 months.

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

Cattle Current Daily—Sept. 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.

Last week, live prices were at $123-$124/cwt. in the Southern Plains, $124-$126 in Nebraska and $124-$127 in the western Corn Belt. Dressed trade was at $198-$203. 

Last week’s five-area direct average steer price was $124.79/cwt. on a live basis, which was 64¢ less than the previous week. The average steer price in the beef was 97¢ lower at $200.82.

Widespread reports of an overnight for at the JBS packing facility in Grand Island, Neb. — apparently halting production, at least for Monday — shoved already faltering Cattle futures lower. Overall weakness in commodity markets also contributed pressure.

Feeder Cattle futures closed an average of $2.09 lower.

Live Cattle futures closed an average of $1.06 lower

Choice boxed beef cutout value was 57¢ lower Monday afternoon at $247.59/cwt. Select was 82¢ lower at $218.01/cwt.

Corn futures closed mostly 4¢ lower through Jly ’22 and then 1¢ to 2¢ lower.

Soybean futures closed mostly 1¢ lower through Aug ’22 and then fractionally higher to 2¢ higher.

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Major U.S. financial indices closed mixed on Monday, snapping a five-day slide as investors await Tuesday’s report on consumer prices to gauge both inflation and the Federal Reserve’s timing to taper stimulus efforts. Crude oil continued to rally in part due to port disruptions spawned by Hurricane Ida.

The Dow Jones Industrial Average closed 262 points higher. The S&P 500 closed 10 points higher. The NASDAQ closed 10 points lower. 

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Beef byproduct values continue significantly higher in recent months than they were for several years. During the ebb in 2020, those values were the lowest since 2009, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. For perspective, he says hide and offal values were $6.93/cwt. (live fed steer basis) in July last year. They were $14.99 last month. They were $15.25 yesterday.

“The sharp jump in byproduct values is due to increases in hide values along with several other products included in the by-product totals,” Peel explains, in his weekly market comments. “The largest component of byproduct values is the hides. The August steer hide value was up 115% year over year. In recent years, hides have dropped from roughly half of total byproduct values to about 30% of the total. Despite the doubling of hide values in the past year, hides still only represent 31.7% of current byproduct value. This is because numerous other byproduct values have likewise increased sharply in the past year.”

For instance, Peel explains inedible tallow values are up 177% year over year while edible tallow values increased 85% percent. Combined, he says edible and inedible tallow represent 25.4% of August total byproduct values. Tongue prices were up 111% year over year in August and accounted for 19.5% of total byproduct values. 

“The majority of hides and offals are exported. Over the past decade, exports of hides, variety meat, and tallow have added an average of $2.42 billion to total beef industry exports. In 2020, the value of hide, variety meat and tallow exports was $1.7 billion,” Peel says.

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

Cattle Current Daily—Sept. 13. 2021

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

Last week, live prices were steady to $1 lower at $123-$124/cwt. in the Southern Plains, $124-$125 in Nebraska and $124-$127 in the western Corn Belt. Dressed trade was $2-$5 lower in Nebraska at $198 and steady to $3 lower in the western Corn Belt at $203.

Cattle futures continued lower Friday, pressured by growing concerns about rising Delta variant infections hampering economic recovery and demand.

Feeder Cattle futures closed an average of $1.47 lower (50¢ lower in the back contract to $2.10 lower in Nov ’21).

Live Cattle futures closed an average of 76¢ lower, (33¢ lower in the front contract to $1.13 lower at the back).

Choice boxed beef cutout value was $5.36 lower Friday at $327.22/cwt. Select was $3.08 lower at $298.37.

The average dressed steer weight the week ending Aug. 28 was 901 lbs., which was 2 lbs. lighter than the previous week and 15 lbs. lighter than the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 821 lbs. was 1 lb. heavier than the previous week but 13 lbs. lighter than the previous year.

Estimated total cattle slaughter the holiday shortened week was 577,000 head, according to USDA, which was 47,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 23.04 million head is 834,000 more (+3.76%) than the same period last year.

Estimated year-to-date total beef production of 19.03 billion lbs. was 648.1 million lbs. more (+3.53%) than the same time the previous year.

Corn futures closed higher Friday, despite bearish World Agricultural Supply and Demand Estimates that increased ending stocks with more projected planted acres and higher estimated yield (see below).

Corn futures closed mostly 1¢ to 9¢ higher.

Soybean futures closed 15¢ to 19¢ higher.

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Major U.S. financial indices closed lower Friday as investors continued to fret over growing cases of the Delta variant and its impact on economic growth, while inflation indicators continue to rise. For instance, the Producer Price Index for final demand increased 0.7% in August, according to the U.S. Bureau of Labor Statistics. On an unadjusted basis, the final demand index rose 8.3% for the 12 months ended in August, the largest advance since 12-month data were first calculated in November 2010.

The Dow Jones Industrial Average closed 271 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 132 points.

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The monthly World Agricultural Supply and Demand Estimates published Friday increased expected fed steer prices and lowered expected corn prices.

ERS lowered projected beef production for this year by 130 million lbs. to 27.74 billion lbs. based on lower expected steer and heifer slaughter and lighter carcass weights more than offsetting higher cow slaughter. However, the total would be 586 million lbs. more (+2.1%) than last year. Total beef production next year is forecast to be 26.87 billion lbs., which would be 867 million lbs. less (-3.1%) than this year.

ERS increased this year’s expected five-area direct annual average fed steer price by $1 to $122.20/cwt. Average projected prices are $124 in the third quarter, $131 in the fourth quarter and $133 in the first quarter of next year. Expectations for next year’s annual average price increased by $2 to $128.

Total red meat and poultry production  this year is projected to be 106.6 billion lbs., which would be 59 million lbs. more than last year. Next year, total red meat and poultry production is forecast to be 204 million lbs. (+0.19%) more than this year on increased pork and poultry production.

Corn

USDA forecast corn production for 2021-22 at 15.0 billion bu., up 246 million from last month on increases to harvested area and yield. The national average yield is forecast at 176.3 bu./acre, up 1.7 bu. Harvested area for grain is forecast at 85.1 million acres, up 0.6 million. With projected supply rising more than use, ending stocks increased 166 million bu. to 1.4 billion. The season-average corn price received by producers was lowered 30¢ to $5.45/bu. 

Soybeans

Soybean production is projected at 4.4 billion bu., up 35 million with lower harvested area more than offset by a higher yield forecast of 50.6 bu./acre. Ending stocks are projected at 185 million bushels, up 30 million from last month.

The U.S. season-average soybean price was forecast at $12.90/bu., down 80¢. The soybean meal price was forecast $25 less at $360 per short ton. The soybean oil price forecast was unchanged at 65¢/lb. 

Wheat

Projected 2021-22 ending wheat stocks were reduced 12 million bu. to 615 million and would be 27% less than last year, the lowest in eight years. The projected 2021-22 season-average farm price was lowered 10¢/bu. to $6.60 on reported NASS prices to date and price expectations for the remainder of 2021-22.

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

Cattle Current Daily—Sept 10, 2021

Negotiated cash fed cattle trade was slow on light demand in Nebraska through Thursday afternoon. Although there were too few transactions to trend, there was some live trade at $124-$125/cwt. and some in the beef at $198. The previous day, established trend was as $126 and $203, respectively.

Trade was limited on light demand in Kansas with a few live sales steady with the previous day at $123.

Trade was limited on light demand in the western Corn Belt. Live prices the previous day were at $124-$125; $203 dressed.

Trade was at a standstill in the Texas Panhandle. Live prices the previous day were at $123-$124.

Cattle futures offered hope again early in yesterday’s session but closed lower yet again, except for front-month Live Cattle.

Feeder Cattle futures closed an average of 69¢ lower (2¢ lower toward the front to $1.28 lower at the back).

Live Cattle futures closed an average of 51¢ lower, except for 2¢ to 65¢ higher in the front three contracts.

Choice boxed beef cutout value was $2.28 lower Thursday afternoon at $332.58/cwt. Select was $1.72 lower at $296.45.

Corn futures closed mostly 2¢ to 5¢ lower.

Soybean futures closed 7¢ to 12¢ lower with most of the pressure in new-crop contracts.

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Major U.S. financial indices closed down for the second consecutive day on Thursday amid volatile trade. First-time unemployment claims fell to the lowest level since the pandemic started, but more large companies like Microsoft announced plans to delay reopening due to the continued spread of the delta variant of Covid-19.

The Dow Jones Industrial Average closed 152 points lower. The S&P 500 closed 21 points lower. The NASDAQ was down 38 points. 

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“Boxed beef prices have started what is expected to be a slow and long price decline following the Labor Day holiday. There may be some buying in the next week or so to restock meat counters, but beef prices are expected to soften until fourth-quarter holiday buying takes center stage,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Beef is the major value determinant of cattle, but the drop credit is also important to finished cattle value. Hide and offal does not play into the boxed beef valuation equation, but packers count on its value to pay the bills. In 2020, the hide and offal value peeked at $9.41/cwt., which is about where it started the current year. However, hide and offal values have been on a linear trajectory and averaged $15.14 last week, which is nearly 44% higher than the five-year average price for the last week of August. Current hide and offal values are at the highest level since January 2015 when cattle supplies were tight, and prices may be destined to go higher.”

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

Cattle Current Daily—Sept. 9, 2021

Negotiated cash fed cattle trade was slow on light demand in Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, there were a few live sales in Nebraska at $126/cwt. There were also some early dressed sales in Nebraska and the western Corn Belt at $203. Last week, live prices were $125-$126 in Nebraska and $125-$128 in the western Corn Belt. Dressed trade in the regions was at $200-$203.

Trade in the Southern Plains was limited on light demand. There were a few live sales at $124, steady with the previous day. Last week, live sales in Kansas were at $125-$126 and at $123-$124 in the Texas Panhandle.

Cattle futures tried to gain traction early in Wednesday’s session but ran out of steam amid continued concerns about declining beef values and demand uncertainty.

Feeder Cattle futures closed an average of $1.18 lower (22¢ lower at the front to $1.77 lower toward the back).

Live Cattle futures closed an average of 76¢ lower amid heavy trade.

Choice boxed beef cutout value was 33¢ lower Wednesday afternoon at $334.86/cwt. Select was $3.73 lower at $298.17.

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

Soybean futures closed fractionally higher to 2¢ higher through Sep ’22 and then fractionally lower.

For the record, 59% of the nation’s corn crop was in Good or Excellent condition (week ending Sept. 5), according to the latest USDA Crop Progress report. That was 1% less than the previous week and 2% less than the five-year average.

57% of the soybean crop was in good or excellent condition versus 56% the previous year and 65% for average

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Major U.S. financial indices softened Wednesday amid investor nervousness about inflation and economic growth.

“Economic growth downshifted slightly to a moderate pace in early July through August,” according to the Federal Reserve’s Beige Book. “…The deceleration in economic activity was largely attributable to a pullback in dining out, travel, and tourism in most Districts, reflecting safety concerns due to the rise of the Delta variant, and, in a few cases, international travel restrictions. The other sectors of the economy where growth slowed or activity declined were those constrained by supply disruptions and labor shortages, as opposed to softening demand.”

As for inflation, according to the Beige Book, “…With pervasive resource shortages, input price pressures continued to be widespread. Most Districts noted substantial escalation in the cost of metals and metal-based products, freight and transportation services, and construction materials, with the notable exception of lumber whose cost has retreated from exceptionally high levels. Even at greatly increased prices, many businesses reported having trouble sourcing key inputs. Some Districts reported that businesses are finding it easier to pass along more cost increases through higher prices. Several Districts indicated that businesses anticipate significant hikes in their selling prices in the months ahead.”

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 87 points.

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“Weather is and will clearly play a role as to the timing and availability of calf numbers. And will also impact the distribution of calf weight,” says Stephen Koontz, agricultural economist at Colorado State University. “There is the potential for an interesting dynamic between regional calf marketings and weights and then the resulting placement into feedlots, which may bunch marketing of fed animals well into next year. There are also interesting opportunities for retaining calves across the different regions. All are worth following.”

In the latest issue of In the Cattle Markets, Koontz explains weather — drought specifically — is creating regional variation in heifer trade.

“There is modest evidence of heifers being sold into the meat supply chain as opposed to being used as replacements into the beef production system. This is especially the case in the North and West,” Koontz says. “In the South and East there is very modest evidence – supported by discussions with producers – about retaining and actually purchasing of heifers. The regional dynamics will likely play out well into next year as the late summer saw only some drought relief for the Southern Plains and desert Southwest.”

As for recent declines in Cattle futures, from a technical standpoint, Koontz says market optimism that pushed contracts higher over the last four months is broken or simply exhausted.

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

Cattle Current Daily—Sept. 8, 2021

Negotiated cash fed cattle trade was at a standstill in all feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service. Last week, live sales were at $124/cwt. in the Texas Panhandle $123-$124 in Kansas, $125-$126 in Nebraska and $125 in the western Corn Belt. Dressed trade was at $200-$203.

Although seemingly plumb oversold, Cattle futures continued to melt down Tuesday. Many other commodity and equity markets suffered, too, as growing cases of the cover delta variant sap risk appetite. For Cattle, that’s on top of everything from cash market leverage woes to post-Labor Day demand uncertainty to the weekend announcement about atypical BSE confirmed in Brazil (see below).

Feeder Cattle futures closed an average of $2.20 lower.

Live Cattle futures closed an average of $1.29 lower, amid active trade.

Choice boxed beef cutout value was $1.23 lower Tuesday afternoon at $335.19/cwt. Select was $2.23 lower at $301.90.

Corn futures closed 10¢ to 13¢ lower through new-crop contracts and then mostly 2¢ to 6¢ lower.

Soybean futures closed mostly 10¢ to 14¢ lower.

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Major U.S. financial indices closed lower Tuesday on follow-through pressure and worries about the impact of the covid variant on global economic growth.

The Dow Jones Industrial Average closed 269 points lower. The S&P 500 closed 15 points lower. The NASDAQ closed 11 points higher.

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“Over the weekend, the Brazilian Ministry of Agriculture, Livestock, and Food Supply confirmed two atypical cases of BSE (bovine spongiform encephalopathy). Atypical cases are very rare and are believed to occur spontaneously. These cases occurred outside the United States and do not pose a risk to American consumers—U.S. beef is safe,” according to Colin Woodall, CEO of the National Cattlemen’s Beef Association (NCBA).

You might recall that USDA prohibited importing fresh Brazilian beef into the U.S. in 2017, based on persistent food safety concerns. The ban was lifted in 2020 after Brazilian exporters demonstrated the ability and willingness to meet U.S. protocols.

“Given Brazil’s history of failing to report BSE cases in a timely manner, we must remain vigilant in enforcing our safeguards and holding them accountable,” Woodall says. “The U.S. has the highest animal health and food safety standards in the world. We must make sure that all countries wishing to export beef to the U.S. continue to meet our standards—even a country with a small footprint like Brazil. We have full faith and confidence in the abilities of the U.S. Department of Agriculture (USDA) and Office of the U.S. Trade Representative (USTR) to enforce our safety standards and trade rules to protect America’s cattle producers and consumers.”

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U.S. beef exports set another new value record in July, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). July beef exports were 45% more than the previous year at $939.1 million. Beef export volume was the third largest of the post-BSE era at 122,743 metric tons (mt), up 14% year-over-year.

“Beef exports were really outstanding in July, especially with COVID-related challenges still impacting global foodservice as well as persistent obstacles in shipping and logistics,” says USMEF President and CEO Dan Halstrom. “Retail demand continues to be tremendous, as evidenced by the new beef value record.”

July beef exports to the mainstay Asian markets of Japan, South Korea and Taiwan were relatively steady with last year, but at significantly higher value. Record-large shipments to China and a strong year-over-year rebound in Western Hemisphere markets drove export volume growth.

For January through July, U.S. beef exports increased 18% from a year ago to 822,830 mt, with value up 30% to $5.58 billion. Compared to the pace established in 2018, the record year for U.S. beef exports, shipments were up 6% in volume and 17% in value.

July beef export value equated to $425.68 per head of fed slaughter, up 52% from a year ago. Through July, export value was $369.15 per head, up 24%.

Pork exports in July were steady with last year at 221,809 mt, but export value jumped 20% to $657.3 million. Pork variety meat exports were especially strong at 49,092 mt, up 54% from the low total posted a year ago and 16% above July 2019. Variety meat export value was the second highest on record at $116.7 million, up 69% from a year ago and 39% above 2019.

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

Cattle Current Daily—Sept. 6-7, 2021

Cattle futures took it on the chin Friday as traders seemed to grow more concerned about post-Labor Day beef demand and the continued apparent inability of cattle feeders to gain currentness, given the anemic packing pace.

Feeder Cattle futures closed an average of $2.04 lower Friday ($1.00 to $2.57 lower).

Live Cattle futures closed an average of $1.02 lower (45¢ to $1.27 lower) amid expanding open interest.

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

For the week, AMS reported live prices $2 lower in Nebraska at $126/cwt. and $2-$3 lower in the western Corn Belt at $125-$126. Dressed trade was $2-$5 lower in Nebraska at $200-$203.

The Texas Cattle Feeders Association reported its members trading steers at an average of $123.94/cwt., which was $1.57 more than the previous week. They traded heifers for $1.67 more at $123.80.

Corn futures closed 8¢ lower in spot Sep, then fractionally lower to 2¢ lower through Dec ’22, and then fractionally higher to 1¢ higher.

Soybean futures closed mostly 8¢ to 10¢ higher through new-crop contracts and then mostly 2¢ to 4¢ higher.

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Wholesale beef values continued to erode.

Choice boxed beef cutout value was $1.50 lower Friday afternoon at $336.42/cwt. Select was 84¢ lower at $304.13.

Total estimated cattle slaughter last week of 624,000 head was 27,000 head fewer than the previous week and 11,000 fewer than the same week last year. Year-to-date total cattle slaughter of 22.46 million head is 836,000 head more (+3.86%) than last year. Total estimated year-to-date beef production of 18.56 billion lbs. is 659.9 million lbs. more (+3.69%) than the same time last year.

The average dressed steer weight the week ending Aug. 21 was 903 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 5 lbs. heavier than the previous week but 7 lbs. lighter than the previous year. The average dressed heifer weight of 820 lbs. was 3 lbs. heavier than the previous week but 13 lbs. lighter than the prior year.

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Major U.S. financial indices closed mixed Friday on a disappointing jobs report – only 235,000 new non-farm jobs were added in August, the smallest gain in the last seven months. Some analysts say this news may slow down the Federal Reserve’s tapering timeline.

Average hourly earnings for all employees on private non-farm payrolls rose by 17¢ to $30.73 in August, following increases in the prior four months.

The Dow Jones Industrial Average closed 74 points lower. The S&P 500 closed 1 point lower. The NASDAQ closed 32 points higher.

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The United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,380 per acre for 2021, up $220 per acre (+7.0%) from 2020, according to USDA’s Land Values 2021 Summary.

The United States cropland value averaged $4,420 per acre, an increase of $320 per acre (+7.8%) from the previous year.

The United States pasture value averaged $1,480 per acre, an increase of $80 per acre (+5.7%) from 2020. For broader perspective, average pasture value increased $150 per acre (+11.3%) since 2017.

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

Cattle Current Daily—Sept. 3, 2021

There were too few negotiated cash fed cattle transactions to trend in any major cattle feeding region through Thursday afternoon, according to the Agricultural Marketing Service. So far this week, amid anemic trade, live prices are $2 lower in Nebraska at $126/cwt. and $2-$3 lower in the western Corn Belt at $125-$126. Dressed trade in Nebraska is $2-$5 lower at $200-$203.

Choice boxed beef cutout value was 53¢ lower Thursday afternoon at $337.92/cwt. Select was $2.60 lower at $304.97.

Cattle futures continued to sag lower Thursday amid sluggish interest ahead of the long holiday weekend, declining wholesale beef values and the lackluster packing pace. Feeder Cattle led the charge lower.

Feeder Cattle futures closed an average of $2.42 lower ($1.65 to $3.00).

Live Cattle futures closed an average of $1.38 lower ($1.05 to $1.60).

Corn futures closed mostly 2¢ higher through new-crop contracts, then mostly 1¢ to 2¢ lower.

Soybean futures closed 1¢ to 5¢ higher through new-crop contracts, then mostly unchanged to fractionally higher

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Major U.S. financial indices closed higher on Thursday with the S&P 500 hitting another record. Weekly initial unemployment insurance claims the week ending Aug. 28 were 340,000, a decrease of 14,000 from the previous week’s revised level. That’s the lowest level since March 14, 2020. The number was also more positive than the trade expected.

The Dow Jones Industrial Average closed 131 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 22 points.

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USDA’s Food Safety and Inspection Service (FSIS) published an advance notice of proposed rulemaking on Thursday to solicit comments and information regarding the labeling of meat and poultry products made using cultured cells derived from animals under FSIS jurisdiction. FSIS will use these comments to inform future regulatory requirements for the labeling of such food products.

In 2019, USDA and FDA announced a formal agreement to jointly oversee the production of human food products made using animal cell culture technology and derived from the cells of livestock and poultry to ensure that such products brought to market are safe, unadulterated and truthfully labeled. Under the agreement, FDA will oversee cell collection, growth, and differentiation of cells. FDA will transfer oversight at the cell harvest stage to FSIS. FSIS will then oversee the cell harvest, processing, packaging, and labeling of products. FDA and FSIS also agreed to develop joint principles for the labeling of products made using cell culture technology under their respective labeling jurisdictions. Seafood, other than Siluriformes fish, falls under FDA’s jurisdiction, whereas meat, including Siluriformes fish, and poultry are under FSIS’ jurisdiction.

Other than new labeling regulations concerning this product, FSIS does not intend to issue any other new food safety regulations for the cell-cultured food products under its jurisdiction. According to FSIS, “Current FSIS regulations requiring sanitation and Hazard Analysis and Critical Control Point systems are immediately applicable and sufficient to ensure the safety of products cultured from the cells of livestock and poultry.”

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

Cattle Current Daily—Sept. 2, 2021

Negotiated cash fed cattle trade was slow on light demand in all major regions through Tuesday afternoon, according to the Agricultural Marketing Service. A few dressed sales in Nebraska traded at $203/cwt.

Last week, live prices were at $122-$123/cwt. in the Southern Plains at $123/cwt. Live and dressed sales were at $128 and $202-$208, respectively, in Nebraska and the western Corn Belt.

The Choice boxed beef cutout value was $3.66 lower Wednesday afternoon at $338.45/cwt. Select was $4.46 lower at $307.57.

Likely short covering helped Cattle futures regain some recently lost ground Wednesday. Further erosion in grain futures, tied to Hurricane Ida impacts, also helped Feeder Cattle futures.

Feeder Cattle futures closed an average of $1.11 higher (30¢ to $1.53), except for 7¢ lower in spot Sep.

Live Cattle futures closed an average of 43¢ higher, except for an average of 43¢ lower in the back two contracts.

Grain futures continued to fall Wednesday beneath the weight of export shipping disruptions wrought by Hurricane Ida.

Corn futures closed 10¢ to 18¢ lower through new-crop contracts and then mostly 2¢ to 4¢ lower.

Soybean futures closed 9¢ to 21¢ lower through new-crop contracts and then mostly 6¢ to 9¢ lower.

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Major U.S. financial indices closed mixed on Tuesday after an ADP Research Institute report showed companies added fewer jobs than anticipated in August. However, manufacturing grew at a faster pace than forecast even as global supply chains continue to be bottlenecked.

Private sector employment increased by 374,000 jobs from July to August, according to the August ADP National Employment Report.

“Our data, which represents all workers on a company’s payroll, has highlighted a downshift in the labor market recovery. We have seen a decline in new hires, following significant job growth from the first half of the year,” says Nela Richardson, ADP chief economist. “Despite the slowdown, job gains are approaching 4 million this year, yet still 7 million jobs short of pre-COVID-19 levels.”

The Dow Jones Industrial Average closed 48 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 50 points. 

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As mentioned previously in Cattle Current, USDA’s Agricultural Marketing Service (AMS) began publishing two new reports in August, based on Livestock Mandatory Reporting and aimed at bolstering market transparency.

The National Weekly Direct Slaughter Cattle-Formulated Base and Forward Contract Base Purchases report provides more detail about foundational prices used in cattle market formulas, grids and contracts. The base prices are published in the morning and afternoon each day, as is an overall summary. Those prices are then aggregated into a weekly report.

Matthew Diersen, a risk and business management specialist at South Dakota State University weighs in with some of his initial observations, in the latest issue of In the Cattle Markets.

“The weekly formulated base shows the formula base price across gender, general quality level, and delivery type. For example, there is now a head count and price range for the base price for formula priced steers, delivered dressed, grading 65-80% Choice,” Diersen explains. “The average net price is there too, thus any major skew in the data would be easier to infer than in the past. The main averages are also broken out by state or region. It is all informative and overwhelming. However, knowing the base you are dealing with as a buyer and as a seller should mean better signals about the value of quality.”

The other new report, the National Weekly Cattle Net Price Distribution report shows at what price and volume levels trade occurred across the weekly weighted average price for each purchase type.

Diersen points out average net prices were available previously and were most useful for monitoring forward net prices over time relative to the negotiated and formula prices. If many cattle were forward contracted during a period of higher expected prices, and prices subsequently fell, then the forward net would be much higher than the negotiated. The opposite could also happen.

The new report provides volumes in $2 increments from the average price levels.

“The more transparent base prices and more complete net prices seem to fill in more of the gap between the average value of average quality cattle and fair values for higher quality cattle being traded today,” Diersen says.

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

Cattle Current Daily—Sept. 1, 2021

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

Last week, live prices were at $122-$123/cwt. in the Southern Plains at $123/cwt. Live and dressed sales were at $128 and $202-$208, respectively, in Nebraska and the western Corn Belt.

Cattle futures declined Tuesday with follow-through pressure tied to concerns about recently slower packer production, post Labor Day demand and declining wholesale beef prices. Month-end position squaring was also a factor.

Feeder Cattle futures closed an average of 72¢ lower (7¢ to $1.20), except for 7¢ higher in May.

Live Cattle futures closed an average of 76¢ lower (10¢ to $1.43 lower). 

Through midday today, though, Cattle futures were rebounding some, helped along by further declines in Grain futures.

Choice boxed beef cutout value was 67¢ lower Tuesday afternoon at $342.11/cwt. Select was 52¢ lower at $312.03/cwt.

Corn and Soybean futures closed lower with continued pressure from uncertainty surrounding the impact of Hurricane Ida.

Corn futures closed down mostly 5¢ to 8¢.

Soybean futures closed mostly 4¢ to 10¢ lower through new-crop contracts, and then mostly 2¢ to 3¢ higher.

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Major U.S. financial indices softened Tuesday, pressured in part by weaker consumer confidence. The Conference Board Consumer Confidence Index® declined to 113.8 in August from 125.1 in July.

“Consumer confidence retreated in August to its lowest level since February 2021 (95.2),” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Concerns about the Delta variant—and, to a lesser degree, rising gas and food prices—resulted in a less favorable view of current economic conditions and short-term growth prospects. Spending intentions for homes, autos, and major appliances all cooled somewhat; however, the percentage of consumers intending to take a vacation in the next six months continued to climb. While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead.”

The Dow Jones Industrial Average closed 39 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 7 points.

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How many beef cows are going to town due to drought is a popular current wonderment, one with no easy answer, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“We do know is that beef cow slaughter is up 8.7% year over year through mid-August. If we assume the current level of year-over-year increase continues for the remainder of the year, it implies an annual beef cow slaughter of 3.55 million head. That would be a net culling rate of 11.4%, the highest beef herd culling rate since 2011,” Peel says. “The average culling rate the past two years, since the cyclical peak in 2019, has been 10.25%. Over the past 35 years, across cycles of expansion and liquidation, the average herd culling rate has been 9.65% annually.

“However, because the drought started so early in the year (carried over from last year), it is likely that beef cow slaughter was shifted earlier in the year. Producers likely have already culled cows that would have been culled later in the year anyway. I doubt that the 8.7% year-over-year beef cow slaughter rate will persist for the remainder of the year. Nevertheless, the drought continues unabated and cow slaughter rates will likely remain strong.”

Further, Peel says heifer retention levels remain unclear.

 “The January Cattle report showed that beef replacement heifers were 18.7% of the cow herd, a level that would support stable herd inventories,” Peel explains. “The total number of beef replacement heifers (which includes heifer calves and coming first calf heifers) and the subset of heifers calving in 2021 were both fractionally higher year over year in the January numbers. No doubt, producers in drought areas have had to adjust replacement heifer numbers along with cows. Some heifer calves that were indicated as replacements in January likely were shifted into feedlots. It is not clear how many.”

Heifer slaughter is 1.4% higher so far this year, but Peel points out last year’s slaughter levels were skewed by Covid disruptions.

“Finally, there is the question of how producers not in drought areas have responded in 2021,” Peel says. “Forage conditions have been good in some regions and it is not clear if producers may be holding more cows and heifers to offset some of the drought region impacts. In short, we don’t know what would have happened in the absence of the drought and we don’t know for sure how the remainder of the year will finish. After playing with lots of numbers and assumptions, my best guess at this point is that the drought has added one-half to one percent of additional beef herd liquidation this year.”

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

Cattle Current Daily—Aug. 31, 2021

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

Last week, live prices were at $122-$123/cwt. in the Southern Plains at $123/cwt. Live and dressed sales were at $128 and $202-$208, respectively, in Nebraska and the western Corn Belt.

Lower Corn futures helped boost Feeder Cattle futures Monday. They closed an average of 62¢ higher (10¢ to $1.75), except for spot Sep, down 60¢.

Recent sluggishness in the pace of packer buying continued to pressure Live Cattle futures again Monday. They closed an average of 57¢ lower (18¢ to $1.75). 

Choice boxed beef cutout value was $2.56 lower Monday afternoon at $342.78/cwt. Select was $2.97 lower at $312.55/cwt.

Front-month Corn and Soybean futures fell hard with barge delivery uncertainty stemming from Hurricane Ida.

Corn futures closed 6¢ to 17¢ lower through new-crop contracts and then mostly 3¢ lower.

Soybean futures closed 11¢ to 54¢ lower in the front seven contracts and then mostly 4¢ to 7¢ lower.

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Major U.S. financial indices closed mixed on Monday, with tech stocks pushing the S&P 500 to its 12th all-time high in August. The after-effects of Hurricane Ida pushed gasoline higher but hurt insurers.

The Dow Jones Industrial Average closed 56 points lower. The S&P 500 19 points higher. The NASDAQ was up 136 points. 

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Logic and current calf prices suggest the nation’s calf crop may be less than what USDA estimated in the semiannual Cattle report released last month, according to the Livestock Marketing Information Center (LMIC).

“Steer calf prices in the Southern Plains have been robust in 2021. Calves weighing 500-600 lbs. have averaged between 6% and 16% higher from June through mid-August. The calf market is incredibly hot, given the higher cost of feed,” say LMIC analysts, in the latest Livestock Monitor. “Reports of droughts and liquidation would have implied early weaning was a given in 2021 but the data has shown little signs that is happening to a large degree.”

For instance, they point to the most recent monthly Cattle on Feed report, which pegged 15% fewer July placements weighing less than 700 lbs., compared to the previous year.

“High feed costs should drive calf prices lower, reducing the incentive to place lighter weight cattle into feedlots. Drought affected areas should have started early weaning and shipped more small animals to feedlots,” say LMIC analysts. “Given the limited forage and high hay costs, it would seem likely that more calves would be moving at these prices that are substantially higher than a year ago. These incongruent signals point towards a smaller calf crop (July 1 estimate). That would explain both the higher prices and limited number of placements seen in July. August might show greater movement of smaller feeders, and the timing may be slower than initially thought.”

By | August 31st, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 30, 2021

Despite the lack of sustained follow-through support from the most recent Cattle on Feed report, volatile outside markets and an apparent top in wholesale beef values, cash cattle and futures mainly gained last week.

Live Cattle futures closed an average of $1.02 higher (7¢ to $1.45 higher) week to week on Friday, except for $2.27 lower in almost-spent spot Aug.

On the cash side of the fence, negotiated fed cattle prices last week, were $1-$2 higher on a live basis in the Southern Plains at $123/cwt. However, the anemic pace of trade meant there was  no established trend in the North. Live prices the previous week were at $125-$127 in Nebraska and at $127 in the westerner Corn Belt. Dressed trade the previous week was at $200 in Nebraska and at $200-$205 in the western Corn Belt.

Sluggish trade pressured Live Cattle futures on Friday. Part of that stemmed from reports of mechanical problems at various plants last week.

Through Thursday, USDA’s Agricultural Marketing Service (AMS) reported 33,363 head traded direct in the five-area regions, compared to 60,342 at the same time the previous week and 65,386 head a year earlier.

Live Cattle futures closed an average of 52¢ lower through the front four contracts (5¢ lower to $1.27 lower in spot Aug) and then an average of 28¢ higher.

Overall, though, recently expanding open interest provided support, as does the reality of improving supply-side fundamentals.

As Derrell Peel, Extension livestock marketing specialist at Oklahoma State University pointed out in his weekly market comments,

“August represents the sixth consecutive monthly decline in feedlot inventories from the February peak, a decrease of 1.032 million head or 8.5% over the six months. In the previous five years, he says the average feedlot inventory decline from the spring high to summer low has been 6.2%.” 

Moreover, Peel notes lighter year-over-year carcass weights also provide more indication that feedlots are getting more current. He adds lower carcass weights also reflect the impact and incentives stemming from sharply higher feedlot cost of gain, which should help hold carcass weights in check.

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“Auction calf and stocker prices have moved counter-seasonally higher in July-August, while feeder cattle markets, which typically increase through the summer, have shown a strong seasonal price increase,” Peel says.

Feeder Cattle futures closed an average of 60¢ higher on Friday (15¢ higher toward the front to $2.40 higher at the back). Week to week they closed an average of 88¢ higher, except for 85¢ lower in new spot Sep. That was with Corn futures closing an average of 16.4¢ higher through the front six contracts.

The CME Feeder Cattle Index was $3.60 higher week to week on Thursday at $159.39.      

In his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee explains stronger prices suggested by Feeder Cattle futures are helping keep cash prices higher for lighter weight calves than would be normally expected this time of year.

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Wholesale beef values appeared to top last week with Labor Day purchases mostly in the books.

Choice boxed beef cutout value was 28¢ higher week to week on Friday at $345.34/cwt. Select was $3.01 lower at $315.52.

However, Griffith points out beef in cold storage at the end of July was the least since November of 2014 when slaughter was light and beef prices were elevated.

“Strong beef prices in the current market are again what is reducing the quantity of beef in cold storage,” Griffith says. “Generally, 91% or more of the beef in cold storage is boneless beef, which is primarily made up of grinding beef. As is evident in wholesale beef prices, beef demand remains strong and continues to support higher prices. This strong demand and strong prices will likely continue to result in beef in cold storage remaining below year-ago levels. However, beef in cold storage will seasonally increase throughout the remainder of the year as cattle weights increase and more animals enter the slaughter mix. The big question is how long can wholesale beef prices remain at such strong levels. The answer is not clear, but prices are not expected to collapse in the near future.”

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Major U.S. financial indices closed higher Friday, buoyed by comments from Federal Reserve Chair Jerome Powell.

“The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff, for which we have articulated a different and substantially more stringent test,” explained Powell. “We have said that we will continue to hold the target range for the federal funds rate at its current level until the economy reaches conditions consistent with maximum employment, and inflation has reached 2% and is on track to moderately exceed 2% for some time. We have much ground to cover to reach maximum employment, and time will tell whether we have reached 2% inflation on a sustainable basis.”

The Dow Jones Industrial Average closed 242 points higher. The S&P 500 closed 39 points higher. The NASDAQ was up 183 points.

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Consumer prices for food surged in July, compared to the previous year but overall year-to-date prices remain closer to the 20-year average.

Consumer at-home food prices were 2.6% higher year over year in July, according to the Change in Food Price Indexes from USDA’s Economic Research Service. At-home meat prices were 5.9% higher — beef and veal prices were 6.5% more, pork prices were up 7.8% and poultry prices were 5.3% higher. Prices for food away from home were up 4.6% year over year.

Year to date, at-home food prices were up 1.9% — beef and veal prices were 4.2% more, pork prices were up 4.4% and poultry prices were 2.6% higher. Prices for food away from home were up 3.1% year over year.

The forecast is for at-home prices to be up an average 2.5% to 3.5% this year — beef and veal prices are projected 4.0% to 4.5% higher, pork prices are forecast 5.0% to 6.0% higher and poultry prices are projected 3.0% to 4.0% higher. Prices for food away from home are projected to 3.5% to 4.5% higher.

For perspective, the 20-year average annual price change for at-home food prices is 2.0% — 4.4% for beef and veal prices, 2.2% for pork prices and 2.1% for poultry prices. The annual average change for food away from home is 2.8%.

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

Cattle Current Daily—Aug. 27, 2021

Negotiated cash fed cattle trade was mostly inactive on light demand in Kansas through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was slow on light demand.

Live sales in the Texas Panhandle were $1-$2 higher at $123/cwt. Although too few to trend, early live sales were $1-$3 higher in Nebraska at $128 and $1 higher in the western Corn Belt at $127. Early dressed sales were $1-$2 higher at $202 in Nebraska and $202.00-$206.50 in the western Corn Belt.

Weaker outside markets and the lack of follow-through support pressured Cattle futures Thursday.

Feeder Cattle futures closed an average of 95¢ lower, except for 15¢ higher spot Aug.

Live Cattle futures closed an average of 55¢ lower, except for 15¢ higher in the back contract.

Choice boxed beef cutout value was 38¢ higher Thursday afternoon at $347.27/cwt. Select was $3.90 higher at $319.59.

Corn futures closed mostly 1¢ to 6¢ lower, except for 1¢ higher in spot Sept.

Soybean futures closed mostly 6¢ to 10¢ lower, except for 21¢ higher in spot Sept.

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Major U.S. financial indices closed lower on Thursday after explosions in Kabul, outside an airport gate, killed both U.S. service members and civilians. Investors are also uncertain whether the Federal Reserve will give a clear signal this week for timing on tapering emergency support.

The Dow Jones Industrial Average closed 192 points lower. The S&P 500 closed 26 points lower. The NASDAQ was down 96 points.

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USDA increased expectations for U.S. beef exports during the current fiscal year, in the latest Outlook for U.S. Agricultural Trade. Compared to the last quarterly report, projected U.S. beef export value increased $800 million to $8.4 billion on higher unit values and volumes to China, Mexico, and South Korea.

Projected export value for U.S. livestock, dairy and poultry exports increased $2.2 billion to $36.4 billion due to increases in all product groups except pork.

Next year, USDA expects beef exports to be $100 million less than this year due to lower exportable supplies. Fiscal year 2022 livestock, poultry, and dairy exports were forecast $400 million higher than this year at $36.8 billion primarily due to growth in dairy and poultry products.

Forecast total U.S. agricultural export value this year increased $9.5 billion from the previous estimate to $173.5 billion, mainly due to higher livestock, poultry, and dairy exports, as well as the adoption of a new definition of agricultural products.

“Beginning with this publication, the report is adopting the World Trade Organization’s (WTO) definition of ‘Agricultural Products,’ which adds ethanol, distilled spirits, and manufactured tobacco products, among others, while removing rubber and allied products from the previous USDA definition,” according to analysts with USDA’s Economic Research Service (ERS).

U.S. agricultural exports next year were projected $4.0 billion higher than this year at $177.5 billion.

“The global COVID-19 pandemic remains the primary factor affecting economic activity across the globe. The prevalence of the Delta variant has renewed concerns over pandemic-induced pressure on public health infrastructures, softening consumer spending and global supply chain recovery,” say ERS analysts. “Microchip manufacturing and the shipping of physical goods are two aspects of the global economy that continue to observe elevated prices from supply chain disruptions. Despite these economic challenges, employment statistics and consumer confidence have remained strong, pointing to a continued economic recovery through the end of 2021. World real gross domestic product (GDP) is projected to increase by 5.7% in the remainder of 2021, and subsequently increase by 4.6% in 2022.”

Growth projections for real U.S. GDP this year were raised to 6.2% from previous estimate of 5.8%.

By | August 26th, 2021|Daily Market Highlights|

Cattle Current Daily—Aug. 26, 2021

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

Last week, live sales were at $121-$122/cwt. in the Texas Panhandle, $122 in Kansas, $125-$127 in Nebraska and $127 in the western Corn Belt. Dressed sales were at $200 in Nebraska and at $200-$205 in the western Corn Belt.

There was just a light run for Wednesday’s fat cattle auction in Tama, IA (313 head), but Choice steers and heifers traded $1.50 to $1.75/cwt. higher. There were 127 Choice 2-4 steers weighing an average of 1,377 lbs., bringing an average of $131.43.

Slaughter steers sold $2-$4 lower at Sioux Falls Regional in South Dakota. Fat heifers traded steady to $1 lower. There were 313 Choice 3-4 steers weighing an average of 1,532 lbs., bringing an average of $126.52/cwt.

Lack of cash direction, positioning from strong gains to start the week and softer wholesale beef values weighed on Live Cattle futures Wednesday.

Live Cattle futures closed an average of 76¢ lower (5¢ to $1.40 lower), except for unchanged to an average of 7¢ higher in three contracts toward the middle of the board.

Higher Corn futures added pressure to Feeder Cattle.

Feeder Cattle futures closed an average of 58¢ lower, except for 72¢ higher in almost spent Aug and 17¢ higher in the back contract.

Wholesale beef prices trended lower for the second consecutive day.

Choice boxed beef cutout value was 69¢ lower Wednesday afternoon at $346.89/cwt. Select was $1.21 lower at 315.69.

Total federally inspected cattle slaughter in July of 2.8 million head was 65,800 fewer (-2.3%) than the previous year. Total cattle slaughter for January through July of 19.25 million head was 880,700 more (+4.8%) year over year.

Commercial beef production in July of 2.3 billion lbs. was 104 million lbs. less (-4.3%) year over year. For January through July, beef production of 16.2 billion lbs. was 758.1 million lbs. more (+4.9%) than the same time last year. The average live weight was down 14 lbs. from the previous year, at 1,349 lbs.

Total commercial red meat production in July of 4.4 billion lbs. was 429.5 million lbs. less (-8.9%) than the previous year. Total commercial red meat production for January through July was 32.3 billion lbs., which was 645.6 million lbs. more (+2.0%).

Corn futures closed mostly 6¢ to 12¢ higher.

Soybean futures closed mostly 8¢ to 12¢ higher, except for mainly 1¢ higher in new-crop contracts.

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Major U.S. financial indices edged higher Wednesday amid optimism variant Covid infections could be peaking in the U.S.

The Dow Jones Industrial average closed 39 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 22 points.

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“Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy,” according to 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% above that for the same period in 2020. This has been a prime factor supporting the Rural Mainstreet economy.”

Creighton University’s Rural Mainstreet Index (RMI) was 65.3 in August, the ninth consecutive month above the growth-neutral level of 50.0. The index is based on surveys of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Approximately, 34.4% of bank CEOs reported that their local economy expanded between July and August.

The farmland price index advanced 5.6 points from July to 76.6 in August. That was the 11th consecutive month of levels above growth-neutral. The last time such a stretch occurred was in 2012-13.

The August farm equipment-sales index declined to 64.7 from 67.2 in July. Readings over the last several months represent the strongest consistent growth since 2012.

Approximately 15.6% of bankers reported that continuing drought conditions were the greatest threat to their banking operations over the next 12 months.

“Rising COVID-19 infections, the turmoil in Afghanistan, and negative views of current infrastructure bills before Congress damaged the economic outlook of bank CEOs. Only 9.4% of bankers support passage of the $3.5 trillion infrastructure bill currently winding through Congress,” says Goss.

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

Cattle Current Daily—Aug. 25, 2021

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

Last week’s five-area direct average steer price was $2.19 higher on a live basis at $125.47/cwt. The average steer price in the beef was 5¢ higher at $200.68.

Cattle futures closed mixed Tuesday. Follow-through support prevailed through most of the session.

Live Cattle closed mainly higher, boosted by the cash outlook and the 13,688-contract increase in open interest the previous day.

Live Cattle futures closed an average of 47¢ higher, except for an average of 45¢ lower in the front two contracts.

Choice boxed beef cutout value was 45¢ lower Tuesday afternoon at $347.58/cwt. Select was $2.50 lower at $316.90.

Rising Corn futures prices, as well as  likely position squaring and profit taking pressured Feeder Cattle.

Feeder Cattle futures closed an average of 81¢ lower, except for 37¢ higher in spot Aug.

Corn and Soybean futures closed higher Tuesday, supported by crop conditions in the weekly Crop Progress report (see below).

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed 30¢ to 43¢ higher through Aug ’22 and then mostly 23¢ to 28¢ higher.

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Major U.S. financial indices closed higher Tuesday, buoyed by follow-through support from FDA’s full approval of the Pfizer-BioNTech Covid vaccine.

The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 77 points.

Crude Oil futures (WTI-CME) continued to climb, up $1.83 to $1.91 through the front six contracts.

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Total pounds of beef in freezers July 31 were down slightly from the previous month and down 9% from last year, according to USDA’s monthly Cold Storage report.

Frozen pork supplies were up slightly from the previous month but down 4% from last year.

Total red meat supplies in freezers were up slightly from the previous month but down 8% from last year.

Total frozen poultry supplies were 2% more than last month but 17% less year over year.

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Nationally, pasture and range conditions continue to erode slightly for the week ending Aug. 22, according to the latest USDA Crop Progress report.

29% of pasture and range was rated as Good (23%) or Excellent (6%), which was the same as the previous week and 5% more than a year earlier. Conversely, 43% was rated as Poor (21%) or Very Poor (22%), which was 1% less than a week earlier and 1% more than a year earlier.

85% of corn was in the dough stage, which was 1% less than last year, but 4% more than the average. 41% was dented, the same as last year and 3% more than the average. 4% was mature, which was 1% less than last year but on par with average. 60% was in Good (46%) or Excellent (14%) condition, which was 2% less than the previous week and 4% less than a year earlier.

97% of soybeans were blooming, which 2% less than last year but the same as the five-year average. 88% were setting pods, which was 3% less than last year but 1% more than average. 3% were dropping leaves, compared to 4% last year and 3% for average. 56% were in Good (45%) or Excellent (11%) condition, which was 1% less than a week earlier and 13% less than the same week last year.

77% of spring wheat was harvested, which was 31% more than the previous year and 22% more than the five-year average.

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

Cattle Current Daily—Aug. 24, 2021

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.

Cash fed cattle prices last week were $1 higher in the Southern Plains at $122/cwt., $1-$2 higher in Nebraska at $125-$127 and $1-$2 higher in the western Corn Belt at $127. Dressed trade was mostly $2 higher in Nebraska at $200; from $1 to $2 higher to $4 lower in the western Corn Belt at $200.

Last week’s five-area direct average steer price was $2.19 higher on a live basis at $125.47/cwt. The average steer price in the beef was 5¢ higher at $200.68.

Lower year-over-year July feedlot placements and fewer cattle on feed year over year — based on the latest Cattle on Feed report — helped boost Cattle futures Monday, amid heavy and active trade.

Choice boxed beef cutout value was $2.97 higher Monday afternoon at $348.03/cwt. Select was 87¢ higher at $319.40.

Corn futures closed mainly narrowly mixed from 1¢ lower to 1¢ higher.

Soybean futures closed 2¢ to 9¢ higher through Sep ’22 and then mostly 11¢ to 14¢ higher.

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Major U.S. financial indices climbed Monday, due in part to FDA’s full approval of the Pfizer-BioNTech COVID vaccine.

The Dow Jones Industrial Average closed 215 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 227 points.

Crude Oil futures (CME-WTI) roared back Monday, up an average of $3.42 through the front six contracts.

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“August is a tough time for fed cattle markets to move higher, but the market seems poised to break out from the constraints of the first half of the year as we move into the last part of the third quarter,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Meanwhile, auction calf and stocker prices have moved counter-seasonally higher in July-August, while feeder cattle markets, which typically increase through the summer, have shown a strong seasonal price increase.” He adds cull cow prices remain above year-ago levels, although they’re less than summer peak prices.

Reflecting on the monthly Cattle on Feed report that came out Friday, Peel notes feedlot inventories continue to fall, partly seasonally, but also reflecting the cleanup of the backlog of feedlot cattle from earlier in the year. 

“August represents the sixth consecutive monthly decline in feedlot inventories from the February peak, a decrease of 1.032 million head or 8.5% over the six months. In the previous five years, the average feedlot inventory decline from the spring high to summer low has been 6.2%.” 

Moreover, lighter year-over-year carcass weights also provide more indication that feedlots are getting more current. 

“Steer and heifer carcass weights dropped below year-ago levels in May and continue below year-earlier levels,” Peel says. “Carcass weights reached a seasonal low in June, a tad later than the normal May low and are rising seasonally into the last part of the year. Most recently, weekly steer carcass weights were 896 lbs., down 10 lbs. year over year but still 18 lbs. heavier than 2019 levels. Heifer carcass weights are currently 817 lbs., down 15 lbs. from last year but 11 lbs. above 2019.”

Peel adds that lower carcass weights also reflect the impact and incentives stemming from sharply higher feedlot cost of gain, which should help hold carcass weights in check.

“Cash feeder cattle markets continue to adjust to higher feed costs, partly in terms of general price levels but particularly in the relative prices of lightweight and heavy feeder cattle,” Peel says. “The flattening of the price line across weights translates into higher value of gain potential for added feeder cattle weight gain.”

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

Cattle Current Daily—Aug. 23, 2021

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

Live prices last week were $1 higher in the Southern Plains at $122/cwt., $1-$2 higher in Nebraska at $125-$127 and $1-$2 higher in the western Corn Belt at $127. Dressed trade was mostly $2 higher in Nebraska at $200; $2 higher to $4 lower in the western Corn Belt at $200.

The down day in grain futures Friday sparked Feeder Cattle futures, as did likely positioning ahead of what turned out to be a positive Cattle on Feed report (see below).

Feeder Cattle futures closed an average of $1.47 higher (75¢ to $2.60 higher). Week to week on Friday, they were an average of $1.17 higher.

Live Cattle futures closed an average of 53¢ higher, except for unchanged and 5¢ lower toward the back. Strength in wholesale beef values and slightly higher cash fed cattle prices provided support.

Choice boxed beef cutout value was $3.43 higher Friday afternoon at $345.06/cwt. Select was $2.12 higher at $318.53.

Corn futures closed down an average of 13¢ lower through the front six contracts, then mostly 5¢ to 9¢ lower.

Soybean futures closed an average of 27¢ lower through the front six contracts, then mostly 9¢ to 18¢ lower.

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Major U.S. financial indices closed higher Friday after a week of volatility. Investors have seemed concerned the Federal Reserve will initiate tapering plans just as the rapid spread of the delta variant may slow the economy. This week’s Jackson Hole symposium – now virtual – may offer more clues to what the Fed’s plans are for tapering.

The Dow Jones Industrial Average closed 226 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 173 points.

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Heading into Monday, it seemed likely traders would view Friday’s monthly Cattle on Feed report (feedlots with 1,000 head or more capacity) as neutral to somewhat friendly.

Placements in July of 1.74 million head were 154,000 head fewer (-8.1%) than the previous year. The average of analyst expectations ahead of the report projected a 7.0% decline.

As for placement weights, 36.2% went on feed weighing 600 lbs. or less, 48.0% weighing 700-899 lbs. and 15.8% weighing 900 lbs. or more.

Marketings in July of 1.9 million head were 90,000 fewer (-4.5%) year over year, compared to analysts expecting a decline, on average, of 3.6%.

Cattle on feed Aug. 1 of 11.07 million head were 210,000 head fewer (-1.9%) than the same time last year. That was about even with pre-report expectations.

Through midday Monday, Feeder Cattle and Live Cattle futures are strongly higher. Live Cattle were more than $2 higher in the front months, while Feeder Cattle were an average of $2.15 higher, except for spot Aug.

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

Cattle Current Daily—Aug. 20, 2021

Negotiated cash fed cattle trade was mainly slow on light demand through Thursday afternoon, according to the Agricultural Marketing Service. So far this week, live prices in the North are generally $1-$2 higher at $125-$127/cwt. Price are steady to $1 higher in the Southern Plains at $121-$122.

Choice boxed beef cutout value was $1.55 higher Thursday afternoon at $341.63/cwt. Select was $6.61 higher at $316.41/cwt.

Net U.S. beef export sales for the week ending Aug. 12 were 11,100 metric tons for 2021, according to USDA’s weekly U.S. Export Sales report. That was 18% less than the previous week and 42% less than the prior four-week average. Increases were primarily for Japan, South Korea, China, Taiwan, and Mexico.

Cattle futures softened Thursday. More than anything, pressure seemed mostly tied to weakness in outside markets and in commodities overall as fund managers assess the impact of surging COVID cases on economic growth.

Live Cattle futures closed an average of 53¢ lower (20¢ to 90¢)

Feeder Cattle futures closed an average of 38¢ lower (23¢ to 58¢ lower)

Corn futures closed an average of 13¢ lower through the front six contracts, then fractionally to 7¢ lower.

Soybean futures closed an average of 30¢ lower through the front six contracts, then mostly 8¢ to 25¢ lower.

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Major U.S. financial indices closed mixed Thursday amid volatile trade. As mentioned, pressure included surging delta COVID-19 infections, as well as fretting over when the Fed will begin tapering stimulus.

The Dow Jones Industrial Average closed 67 points lower. The S&P 500 6 points higher. The NASDAQ was up 15 points higher at 14,542

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Most analysts expect the monthly Cattle on Feed report, due out Friday to be neutral to friendly.

For instance, David Anderson, Extension livestock economist at Texas A&M University looks for July placements to be 6-7% less year over year.

“Over the last five years, on average, placements have tended to decline slightly from June to July with last year being the exception,” Anderson says, in the latest issue of In the Cattle Markets. “One area of interest in the report will be any evidence of drought-forced earlier placements out of the West and Northern Plains.”

Anderson expects July marketings to be 3% less and the inventory of cattle on feed Aug. 1 to be 1.5% less. He adds that on-feed inventory tends to decline seasonally from June to a low in September.

“The Cattle on Feed report will likely provide more evidence of tightening fed cattle numbers and beef production to begin in 2022,” Anderson says. “Beef production has been below a year ago for five out of the last six weeks. Average federally inspected steer and heifer dressed weights continue to run below a year ago, fueling the decline in beef production. It’s also worth noting that the amount of beef grading Choice as a percent of all beef graded has been below last year for about seven weeks…Tighter supplies of Choice beef is likely keeping the Choice-Select spread wider than at this time last year and wider than the five-year average.

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

Cattle Current Daily—Aug. 19, 2021

Negotiated cash fed cattle trade was slow on moderate demand in the North Tuesday at steady to higher money.

Live sales in Nebraska were $2 higher at $125 to $128/cwt. Dressed sales were generally $2 higher at $200, but some up to $205.

In the western Corn Belt, live sales were $1-$2 higher at $127. Although too few to trend, there were some dressed sales at $200, compared to $198-$204 last week.

Trade in the Texas Panhandle was slow on light demand. There were some live trades at $121 to $122 — steady to $1 higher than last week — but too few to trend.

In Kansas, trade was mostly inactive.

Cattle futures retraced recent softness, led by Feeder Cattle Wednesday. Support included the outlook for steady to higher cash fed cattle prices, as well as optimism about the monthly Cattle on Feed report due out Friday.

Feeder Cattle futures closed an average of $1.74 higher ($1.35 to $2.42 higher).

Live Cattle futures closed an average of 52¢ higher (2¢ to 92¢ higher), except for 17¢ lower in the back contract.

Choice boxed beef cutout value was $2.02 higher Wednesday afternoon at $340.08/cwt. Select was $3.03 higher at $309.80.

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 4¢ to 10¢ lower through Jly ’22 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices stepped lower Wednesday, pressured by the Federal Reserve making plans to begin tapering its bond buying program, possible by the end of the year, according to FOMC minutes released yesterday.

“Almost 60% of respondents anticipated the first reduction in the pace of net asset purchases to come in January, though, on average, respondents placed somewhat more weight than in the June surveys on the possibility of tapering beginning somewhat earlier,” according to the minutes.

The Dow Jones Industrial Average closed 382 points lower. The S&P 500 closed 47 points lower. The NASDAQ was down 120 points.

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USDA increased the projected average feeder steer price (750-800 lbs., basis Oklahoma City) for the remainder of this year and the first half of next year, based on recent price strength and declining cattle numbers.

In the latest Livestock, Dairy and Poultry Outlook, analysts with USDA’s Economic Research Service (ERS) project the average feeder steer price this year at $145.13/cwt., which is $3 more than last month. Average prices are projected at $153 in the second and third quarter. Compared to the previous month, that’s $7 higher in the third quarter and $5 higher in the fourth quarter.

ERS forecasts next year’s annual average feeder steer price $5 higher at $151.50. Prices are projected to average $149 in the first quarter next year and $147.00 in the second.

“The July five-area price for fed steers was $122.03/cwt., up more than $25 year over year and about $9 higher than the July 2019 average price,” according to ERS analysts. “The average five-area steer price for the week ending August 8 was $123.83, over $22 above a year ago.”

ERS increased the forecast fed steer price $4 to $124/cwt. in the third quarter and to $127 in the fourth quarter. The projected 2021 annual price increased  $2.00 to $121.20, compared to the previous month. ERS raised the expected average fed steer price next year by $4 to $126.

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

Cattle Current Daily—Aug. 18, 2021

Although too few to trend, there were some early live sales in the western Corn belt at $127/cwt. and a few in the beef at $204, the top end of last week’s price range in the region.

Elsewhere, trade ranged from a standstill to mostly inactive with very light demand.

Weaker outside markets and the lack of cash direction weighed on Cattle futures Tuesday.

Feeder Cattle futures closed an average of 75¢ lower (32¢ to $1.30 lower).

Live Cattle futures closed an average of 56¢ lower (22¢ to $1.00 lower) except for 5¢ higher in the back contract.

That was despite another day of strong gains for wholesale beef prices. Choice boxed beef cutout value was $8.26 higher Tuesday afternoon at $338.06/cwt. Select was $3.22 higher at $306.77/cwt.

Corn futures close mostly 4¢ to 5¢ lower.

Soybean futures closed 3¢ to 7¢ lower through Jly ’22 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed lower Tuesday, amid various reports pointing to a slowing domestic and international economy.

U.S. retail and food service sales were 1.1% less month to month in July, according to advanced estimates from the U.S. Census Bureau. That was a steeper decline than expected.

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USDA’s Agricultural Marketing Service (AMS) began publishing two new reports this month, based on Livestock Mandatory Reporting, aimed at bolstering market transparency.

The National Weekly Direct Slaughter Cattle-Formulated Base and Forward Contract Base Purchases report provides more detail about foundational prices used in cattle market formulas, grids and contracts.

More specifically, according to USDA, it enables stakeholders to see the correlation between the negotiated trade and reported formula base prices, as well as the aggregated values being paid as premiums and discounts. Ultimately, it sounds like there will be daily reports, as well.

“Daily formula base price reports will be national in scope and released in morning, summary and afternoon versions,” according to the announcement. “The weekly and monthly formula base reports will be both national and regional in scope and include forward contract base purchase information.”

The other new report, the National Weekly Cattle Net Price Distribution report details at what price and volume levels trade occurred across the weekly weighted average price for each purchase type – negotiated, negotiated grid, formula and forward contract.

“Currently, the market speculates whether large or small volumes of cattle trade on both sides of the price spread. And in fact, with premiums and discounts applied to the prices, the spreads shown on reports can be wide. Publishing a price distribution for all cattle net prices will offer more transparency to each of the purchase type categories,” according to the USDA announcement. “This report is a window into what producers are paid for cattle (net) and retains confidentiality by segregating volumes purchased in $2.00 increments (plus or minus) the daily weighted average price depending upon premiums and discounts.”

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

Cattle Current Daily—Aug. 17, 2021

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. Prices last week were generally steady. Live sales were at $121/cwt. in the Southern Plains, $123-$126 in Nebraska and $125-$126 in the western Corn Belt. Dressed sales were at $198 in Nebraska and at $198-$203 in the western Corn Belt.

Live Cattle futures rode surging wholesale beef values higher through nearby contracts.

Choice boxed beef cutout value was $4.97 higher Monday afternoon at $329.80/cwt. Select was $5.53 higher at $303.55/cwt.

Live Cattle futures closed an average of 81¢ higher through the front three contracts on Monday and then an average of 45¢ lower.

Feeder Cattle futures softened on likely profit taking and wariness about sustained strength. They closed an average of 71¢ lower, except for 17¢ higher toward the back of the board.

Corn futures closed 2¢ to 4¢ lower through new-crop contracts, and then mostly fractionally lower to 1¢ higher.

Soybean futures closed mostly 3¢ to 5¢ higher.

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Major U.S. financial indices closed mixed on Monday. Investors look to Tuesday’s town hall with Federal Reserve Chairman Jerome Powell for possible signals on how and when the Fed may taper bond buying.

The Dow Jones Industrial Average closed 110 points higher. The S&P 500 12 points higher. The NASDAQ closed 29 points lower.

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Although production costs are unknown at this time, especially the cost of wheat pasture, early budgets suggest decent return potential for fall stocker programs, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

Using prices in his state, Peel explains over the last four weeks 450 lb. steers (Med. and Lg. #1) averaged $186.08/cwt., while 750 lb. steers averaged $156.31. That adds up to $1.12/lb. for 300 lb. of gain.

“Values of stocker gain are higher this year and reflect the increased feedlot cost of gain due to high feed grain prices,” Peel explains. “Stocker value of gain is expected to remain elevated in the coming months. The value of gain reflects the broad market environment for adding weight to feeder cattle.  Actual profitability will, of course, depend on actual purchase and sale prices and production costs for stockers.”

Further, Peel points out March Feeder Cattle futures are in the $166-$167 range. For Oklahoma producers, where basis is about $2 for 750 lb. steers, the estimated average March price is $168-$169.

“Another question for stocker producers is the expected purchase price of stocker calves later in the fall. The price of 450-500 lb. steers typically decreases seasonally from summer to an October low, dropping about 4.5% from August to October. This suggests a price of roughly $177/cwt., for 450 lb. steers in October,” Peel says. “However, cattle markets are trending higher and may offset the seasonal price patterns. Current October feeder futures plus average basis for calves suggests a price for 450 lb. steers of roughly $196/cwt. I suspect the most likely calf price for October will be between these values, perhaps in the range from $180-$190/cwt.”

Peel points out multiple factors — including the size and timing of fall calf marketings — will determine actual calf prices.

“Good pasture conditions could result in some delay in calf weaning and marketing this fall,” Peel explains. “Stocker prices will also be affected by the development, availability and supply of wheat pasture. Conditions may be favorable for early wheat planting but the threat of armyworms appears to be elevated this year.”

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

Cattle Current Daily—Aug. 16, 2021

Negotiated cash fed cattle trade ranged from mostly inactive to limited on light demand through Friday afternoon, according to the Agricultural Marketing Service. Prices for the week were generally steady. Live sales were at $121/cwt. in the Southern Plains, $123-$126 in Nebraska and $125-$126 in the western Corn Belt. Dressed sales were at $198 in Nebraska and at $198-$203 in the western Corn Belt.

Cattle futures softened in front-month contracts Friday, but strengthened in away months, supported by improving supply fundamentals.

Live Cattle futures closed an average of 28¢ higher, except for an average of 30¢ lower in the front three contracts.

Feeder Cattle futures closed an average of 67¢ higher (15¢ to $1.40 higher), except for an average of 56¢ lower in the front two contracts.Choice boxed beef cutout value was $6.90 higher Friday afternoon at $324.83/cwt. Select was $7.71 higher at $298.02/cwt.

Corn futures wavered on the positive weather outlook.

Corn futures closed mixed, fractionally lower to 1¢ higher through new-crop contracts and then mostly 3¢ lower to 2¢ higher.

Soybean futures gained on confirmed strong weekly exports.

Soybean futures closed 11¢ to 26¢ higher through Aug ’22 and then 5¢ to 9¢ higher

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Major U.S. financial indices closed slightly higher on Friday. Consumer sentiment, as measured by the University of Michigan index, fell 11 points to the lowest level since 2011. Analysts believe consumers are growing more concerned about the ongoing surge in the Covid virus and its effects on slowing the economy, as well as inflation.

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

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Weather the remainder of this year and Chinese demand will continue to bolster domestic feed grain prices, says Mike Murphy, CattleFax vice president of research and risk management services.

“As China rebuilds its pork industry following their battle with African Swine Fever, they are looking for higher quality feed ingredients, such as corn and soybeans” Murphy explained, during last week’s CattleFax Outlook Seminar in Nashville, Tennessee. “Exceptional demand from China is leading U.S. corn exports to a new record in the current market year, and strong demand for U.S. soybeans has elevated prices in the last 12 months.”

CattleFax expects spot soybeans prices to be $13 to $16/bu. for the next 18 months. They forecast Corn futures at $4.75 to $6.25 during the same period.

As for weather, long-time CattleFax meteorologist, Art Douglas, professor emeritus at Creighton University, forecasts La Niña conditions to return this fall, which would intensify drought in the West and Plains into early 2022. He adds that the precipitation outlook for fall through early next year suggests drought increasing in the Pacific Northwest with above-normal precipitation across the inter-mountain West – leaving the Midwest drier. He expects less tropical storm activity to reduce Southeast rainfall into late fall.

Drier weather in the Northern Plains and West will pressure hay production and quality in the 2021 season – supporting prices into the next year, according to Murphy.

“May 1 on-farm hay stocks were down 12% from the previous year, at 18 million tons,” Murphy explains. “The USDA estimates hay acres are down 700,000 from last year at 51.5 million acres. So, expect current-year hay prices to average near $170/ton; 2022 average prices should be steady to $10 higher due to tighter supplies and stronger demand.”

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

Cattle Current Daily—Aug. 13, 2021

Negotiated cash fed cattle trade continued at a listless pace Thursday. Although too few transactions to trend, there were some live trades in Nebraska at $123-$126/cwt. and at $198 in the beef, compared to $125 and $198, respectively, last week. Elsewhere, trade was inactive to limited.

Feeder Cattle futures started Thursday’s session strong, retreated in the face of higher Corn futures — in the wake of the monthly World Agricultural Supply and Demand Estimates (WASDE) — and then mostly firmed by the end of the session.

Feeder Cattle futures closed mixed, from an average of 14¢ lower to an average of 38¢ higher.

Surging wholesale beef prices helped lift Live Cattle futures, but sluggish cash trade limited the potential. Choice boxed beef cutout value was $7.13  higher Thursday afternoon at $317.93/cwt. Select was $2.32 higher at $290.31/cwt.

Live Cattle futures closed an average of 64¢ higher.

The average dressed steer weight the week ending July 31 was 3 lbs. lighter than the previous week at 891 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 2 lbs. lighter at 814 lbs.

Corn futures gained on the WASDE report, amid volatile intra-day trading. They closed 9¢ to 14¢ higher through new-crop contracts and then mostly 1¢ to 3¢ higher.

Soybean futures closed mixed, mostly 3¢ lower to 2¢ higher.

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Major U.S. financial indices closed higher on Thursday, supported by the third consecutive decline in weekly initial unemployment insurance claims.

The Dow Jones Industrial Average closed 15 points higher. The S&P 500 closed 13 points higher. The NASDAQ closed 51 points higher.

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USDA’s Economic Research Service (ERS) increased the projected annual average five-area direct fed steer price this year by $2 to $121.20/cwt., based on current price strength and firm demand. The estimated annual price for next year increased by $4 to $126.

That’s in the latest World Agricultural Supply and Demand Estimates (WASDE)

More specifically, the average fed steer price was projected at $124 in the third quarter, $127 in the fourth quarter and $131 in the first quarter of next year.

Some of that bullishness is based on lower expected beef production this year and next.

Total beef production this year was projected at 27.87 billion lbs., which was 33 million lbs. less than the prior month. It would be 698 million lbs. more (+2.57%) than last year. ERS analysts say the decline is mostly due to lighter expected carcass weights due to a higher expected proportion of non-fed cattle being slaughtered through the end of the year.

Total estimated beef production next year of 26.96 billion lbs. was 360 million lbs. less (-1.31%) than the previous month and would be 907 million lbs. less (-3.25%) than this year’s estimate. That’s based on  tighter expected supplies of both fed and non-fed cattle.

Lower expected beef production pushed total anticipated red meat and poultry production lower.

Projected total red meat and poultry production this year of 106.82 billion lbs. was 315 million lbs. less (-0.29%) than the previous month. That would be 265 million lbs. more (+0.25%) than last year.

Corn

ERS reduced forecast corn production for 2021-22 by 415 million bu. to 14.8 billion bu., based on projected yield of 174.6 bu./acre, which was 4.9 bu. less than the previous month’s estimate.Ending stocks were projected 190 million bu. lower at 1.2 billion.

The season-average corn price received by producers was raised 15¢ to $5.75/bu.

Soybeans

ERS reduced estimated soybean production for 2021-22 by 66 million bu. to 4.34 billion bu., based on lower projected yield. But, beginning stock estimates increased based on decreased expectations for crush and exports.

The U.S. season-average soybean price for 2021-22 was forecast at $13.70/bu., unchanged from last month. The soybean meal price was forecast at $385 per short ton, down $10. The soybean oil price forecast was unchanged at 65.0¢/lb. 

Wheat

ERS reduced estimated wheat production for 2021-22 by 49 million bu. to 1,697 million bu., based on yield of 44.5 bu./acre, which was 1.3 bu. less than the previous forecast. Projected 2021-22 ending stocks were reduced 38 million bu. to 627 million, which would be 26% less than last year.

The projected 2021-22 season-average farm price was raised 10¢/bu. to $6.70.

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

Cattle Current Daily—Aug.12, 2021

Negotiated cash fed cattle trade was slow on light to moderate demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. A few early live sales traded steady with last week at $121.

In Nebraska and the Western Corn Belt, trading was limited with light demand

Last week in Kansas, live sales traded at $121. In Nebraska live sales traded at $125 and dressed at $198. In the Western Corn Belt, live sales were at $125-$126 and dressed at $198.

Stronger Corn futures and sluggish cash prices helped pressure Cattle futures Wednesday. There might have also been some defensiveness ahead of Thursday’s monthly World Agricultural Supply and Demand Estimates.

Live Cattle futures closed mixed from an average of 34¢ lower to an average of 15¢ higher

Feeder Cattle futures closed an average of 64¢ lower (22¢ lower toward the front of the board to $1.12 lower in the back contract).

Choice boxed beef cutout value was $5.48  higher Wednesday afternoon at $310.80/cwt. Select was $3.38 higher at $287.99/cwt.

Corn futures closed 2¢ to 7¢ higher through the front six contracts, then fractionally higher to 1¢ higher.

Soybean futures closed mostly fractionally higher to 2¢ higher, except for 42¢ lower in waning Spot Aug. 

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Major U.S. financial indices closed mixed on Wednesday with both the S&P 500 and the Dow Jones hitting record highs. Support included the moderating Consumer Price Index in July.

The Dow Jones Industrial Average closed 220 points higher. The S&P 500 closed 11 points higher. TheNASDAQ closed 23 points lower.

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Declining cattle numbers, finally working through backlogged cattle supplies, as well as strong beef demand are setting the stage for significantly higher cattle prices next year and beyond, according to the 2021-22 CattleFax Industry Outlook yesterday at the 2021 Cattle Industry Convention and NCBA Trade Show in Nashville.

CattleFax projects the average fed steer price next year to be $135/cwt., up $14 from this year. That’s with the forecast average carcass composite price at $265/cwt., up $5 from this year.

In turn, projected feeder steer prices (850 lbs.) are forecast $20 higher next year at an average of $165/cwt. Steer calf (550 lbs.) prices are projected to average $200/cwt., which would be $30 more than this year.

Bred cows are projected to average $1,750/head, which would be $125 more than this year.

Rounding out prices, CattleFax sees Utility cows averaging $70/cwt., up $6.

Declining Cow Numbers

CattleFax expects the beef cowherd to decline 400,000 head by Jan. 1 of next year, reaching 30.7 million head. Part of that has to do with lingering drought.

Art Douglas, professor emeritus at Creighton University expects La Niña conditions to return this fall, intensifying drought in the West and Plains into early 2022.

According to Kevin Good, CattleFax vice president of industry relations and analysis, total cattle inventory peaked at 94.8 million head. He explains those numbers remain in the system due to the COVID-19 induced slowdown in harvest over the past year. So, fed cattle slaughter will remain elevated through 2021 as carryover from pandemic disruptions works through the processing sector, which remains hindered by labor issues.

Ultimately, during the current contraction phase, CattleFax expects feeder cattle and calf supplies to decline roughly 1 million head from the cyclical peak.

“While fed cattle slaughter nearly equals 2019 highs at 26.5 million head this year, we expect a 500,000-head decline in 2022,” Good says. “This, combined with plans for new packing plants and expansions, possibly adding near 25,000 head per week of slaughter capacity over the next few years, should restore leverage back to the producer.”

Beef Demand Remains Strong

Aftershocks from the pandemic continue to keep domestic demand at elevated levels not seen since 1988, say CattleFax analysts.

“Customer traffic remained strong at restaurants and retail – even as those segments pushed on the higher costs, proving consumers are willing to pay more for beef,” Good explains. He notes the boxed beef cutout price peaked at $336/cwt. in June, while retail beef prices pushed to an annual high at $7.11/lb. Retail beef prices are expected to average $6.80/lb. in 2021 and increase to $6.85/lb. in 2022, he says.

At the same time, global U.S. beef export demand is on a record pace this year.

“Tightening global protein supplies will support stronger U.S. red meat exports in 2022,” according to Good. “U.S. beef exports are expected to grow 15% in 2021 and another 5% in 2022.”

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

Cattle Current Daily—Aug. 11, 2021

Negotiated cash fed cattle trade was again at a standstill in the Southern Plains and Nebraska through Tuesday afternoon, according to the Agricultural Marketing Service. In the Western Corn Belt, trading was still mostly inactive on light demand.

Last week in the Texas Panhandle, live sales traded from $121 to $122. In Kansas, live sales traded at $121. In Nebraska live sales traded at $125 and dressed at $198. In the Western Corn Belt, live sales were at $125-$126 and dressed at $198.

Cattle futures firmed after early pressure to close higher Tuesday, helped along by the extraordinary run in wholesale beef prices.

Live Cattle futures closed an average of 40¢ higher (3¢ to 65¢).

Feeder Cattle futures closed an average of 34¢ higher, except for 15¢ lower in Sept.

Corn futures closed fractionally lower to 4¢ lower through the front six contracts.

Soybean futures closed 6¢ to 7¢ higher in the front six contracts, except for 14¢ higher in Spot Aug.

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Major U.S. financial indices closed mixed on Tuesday, with support including Senate passage of the trillion-dollar infrastructure bill.

The Dow Jones Industrial Average closed 163 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 72 points.

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The massive $1 trillion infrastructure bill took a long step toward fruition Tuesday with Senate passage.

According to a statement from Agriculture Secretary Tom Vilsack, “Rural America stands to benefit from this historic long-term investment in our infrastructure and economic competitiveness. From tackling some of the greatest challenges we face today, to making long-term investments in the rural areas that are the heart of our nation, the Bipartisan Infrastructure Investment and Jobs Act will ensure we build back better, stronger, and more resilient and equitable than ever before.”

If passed, Secretary Vilsack says the legislation will deliver broadband to rural homes, communities and businesses across the country, as well as increasing access to jobs, education, health care, banking, and markets for farmers and rural small businesses.

“It also upgrades our power infrastructure, improves drinking water, and connects rural communities through upgraded roads and bridges,” he says.

The bill now goes to the House for consideration.

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

Cattle Current Daily—Aug. 10, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Nebraska through Monday afternoon, according to the Agricultural Marketing Service. It was mostly inactive on light trade in the Western Corn Belt.

Last week in the Texas Panhandle, live sales traded from $121 to $122. In Kansas, live sales traded at $121. In Nebraska live sales traded at $125 and dressed at $198. In the Western Corn Belt, live sales were at $125-$126 and dressed at $198.

Steep declines in Lean Hog futures pressured Cattle futures Monday despite last week’s stronger cash trade and surging wholesale beef prices. By the end of the session, though, they were back to about even.

Live Cattle futures closed an average of 27¢ lower (15¢ to 45¢), except for unchanged in spot Aug.

Feeder Cattle futures closed mixed, down an average of 19¢, except for 28¢ higher in Apr.

Choice boxed beef cutout value was $3.54 higher Monday afternoon at $299.80/cwt. Select was $3.72 higher at $280.81/cwt.

Crop progress and an improved weather outlook pressured Corn futures Monday.

Corn futures closed mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 4¢ to 7¢ lower, except for 11¢ higher in Spot Aug.

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Major U.S. financial indices closed mixed Monday. The spread of the Delta variant of Covid, as well as anticipation of year-end stimulus tapering, weighed on the market.

The Dow Jones Industrial Average closed 107 points lower. The S&P 500 closed 4 points lower.The NASDAQ closed 24 points higher. 

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“Triple-digit gains in Choice cutout values last week created optimism, however traders are still questioning where beef prices will land once Labor Day buying is complete,” says Brenda Boetel, Extension livestock economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “Feeders are expected to focus on further advancement of cash values following the moderate $1 to $2/cwt. gains last week. This could create a wider gap between asking prices and bids once each side becomes more active.”

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

Cattle Current Daily—Aug. 9, 2021

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

Last week were generally $1-$2 higher on a live basis in the Texas Panhandle at $121-$122/cwt.; $1 higher in Kansas at $121; $3 higher in Nebraska at $125; $1-$2 higher in the western Corn Belt at $125-$126. Dressed trade was $2 higher in Nebraska at $198; $3 higher to $3 lower at $198 in the western Corn Belt.

Surging wholesale beef values, position squaring and stronger cash fed cattle prices, albeit with anemic trade, helped buoy Cattle futures Friday.

Live Cattle futures closed an average of 78¢ higher (30¢ to $1.225)

Feeder Cattle futures closed an average of $1.62 higher (80¢ to $2.20)

Corn futures closed 3¢ to 6¢ higher through the front six contracts, except for up fractionally in spot Sept, and then mostly 8¢ to 9¢ higher.

Soybean futures closed 6¢ to 8¢ higher, except for 20¢ higher in Spot Aug.

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After a better-than-expected employment report for July, major U.S. financial indices once again closed at record highs although the NASDAQ was down. The report from the labor department showed 943,000 new jobs last month, which brought the unemployment rate down to 5.4%.

The Dow Jones Industrial Average closed 144 points higher. The S&P 500 closed 7 points higher. The NASDAQ was down 59 points.

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U.S. red meat exports closed the first half of the year at record levels, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Although volume and value eased from the enormous totals posted in April and May, export value was still the highest on record for the month of June and first-half shipments established a record pace for both beef and pork exports.

June beef exports totaled 112,249 metric tons (mt), up 42% from a year ago when exports were still hampered by a COVID-related slowdown in production. Export value was $804.4 million, up 68% from a year ago and the third highest on record after April and May of this year. First-half exports reached 700,087 mt, up 18% from a year ago, valued at $4.64 billion (up 28%). Compared to 2018, the record year for U.S. beef exports, first-half results were up 6% in volume and 15% in value.

“USMEF had expected a continued strong performance in June for both beef and pork exports, despite significant headwinds,” said USMEF President and CEO Dan Halstrom. “2021 has presented many formidable challenges for the U.S. industry, including a very tight labor situation, logistical obstacles that slowed product movement and foodservice restrictions in many key markets. So the fact that first-half exports reached record levels speaks to the loyalty of our international customer base, strong consumer demand for high-quality, nutritious U.S. red meat and the U.S. industry’s ability to adapt to a challenging and rapidly changing business climate. We have also seen a welcome rebound in beef and pork variety meat volumes, which had been down last year.”

Beef export value equated to $351.18 per head of fed slaughter in June, up 60% from last June’s COVID-impacted average. The first-half per-head average was $359.49, up 20% from a year ago. June exports accounted for 13.6% of total beef production and 11.5% of muscle cuts, both dramatically higher than a year ago. In the first half, exports accounted for 14.7% of total beef production and 12.5% for muscle cuts, each up about 1.5 percentage points from a year ago.

Pork exports reached 238,935 mt in June, up 15% from a year ago, while export value climbed 35% to $696.8 million. First-half pork exports topped last year’s record pace by 1% at 1.58 million mt, valued at $4.33 billion (up 7%).

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

Cattle Current Daily—Aug. 6, 2021

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

So far this week, live sales are: $1-$2 higher in the Texas Panhandle at $121-$122/cwt.; $1 higher in Kansas at $121; $3 higher in Nebraska at $125; $1-$2 higher in the western Corn Belt at $125-$126. Dressed trade is $2 higher in Nebraska at $198; $3 higher to $3 lower at $198 in the western Corn Belt.

Heavy pressure in Lean Hog futures weighed on Live Cattle Thursday, despite higher cash and wholesale prices.

Live Cattle futures closed an average of 96¢ lower with more pressure at the front (52¢ to $1.47 lower).

Higher Corn futures pressured Feeder Cattle futures.

Feeder Cattle futures closed an average of $1.59 lower.

Choice boxed beef cutout value was $3.24 higher Thursday afternoon at $292.58/cwt. Select was $2.62 higher at $273.77/cwt.

Corn futures closed 5¢ to 10¢ higher through the front six contracts and then mostly fractionally higher to 1¢ higher.

Soybean futures mixed, from 4¢ lower to 3¢ higher.

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Major U.S. financial indices closed at record highs, supported by declining weekly initial unemployment insurance claims. Perhaps there was also speculation on Friday’s monthly employment report.

The Dow Jones Industrial Average closed 272 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 115 points.

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USDA’s Agricultural Marketing Service will begin publishing two new reports this month, based on Livestock Mandatory Reporting, aimed at bolstering market transparency.

The National Daily Direct Formula Base Cattle report is supposed to provide more information about foundational prices used in cattle market formulas, grids and contracts. It begins publication Monday (Aug. 9)

According to USDA’s announcement Thursday, “National Daily Direct Formula Base Cattle reports will enable stakeholders to see the correlation between the negotiated trade and reported formula base prices, as well as the aggregated values being paid as premiums and discounts. Daily formula base price reports will be national in scope and released in morning, summary and afternoon versions. The weekly and monthly formula base reports will be both national and regional in scope and include forward contract base purchase information.”

The National Weekly Cattle Net Price Distribution report will show the volume of cattle purchased at each different level of pricing within those formulas, grids, and contracts. It begins publication next Tuesday (Aug. 10).

“The National Weekly Cattle Net Price Distribution report will show at what levels (price and volume) trade occurred across the weekly weighted average price for each purchase type – negotiated, negotiated grid, formula and forward contract,” according to USDA. “Currently, the market speculates whether large or small volumes of cattle trade on both sides of the price spread. And in fact, with premiums and discounts applied to the prices, the spreads shown on reports can be wide. Publishing a price distribution for all cattle net prices will offer more transparency to each of the purchase type categories. This report is a window into what producers are paid for cattle (net) and retains confidentiality by segregating volumes purchased in $2.00 increments +/- the daily weighted average price, depending upon premiums and discounts. AMS has published a similar net price distribution report for direct hogs since January 2010.”

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

Cattle Current Daily—Aug. 5, 2021

Negotiated cash fed cattle prices leaned higher Wednesday: $1 higher in Kansas at $121/cwt. on a live basis; steady to $1 higher in Nebraska at $125 (compared to Tuesday); steady with the previous day at $125 in the Western Corn Belt. Although too few to trend, live prices in the Texas Panhandle were $2 higher at $122. Dressed trade was $2 higher in Nebraska at $198. All of that was on slow trade with light to moderate demand.

Stronger cash prices and surging wholesale beef values provided support for Cattle futures Wednesday.

Live Cattle futures closed an average of 55¢ higher.

Feeder Cattle futures closed an average of 42¢ higher.

Through mid session today, limit-down moves in Lean Hogs are weighing on Live Cattle, while a bounce in Corn futures is pressuring Feeder Cattle.

Corn futures closed mixed mixed Wednesday, down 4¢ to 5¢ through new-crop contracts and then mostly fractionally higher.

Soybean futures closed 5¢ to 11¢ higher through Jul ’22 and then 4¢ higher.

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Major U.S. financial indices closed mixed on Wednesday as investors speculate about the Federal Reserve tapering stimulus support.

The Dow Jones Industrial Average closed 324 points lower at 34,793. The S&P 500 closed 21 points lower. The NASDAQ was down 19 points. 

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“My farm gains from red meat exports in the price of every acre of crops that we grow,” says Dean Meyer, who produces corn, soybeans, cattle and hogs near Rock Rapids, Iowa. “Red meat exports are vital to my family’s operation.”

Myer was speaking about a recent study conducted by World Perspectives, Inc. and released by the U.S. Meat Export Federation (USMEF), indicating U.S. beef and pork exports added 41¢/bu. to the value of corn and $1.06/bu. to soybeans in 2020.

Corn and soybean producers support the international promotion of U.S. pork, beef and lamb by investing a portion of their checkoff dollars in market development efforts conducted by USMEF. This funding is leveraged with support from pork and beef checkoff programs and USDA.

Meyer also highlights the industry-wide collaboration behind the promotion of value-added U.S. red meat in international markets. “Something else this study points to is how different sectors of U.S. agriculture can work together to benefit the industry as a whole.” With such collaboration, Meyer adds, “there is great potential for U.S. agriculture on the world stage.”

Key findings from the study, based on 2020 export data:

Beef and pork exports used 530.5 million bu. of corn. At an average annual price of $3.52/bu., beef and pork exports accounted for $1.87 billion in market value to the corn industry.

U.S. pork exports used 2.45 million tons of soybean meal, which is the equivalent of 103.2 million bu. of soybeans. At an average annual price of $8.98/bu., pork exports accounted for $927 million in market value to the soybean industry.

Beef and pork exports also used 3.03 million tons of distiller’s dried grains with solubles (DDGS) at an annual average price of $154.59/ton, generating $468 million in market value for ethanol mills’ co-products.

“USMEF’s efforts to promote U.S. red meat in international markets have paid off for producers, whether they raise livestock or grow corn and soybeans – or, like me, they do both,” says Mark Legan, a hog farmer from Coatesville, Ind. “The study adds numbers to the story – a story those of us in this business have been telling for a long time – that global trade is vital to all of us involved in U.S. agriculture.”

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

Cattle Current Daily—Aug. 4, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. In the Western Corn Belt, a few live sales traded at $125/cwt. 

Trade was mostly inactive on light demand in the Southern Plains.

Surging wholesale beef prices helped lift Live Cattle.

Choice boxed beef cutout value was $4.84 higher Tuesday afternoon at $285.84/cwt. Select was $4.11 higher at $267.49/cwt.

Live Cattle futures closed an average of 50¢ higher, (25¢ higher at the back to $1.12 at the front), except for 10¢ lower in the back contract.

Feeder Cattle futures were buoyed by lower Corn futures.

Feeder Cattle futures closed an average of 59¢ higher, except for an average of 17¢ lower in the back two contracts.

Grain futures trended lower with the weekly Crop Progress report (see below), profit taking and the lack of follow-through for Wheat.

Corn futures closed 6¢ to 8¢ lower through new-crop six contracts, then mostly unchanged to fractionally lower.

Soybean futures closed 22¢ to 33¢ lower through Aug ’22 and then mostly 15¢ to 16¢ lower.

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Major U.S. financial indices closed higher Tuesday on strong earnings reports. The S&P 500 hit a record level. Investors will be looking for this week’s report on jobs data to gauge the strength of the recovery.

The Dow Jones Industrial Average closed 278 points higher. The S&P 500 36 points higher. The NASDAQ was up 80 points.

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The Purdue University/CME Group Ag Economy Barometer leveled off after two months of sharp declines, down 3 points in July to a reading of 134.

“This month’s sentiment index marks the lowest barometer reading since July of 2020 and actually marks a return to sentiment readings observed from much of 2017 through 2019, when annual average barometer readings ranged from 131 to 133,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Producers’ sentiment regarding their farms’ financial condition was more optimistic when prices for corn, soybeans and wheat were surging last fall, winter and early spring. Still, recent sentiment readings suggest farmers remain cautiously optimistic about financial conditions on their farms.”

The Index of Current Conditions was down 6 points to a reading of 143, primarily as a result of weakened principal crop prices. The Index of Future Expectations was down 2 points to a reading of 130.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between July 19-23, 2021.

The Farm Capital Investment Index declined for the fourth consecutive month down 4 points to a reading of 50. Weakness in the investment index was primarily attributable to more producers indicating they plan to reduce their farm building and grain bin purchases in the upcoming year. Two-thirds of July’s respondents said their construction plans were lower than a year earlier, compared to 61% in June. Plans for farm machinery purchases were also somewhat weaker, with a shift of more respondents planning to reduce their machinery purchases compared to last year instead of holding them constant.

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

Cattle Current Daily—Aug. 3, 2021

Negotiated cash fed cattle trade was limited on very light demand in Nebraska and at a standstill in all other major feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Cattle futures edged higher Monday with stronger wholesale beef prices and optimism for pushing cash prices higher this week.

Live Cattle futures closed an average of 31¢ higher.

Feeder Cattle futures closed an average of 53¢ higher, from 7¢ higher in spot Aug to $1.05 higher at the back.

Choice boxed beef cutout value was $2.54 higher Money afternoon at $281.00/cwt. Select was $4.19 higher at $263.38/cwt.

CME Feeder Cattle Index $1.54 higher at $155.58

Rallying wheat futures led grains higher Monday.

Corn futures closed mostly 10¢ to 14¢ higher.

Soybean futures closed mostly 4¢ to 6¢ higher through Aug ‘22, and then mostly 11¢ to 17¢ higher.

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Major U.S. financial indices closed mixed on Monday as manufacturing growth slowed and worries about economic growth, combined with supply issues and the Delta Covid-19 variant’s continued spread all weighed on stocks.

The Dow Jones Industrial Average closed 97 points lower. The S&P 500 closed 8 points lower. The NASDAQ was up 8 points.

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“Cattle carcass weights will rise seasonally the remainder of the year but are expected to remain lower year over year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.  “Lower steer and heifer carcass weights likely reflect several influences, including feedlots becoming more current in marketings, higher feed prices and perhaps a return to longer-term carcass weight trends. Beef production for the remainder of 2021 is predicted to be 4-5% lower year over year as a result of lower slaughter totals and lighter carcass weights.”

For the first 28 weeks this year, Peel says average weekly yearling slaughter averaged 501,392 head, fractionally higher than the same period last year. 

“However, he adds, Monday-Friday slaughter thus far in 2021 has averaged 2.7% lower than 2019 and is covered by a 31.0% increase in Saturday slaughter of steers and heifers,” Peel says. “The 2021 average Saturday yearling slaughter total is 50,430 head compared to 38,492 head in 2019. Saturday slaughter accounts for 10.4% of total yearling slaughter in 2021 compared to 7.6% of slaughter for the same period in 2019.”

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

Cattle Current Daily—Aug. 2, 2021

Negotiated cash fed cattle prices last week were $1 higher in the Southern Plains at $122/cwt. and unevenly steady in Nebraska at $122. Dressed trade in Nebraska was $1 higher at $196. Dressed prices in the western Corn Belt were $196, compared to $195-$202 the previous week; no established trend for live trade.

Through Thursday, the average five-area direct fed steer price was $121.05/cwt., 40¢ more than the previous week. The average steer price in the beef was $197.49, which was 70¢ more.

Cattle futures softened further Friday amid week-end and month-end position squaring.

Live Cattle futures closed an average of  60¢ lower.

Feeder Cattle futures closed an average of  32¢ lower (5¢ to $1.02 lower).

Choice boxed beef cutout value was $3.24 higher Friday afternoon at $278.46/cwt. Select was $2.37 higher at $259.19/cwt.

Estimated total cattle slaughter last week of 649,000 head was 1,000 more than the previous week and 13,000 more than the same week last year. Estimated year-to-date total cattle slaughter of 19.24 million head is 826,000 more (+4.5%) than the same period last year.

Corn futures closed 10¢ 11¢ lower through new-crop contracts and then mostly 5¢ to 7¢ lower.

Soybean futures closed mostly 14¢ to 29¢ lower.

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Major U.S. financial indices closed the week lower on Friday as concern among investors seems to be corporate earnings, while strong in the second quarter, may have peaked – especially with megacap tech companies like Amazon.

The Dow Jones Industrial Average closed 149 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 106 points. l

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The Livestock Marketing Information Center (LMIC) revised beef production lower this year based on the reduced beef cow numbers in the recent semiannual Cattle report.

“LMIC is now projecting prices could be almost 7% higher than a year ago for fed cattle, which would support strong gains in the feeder cattle complex,” say the organization’s analysts, in the latest Livestock Monitor.

These are among specific points LMIC made regarding the Cattle report:

“The beef cow decline was expected, given year-to-date slaughter is up 9% or 152,000 head. Heifer slaughter, too, was in line with a decline, up 9% over last year.”

“One of the more surprising numbers was the calf crop, which was reported as even with a year ago, even though total cows (beef + dairy) was down by 500,000 head.” 

“…the dairy cow herd has shown stronger growth in 2021 reaching 9.5 million head, a 1.6% increase over 2020. Dairy replacements indicated that trend may continue as dairy farmers held back 2.5% more heifers than a year ago.” 

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

Cattle Current Daily—July 30, 2021

Negotiated cash fed cattle trade was slow on light to moderate demand in in all major feeding regions through Thursday afternoon, according to the Agricultural Marketing Service. In the Southern Plains compared to last week, live purchases traded $1 higher at $120/cwt.

In Nebraska, live sales traded unevenly steady at $122/cwt. and dressed sales were $1 higher at $196/cwt. In the Western Corn Belt, dressed sales traded unevenly steady at $196/cwt. while live sales last week traded from $120-$124/cwt.

Higher grain futures prices weighed on Cattle futures Thursday.

Feeder Cattle futures closed an average of $1.23 lower, from 85¢ lower at the back to $1.67 lower in spot Aug.

Live Cattle futures closed just an average of 21¢ lower. Part of the support was Lean Hog futures recovering from the previous day’s slide, when there was chatter about African Swine Fever being confirmed closer to the Continental United States — it was confirmed the Dominican Republic.

Choice boxed beef cutout value was $2.06 higher Thursday afternoon at $275.22/cwt. Select was 70¢ higher at $256.82.

The average dressed steer weight the week ending July 17 was 888 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 3 lbs. heavier than the previous week but 11 lbs. lighter than the same week last year. The average dressed heifer weight of 813 lbs. was 1 lb. heavier than the prior week but 16 lbs. lighter than the previous year.

Net U.S. beef export sales were 22,500 metric tons (2021) the week ending July 22, according to the weekly U.S. Export Sales report. That was 11% less than the previous week but 28% more than the prior four-week average. Increases were primarily for South Korea, Japan and China.

Hotter, drier weather in the Corn Belt helped lift grain futures prices Thursday.

Corn futures closed 7¢ to 8¢ higher through new-crop contracts, then mostly 3¢ to 5¢ higher.

Soybean futures closed mostly 11¢ to 16¢ higher.

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Major U.S. financial indices closed higher Thursday, despite less robust economic growth in the second quarter than traders expected. Real Gross Domestic Product in the second quarter was 6.5%, according to the U.S. Department of Commerce.

The Dow Jones Industrial Average closed 153 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 15 points.

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Retail food prices (food at home) are 1.6% higher year over year, for the first six months of 2021, according to USDA’s Economic Research Service (ERS). That’s about equal to the pace of increase for the same periods in 2000 to 2019. Food away from home prices for the same period are 2.8% higher. The Consumer Price Index (CPI) for all food is up an average of 2.1%.

“In addition to factors influencing prices for specific food categories, economy-wide inflation is also high and is contributing to overall price increases,” ERS analysts explain. “The Consumer Price Index (CPI) for all-items, which encompasses food, housing, transportation, and other categories, has increased 2.9% so far in 2021 compared to 2020. For context, annual all-items inflation has averaged 2.0% over the past 20 years. Inflation in 2021 is already nearly 50% higher than average annual inflation only halfway through the year. Above-average inflation is expected to continue through 2022.”

ERS expects beef and veal prices to be up between 3.0% and 4.0% this year.

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

Cattle Current Daily—July 29, 2021

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

Central Stockyards offered 7,773 head in its weekly Fed Cattle Exchange auction. Of those, 1,085 head sold (436 heifers and 649 steers), all from the Southern Plains. Steers brought a weighted average price of $119.78/cwt. The weighted average price for heifers was $119.14.

Cattle futures limped to narrowly mixed trade Wednesday amid sluggish interest

Live Cattle support included another day of higher boxed beef prices.

Live Cattle futures closed marginally mixed, from an average of 7¢ lower in four contracts to an average of 9¢ higher. 

Feeder Cattle futures wavered with pressure from higher Corn futures, led by sharply higher Wheat futures. Kansas City Wheat on the CME was 14¢ to 18¢ higher through May ’23. Chicago Wheat was 10¢ to 14¢ higher through Sep ’22.

Feeder Cattle futures closed narrowly mixed, from an average of 37¢ lower through the front five contracts to an average of 19¢ higher.

Choice boxed beef cutout value was $3.43 higher Wednesday afternoon at $273.16/cwt. Select was $2.18 higher at $256.12/cwt. The CME Boxed Beef Index was $1.19 higher at $262.75.

Corn futures closed fractionally higher to 3¢ higher through the front six contracts, then mostly fractionally higher to 1¢ higher.

Soybean futures closed 13¢ higher in spot Aug, then 1¢ to 3¢ higher through Jan ’23.

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Major U.S. financial indices closed mixed on Wednesday after Federal Reserve Chairman Jerome Powell announced interest rates would continue near zero while acknowledging the economic recovery has made progress.

The Dow Jones Industrial Average closed 128 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 102 points.

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“Despite the challenges of the past couple of years, the beef cattle system responded remarkably well to a series of large, unexpected disruptions. Producer prices have been on the rise. Consumer demand is strong. These core facts should remain front of mind when considering changes that would significantly affect the cattle industry going forward.”

That’s the conclusion of testimony Wednesday from Jayson Lusk, noted agricultural economist at Purdue University, to the U.S. House Agriculture Subcommittee on Livestock and Foreign Agriculture. This was in a hearing titled, State of the Beef Supply Chain: Shocks, Recovery, and Rebuilding. You likely recall the U.S. Senate Agriculture Committee recently held a similar hearing.

Lusk explored central topics in his testimony, topics receiving much of the attention when it comes to cattle markets. Among them: packing capacity and price discovery. Here’s some of what he had to say.

Packing capacity

“My research with Purdue colleague Meilin Ma indicates that even if we would have had a more distributed packing sector consisting of more small and medium sized plants instead of a small number of larger plants, the price spread dynamics and beef supply disruptions would not have likely been appreciably different than what we witnessed. The problem at the time was not the size and localness of the plants but total industry capacity.”

“Support for small and local processors might benefit local economic ecosystems and increase custom harvest operations for producers, but these operations, because they lack economies of scale, must focus on quality and service to be competitive, and are such a small part of the national industry that investments at this size are unlikely to significantly alter the aggregate industry capacity.”

Price discovery

“In efforts to improve price discovery, an important distinction needs to be made: price levels and price volatility. Even if all cattle were traded on a negotiated cash basis, the price level would not necessarily improve; however, we might be more confident that any given transaction would be reflective of the ‘true’ underlying supply and demand conditions at the time and location. Whether, in fact, there are too few cash transactions to reflect market fundamentals is debatable.”

“The best economic case for mandating more negotiated transactions rests on the argument that price discovery is a public good. Are there less costly ways to improve price discovery…Even if a mandate were pursued, it might be made more efficient if coupled with a ‘cap and trade’ system, where obligations to secure cattle in the cash market might be bought and sold in a secondary ‘offset’ market, similar to what currently exists for fuel manufacturers to blend a given amount of biofuels…”

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

Cattle Current Daily—July 28, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in Nebraska and the Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. In Nebraska last week, live sales were at $120-$123/cwt. and dressed at $195/cwt.

In the Western Corn Belt last week, live sales traded from $120-$124/cwt. and dressed sales from $195-$202/cwt.

Trading was at a standstill in the Southern Plains. Last week in the Southern Plains, live sales traded at $119/cwt.

Cattle futures drifted lower Tuesday amid likely profit taking and with traders awaiting cash direction.

Feeder Cattle futures closed an average of 50¢ lower, except for unchanged in the back contract. 

Live Cattle futures closed an average of 42¢ lower, except for an average of 20¢ higher in the back three contracts.

Wholesale beef prices continued to gain on Labor Day stocking. Choice boxed beef cutout value was $1.80 higher Tuesday afternoon at $269.73/cwt. Select was $3.02 higher at $253.94/cwt.

Grain futures on Tuesday battled between tougher crop conditions and a mixed to favorable weather forecast.

Corn futures closed fractionally lower to 3¢ lower.

Soybean futures closed 1¢ to 5¢ higher through Jan ’22, then fractionally lower to 11¢ lower.

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Major U.S. financial indices closed lower on Tuesday, led by declines in tech stocks and consumer-reliant companies.

The Dow Jones Industrial Average closed 86 points lower. The  S&P 500 closed 21 points lower. The NASDAQ  closed 180 points lower.

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The International Monetary Fund (IMF) left projections for global economic growth this year at 6.0%, in the latest quarterly World Economic Outlook Update (WEOU). Compared to the last update, IMF increased expectations for global growth next year by 0.5% to 4.9% mostly based on higher expectations for advanced economies, particularly for the U.S.

IMF projections for inflation are a mixed bag.

“Recent price pressures for the most part reflect unusual pandemic-related developments and transitory supply-demand mismatches. Inflation is expected to return to its pre-pandemic ranges in most countries in 2022 once these disturbances work their way through prices, though uncertainty remains high,” according to the WEOU. “…Central banks should generally look through transitory inflation pressures and avoid tightening until there is more clarity on underlying price dynamics…There is, however, a risk that transitory pressures could become more persistent and central banks may need to take preemptive action.”

Among risks to the downside, IMF cites:

  • Slower-than-anticipated COVID-19 vaccine rollout, allowing allow the virus to mutate further.
  • Rapidly tightening financial conditions; for instance, stemming from a reassessment of the monetary policy outlook in advanced economies if inflation expectations increase more rapidly than anticipated.

“Vaccine access has emerged as the principal fault line along which the global recovery splits into two blocs: those that can look forward to further normalization of activity later this year (almost all advanced economies) and those that will still face resurgent infections and rising COVID death tolls,” according to the report. “The recovery, however, is not assured even in countries where infections are currently very low, so long as the virus circulates elsewhere.”

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

Cattle Current Daily—July 27, 2021

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.

In the Western Corn Belt last week, live sales traded from $120-$124/cwt. and dressed sales from $195-$202.

Live trade in the Southern Plains last week was at $119.

In Nebraska last week, live sales were at $120-$123 and dressed at $195.

Cattle futures gained traction Monday, buoyed by last Friday’s friendly USDA reports (see below).

Feeder Cattle futures closed an average of $1.44 higher. 

Live Cattle futures closed an average of 97¢ higher.

Choice boxed beef cutout value was $1.30 higher Monday afternoon at $267.93/cwt. Select was 98¢ higher at $250.92/cwt.

Grain futures edged higher Monday on a hotter, drier near-term weather outlook.

Corn futures closed up 2¢ to 3¢ through new-crop contracts, then mostly 6¢ to 7¢ higher.

Soybean futures closed up mostly 8¢ to 9¢, except for mostly 6¢ higher in the front four contracts.

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Major financial indices posted modest gains on Monday, as investors appeared content to wait for Wednesday’s Federal Reserve update on the economy and interest rates.

The Dow Jones Industrial Average closed 83 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 4 points.

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“While it is not clear that drought has contributed significantly to cattle liquidation thus far, the potential is high for additional herd liquidation in the remainder of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel was referring to Friday’s semiannual USDA Cattle report, which pegged the July 1 beef cow inventory at 31.4 million, which was 650,000 head fewer (-2.03%) than the same time a year earlier.

Beef heifers retained for replacement of 4.3 million head were 100,000 head fewer (-2.27%) than the previous year.

“Tighter cattle supplies, combined with continued strong beef demand leads to expectations for modestly higher prices for the remainder of 2021 and beyond,” Peel says. “Fourth-quarter prices for calves, feeders and fed cattle are currently projected to average 8-12% higher year over year. However, profitability will be tempered by higher input costs, including sharply higher prices for feed grains and supplements.”

Likewise, Peel explains the feedlot situation continues to improve relative to slaughter capacity constraints.

“It appears that the feedlot industry has finally moved past the cyclical bulge of cattle numbers and should be operating with declining numbers going forward for the foreseeable future,” Peel says, citing the latest Cattle on Feed report.

As mentioned in Monday’s Cattle Current, June feedlot placements (feedlots with 1,000 head or more capacity) of 1.67 million head were 7.1% less (128,000 head fewer) than last year. June marketings of 2.02 million head were 2.7% more (53,000 head more) than a year earlier. Total cattle on feed July 1 of 11.29 million head was 1.3% less (148,000 head fewer) than the previous year.

“The overall message of these two reports is that declining cattle numbers are improving cattle market conditions both for the remainder of the year and into 2022 and beyond,” Peel says. 

By | July 26th, 2021|Daily Market Highlights|

Cattle Current Daily—July 26, 2021

Negotiated cash fed cattle prices ended up lower last week: $1 lower in the Southern Plains on a live basis at $119/cwt.; steady to $3 lower in Nebraska at $122-$123; $1 lower in the western Corn Belt at $124. Dressed trade was $1-$7 lower in Nebraska at $195; $1-$2 lower in the western Corn Belt at $195.

Through Thursday, the five-area average direct fed steer price was $120.65/cwt. on a live basis, which was $2.15 less than the previous week. The average steer price in the beef was $196.79, which was 96¢ less.

Cattle futures, especially Feeder Cattle gained Friday, buoyed by lower Corn futures and expectations of a friendly Cattle on Feed report (see below).

Feeder Cattle futures closed an average of $1.76 higher across the board. 

Live Cattle futures closed an average of 46¢ higher through Aug ’22; then down 30¢-45¢ in the back contracts.

Choice boxed beef cutout value was 49¢ higher Friday afternoon at $266.63/cwt. Select was 17¢ higher at $249.94/cwt.

Estimated total cattle slaughter last week was 652,000 head, which was 1,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 18.60 million head is 820,000 head more (+4.61%) than the same period last year.

Positive weather expectations and lower weekly exports pressured Grain futures Friday.

Corn futures closed down 10¢ to 18¢ through the front six contracts, then down 1¢ to 9¢ through Dec ’23.

Soybean futures closed down 10¢ to 15¢ in the through Jan ’22, then down 3¢ to 6¢.

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Major financial indices closed at record highs on Friday with more corporate profits beating Wall Street estimates. The Dow Jones closed above 35,000 for the first time.

The Dow Jones Industrial Average closed 238 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 53 points.

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Both the latest Cattle on Feed and Cattle inventory reports should be price-supportive.

Cattle feeders (feedlots with 1,000 head or more capacity) placed 1.67 million head in June, which was 7.1% less (128,000 head fewer) than last year and 1.3% less than average expectations heading into the report.

In terms of weights, 36.2% went on feed weighing 699 lbs. or less, 46.8% weighing 700-899 lbs. and 17.1% weighing 900 lbs. or more.

Marketings in June were 2.02 million head, which was 2.7% more (53,000 head more) than the previous year and in line with expectations.

Total cattle on feed July 1 of 11.29 million head were 1.3% less (148,000 head fewer) than the previous year, also in line with pre-report expectations.

Beef Cows 2% Less

USDA’s semiannual Cattle report published Friday offers the first insight to the potential degree of herd contraction for the year.

There were 31.4 million beef cows July 1, which was 650,000 head fewer (-2.03%) than the same time a year earlier.

Beef heifers retained for replacement were 4.3 million head, which was 100,000 head fewer (-2.27%) than the previous year.

The calculated number of calves outside feedlots July 1 of 36.1 million head was 600,000 head fewer (-1.63%) than the same time last year.

Total cattle and calves, including dairy, was 100.9 million head, which was 1.3 million head fewer (-1.27%) than the previous year.

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

Cattle Current Daily—July 23, 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.

For the week, live sales in Nebraska are steady to $2 lower at $122-$123/cwt. Dressed trade is $1-$7 lower at $195.

Live sales in the western Corn Belt are $5 lower at $120. Dressed trade is $1 lower to $5 higher at $195-$202.

Live sales in the Southern Plains this week are mainly steady at $120.

Feeder Cattle closed higher Thursday, supported by lower Corn futures.

Feeder Cattle futures closed an average of $1.40 higher across the board. 

Live Cattle benefitted from higher wholesale beef prices the last couple of days, although it seems way too early to call a seasonal bottom.

Live Cattle futures closed an average of 68¢ higher across the board.

Strong weekly export sales also provided support.

U.S. net beef export sales for 2021 totaled 25,100 metric tons the week ending July 15, according to USDA’s weekly U.S. Export Sales report. That was noticeably more than the previous week and 63% more than the prior four-week average. Increases primarily were for South Korea, Japan, China, Canada, and Mexico.

Choice boxed beef cutout value was 90¢ higher Thursday afternoon at $266.14/cwt. Select was $1.00 higher at $249.77/cwt. Steer byproduct value was $14.07/cwt., the first time it reached that mark since April of 2015. It started this calendar year right at $9.00. 

The average dressed steer weight the week ending July 10 was 885 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week but 17 lbs. lighter than the same week last year. The average dressed heifer weight of 812 lbs. was 1 lb. lighter than the previous week but 17 lbs. lighter than the previous year.

Grain futures softened, with reported pressure from the aforementioned export report.

Corn futures closed 6¢ to 7¢ lower through Jul ’22; then 2¢ lower to fractionally higher.

Soybean futures closed mostly 18¢ to 28¢ lower.

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Major financial indices closed higher Thursday, led by tech stocks. Positive earnings are damping investor anxiety over inflation and the resurgence of COVID-19 cases. Economic data was mixed, though. Sales of previously owned homes increased for the first time in five months, but jobless claims also rose.

Initial weekly unemployment insurance claims the week ending July 17 were 419,000, which was 51,000 more than the previous week and significantly more than analysts were expecting.

The Dow Jones Industrial Average closed 25 points higher. The S&P 500 closed 9 points higher. The NASDAW was up 53 points.

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Total pounds of beef in freezers June 30 were 4% less than the previous month and 7% less than last year, according to USDA’s monthly Cold Storage report.

Frozen pork supplies were 4% less than the prior month and 4% less year over year. 

Total red meat supplies in freezers were down 4% from the previous month and down 8% from last year.

Total frozen poultry supplies were 2% more than the previous month, but 15% less than a year earlier.

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Total federally inspected cattle slaughter in June was 2.90 million head, according to USDA’s monthly Livestock Slaughter report. That was 76,500 more (+2.71%) year over year. Total cattle slaughter from January through June of this year was 16.45 million head, which was 945,600 head more (+6.10%) than the same period last year.

Commercial beef production in June of 2.4o billion lbs. was 23.6 million lbs. more (+1.0%) than last year. Commercial beef production for January through June was 13.85 billion lbs., which was 862.4 million lbs. more (+6.64%) than last year.

Total commercial red meat production for January through June was 27.91 billion lbs., which was 1.1 billion lbs. more (+4.0%) than the same period last year.

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

Cattle Current Daily—July 22, 2021

Negotiated cash fed cattle trade and demand were moderate in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Compared to last week, live sales traded $1 lower at $119/cwt.

Although too few transactions to trend, there was limited trade and light demand in Nebraska, where a few live sales traded at $122-$123, compared to $123-$125 last week.

Cattle futures, especially Feeder Cattle, gained Wednesday. It was tough to pinpoint any particular reason. Perhaps some of the support came from early positioning ahead of the Cattle on Feed and semiannual Cattle reports due out Friday.

Feeder Cattle futures closed an average of $1.12 higher. 

Live Cattle futures closed an average of 48¢ higher.

Choice boxed beef cutout value was 36¢ higher Wednesday afternoon at $265.24/cwt. Select was 19¢ higher at $248.77/cwt.

Corn futures closed mostly fractionally higher to 2¢ higher.

Soybean futures closed mixed, down 1¢ to 4¢ in the front two contracts, then mostly 2¢ to 6¢ higher through Sep ’22 and then mostly fractionally higher to 7¢ lower.

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Major financial indices closed higher driven by positive corporate earnings reports.

The Dow Jones Industrial Average closed 286 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 133 points.

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Domestic beef demand continued higher year over year in May, according to the recently updated monthly Domestic Meat Demand Indices provided by Glynn Tonsor, agricultural economist at Kansas State University.

Specifically, the Choice Retail Beef Demand Index was 1.96% more than the previous year and the All-fresh Retail Beef Demand Index was 4.43% more.

Keep in mind, that’s amid continued strength in retail prices.

“The June all fresh beef price was $7.11/lb., down 1.2% from last year but the third highest level only behind record prices of June ($7.56) and May ($7.59) set last year during the pandemic,” say analysts with the Livestock Marketing Information Center (LMIC). “The Choice sirloin steak, beef for stew, and all uncooked beef steaks each set all-time high prices in June. Choice sirloin steak was $10.78/lb. rising 3.4% over last year, which was the prior record price at $10.42. Beef for stew and all uncooked beef steaks were $6.80 and $9.75/lb., respectively, beating the prior record prices set exactly one year ago.”

On the other end of the scale, ground beef prices decline 8.0% year over year in June to $4.36/lb., according to LMIC. Chuck roast and round roast both fell 7.4% and 5.1%, to $6.64 and $6.21/lb., respectively.

“Many of the retail beef price data for June last year were record prices, which led to some of the reported prices posting year-over-year declines,” LMIC analysts explain, in the latest Livestock Monitor.

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

Cattle Current Daily—July 21, 2021

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

Cattle futures closed lower amid light trade Tuesday, led by Feeder Cattle, which was pressured by Corn futures once again.

Feeder Cattle futures closed an average of $1.25 lower through the front five contracts, then down 18¢ to 30¢ at the back. 

Live Cattle futures closed an average of 47¢ lower, except for 73¢ higher in the back contract.

Choice boxed beef cutout value was $1.61 lower Tuesday afternoon at $264.88/cwt. Select was 91¢ lower at $248.58/cwt. Also of note, steer byproduct value spiked 80¢ to $13.93/cwt.

Grain futures bounced higher Tuesday with hotter, drier weather forecast in the Corn Belt and wheat challenges in the West.

Corn futures closed 12¢ to 16¢ higher through Jly ‘22, and then mostly 2¢ to 6¢ higher.

Soybean futures closed 10¢ to 15¢ higher through Sep ‘22, and then 8¢ to 9¢ higher.

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Major U.S. financial indices recovered a majority portion of what was lost in the previous day’s steep selloff as investors seemed content to bet on the dip.

The Dow Jones Industrial Average closed 550 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 224 points.

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“Across day-parts, the motivations for visiting restaurants are evolving, necessitating a refocus on how restaurant operators target consumers,” says David Portalatin, food industry advisor for the NPD Group (NPD). “Quality, value, and innovation will always be relevant to the consumer, but we also need to recognize that in many ways the world has fundamentally changed.”

Depending on new consumer rhythms of home, school, and work-life, recovery of each day-part — morning meal, lunch, dinner, and P.M. Snack — will be key to the restaurant industry’s recovery.

For instance, online or physical visits for the morning meal (breakfast and morning snack periods) were 5% less in May than the same time last year and 11% less than two years earlier. Since morning meal visits are habitual, recovery for this day-part will depend on consumers returning to workplaces and schools, according to NPD.

Lunch traffic was 4% less year over year in May and 10% less than two years ago, so recovery relies on more employees returning to workplaces, as well as more midday activities such as shopping.

Visits during the dinner day-part were 5% less than a year earlier and 12% less than two years ago. According to NPD, restaurant’s ability, particularly full service restaurants, to operate at total capacity will aid in recovery of this day-part, as will consumer comfort with dining in, and more business and recreational travel.

On the other hand, P.M. Snack visits in May were 8% more than last year and 3% more than two years ago as more flexible work schedules blur day-parts. Operators need to innovate their food and beverage offerings to grow traffic in this day-part, say the NPD folks.

Overall, total restaurant visits were 23% percent more year over year in May but were 6% less than two years earlier.

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

Cattle Current Daily—July 20, 2021

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

Last week, live trade was generally steady: $120/cwt. in the Southern Plains; $123-$125 in Nebraska; $125 in the western Corn Belt. Dressed trade was steady in Nebraska at $196-$202 and steady to $5 lower in the western Corn Belt at $196-$197.

Cattle futures faded early pressure from outside markets to close mostly higher.

Feeder Cattle futures closed an average of 52¢ higher, except for 5¢ lower in Apr. 

Live Cattle futures closed narrowly mixed, from and average of 46¢ lower to an average of 16¢ higher.

Choice boxed beef cutout value was $1.45 lower Monday afternoon at $266.49/cwt. Select was $2.30 lower at $249.49/cwt.

Grain futures closed mixed Monday with traders eyeing sharply lower outside markets and weather.

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

Soybean futures closed 14¢ to 26¢ lower through Sep. ’22 and then mostly 9¢ lower.

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Equity markets tumbled Monday with investors fretting the potential economic slowdown from resurgent COVID-19 cases among the unvaccinated.

The Dow Jones Industrial Average closed 725 points lower. The S&P 500 closed 68 points lower. The NASDAQ was down 152 points.

CME WTI Crude Oil futures closed $4.77 to $5.39 lower through the front six contracts.

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“High feed prices mostly impact how cattle are produced. In an environment of high feed prices, the industry incentives are to make cattle bigger before feedlot placement and to slow down the rate of cattle production somewhat. For cow-calf and stocker producers, this means more opportunities for retained stockers and stocker production to heavier weights in response to those market signals,” says Derrell Peel, Extension livestock marketing specialist, in his weekly market comments.

More specifically, Peel explains feeder cattle markets respond to increased feed costs by reducing the price premium of lightweight feeders.

“This represents a reduction in the price rollback or price slide for feeder cattle as weight increases,” Peel says. “The result is to increase the value of gain for stocker production and thereby encourage cattle to achieve more weight prior to placement in the feedlot. More emphasis on stocker production also slows down the movement of cattle into the feedlot and reduces feed demand by spreading out feeder cattle over more time.”

Another way of looking at it, Peel says is that the price of lightweight feeder cattle would be significantly higher relative to heavy feeders with lower feed costs and the market line would be steeper and would be close to the green line.

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

Cattle Current Daily—July 19, 2021

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

For the week, live trade was generally steady in the Southern Plains at $120/cwt. and at $123 in Nebraska. It was unevenly steady in the western Corn Belt at $125.00-$125.50. There was no established dressed trade.

Choice boxed beef cutout value was $1.93 lower Friday afternoon at $267.94/cwt. Select was 69¢ lower at $251.79/cwt.

Total estimated cattle slaughter last week was 653,000 head, which was 78,000 head more than the previous holiday-shortened week.

Year-to-date estimated total cattle slaughter of 17.94 million head is 802,000 head more (+4.68%) than the same period last year.

Year-to-date estimated total beef production of 14.85 billion lbs. is 706.5 million lbs. more (+4.99%) than last year.

Cattle futures lost some ground Friday amid generally steady cash prices, lower outside markets and stronger Wheat futures.

That was despite front-month Lean Hog futures surging higher in response to news that African Swine Fever (ASF) was confirmed in Germany’s domestic swine population for the first time, by the National Reference Laboratory for African Swine Fever at the nation’s Friedrich-Loeffler Institute (FLI). The disease was confirmed in one sow at an organic farm and two pigs at a smallholdings farm, in districts near the border between Germany and Poland. The disease was confirmed in a wild boar in the same region last September.

Feeder Cattle futures closed an average of $1.14 lower (72¢ to $1.75 lower).

Live Cattle futures closed an average of 68¢ lower (12¢ to 95¢ lower).

Grain futures closed mixed Friday.

Corn futures closed 3¢ to 8¢ lower through new-crop contracts and then fractionally higher to 3¢ higher.

Soybean futures closed 7¢ to 11¢ higher through Aug. ’22 and then mostly 2¢ to 3¢ higher.

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Even though U.S. retail and food service sales increased 0.6% month to month in June — more than analysts expected — according to the U.S. Census Bureau, major U.S. financial indices faltered Friday, amid inflation worries and some likely profit taking.

The Dow Jones Industrial Average closed 299 points lower. The S&P 500 closed 32 points lower. The NASDAQ was down 115 points. 

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USDA boosted expected average feeder steer prices by $5/cwt. for upcoming quarter, based on current price strength.

Specifically, in the latest Livestock, Dairy and Poultry Outlook, USDA projects the average price of feeder steers (750-800 lbs., Oklahoma City) at $146/cwt. in the third quarter and $148 in the fourth quarter for an annual average of $142.13. Next year, prices are forecast to be $144 in the first quarter and $142 in the second quarter with an annual average price of $146.50 in 2022.

Earlier in the week, analysts with USDA’s Economic Research Service (ERS) raised expectations for fed steer prices, too. In the July World Agricultural Supply and Demand Estimates, ERS forecast the average five-area fed steer price at $120/cwt. in the third quarter, $123 in the fourth quarter and $127 in the first quarter of next year.

“Based on Agricultural Marketing Service data — actual and estimated daily cattle slaughter — the percentage of heifer slaughter compared to that of steers for June 2021 was estimated 2.5% higher than a year ago. The estimated percentage of federally inspected cow slaughter to total slaughter for June 2021 was 0.5% higher than June 2020,” say ERS analysts.

Based on the U.S. Drought Monitor, ERS estimates approximately 34% of the nation’s cattle are in regions experiencing some level of drought.

“Pasture and range in much of the western and northern United States continue to be in very poor to poor conditions, which is likely affecting cow slaughter in regions where forage availability has become critical,” say ERS analysts. “However, to the extent that the increase in aggregate slaughter numbers is driven by higher expected cow numbers and that heifers have recently been a higher proportion of steer and heifer slaughter, average carcass weights are expected to be lower.”

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

Cattle Current Daily—July 16, 2021

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

On Wednesday, live sales in Nebraska were steady with the previous week at $123/cwt. and unevenly steady in the western Corn Belt at $125.00-$125.50. Last week, dressed trade in both regions was at $196-$202.

A day earlier, live trade in the Southern Plains was generally steady at $120.

Cattle futures closed narrowly mixed Thursday with pressure from sluggish cash fed cattle sales and continued erosion of wholesale beef values. Weekly U.S. beef export sales also took a breather.

Net U.S. beef export sales for the week ending July 8 were 9,300 metric tons (2021), which was 61% less than the previous week and 44% less than the prior four-week average, according to the Weekly U.S. Export Sales report. Increases were primarily for Japan, Mexico, China, Taiwan), and South Korea. 

Feeder Cattle futures closed mixed, from 25¢ lower to 43¢ higher.

Live Cattle futures closed mixed, from an average of 17¢ lower to an average of 9¢ higher, except for unchanged in the back contract.

Choice boxed beef cutout value was $3.01 lower Thursday afternoon at $269.87/cwt. Select was $1.27 lower at $252.48/cwt.

The average dressed steer weight the week ending July 3 was 884 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week but 12 lbs. lighter than the same week a year earlier. The average dressed heifer weight of 811 lbs. was 1 lbs. lighter than the previous week and 15 lbs. lighter than the previous year.

Corn futures closed 2¢ to 4¢ lower through Jul ’22 and then 2¢ to 3¢ higher.

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

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Major U.S. financial indices closed mixed Thursday, despite positive quarterly corporate earnings reports and jobless progress.

Initial unemployment insurance claims the week ending July 10 were 360,000. That was 26,000 fewer than the previous week and the fewest since March 14 last year.

The Dow Jones Industrial Average closed 54 points higher. The S&P 500 closed 14 points lower. The NASDAQ was down 102 points.

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“With record U.S. beef production forecast this year, U.S. beef exports are forecast to strengthen their position in the global marketplace,” according to a special report from USDA’s Foreign Agricultural Service (FAS). “Meanwhile, lower production in Australia and tighter exportable supplies from Argentina are expected to limit the global availability of beef. For 2021, U.S. beef exports are forecast to reach a record 1.5 million metric tons (mt) carcass weight equivalent (cwe), up 16% compared to last year and 8% above the 2018 high.”

Through the first five months this year, exports to South Korea accounted for 25% of all U.S. beef export in terms of both volume and value, according to the report.

FAS analysts note that exports to China continue to grow, although they still represent a sliver of that nation’s imports.

“U.S. beef has benefited from the Economic and Trade Agreement between the United States and the People’s Republic of China (also known as the Phase One Agreement), which expanded market access for U.S. beef by eliminating several long-standing non-tariff barriers,” according to the report. Through May 2021, China ranks as the third-largest U.S. market by both volume and value, surpassing both Mexico and Canada which have historically been ranked as top U.S. markets.”

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

Cattle Current Daily—July 15, 2021

Negotiated cash fed cattle trade in Nebraska was slow on light demand through Wednesday afternoon, according to the Agricultural Marketing Service. Compared to the last reported market on Monday, live sales traded $2 lower at $123/cwt. Last week, dressed sales were at $196-$202/cwt.

In the Southern Plains and Western Corn Belt, trade was mostly inactive on light demand. On Tuesday in the Southern Plains, live sales traded mostly at $120/cwt. In the Western Corn Belt, last week live sales traded from $124-$126/cwt. and dressed at $196-$202/cwt.

Cattle futures tried to extend gains early Wednesday but apparently ran out of technical steam.

Feeder Cattle were also pressured by strong gains in Corn futures.

Feeder Cattle futures closed an average of $2 lower (from $1.55 to $2.42).

Live Cattle futures closed an average of 41¢ lower, except for 12¢ higher in the back contract.

Choice boxed beef cutout value was 46¢ lower Wednesday afternoon at $272.88/cwt. Select was $2.99 lower at $253.75/cwt.

Front-month grain futures continued higher with a hotter, drier forecast and reports of storm-damaged beans in some areas of the Corn Belt.

Corn futures closed 15¢ to 18¢ higher through new-crop contracts and then mostly unchanged to fractionally higher.

Soybean futures closed 29¢ to 38¢ higher through the front six contracts and then mostly 20¢ to 25¢ higher.

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Major U.S. financial indices closed narrowly mixed on Wednesday.

Support included testimony from Federal Reserve Chair Jerome Powell to the U.S. House Committee on Financial Services. He stressed the Fed remained committed to maintaining the federal funds rate near zero and the current level of asset purchases until the Fed’s long-term goal of inflation exceeding 2% for some time.

“Inflation has increased notably and will likely remain elevated in coming months before moderating. Inflation is being temporarily boosted by base effects, as the sharp pandemic-related price declines from last spring drop out of the 12-month calculation,” Powell explained. “In addition, strong demand in sectors where production bottlenecks or other supply constraints have limited production has led to especially rapid price increases for some goods and services, which should partially reverse as the effects of the bottlenecks unwind. Prices for services that were hard hit by the pandemic have also jumped in recent months as demand for these services has surged with the reopening of the economy.”

The Dow Jones Industrial Average closed 44 points higher. The S&P 500 closed 5 points higher. The NASDAQ closed 33 points lower.

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Despite increased beef cow slaughter this year, less dairy cow slaughter and beef imports are helping maintain cull cow prices at higher levels, according to James Mitchell, Extension livestock economist with the University of Arkansas.

“Southern Plains slaughter cow prices have averaged 8.1% above 2020 and 14.7% above 2019 prices,” Mitchell says, in the most recent issue of In the Cattle Markets. “In 2021, dairy cow slaughter has averaged 0.9% below 2020 slaughter and 3.7% lower than 2019 slaughter. USDA forecasts beef imports to be down 10% this year.”

“Cull beef cows contribute to ground beef production as a source of 90% lean trimmings, blended with 50% lean trimmings to make the majority of our ground beef and hamburger,” Mitchell explains. “The other two sources of lean trimmings are dairy cows and lean beef imports. For context, in 2019 and 2020, cull beef and dairy cows represented 28.4% and 27.6% of total U.S. beef trim supplies, respectively. Fed cattle trimmings are the main source of 50% lean trim. In 2020, fed trim accounted for 41.3% of total U.S. supplies.”

Lean trim and ground beef prices are also underpinning cull cow prices, Mitchell says.

“Fresh 90% lean trimmings have averaged 4% below 2020 prices but 11% higher than 2019 prices, Mitchell explains. “BLS data through May 2021 shows that ground beef prices have averaged $4.04/lb.  or 0.5% higher than 2020. Lean ground beef prices have averaged 1.6% and 9.9% above 2020 and 2019 prices, respectively. The only way to have higher prices with larger supplies of cull cows and lean trimmings is with strong ground beef demand.”

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

Cattle Current Daily—July 14, 2021

Negotiated cash fed cattle trade was limited on light demand in the Texas Panhandle through Tuesday afternoon, according to the Agricultural Marketing Service. Compared to last week, early live sales traded steady at $120/cwt. In Kansas, trading was slow on moderate demand. Compared to last week, early live sales traded steady to $1 higher, mostly at $120/cwt.

In Nebraska and the Western Corn Belt, cash trading was mostly inactive on light demand. In Nebraska on Monday, live sales traded at $125/cwt.; dressed sales last week traded from $196-$202/cwt. In the Western Corn Belt, last week live sales traded from $124-$126/cwt. and dressed at $196-$202/cwt.

Whether it was hedging for inflation (see below) or simply considering the fundamentals and optimistic prices ahead, Live Cattle futures closed higher Tuesday, dragging Feeder Cattle along.

Live Cattle futures closed an average of $1 higher (45¢ to $1.92 higher).

Feeder Cattle futures closed an average of 82¢ higher (62¢ to $1.17 higher).

Choice boxed beef cutout value was $1.66 lower Tuesday afternoon at $273.34/cwt. Select was $2.03 lower at $256.74/cwt.

Net U.S. beef export sales were 23,700 metric tons (for 2021) the week ending July 1, according to USDA’s Weekly Export Sales report. That was 96% more than the previous week and 64% more than the prior four-week average.

Increases were primarily for South Korea, Japan, China, Mexico, and Canada. 

Grain futures edged higher with follow-through support from the previous day’s, WASDE.

Corn futures closed 7¢ to 8¢ higher through Jly ‘22, and then mostly 3 higher

Soybean futures closed mostly 1¢ to 3¢ higher.

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Major U.S. financial indices closed lower on Tuesday after reports the consumer price index rose 0.9% last month and 5.4% compared to June 2020 – higher than expected and the biggest jump since 2008.

The index for all items less food and energy rose 0.9% in June after increasing 0.7% percent in May, according to the U.S. Bureau of Labor Statistics.

The food index increased 0.8% in June. The beef index rose 4.5% in June, its steepest one-month increase since June of last year.

The Dow Jones Industrial Average closed 107 points lower. The  S&P 500 closed 15 points lower. The NASDAQ was down 56 points.

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Despite elevated feed costs, prospects for higher fed cattle prices are pushing projected feedlot returns higher, according to the latest monthly Focus on Feedlots Survey (FFS) from Kansas State University.

Currently, net returns projected for closeouts in June are -$11.22/head for steers and -$47.34/head for heifers. Estimated returns in May were +$3.71 for steers and -$39.91 for heifers.

After projected returns for steers of -$19.30/head in July, the FFS forecasts positive returns for the remainder of the year ranging from $3.34 (Sept.) to +$76.33 (Dec.). Feedlot cost of gain for September through December ranges from $126/cwt. (Sept.) to $137.08 (Dec.).

Projected returns follow a similar path for fed heifers.

Keep in mind that estimates exclude any price risk management.

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

Cattle Current Daily—July 13, 2021

Negotiated cash fed cattle trade was slow on light demand in Nebraska through Monday afternoon, according to the Agricultural Marketing Service. Early live sales traded steady to $2 higher than last week at $125/cwt. Dressed sales there last week were at $196-$202/cwt.

Trading in the Western Corn Belt was mostly inactive on very light demand. Last week, live sales traded from $124-$126/cwt. and dressed sales were at $196-$202/cwt.

In all other major trading regions, trading was at a standstill. Last week in the Texas Panhandle, live sales traded at $120/cwt. In Kansas, live sales were at $119-$120/cwt.

Live Cattle futures gained Monday, supported by higher prices forecast in the latest World Agricultural Supply and Demand Estimates (see below).

Live Cattle futures closed an average of 52¢ higher.

Feeder Cattle futures faltered with another session of higher Corn futures.

Feeder Cattle futures closed an average of 70¢ lower.

Choice boxed beef cutout value was $3.59 lower Monday afternoon at $275.00/cwt. Select was $1.36 higher at $258.77.

Grain futures closed higher, supported by the WASDE.

Corn futures closed 15¢ to 16¢ higher through new-crop contracts, and then mostly 11¢ to 12¢ higher.

Soybean futures closed mostly 18¢ to 20¢ higher.

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Major U.S. financial indices closed higher on Monday, reaching all-time highs, with second-quarter earnings reports due this week.

The Dow Jones Industrial Average closed 126 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 31 points.

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USDA’s Economic Research Service (ERS) boosted expected fed cattle prices in the latest World Agricultural Supply and Demand Estimates (WASDE).

Specifically, based on recent price strength, ERS forecast the annual average five-area direct fed steer price $2.20 higher than the previous month at $119.20/cwt. Average prices are projected at $120 in the third quarter, $123 in the fourth quarter and $127 in the first quarter of next year.

Beef production for this year was estimated to be the same as the previous month at 27.91 billion lbs., which would be 731 million lbs. more (+2.69%) than last year. Projected beef production next year of 27.33 billion lbs. would be 580 million lbs. less (-2.08%) than this year.

Total red meat and poultry production is forecast to be 107.14 billion lbs. this year, which would be 580 million lbs. more (+0.54%) than last year. Next year’s total red meat and poultry production is forecast at 107.19 billion lbs.

Corn

Corn production for 2021-22 was projected 175 million bu. higher than the previous month based on increased planted and harvested area. National average corn yield was unchanged at 179.5 bu./acre.

With supply rising more than use, ending stocks were projected 75 million bu. more than the previous month.

The season-average farm price received by producers was lowered 10¢ to $5.60/bu. 

Soybeans

Soybean production was projected at 4.4 billion bu., the same as last month with harvested area of 86.7 million acres unchanged, as well as forecast yield of 50.8 bu./acre. With offsetting changes in supply and use, ending stocks were unchanged at 135 million bu.

The U.S. season-average soybean price for 2020-21 was forecast at $11.05/bu., down 20¢ from the previous month based on early-season sales at lower prices. The soybean meal price was projected at $395.00/short ton, down $10 from last month. The soybean oil price was forecast at 57.5¢/lb., down 1.5¢.

Wheat

All wheat production was lowered 152 million bu. to 1,746 million. The forecast all wheat yield of 45.8 bu./acre was 4.9 bu. less than last month. Beginning stocks were reduced on the latest NASS Grain Stocks report.

Projected exports and feed and residual usage were lowered to 875 and 170 million bu., respectively, on the reduction in durum and other spring wheat supplies. These would be the smallest U.S. wheat exports since the 2015-16 marketing year. Projected 2021-22 ending stocks were reduced 105 million bu. to 665 million, the lowest since 2013-14.

The projected 2021-22 season-average farm price was raised 10¢/bu. to $6.60.

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

Cattle Current Daily—July 12, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle though Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was limited on light demand.

For the week, live prices were generally steady to $2 lower in the Southern Plains at $119-$120/cwt. and steady to either side of steady at $123-$126 in the north. Dressed trade was steady in the western Corn Belt at $196-$202 but steady to $4 higher in Nebraska at  $198-$202.

The five-area direct average steer price through Thursday was $122.01/cwt. on a live basis, which was $1.81 less than the same period a week earlier. The average steer price in the beef was 34¢ higher at $198.48.

Feeder Cattle futures faded pressure through much of the session to close higher Friday, perhaps supported by some positioning ahead of Monday’s monthly World Agricultural Supply and Demand Estimates.

Feeder Cattle futures closed an average of $1.68 higher ($1.30 to $2.12 higher).

Live Cattle futures managed to edge higher but remained under pressure from declining wholesale beef values. Monday’s markets could come under pressure from the Executive order signed by President Biden Friday, aimed at a number of broad issues, including concentration and competition in several industries, including agriculture (see below).

Live Cattle futures closed an average of 51¢ higher, except for 5¢ lower in spot Aug.

Choice boxed beef cutout value was $3.38 lower Friday afternoon at $278.59/cwt. Select was $2.65 lower at $257.41

Corn futures closed 6¢ to 8¢ lower through new-crop contracts, and then fractionally higher to 3¢ lower.

Soybean futures closed mostly 10¢ to 14¢ higher.

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Major U.S. financial indices closed higher Friday amid general economic optimism.

The Dow Jones Industrial Average closed 448 points higher. The S&P 500 closed 48 points higher. The NASDAQ up up 142 points. 

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Buckle Up.

President Biden signed an Executive order and USDA announced intentions Friday that could have plenty to say about producer marketing opportunities in decades to come.

“The COVID-19 pandemic led to massive disruption for growers, food workers, and consumers alike. It exposed a food system that was rigid, consolidated, and fragile. Meanwhile, those growing, processing and preparing our food are earning less each year in a system that rewards size over all else,” said Agriculture Secretary Tom Vilsack. “To shift the balance of power back to the people, USDA will invest in building more, better, and fairer markets for producers and consumers alike. The investments USDA will make in expanding meat and poultry capacity, along with restoration of the Packers and Stockyards Act, will begin to level the playing field for farmers and ranchers. This is a once in a generation opportunity to transform the food system so it is more resilient to shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds. I am confident USDA’s investments in expanded capacity will spur millions more in leveraged funding from the private sector and state and local partners as our efforts gain traction across the country.”

Specifically, USDA intends to invest $500 million in American Rescue Plan funds to expand meat and poultry processing capacity, “…so that farmers, ranchers, and consumers have more choices in the marketplace.” USDA also announced more than $150 million for existing small and very small processing facilities.

“Concentration in food processing has contributed to bottlenecks in America’s food supply chain, too. Just a few meatpackers, with a few large processing facilities, process most of the livestock that farmers and ranchers raise into the meat that we buy,” according to the announcement. “For example, just four large meat-packing companies control over 80% of the beef market alone. One of the lessons from the COVID-19 pandemic is that this system is too rigid and too fragile. When COVID slowed or shuttered meat processing, many farmers had no place to go. Farmers were forced to depopulate their animals, while grocery store shelves went bare and demand for food assistance spiked. These vulnerabilities are not new. And, given current concerns about climate and cybersecurity, these risks are likely to grow even more sharply in the future.”

For the record, I’m unaware of any cattle depopulation due to the processing backlog, never mind other hyperbole in the USDA statements.

“…To facilitate effective enforcement of the Act (Packer and Stockyards), USDA will be conducting three rulemakings,” according to the announcement. “First, the rulemakings will clarify the conduct that USDA considers a violation of the Packers and Stockyards Act, including conduct that is unfair, deceptive, or unjustly discriminatory against farmers and growers. Second, they will address oppressive practices in chicken processing. Third, the rulemakings will reinforce the longstanding USDA position that it is not necessary to demonstrate harm or likely harm to competition in order to establish a violation of the Act.”

Lots to ponder in all of that, and to monitor closely.

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

Cattle Current Daily—July 9, 2021

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service.

Elsewhere, trade was slow with moderate demand.

For the week, live prices are generally steady to $2 lower in the Southern Plains at $119-$120/cwt. and steady to either side of steady at $123-$125 in the north. Dressed trade is steady in the western Corn Belt at $196-$202 but steady to $4 higher in Nebraska at  $198-$202.

Cattle futures closed lower Thursday, pressured by declining wholesale beef prices and softer cash prices.

Feeder Cattle futures closed an average of $1.28 lower.

Live Cattle futures closed an average of $1.24 lower.

Choice was boxed beef cutout value was $2.93 lower Thursday afternoon at $281.97/cwt. Select was $2.02 lower at $260.06

Favorable weather continued to pressure Corn and Soybean futures Thursday.

Corn futures closed down between 6¢ and 14¢ lower through the front six contracts.

Soybean futures closed between 1¢ and 7¢ lower through the front six contracts, except for spot July, up 3¢.

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Major U.S. financial indices fell on Thursday on fears prompted by the continued spread of the Delta variant of Covid-19. Reports suggest traders have gone from worrying that economic growth would fuel inflation to fears the virus will cause further damage economically.

The Dow Jones Industrial Average closed 260 points lower. The S&P 500 37 points lower. The NASDAQ was down 105 points.

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“Domestic beef demand looks to continue strong in the second half of the year and beef exports are expected to increase as well,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Strong beef demand and year-over-year decreases in beef production in the third and fourth quarters is expected to continue supporting wholesale beef values for the remainder of the year.”

The seasonal increase in boxed beef cutout prices was stronger than usual this year, according to Peel. He explains weekly average Choice boxed beef prices increased 63.8% from early January to early June. 

“Among the four major beef primals, values were higher across the board, led by the loin (up 93.0%), rib (up 60.0%), round (up 43.8%) and chuck (up 39.0%),” Peel says. “The smaller primals were also up strongly with increases for brisket (up 99.3%), short plate (up 107.5%) and flank (up 85.7%).”

According to Peel, wholesale price strength stemmed from a number of factors, including increased seasonal beef demand, strong export demand and food service inventory rebuilding, all underpinned by generally strong domestic protein demand.

Boxed beef prices declined since the early June peak but remain up since the beginning of the year. 

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

Cattle Current Daily—July 8, 2021

Negotiated cash fed cattle trade was moderate with moderate demand in the Texas Panhandle through Wednesday afternoon, according to the Agricultural Marketing Service. In Kansas, trading was slow on moderate demand. Live sales in both regions were steady to $2 lower at $120/cwt.

Trading in Nebraska and the Western Corn Belt was limited on light demand.

In Nebraska, a few dressed sales traded at $198-$202/cwt. Prices last week were $198 in the beef and $125.00-$126.50 on a live basis.

In the Western Corn Belt, a few live sales traded at $125/cwt. and a few dressed from $200-$202/cwt. Last week, prices were $124-$126 and $197-$202, respectively.

Feeder Cattle futures closed an average of $1.71 lower Wednesday amid likely profit taking from solid gains in the previous session.

Live Cattle futures closed an average of $1.15 lower with the steady to lower cash market and continued decline in wholesale beef values.

Choice boxed beef cutout value was $1.78 lower Wednesday afternoon at $284.90/cwt. Select was $1.23 lower at $262.08

Corn futures continued under pressure from the wetter, cooler forecast: 3¢ and 9¢ lower through the front six contracts.

Soybean futures bounced back from the previous day’s steep decline, helped along by eroding crop conditions. They closed 20¢ and 22¢ higher through the front six contracts.

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Major U.S. financial indices rose moderately on Wednesday with the S&P 500 closing at another record high.

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 1 point.

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“Over the last three months, beef cow slaughter totaled 818,000 head, the most since the 837,000 during the same period in 2010,” says David Anderson, livestock economist with Texas A&M AgriLife Extension Service. “Total cow slaughter over the same period is the largest since 2013. At that time, the industry was reducing the number of beef cows due mostly to low prices and then the drought in Texas and the Southwest.”

More specifically, in the July 5 issue of In the Cattle Markets, Anderson explains beef cow slaughter for the previous three months was the most since 2011 in the region that includes Texas, New Mexico and Oklahoma. It was the most since 2013 for the region including Arizona and Nevada.

Even so, Anderson points out cull cow prices are higher year over year.

“Cull cow prices usually increase from the beginning of the year until mid-year,” Anderson explains. “Southern Plains 85-90% lean cows increased at a normal seasonal rate to about $65/cwt. at the end of June, about $8 higher than last year. National cutter cow prices hit $67 (end of June), also about $8 above a year ago.”

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

Cattle Current Daily—July 7, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. It was at a standstill in the Southern Plains.

Last week, live prices were at $120-$122/cwt. in the Southern Plains and at $124-$126 in the North. Dressed prices were at $197-$198.

Feeder Cattle futures closed an average of $3.03 higher across the board Tuesday, taking advantage of the wide berth opened by Corn futures.

That helped support Live Cattle, despite the decline in wholesale beef prices, in tandem with climbing retail prices that could challenge demand.

Live Cattle futures closed narrowly mixed, from 40¢ higher in spot Aug to 23¢ lower in Dec with the back two contracts unchanged.

Choice boxed beef cutout value was $1.24 higher Tuesday afternoon at $286.68/cwt. Select was $1.10 lower at $263.31

Corn and Soybean futures plunged Tuesday, pressured by a wetter, cooler forecast.

Corn futures closed down between 38¢ and 41¢ lower through the front six contracts.

Soybean futures closed down between 86¢ and 95¢ lower through the front six contracts.

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Major U.S. financial indices mostly fell on Tuesday, ending seven consecutive record-high closings. However, NASDAQ closed slightly higher thanks to gains from Amazon.

The Dow Jones Industrial Average closed 209 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 24 points.

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U.S. beef exports shattered volume and value records in May, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Pork exports also set a value record.

U.S. beef export volume soared to a record 133,440 metric tons (mt) for the month, up 68% from a year ago, while value increased 88% to $904.3 million. May marked the third consecutive monthly value record for beef exports, which had never exceeded $800 million before March 2021. Record-large exports to South Korea, continued growth in China and a strong rebound in Japan and Taiwan were all part of the strong month.

“The outstanding May performance is especially gratifying when you consider where red meat exports stood a year ago,” says USMEF President and CEO Dan Halstrom. “The industry faced unprecedented, COVID-related obstacles at all levels of the supply chain, and a very uncertain international business climate. These challenges are still not behind us, but international demand has been very resilient and the U.S. industry has shown a tremendous commitment to serving its global customers.”

For January through May, exports reached 587,838 mt, up 15% from a year ago, while value increased 22% to $3.84 billion.

Halstrom cautions U.S. labor availability remains a major concern and limitation for the industry, and exporters continue to face significant obstacles when shipping product overseas. Due to the ongoing, fluid impact of COVID-19, foodservice restrictions also continue to affect several key markets where dine-in service is either suspended or subject to capacity limits and shorter hours, and tourism has not yet returned in many countries.

“USMEF remains optimistic that international demand will remain strong in the second half of 2021, but the road ahead is not an easy one,” Halstrom explains. “The U.S. industry must continue to be innovative and aggressive in defending existing market share, while also expanding our customer base by responding to COVID-driven changes in the marketplace and shifts in consumer trends and preferences.”

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

Cattle Current Daily—July 5-6, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the Western Corn Belt through Friday afternoon, according to the Agricultural Marketing Service. It was at a standstill in the Southern Plains.

For the week, live prices were steady to $2 lower in the Southern Plains at $120-$122/cwt. and unevenly steady in the North at $124-$126. Dressed prices were steady to $1 higher at $197-$198.

Stagnant cash trade and lower wholesale beef prices pressured Live Cattle futures Friday.

Live Cattle futures closed mostly lower, from 2¢ lower toward the back to $1.57 lower in spot Aug, except for unchanged to 2¢ higher in three contracts.

Softer Corn futures helped Feeder Cattle futures close an average of 70¢ higher, except for 50¢ lower at the back.

Choice boxed beef cutout value was $2.21 lower Friday afternoon at $285.44/cwt. Select was $2.52 lower at $264.41.

Estimated total cattle slaughter last week was 623,000 head, according to USDA, which was 38,000 head fewer than the previous week. Year-to-date estimated total cattle slaughter of 16.71 million head is 865,000 head more (+5.5%) than last year. Year-to-date estimated beef production of 13.85 billion lbs. is 784.7 million lbs. more (+6.0%).

Thin trade volume and positive weather pressured Corn and Soybean futures.

Corn futures closed 22¢ lower in spot Jly and then 8¢ and 9¢ lower in new crop contracts. Soybean futures closed mostly 2¢ to 5¢ higher.

For the week, though, Corn futures closed an average of 59¢ higher through the front six contracts, while Soybean futures closed an average of $1.27 higher through the front six contracts.

That had everything to do with USDA’s Acreage report issued on Wednesday. USDA estimated corn planted area for all purposes to be 1.87 million acres more than last year at 92.7 million acres, and soybean planted area 5% more at 87.6 million acres. That was significantly less than analysts expected for both crops.

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Major U.S. financial indices closed higher Friday, buoyed by the positive employment outlook. Total non-farm payroll employment increased 850,000 in June, according to the U.S. Bureau of Labor Statistics. The unemployment rate was little changed at 5.9%. Average hourly earnings for all employees on private non-farm payrolls increased 10¢ to $30.40.

The Dow Jones Industrial Average closed 153 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 117 points.

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Members of the Texas Cattle Feeders Association (TCFA) are proving their willingness and ability to increase cash trade on a voluntary basis. According to the most recent weekly TCFA newsletter, members are exceeding regional quarterly cash trade goals outlined by what’s termed the industry’s 75% plan, a voluntary framework adopted by the National Cattlemen’s Beef Association (NCBA).

“TCFA members have surpassed levels established in the NCBA plan. More specifically, our members averaged 13,681 head per week in Q2 2021; 10,893 head per week in Q1 2021 and 9,593 head per week in Q4 2020 compared to the TCFA goal of 9,750 head in the NCBA plan,” says TCFA Chairman, Scott Anderson. “By any measure, we have proven that an industry solution to increasing negotiated trade will work. We do not need a government mandate and all the unintended consequences that could result. Our members have clearly demonstrated their commitment to increasing negotiated trade and improving price discovery. We want the market to work and will continue to also focus on leverage and competition issues that are negatively impacting the market.”

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

Cattle Current Daily—July 2, 2021

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

So far this week, live prices are steady to $2 lower in the Southern Plains at $120-$122/cwt. and unevenly steady in the North at $124-$126. Dressed prices are steady to $1 higher at $197-$198.

Cattle futures rallied back Thursday, following heavy pressure from grains in the previous session.

Live Cattle futures closed an average of $1.03 higher.

Feeder Cattle futures closed an average of $1.27 higher.

Choice boxed beef cutout value was $2.17 lower Thursday afternoon at $230.23/cwt. Select was $1.52 lower at $205.35.

The average dressed steer weight the week ending June 19 was 879 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 3 lbs. lighter than the previous week and 11 lbs. lighter than the same week last year. The average dressed heifer weight was 2 lbs. heavier week to week at 813 lbs., but 10 lbs. lighter than a year earlier.

Corn and Soybean futures finished Thursday a touch softer amid volatile trade, following the previous day’s limit-up and near limit-up moves in the front months.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed down between 1¢ and 3¢ lower through the front six contracts and then mostly 3¢ to 6¢ lower.

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Major U.S. financial indices closed higher Thursday on positive economic reports, including a new low in initial jobless claims since the pandemic started and news that U.S. manufacturing expanded.

For the week ending June 26, initial unemployment insurance claims tallied 364,000, which was 51,000 fewer than the previous week and the lowest level since March 14 last year.

The Dow Jones Industrial Average closed 131 points higher. The S&P closed 22 points higher. The NASDAQ was up 18 points. 

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“Currently, U.S. cattle inventories are cyclically high, but beef demand is also high both domestically and in our major export markets. The clearest solution to meeting this demand while fostering profitability throughout the supply chain is to expand beef processing capacity,” according to comments from the Texas Cattle Feeders Association (TCFA). These comments were submitted in response to the supply chain executive order (14017) issued by the Biden administration earlier this year. In part, the order seeks to develop initiatives that bolster cattle and beef supply chain resiliency.

“Meatpackers of all sizes face similar operational challenges, the most consistent and severe of which is labor recruitment and retention. The largest barrier to entry, however, is access to sufficient capital for construction,” according to the TCFA comments. “The industry average startup cost for a meat processing facility is roughly $100,000 per hook. This means that a 1,000-head-per-day plant would need to secure $100 million in financing just to build the infrastructure. As a further complication, traditional lending institutions are sometimes unable to provide adequate financing due to the capital requirements of meatpacking business models.”

Although expanding domestic beef processing capacity is a key mid-to-long term strategy to improve supply chain resiliency, TCFA also points out current infrastructure offers added opportunity.

“Most major meatpackers are not operating plants at 100% throughput capacity,” according to TCFA. “Unfortunately, due to the proprietary nature of firm-by-firm and plant-by-plant efficiency data, the exact number of hooks which are not being utilized is unknown. TCFA urges USDA to examine ways to support the industry in reaching 100% processing capacity utilization.”

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

Cattle Current Podcast—July 1, 2021

Negotiated cash fed cattle prices were unevenly steady through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were steady to $1 higher in Nebraska at $125-$126/cwt., but steady to $2 lower in Kansas at $120-$122 (compare to two weeks earlier). Dressed prices in Nebraska were $1 higher at $198.

Although too few to trend, there were some live sales in the western Corn Belt steady to $1 higher at $126 and some in the beef $1 higher at $198.

So far this week, live prices in the Texas Panhandle are steady to 75¢ lower than two weeks earlier at $121.25 to $122.00.

Feeder Cattle futures sagged lower Wednesday beneath the weight of surging Corn futures, while Live Cattle received support from outside markets.

Live Cattle futures closed an average of 63¢ higher, except for 5¢ lower in expiring Jun.

Feeder Cattle futures closed an average of $2.19 lower through the front four months, then an average of 73¢ lower.

Choice boxed beef cutout value was $1.05 lower Wednesday afternoon at $291.29/cwt. Select was $1.13 lower at $269.27

USDA’s Acreage and Grain Stocks reports (see below) fueled grain futures Wednesday. Along with month-end position squaring, the wetter forecast and the coming holiday, some expect extreme price volatility in the coming days.

Corn futures closed between 25¢ and 40¢ higher through the front six contracts. That included limit-up in the front four new-crop contracts.

Soybean futures closed between 73¢ and 90¢ higher through the front six contracts

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Major U.S. financial indices closed mixed on slow trading Wednesday.

The Dow Jones Industrial Average closed 210 points higher. The S&P 500 closed 6 points higher. The NASDAQ down 24 points.

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Grain futures surged Wednesday as the latest USDA reports underscored the necessity of yield-favorable weather. Planted acre projections were significantly less than analyst expectations ahead of the report. Estimated grain stocks were less than expected, too.

Acreage

USDA estimates corn planted area for all purposes this year at 92.7million acres, according to the Acreagreport released Wednesday. That would be 1.87 million acres more (+2%) than last year.

Soybean planted area for 2021 is estimated at 87.6 million acres, up 5% from last year.

All wheat planted area this year is projected to be 46.7 million acres, which would be 5% more than last year, but still the fourth lowest all wheat planted area since records began in 1919. The 2021 winter wheat planted area, projected at 33.7 million acres, would be 11% more than last year.

Estimated acres of all hay harvested this year is forecast at 51.5 million acres, which would be 701,000 fewer acres (-1.34%) than last year.

Grain Stocks

Corn stocks in all positions on June 1 were 18% less than a year earlier at 4.11 billion bu., according to USDA’s quarterly Grain Stocks report. Of the total stocks, 1.74 billion bu. are stored on farms, down 39% from a year earlier. Off-farm stocks, at 2.37 billion bu., are up 11% from a year ago.

Soybeans stored in all positions on June 1 totaled 767 million bu., down 44% from the same time last year. On-farm stocks totaled 220 million bu., down 65% from a year ago. Off-farm stocks, at 547 million bu., are down 27% from a year ago.

Old crop all wheat stored in all positions on June 1 totaled 844 million bu., down 18% from a year earlier. On-farm stocks are estimated at 142 million bu., down 38% from last year. Off-farm stocks, at 702 million bu., are down 12% percent from a year ago.

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

Cattle Current—June 30, 2021

Negotiated cash fed cattle trade was at a standstill in most regions through Tuesday afternoon, according to the Agricultural Marketing Service. In the Western Corn Belt, trading was mostly inactive on very light demand. Last week in the region, live sales traded from $125-$126/cwt. and dressed at $197/cwt.

The latest reported market in the Southern Plains was two weeks ago with live sales at $122/cwt.

On Monday in Nebraska, live sales traded at $126.50/cwt. and dressed sales at $197/cwt.

Cattle futures closed narrowly mixed Tuesday, able to fade some early pressure, but remained mired in uncertainty surrounding potential contract-end volatility (Live Cattle), limited cash trade last week, coupled with next week’s holiday and how Wednesday’s USDA Grain Stocks and Acreage reports will influence feed prices.

Live Cattle futures closed mixed with an average of 33¢ higher through the front three contracts then from 15¢ lower to 25¢ higher.

Feeder Cattle futures closed mixed, up an average of 64¢ higher in the front four contracts.

Choice boxed beef cutout value was $5.09 lower Tuesday afternoon at $292.34/cwt. Select was $3.56

Grain futures closed mainly narrowly mixed as traders awaited direction from the aforementioned USDA reports due out Wednesday.

Corn futures closed mostly 2¢ lower to 1¢ higher, except 19¢ higher in spot Jly.

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Major U.S. financial indices were little changed on Tuesday.

The Dow Jones Industrial Average closed 9 points higher. The S&P 500 closed a point higher and the NASDAQ was up 28 points.

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“Before trying to “fix” something it is prudent to look back and acknowledge the benefits that flow from the system as it exists,” says Mark Dopp, senior vice president of government affairs for the North American Meat Institute (Meat Institute). “In 2019, Americans spent an average of 9.5% of their disposable personal incomes on food—divided between food at home (4.9%) and food away from home (4.6%).

“Between 1960 and 1998, the share of disposable personal income spent on total food by Americans, on average, fell from 17.0% to 10.1%, driven by a declining share of income spent on food at home. Indeed, Americans spend less of their disposable personal income on food than any other country in the world. This remarkable drop is attributable largely to systemic efficiencies that allow food processors to offer food to consumers at lower prices.”

Dopp’s perspectives come from a letter submitted in response to a request by U.S. Agriculture Secretary Tom Vilsack for comments about efforts to improve supply chains for the production of agricultural commodities and food products.

In the letter, Dopp outlines some of the myths and misconceptions surrounding current debate and proposed legislation aimed at cattle markets. Some of that focuses on strained beef packing capacity, resulting in lost producer market leverage.

In written testimony to the U.S. Senate Agriculture Committee last week, Julie Anna Potts, Meat Institute President and CEO Julie Anna Potts pointed out publicly announced plans for beef packing capacity expansion would add more than 5,200 head per day capacity.

“These new entrants or company expansions were based on decisions to build or expand based on market conditions, not because of government intervention. Government interference into the market could well undermine this industry growth,” Potts says.

“Demands for more harvest capacity also ignore another fundamental issue: a significant, perhaps the biggest, problem facing the meatpacking industry is labor, or the shortage of it, “Dopp explained in his comments. “Labor challenges were not caused by the pandemic; COVID-19 only exacerbated the issue.”

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

Cattle Current Daily—June 29, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Monday afternoon, according to the Agricultural Marketing Service. The latest reported market in the Southern Plains was two weeks ago with live sales at $122/cwt.

Trading was slow on light demand in Nebraska with early live sales steady to $1.50 higher at $126.50/cwt. Last week in Nebraska, dressed sales traded at $197/cwt.

Trading in the Western Corn Belt and Kansas was mostly inactive on very light demand. Last week in the Western Corn Belt, live sales traded from $125-$126/cwt. and dressed sales traded at $197/cwt.

A surge in Corn futures pressured feeder cattle futures on Monday, while live cattle futures traded narrowly mixed.

Live Cattle futures closed mixed from an average of 78¢ lower through the front four contracts to an average of 9¢ higher except for the back contract, unchanged.

Feeder Cattle futures closed down across the board an average of $1.73 lower, from $3.20 lower at the front to $1 lower at the back.

Choice boxed beef cutout value was $7.13 lower at $297.43/cwt. Select was $2.22 lower at $273.96.

Grain futures closed rallied back on Monday as weekend weather conditions deteriorated.

Corn futures closed mostly 17¢ to 39¢ higher through Dec ’22.

Soybean futures closed mostly 36¢ to 42¢ higher through Sept ’22.

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Major U.S. financial indices closed mixed to start the week, with tech companies rallying on news that Facebook won dismissal of two monopoly lawsuits. Economic news to come out this week include a jobs report on Friday.

The Dow Jones Industrial Average closed 151 points lower. The S&P 500 closed 10 points higher. The NASDAQ closed up 140 points.

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Cattle feeders have yet to turn the corner toward reduced average feedlot inventories, but Derrell Peel says it’s getting closer.

Peel, Extension livestock marketing specialist at Oklahoma State University explains in his weekly market comment that feedlot inventories declined by 3.4% from February to June of this year, the largest decrease for that period since 2012. He notes the average change in feedlot inventories from February to June in the five years from 2016-2020 was an increase of 0.3%.

At the same time, Peel points out the 12-month moving average feedlot inventory has been record large since March.

“The current fed cattle market will show improvement faster than the moving average (figure below), which takes time to reflect changing conditions, and that appears to be happening,” Peel says. “Cash fed cattle prices last week averaged $122/cwt., the highest level in eight weeks. Barring some new disruption, feedlot inventories should drop below 2020 (and 2019) levels in the next month or two and remain there going forward. However, the ongoing drought could represent such a disruption if dry conditions force feeder cattle into feedlots sooner than usual. Drought could slow down the process of tightening beef supplies in 2021 but increased cowherd liquidation would lead to even smaller supplies in the coming years.”

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

Cattle Current Daily—June 28, 2021

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

Through Thursday, AMS reported 43,484 confirmed negotiated sales for the week, compared to 76,273 head the previous week and 86,986 the previous year.

Although there were too few transactions to trend, a few live sales traded $1-$2 higher in Nebraska at $125-$126/cwt. and a few $2 higher in the western Corn Belt at $126.

The previous week, live prices were at $122/cwt. in the Southern Plains and $124 in the North. Dressed prices were at $195.

Through Thursday, the five-area direct average steer price was $2.69 higher week to week on a live basis at $125.54/cwt. The average steer price in the beef was $2.32 higher at $197.86.

Lower Corn futures helped Feeder Cattle futures gain steam on Friday, while Live Cattle inched higher with relatively few traded in the cash market this week.

Live Cattle futures closed an average of 19¢ higher, from 53¢ higher in Dec ’21 to 3¢ higher in Jun ’22.

Feeder Cattle futures closed an average of $2.40 higher, from $2.40 higher at the front to 93¢ higher toward the back.

Choice boxed beef cutout value was $2.86 lower Friday afternoon at $304.56/cwt. Select was 4¢ higher at $276.18.

Grain futures closed mostly down on Friday with more rain forecast. As well, the Supreme Court ruled in favor of small refineries seeking exemptions from federal requirements to blend ethanol or other bio-fuels with their products.

Corn futures closed mostly 10¢ to 17¢ lower through July ’23.

Soybean futures closed mostly 20¢ to 40¢ lower through Sept ’22.

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Major U.S. financial indices closed the week on a mostly steady note, reflecting easing investor worries about the Federal Reserve raising interest rates – at least for now. The S&P had its best week since February. New economic reports out on Friday indicated personal spending was stagnate in May, and consumer sentiment grew in June, but by less than expected.

The Dow Jones Industrial Average closed 237 points higher. The S&P 500 closed 14 points higher. The NASDAQ was down 9 points.

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USDA’s monthly Cattle on Feed report for June (feedlots with 1,000 head or more capacity) will likely be viewed as bullish. Compared to expectations ahead of the report, placements were 2% less, marketings were on par and cattle on feed were slightly less.

Cattle feeders placed 1.91 million on feed in May, which was 141,000 head fewer (-6.87%) than the same time a year earlier.

In terms of placement weights, 31.92% went on feed weighing up to 699 lbs. 50.81% weighing 700-899 lbs. and 17.27% weighing 900 lbs. or more.

Feeders marketed 355,000 head more (+23.43%)  in May than the previous year.

Cattle on feed June 1 were 11.70 million head, the second most for the date since the data series began in 1996. However, the total was just 28,000 more (+0.24%) than the previous year.

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

Cattle Current Daily—June 25, 2021

Negotiated cash fed cattle trade was mostly inactive on light demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service. In Nebraska and the Western Corn Belt, trading was limited on light demand. A few live sales in Nebraska traded at $125-$126. 

Last week, live prices were at $122/cwt. in the Southern Plains and $124 in the North. Dressed prices were at $195.

Cattle futures faded early pressure Thursday to close mostly higher, perhaps with positioning ahead of this afternoon’s Cattle on Feed report. Heading into mid-day Friday, Feeder Cattle futures continued to edge higher, while Live Cattle were mostly a touch softer.

Live Cattle futures closed an average of 47¢ higher, except for 25¢ lower in near Aug. 

Feeder Cattle futures closed an average of 84¢ higher, from 52¢ higher to $1.45 higher at the front.

Choice boxed beef cutout value was $4.63 lower Thursday afternoon at $312.05/cwt. Select was 73¢ higher at $276.14.

Corn and Soybean futures continued mostly lower Thursday with weather pressure.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed 7¢ to 13¢ lower through Aug ’22, and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices rose to all-time highs on Thursday as agreement was announced on a $579 billion infrastructure plan.

The Dow Jones Industrial Average closed 323 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 97 points. 

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As noted in Cattle Current Thursday, Dustin Aherin, RaboResearch animal protein analyst, shared insight about planned beef packing capacity expansion in his testimony to the U.S. Agriculture Committee. He also cited the estimated cost of $100-$200 million per 1,000 head of daily capacity.

Today, the National Cattlemen’s Beef Association (NCBA) announced it secured introduction of the Butcher Block Act in the U.S. House, a bipartisan bill that would provide critical funding to expand capacity for small, regional, and independent processing facilities.

“When there’s not enough capacity to process the current supply of live cattle, our producers lose leverage in the market. Expanding capacity is an essential component of the multifaceted effort to increase the opportunities for profitability for cattle producers, and we’ve been hearing for months that the two biggest obstacles standing in the way of that are lack of capital and lack of labor,” says NCBA President Jerry Bohn. “The Butcher Block Act addresses both of those hurdles, and would go a long way to alleviating the bottleneck that is depressing live cattle prices for our farmers and ranchers.”

Introduced by Rep. Dusty Johnson (R-SD) and Rep. Abigail Spanberger (D-VA), the legislation would establish a stand-alone loan program through the U.S. Department of Agriculture (USDA) to help processors expand capacity, improve marketing options for cattle producers, and encourage competitive markets and pricing for live cattle.

The legislation would also authorize the Secretary of Agriculture to establish a grant program that would support a range of research and training efforts aimed at strengthening the workforce to meet labor needs, and helping processors become federally inspected.

A recent study by Rabobank found that under the current dynamics of supply and demand, the industry could economically accommodate an additional 5,700 hooks per day of processing capacity, or processing roughly 1.5 million additional head per year. However, access to capital is a major barrier. The average start-up cost for a beef processing facility is roughly $100,000 per hook, which means that someone trying to open a modest 25-hear-per-day facility has to secure $2.5 million in financing just to turn on the lights.

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

Cattle Current Daily—June 24, 2021

Negotiated cash fed cattle trade was mostly inactive on light demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. In Nebraska and the Western Corn Belt, trading was limited on light to moderate demand. A few live sales in Nebraska traded at $126 and a few dressed at $197.

Choice boxed beef cutout value was $3.70 lower Wednesday afternoon at $312.05/cwt. Select was $4.34 lower at $275.41.

Cattle futures softened Wednesday, pressured by crumbling Lean Hog futures, the lack of cash direction and perhaps some early positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 89¢ lower, from 30¢ to $1.40 lower.

Feeder Cattle futures closed an average of $2.11 lower, from $1.85 to $2.65 lower.

Corn futures closed mostly 1¢ to 3¢ lower through new-crop contracts, and then mostly fractionally higher to 2¢ higher.

Soybean futures closed 1¢ to 9¢ lower through the front five contracts and then mostly 6¢ to 10¢ higher.

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Major U.S. financial indices traded narrowly on Wednesday as investors continue to evaluate the strength of the economy.

The Dow Jones Industrial Average closed 71 points lower. The S&P 500 closed 5 points lower. The NASDAQ was up 18 points.

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Arguably, the root cause of much of the current debate surrounding the lack of producer leverage in recent and current markets — compounded by several black swan events — revolves around available packing capacity, relative to cattle supplies.

That was one of the issues discussed in Wednesday’s U.S. Agriculture Committee hearing: Examining Markets, Transparency, and Prices from Cattle Producer to Consumer. Dustin Aherin, RaboResearch animal protein analyst was one of five expert witnesses invited to testify. As part of his testimony, Aherin explained plans for new and expanded packing facilities announced in recent months could add about 8,000 head per day daily fed cattle capacity and 2,000 head of non-fed daily capacity over the next five years.

“Even before the extremes of 2020, recent margins suggest that there is opportunity to add packing capacity. However, that opportunity does not come without significant risk,” Aherin explained. “First, the upfront cost of a new or expanded plant is extremely expensive. Industry sources estimate that a new plant costs $100 to $120 million (USD) for every 1,000 head of daily capacity. Increasing construction costs over the past year likely put current costs near or even above the high end of that estimate. Then, a new endeavor must meet regulatory requirements, build a labor force, and keep enough cash on hand to absorb losses. It’s not just about building facilities, it’s about building a business model.”

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

Cattle Current Daily—June 23, 2021

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains and Western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. In Nebraska, trading was mostly inactive on light demand.

Last week, live prices were at $122/cwt. in the Southern Plains and $124 in the North. Dressed prices were at $195.

Softer Corn futures helped Feeder Cattle futures gain Tuesday, while apparently oversold conditions and reports of higher cash prices in the North spurred Live Cattle.

Live Cattle futures closed an average of $1.65 higher, from $2.12 higher at the front to 65¢ higher at the back.

Feeder Cattle futures closed an average of $2.70 higher, from $3.25 higher at the front to $2.275 higher toward the back.

Choice boxed beef cutout values was $5.45 lower Tuesday afternoon at $315.75/cwt. Select was $1.71 lower at $279.75.

Grain futures were pressured Tuesday by timely rains forecast across the Midwest.

Corn futures closed mostly 11¢ to 18¢ lower through Dec ’22, except for fractionally higher in spot July.

Soybean futures closed mostly 16¢ to 18¢ lower through Nov ’22.

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Major U.S. financial indices closed higher on Tuesday, buoyed by Fed Chief Jerome Powell downplaying recent inflation as transitory.

The Dow Jones Industrial Average 69 points higher. The S&P 500 closed 22 points higher. The NASDAQ up 112 points.

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Total pounds of beef in freezers as of May 31 were 8% less than the previous month and 1% less than the same time last year, according to USDA’s most recent Cold Storage report.

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

Total red meat supplies in freezers were 4% less than the previous month and 3% less than a year earlier.

Total frozen poultry supplies were up 3% from the previous month, but down 12% percent from a year ago.

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

Cattle Current Daily—June 22, 2021

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

Last week, live prices were at $122/cwt. in the Southern Plains and $124 in the North. Dressed prices were at $195.

Cattle futures closed narrowly mixed Monday, supported by improving fundamentals but balanced by declining wholesale beef values and weaker Lean Hog futures.

Live Cattle futures closed an average of 23¢ lower.

Feeder Cattle futures closed an average of 47¢ higher, from 7¢ higher at the front to $1.12 higher toward the back.

So far this morning, both are higher.

Choice boxed beef cutout value was $2.08 lower Monday afternoon at $321.20/cwt. Select was $2.15 lower at $281.46.

Although new-Crop Corn futures eased Monday, overall Corn and Soybean futures were supported by weaker crop conditions (Good and Excellent) week over week and year over year.

Corn futures closed mostly 6¢ to 9¢ lower through new-crop contracts, and generally 3¢ to 5¢ higher in other contracts.

Soybean futures closed mostly 6¢ to 9¢ higher in new-crop contracts and mostly 13¢ to 22¢ higher in the others.

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Major U.S. financial indices rallied back Monday, supported by higher crude oil prices. CME WTI Crude Oil futures closed $1.21 to $2.02 higher through the front six contracts.

The Dow Jones Industrial Average closed 586 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 111 points.

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USDA and lawmakers continue to focus more money and proposed legislation on addressing the nation’s meat packing industry.

USDA announced Monday $55.2 million in competitive grant funding available through the new Meat and Poultry Inspection Readiness Grant (MPIRG) program.

“We are building capacity and increasing economic opportunity for small and midsized meat and poultry processors and producers across the country,” said Agriculture Secretary, Tom Vilsack. “Through MPIRG, meat and poultry slaughter and processing facilities can cover the costs for necessary improvements to achieve a Federal Grant of Inspection under the Federal Meat Inspection Act or the Poultry Products Inspection Act, or to operate under a state’s Cooperative Interstate Shipment program.”

MPIRG’s Planning for a Federal Grant of Inspection (PFGI) project is for processing facilities currently in operation and are working toward Federal inspection.

Earlier this month (June 11), as mentioned in Cattle Current, USDA announced it was beginning work on three proposed rules to support enforcement of the Packers and Stockyards (P&S) Act.

First, USDA intends to propose a new rule that will provide greater clarity to strengthen enforcement of unfair and deceptive practices, undue preferences, and unjust prejudices. Second, USDA will propose a new poultry grower tournament system rule, with the current inactive proposal to be withdrawn. Third, USDA will re-propose a rule to clarify that parties do not need to demonstrate harm to competition in order to bring an action under section 202 (a) and 202 (b) of the P&S Act.

Earlier that week, USDA announced $4 billion in assistance as part of the Build Back Better initiative, an effort designed to strengthen and transform critical parts of the U.S. food system. Investments made through Build Back Better will include a mix of grants, loans and innovative financing to address the shortage of small meat processing facilities across the country as well as the necessary local and regional food system infrastructure needed to support them.

Also on June 11, Senator Chuck Grassley (R-Iowa), along with Senators Jon Tester (D-Mont.) and Mike Rounds (R-S.D.) announced new bipartisan legislation they said was meant to address anticompetitive practices in the meat and poultry industries.

“Increased consolidation is driving concerns about competitive market access for Iowa livestock producers,” Grassley said. “The recent cyberattack (JBS) added to existing vulnerabilities in our food supply chain, underscoring the importance of protecting the livelihoods of our family farmers. Food security is national security. This bill provides USDA with the necessary tools to beef up enforcement of the Packers and Stockyards Act, increase coordination with DOJ, FTC, and DHS and to foster a fair and functional marketplace for farmers and consumers alike.”

The Senators’ bill, the Meat Packing Special Investigator Act, would create the “Office of the Special Investigator for Competition Matters” within the U.S. Department of Agriculture’s (USDA) Packers and Stockyards Division.

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

Cattle Current Daily—June 21, 2021

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

Live prices last week were $2-$3 higher in the Southern Plains at $122/cwt. and $3-$4 higher in the North at $124. Dressed prices were $4-$5 higher at $195.

Live Cattle futures closed higher Friday, regaining some of what was lost in the previous session, supported by higher cash prices and improving fundamentals.

Live Cattle futures closed an average of $1.00 higher (37¢ to $1.92 higher).

Resurgent grain futures prices pressured Feeder Cattle futures.

Feeder Cattle futures closed an average of $1.41 lower, from an average of (85¢ lower at the back to $2.37 lower at the front.

Choice boxed beef cutout value was $2.97 lower at $323.28/cwt. Select was $3.63 lower at $283.61.

Estimated total cattle slaughter for the week ending June 19 was 663,000 head, which was 2,000 head fewer than the previous week, but 17,000 head more than a year earlier, according to USDA. Year-to-date estimated total cattle slaughter of 15.4 million head is 820,000 more (+5.62%) than the same period last year. Total estimated beef production so far this year is 12.81 billion lbs., which is 772.6 million lbs. more (+6.42%).

Grain futures bounced back Friday from the previous day’s steep selloff, looking for the trading range encompassing the stronger U.S. dollar, weather risk, uncertainty about potential changes to the Renewable Fuel Standard and all of the rest.

Corn futures closed 22¢ to 34¢ higher through Jly ‘22 , and then mostly 14¢ to 17¢ higher.

Soybean futures closed mostly 54¢ to 66¢ higher.

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Major U.S. financial indices sagged lower Friday, beneath the weight of investor worries about the Fed raising interest rates sooner than 2023.

The Dow Jones Industrial Average closed 533 points lower. The S&P 500 closed 55 points lower. The NASDAQ down 130 points.

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“Strong grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. Even so, current rural economic activity remains below pre-pandemic levels,” says Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey, which underpins the Creighton University Rural Mainstreet Index (RMI), covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. 

The June RMI remained above growth neutral for the seventh consecutive month at 70.0. The RMI was record high a month earlier at 78.8. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

The farmland price index was significantly above growth neutral for the ninth consecutive month; the first time since 2013. The June reading slipped to 75.9 from May’s 78.1.

The June farm equipment-sales index rose to 71.6 from 67.9, its highest level since 2012 and the seventh consecutive month of a reading above growth neutral.

Approximately, 46.7% of bank CEOs reported their local economy expanded between May and June, but several bankers raised future concerns.

For instance, according to Steve Simon, CEO of South Story Bank and Trust in Huxley, Iowa, “Continued dry conditions will start to have an effect on markets and crops soon.”

Longer term, Larry Winum, CEO of Glenwood State Bank in Glenwood, Iowa, says, “In my view, $29 trillion in total debt with no real plan to reduce that debt, or balance the annual budget is the biggest threat to our economy’s success.” He argues that neither political party, nor the Federal Reserve, has engaged in a serious discussion to solve the problem.

When asked to name the greatest threat to 2021-22 bank operations, approximately 25% cited a downturn in farm income. Another 25%  pointed to rising government regulation.

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

Cattle Current Daily—June 18, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand with too few transactions to trend. So far this week, live prices are $2-$3 higher in the Southern Plains at $122/cwt., $4 higher in Nebraska at $124 and $3-$4 higher in the western Corn Belt at $124. Dressed prices are $4-$5 higher at $195.

Live Cattle futures closed sharply lower Thursday with apparent profit taking, limit-down moves in Lean Hog futures and spillover pressures from widespread commodity selling (see below).

Live Cattle futures closed an average of $2.85 lower. 

Despite the pressure, sharply lower grain futures supported Feeder Cattle futures.

Feeder Cattle futures closed mixed, from an average of 49¢ lower to an average of 55¢ higher.

Choice boxed beef cutout value was $2.92 lower Thursday afternoon at $326.25/cwt. Select was $2.72 lower at $287.24.

The average dressed steer weight the week ending June 5 was 891 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. less than the previous year. The average dressed heifer weight of 812 lbs. was 12 lbs. lighter.

Grain futures tanked Thursday with promising weather in the Corn Belt. Growing uncertainty about whether President Biden will bolster or relax the current Renewable Fuel Standard added pressure, as did the sharply higher U.S. Dollar.

Moreover, there was broad-based commodity selling, tied to reports of China directing state-owned firms to reduce exposure to foreign commodity markets, in an effort to curb inflation.

Corn futures closed limit down 40¢ through the front six contracts, and then mostly 26¢ to 30¢ lower.

Soybean futures closed 82¢ to $1.18 lower through Jly ‘22. And then mostly 55¢ to 69¢ lower.

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Major U.S. financial indices closed mixed Thursday. Along with continued pressure from the Fed’s expectation of raising interest rates a year earlier than previously intended, initial weekly unemployment insurance claims were more than expected. Those claims tallied 412,000 for the week ending June 12, up 37,000 from the previous week.

The Dow Jones Industrial Average closed 210 points lower. The S&P 500 closed 1 point lower. The NASDAQ was down 121 points.

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Delays and congestion at U.S. ports continue to hamstring U.S. agriculture exports, including meat and poultry products.

“Perhaps the most egregious action perpetrated by ocean carriers is their growing proclivity to decline to carry U.S. agricultural commodity exports, including meat and poultry exports, instead choosing to hasten empty containers to Asian markets to fill them with more lucrative consumer goods to export to the U.S.,” explained Julie Anna Potts, Meat Institute president and CEO. “In some instances, common carriers are collecting freight rates as high as $12,000 per container to carry cargo from Asia to the U.S., while containers carrying U.S. agriculture exports earn only $1,800.” That was part of the testimony she delivered earlier this week to the House Committee on Transportation and Infrastructure Subcommittee On Coast Guard and Maritime Transportation.

Further, Potts explained ocean carriers and marine terminal operators are charging excessive and unreasonable detention and demurrage fees.

“Failure to hold these carriers accountable could have long-lasting, detrimental effects for the trade-dependent U.S. meat and poultry industry and agriculture sector which has caused $1.5 billion in lost revenue,” said Potts. “If current ocean carrier practices persist, and are not subject to oversight, then the U.S. meat and poultry industry, its workers and the communities it supports will struggle to access these vital markets that have been cultivated over decades.”

The U.S. Department of Agriculture estimates that the $141.6 billion in U.S. agricultural export value in 2019 generated an additional $160 billion in economic activity for a total of $301.6 billion in economic output.

The Meat Institute is urging U.S. Secretary of Agriculture Tom Vilsack and the Congress to confront the crisis as part of efforts to improve and strengthen the food supply chain.

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

Cattle Current Daily—June 17, 2021

Negotiated cash fed cattle prices continued higher in Kansas and Nebraska on slow trade and light demand through Wednesday afternoon, according to the Agricultural Marketing Service. So far this week, live prices are $2-$3 higher in the Southern Plains at $122/cwt. and $4 higher in Nebraska at $124. Dressed prices in Nebraska are $4-$5 higher at $195.

Last week, prices in the western Corn Belt were $120-$121 on a live basis and $190-$191 in the beef.

Cattle feeders offered 6,049 head in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 1,006 sold — all from the Southern Plains and all on a live weight basis. Steers brought a weighted average price of $121.65/cwt. and heifers brought an average of $121.22.

Cattle futures mostly gained again Wednesday, supported by the recent break in grain futures, as well as higher cash prices. That came in the face of limit-down moves in front-month Lean Hog futures.

Feeder Cattle futures closed an average of 87¢ higher (17¢ to $2.30 higher), except for an average of 25¢ lower in the back two contracts.

Live Cattle futures closed an average of 72¢ higher (12¢ to $1.35 higher). 

Choice boxed beef cutout value was $5.26 lower Wednesday afternoon at $329.17/cwt. Select was $8.32 lower at $289.96. The Choice/Select spread was $39.21/cwt.

Positive weather kept pressure on Corn futures Wednesday.

Corn futures closed 1¢ to 7¢ lower, except for 5¢ higher in spot Jly.

Soybean futures closed mostly 18¢ to 30¢ lower.

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Major U.S. financial indices closed lower Wednesday, pressured by information from the Federal Reserve, indicating inflation was running higher than previously expected and interest rates may increase sooner than expected. In this case, sooner means 2023 versus 2024.

In the meantime, according to the FOMC statement, the committee expects to maintain its current accommodative monetary policy until inflation averages 2% over time and longer‑term inflation expectations remain “well anchored” at 2%.

In prepared remarks, Federal Reserve Chair Jerome Powell said, “Inflation has increased notably in recent months. The 12-month change in Personal Consumption Expenditure (PCE) prices was 3.6% in April and will likely remain elevated in coming months before moderating.” The committee increased PCE expectations for this year by 1% from its previous estimate to 3.4%. 

The Dow Jones Industrial Average closed 265 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 33 points.

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Although total cattle slaughter in May was more than last year’s pandemic-ravaged pace, it was 1% less than in 2019, according to USDA’s Economic Research Service (ERS). Cow slaughter, though, was 6% more than last year and 7% more than in 2019.

“While there have been improvements in drought conditions in some regions since last month, pasture and range conditions in areas like the Northwest and North Dakota remain very poor compared to last year,” say ERS analysts, in the latest Livestock, Dairy and Poultry Outlook.

ERS increased expected cow slaughter for the second and third quarters this year, but analysts say projected total cattle slaughter remained static based on less fed cattle slaughter in the second quarter, and reduced expectation for fourth-quarter cow slaughter. Expected annual beef production this year is 5 million lbs. more than the previous month at 27.905 billion lbs.

In the monthly World Agricultural Supply and Demand Estimates, ERS forecast the annual average five-area direct fed steer price at $117/cwt. Average prices are projected at $120 in the second quarter, $115 in the third quarter and $120 in the fourth quarter. Next year’s forecast annual average price is $121.50.

ERS projects the annual average feeder steer price (basis Oklahoma City) this year at $139.33/cwt. Average prices are forecast at $139 in the second quarter, $141 in the third quarter and $143 in the fourth quarter. ERS pegs the average annual price for next year at $144.25.

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

Cattle Current Daily—June 16, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service (AMS). Although too few to trend, there were a few dressed trades at $195/cwt., compared to $190-$191 last week. Elsewhere, trade ranged from mostly inactive on very light demand to a standstill.

Live prices last week were at mostly $119-$120 in the Southern Plains, $120 in Nebraska and $120-$121 in the western Corn Belt.

The recent decline in Corn futures moderated Tuesday but continued to bolster Cattle futures, which were also supported by the outlook for steady to higher cash prices this week.

Feeder Cattle futures closed an average of $1.34 higher (62¢ to $2.22 higher).

Live Cattle futures closed an average of $1.91 higher through the front four contracts ($1.32 to $1.62 higher) and then an average of 26¢ higher, except for 12¢ lower in the back two contracts.

Choice boxed beef cutout value was $1.04 lower at $334.43/cwt. Select was $5.13 lower at $298.28. At $36.15, the Choice/Select spread was the highest since June 2017, when it peaked at $30.92.

Grain futures continued mainly lower Tuesday with the progress-friendly weather forecast in the Corn Belt.

Corn futures closed mostly 3¢ to 7¢ lower, except for 8¢ higher in spot Jly.

Soybean futures closed mostly 17¢ to 21¢ lower.

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Major U.S. financial indices softened Tuesday, with weaker economic data.

Advance estimates of U.S. retail and food services sales for May 2021 were less than expected at $620.2 billion, a decrease of 1.3% month to month, according to the U.S. Census Bureau.

The Producer Price Index (PPI) for final demand increased 0.8% in May, according to the U.S. Bureau of Labor Statistics. On an unadjusted basis, the final demand index advanced 6.6% for the 12 months ended in May, the largest increase since 12-month data were first calculated in November 2010.

The Dow Jones Industrial Average closed 94 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 101 points.

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U.S. beef exports this year are forecast to exceed the level of the last two years and perhaps that of the record year in 2018, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

As noted in Cattle Current last week, U.S. beef exports set another new value record in April at $808.3 million, up 35% from a year ago, according to data released by USDA and compiled by the U.S. Meat Export Federation. Export volume was 23% more year over year and the fifth largest on record at 121,050 metric tons (mt).

“Beef exports represent a component of total beef demand in terms of quantity and value,” Peel says, in his weekly market comments. “Moreover, beef exports represent a wide range of product types and qualities exported to various markets and augment domestic beef demand by providing markets for products less desired in the U.S.” He explains exporting products that have more value to international consumers than domestic ones enables maximizing domestic beef value.

U.S. beef export value per head of fed slaughter reached a new monthly high in April at $367.45.

More broadly, total global food and agricultural exports grew by almost $52 billion last year (+3.2% annualized), according to the Food and Agriculture Organization of the United Nations (FAO). Developing countries accounting for about 40% of the increase.

This year, FAO forecasts global agricultural exports to increase 8%, or $137 billion. Much of that growth reflects demand from East Asia.

FAO analysts expect meat production this year to increase 2% to 346 million tons, reflecting an anticipated rebound in meat production in China, especially for pork.

“The average worldwide consumer price of protein in May 2021 was 23% above its May 2020 level,” according to FAO’s semiannual Food Outlook. “Calories, in prices, meanwhile, were up 34% year-on-year and hit their highest level since February 2013. The difference reflects stronger price rises for wheat, coarse grains and vegetable oils compared to meats, dairy products and fish.”

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

Cattle Current Daily, June 15, 2021

Negotiated cash fed cattle trade was limited on very light demand in Nebraska through Monday afternoon, according to the Agricultural Marketing Service. There were a few live sales at $124/cwt., but too few to trend. Elsewhere, trade was at a standstill.

Live prices last week were at mostly $119-$120 in the Southern Plains, $120 in Nebraska and $120-$121 in the western Corn Belt. Dressed trade was at $190-$191.

Feeder Cattle futures roared higher Monday, buoyed by a sharp break in Corn futures. Live Cattle futures edged higher, with interest apparently constrained by what appears to be post-top wholesale prices for a while.

Feeder Cattle futures closed an average of $2.78 higher ($2.00 higher at the back to $3.42 higher at the front). That’s right at an average of $5 higher in the last two sessions.

Live Cattle futures closed an average of 48¢ higher.

Choice boxed beef cutout value was $2.09 lower through Monday afternoon at $335.47/cwt. Select was $1.80 lower at $303.41.

Grain futures prices fell Monday, swamped by more weekend rain than expected in the Corn Belt, as well as increased chances for rain and cooler temperatures in that region for the next couple of weeks.

Corn futures closed 25¢ to 31¢ lower through Jly ‘22, and mostly 13¢ and 16¢ lower. 

Soybean futures closed mostly 31¢ to 41¢ lower.

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Major U.S. financial indices closed mixed Monday, with the strongest performance in tech stocks.

The Dow Jones Industrial Average closed 85 points lower. The S&P 500 closed 7 points higher. The NASDAQ closed 104 points higher.

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Nationally, pasture and range conditions held about steady, according to the latest USDA Crop Progress report, for the week ending June 13.

35% of pasture and range was rated as Good (28%) or Excellent (7%), the same as a week earlier, but 10% less than a year earlier. Conversely, 36% was rated as Poor (20%) or Very Poor (16%), compared to 37% a week earlier and 22% a year earlier.

According to the U.S. Drought Monitor (week beginning June 10), 61.2% of the continental U.S. ranged from abnormally dry to Exceptional Drought. That was 2.1% more than the previous week, but 5.2% less than at the beginning of the year.

Crop progress continues strong for row crops.

96% of corn was emerged, which was 2% more than last year and 5% more than the five-year average. 68% was in Good (56%) or Excellent (12%) condition, which was 4% less than the previous week and 3% less than the five-year average.

94% of soybeans were in the ground, which was 2% more than last year and 6% more than the average. 86% were emerged, which was 7% more than the prior year and 12% more than the five-year average. 62% were in Good (53%) or Excellent (9%) condition, which was 5% less than the previous week and 10% less than the same week last year.

92% of winter wheat was headed, compared to 90% the previous year and 92% for the five-year average. 4% was harvested, which was 10% less than a year earlier and 11% less than average. 48% was rated in Good (40%) or Excellent (8%) condition, compared to 50% the prior week and a year earlier. 20% was rated Poor (14%) or Very Poor (6%) compared to 18% a week earlier and 19% at the same time last year.

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

Cattle Current Daily—June 14, 2021

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

Negotiated cash fed cattle prices for the week were mainly steady at mostly $120/cwt. on a live basis, except for $2 higher in the western Corn belt at $122. Dressed trade was steady at $190-$191.

Cattle futures gained Friday with support from softer Corn futures, continued elevated consumer demand and the likelihood improved supply fundamentals are getting closer.

Feeder Cattle futures closed an average of $2.19 higher ($1.57 higher at the back to $2.77 higher at the front).

Live Cattle futures closed an average of $1.16 higher.

Choice boxed beef cutout value was 48¢ lower at $337.77/cwt. Select was $4.89 lower at $305.51.

Estimated total cattle slaughter the week ending June 12 was 665,000 head, according to USDA. That was 127,000 more than the previous holiday-shortened week. Estimated beef production of 545.7 million lbs. was 102.7 million lbs. more.

Corn and Soybean Futures softened Friday with more near-term rain forecast for the Corn Belt and likely week-end profit taking.

Corn futures closed mostly 1¢ to 6¢ lower, except for 14¢ and 8¢ lower in the front two contracts.

Soybean futures closed 20¢ to 35¢ lower through Jan ‘22, 11¢ to 18¢ lower through the next five contracts, and then mostly 3¢ to 6¢ lower.

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Major U.S. financial indices closed higher again Friday, with investors apparently feeling confident the surging inflation suggested by the previous day’s Consumer Price Index is transitory.

The Dow Jones Industrial Average closed 13 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 49 points. 

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USDA announced Friday it is beginning work on three proposed rules to support enforcement of the Packers and Stockyards (P&S) Act.

“The Packers and Stockyards Act is a vital tool for protecting farmers and ranchers from excessive concentration and unfair, deceptive practices in the poultry, hog, and cattle markets, but the law is 100 years old and needs to take into account modern market dynamics. It should not be used as a safe harbor for bad actors,” says Agriculture Secretary Tom Vilsack. “The process we’re beginning today will seek to strengthen the fairness and resiliency of livestock markets on behalf of farmers, ranchers and growers.”

First, USDA intends to propose a new rule that will provide greater clarity to strengthen enforcement of unfair and deceptive practices, undue preferences, and unjust prejudices. Second, USDA will propose a new poultry grower tournament system rule, with the current inactive proposal to be withdrawn. Third, USDA will re-propose a rule to clarify that parties do not need to demonstrate harm to competition in order to bring an action under section 202 (a) and 202 (b) of the P&S Act.

As an aside, the latter point will likely be a sticky subject. Previously, much of the cattle industry rallied against a similar proposal. In part, the opposition was based on worries that it would lead packers to pay the same price to everyone — no premiums or discounts — rather than risk lawsuits.

USDA’s pending action was noted in the Unified Agenda of Regulatory and Deregulatory Actions released by the White House Office of Management and Budget (OMB).

Earlier last week, USDA announced $4 billion in assistance as part of the Build Back Better initiative, an effort designed to strengthen and transform critical parts of the U.S. food system. Investments made through Build Back Better will include a mix of grants, loans and innovative financing to address the shortage of small meat processing facilities across the country as well as the necessary local and regional food system infrastructure needed to support them.

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

Cattle Current Daily—June 11, 2021

Compared to the previous month, USDA increased projected 2021 beef production by 5 million lbs. to 27.905 billion lbs., in the latest World Agricultural Supply and Demand Estimates (WASDE). Analysts with the Economic Research Service (ERS) note higher expected cow slaughter is largely offset by lower steer and heifer slaughter.

USDA forecast the five-area direct fed steer price 70¢ higher for this year to $117/cwt., reflecting current price strength. Projected average prices are $120 in the second quarter, $115 in the third quarter and $120 in the fourth quarter.

Negotiated cash fed cattle trade in the Southern Plains was at a standstill through Thursday afternoon, according to the Agricultural Marketing Service. For the week so far, live sales are at $119-$120/cwt.

Elsewhere, trade ranged from slow to inactive on light demand.

Live sales in Nebraska and the western Corn Belt earlier in the week were at $120 on a live basis and at $190-$191 in the beef.

Cattle futures traded mostly higher on Thursday, amid light trade, especially for Live Cattle.

Feeder Cattle futures closed an average of 36¢ higher.

Live Cattle futures closed an average of 19¢ higher, except for down an average of 10¢ in the back two contracts.

Choice boxed beef cutout value was 40¢ lower Thursday afternoon at $338.25/cwt. Select was $2.53 higher at $310.40

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Despite USDA lowering projecting beginning and ending corn stocks by 150 million bu. in the latest World Agricultural Supply and Demand Estimates, Corn Futures trended mostly 3¢ to 6¢ higher with support from the weather outlook. The WASDE left the projected season-average corn price unchanged at $5.70/bu.

USDA forecast beginning soybean stocks (2021-22) 15 million bu. more month to month. Ending stocks were projected 15 million bu. higher at 155 million bu. The season-average soybean price remained unchanged at $13.85/bu.

Soybean futures closed mixed, with the front three contracts down fractionally to 18¢, then up between 4¢ to 11¢ through Sep ’22.

Soybean futures closed 13¢ and 18¢ lower in the front two contracts, then mainly 8¢ to 11¢ higher through new-year contracts, followed by mostly 5¢ to 7¢ lower the rest of the way.

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Major U.S. financial indices closed higher on Thursday, despite the Consumer Price Index coming in a little stronger than expected. A wide array of analysts viewed increased consumer prices as expected in the categories bolstered by the reopening of the economy rather than a long-term rise in inflation.

The Dow Jones Industrial Average closed 19 points higher. The S&P 500 closed 20 points higher. The NASDAW was up 109 points.

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JBS USA (JBS) announced yesterday it’s investing $130 million to increase production capacities at two of its major beef processing facilities in Nebraska. The company is on schedule to complete, in late summer, a significant expansion of its Grand Island beef production facility, including the construction of a new harvest floor and enhanced animal welfare facilities. JBS is also expanding cooler capacity and upgrading the fabrication floor at its Omaha beef production facility. The expanded facilities and upgrades will increase processing capacity by nearly 300,000 head of cattle per year, according to the company.

“At JBS USA, we recognize the importance and cultural significance of beef – from the men and women who raise cattle, to the frontline essential workers who process beef, to the families who enjoy a tender steak or hamburger as part of the family meal,” says Tim Schellpeper, President of the JBS USA Fed Beef business unit. “Our longstanding commitment to the U.S. beef industry and continued reinvestment in its success will help ensure that beef remains at the center of plates around the world for years to come.”

To ensure consistent access to a skilled workforce, JBS also increased annualized wages by $150 million over the last 12 months. This permanent yearly investment is in addition to more than $71 million in short-term incentives and non-permanent bonus payments JBS provided to its U.S. beef workforce during the pandemic.

The JBS USA Grand Island facility is a two-shift, beef-processing plant in central Nebraska employing more than 3,600 people. Grand Island has the capacity to process more than 1.4 million cattle per year and currently exports to 20 different countries. The Omaha facility is a single-shift, beef processing plant employing more than 650 people. The plant offers a range of high-end specialty beef products.

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

Cattle Current Daily—June 10, 2021

Negotiated cash fed cattle trade in the Southern Plains, Nebraska and Western Corn Belt was limited on moderate demand through Wednesday afternoon, according to the Agricultural Marketing Service. In the Texas Panhandle live sales were steady to 50¢ lower than last week at $119.50 to $120.00/cwt. In Kansas, live sales traded mostly steady at $120.00. In Nebraska, a few live sales traded from $120 to $121.

Cattle futures traded mixed Wednesday. Higher Corn futures pressured Feeder Cattle once again, while steady cash helped Live Cattle tread water.

Feeder Cattle futures closed an average of $1.11 lower (52 to $1.47 lower), except for unchanged and up $1.02 in the back two contracts.

Live Cattle futures closed narrowly mixed, from an average of 36¢ lower to an average of 35¢ higher.

Choice boxed beef cutout value was 4¢ higher Wednesday afternoon at $338.65/cwt. Select was $1.69 higher at $307.87

Grain markets were mixed on Wednesday, with corn futures getting help from ethanol demand and soybeans down across most of the board. The monthly World Agricultural Supply and Demand Estimates due out Thursday will likely have plenty to say about direction for the rest of the week.

Corn futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed 13¢ to 17¢ lower through the front three contracts and then mostly 3¢ to 7¢ lower.

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Major U.S. financial indices closed lower on Wednesday with investors apparently jittery about Thursday’s inflation reading.

The Dow Jones Industrial Average closed 153 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 13 points.

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U.S. beef exports set another new value record in April at $808.3 million, up 35% from a year ago, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Export volume was 23% more year-over-year and the fifth largest on record at 121,050 metric tons (mt).

“Looking back at April 2020, it was a difficult month for red meat exports as we began to see COVID-related supply chain interruptions, and foodservice demand took a major hit in many key markets,” says Dan Halstrom, USMEF President and CEO. “While it is no surprise that exports performed much better in April 2021, we are pleased to see that global demand continued to build on the broad-based growth achieved in March.”

Beef export value per head of fed slaughter reached a new monthly high in April at $367.45.

As for customers, April beef exports to South Korea increased 21% from a year ago and just missed setting a new value record at $182.7 million. Beef exports to China continued to soar in April, reaching a record 17,233 mt (up from just 1,367 mt a year ago). Export value to China was $130.6 million – up from $11.5 million.

U.S. pork exports built on the previous month’s record pace as well. Pork exports were the sixth largest on record in April at 269,918 mt, up 2% from a year ago. Export value was $749.2 million, up 10% and the fourth highest on record.

Halstrom cautioned that the COVID-19 pandemic is still a major concern for the U.S. meat industry, adding uncertainty to the business climate in many export destinations. Logistical challenges, including container shortages and ongoing vessel congestion at many U.S. ports, also present significant obstacles for red meat exports.

“While conditions are improving in many key markets, the COVID impact is the most intense it has ever been in Taiwan and heightened countermeasures are also in place in Japan and other Asian countries,” Halstrom explains. “But foodservice activity is climbing back in our Latin American markets and retail demand – both in traditional settings and in e-commerce – has been outstanding and USMEF continues to find innovative ways for the U.S. industry to capitalize on these opportunities. We are also working with ag industry partners and regulatory agencies to find ways to improve the flow of outbound cargo, which is essential to maintaining export growth.”

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

Cattle Current Daily—June 9, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Tuesday afternoon, according to the Agricultural Marketing Service. Last week in the Southern Plains, live sales traded at $120. In Nebraska and the Western Corn Belt, trade was slow on moderate demand. Live sales in Nebraska traded steady at $120, dressed at $190-$191. In the Western Corn Belt, a few lives sales traded from $120-$121 and dressed from $190-$193. In Kansas, trading was limited on light demand with a few live sales at $119.

Cattle futures traded mixed Tuesday with Feeder Cattle mainly pressured by higher Corn futures, while Live Cattle edged higher, helped along by early cash direction.

Feeder Cattle futures closed an average of 59¢ lower through the front half of the board and then an average of 30¢ higher, except for $1.15 lower in the back contract.

Live Cattle futures closed an average of 36¢ higher, except for 30¢ lower in the back contract.

Choice boxed beef cutout value was 1¢ higher Tuesday afternoon at $338.61/cwt. Select was $2.99 lower at $306.18

A continued hot and dry forecast in the Midwest and Northern Plains helped push  grain markets higher on Tuesday.

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed mostly 6¢ to 17¢ higher, except for 15¢ to 17¢ lower in most ‘23 contracts.

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Major U.S. financial indices were little changed Tuesday with some investors likely waiting for Thursday’s inflation reading that comes with the consumer price index. The Dow Jones Industrial Average closed 31 lower. The S&P 500 closed 1 point higher. The NASDAQ up 43 points.

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Good, bad or otherwise, the state of cattle markets is drawing more Congressional attention.

Yesterday, Representative Vicky Hartzler (R-MO) introduced the Optimizing the Cattle Market Act of 2021 in the U.S. House. The legislation builds on a growing consensus among cattle producers, industry leaders, and Members of Congress that current market dynamics are unsustainable for the beef supply chain.

If enacted, the bill would direct the U.S. Department of Agriculture (USDA) to create a cattle formula contracts library, and increase the reporting window for “cattle committed” from seven to 14 days. These measures would increase transparency in the industry and improve the opportunity for robust price discovery.

Rep. Hartzler’s legislation also reiterates the need for expedited reauthorization of USDA’s Livestock Mandatory Reporting (LMR) program. That jibes with one of the recommendations from the coalition of national cattlemen’s organizations that met last month.

The bill would also require USDA, in consultation with the Chief Economist, to establish mandated minimums for regional negotiated cash and negotiated grid live cattle trade. Minimums would be set within two years of passage of the bill, and would invite stakeholder input through a public comment period and the consideration of key, peer-reviewed research from land grant universities.

Mandatory requirements versus voluntary ones remain a difference of opinion between producers and producer groups. In the case of the National Cattlemen’s Beef Association (NCBA), for instance, grassroots policy supports voluntary regional minimums, but also provides for pursuing a legislative or regulatory solution determined by membership. 

“The growing momentum we’re seeing in the House and Senate behind addressing these critical concerns in the cattle markets is reflective of the urgency producers are feeling across the country,” says Ethan Lane,  NCBA Vice President of Government Affairs. “Extreme market volatility, unpredictable input costs, a shifting regulatory landscape and natural crises like drought leave cattle farmers and ranchers with a growing list of threats to their continued financial viability. Something needs to give.”

Also on Tuesday, Representative Mike Guest (R-MS) and Representative Darren Soto (D-FL) led a bipartisan group of 52 lawmakers in pushing the U.S. Department of Justice (DOJ) to complete its investigation into the meatpacking sector, and whether or not anticompetitive practices have contributed to a persistent imbalance in the cattle markets.

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

Cattle Current Daily—June 8, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Western Corn Belt through Monday afternoon, according to the Agricultural Marketing Service. In Nebraska, trading was mostly inactive with very light demand. Last week, live prices were at $120. Dressed prices in Nebraska and the Western Corn Belt were at $190-$191.

Cattle futures tread water to the downside Monday with pressure from new-crop grain prices and the appearance of an imminent top for wholesale beef values.

Feeder Cattle futures closed an average of 18¢ lower, except for 28¢ and 55¢ higher at either end of the board.

Live Cattle futures closed an average of 33¢ lower through the front four contracts and then an average of 68¢ higher (37¢ higher to $1.60 higher in the back contract).

Choice boxed beef cutout value was 38¢ lower Monday afternoon at $338.60/cwt. Select was $2.56 lower at $309.17.

Except for nearby contracts, grain futures continued to extend gains Monday.

Corn futures closed 10¢ to 14¢ higher in new-crop contracts, and then mostly 4¢ to 7¢ higher. Spot Jly was down 3¢.

Soybean futures closed mostly 7¢ to 14¢ higher, except for 4¢ to 23¢ lower in the front three contracts.

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Major U.S. financial indices fell on Monday, due mostly to concern over inflation risks and speculation about the Fed’s looming decision on interest rates. However, the NASDAQ gained on biotech stocks.

The Dow Jones Industrial Average closed 126 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 67 points.

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“Calmer times may be coming but we are not quite there yet,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “It will take a few more weeks to work through current fed cattle supplies and get the packing industry below capacity constraints. That will allow fed cattle markets to once again fully reflect market conditions.”

Peel points out domestic and international beef markets are very strong as economies continue to open.

“Feed prices are expected to remain elevated and feeder cattle markets will continue to adjust to both feed market and fed cattle market conditions,” Peel says. “Drought impacts remain uncertain and the short-term and long-term impacts on cattle markets are unknown. If enough herd liquidation is forced by the drought, short-term cattle slaughter and beef production will be higher than expected and beef production prospects beyond 2021 will be reduced.”

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

Cattle Current Daily—June 7, 2021

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on light demand.

Regionally, negotiated prices last week were mostly steady to $1 either side of steady. Live prices were at $120/cwt. and dressed prices were at $189-$191.

Estimated total cattle slaughter for the week ending June 5 was 538,000 head, according to USDA. That was 91,000 head fewer than the previous week and 90,000 head fewer than the same week a year earlier. Estimated beef production for the week was 443.0 million lbs., which was 75 million lbs. less than the previous week.

Surging Corn futures prices hammered Feeder Cattle futures on Friday. It’s likely week-end profit taking also played a role.

Feeder Cattle futures closed an average of $2.09 lower ($1.32 lower at the back to $3.02 lower in spot Aug).

Although mainly lower Friday, Live Cattle futures continued to consolidate, supported by wholesale beef values and slaughter data suggesting a return to post-pandemic normal following disruptions at JBS earlier in the week.

Live Cattle futures closed an average of 47¢ lower, except for 5¢ and $1 higher at either end of the board and unchanged in away Aug.

Net U.S. beef export sales of 12,600 metric tons for 2021 were 55% less than the previous week and 38% less than the prior four-week average, according to USDA’s Export Sales report for the week ending May 27. Increases were primarily for Japan, South Korea, Taiwan, Mexico and Chile.

Choice boxed beef cutout value was $1.57 lower Friday afternoon at $338.98/cwt. Select was $1.43 lower at $311.73.

Grain markets were sharply higher on Friday as extreme heat gripped the Western Corn Belt and Northern Plains.

Corn futures closed up through Jul ’22 an average of 24¢ higher.

Soybean futures closed up an average of 33¢ through Jan ’22.

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Major U.S. financial indices rallied on Friday despite a somewhat disappointing jobs report and downward pressure on the dollar. The S&P 500 almost hit an all-time high as investor anxiety seemed to lessen about the Federal Reserve changing rates and tapering support. NASDAQ posted its best day in three weeks.

The Dow Jones Industrial Average closed 179 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 200 points.

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Drought continues to elevate beef cow slaughter.

“The start of pasture and range conditions (this year) was the worst since the 2012 and 2013 growing seasons. These early weeks are showing a large portion of the U.S. was already requiring supplemental feed to maintain herds,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “For the west, this is a second year of continued hardship and will result in a second year of beef cow culling. As of this week (June 4) about 25% of the beef cowherd was in areas where pasture and range conditions were assessed as poor and very poor. This is an improvement from a few weeks ago, when 40% of the cowherd was assessed to be in those conditions. Still, pasture and range is not improving evenly.”

More specifically, utilizing regional USDA cow slaughter reports, LMIC analysts point out beef cow slaughter is 29% higher year over year in Region 5 (IL, IN, MI, MN, OH, WI), 12% higher in Region 6 (AR, LA, NM, OK, TX) and 18% higher in Region 9 (AZ, CA, HI, NV).

“Total U.S. beef cow slaughter in federally inspected plants is up 10.1% year to date,” explain LMIC analysts. “In the last couple of weeks, beef cow slaughter accelerated, hitting above 70,000 head per week. The percent change is being amplified by below average slaughter levels of last year during April and May…In addition to the West, drought has been creeping into the Southeast, and the Northern Plains continue to struggle with limited moisture.”

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

Cattle Current Daily—June 4, 2021

Negotiated cash fed cattle trade was at a standstill in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light to moderate demand.

So far this week, live sales are steady to $4 higher in the Texas Panhandle at $120/cwt., steady in Kansas at $119 to $120 and steady at $120 in Nebraska and the western Corn Belt. Dressed trade is steady with the upper end of last week’s range at $190-$191.

Cattle futures, especially Feeder Cattle faded early pressure to close mainly higher Thursday with continued support from higher wholesale beef values.

Feeder Cattle futures closed an average of $1.54 higher (62¢ higher in spot Aug to $2.92 higher at the back).

Live Cattle futures closed an average of 60¢ higher (12¢ to $1.02 higher), except for an average of 44¢ lower in the front three contracts.

Choice boxed beef cutout value was 39¢ higher Thursday afternoon at $340.55/cwt. Select was $1.28 higher at $313.16.

Grain markets were mainly lower on Thursday with weather forecasts continuing to cast a shadow.

Corn futures closed 6¢ to 13¢ lower through Jly ’22 and then mostly unchanged to fractionally higher.

Soybean futures closed 9¢ to 13¢ lower through Jan ‘22 and then mostly 5¢ higher, except for fractionally lower to 4¢ lower in a few middle contracts.

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Major U.S. financial indices fell on Thursday with uncertainties about the strength of the economy and anticipation over when the Federal Reserve may slow or stop support. Friday’s jobs report is expected to give a strong indication of where the economy stands.

The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 142 points.

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Agricultural producer sentiment declined significantly last month, according to the Purdue University/CME Group Ag Economy Barometer. Month to month, the index dropped 20 points to 158, the lowest level since September last year.

“The potential for changing tax rules and rising input costs appeared to be on producers minds this month and were the primary drivers for the Ag Barometer’s decline,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

More specifically, producers’ expectations for good versus bad times in U.S. agriculture shifted dramatically. In May, just 27% of respondents said they expect good times in U.S. agriculture during the next five years, the lowest reading in the survey’s history and down 12 points from a month earlier. One driver appears to be the dichotomy between expectations for the crops versus livestock sectors. More than half (54%) of respondents said they expect widespread good times for the crops sector in the next five years, but just one-fourth (26%) of producers said they expect the same for the livestock sector.

“The difference in expectations for these two principal sectors of the agricultural economy could help explain why producers appear to be very bullish about farmland values and cash rental rates while at the same time expressing less optimism about both current conditions and future expectations for the agricultural economy overall,” Mintert says.

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

Cattle Current Daily—June 3, 2021

Negotiated cash fed cattle trade was limited on light demand in the Southern Plains. A few live sales in the Texas Panhandle traded from $119 to $120/cwt. through Wednesday afternoon, according to the Agricultural Marketing Service. In Kansas, a few live purchases traded at $120. In Nebraska and the Western Corn Belt, negotiated cash trading was slow with moderate demand. There were a few dressed trades in Nebraska at $190 to $191. In the western Corn Belt, there were a few live sales at $120 and few in the beef at $190-$191.

Feeder Cattle futures rallied higher with news JBS was resuming operations following the cyber-attack on its IT systems.

Feeder Cattle futures closed an average of $2.08 higher, from $3.18 to $2.40 higher in the front three months and $1.90 to $1.40 higher across the rest of the board.

Live Cattle futures closed an average of $1.61 higher, with the most gain ion the front two contracts. Only Apr ’22 and Jun ’22 gained less than $1 at 75¢ and 88¢ respectively.

Choice boxed beef cutout value was was $5.60 higher Wednesday afternoon at $340.16/cwt. Select was $5.43 higher at $311.88.

Grain markets were mixed on Wednesday with weather weighing on the corn market.

Corn futures closed down across the board an average of 6¢ lower through Jly ‘22.

Soybean futures closed up up an average of 16¢ through Mar ’22.

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Major U.S. financial indices closed narrowly higher on Wednesday, remaining near all-time highs.

The Dow Jones Industrial Average closed 25 points higher at 34,600. The S&P 500 closed 6 points higher at 4,208. The NASDAQ closed 20 points higher at 13,756.

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“Cattle producers are frustrated, and with good reason. In sale barns and state meetings across the country, we’re hearing the same story of sky-high input costs and intense market volatility. Across the industry, there’s a consensus that market dynamics which consistently squash producer profitability are not sustainable for live cattle or beef producers,” says NCBA President Jerry Bohn, president of the National Cattlemen’s Beef Association (NCBA). “As members of Congress create policy that directly impacts business conditions for our producers, it is critical that they consider the grassroots input and firsthand experiences of folks on the ground. Our letter provides that perspective and reinforces how urgently we need something to shift here to strengthen the security of the beef supply chain. NCBA has strong working relationships with members on both sides of the aisle, we have grassroots policy to back the actions we outlined today, and we hope the conversation in Washington around these critical policy areas will progress quickly.”

The letter Bohn refers to is one NCBA sent—with the support of 37 affiliate state cattle organizations— urging the leadership of the U.S. Senate and House Agriculture Committees to address critical areas of concern in the cattle and beef industry.

Specifically, NCBA pushed Sen. Debbie Stabenow (D-MI), Sen. John Boozman (R-AR), Rep. David Scott (D-GA-13), and Rep. Glenn “GT” Thompson (R-PA-15) to consider swift Congressional action to:

  • Expand beef processing capacity
  • Broaden labor policies to strengthen the beef processing workforce
  • Increase transparency in cattle markets by reauthorizing Livestock Mandatory Reporting (LMR)
  • Support industry efforts to reform “Product of the USA” generic labeling
  • Ensure proper oversight of cattle market players by concluding the ongoing U.S. Department of Justice investigation into the meatpacking sector
By | June 3rd, 2021|Daily Market Highlights|

Cattle Current Daily—June 2, 2021

Cattle futures dropped hard Tuesday, in response to the uncertainties spawned by disruptions to JBS processing facilities, caused by the Sunday cyber-attack on that company’s global IT infrastructure. They clawed back some of the losses by the end of the session, though.

According to a JBS news release: “On Sunday, May 30, JBS USA determined that it was the target of an organized cyber-security attack, affecting some of the servers supporting its North American and Australian IT systems. The company took immediate action, suspending all affected systems, notifying authorities and activating the company’s global network of IT professionals and third-party experts to resolve the situation. The company’s backup servers were not affected, and it is actively working with an Incident Response firm to restore its systems as soon as possible.

“The company is not aware of any evidence at this time that any customer, supplier or employee data has been compromised or misused as a result of the situation. Resolution of the incident will take time, which may delay certain transactions with customers and suppliers.”

Widespread reports suggested JBS packing facilities closed. At press time there was no word on when normal production would resume. However, there were unconfirmed reports Tuesday evening that operations would resume Wednesday.

There was no negotiated trade report from the Agricultural Marketing Service as of press time Tuesday evening.

Negotiated cash fed cattle prices last week were at $116-$120/cwt. in the Texas Panhandle, at $119-$120 in Kansas and at $120 in Nebraska and the western Corn Belt. Dressed prices were at $191 in Nebraska and at $189-$191 in the western Corn Belt.

Feeder Cattle futures closed mixed on Tuesday, with JBS uncertainty weighing on the front months.

Feeder Cattle futures closed an average of $1.28 lower through the front half of the board, (45¢ lower to $2.20 lower in spot Aug) and then an average of 36¢ higher.

Live Cattle futures closed an average of $1.70 lower in the front three contracts (77¢ to $2.32 lower) and then an average of 89¢ higher, except for unchanged in the back contract.

Choice boxed beef cutout value was $3.59 higher Tuesday afternoon at $334.56/cwt. Select was $5.55 higher at $306.45.

Grain markets were up on Tuesday on news of a hot, dry forecast for the next two weeks in northern U.S. growing areas as well as southern Canada. Brazil’s drought also worsened.

Corn futures closed 28¢ to 32¢ higher through Jly ’22 and then mostly 10¢ to 15¢ higher.

Soybean futures closed mostly 16¢ to 24¢ higher.

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Major U.S. financial closed narrowly mixed Tuesday as investors wait for economic data coming out this week to indicate how well the economy is rebounding and to get a feel for inflation.

The Dow Jones Industrial Average closed 46 points higher. The S&P 500 2 points lower. The NASDAQ closed 12 points lower.

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“With the economy opening up and growing rapidly, meat markets of all types are enjoying strong demand,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “In numerous cases, wholesale prices for specific meat products are at record levels, exceeding the levels provoked by the pandemic disruptions one year ago; and unlike last year, lack of supply is not the issue. Year-to-date production of beef, pork and broilers is higher, not only compared to last year but also compared to 2019 levels.”

Wholesale beef tenderloin set a new record at more than $17/lb., Peel says, in his weekly market comments. Ribeye prices also set a new record at more than $13/lb.

“Tenderloin is almost exclusively a restaurant item, while ribeye is popular in restaurants, at retail grocery and for export,” Peel explains. “Strip loins are very popular at retail grocery and prices have also increased sharply this year but failed to exceed the pandemic levels from last year. Brisket prices have increased dramatically since January, averaging over $7/lb. in May; another indication that BBQ is back.”

Prices for chuck and round products—driven by retail grocery for use as value cuts and ground beef—are higher, too, but less steeply than middle meats, Peel says.

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

Cattle Current Daily—May 31 and June 1, 2021

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

Live prices last week were steady to $3 lower in the Texas Panhandle at $116-$120/cwt., steady to $1 lower in Kansas at $119-$120 and steady at $120 in Nebraska and the western Corn Belt. Dressed prices were steady to $1 higher in Nebraska at $191; steady in the western Corn Belt $189-$191.

Live Cattle futures closed mixed Friday, an average of 46¢ lower through the front four contracts, and then unchanged to an average of 7¢ higher. Part of the pressure likely stemmed from the lack of budge in cash prices, while the rally in wholesale beef values appears long in the tooth.

Choice boxed beef cutout value was 99¢ higher Friday at $330.97/cwt. Select was $3.20 lower at $300.90.

Feeder Cattle futures closed an average of $1.28 lower. Even though Corn futures were mostly 3¢ to 9¢ lower, the steep climb in the previous session continued to apply pressure. Feeder Cattle were down an average of about $3 in the last two sessions.

Total estimated cattle slaughter the week ending May 29 was 629,000 head, according to USDA. That was 40,000 head fewer than the previous week. Total estimated beef production for the week was 518.0 million lbs., which was 32.7 million lbs. less than the prior week.

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Major U.S. financial indices edged higher Friday on generally positive economic news.

Personal consumption expenditures (PCE), excluding food and energy, increased $80.3 billion (0.5%), according to the U.S. Bureau of Economic Analysis. The core PCE price index, excluding food and energy—a key inflation gauge the Federal Reserve monitors—was 3.1% more than a year earlier, according to the U.S. Commerce Department. The pace of inflation was slightly more than analyst expectations but reportedly less than many traders feared.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 12 points.

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Between new packing plants and plans for expanding current facilities, the North American Meat Institute (the Meat Institute) estimates there’s an additional 4,150 head per day (+4%) packing capacity in various stages of completion. However, even with added capacity, Sarah Little, vice president of communications for the Meat Institute explains, “Labor is, and is likely to remain, a significant factor that affects utilization of production; and is also a factor that will challenge new small and medium sized facilities entering the market.”

As mentioned previously in Cattle Current, there are no easy solutions to the ongoing predicament of lower derivative demand for fed cattle from packers, relative to elevated derivative demand from wholesalers and overall strong consumer beef demand. Economic fundamentals explain the current reality, no matter how frustrating.

Plenty of emotion is understandably involved, but sharing myths as fact hinders legitimate discussion and the search for long-term market solutions. With that in mind, the Meat Institute shared facts to counter several popular cattle market myths. Among them:

Myth: Fed cattle marketing options such as forward contracting and formula-based sales, allow meatpackers to exert more control, limit competition and depress sales in the live cash market.

Fact: Forward contracts and formula-based sales provide an effective way for producers to hedge their risk and lock in prices. They also often pay premiums for quality. This allows packers and producers and feeders to predict needs in advance…In its 2018 report to Congress, USDA’s Agricultural Marketing Service reported, “Stakeholders were in general agreement that formula-based purchases provide greater benefits, in terms of operational efficiency, for both packers and feedlots.”

Fact: From 2002 to 2019, according to USDA data compiled by economist and industry expert Nevil Speer, PhD, while the number of cattle sold on a cash market basis declined 55%, beef grading in the top two quality grades (Choice and Prime) increased 39%. During the same period of time, consumer per capita beef expenditures increased 56%.

Myth: Packers can control prices and defy expectations of market fundamentals.

Fact: The cattle market works as economists would have predicted, given the current conditions: when supplies of cattle increase, prices decrease, and vice versa.

Fact: There appears to be insufficient long-term profitability to attract many investors to the beef packing sector. According to Rabobank analysts, “Several considerable hurdles must be addressed by both incumbents and new entrants…First, the upfront cost of a new plant is extremely expensive…$100 million to $120 million USD for every 1,000 head of daily capacity.

“… the capital depth and longevity required to build and maintain a new plant through its first cattle cycle precludes most would-be investors from considering such a project…That’s not a recipe for thin capital or weak hearts.”

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

Cattle Current Daily—May 28, 2021

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

So far this week, live prices are $116-$120/cwt. in the Texas Panhandle, $119-$120 in Kansas and at $120 in Nebraska and the western Corn Belt. Dressed prices are at $191 in Nebraska and $189-$191 in the western Corn Belt.

Feeder Cattle futures closed an average of $1.69 lower Thursday, from 20¢ lower in spot May to $2.35 lower. Corn futures applied the pressure, up 33¢ to 40¢ higher through Jly ’22 and then mostly 13¢ to 24¢ higher. Dryness in the forecast and strong exports helped fuel the bounce. Soybean futures tagged along, closing 26¢ to 34¢ higher.

Live Cattle futures edged an average of 20¢ higher, except for 10¢ lower in spot Jun. Support included positive export news.

Net U.S. beef export sales of 27,900 metric tons (mt) for 2021 were 19% more than the previous week and 45% more than the prior four-week average, according to USDA’s U.S. Export Sales report for the week ending May 20. Increases were primarily for China, Japan, South Korea, Indonesia, and Taiwan.

Choice boxed beef cutout value was 49¢ higher Thursday afternoon at $329.98/cwt. Select was 5¢ higher at $304.10

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Major U.S. financial indices closed flat to higher Thursday, supported by fewer initial weekly unemployment insurance claims than analysts expected. Initial claims were 406,000 for the week ending May 22, according to the U.S. Department of Labor. That was 38,000 fewer than the previous week and the least since March of last year.

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 1 point.

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La Niña conditions ended earlier this month and NOAA forecasters estimate about a 67% chance that neutral conditions will continue through the summer.

As it is, dryness and drought continues across much of the United States, according to the U.S. Drought Monitor. Specifically, 61.4% of the nation is classified from abnormally dry to exceptional drought, compared to 34.4% a year earlier; 21.3% is experiencing extreme or exceptional drought versus 1.2% last year.

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

Cattle Current Daily—May 27, 2021

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

Live prices in the Texas Panhandle Prices were steady to $3 lower than last week at $116-$120/cwt., steady to $1 higher in Kansas at $119-$120 and steady in Nebraska at $120. Dressed trade was steady to $1 higher in Nebraska at $191.

Although there were too few transactions to trend in the western Corn Belt, early live trades were steady at $120, while dressed sales were steady to $3 higher at $191.

Cattle futures edged lower Wednesday. Pressure included softer cash prices in the south and a deceleration in wholesale beef values.

Feeder Cattle futures closed an average of 49¢ lower (5¢ to $1.47 lower), except for an average of 24¢ higher in two contracts. 

Live Cattle futures closed an average of 34¢ lower.

Corn futures edged mostly 2¢ to 5¢ higher Wednesday, following the previous day’s steep break.

Front-month Soybeans continued to soften with the lack of follow-through export sales. Soybean futures closed fractionally lower to 8¢ lower through Jly ‘22 and then mostly 7¢ higher.

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Major U.S. financial indices closed mainly flat Wednesday.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 7 points higher. The NASDAQ was up 80 points.

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USDA projects U.S. beef exports this year to be record large for both volume and value at $7.6 billion, according to the latest quarterly Outlook for U.S. Agricultural Trade. That’s $200 million more than forecast three months earlier, based on both increased volume and unit values.

For that matter, USDA forecasts record-high levels of exports for other red meats and poultry, as well as for U.S. agricultural products overall. Total value of U.S. farm exports for fiscal year 2021 is projected to be $164 billion, which would be $28 billion more (+21%) than the previous year and the highest total on record. The annual export record of $152.3 billion was set in 2014.

“U.S. agricultural trade has proven extraordinarily resilient in the face of a global pandemic and economic contraction,” says Agriculture Secretary Tom Vilsack. “Today’s estimate shows that our agricultural trading partners are responding to a return to certainty and reliability from the United States.” 

Key drivers of the surge in projected U.S. agricultural exports include a record outlook for China, record export volumes and values for a number of key products, sharply higher commodity prices, and reduced foreign competition.

China is poised to be back on top as the United States’ number one customer, with U.S. exports to that nation forecast at $35 billion, eclipsing the previous record of $29.6 billion set in 2014.

“The comparatively early post-pandemic re-emergence of the manufacturing sector in China facilitated the boost in global demand for goods, helping China’s GDP to grow by 2.3% in 2020,” say analysts with USDA’s Economic Research Service (ERS). GDP in China this year is projected to be 8.2%.

As the global economy emerges from the pandemic, ERS analysts note the significant price increase for commodities, such as lumber and copper, used in manufacturing and construction.

“The current level of backwardation or inversion of commodity future contracts, where the nearby delivery contract is priced above more distant delivery dates, suggests the price boom is in part due to near-term supply constraints,” say ERS analysts. “The U.S. dollar is expected to depreciate by 2.4% in 2021, which is likely to continue to support higher commodity demand and prices into next year.”

By | May 26th, 2021|Daily Market Highlights|

Cattle Current Daily—May 26, 2021

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains, Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales at $119 to mostly $120/cwt., except for $118 in the western Corn Belt. Early dressed sales in Nebraska were at $191.

Feeder Cattle futures closed higher Tuesday, boosted by another sharp break in Corn futures prices.

Feeder Cattle futures closed an average of $2.07 higher, from 35¢ higher in spot May to $2.55 higher. 

Live Cattle futures mainly edged higher, supported by wholesale beef values and resurgent front-month

Live Cattle futures closed an average of 30¢ higher, except for unchanged to an average of 9¢ lower in three contracts.

Choice boxed beef cutout value was $2.09 higher Tuesday afternoon at $329.92/cwt. Select was 87¢ higher at $304.26

Corn futures wilted Tuesday, pressured by planting progress and crop development, forecast rain and chatter about more corn acres.

Corn futures closed 23¢ to 37¢ lower though Jly ‘22 and then mostly 8¢ lower

Soybean futures closed 10¢ to 15¢ lower through May ‘22 and then mostly 6¢ lower.

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Major U.S. financial indices softened Tuesday after early gains.

The Dow Jones Industrial Average closed 81 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 4 points. 

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Total pounds of beef in freezers April 30 were 6% less than the previous month and 5% less than a year earlier, according to USDA’s monthly Cold Storage report. 

Frozen pork supplies were up 1% from the previous month but down 26% from last year. Stocks of pork bellies were down 3% from last month and down 58% from last year.

Total red meat supplies in freezers were 3% less than the previous month and 17% less than the same time last year.

Total frozen poultry supplies were down slightly from the previous month and down 20% from a year ago.

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

Cattle Current Daily—May 25, 2021

Negotiated cash fed cattle trade was mostly inactive with very light demand in Nebraska and the western Corn belt through Monday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was at a standstill.

Live prices last week were at $119-$120/cwt. in the Texas Panhandle, at $119 in Kansas and at $120 in other regions. Dressed trade was at $190-$191 in Nebraska, $191 in Colorado and at $188-$191 in the western Corn Belt.

Feeder Cattle futures shrugged off Friday’s Cattle on Feed report and mostly extended gains Monday, helped along by further softness in Corn futures and recently stronger cash prices.

Feeder Cattle futures closed an average of 57¢ higher, except for 95¢ lower in spot May and unchanged in Mar.

Live Cattle futures weakened. Besides the lack of early-week cash direction, traders are likely trying to decide whether beef prices decline significantly after the Memorial Day push or slowly recede from current levels with further reopening of restaurants and food service.

Live Cattle futures closed an average of 55¢ lower, from 15¢ lower toward the back to 92¢ lower in spot Jun.

Choice boxed beef cutout value was $2.66 higher Monday afternoon at $327.83/cwt. Select was $1.08 higher at $303.39

Corn futures closed mostly 5¢ to 6¢ lower. 

Soybean futures closed mostly 3¢ to 4¢ higher, after 1¢ to 3¢ lower in the front three contracts.

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Major U.S. financial indices closed higher Monday, apparently buoyed most by stocks that gain more with the reopening economy.

The Dow Jones Industrial Average closed 186 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 190 points.

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“Current futures prices imply fourth-quarter margins will be very good for feedlots,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “LMIC projected break-evens currently list October at about $115/cwt., nearly $10 under the current October Live Cattle Contract. More distant deferred Live Cattle contracts are even higher, which should bode well for cattle feeding returns into the first half of 2022.”

So far this year, LMIC estimates cattle feeding returns at -$60 to +$40 per head, due in part to escalating feed costs on the negative side of the ledger, but supported by declining feeder cattle prices from August of last year through January this year.

“Break-evens have been declining since January because of the rapid decline in feeder prices six months prior,” say LMIC analysts. “However June will be the last month of declining feeder costs, and those breakeven prices are expected to rise at least through September. May feeder cattle costs are expected to drop significantly, offering an opportunity for cattle feeders to make money in the fourth quarter.”

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

Cattle Current Daily—May 24, 2021

Negotiated cash fed cattle trade was mostly inactive with very light demand in Nebraska and the western Corn belt through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was at a standstill.

For the week, live prices were steady to 50¢ higher in the Texas Panhandle at $119-$120/cwt., $1 lower in Kansas at $119, steady in Nebraska at $120 and mostly steady in the western Corn Belt at $120. Dressed prices were steady to $1 lower at $190-$191 in Nebraska and at $188-$191 in the western Corn Belt.

Cattle futures closed mainly higher Friday, with a late surge after two-sided trading. Support included softer, more stable Corn futures, along with continued demand strength.

Feeder Cattle futures closed an average of $1.69 higher. 

Live Cattle futures closed an average of 66¢ higher, (27¢ to $1.07 higher), except for and average of 30¢ lower in the back to contracts.

How the market reacts to the monthly Cattle on Feed report (see below) is anybody’s guess.

Boxed beef cutout value (p.m.): Choice boxed beef cutout value was 99¢ higher Friday afternoon at $325.17/cwt. Select was 70¢ higher at $302.31.

Estimated total cattle slaughter of 669,000 head last week was 29,000 head more than the previous week. Estimated year-to-date total cattle slaughter of 12.9 million head is 757,000 head more (+6.2%) than last year’s pandemic-ravaged pace. Estimated beef production last week was 550.7 million lbs., which was 23.1 million lbs. more than the previous week.

Corn futures closed mostly 3¢ to 5¢ lower. 

Soybean futures closed 7¢ to 14¢ lower. 

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Major U.S. financial indices closed mixed Friday, with most of the pressure on big tech stocks. The Dow Jones Industrial Average closed 123 points higher. The S&P 500 3 points lower. The NASDAQ down 64 points.

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Reaction to the monthly Cattle on Feed report for feedlots with 1,000 head or more capacity could range from neutral to widely diverse.

April placements of 1.82 million head were 389,000 head more (27.16%) more than the previous year, which was about 6.3% more than the average of analyst expectations ahead of the report. However, comparing to last year’s pandemic blip seems a fool’s errand. Compared to 2019, April placements were 21,000 head fewer (-1.14%).

In terms of placement weight, 35% went on feed weighing 699 lbs. or less, 49% weighing 700-899 lbs. and 16% weighing 900 lbs. or more.

Marketings in April of 1.94 million head were 479,000 head more (32.83% more) than a year earlier, about even with the average of analyst expectation. The number was 10,000 head more (0.5%) than the same month in 2019.

Cattle on Feed May 1 of 11.73 million head were 525,000 head more (4.69%) more than last year and the second most for the date since the data series began in 1996. That was about 1% more than what analysts expected, on average. Compared to two years earlier, there were 93,000 head fewer (-0.79%) cattle on feed.

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

Cattle Current Daily—05-21-21

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

Live trade continued at $120/cwt. in Nebraska, which is steady with the previous week. Dressed trade earlier in the week was at $190-$191, which was steady to $1 lower.

Although too few to trend, there were some live trades in the western Corn Belt at $120 and some in the beef at $191. Prices last week were at mostly $120 and $188-$191, respectively.

Trade was limited on light demand in Kansas with a few live trades at $119, steady with earlier in the week but steady to $1 lower than last week.

Elsewhere, trade was mostly inactive on very light demand. Earlier in the week live trades were at $119-$120 in the Texas Panhandle, which was steady to 50¢ higher than last week.

Feeder Cattle futures closed and average of $1.54 lower Thursday, pressured by the bounce higher in Corn futures and the dour fed cattle market.

Live Cattle futures closed mixed (average of 22¢ lower to average of 43¢ higher), helped along by stellar wholesale beef prices.

Choice boxed beef cutout value was 80¢ higher Thursday afternoon at $324.18/cwt. Select was $1.92 higher at $301.61.

Net U.S. beef export sales added optimism. For the week ending May 13, they were 56,900 metric tons (mt), according to the U.S. Export Sales report from USDA. That’s a market-year high, up noticeably from the prior week and from the previous four-week average. Increases were primarily for the Netherlands, China, Japan, South Korea and Taiwan.

The average dressed steer weight the week ending May 8 was 896 lbs., which was 5 lbs. heavier than the previous week and even with the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 826 lbs., which was 2 lbs. heavier than the prior week but 3 lbs. lighter than the previous year.

Corn futures closed mostly 12¢ to 13¢ higher through Jly ‘22 and then mostly 3¢ to 4¢ higher.

Soybean futures closed mostly fractionally lower to 3¢ lower.

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Major U.S. financial indices closed higher Thursday, lifted by a rebound from the previous session’s sharp decline in digital Bitcoin currency, as well as positive employment news. Weekly initial unemployment insurance claims were 444,000, according to the U.S. Department of Labor. That was 34,000 fewer than the previous week and a pandemic-era low.

The Dow Jones Industrial Average was up 188 points. The S&P 500 closed 43 points higher. The NASDAQ was up 236 points.

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Beef production next year is projected to be 2% less than this year at 27.3 billion lbs., according to USDA’s Economic Research Service (ERS). If so, that would be the first year-over-year decline of domestic beef production in seven years.

That’s based on expectations drought conditions will accelerate the pace of cattle slaughter in the second-half of this year, likely reducing cattle supplies for next year. “However, carcass weights are expected to increase year over year as non-fed cattle will be a smaller portion of the slaughter mix,” ERS analysts explain.

The same expectations for increased cattle slaughter in the second half of this year led ERS to increase projected 2021 beef production to 27.9 billion lbs., which was 260 million lbs. more than the previous month.

“A greater number of feeder cattle than expected were placed in first-quarter 2021, raising the expected pace of fed cattle marketed for slaughter,” say ERS analysts in the latest Livestock, Dairy and Poultry Outlook. “In second-quarter 2021, poor pasture conditions and higher feed costs will likely favor a faster pace of cattle entering feedlots, supporting higher fed cattle marketings in the second half of 2021. Further, in the face of expected tightening forage supplies, producers will likely increase culling of breeding stock—both cows and bulls—in second-half 2021.”

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

Cattle Current Daily—May 20, 2021

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

For the week, live sales are steady to $1 lower in Kansas at $119/cwt.. steady in Nebraska at $120, and steady to 50¢ higher in the Texas Panhandle at $119-$120. Dressed trade in Nebraska is steady to $1 lower at $190-$191.

Slaughter steers sold steady to $1 higher at the Sioux Falls Regional fat auction Wednesday. Slaughter heifers traded $1-$2 higher. There were 246 Choice 3-4 steers weighing an average of 1,536 lbs., bringing an average of $120.57/cwt.

Feeder Cattle futures were mostly higher Wednesday, buoyed by pressure in grain markets. They closed an average of 85¢ higher (10¢ to $1.22 higher), except for 62¢ lower in spot May. 

Live Cattle futures closed narrowly mixed as traders balanced sluggish cash prices and cattle movement with expectations for lower boxed beef prices after Memorial Day buying ends. They closed an average of 34¢ lower, except for an average of 22¢ higher in the front three contracts.

Choice boxed beef cutout value was 4¢ higher Wednesday afternoon at $323.38/cwt. Select was 64¢ higher at $299.69

Corn futures closed mixed, from 4¢ lower to 1¢ higher with most of the pressure in nearby contracts.

Soybean futures closed mostly 21¢ to 36¢ lower through Jly ‘22 and then mostly 6¢ to 10¢ lower. 

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Major U.S. financial indices closed lower Wednesday, but well off of session lows as a sudden, sharp decline in digital Bitcoin currency rattled investors and fueled a decline in speculative stocks.

The Dow Jones Industrial Average closed 164 points lower. The S&P was down 12 points. The NASDAQ was down 3 points. 

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“With decreased forages available, feeder cattle may need to enter feedlots earlier, depressing feeder cattle prices and possibly having a seasonal low mid-summer as opposed to early fall,” says Brenda Boetel, Extension livestock economist at the University of Wisconsin-River Falls. “With continued labor shortages and high levels of cattle on feed, there is limited bullish news for fat cattle prices. Corn prices will remain volatile and will move with any weather news.”

Even so, in the latest issue of In the Cattle Markets, Boetel notes fed cattle profit potential increased slightly last week. “The potential shows up in the gross feeding margins and the idea that corn price has decreased more than the increase in feeder cattle prices,” she says.

For all of the recent price volatility and elevated costs, the outlook is more positive than one might guess, based on the monthly Focus on Feedlots Survey (FFS) conducted by Kansas State University and published in Historical and Projected Kansas Feedlot Net Returns.

Net returns projected for steer closeouts in April were -$39.01/head for steers and $2.77/head for heifers, according to the Kansas data. Estimated returns the previous month were -$69.52 for steers and -$61.18 for heifers. Keep in mind no price risk management is included in the calculations.

Looking ahead, FFS projected returns for steers range from $105.09/head in May to -$56.12 in October, with feedlot cost of gain ranging from $100.82/cwt. in May to $115.80 in October. Projected heifer returns follow a similar pattern.

“Pay attention to basis levels, especially with feed purchases,” Boetel says. “Producers may also want to consider using the futures and options markets more effectively and explore hedging strategies to protect any profit potential. Finally, reconsider your marketing plan, including your marketing strategies and price risk management strategies. Purchasing and selling decisions need to be made in a timely manner and without emotion. Volatility in the cattle/feed markets is not likely to decrease. However, given good cattle marketing and some price risk management, there are still opportunities for profitability.”

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

Cattle Current Daily—May 19, 2021

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains through Tuesday afternoon at $119-$120/cwt. That was steady in Kansas and steady to 50¢ higher in the Texas Panhandle. Although too few to trend, there were a few live trades at $120 in Nebraska and the western Corn Belt, mainly steady with the prior week.

Feeder Cattle futures weakened amid higher Corn futures prices Tuesday.

Feeder Cattle futures closed an average of 66¢ lower, except for 40¢ higher in the back contract.

Live Cattle futures closed mainly higher on Tuesday, with support from a bounce higher in Lean Hog futures and the relentless climb in wholesale beef values. There were also reports that Argentina banned exporting beef for the next 30 days.

Live Cattle futures closed an average of 90¢ higher (22¢ to $1.40 higher), except for an average of 21¢ lower in two contracts.

Choice boxed beef cutout value was $3.72 higher Tuesday afternoon at $323.34/cwt. Select was $2.16 higher at $299.05

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed mostly 6¢ to 8¢ higher after 1¢ to 13¢ lower in the front three contracts.

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Major U.S. financial indices closed lower Tuesday, despite positive earnings reports from the likes of Home Depot and Walmart. Negative economic news included less robust housing news than traders expected. Housing starts in April of 1.57 million were 9.5% less than the previous month, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 267 points lower. The S&P 500 closed 35 points lower. The NASDAQ was down 75 points.

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“Packers appear unable to increase weekday slaughter levels to process the market-ready supply in a timely manner as the sector enters a period of typically higher fed cattle slaughter,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “This appears to be in part due to labor disruptions that packers have dealt with since the beginning of the pandemic, but also interruptions in slaughter due to extreme weather in February and scheduled plant maintenance events.”

Compared to 2019, due to pandemic disruptions last year, ERS analysts say packers are processing about 10,000-15,000 head fewer per week, for the first six weeks of the second-quarter this year. That’s with Saturday kills about 5,000 head more per week than in 2019. As of April 1 they estimated there were 11% more cattle on feed for more than 150 days than last year; about 1% more than in 2019.

At the same time, ERS expects drought, poor pasture and higher feed costs will increase feedlot placements this year more than previously expected.

“Feedlots are constrained in their ability to market cattle in a timely manner. As producers face poor pasture conditions and rising feed costs, they will compete for space in feedlots in an environment with higher expected feed prices and little optimism for fed cattle prices,” ERS analysts explain. “Accordingly, the second-quarter 2021 feeder steer price forecast was lowered $1 on current prices and the third-quarter 2021 price was dropped $2, for a 2021 annual forecast of $139.30/cwt.,” say ERS analysts.

Projected average feeder steer prices (basis Oklahoma City) are $139 for the second quarter, $141 for the third quarter and $143 for the fourth quarter.

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

Cattle Current Daily—May 18, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in Kansas and the western Corn Belt through Monday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was at a standstill. Depending on the region last week, live prices were generally $1-$2 higher at $119-$121/cwt. on a live basis and at $188-$191 in the beef.

Feeder Cattle futures gained to start the week as Corn futures maintained their lower pace, in relative terms.

Feeder Cattle futures closed an average of $1.14 higher (37¢ to $1.60 higher).

Live Cattle futures were mixed on Monday, though as the slower pace of slaughter cork potential.

Live Cattle futures closed mixed, from an average of 29¢ lower to an average of 20¢ higher.

Choice boxed beef cutout value was $2.68 higher Monday afternoon at $319.62/cwt. Select was $3.70 higher at $296.89.

Corn futures closed mostly 1¢ to 3¢ higher, except for 8.6¢ higher in new spot Jly and 3¢ to 5¢ lower in most new crop contracts.

Soybean futures closed mostly 1¢ to 4¢ lower.

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Major U.S. financial indices softened Monday, with most of the pressure presumably coming from inflation worries.

The Dow Jones Industrial Average closed 54 points lower. The S&P 500 closed 10 points lower. The NASDAQ was 50 points.

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“Beef cow slaughter increased sharply in the latest data to levels not seen since fall cow culling last November and December,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Weekly beef cow slaughter increased 13-14% in the latest two weeks of data over the previous six-week average. It appears herd liquidation is already happening and more can be expected. Poor pasture conditions now, reduced hay stocks and limited potential for pasture and hay production all suggest that additional beef cow herd liquidation is imminent.”

Although marginally more positive week to week, 25% of the nation’s pasture and range was rated as Good or Excellent for the week ending May 16, compared to 47% a year earlier, according to the latest USDA Crop Progress report. Conversely, 43% was rated as Poor or Very Poor, compared to 16% a year earlier.

The previous week, based on regional aggregation compiled by the Livestock Marketing Information Center, Peel explains 51% of pastures were rated Poor or Very Poor in the eight states of the western region, 43% in the seven states of the Great Plains Region and 29% in the Southern Plains states of Oklahoma and Texas.

“These three regions account for 60.6% of the total beef cow inventory,” Peel says. “Currently 40.1% of all beef cows in the country (12.67 million head) are in states with 40% or more poor to very poor pasture and range conditions.”

At the same time, Peel says May 1 hay stocks were 24.9% less year over year in the West; 34.1% less than the five-year average. Hay stocks in the Great Plains region were down 20.1% year over year and down 6.4% from the five-year average. Southern Plains hay stocks were 28.8% less than the same time a year earlier; 29.3% less than the five-year average. 

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

Cattle Current Daily—May 17, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on light demand.

Live prices last week were 50¢ to $1.50 higher in the Texas Panhandle at $119.00-$119.50/cwt., steady to $1 higher in Kansas at $119-$120, $2 higher in Nebraska at $120, and $1 higher in the western Corn Belt at $118-$120. Live prices in Colorado two weeks ago were at $119-$120.

Dressed prices were $1-$4 higher in Nebraska last week at $191. Prices were at $187-$190 in the western Corn Belt the prior week.

Through Thursday, the five-area direct average steer price was $1.35 higher than the previous week at $119.70/cwt., on a live basis. The average five-area direct dressed steer price was $2.01 higher at $190.48.

Feeder Cattle futures mostly gained back on Friday what was lost in the previous session, helped by continued pressure on grain markets.

Feeder Cattle futures closed an average of 52¢ higher, except for an average of 30¢ lower in the back two contracts.

Live Cattle futures mostly extended losses, amid stagnant cash trade and softer Lean Hog futures.

Live Cattle futures closed an average of 44¢ lower, except for an average of 12¢ higher in the back three contracts.

Choice boxed beef cutout value was 16¢ higher Friday afternoon at $316.94/cwt. Select was $2.72 lower at $293.19.

Estimated total cattle slaughter for the week was 2,000 head more than the prior week at 640,000 head. Year-to-date estimated total cattle slaughter of 12.2 million head is 658,000 more than the pandemic-ravaged harvest the same week last year. Estimated beef production for the week of 527.6 million lbs. was 300,000 lbs. more than the previous week. Year-to-date estimated beef production of 10.2 billion lbs. is 660.8 million lbs. more than the same time last year.

Forecast rain in Brazil and the U.S. Corn Belt, reopening barge traffic on the Mississippi River and chatter about private analysts projecting significantly more corn acres all added pressure to Corn futures Friday.

Corn futures closed mostly 13¢ to 15¢ lower, after 20¢ to 34¢ lower in the front three contracts.

Soybean futures closed mostly 2¢ to 6¢ higher, except for 8¢ lower in spot May.

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Major U.S. financial indices continued higher Friday, following the steep selloff earlier in the week. That was despite ongoing inflation worries and flat national retail sales.

Advance estimates of U.S. retail and food services sales for April were $619.9 billion, virtually unchanged from the previous month, according to the U.S. Census Bureau.

The Dow Jones Industrial Average closed 369 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 304 points.

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Tight corn supplies, coupled with strong international demand, pushed corn prices to their highest level in more than a decade. In turn, higher corn prices are altering the price prospects of other products.

“The key for folks to understand is that corn prices roll through everything else,” said David Anderson, Extension livestock economist at Texas A&M University (TAMU). “High grain prices mean meat will eventually cost more because input costs are up. And corn overlaps with other important crops like wheat and soybeans because prices influence what is planted on the available crop acres.” He explained the ripple effect in a consumer-focused interview last week.

In the same interview, Mark Welch, TAMU Extension grain economist, said the corn market is highly speculative currently, due to current supply and demand, coupled with uncertainty about domestic and foreign production this growing season.

Besides higher corn prices currently trying to buy more acres, Welch pointed out U.S. corn planting started early than usual this season, which typically means planted acres will be more than projected in USDA’s March Prospective Plantings report.

“If we see more acres planted, the weather improves in South America and domestic corn-producing states, then we could see things settle down. If corn stocks get lower, there are problems with corn crops and things get tighter, then we could see all-time high record corn prices,” Welch said.

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

Cattle Current Daily—May 14, 2021

Negotiated cash fed cattle trade was limited on light demand in Kansas, Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on very light demand.

So far this week, live trade is $1 higher in Kansas at $119-$120/cwt., 50¢ to $1 higher in the Texas Panhandle at $119.00 to $119.50, steady to $1 higher in Nebraska at $120 and unevenly steady in the western Corn Belt at $118-$120. Dressed trade is steady to $1 higher in Nebraska at $191.

Live Cattle futures plunged Thursday. Besides the break in Lean Hog futures, likely explanations for the reversal include sluggish cattle slaughter due in part to pandemic safety measures, but also reports that labor availability is adding constraint. Achieving feedlot currentness becomes more challenged.

Live Cattle futures closed an average of $2.40 lower ($1.95 lower at the back to $3.00 lower in spot Jun).

That was too much for Feeder Cattle to withstand, despite the sharp selloff in Corn.

Feeder Cattle futures closed an average of 48¢ lower (2¢ to 87¢ lower), except for 70¢ higher in spot May.

Choice boxed beef cutout value was $1.70 higher Thursday afternoon at $316.78/cwt. Select was $1.25 lower at $295.91

The average dressed steer weighing for the week ending May 1 was 891 lbs., which was 5 lbs. lighter than the previous week and 2 lbs. lighter than last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 824 lbs. was 1 lb. lighter than the previous week and 2 lbs. lighter than the same week last year.

Improved weather conditions, including moisture in the Corn Belt forecast, and the previous day’s World Agricultural Supply and Demand Estimates applied heavy pressure to grain futures Thursday.

Corn futures closed 33¢ to 40¢ lower through Jly ‘22 and then mostly 22¢ lower.

Soybean futures closed 45¢ to 58¢ lower through Jan ‘22, then mostly 15¢ to 29¢ lower.

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Major U.S. financial indices bounced back from the previous day’s selloff, supported by new recommendations from the Centers for Disease Control and Prevention that those fully vaccinated against COVID-19 can resume pre-pandemic activities including doing away with masks and social distancing.

The Dow Jones Industrial Average closed 433 points higher. The S&P 500 closed 49 points higher. The NASDAQ was up 93 points.

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Geography will help determine price impacts from potential partial beef cow herd liquidation due to drought, says Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln. He points out drought impacts are currently most severe in the Mountain region and parts of the Northern Plains.

Using data from USDA’s Economic Research Service, Dennis says average grazed pasture acres per beef cow is 55.56 acres in the Mountain Region, 19.17 acres in the Southern Plains, 16.49 acres in the Pacific region and 13.78 acres in the Northern Plains. Those are the nation’s lowest stocking rates and where the most beef cows exist.

“Under a situation of worsening drought, more feeder cattle will enter feedlots earlier than expected lowering feeder cattle prices,” Dennis explains, in the latest issue of In the Cattle Markets. “Areas with lower stocking rates are likely areas that are at more risk to adverse weather conditions since they rely upon either seasonal or harvested feed resources to sustain a beef cow herd. Further, in the absence of seasonal forage, there are not large amounts of crop residues or protein concentrates from ethanol plants to supplement the lack of forage.”

If producers in the Mountain and Pacific regions are forced to liquidate, then Dennis explains feedlots in the Northern Plains and Southern Plains will likely be able to buy feeder cattle cheaper, decreasing demand for calves in the Southeast and Appalachia regions.

On the other hand, Dennis says cull cow prices are more likely to decrease in the Mountain and Northern Plains regions because those prices are generally assumed to be regional.

“A drought scenario combined with elevated corn and soybean prices is a worst-case scenario,” Dennis says. “With elevated feed costs, feedlots would have further incentives to delay feeder cattle placements, especially lighter feeder cattle, since the cost of gain would be too high. This would put further downward pressure on feeder cattle prices. Risk management in the form of USDA-RMA Livestock Risk Protection or CME futures and options can help mitigate some of these potential downward price movements and likely merit a closer look by producers this production year.”

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

Cattle Current Daily—May 13, 2021

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains through Wednesday afternoon. Live prices were steady to $1.50 higher in the Texas Panhandle at mostly $119/cwt. There were a few live trades in Kansas at $120, but too few to trend; $119 last week.

Trade was limited on light demand in Nebraska. Dressed trade was at $191, steady with the previous day and $1 to $3 higher than last week. There were a few live trades at $120, but too few to trend; $118 last week.

Elsewhere, trade was mostly inactive on light demand.

Live prices in the western Corn Belt Tuesday were $118-$120, compared to $119 last week. Dressed prices last week were $187-$190.

Cattle feeders offered 2,469 head in Central Stockyards’ weekly Fed Cattle Exchange Auction. Of those, 1,588 head sold (1,114 heifers and 474 steers) for a weighted average price of $119.93/cwt., via live weight and bid-the-grid. The majority was from Texas.

Slaughter steers sold $1-$2 higher at Sioux Falls Regional in South Dakota and slaughter heifers traded steady to $1 higher. There were 168 Choice 3-4 steers weighing an average of 1,534 lbs., bringing an average of $119.56.

Choice steers and heifers sold $4.25 to $5.75 higher at the fat auction in Tama, IA. There were 152 Choice 2-4 steers weighing an average of 1,442 lbs., bringing an average of $125.65.

Feeder Cattle futures continued their nascent rally Wednesday, supported by more optimistic projections of the balance sheet for corn, in the monthly World Agricultural Supply and Demand Estimates. Live Cattle closed narrowly mixed with some likely profit taking and sharply lower outside markets.

Live Cattle futures closed an average of 38¢ higher, except unchanged in two contracts and down an average of 12¢ in two.

Feeder Cattle futures closed an average of $1.79 higher ($1.42 higher at the front of the board to $2.20 higher at the back).

Choice boxed beef cutout value was $2.71 higher Wednesday afternoon at $315.08/cwt. Select was 82¢ higher at $297.16.

The monthly World Agricultural Supply and Demand Estimates (see below) stoked Soybean futures Wednesday, but dampened new-crop Corn futures.

Corn futures closed mostly 13¢ to 18¢ lower through the new crop year and then mostly 2¢ to 9¢ lower.

Soybean futures closed 11¢ to 23¢ higher through Jan ‘22, then mostly 15¢ to 17¢ lower.

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

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8% in April, according to the U.S. Bureau of Labor Statistics. That followed an increase of 0.6% the previous month. The all items index is up 4.2% over the last 12 months, the steepest rise since the period ending September 2008.

The Dow Jones Industrial Average closed 681 points lower. The S&P 500 closed 89 points lower. The NASDAQ was down 357 points.

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USDA’s latest monthly World Agricultural Supply and Demand Estimates pegged beef production for this year at 27.9 billion lbs., which would be 260 million lbs. more (0.94%) than the previous month and 726 million lbs. more (2.67%) than last year. Increased fed and non-fed slaughter projections drove the adjustment.

The forecast annual average five-area direct fed steer price was projected at $116.30/cwt., which was 30¢ higher than the previous month. Projected average prices are $118 in the second quarter, $114 in the third quarter and $120 in the fourth quarter.

Hay stocks on farms May 1 of 18.0 million tons were 2.4 million tons less than the same time last year, according to the USDA Crop Production report.

Projections for total red meat and poultry production increased 161 million lbs. (0.15%) month to month. That would be 693 million lbs. more (0.65%) than last year.

Corn

The new corn crop is projected at 15.0 billion bu., up from last year on increased area and a return to trend yield of 179.5 bu./acre. With beginning stocks sharply lower year over year, total corn supplies are forecast to increase modestly to 16.3 billion bu.

The season-average corn price received by producers in 2021-22 was projected at $5.70/bu., up $1.35 from a year ago.

Soybeans

The soybean crop was projected at 4.4 billion bu., up 270 million from last year on increased harvested area and trend yields. With lower beginning stocks, soybean supplies were projected 3% less than last year.

With prices for fall delivery above $14.00/bu. in some locations, the 2021-22 U.S. season-average soybean price was projected at $13.85/bu., up $2.60 from 2020-21. Soybean meal prices were forecast at $400 per short ton, down $5.00 from the revised forecast for 2020-21. Soybean oil prices were forecast at 65.0¢/lb., up 10¢ from the revised 2020-21 forecast.

Wheat

Projected 2021-22 ending stocks were projected 11% lower than last year at 774 million bu., the lowest level in seven years. That’s based on lower carry-in stocks and production increasing 3%.

The projected 2021-22 season-average farm wheat price was $6.50/bu., which would be $1.45 higher than last year’s revised price.

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

Cattle Current Daily—May 12, 2021

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

Although too few transactions to trend, there were a few dressed trades in Nebraska at $191/cwt., which was $1-$3 higher than last week; a few lives trades in the western Corn Belt at $120, which was $1-$3 higher. Elsewhere, trade was mostly inactive on light demand or at a standstill.

Cattle futures maintained gains from the previous session, supported by the outlook for higher cash prices and continued wholesale strength.

Live Cattle futures closed an average of $1.14 higher (40¢ to $1.70 higher). 

Feeder Cattle futures closed an average of 25¢ higher, except for 12¢ lower in spot May. 

Choice boxed beef cutout value was $3.26 higher Tuesday afternoon at $312.37/cwt. Select was $2.58 higher at $296.34

Grain futures recovered from sharp losses the previous day to surge ahead again in the front months, with likely profit taking and positioning ahead of Wednesday’s monthly World Agricultural Supply and Demand Estimates.

Corn futures closed 10¢ to 11¢ higher in the front two contracts, and then mostly 2¢ to 5¢ higher.

Soybean futures closed 16¢ to 27¢ higher through Jan ‘22,  then mostly 4¢ to 11¢ higher.

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Major U.S. financial indices closed lower Tuesday as ongoing supply chain disruptions and reports of labor shortages fueled inflation worries.

The Dow Jones Industrial Average closed 473 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 12 points.

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“Weekly cattle slaughter has been averaging near 650,000 head per week, except for the first week in January and the winter storm in February. This is near post-pandemic weekly slaughter highs, which signal that COVID-related changes in processing facilities are limiting slaughter levels,” say analysts with the Livestock Marketing Information Center (LMIC), in the May 7 Livestock Monitor. “The capacity-limited flow of cattle has limited upside potential for cattle prices but has led to a rise in the Choice boxed beef cutout value since the start of the year which has increased 41.1% ($85.06) to 291.79 per cwt.” Choice price was $312.37 Tuesday.

On the other side of the trade, LMIC analysts say the five-area direct weekly weighted average steer price rose from $111.28/cwt. at the start of the year to $122.03 in mid-April. Since then, prices declined.

Tyson Foods, Inc. provided another perspective in its second-quarter financial results released Monday.

“Beef sales volume decreased during the second quarter of fiscal 2021 due to a reduction in live cattle processed, partially associated with the impacts of severe winter weather and a challenging labor environment,” according to the Tyson report. “…Average sales price increased in the second quarter and first six months of fiscal 2021 as demand for our beef products remained strong. Operating income increased in the second quarter and first six months of fiscal 2021 due to strong demand as we continued to optimize revenues relative to live cattle supply, partially offset by production inefficiencies and direct incremental expenses related to COVID-19.”

Dean Banks, Tyson Foods President and CEO, noted, “We’re seeing substantial inflation across our supply chain, which will likely create margin pressure during the back half of the year.”

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

Cattle Current Daily—May 11, 2021

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

Live prices last week were at $117.50-$119.00/cwt. in the Texas Panhandle, $119 in Kansas, $118 in Nebraska and $117-$119 in the western Corn Belt. Dressed prices were $187-$190.

Rain in the Corn Belt pressured Corn futures Monday, opening the gate for Cattle futures to trade higher and begin taking a swipe at extremely oversold conditions.

Live Cattle futures closed an average of $1.03 higher, an average of $1.46 higher across the front half of the board and then an average of 61¢ higher, except unchanged in the back contract.

Feeder Cattle futures closed an average of $3.36 higher ($2.35 higher toward the back to $4.42 higher toward the front).

Choice boxed beef cutout value was $3.23 higher at $309.11/cwt. Select was $3.49 higher at $293.76.

Corn futures closed 20¢ to 27¢ lower through Jly ‘22, and then mostly 4¢ to 9¢ lower.

Soybean futures closed mostly 8¢ to 9¢ lower, but as much as 19¢ lower.

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Major U.S. financial indices closed lower Monday, pressured by a selloff in big tech stocks.

The Dow Jones Industrial Average closed 34 points lower. The S&P 500 was down 34 points. The NASDAQ was down 350 points. 

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“It now appears that it will take the remainder of the second quarter and likely much of the third quarter of the year to move the fed cattle industry into tighter numbers and relieve the capacity constraints that are limiting the fed cattle market,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel provides insight to U.S. beef packing capacity over time. In the 1980’s, when much of the current capacity was constructed, he explains cattle inventories averaged 15% more than in the last decade and there was surplus capacity. That fueled closing some plants like the Tyson plant at Emporia, KS in 2008 and the Cargill plant at Plainview, TX in 2013. Before that,  ConAgra never replaced its facility that burned at Garden City, KS in 2000.

“The cyclical expansion in cattle numbers from 2014 to 2019 has now pushed cattle slaughter beyond packing industry capacity,” Peel says. “It is estimated that annual average slaughter has exceeded capacity since 2016. Although cattle numbers peaked cyclically in 2019, feedlot production is just now at a peak in early 2021, partly as a result of pandemic delays in 2020.”

Saturday harvests are used to bridge some of the gap. For instance, Saturday slaughter accounted for 2.7% of weekly slaughter in 2012 and 7.3% in 2007, according to Peel. Saturdays accounted for more than 9% of weekly slaughter in 2019 and 2020; 10% so far this year.

“Slaughter needs will be seasonally larger in the coming weeks and it will be difficult for feedlots to get more current. It will be challenging to maintain, let alone push Saturday slaughter in the coming weeks,” Peel says.

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

Cattle Current Daily—May 10, 2021

Negotiated cash fed cattle trade was mostly inactive on very light demand in Kansas through Friday afternoon. Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service.

Live prices for the week were steady to 50¢ lower in the Texas Panhandle at $117.50-$119/cwt., steady in Kansas at $119, $1-$2 lower in Nebraska at $118 and steady to $1 lower in the western Corn Belt at$118-$119. Dressed trade was $1-$2 lower in Nebraska at $188-$190 and steady to $4 lower in the western Corn Belt at $187-$190.

Feeder Cattle futures closed mostly higher Friday, but off of session highs, in the face of increasing front-month Corn futures. Live Cattle futures tagged along.

Live Cattle futures closed an average of 32¢ higher in five contracts and then unchanged to 5¢ lower

Feeder Cattle futures closed an average of 65¢ higher through the front five contracts (27¢ to $1.25 higher) and then unchanged to 27¢ lower.

Choice boxed beef cutout value was 49¢ lower at $305.88/cwt. Select was 91¢ higher at $290.27

Total estimated cattle slaughter for the week ending May 7 was 638,000 head, which was 11,000 head fewer than the previous week. Total estimated beef production of 527.3 million lbs. was 10 million lbs. less week to week.

Corn futures closed mostly 11¢ to 13¢ higher through Jly ‘22, and then mostly 2¢ to 3¢ lower.

Soybean futures closed 15¢ to 25¢ higher through May ‘22, and then mostly 9¢ to 13¢ higher.

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Major U.S. financial indices closed higher Friday, amid one of those frequent non-intuitive paradoxes. Presumably, much of the support stemmed from investors betting the Federal Reserve will maintain dovish monetary policy longer, due to April employment numbers falling far short of expectations.

Total non-farm payroll employment increased 266,000 in April, according to the U.S. Bureau of Labor Statistics. Various reports pegged pre-report estimates at closer to 1 million.

Average hourly earnings for all employees on private non-farm payrolls were $30.17 in April, up 21¢ from the previous month.

The Dow Jones Industrial Average closed 229 points higher. The S&P 500 was up closed 30 points higher. The NASDAQ was up 119 points.

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“Timely rains remain critical to being able to stock cattle through the summer,” say analysts with the Livestock Marketing Information Center (LMIC). “ Drought continues to intensify across the U.S. and is looking dismal in key areas.  The Western half of the U.S. is in the worst stages of drought (65%-D0-D4, 47% D3-D4), a situation that has persisted since last year and is escalating.”

As noted in Cattle Current last week, USDA’s first seasonal assessment ranked just 22% of the nation’s pasture and range as Good or Excellent, versus 46% at the same time last year. Conversely, 47% was rated as Poor or Very Poor, compared to 16% a year earlier.

“One of the newer developments in the Drought Monitor has been the spread of dryness across the Corn Belt,” say LMIC analysts, in the latest Livestock Monitor.  The Drought Monitor indicates that 44% of this region is in some level of drought. Dryness is less of a concern when planting, and typically means faster acres planted…The problem is more about soil moisture and growing phases which can affect crop yields.”

Based on USDA’s Crop Progress report last week, LMIC analysts point out top soil moisture conditions are rated as Short or Very short across 37% of cropland in the continental U.S. About 55% of cropland is reporting adequate moisture compared to 65% in 2020

“These figures are worrisome but with most of the growing season ahead of us, it’s early to be calling for yield declines just yet,” say LMIC analysts.

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

Cattle Current Daily—May 7, 2021

Negotiated cash fed cattle trade was slow on light demand in Kansas through Thursday afternoon. Live prices were steady with the previous day at $119/cwt., according to the Agricultural Marketing Service.

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

Earlier in the week, live prices were at $117.50 to $119.00 in the Texas Panhandle, at $118 in Nebraska and at $118 to $119 in the western Corn Belt. Dressed prices were at $187 to $190. Live prices in Colorado last week were at $119-$120.

Feeder Cattle futures gave back everything gained in the previous session as corn prices surged higher yet again on Thursday. Live Cattle futures extended modest gains, supported by blooming wholesale beef values and a sizable gain in open interest the previous day.

Live Cattle futures closed an average of 66¢ higher.

Feeder Cattle futures closed an average of $2.02 lower.

Choice boxed beef cutout value was $1.59 higher Thursday afternoon  at $306.37/cwt. Select was $3.18 higher at $289.36

The average dressed steer weighing for the week ending Apr. 24 was 896 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 2 lbs. lighter than the previous week. The average dressed heifer weight of 825 lbs. was 12 lbs. lighter. Beef production was 16.9 million lbs. at 547.4 million lbs.

Corn futures closed 10¢ to 20¢ higher from Jly ‘21 to Jly ‘22, mostly 6¢ to 8¢ higher in other contracts.

Soybean futures closed 20¢ to 28¢ higher through Mar ‘22, and then mostly 11¢ to 13¢ higher.

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Major U.S. financial indices closed higher Thursday, apparently buoyed by the previous day’s bullish ADP®National Employment ReportTM, and betting on similar results in the government’s employment situation summary due out Friday.

The Dow Jones Industrial Average closed 318 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 50 points.

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U.S. beef exports surged in March, with volume up 8% year over year, the second most in the post-BSE era, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 124,808 metric tons (mt) in March. Export value for the month exceeded $800 million for the first time at $801.9 million, up 14% year-over-year. Beef muscle cut exports set new monthly records for both volume (98,986 mt, up 13% from a year ago) and value ($718.3 million, up 17%). For the first quarter, beef exports pulled even with last year’s pace at 333,348 mt, valued at $2.12 billion. For beef muscle cuts, first quarter exports increased 4% to 262,914 mt, valued at $1.9 billion (up 5%).

March highlights for U.S. beef included record exports to China, Honduras and the Philippines.

March pork exports were record-large at 294,724 mt, up 1% from last year’s strong total, setting a new value record at $794.9 million (up 4%).

“It’s very gratifying to see such an outstanding breakout month for U.S. beef and pork exports,” says Dan Halstrom, USMEF President and CEO. “Exports were off to a respectable start in 2021, considering the logistical and labor challenges the industry is facing and ongoing restrictions on the foodservice sector in many key markets. While these obstacles are not totally behind us, the March results show the situation is improving and the export totals better reflect the strong level of global demand for U.S. red meat.”

Muscle cuts drove March export growth, but Halstrom is also encouraged by a rebound in shipments of beef and pork variety meat.

“The tight labor situation at the plant level has been especially hard on variety meat volumes,” Halstrom explains. “But March variety meat exports matched last year’s performance for pork and were the largest of 2021 on the beef side. It’s important that the capture rate for variety meat continues to improve, as this is a critical component of the export product mix.”

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

Cattle Current Daily—May 6, 2021

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

So far this week, live prices in Nebraska are $1-$2 lower than last week at $118/cwt. Dressed prices are $1-$2 lower at $188-$190.

Live prices in the western Corn Belt this week are steady to $2 lower at $118-$119. Dressed prices are steady to $4 lower at $187-$190.

Last week, live prices were at $118-$119 in the Southern Plains and at $119-$120 in Colorado.

Cattle feeders offered 1,906 head (12 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 1,091 head (6 lots) sold for mostly $118.50 to $119/cwt., steady with the previous week’s country trade.

At Sioux Falls Regional in South Dakota, fat steers and heifers sold $3-$5 lower. There were 223 Choice 2-3 steers weighing an average of 1,433 lbs., bringing an average of $115.97/cwt., which was $2-$3 lower than established country trade.

Cattle futures found some footing on Wednesday, helped along by technical support and oversold conditions.

Live Cattle futures closed an average of $1.44 higher.

Feeder Cattle futures closed an average of $1.86 higher.

Choice boxed beef cutout value was $3.56 higher Wednesday afternoon at $304.78/cwt. Select was $2.27 higher at $286.18

Corn futures closed 20¢ to 24¢ higher from near Sep to Jly ‘22, mostly 5¢ to 7¢ higher in other contracts.

Soybean futures closed mostly 15¢ to 19¢ higher, except for 4¢ to 9¢ higher in the front three contracts.

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Major U.S. financial indices closed narrowly mixed Wednesday. Support included positive quarterly corporate earnings reports from the likes of GM. Employment data suggested more optimism, as well.

Private sector employment increased by 742,000 jobs from March to April according to the April ADP® National Employment ReportTM. That was more than the trade expected.

The Dow Jones Industrial Average closed 97 points higher. The S&P 500 closed 2 points higher. The NASDAQ was down 51 points.

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Declining cattle futures reflect the market realities cash prices first followed, says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets.

“Optimism from late winter and early spring is being replaced by realism that: it is going to take another two to three months to work through the large front-loaded fed animal inventories; fed animal slaughter is at capacity; costs of gain are now substantially higher than the past several years,” Koontz explains.

As noted recently in Cattle Current, larger than expected ready fed cattle supplies stem from lingering pandemic impacts, as well as the February winter storm that disrupted supply chains. Concurrently, packing capacity remains less than before the pandemic.

“Combined fed steer and heifer slaughter has been just short of 525,000 head per week. It is likely that this is a reasonable maximum that the packing industry can process,” Koontz says. “Packer margins are strong but there is little incentive to pay more for fed cattle when plants are operating six days per week. There is little to no possibility to process more cattle, regardless of the incentive to do so. There are a lot of historical relationships that are irrelevant when the packing industry is essentially at capacity.”

Based on the latest Cattle on Feed report, he says the number of cattle on feed more than 120 days and more than 150 days declined, suggesting some progress in reducing market-ready fed cattle supplies. But, Koontz says supplies will likely be abundant into late summer.

As for increasing feed costs, Koontz points out Corn futures increased $2/bu. from August of last year to mid-January this year and then tacked on another $1.50 since the end of March. He notes the formula cost of gain for fed cattle this summer is well beyond $1/lb.

“If live cattle have little upside and the corn market continues to ration old crop, then it is feeder cattle that have to adjust,” Koontz says.

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

Cattle Current Daily—May 5, 2021

Negotiated cash fed cattle trade was light to moderate on moderate demand in Nebraska through Tuesday afternoon. Live prices were steady to 50¢ higher than the previous day at $118/cwt., which was $1-$2 lower than last week. Dressed prices were $1-$2 lower at $188-$190.

Trade in the western Corn Belt was light to moderate on moderate demand. Live prices were steady to $3 lower than last week at $117-$119. There were a few dressed trades at $187-$190, but too few to trend; $190-$191 last week.

Elsewhere, trade was limited on light demand. Live prices in the Southern Plains last week were at $118-$119. Prices in Colorado last week were $119-$120.

Choice boxed beef cutout value was $1.92 higher at $301.22/cwt. Select was 12¢ higher at $283.91

Feeder Cattle futures and front-month Live Cattle wilted Tuesday, pressured by higher feed costs and plentiful fed cattle supplies.

Live Cattle futures closed an average of 82¢ lower across a broad range, from an average of $1.52 lower in the front four contracts to an average of 26¢ lower across the rest of the board.

Feeder Cattle futures closed an average of $3.26 lower.

Grain futures popped higher Tuesday as the market continues trying to buy more acres. That was despite what appeared to be a production-friendly planting report.

Corn futures closed mostly 13¢ to 18¢ higher.

Soybean futures closed mostly 12¢ to 18¢ higher.

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Major U.S. financial indices closed mixed to mainly lower Tuesday. Investor jitters seemed centered around inflation fears. On the one hand, pandemic supply chain disruptions, in tandem with economic reopening are driving up input costs. On the other, there’s concern the Federal Reserve will be forced to raise interest rates and slow monetary easing faster than previously suggested.

The Dow Jones Industrial Average closed 19 points higher. The S&P 500 closed 28 points lower. The NASDAQ was down 261 points.

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Agricultural producers grew more optimistic about the future last month, according to the Purdue University/CME Group Ag Economy Barometer. Month to month, the Index of Future Expectations increased 5 points to 169.

“The strength in commodity prices continues to drive improving expectations for strong financial performance, even as many are seeing rising input costs,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

At the same time, agricultural producers lost some confidence in existing circumstances. The Index of Current Conditions dropped 7 points in April, to a reading of 195.

“The difference in producers’ short-term versus long-term expectations could be an indication they are concerned that the rapid rise in farmland values we’re seeing may not be sustainable over the long run,” Mintert says.

Even so, ranchers and farmers expect farmland values to continue rising over the next year. The Short-Run Farmland Value Expectations Index rose to a record high reading of 159, which was 11 points higher than the previous month. Further out, producers were less optimistic. The Long-Term Farmland Values Expectations Index (looking five years ahead) declined 9 points in April to a reading of 148.

Overall, the Ag Economy Barometer was virtually unchanged, up one point from March to a reading of 178. It’s calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. The current survey was conducted April 19 to 23.

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

Cattle Current Daily—May 4, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska through Monday afternoon. There were a few live trades at $117.50 to $118.00/cwt. but too few to trend. Elsewhere, trade ranged from mostly inactive on light demand to a standstill, according to the Agricultural Marketing Service.

The average five-area direct fed steer price last week was $118.89/cwt. on a live basis, which was $2.47 less than the previous week. The average steer price in the beef was $1.67 less at $190.44.

Cattle futures managed to fade stronger pressure early to close mixed on Monday with most of the pressure in nearby contracts.

Live Cattle futures closed an average of 23¢ higher, except for $1.27 and 27¢ lower in the front two contracts.

Feeder Cattle futures closed an average of 69¢ higher (5¢ to $1.40 higher), except for an average of 27¢ lower in three contracts.

Choice boxed beef cutout value was $2.80 higher Monday afternoon at $299.30/cwt. Select was 74¢ higher at $283.

Corn futures closed mixed; mostly fractionally lower to 2¢ higher, except for 7¢ lower and 6¢ higher in the front two contracts.

Soybean futures closed 4¢ to 10¢ lower through the front three contracts, then mostly 2¢ to 5¢ higher through Aug ’22; mostly fractionally lower across the rest of the board.

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Major U.S. financial indices closed mostly higher Monday, buoyed by continued progress in COVID-19 vaccinations and easing health restrictions.

The Dow Jones Industrial Average closed 238 points higher. The S&P 500 closed 11 points higher. The NASDAQ was down 67 points.

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“Overall cattle market conditions are still expected to improve year over year in the second half of the year. However, current challenges are somewhat more severe and taking longer to clear than earlier expected. Market conditions are very dynamic now and the next few weeks may determine the tone of markets for the remainder of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel explains ample supplies are pressuring fed cattle prices as feedlots struggle to get more current.

“On the other end, feeder cattle are being squeezed between a stagnant fed market and rising feed prices. The pressure is weighing on feeder cattle markets with both cash feeder cattle prices and feeder futures moving lower in April,” Peel says.

As well, drought continues to deepen. Peel notes the Drought Severity and Coverage Index (DSCI) is at 180 for the U.S., the highest ever for April or May. He points out hay prices are increasing, too. The national average price for other hay in March was $142/ton versus $134 a year earlier. March prices for alfalfa were $181/ton compared to $172 the previous year.

‘There are indications that beef cow liquidation is accelerating,” Peel says. “March monthly beef cow slaughter was up 10.2% year over year. Beef cow slaughter in April is increasing but is difficult to interpret compared to pandemic-disrupted levels one year ago.”

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

Cattle Current Daily—May 3, 2021

Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Colorado through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on light demand with too few transactions to trend.

For the week, live prices were steady to $2 lower in the Southern Plains at $118-$119/cwt., $1-$2 lower in Nebraska at $119-$120, $2 lower in Colorado at $119 and $2-$3 lower in the western Corn Belt at $119. Dressed trade was $1-$2 lower in Nebraska and the western Corn Belt at $190-$191.

Continued increase in wholesale beef values helped Live Cattle futures mostly advance Friday, despite the week’s anemic cash trade and another surge higher in Corn futures, which upended Feeder Cattle once again.

Live Cattle futures closed an average of 87¢ higher, except for $3.47 lower in expiring Apr.

Feeder Cattle futures closed an average of $1.43 lower, from 10¢ lower at the back to $3.12 lower toward the front.

Choice boxed beef cutout value was $2.74 higher Friday afternoon at $296.50/cwt. Select was $3.26 higher at $283.05

Total estimated cattle slaughter for the week ending May 1 was 649,000 head, which was 16,000 head fewer than the previous week, according to USDA.

Corn futures closed 13¢ to 38¢ higher through Jly ‘22, and then mostly 5¢ to 9¢ higher.

Soybean futures closed 20¢ to 28¢ higher through Jan ‘22, and then mostly 12¢ to 18¢ higher.

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Major U.S. financial indices closed lower Friday, apparently pressured by profit taking more than anything.

The Dow Jones Industrial Average closed 185 points lower. The S&P 500 closed 30 points lower. The NASDAQ down 119 points.

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Frustration among cattle producers continues to mount as wholesale beef prices escalate, while fed cattle prices weaken and the run-up in feed costs pressures calf and feeder cattle prices.

“Slaughter levels have increased year over year, beef demand is strong, and packers have more cattle available to them than they want to process. This means the packer maintains leverage over cattle feeders despite the market moving into a period of stronger beef demand or at least strong anticipated demand,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Although carcass weights are typically lightest at this time of year, Griffith points out they are heavier than last year and the five-year average.

“Slaughter levels are manageable, but they are expected to increase, given the quantity of cattle on feed. There will be lower prices to come in the finished cattle market,” Griffith says.

Economics explains much of what’s happening, if not the magnitude. More cattle in need of harvesting, compared to existing slaughter capacity, means packers have the leverage, period. Keep in mind, according to various reports, much of the capacity lost to the pandemic last year returned with extraordinary speed. However, measures imposed to protect workers means post-pandemic capacity is less than it was before. If drought forces lots more cows to town in bunches, the challenge will grow.

New processing facilities—more packing capacity—are currently in various stages of construction in different parts of the U.S. I don’t have the numbers to tell you how much capacity or how much it will address the current imbalance.

One Cattle Current podcast listener called me at the end of last week. I know him. His family is one of those in the business for generations. He’s a solid thinker, innovative and progressive as they come, and not given to buying into the fiction some toss around about packer conspiracies and all of that. He wonders why producers don’t create a check-off to fund construction of more producer-owned packing capacity.

Never minding the monumental raw cost and challenges of building and running a packing plant, the notion of producers taking more control of their economic fortunes at the last stage of production is hard to argue.

For my money, those producers who put up the money and took the risk to start U.S. Premium Beef (USPB) proved the possibility. If you’re unfamiliar, the vision began in 1995. By 1997, about 450 cow-calf producers and cattle feeders made a financial commitment, developed a business plan and purchased a minority interest in what was then Farmland National Beef. At one point, USPB was the majority owner of what became National Beef; they still own an interest today. In essence, these producers purchased shares, which not only gave them ownership in the company, annual dividends and whatnot, but it secured them delivery slots for cattle aimed at the value-added grid USPB created.

In some ways, from what little I know of it, that sounds like what producers and other business interests are doing with the recently announced Sustainable Beef LLC packing plant to be constructed at North Platte, NE.

Anyway, building more producer-owned packing capacity is one listener’s idea. What’s yours? If you have ideas you want to share with Cattle Current listeners, please email them to wes@cattlecurrent.com

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

Cattle Current Daily—April 30, 2021

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

So far this week, live prices in the Texas Panhandle are $1-$2 lower than last week in the Southern Plains at $118-$119/cwt., $2-$4 lower in the Northern Plains at $119-$120 and $1-$4 lower in the western Corn Belt at $119. Dressed trade is $1-$4 lower in Nebraska at $188-$191 and $1-$2 lower in the western Corn Belt at $191-$192.

Another day of softer Corn futures prices, after the front of the board, helped Cattle futures mostly extend gains on Thursday.

Live Cattle futures closed an average of 45¢ higher, except for an average of 14¢ lower in three contracts.

Feeder Cattle futures closed an average of 72¢ higher.

Corn futures closed fractionally lower to 5¢ lower, except for 15¢ and 4¢ higher in the front two contracts.

Soybean futures closed 8¢ to 15¢ lower through Jan ‘22, and then mostly 2¢ lower.

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Major U.S. financial indices closed higher Thursday, boosted by mostly positive economic new that included tech giant, Facebook, smashing quarterly revenue estimates and McDonald’s reporting sales higher than before the pandemic.

As well, the U.S. Bureau of Economic Analysis reported real gross domestic product increased at an annual rate of 6.4% in the first quarter of this year, reflecting continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic.

Initial weekly unemployment insurance claims were slightly more than anticipated, though. For the week and Apr. 24, claims were 553,000, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 239 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 31 points.

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Net U.S. beef export sales for 2021 were 23,600 metric tons the week ending Apr. 22, according to weekly U.S. Export Sales report. That was down 4% from the previous week, but up 22% from the prior four-week average. Increases were primarily for South Korea, Japan, Mexico, China, and Hong Kong. 

Since 2000, beef exports accounted for about 9% of U.S. production, while beef imports represented about 11%, according to USDA’s Economic Research Service (ERS).

“U.S. beef trade is largely dependent on domestic production, and shocks to production can lead to a boost in import demand and a reduction in supplies available for export,” say ERS analysts.

For illustration those analysts point to the 2003 discovery of bovine spongiform encephalopathy (BSE) in Canada and then in the United States. U.S. beef exports plummeted. At the same time, U.S. beef imports grew to record high levels in 2004 and 2005. The latter had to do with the fact there were more cattle to slaughter here, in need of more lean trim from outside the country, in order to maximize value.

More recently, of course, weekly beef production plunged as much as 34% year over year in the second quarter of last year as the pandemic forced temporary closures and reduced operations at processing facilities. Consumer beef purchasing patterns shifted dramatically toward retail.

ERS projects U.S. beef exports to grow as a percent of production this year, while imports are expected to decline.

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

Cattle Current Daily—April 29, 2021

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

Live prices in the Texas Panhandle were $1-$2 lower than last week at $118-$119/cwt.

Live sales in Nebraska were $2-$3 lower at $119-$120. Dressed trade was $1-$4 lower at $188-$191.

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

So far this week, live sales in Kansas are $2 lower at $118-$119 and $3-$4 lower in Colorado at $119.

In the western Corn Belt last week, live prices were at $120-$123 and dressed prices were at $192.

Cattle feeders offered 3,231 head (19 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, just 287 head (three lots) sold, all from Texas and all on a live-weight basis. The price was $119/cwt. for two lots of steers and $117.75 for a lot of heifers.

Lower cash prices and less packer processing than expected recently helped pressure Cattle futures Wednesday, despite softer Corn futures and oversold conditions.

Live Cattle futures closed an average of $1.04 lower, except for 57¢ higher in spot Apr.

Feeder Cattle futures closed an average of $1.25 lower, from 32¢ lower at the front to $1.72 lower at the back.

Choice boxed beef cutout value was $1.51 higher Wednesday afternoon at $292.50/cwt. Select was 53¢ lower at $279.00

Corn futures closed 9¢ to 15¢ lower through Sep ‘22 and then 4¢ to 6¢ lower.

Soybean futures closed mostly 13¢ to 14¢ lower through Aug ‘22, except for 15¢  higher in spot May, and then mostly 7¢ lower.

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Major U.S. financial indices closed lower Wednesday. Primary pressure seemed linked to inflation worries, with the Federal Reserve issuing a statement that it will maintain the current lending rate and its accommodative monetary stance as the nation’s the economy and employment strengthen.

The Dow Jones Industrial Average closed 164 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 39 points.

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“A year since COVID-19 changed how we live, work and shop, online grocery demonstrates continued strength and impressive staying power,” says David Bishop, partner, Brick Meets Click. “The monthly active user base remains robust, average order values are at similarly elevated levels and order frequency has gone up.”

There were $9.3 billion in online grocery market sales during March, with 69 million households placing an average of 2.8 online orders, according to the Brick Meets Click/Mercatus Grocery Shopping Survey. Sales were 43% more year over year.

“Over the last 12 months, consumers’ dramatic shift to online grocery shopping has solidified, with curbside pickup attracting the largest share of monthly shoppers at 53% compared to ship-to-home and delivery,” explains Sylvain Perrier, Mercatus president and CEO. “In fact, pickup continues to have stronger consumer demand across all market types compared to delivery. Those brick-and-mortar chains that invested in optimizing pickup services likely will continue to benefit from the high repeat intent rate as indicated in the data.”

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

Cattle Current Daily—April 28, 2021

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

Feeder Cattle futures closed mixed across a broad range Tuesday, helped along by a day of respite from rising new-crop Corn futures. Live Cattle softened as traders await cash direction.

Live Cattle futures closed an average of 39¢ lower, except for 15¢ higher in the back contract.

Feeder Cattle futures closed mixed, from an average of 51¢ higher in five contracts (10¢ to $1.45 higher) to an average of 57¢ lower (7¢ to $1.40 lower).

Choice boxed beef cutout value was $5.79 higher at $290.99/cwt. Select was $5.18 higher at $279.53

Corn futures closed mostly 3¢ to 7¢ lower, expect for 15¢ higher in spot May and 2¢ higher in back contracts.

Soybean futures closed 18¢ to 19¢ lower through the front six contracts and then 6¢ to 16¢ lower.

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Major U.S. financial indices closed narrowly mixed Tuesday.

Positive economic news included The Conference Board Consumer Confidence Index®rising 12 points month to month to 121.7 in April.

“Consumer confidence has rebounded sharply over the last two months and is now at its highest level since February 2020,” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

The Dow Jones Industrial Average closed 3 points higher. The S&P 500 closed fractionally lower. The NASDAQ down 48 points.

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Snugger beef supplies in cold storage are supporting the rise in wholesale prices.

Total pounds of beef in freezers Mar. 31 were 5.6% less than the previous month and 3.7% less than the previous year, according to the latest USDA Cold Storage report.

Specifically, analysts with the Livestock Marketing Information Center (LMIC) point out total beef in cold storage declined by 483.7 million lbs. month to month.

“Both boneless beef and beef cuts fell 3.4% and 8.5%, respectively, from last year to 451.3 and 32.3 million lbs.,” say LMIC analysts, in the latest Livestock Monitor. They note boxed beef cutout value rose $66.69/cwt. (+32.3%) from the start of the year to mid-April, when it was $274.42/cwt.

Total pork in cold storage was 6.5% less than the previous month and 26.8% less year over year. LMIC analysts add the 451.8 million lbs. of pork in cold storage was 26.0% less than the five-year average.

Total red meat in cold storage of 969.3 million lbs. was 62.3 million lbs. less (-6.0%) than the previous month and 192.7 million lbs. less year over year (-16.6%).

Total frozen poultry supplies in cold storage of 1.1 billion lbs. were 1.2 million lbs. more than the previous month (+0.1%), but 217.6 million lbs. less (-16.6%) year over year.

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

Cattle Current Daily—April 27, 2021

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

Live prices last week ranged from $118-$120 in the Southern Plains to $121 in the Northern Plains  to $120-$122 in the western Corn Belt. Dressed trade was $2-$4 lower at $192.

The five-area direct fed steer price was 67¢ lower on a live basis last week at $121.36/cwt. The average steer price in the beef was $3.43 lower at $192.11.

Cattle futures closed mixed Monday as another surge in Corn futures weighed on Feeder Cattle.

Live Cattle futures closed an average of 69¢ higher (35¢ to $1.10 higher).

Feeder Cattle futures closed an average of 39¢ lower (15¢ to $1.10 lower), except for an average of 31¢ higher in two contracts.

Choice boxed beef cutout value was $1.43 higher Monday afternoon at $285.20/cwt. Select was $2.22 higher at $274.35

Total estimated cattle slaughter last week of 665,000 head was 20,000 head more than the previous week, according to USDA. Total estimated beef production was 20 million lbs. more at 550.2 million lbs.

Corn futures closed 15¢ to limit up 25¢ higher through Jly ‘22, and then mostly 8¢ to 9¢ higher.

Soybean futures closed mostly 21¢ to 26¢ higher.

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Major U.S. financial indices closed mixed Monday, with investors awaiting one of the busiest weeks of the season for quarterly corporate earnings reports.

The Dow Jones Industrial Average closed 61 points lower. The S&P 500 closed 7 points higher. The NASDAQ was up 121 points.

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“Fed cattle prices have been disappointingly stagnant thus far in 2021, largely under the pressure of ample feedlot supplies,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Fed cattle price improvement is expected in the second half of the year but progress has been slower than expected due to residual effects of pandemic disruptions and the February winter storm. Fed prices are expected to be higher year over year for the remainder of the year, mostly when compared to pandemic-reduced prices last year, but also due to improving fed cattle market fundamentals as the year progresses.”

Relative to the cattle cycle, Peel explains pandemic impacts extended the pipeline of cattle supplies, delaying the reduction of fed cattle numbers last year and pushing more cattle into the first half of 2021.

“While feedlot inventories dropped seasonally in March and April, it may be into the second half of the year before feedlot inventories drop cyclically below year earlier levels,” Peel says.

Reflecting on Friday Cattle on Feed report, Peel points out numbers are less than two years earlier. More specifically, he says the Apr. 1 feedlot inventory is 0.5% less than in 2019, March feedlot placements were 0.8% less and March feedlot marketings were 14.8% more than the same time in 2019.

“The March placement total likely did include some increase in placements pushed into March by the February winter storm. Nevertheless, the placement total was not only smaller than pre-report expectations but was somewhat bullish in an absolute sense,” Peel says.

By | April 26th, 2021|Daily Market Highlights|

Cattle Current Daily—April 26, 2021

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

Live prices last week ranged from steady to $2 lower in the Southern Plains at $118-$120/cwt. to $1-$5 lower in the Northern Plains at $121; steady to $4 lower in the western Corn Belt at $120-$122. Dressed trade was $2-$4 lower at $192.

Cattle futures closed higher Friday, supported by oversold conditions and a reprieve from another day of higher corn prices.

Live Cattle futures closed an average of 67¢ higher (12¢ to 92¢ higher), except for 47¢ and 12¢ lower in the front two contracts.

Feeder Cattle futures closed an average of $1.42 higher (65¢ to $1.67 higher).

Choice boxed beef cutout value was $1.46 higher at $283.77/cwt. Select was $1.56 lower at $272.13

Corn futures closed 1¢ to 4¢ lower, except for 5¢ and 1¢ higher in the front two contracts.

Soybean futures closed 1¢ to 6¢ higher through Nov ‘22, and then fractionally lower to 2¢ lower.

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Major U.S. financial indices closed higher Friday, amid mainly positive economic news, and as investors took a more measured view of reports that President Biden will seek an increase in capital gains taxes.

The Dow Jones Industrial Average closed 227 points higher. The S&P 500 closed 45 points higher.

The NASDAQ up 198 points.

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Logic suggests markets will view the monthly Cattle on Feed report as neutral to hopefully friendly, with placements significantly less than the average of analysts expectations.

Feedlots with 1,000 head or more capacity placed 2.0 million head in March, which was 440,00 head more (+28.26%) than the previous year’s paltry placements, due to the pandemic. Placements were 5.5% less than expectations.

In terms of placement weights: 36.5% went on feed weighing 699 lbs. or less; 51.6% weighed 700-899 lbs.; 11.75% weighed 900 lbs. or more.

Marketings in March of 2.04 million head were 1.49% more year over year, which was in line with expectations. The total was the second most for the month since the data series began in 1996, according to USDA’s National Agricultural Statistics Service.

There were 11.9 million head on feed Apr. 1, which was 600,000 head more (+5.31%) than last year; the second most for the month since the data series began. That was 0.8% less than analysts expected. The number of heifers and heifer calves on feed were 7% more than the previous year.

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

Cattle Current Daily—April 23, 2021

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

Live trade in Nebraska was at $121/cwt., which was $1-$5 lower than last week. Dressed trade was $4 lower at $192.

In the western Corn Belt, at $121-$122, which was steady to $2 lower than last week. Dressed trade was $2-$4 lower at $192.

Trade was limited on light demand in in Colorado. Live prices were $1-$2 lower at $121.

Trade was mostly inactive on light demand in the Southern Plains. For the week, prices are steady in the Texas Panhandle at $120 and steady to $2 lower in Kansas at $118-$120.

Cattle futures—especially Feeder Cattle—crumbled beneath the weight of surging Corn futures.

Corn futures closed 20¢ to limit up 25¢ in the front three contracts, 15¢ to 16¢ higher through the next four and then mostly 5¢ to 7¢ higher.

Soybean futures closed 28¢ to 36¢ higher in the front six contracts, and then mostly 22¢ to 27¢ higher.

Live Cattle futures closed an average of $1.12 lower (85¢ lower at the back to $1.45 in spot Apr).

Feeder Cattle futures closed an average of $2.70 lower ($1.45 higher at the back to $3.55 lower).

Live Cattle futures closed an average of $1.12 lower (85¢ lower at the back to $1.45 in spot Apr).

Net U.S. beef export sales of 24,600 metric tons (mt) for 2021 were 57% more than the previous week and 38% more than the prior four-week average, according to USDA’s weekly U.S. Export Sales report for the week ending Apr. 15. Increases were primarily for South Korea, Japan, China, Mexico and Taiwan.

Choice boxed beef cutout value was $1.85 higher Thursday afternoon at $282.31/cwt. Select was $1.81 higher at $273.69

The average dressed steer weight the week ending Apr. 10 was 900 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 6 lbs. heavier than the prior week and 4 lbs. heavier than the same week last year. The average dressed heifer weight of 829 lbs. was 3 lbs. lighter than the prior week but 3 lbs. heavier than the prior year.

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Major U.S. financial indices closed lower Thursday, supposedly linked to reports that President Biden is set to try increasing capital gains taxes. That followed early-session support tied to positive quarterly corporate earnings and economic data.

Initial weekly unemployment insurance claims were 547,000 for the week ending Apr. 17, which was less than traders expected.

The Dow Jones Industrial Average closed 321 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 131 points.

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

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

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

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

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

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

Cattle Current Daily—April 22, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 21, 2021

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

Last week, live prices were at $120/cwt. in the Texas Panhandle, $120-$121 in Kansas, $122-$126 in Nebraska, $122-$123 in Colorado and at $122-$124 in the western Corn Belt. Dressed prices were at $196 in Nebraska and at $194-$196 in the western Corn Belt.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 20, 2021

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

Last week, live prices were at $120/cwt. in the Texas Panhandle, $120-$121 in Kansas, $122-$126 in Nebraska, $122-$123 in Colorado and at $122-$124 in the western Corn Belt. Dressed prices were at $196 in Nebraska and at $194-$196 in the western Corn Belt.

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

Live Cattle futures closed an average of 45¢ lower.

Feeder Cattle futures closed an average $1.51 lower.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 19, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 16, 2021

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

Elsewhere, trade was slow with moderate demand.

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

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

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

Live Cattle futures closed an average of 57¢ lower. 

Feeder Cattle futures closed an average $1.04 lower.

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 15, 2021

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

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

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

Feeder Cattle futures closed an average $1.32 lower.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 14, 2021

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

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

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

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

Feeder Cattle futures closed an average $2.09 lower.

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 13, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 12, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 9, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 8, 2021

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

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

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

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

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

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

Live Cattle futures closed an average of 49¢ higher.

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

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

Corn futures closed mostly 1¢ to 3¢ higher.

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 7, 2021

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

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

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

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

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

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

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

Soybean futures closed 1¢ to 6¢ higher.

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

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

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

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

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

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

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

Cattle Current Daily—April 6, 2021

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

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

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

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

Live Cattle futures closed an average of $1.32 higher.

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

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

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

Soybean futures closed mostly 5¢ to 9¢ higher.

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 5, 2021

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

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

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

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

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

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Equity markets were closed Friday.

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 2, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—April 1, 2021

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

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

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

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

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

Feeder Cattle futures closed an average of $2.41 lower. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 31, 2021

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

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

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

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

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

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

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

Corn futures closed mostly 4¢ to 8¢ lower.

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 30, 2021

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

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

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

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

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

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

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

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

Corn futures closed 2¢ to 5¢ lower.

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 29, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 26, 2021

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

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

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

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

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

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

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

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed 10¢ to 18¢ lower.

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

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

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

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

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

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

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

Cattle Current Daily—March 25, 2021

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

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

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

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

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

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

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

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

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

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

Soybean futures closed mostly 6¢ to 9¢ higher.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 24, 2021

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

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

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

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

Feeder Cattle futures closed an average of 39¢ higher.

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

Corn futures closed mostly fractionally higher to 2¢ higher.

Soybean futures closed 5¢ to 8¢ higher.

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

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

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

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

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

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

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

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

Highlights from the March survey include:

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

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

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

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

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

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

Cattle Current Daily—March 23, 2021

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

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

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

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

Live Cattle futures closed an average of 40¢ higher.

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 22, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 19, 2021

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

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

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

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

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

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

Live Cattle futures closed an average of $1.92 lower.

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

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

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

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

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

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

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

Soybean futures closed 20¢ to 29¢ lower.

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

 

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

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

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

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

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

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

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

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

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

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

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

Among other highlights from the latest report:

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

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

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

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

Cattle Current Daily—March 18, 2021

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

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

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

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

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

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

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

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

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

Soybean futures closed mostly 5¢ to 10¢ lower.

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 17, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 16, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 15, 2021

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

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

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

Live Cattle futures closed an average of 83¢ higher.

Feeder Cattle futures closed an average of $1.52 higher.

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

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

Corn futures closed mostly 4¢ lower.

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

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

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

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

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

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

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

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

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

Among other highlights from the OECD report summary:

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

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

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

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

Cattle Current Daily—March 12, 2021

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

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

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

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

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

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

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

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

Corn futures closed mostly 2¢ to 4¢ higher.

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 11, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 10, 2021

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

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

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

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

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

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

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

Soybean futures closed mostly 4¢ to 7¢ higher.

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

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

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

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

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

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

Among other WASDE highlights:

Corn

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

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

Soybeans

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

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

Wheat

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

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

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

Cattle Current Daily—March 9, 2021

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

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

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

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

Live Cattle futures closed an average of 59¢ higher.

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

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

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed mostly 3¢ to 8¢ higher.

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

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

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

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

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

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

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

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

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

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

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

Cattle Current Daily—March 8, 2021

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

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

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

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

Live Cattle futures closed an average of 59¢ higher.

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

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

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

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

Soybean futures closed mostly 10¢ to 19¢ higher.

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

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

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

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

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

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

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

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

Cattle Current Daily—March 5, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Among the survey findings:

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

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

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

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

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

Cattle Current Daily—March 4, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“That strikes me as high and may include a bit of cheap talk,” Lusk explains. “It may also be that the question was worded too vaguely. What are the conditions of the contract? What are the price premiums? Farmers would want to know answers to these questions (and more) before switching to a new crop.”

February’s Ag Economy Barometer reading of 165 was little changed compared to January when the index stood at 167.

The Current Conditions Index of 200 in February was near the all-time high. The Future Expectations Index, though, declined by 3 points to 148, marking the third decline in four months.

“Ongoing strength in ag commodity prices and farm income continue to support producers’ perspective on current conditions while concerns about possible policy changes affecting agriculture and eroding confidence in future growth in ag trade continue to weigh on producers’ future expectations,” according to the report.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses.

By | March 3rd, 2021|Daily Market Highlights|

Cattle Current Daily—March 3, 2021

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service. Live prices last week were at $114/cwt. and dressed trade was at $182.

Cattle futures closed mixed Tuesday, with continued pressure from Corn futures and uncertainty about the week’s cash direction.

Live Cattle futures closed an average of 33¢ higher, except for 25¢ lower in the back contract.

Feeder Cattle futures closed mixed, from an average of 42¢ lower to an average of 18¢ higher.

Choice boxed beef cutout value was $4.35 lower Tuesday afternoon at $234.68/cwt. Select was $1.47 lower at $226.17.

Corn futures closed mostly 4¢ to 7¢ higher; 13¢ higher in spot Mar.

Soybean futures closed 10¢ to 11¢ higher through Jan ‘22, and then mostly 3¢ higher.

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Major U.S. financial indices closed lower Tuesday, with likely profit taking from the previous day’s sharp rebound.

The Dow Jones Industrial Average closed 143 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 230 points.

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Bipartisan U.S. Senators—Deb Fischer (R-Neb.) and Ron Wyden (D-Ore.)— introduced a bill on Tuesday aimed at increasing transparency and price discovery in cash fed cattle markets.

The Cattle Market Transparency Act of 2021, according to the Senators, will:

Establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades to enable price discovery in cattle marketing regions. It will require the Secretary of Agriculture, in consultation with the Chief Economist, to establish regionally sufficient levels of negotiated cash and negotiated grid trade, seek public comment on those levels, then implement.

Require USDA to create and maintain a publicly available library of marketing contracts between packers and producers in a manner that ensures confidentiality.

Prohibit the USDA from using confidentiality as a justification for not reporting and make clear that USDA must report all Livestock Mandatory Reporting (LMR) information, and they must do so in a manner that ensures confidentiality.

Senator Fischer, a member of the Senate Agriculture Committee first introduced the bill last September.

“I am pleased to reintroduce this bill with bipartisan support,” says Senator Fischer. “It will help facilitate price discovery and provide cattle producers with the information they need to make informed marketing decisions. I am committed to working across the aisle to advance the bill forward this Congress.”

The need for increased market transparency and cash price discovery is recognized widely. Choosing a voluntary or mandatory approach is where opinions diverge just as widely.

“Cattle producers continue to face serious obstacles when it comes to increasing profitability and gaining leverage in the marketplace,” explains Ethan Lane, Vice President of Government Affairs for the National Cattlemen’s Beef Association (NCBA). “Leveling the playing field and putting more of the beef dollar in producer pockets remains the top priority of this association. NCBA shares Senator Fischer’s objectives, as do its affiliates and indeed the entire industry. The best way to achieve those objectives, however, continues to be hotly debated by the very cattle producers this legislation would directly impact. We have worked and will continue to work alongside our affiliates, Congress, and USDA toward regionally robust negotiated trade, the establishment of a cattle contract library, and commonsense in USDA’s rules of confidentiality by taking direction from our membership through the grassroots policy process.”

NCBA is two months into the implementation phase of a voluntary approach, which established a series of triggers to evaluate negotiated trade volumes in each region and benchmarks for improvement.

By | March 2nd, 2021|Daily Market Highlights|

Cattle Current Daily—March 2, 2021

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service. Live prices last week were at $114/cwt. and dressed trade was at $182.

The weekly five-area direct average fed steer price last week was $114.07/cwt., which was even with the previous week but 78¢ less than the previous year. The average five-area dressed steer price was $181.63, which was $1.06 more than the previous week but $3.15 less than the previous year.

Cattle futures extended losses Monday, with pressure including last week’s steady cash prices, the outlook for steady money this week and expectations for declining wholesale beef values.

Live Cattle futures closed an average of 47¢ lower, except for unchanged to an average of 8¢ higher in three contracts.

Feeder Cattle futures closed an average of 70¢ lower (10¢ lower toward the back to $1.47 lower in spot Mar), except for 50¢ higher in the back contract.

Boxed beef cutout value: Choice boxed beef cutout value was $1.50 lower Monday afternoon at $239.03/cwt. Select was $2.09 lower at $227.64.

Grain Futures softened Monday, pressured by the stronger U.S. Dollar and recently weaker export sales.

Corn futures closed 8¢ to 9¢ lower through the front three contracts, 1¢ to 5¢ lower through the next five and then 1¢ higher.

Soybean futures closed 9¢ to 13¢ lower through Aug’21, and then mostly 1¢ to 4¢ higher

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Major U.S. financial indices roared back Monday, helped along by a lower Treasury yield rate and U.S. approval of a third COVID-19 vaccine—this one a single-shot version from Johnson & Johnson.

The Dow Jones Industrial Average closed 603 points higher. The S&P 500 closed 90 points higher. The NASDAQ was up 396 points.

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Although the La Niña weather pattern leveled off recently, it will return with warm and dry conditions over most of the United States into the summer, according to Dr. Art Douglas, professor emeritus at Creighton University.

“The Pacific jet stream is positioned far north from normal preventing moisture from reaching the continent,” Douglas explained at last week’s CattleFax Outlook, held during the virtual 2021 Cattle Industry Convention Winter Reboot. “The only significant moisture will be in the Ohio Valley and along the Canadian border from northeast North Dakota into Minnesota.”

Douglas forecasts the Southwest U.S. will be warmer than normal, and the western half of the country will be relatively dry. Dry conditions in the Rockies will eventually extend into the central Corn Belt, he said, causing concerns for corn and soybean growers.

With crops and feed costs in mind, Mike Murphy, CattleFax vice president of research and risk management services, estimated that there will be 181 million planted acres of corn and soybeans in 2021, the most ever combined acres for those two commodities.

“That number is likely to be even higher, and in some regards it needs to be larger to balance the demand and build back supply,” said Murphy. He explained corn should be able to balance supply and demand, but soybean supplies will be snugger globally, with a smaller crop expected from South America.

On the demand side of the ledger, Murphy explained China is looking for higher quality feed ingredients, such as corn and soybeans, as that nation rebuilds its pork industry in the wake of African Swine Fever. That includes the estimated 700 million bu. of corn China purchased from the U.S. this year.

“As soybean prices drive higher, soybeans will have a greater influence on the value of corn, bringing corn prices with it,” said Murphy.

Spot soybean prices are expected to be $13.50-$16.50/bu. for the remainder of 2021, according to Murphy.

By | March 1st, 2021|Daily Market Highlights|

Cattle Current Daily—March 1, 2021

Negotiated cash fed cattle trade continued sluggish on Friday. Live trade last week was steady in Nebraska and the Southern Plains at $114/cwt.; steady to $1 lower at $114 in the western Corn Belt. Dressed trade was steady to $2 higher at $182.

Sluggish cattle trade, near-term heavy fed cattle supplies and month-end position squaring all helped pressure Cattle futures Friday.

Live Cattle futures closed an average of $1.50 lower, from 95¢ lower toward the back to $3.90 lower in expiring Feb.

Feeder Cattle futures closed an average of $2.27 lower.

Choice boxed beef cutout value was 14¢ higher Friday afternoon at $240.53/cwt. Select was 94¢ higher at $229.73.

Estimated total cattle slaughter last week of 666,000 head was 114,000 head more than the previous week and 38,000 more than the prior year. Year-to-date estimated cattle slaughter of 5.17 million head is 227,000 head fewer than the same time last year. Beef production of 4.37 billion lbs. is 87.9 million lbs. less (-1.97%) year over year.

Corn futures closed mostly 3¢ to 4¢ lower.

Soybean futures closed mostly 7¢ to 9¢ lower.

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Major U.S. financial indices closed mixed Friday, from the sharply lower Dow to higher tech stocks. Primary pressure continued to be investor fears about rapidly rising inflation and interest rates.

The Dow Jones Industrial Average closed 469 points lower. The S&P 500 closed 18 points lower. The NASDAQ was up 72 points.

CME WTI Crude Oil futures closed $1.93 to $2.03 lower through the front six contracts.

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“Beef in cold storage followed a fairly typical seasonal pattern in 2020 despite the coronavirus pandemic,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, beef in cold storage accelerated more than normal the last quarter of 2020. This resulted in beef in cold storage at the end of January 2021 totaling 519 million lbs., which is the largest quantity of beef in cold storage at the end of January since 2017. This is not an unmanageable quantity of beef, but it could indicate that beef is slowly backing up in the supply chain.” He adds that recently higher wholesale beef values may suggest supplies will be easily cleared.

Total pounds of beef in freezers Jan. 31 were down 3% from the previous month, but up 6% from last year, according to the latest USDA Cold Storage report.

By | February 27th, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 26, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live trades at $114/cwt., and a few in the beef at $182, but too few to trend.

There were also a few dressed trades in the western Corn Belt at $182, but too few to trend.

Last week, live sales were at $114 in the Southern Plains and Nebraska; $114-$115 in the western Corn Belt. Dressed trade was at $180-$182.

Cattle feeders offered 790 head (6 lots) in Central Stockyards’ special Fed Cattle Exchange auction Thursday, all from the Southern Plains. None sold. Reserve prices were $115-$116 and bids were $114.25 to $114.50.

Cattle futures closed mixed Thursday. Weaker Corn futures, tied to lower export sales and profit taking, helped Feeder Cattle.

Feeder Cattle futures closed an average of 35¢ higher.

Sharply lower outside markets, the continued lack of cash direction and weaker export sales helped to mostly pressure Live Cattle.

Net U.S. beef export sales of 8,500 metric tons for 2021 were 63% less than the previous week and 66% less than the prior four-week average, according to the U.S. Export Sales report for the week ending Feb. 18. Increases were primarily for South Korea, Japan, Mexico, Canada, and Taiwan.

Live Cattle futures closed an average of 33¢ lower, except for an average of 17¢ higher in three contracts.

Choice boxed beef cutout value was 36¢ lower Thursday afternoon at $240.39/cwt. Select was $1.00 lower at $228.79.

The average dressed steer weight the week ending Feb. 13 was 919 lbs., the same as a week earlier, but 14 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 850 lbs. was 2 lbs. heavier than the prior week and 17 lbs. heavier than the previous year. Fed cattle slaughter of 468,241 head was 40,812 head less than the previous week; 20,542 head less than the prior year.

Corn futures closed 3¢ to 7¢ lower through Sep ‘21, and then mostly 1¢ to 2¢ lower.

Soybean futures closed 5¢ to 18¢ lower through Jan ‘22, and then mostly fractionally higher to 1¢ higher.

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Major U.S. financial indices closed sharply lower Thursday with investors apparently rattled by a surge in Treasury bond yield rates. That came in the face of a more positive unemployment report than the trade expected.

Weekly initial unemployment insurance claims were 730,000 the week ending Feb. 20, down 111,000 from the previous week, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 559 points lower. The S&P 500 closed 96 points lower. The NASDAQ was down 478 points. 

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Beef byproduct values continue to gain after sinking to a pandemic low of $6.57/cwt. the latter part of last April. Prices mostly gradually increased since then to $9.78 by Feb. 24; about 7% more than a year earlier.

“Beef and beef byproducts are typically produced in nearly fixed proportions; however, when packers experienced line disruption in 2020, many plants changed fabrication methods to keep more whole muscles/primals intact and keep less offal to maximize line speed,” explains Brenda Boetel, livestock economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “The decrease in beef and offal provided less opportunities for exports and byproduct values decreased…When these edible offal products are not exported, they will often go into rendering or into pet food and ultimately decrease the overall value of the finished steer.”

Total offal value plus hides accounted for 20.7% of U.S. beef export value in 2020, down from 22% in 2019, according to Boetel.

For perspective, basis a steer at 1,400 lbs., byproduct value increased $44.94 per head to $136.92 at the end of February, compared to the pandemic low.

“With the continued recovery from COVID disruptions, byproduct production has mostly returned to pre-COVID levels. Given the relatively fixed pounds of byproducts per 1,400 lb. steer, the byproduct drop value contributions have been increasing due primarily to changes in demand,” Boetel says.

By | February 25th, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 25, 2021

Negotiated cash fed cattle tradewas limited on light demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service. There were a few live trades in the Southern Plains steady with last week at $114/cwt., but too few to trend.

Cattle feeders offered 1,145 head (9 lots) in Central Stockyards’ (CS) Fed Cattle Exchange auction Wednesday, all from the Southern Plains. Of those, 409 head sold (250 heifers and 159 steers) for a weighted average price of $114.25/cwt. CS will host a special sale Thursday.

On the other hand, slaughter steers sold steady to $3 lower, with instances of $4 lower at Sioux Falls Regional in South Dakota. There were 534 head of Choice 3-4 steers weighing an average of 1,654 lbs., bringing an average of $112.06, which was $2-$3 lower than cash trade in the region last week.

Cattle futures closed higher Wednesday, helped along by sharply higher outside markets, broad commodity support and recent strength in Lean Hog futures.

 Live Cattle futures closed an average of 91¢ higher.

Feeder Cattle futures closed an average of $1.23 higher, from 67¢ higher at the back to $2.15 higher toward the front.

Choice boxed beef cutout value was 46¢ higher Wednesday afternoon at $240.75/cwt. Select was 74¢lower at $229.79. 

Corn futures closed mostly 3¢ to 7¢ higher.

Soybean futures closed 14¢ to 18¢ higher through Jan ‘22, and then mostly 5¢ to 10¢ higher.

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Major U.S. financial indices closed higher Wednesday, amid another volatile session. Support seemed to center around optimism for the economy picking up steam. Remarks from Federal Reserve Vice Chair, Richard Clarida also helped quell inflation worries, with remarks to the U.S. Chamber of Commerce, mirroring the dovish tone of Chair Jerome Powell a day earlier.

The Down Jones Industrial Average closed 424 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 132 points.

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Cattle markets continue to underperform, beneath the weight of record high beef production since the middle of June. But, Randy Blach, CattleFax CEO, expects cattle prices to increase from now through 2024, especially after the first half of this year. Profitability will increase significantly for cow-calf producers and margin operators, he says.

CattleFax shared its Market Outlook Wednesday, as part of the National Cattlemen’s Beef Association Winter Reboot.

Part of the price optimism has to do with declining cattle numbers, after working through current front-end supplies.

CattleFax projects modest herd liquidation of 200,000 beef cows this year and 350,000 head next year, due in part to the likelihood of expanding La Niña drought this spring and summer.

Leverage will also swing back in producers’ favor as packing plant capacity utilization declines, according to Kevin Good, CattleFax vice president of industry relations and analysis.

At the same time, CattleFax expects consumer beef demand to continue strong.

Blach explained domestic consumer beef demand last year was the strongest in more than 30 years, based on the U.S. Consumer Beef Demand Index. That was helped by consumer incomes being replaced almost entirely by government stimulus.

Internationally, CattleFax expects U.S. beef exports to increase at least 5% this year.

In terms of cattle prices, these are the CattleFax projections for this year.

 

                                                Annual Av.                Range

 

Fed steer                               $119/cwt.                  $108 to $128

 

800 lbs. steer                       $145/cwt.                  $135 to $160

 

550 lbs. steer                       $170/cwt.                  $160 to $180

 

Utility cows                          $64/cwt.                     $52 to $74

 

Bred cows                            $1,600/hd                 $1,200 to $1,900

There are headwinds, of course.

Even before considering the drought, Mike Murphy, CattleFax vice president of research and risk management services, said both supply and demand mean feed costs will likely remain elevated into the next crop marketing year.

As well, the folks at CattleFax expect inflation and interest rates to begin rising.

By | February 24th, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 24, 2021

Negotiated cash fed cattle trade was at a standstill in Kansas through Tuesday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand, with too few transactions to trend.

Cattle futures softened Tuesday, with spot Live Cattle soon to expire, the lack of cash direction and bearish outside markets early in the session.

Live Cattle futures closed an average of 85¢ lower, from 10¢ to $1.85 lower.

Feeder Cattle futures closed an average of $1.01 lower, from 67¢ to $1.35 lower.

Choice boxed beef cutout value was 31¢ higher Tuesday afternoon at $240.29/cwt. Select was 55¢ higher at $230.53.

Corn futures closed 1¢ to 2¢ higher through Jly ‘21, and then mostly fractionally mixed.

Soybean futures closed 10¢ to 22¢ higher through Sep ‘22, and then mostly 8¢ higher.

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Major U.S. financial indices closed mixed Tuesday, following steep early losses. Part of the turnaround stemmed from comments made by Federal Reserve Chair, Jerome Powell, which seemed to quell some inflation fears, at least for the day.

“Following large declines in the spring, consumer prices partially rebounded over the rest of last year. However, for some of the sectors that have been most adversely affected by the pandemic, prices remain particularly soft. Overall, on a 12-month basis, inflation remains below our 2% longer-run objective,” explained Powell, in his Semiannual Monetary Policy Report to the Congress. “As noted in our January policy statement, we expect that it will be appropriate to maintain the current accommodative target range of the federal funds rate until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.”

The Dow Jones Industrial Average closed 15 points higher. The S&P 500 closed 4 points higher. The NASDAQ was down 67 points.

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“It’s likely that you’ve heard individuals like Bill Gates claim that U.S. livestock’s contribution to climate change is immense. However, these claims are flat out wrong,” says Jerry Bohn, president of the National Cattlemen’s Beef Association, in an op-ed released yesterday. “Some activists and others like Gates often cite old claims made in the United Nation’s debunked report titled Livestock’s Long Shadow. They also use global numbers to back their claims about U.S. cattle production to back their marketing claims and sell their products.

“It’s critical that Americans understand that global GHG emissions are skewed higher because they include emissions from nations whose cattle and beef management systems are far less efficient than those in the United States. Global numbers also include countries like India, which have large bovine populations but where harvest is very low or non-existent because of cultural or religious practices. In global terms, U.S. beef cattle production counts for just 0.5% of global GHG emissions, so even if every American stopped eating beef in favor of fake meat substitutes, there would be virtually no discernible impact on our changing climate.”

In the op-ed—Beef Is, and Always Will Be Sustainable—Bohn emphasizes continued progress of the U.S. beef production system, which is already among the most productive and efficient in the world.

“Between 1975 and 2017, beef cattle emissions declined 30%. At the same time, the U.S. now produces even more beef from fewer animals and a smaller land base. Today, the U.S. produces 18% of the world’s beef with just 6% of the world’s cattle numbers,” Bohn explains. “This is possible through commitments to animal welfare, better animal nutrition and advancements in genetics. Those statistics are often overlooked or ignored by individuals like Bill Gates, the writers at OZY and others who are working to advance an agenda that drives people away from eating meat using scare tactics and unsound science to advance their cause and line their pockets with grocery money from well-meaning, concerned consumers who have been sold something they don’t want and never needed in the first place.”

By | February 23rd, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 23, 2021

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Live sales last week were at $114/cwt. in the Southern Plains and Nebraska; at $114-$115 in the western Corn Belt. Dressed trade was at $180-$181 in Nebraska and at $180-$182 in the western Corn Belt.

Last week’s five-area direct average steer price was 39¢ higher on a live basis at $113.99/cwt. The average five-area dressed steer price was 47¢ higher at $180.57.

Despite rising Corn futures prices and higher feedlot placements than expected (Friday’s Cattle on Feed report), Feeder Cattle futures shook off early pressure to mostly extend gains. Live Cattle futures closed narrowly mixed, though, amid plentiful fed cattle supplies and short-term uncertainty.

Live Cattle futures closed narrowly mixed, from an average of 28¢ lower across the front half of the board to an average of 16¢ higher.

Feeder Cattle futures closed an average of 27¢ higher, except for an average of 32¢ lower in the back two contracts.

Choice boxed beef cutout value was 75¢ higher Monday afternoon at $239.98/cwt. Select was $2.08 higher at $229.98.

Grain Futures rebounded with last week’s USDA forecast during the Agricultural Outlook Forum.

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed mostly 5¢ to 15¢ higher.

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Major U.S. financial indices closed mixed Monday. Primary pressure stemmed from a selloff in big tech stocks, as well as continued nervousness over rising Treasury yield rates—potential implications for higher interest rates and economic recovery. 

The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed 30 points lower. The NASDAQ was down 341 points.

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“The feedlot situation in early 2021 is a carryover from the disruptions and unusual dynamics last year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “For the entire year in 2020, feedlot placements were down 4.0%. In the last half of the year feedlot placements were almost unchanged year over year, up 0.3%.  However, this average belies dramatic dynamics as feedlot placements in the third quarter were up 8.5% year over year, while placements in the fourth quarter were down 7.0% from the prior year.”

Peel points out total estimated feeder supplies outside of feedlots Jan. 1 were 25.66 million head, down 0.2% year over year. Even when adjusted for decreased veal slaughter and increased feeder cattle imports, he says the 1.3% year-over-year decrease in the 2020 calf crop would have suggested a bigger decrease in the feeder supply to start the year.

“It appears that some feeder cattle were carried over into 2021 and likely is reflected in the relatively large January placements,” Peel says. “Feeder supplies are somewhat front-loaded early in 2021 but should tighten up in the second half of the year.”

As reported in Cattle Current Monday, feedlot placements in January were 2.017 million head, according to the latest Cattle on Feed (COF) report. That was about 3% more year over year and about 3% more than pre-report expectations.

Peel shares one other note about the COF.

“January marketings were 1.822 million head, down 5.6% from one year ago and about as expected. However, January 2021 had two less slaughter days than the year before meaning that daily average marketings this year were 3.8% higher than last year,” Peel explains.

By | February 22nd, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 22, 2021

Negotiated cash fed cattle trade last week ended up steady in the Southern Plains at $114/cwt., according to the Agricultural Marketing Service. Live trades were steady to $1 higher in Nebraska at $114; dressed trade steady to $1 higher at $180-$181. In the western Corn Belt, prices were steady to $2 higher on a live basis at $114-$115 and steady to $2 higher in the beef at $180-$182.

Through Thursday, the five-area direct average steer price was $114.11/cwt. on a live basis, which was 33¢ more than the previous week but $5.66 lower than the same week last year. The average five-area dressed steer price was 64¢ higher week to week at $180.71, which was $9.39 less year over year.

Cattle futures closed higher Friday with steady cash prices, lower Corn futures, the week’s strong wholesale beef values and expectations for packers to pick up production following storm disruptions.

Live Cattle futures closed an average of 71¢ higher.

Feeder Cattle futures closed an average of 90¢ higher.

Choice boxed beef cutout value was 38¢ higher Friday afternoon at $239.23/cwt. Select was 43¢ higher at $227.90.

Estimated cattle slaughter for the week of 552,000 head was 56,000 head fewer than the previous week and 74,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 4.50 million head is 263,000 head fewer (-5.52%) than last year. Estimated year-to-date beef production of 3.81 billion lbs. is 124.8 million lbs. less (-3.17%) than the same time last year.

Corn futures closed 6¢ to 7¢ lower through the front three contracts, mostly fractionally higher to 1¢ higher through Jly ’23 and then mostly 3¢ lower.

Soybean futures closed mostly 3¢ to 9¢ higher.

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Major U.S. financial indices closed narrowly mixed Friday. Likely profit taking and inflation jitters counterbalanced positive economic news.

Existing-home sales of 6.69 million rose 0.6% in January, marking two consecutive months of growth, according to the National Association of Realtors® (NAR). Sales were 23.7% more year over year.

“Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market,” says Lawrence Yun, NAR’s chief economist. “Sales easily could have been even 20% higher if there had been more inventory and more choices.”

The Dow Jones Industrial Average closed fractionally higher. The S&P 500 closed 7 points lower. The NASDAQ was up 9 points. 

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Feedlots with 1,000 head or more capacity placed 2.017 million head in January, according to Friday’s monthly Cattle on Feed report. That was about 3% more year over year and about 3% more than pre-report expectations. The report accounts for feedlots with 1,000 head or more capacity.

In terms of weight, 42.14% went on feed weighing 699 lbs. or less; 49.18% weighed 700-899 lbs.; 8.68% weighed 900 lbs. or more.

“With higher placements in January, rising feed costs are likely to become more of a focus and concern,” say analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor. “The weekly Omaha corn price for January averaged $5.04/bu., which is a 15.2% ($0.67 per bushel) rise over December 2020 and 32.0% ($1.23 per bushel) higher than last year. High feed costs may incentivize cow-calf operators to add more weight to calves before placing into feedlots. This may be a challenge as much of the western U.S. remains in drought, potentially limiting available pasture and feed supplies. The harsh winter weather in mid-February likely depleted hay stocks in some areas.”

Marketings in January of 1.822 million head were 5.6% less year over year and slightly fewer than expected.

Total cattle on feed Feb. 1 of 12.106 million head were 1.5% more than a year earlier and about 0.5% more than expectations. That’s the second most for the month since the data series began in 1996.

By | February 20th, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 19, 2021

Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service. Live sales were steady with the prior week at $114/cwt. in the Southern Plains. There were a few live sales at $114 in Nebraska and a few in the western Corn Belt at $115, but too few to trend.

Prices last week were $113-$114 in Nebraska on a live basis and at $112-$115 in the western Corn Belt. Dressed trade was at $180.

Cattle feeders offered 1,518 head of Southern Plains steers and heifers in Central Stockyards’ special Fed Cattle Exchange auction on Thursday. Of those, 737 head sold (5 lots), via live weight and Bid-the-Grid for $114/cwt. The exception was 41 head bringing $113.75.

Cattle futures closed mixed but mostly lower Thursday, pressured again by supply chain disruptions and uncertainty about post-storm impacts. Positioning ahead of Friday’s monthly Cattle on Feed report also could have been in play.

Live Cattle futures closed an average of 70¢ lower (17¢ to $1.22 lower), except for an average of 32¢ higher in the back three contracts.

Feeder Cattle futures closed an average of 48¢ lower, except from unchanged to an average of 8¢ higher in three contracts.

Choice boxed beef cutout value was $1.34 higher Thursday afternoon at $238.85/cwt. Select was $1.83 higher at $227.47.

The average dressed steer weight the week ending Feb. 6 was 919 lbs., which was 1 lb. lighter than the previous week but 16 lbs. heavier than the same time a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 848 lbs. was 5 lbs. lighter week to week but 14 lbs. heavier year over year. Total fed cattle slaughter for the week of 509,053 head was 16,884 head more than the same week last year.

Corn futures closed mixed, mostly from 1¢ lower to 1¢ higher.

Soybean futures closed 6¢ to 8¢ lower through the front four contracts, then 2¢ lower to mostly 2¢ to 4¢ higher.

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Major U.S. financial indices closed lower Thursday, pressured in part by discouraging jobs data.

Initial weekly unemployment insurance claims for the week ending Feb. 13 increased by 13,000 to 861,000, according to the U.S. Department of Labor. That was more than the trade expected.

The Dow Jones Industrial Average closed 119 points lower. The S&P 500 closed 17 point lower. The NASDAQ was down 100 points.

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U.S. beef and veal exports for fiscal year (FY) 2021 are projected to be $7.4 billion, according to the latest quarterly Outlook for U.S. Trade report from USDA’s Economic Research Service (ERS) and Foreign Agricultural Service (FAS). The forecast is $300 million more than the November estimate, mostly on increased unit values. The total would be $756 million more than FY 2020.

Total FY 2021 U.S. livestock, dairy, and poultry exports are forecast $300 million more than the November projection at $32.6 billion.

Total FY 2021 U.S. agricultural exports are forecast $5 billion more than the November projection at $157.0 billion, driven by higher oilseed and grain export forecasts.

“The global COVID-19 pandemic remains the defining variable impacting economic growth for countries around the globe,” say ERS-FAS analysts. “The success of both economic relief programs and vaccination deployments is expected to shape the growth rates and extent of recovery in FY 2021. Several new variants of the virus pose concerns for prolonged economic setbacks, but widespread distribution of vaccines has the potential to provide a buffer against further economic disruption. Global gross domestic product (GDP) is projected to grow 5.5% in FY 2021. Containing the pandemic, restoring consumer confidence, and boosting consumption levels are essential to advancing growth.”

For perspective, those analysts note global GDP last year declined by about 3.5%.

“The impact of wide-ranging adaptations in monetary policy and shifts in international trade flows due to the pandemic have had notable impacts on foreign exchange rates over the last 14 months,” says ERS-FAS analysts. “The initial outbreak of COVID-19 caused a flight of currency toward the U.S. dollar, leading to its dramatic appreciation in early 2020. As the outbreak steadied, and interest rates on U.S. Treasuries remained low relative to government debt from other currency safe havens, particularly the European Union’s Euro, the dollar has depreciated steadily since April…The recent currency trend of a weakening U.S. dollar relative to the Japanese yen, Euro, and Chinese renminbi yuan is expected to continue into 2021 but moderate as the year progresses.”

U.S. agricultural imports in FY 2021 are forecast at $137.5 billion, up $500 million from the November forecast, led by increases in livestock, dairy, and poultry imports.

By | February 18th, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 18, 2021

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service. There was some trade in the Texas Panhandle on Tuesday at $114/cwt., which was steady with last week.

Impacts from the severe weather, including reports of reduced slaughter at some packing plants in the Southern Plains, due to rolling power outages, might help explain what appears to be a tough road to maintaining steady fed cattle prices this week. Reduced production also helps account for the atypical rise in wholesale beef values.

Cattle feeders offered 1,444 head (9 lots) in Central Stockyards’ (CS) weekly Fed Cattle Exchange auction, all from Kansas and Texas. None sold. The reserve price for most was $114.50/cwt. CS will host another sale Thursday.

Choice steers and heifers sold 75¢ to $1.00/cwt. higher amid a light offering at the fat auction in Tama, IA. The deepest test was 198 head of Choice 2-4 heifers weighing an average of 1,362 lbs., bringing an average of $114.92. That was at the upper end of last week’s country trade in the region.

At Sioux Falls Regional, though, slaughter steers sold steady, while heifers traded $2-$3 lower. There were 171 Choice 2-3 steers weighing an average of 1,457 lbs. and bringing an average of $113.37.

Cattle futures closed lower Wednesday, pressured by supply chain disruptions, as well as uncertainty about post-storm impacts.

Live Cattle futures closed an average of 58¢ lower, from 2¢ lower toward the back to $1.65 lower toward the front.

Feeder Cattle futures closed an average of $1.26 lower, from 85¢ lower to $2.35 lower in spot Mar.

Choice boxed beef cutout value was $2.74 higher Wednesday afternoon at $237.51/cwt. Select was $3.61 higher at $225.64.

Corn futures closed mostly 1¢ to 3¢ higher through Sep ‘22, and then mostly unchanged to fractionally higher.

Soybean futures closed mostly 1¢ to 3¢ lower, except for 3¢ higher in near Nov and Jan.

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Major U.S. financial indices closed narrowly mixed amid volatile trade Wednesday, despite domestic retail sales last month shattering expectations to the upside.

U.S. retail and food services sales in January were 5.3% more than the previous month at $586.2 billion, according to the U.S. Census Bureau.

Apparently, the sharp increase fueled investor concerns about inflation, as did the monthly Producer Price Index (PPI) from the U.S. Bureau of Labor Statistics. It increased 1.3% in January, the steepest rise since the index began in 2009.

The Dow Jones Industrial Average closed 90 points higher. The S&P 500 was down 1 point to 3,931. The NASDAQ was down 82 points.

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Creighton University’s Rural Mainstreet Index (RMI) increased to 52.0 in January, from 51.6 in December. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the index increased to its second highest level since January 2020. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Recent sharp improvements in agriculture commodity prices, federal farm support payments, and the Federal Reserve’s record-low short-term interest rates have underpinned the Rural Mainstreet Economy in a solid and positive growth range. However, the rural economy remains well below pre-pandemic levels,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The confidence index, which reflects bank CEO expectations for the economy six months out, declined slightly to a still healthy 60.0 from December’s 62.9.

“Federal farm support payments, improving grain prices, and advancing exports have supported confidence, offsetting negatives from pandemic ravaged retail and leisure and hospitality companies in rural areas,” Goss explains.

For a fourth straight month, the farmland price index advanced above growth neutral. The January level of 56.3 was the highest level since July 2013, and up from 55.0 in December. This is first time since 2013 that Creighton’s survey has recorded four straight months of above growth-neutral farmland prices.

Similarly, the farm equipment-sales index the past two months rose above growth neutral for the first time in 86 months. It was 50.2 in December and then rose to 54.5 in January, the highest level since April 2013.

According to Goss, bankers reported that their primary economic concerns for this year are excessive inflation and higher long-term interest rates.

“I feel the economy is moving in a positive direction that can be rattled by a combination of higher taxes, higher inflation, and a return of stricter regulation,” explained Jim Levick, president of Nebraska State Bank in Oshkosh, NE.

By | February 17th, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 17, 2021

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service.

Trade last week was steady in the Southern Plains at $114/cwt. on a live basis, $1-$2 higher in Nebraska at $113-$114 and steady to $1 higher in the western Corn Belt at $112-$115. Dressed trade was steady to $2 higher at $180.

Futures markets closed mixed but mainly higher Tuesday, with Feeder Cattle fading pressure from surging grain futures and Live Cattle helped by higher wholesale beef values and recently increasing open interest.

Live Cattle futures closed mixed, from an average of 41¢ lower in four contracts (5¢ lower at the back to $1.05 lower in spot Feb) to an average of 31¢ higher.  

Feeder Cattle futures closed an average of 78¢ higher, except for an average of 10¢ lower in the front three contracts.

Choice boxed beef cutout value was $2.33 higher Tuesday afternoon at $234.77/cwt. Select was 62¢ higher at $222.03.

Grain futures surged, led by wheat and concerns about winter kill from the severe weather.

Corn futures closed 11¢ to 13¢ higher through Sep ‘21, 7¢ to 9¢ higher through the next four contracts and then mostly 3¢ to 4¢ higher. 

Soybean futures closed 11¢ to 17¢ higher. 

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Major U.S. financial indices closed narrowly mixed Tuesday. Pressure included investors fretting over escalating Treasury yield rates pointing toward higher interest rates and the potential impact on the speed of economic recovery.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 2 points lower. The NASDAQ closed 47 points lower.

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“Heavier anticipated carcass weights and greater fed cattle marketings are expected to lift 2021 beef production to record levels at 27.540 billion lbs.,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook (LDPO).

Based on January’s Actual Slaughter Under Federal Inspection report, ERS analysts say average carcass weights were more than 18 lbs. heavier than the same time a year earlier at 844.1 lbs. They add that the same data suggests cattle slaughter is 3.7% more than last year.

“Although the number of cattle outside feedlots Jan. 1 was less than a year ago, a larger proportion of cattle on small grains pastures, and dry conditions in parts of the Plains States, raised prospects for higher anticipated placements in first-half 2021. As a result, marketings in second-half 2021 were increased, which also contributed to a raised production forecast,” say ERS analysts.

Those projections helped lead to the lower month-to-month forecast for an average five-area direct fed steer price of $115/cwt.

ERS also lowered expectations for feeder steer prices.

“Feeder steer prices for January 2021 averaged $133.94/cwt. for steers weighing 750-800 lbs. sold at Oklahoma City National Stockyards, about 7% below the average for January 2020. With prices for the first two weeks of February almost $7 below the same month last year, the first-quarter 2021 forecast was lowered $2 to $132/cwt.,” say ERS analysts. “Revisions to the 2020 calf crop tightened anticipated feeder cattle supplies in second-half 2021. However, higher expected feed costs offset expectations for stronger prices the rest of the year; as a result, the second-half 2021 feeder steer price forecasts are unchanged from last month.”

ERS forecasts the feeder steer price at $134/cwt. in the second quarter, $139 in the third and $140 in the fourth quarter for an annual average of $136.25. That would be only 80¢ more than the 2020 average.

By | February 16th, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 16, 2021

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Trade last week was steady in the Southern Plains at $114/cwt. on a live basis, $1-$2 higher in Nebraska at $113-$114 and steady to $1 higher in the western Corn Belt at $112-$115. Dressed trade was steady to $2 higher at $180.

The five-area direct average steer price last week was about even with the prior week at $113.83/cwt. on a live basis and at $180.10 in the beef. Confirmed trade volume was 19,328 head fewer at 62,079.

Futures markets were closed Monday in observance of President’s Day. Week to week on Friday, Live Cattle futures closed an average of 79¢ higher (45¢ to $1.40 higher). Feeder Cattle futures closed an average of $1.29 higher, from 17¢ higher at the back to $2.57 higher at the front.

Choice boxed beef cutout value was 7¢ higher Monday afternoon at $232.44/cwt. Select was 48¢ higher at $221.41.

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Equity markets were closed Monday in observance of President’s Day. Week to week on Friday, the DJIA closed 310 points higher, the NADASQ closed 239 points higher and the S&P 500 was up 48 points.

Crude Oil futures (WTI-CME) closed an average of $2.57 higher last week, through the front six contracts. The severe weather will likely boost energy markets this week.

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Frigid, prolonged temperatures in the Southern Plains, along with ice and snow are being described as once in a generation or downright history making.

“An unprecedented and expansive area of hazardous winter weather continues into President’s Day as disruptive snow and ice accumulations transpire across the South Central U.S.,” according to the National Weather Service on Monday. “This impressive onslaught of wicked wintry weather across much of the Lower 48 is due to the combination of strong Arctic high pressure supplying sub-freezing temperatures and an active storm track escorting waves of precipitation from coast to coast.”

Sub-zero temperatures and wind chills were expected to last several more days, as the storm system tracked from the Southern Plains toward the northeast. It was preceded by last week’s Arctic blast across the Northern and Central Plains.

“Wheat pasture cattle and other stockers are no doubt experiencing reduced gains or even weight loss in these conditions. Many cattle grazing dual-purpose wheat will need to be removed and marketed in the next two to three weeks, very likely a bit lighter in weight than expected,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel notes feeder cattle prices in the state were 3-10% lower last week as decreased demand overwhelmed the significant decline in auction volume. Some markets in the region closed last week and will this week.

“Feedlot cattle are no doubt impacted as well and the market effects will be apparent over time,” Peel says. “Reduced performance will show up as lower carcass weights in the coming weeks. The residual impacts of this historic weather event will likely effect cattle markets for several weeks.”

By | February 15th, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 15, 2021

Negotiated cash fed cattle trade ranged from slow to limited trade on light demand up north, to mostly inactive in the Southern Plains, through Friday afternoon, according to the Agricultural Marketing Service.

For the week:

Live prices in the Southern Plains were steady at $114/cwt.

Live prices in Nebraska were $1-$2 higher at $113-$114. Dressed trade was steady to $2 higher at $180.

Live prices in the western Corn Belt were steady to $3 higher at $114-$115. Dressed trade was steady to $2 higher at $180.

The five-area direct average steer price through Thursday was $113.78/cwt. on a live basis, which was 50¢ lower than the previous week and $5.10 less than the prior year. The average steer price in the beef of $180.07 was 75¢ less than the prior week and $10.19 less than the previous year.

Estimated total cattle slaughter last week was 611,000 head, which was 42,000 head fewer than the previous week. Estimated year-to-date cattle slaughter of 3.95 million head is 185,000 head fewer (-4.47%) than the same period last year. Estimated year-to-date beef production of 3.35 billion lbs. is 68.2 million lbs. less (-2.0%) than a year earlier.

Cattle futures closed higher Friday with support from consolidating grain futures prices, as well as the outlook for higher cash prices next week, given the frigid weather and what appeared to be sluggish fed cattle trade for the week.

Live Cattle futures closed an average of 98¢ higher, from 22¢ lower toward the back to $2.05 higher toward the front.

Feeder Cattle futures closed an average of 98¢ higher (60¢ to $1.70 higher).

Choice boxed beef cutout value was 59¢ lower Friday afternoon at $232.37/cwt. Select was 64¢ higher at $220.93.

Corn futures closed 2¢ to 4¢ lower through Jly ‘22, and then mostly fractionally lower to 1¢ lower. 

Soybean futures closed 4¢ to 5¢ higher through Aug ‘21, and then mostly fractionally higher to 2¢ higher. 

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Major U.S. financial indices edged higher Friday, supported by higher oil prices and prospects for additional federal economic stimulus.

The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 69 points.

Crude Oil futures (WTI-CME) closed an average of $2.57 higher through the front six contracts, week to week on Friday. That’s an average of $6.98 higher over the last two weeks.

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As might be suspected, the novelty of the pandemic overwhelmed conventional logic and expectations in many areas.

For instance, as COVID-19 began upending economies and supply chains last April, the Food and Agricultural Policy Institute (FAPRI) at the University of Missouri provided projected impacts. At the time, analysts there expected the pandemic would lead to lower prices for livestock producers. That happened, but not to the degree or for the reasons anticipated.

“In hindsight they note that they incorrectly assumed that supply chain concerns would play only a minor part in the story, and that the main cause of lower producer prices would be weaker consumer demand. They expected a contracting U.S. economy to reduce disposable income, and that consumers with less money in their pockets would choose to buy less meat and other high-value food products,” according to a recent FAPRI draft document—Expected and Unexpected Impacts of COVID-19 on U.S. Markets for Animal Products. That’s part of an investigation into the impacts of the COVID-19 pandemic on agriculture, food, and related supply chains, conducted by FAPRI and Texas A&M University’s Cross-Border Threat Screening and Supply Chain Defense (CBTS) DHS Center of Excellence.

Instead, real disposable income in the U.S. increased significantly, even as real GDP plunged, due to government stimulus programs. Domestic meat consumption increased slightly year over year, in the face of higher prices.

For context, FAPRI researchers note the average price paid to livestock producers declined 20% in April. At the same time, consumer prices began to increase sharply for meat, poultry, fish and eggs. By June, consumer prices were 10% more than in March. Both matched expectations as costs increased for meat processing and delivery.

“As packing plants were able to return to more normal levels of capacity utilization and as other supply chain problems were resolved or at least mitigated, these trends reversed,” say FAPRI researchers. “Consumer prices for meat and other animal products declined by more than 5% between June and November, while farm-level prices for animal products increased by 20% between April and November. It would be a mistake to say things are back to normal in the sector, but the situation has improved dramatically since the depths of the crisis last spring.”

By | February 13th, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 12, 2021

Negotiated cash fed cattle trade was slow on light demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live trades in Nebraska, but too few to trend.

For the week so far, live trade in the Southern Plains is steady at $114/cwt. Dressed trade is steady to $2 higher at $180 in Nebraska and the western Corn Belt. Live trade in the latter two regions last week was at $112-$114.

Cattle futures closed narrowly mixed on Thursday.

Live Cattle futures closed an average of 52¢ higher, except for 80¢ lower in spot Feb. 

Feeder Cattle futures closed an average of 20¢ lower, except for unchanged to an average of 9¢ higher in three contracts.

Choice boxed beef cutout value was 6¢ lower through Thursday afternoon at $232.96/cwt. Select was 67¢ lower at $220.29.

The average dressed steer weight the week ending Jan. 30 was 920 lbs., which was 6 lbs. lighter than the previous week but 23 lbs. heavier than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 853 lbs. was 2 lbs. heavier than the prior week and 20 lbs. heavier than the previous year.

Grain futures recovered some gains from the previous session’s steep decline as markets continue carving out a trading range.

Corn futures closed 6¢ to 7¢ higher through the front three contracts, and then 1¢ to 4¢ higher. 

Soybean futures closed 10¢ to 15¢ higher through Nov ‘21, and then mostly 3¢ to 5¢ higher. 

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Major U.S. financial indices closed narrowly mixed Thursday. Pressure included softer energy prices and more jobless claims than the trade expected.

Initial unemployment insurance claims for the week ending Feb. 6 were 793,000, which was 19,000 fewer than the previous week, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 7 points lower. The S&P 500 was up 6 points. The NASDAQ was up 53 points.

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USDA’s latest Feed Outlook provides perspective on the global demand fueling higher grain prices.

For instance, the latest estimate for 2020-21 U.S. corn exports of 2,600 million bu. would be the most ever and 162 million bu. more than the previous record set in 2017-18.

“Export prospects improved due to increased shipments to China this year, culminating in 38.8 million bu. in December to that country, as reported by the Census Bureau,” according to analysts with USDA’s Economic Research Service (ERS). “September through December shipments to China reached 124 million bu., compared with less than a million during the same period in 2019-20. Total U.S. exports through December are 628 million bu., compared with 371 million during the same period in 2019-20. USDA Agriculture Marketing Service Export Inspections through Feb. 4 indicate a strong pace of exports since the New Year.”

ERS projects China will import 40.3 million tons of corn, barley, oats, and sorghum in 2020-21, more than double what that nation imported in 2019-20. Analysts cite high domestic prices and strong demand from that nation’s livestock sector as drivers to the increase.

“This change—coupled with lower coarse grain production and exports in the Black Sea region of Europe, due to hot and dry growing conditions in several key production regions—has substantially impacted 2020-21 feed grain trade,” say ERS analysts. “Price levels across the world are substantially higher than they were a year ago. China has increased its market share of trade for nearly every feed-grain commodity in 2020-21. Other significant import markets have seen their import outlooks reduced due to higher prices and increased competition.”

By | February 11th, 2021|Daily Market Highlights|

Cattle Current Daily—Feb. 11, 2021

Negotiated cash fed cattle trade was slow on light demand in Kansas through Wednesday afternoon at $114/cwt. on a live basis, which was steady with last week.

Trade was also slow on light demand in the western Corn Belt with early dressed sales steady to $2 higher at $180. Live prices there last week were at $112-$114.

Elsewhere, trade was limited on light demand, with too few transactions to trend, according to the Agricultural Marketing Service.

Last week: live prices in the Texas Panhandle and Nebraska were at mostly $114; dressed trade in Nebraska was at $178-$180.

Cattle feeders offered 1,251 head (10 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. Of those, 518 head (four lots) from the Southern Plains sold for a weighted average price of $114/cwt., via live weight and Bid-the-Grid. That was steady with the previous week’s country trade in the region.

Slaughter steers and heifers sold $3-$5 higher at Sioux Falls Regional in South Dakota. There were 147 head of Choice 3-4 steers weighing an average of 1,548 lbs., bringing an average of $113.79. That was at the upper end of last week’s country price for the region.

Cattle futures closed mixed on Wednesday. Sharply lower Corn futures helped boost Feeder Cattle, while softer Choice wholesale beef values and demand uncertainty pressured Live Cattle.

Live Cattle futures closed an average of 87¢ lower, from 55¢ lower to $1.32 lower.

Feeder Cattle futures closed an average of 39¢ higher, from 10¢ to 85¢ higher

Choice boxed beef cutout value was $1.27 lower Wednesday afternoon at $233.02/cwt. Select was 23¢ higher at $220.96.

Grain futures fell hard on Wednesday, with likely profit taking following the WASDE report leaving South American production unchanged, whereas the trade expected a reduction.

Corn futures closed 11¢ to 21¢ lower through the front four contracts, 5¢ to 8¢ lower through the next five contracts and then mostly 1¢ to 2¢ lower.

Soybean futures closed 24¢ to 47¢ lower through Jan ‘22, 12¢ to 18¢ lower through the next five contracts and then mostly 8¢ lower.

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Major U.S. financial indices closed narrowly mixed Wednesday, as positive quarterly corporate earnings competed with a gloomy labor outlook.

In a speech to the Economic Club of New York on Wednesday, Federal Reserve Chair, Jerome Powell, painted a dour picture of the current labor market, in the pandemic’s wake, illustrating the daunting challenge to achieving maximum employment.

“After rising to 14.8% in April of last year, the published unemployment rate has fallen relatively swiftly, reaching 6.3% in January. But published unemployment rates during COVID have dramatically understated the deterioration in the labor market. Most importantly, the pandemic has led to the largest 12-month decline in labor force participation since at least 1948,