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

Daily Market Highlights

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Cattle Current—Feb. 3, 2023

Cattle futures rebounded Thursday after the previous day’s breather, buoyed by the bullish Cattle report, positive weekly exports and notions this week’s cash fed cattle prices will be higher.

Feeder Cattle futures closed an average of $2.03 higher ($1.80 to $2.68 higher).

Live Cattle futures closed an average of $1.12 higher (80¢ to $1.325 higher).

Negotiated cash fed cattle trade was limited on light demand in the Western Corn Belt through Thursday afternoon, with a few live sales at $154/cwt., according to the Agricultural Marketing Service. Elsewhere, trade ranged from standstill to mostly inactive.

Last week, live prices were $156/cwt. in the Southern Plains, $153-$156 in Nebraska and $152-$157 in the western Corn Belt. Dressed prices were $248.

Choice boxed beef cutout value was 3¢ higher Thursday afternoon at $265.10/cwt. Select was 88¢ higher at $253.66/cwt.

Corn futures closed 1¢ to 5¢ lower through Jly ’24.

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

Soybean futures closed 3¢ to 17¢ higher.

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Major U.S. financial indices closed mixed on mixed economic news.

The Dow Jones Industrial Average closed 39 points lower. The S&P 500 closed 61 points higher. The NASDAQ was up 385 points.

West Texas Intermediate Crude Oil futures (CME) closed 39¢-53¢ lower through the front six contracts.

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Prices and profitability will favor cattle producers this year, according to CattleFax Analysts at Thursday’s Outlook Seminar, during the 2023 Cattle Industry Convention and NCBA Trade Show in New Orleans.

Kevin Good, vice president of industry relations and analysis at CattleFax forecast the average 2023 fed steer price at $158/cwt., up $13 from 2022, with a range of $150 to $172/cwt. CattleFax projects feeder steers (800 lbs.) to average $195/cwt. with a range of $175 to $215/cwt. Steer calves (550 lbs.) are forecast to  average $225/cwt., with a range of $200 to $245/cwt.

“Drought affected nearly half of the beef cow herd over the last year, exacerbating the liquidation in 2022,” Good says. “Drought improvement and higher cattle prices should drastically slow beef cow culling through 2023.”

Good forecast utility cows at an average of $100/cwt. with a range of $75 to $115/cwt. CattleFax projects bred cow prices an average of $2,100 per head for load lots of quality, running age cows; a range of $1,900 to $2,300.

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

Cattle Current Daily—Feb. 2, 2023

Cattle futures paused and retraced Tuesday following the previous day’s gains and awaiting cash direction.

Feeder Cattle futures closed an average of $1.72 lower ($1.35 to $2.90 lower).

Live Cattle futures closed an average of 45¢ lower (35¢ to 80¢ lower).

Negotiated cash fed cattle trade was at a standstill through Wednesday afternoon in the Southern Plains and Nebraska, according to the Agricultural Marketing Service. In the Western Corn Belt, trading was inactive on very light demand with too few trades for a trend.

Last week, live prices were $156/cwt. in the Southern Plains, $153-$156 in Nebraska and $152-$157 in the western Corn Belt. Dressed prices were $248.

Choice boxed beef cutout value was $1.02 lower Wednesday afternoon at $265.07/cwt. Select was 14¢ lower at $252.78/cwt.

Corn futures closed mostly 1¢ to 5¢ higher.

KC HRW Wheat closed mostly 3¢ to 5¢ higher through May ’24 and then mostly 2¢ lower

Soybean futures closed fractionally lower to 17¢ lower through Jan’24, then mixed.

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Major U.S. financial indices rallied Wednesday as Fed Chairman Jerome Powell announced a quarter percentage point interest rate increase, notching another slowdown in the Fed’s rate hikes. In a press conference, Powell said, “We can now say for the first time that the disinflationary process has started.” 

Inflation numbers have been easing for the past three months but are still higher than the 2% target the Fed would like to see.

The Dow Jones Industrial Average closed 6 points higher. The S&P 500 closed 42 points higher. The NASDAQ was up 231 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.38 to $2.46 lower through the front six contracts.

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Consumer demand for beef remains strong overall with more than two-thirds of consumers reportedly eat beef on a weekly basis, or more, according to the Today’s Beef Consumer report from the National Cattlemen’s Beef Association (NCBA), a contractor to the Beef Checkoff.

“During the pandemic consumers were forced to cook at home and many have continued to do so as it has become a popular way to make a dollar stretch and combat inflation,” according to the report, which was released Wednesday. The report found 76% of meals are now cooked at home and 94% of consumers who are cooking more at home say they will continue to do so.

“In 2022 fresh ground beef accounted for 50% of volume of beef sales, likely due to the lower price point as well as a renewed consumer interest in comfort foods and nostalgic recipes, like meatloaf,” according to the report.

Report analysts explain inflation is top of mind with 78% of consumers noticing an increase in the price of food whether at retail or foodservice. However, beef has experienced far lower levels of inflation when compared to other proteins in the “food at home” category.

As for food service, beef sales in both dollars and volume rebounded to surpass the pre-pandemic level of 2019.

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

Cattle Current Daily Feb. 1, 2023

Feeder Cattle futures closed higher Monday in anticipation of the USDA Cattle report (see below).

Feeder Cattle futures closed an average of $1.36 higher (93¢ to $2.23 higher).

Live Cattle futures closed mixed, from 33¢ down to 45¢ higher.

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

Last week, live prices were $156/cwt. in the Southern Plains, $153-$156 in Nebraska and $152-$157 in the western Corn Belt. Dressed prices were $248.

Choice boxed beef cutout value was $2.01 lower Tuesday afternoon at $266.09/cwt. Select was $1.40 higher at $252.92/cwt.

Corn futures closed mixed,  unchanged to down 4¢ through Sept. 23, then up 1¢ to 3¢.

KC HRW Wheat closed mostly down 2¢.

Soybean futures closed mixed, up fractionally to 2¢ higher in spot March and May respectively, then mostly down 1¢ to 4¢.

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Major U.S. financial indices closed higher Tuesday with signs of continuing cooling inflation. The housing market saw prices drop 2.5% from June highs and unemployment costs rose but less than expected at the end of 2022.

The Dow Jones Industrial Average closed 369 points higher. The S&P 500 closed 59 points higher. The NASDAQ was up 191 points.

West Texas Intermediate Crude Oil futures (CME) closed 97¢ to $1.07 higher through the front six contracts.

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As expected, beef cattle numbers were significantly fewer at the beginning of this year compared to a year earlier, according to USDA’s Cattle report that came out Tuesday afternoon. As of Jan. 1, year over year:

The nation’s beef cow inventory of 28.92 million head was 1.06 million fewer (-3.5%). That is among the fewest recorded in the United States.

Beef cow-calf states with 5% to 7% year-over year declines included: Kansas (-7%); Kentucky (-7%); Nebraska (-5%); North Dakota (-6%); Oklahoma (-7%).

Beef replacement heifers of 5.16 million head were 317,800 head fewer, down 5.8%.

Cattle on feed of 14.16 million head were down 537, 000 head (-3.6%).

The calculated number of feeder cattle outside of feedlots of 25.27 million head was 722,900 fewer (-2.8%).

Total cattle and calves in the U.S. of 89.27 million head were 2.80 million head fewer (-3.04%).

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

Cattle Current Daily—Jan. 31, 2023

Cattle futures gained Monday, supported by higher cash trade in the South at the end of last week, as well as likely positioning ahead of Tuesday’s Cattle inventory report (see below).

Live Cattle futures closed an average of $1.26 higher (80¢ to $2.52 higher).

Feeder Cattle futures closed an average of 80¢ higher.

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

Last week, live prices were $1 higher in the Southern Plains at $156/cwt., from $2 lower to $1 higher in Nebraska at $153-$156 and $1-$4 lower in the western Corn Belt at $152-$157.

Dressed prices were steady in Nebraska at $248 and steady to $2 lower in the western Corn Belt at $248.

The weighted average five-area direct fed steer price last week was near steady with the previous week on a live basis at $155.25/cwt. The average steer price in the beef was 50¢ lower at $247.72.

Choice boxed beef cutout value was 34¢ higher Monday afternoon at $268.10/cwt. Select was 98¢ higher at $251.52/cwt.

Soybean futures led grains higher Monday, supported by recently more positive U.S. exports.

Soybean futures closed 21¢ to 25¢ higher through Aug ‘23, and then 10¢ to 17¢ higher.

Corn futures closed mostly 2¢ to 5¢ higher.

KC HRW Wheat futures closed mostly 4¢ to 6¢ higher through Mar ‘24 and then mostly 2¢ lower to 8¢ higher.

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Major U.S. financial indices closed lower Monday, pressured by tech stocks and perhaps positioning ahead of the Fed’s interest rate decision this week.

The Dow Jones Industrial Average closed 260 points lower. The S&P 500 closed 52 points lower. The NASDAQ was down 227 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.67 to $1.78 lower through the front six contracts.

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The USDA Cattle report scheduled for release Tuesday afternoon will provide some insight to the drastic level of beef cow liquidation over the last year.

Depending on the analysts you follow, and how you run your own abacus, odds suggest Jan. 1 beef cow numbers will be at least 3.5% less year over year and perhaps as high as the 4% range.

Conservatively, if cow numbers are 3% less, that would mean 2.5 million fewer cows since the most recent peak.

Bottom line is that beef cow numbers at the beginning of this year were likely among the fewest, if not the fewest, ever recorded. If the beef cow inventory is under 29 million head, it will be only the third time in 60 years, according to the Agricultural Marketing Service.

Likewise, heifers retained for replacement are expected to be significantly fewer.

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

Cattle Current Daily—Jan. 30, 2023

Cattle futures mostly edged higher Friday with support from weaker Corn futures.

Feeder Cattle futures closed an average of 40¢ higher, except for an average of 15¢ lower in the back two contracts.

Live Cattle futures closed an average of 15¢ higher, except for unchanged in spot Feb.

Corn futures closed mostly 1¢ to 3¢ lower.

KC HRW Wheat futures closed 1¢ to 5¢ higher through May ‘24 and then mostly 2¢ lower to 1¢ higher.

Soybean futures closed 2¢ to 14¢ lower through Sep ‘23, and then mostly 3¢ higher.

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

For the week dressed prices were steady in Nebraska at $248/cwt. and steady to $2 lower in the western Corn Belt at $248, where live prices were $1-$4 lower at $152-$157.

The previous week, live prices were $155 in the Southern Plains and Nebraska.

Choice boxed beef cutout value was 99¢ lower Friday afternoon at $267.76/cwt. Select was 94¢ lower at $250.54/cwt.

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Major U.S. financial indices closed higher Friday with follow-through support from the previous day’s read on domestic economic growth.

The Dow Jones Industrial Average closed 28 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 109 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.30 to $1.33 lower through the front six contracts.

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Andrew P. Griffith, agricultural economist at the University of Tennessee, says calf prices are expected to firm through February and into March.

“The primary driver of how quickly prices increase and to what degree prices increase will be determined by how quickly certain regions experience spring green up,” Griffith explains in his weekly market comments. “Many cattle producers in Tennessee are short on hay as are many other regions of the country. The inability to feed animals will keep a lid on prices…If there are signs of an early jump in forage this spring, then prices will escalate earlier and move higher. If the opposite is true, then calf prices will still increase but not at the same speed or reach the same level.”

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

Cattle Current Daily—Jan. 27, 2023

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

Dressed prices were steady in Nebraska at $248/cwt. and steady to $2 lower in the western Corn Belt at $248.

Last week, live prices were $155/cwt. in the Southern Plains and Nebraska, and $156-$158 in the western Corn Belt.

Choice boxed beef cutout value was 47¢ higher Thursday afternoon at $268.75/cwt. Select was 32¢ lower at $251.48/cwt.

Cattle futures faltered Thursday with weaker early cash fed cattle trade and firmer Corn futures.

Feeder Cattle futures closed an average of $1.09 lower, except for 17¢ higher in expiring Jan.

Live Cattle futures closed an average of 68¢ lower.

Corn futures closed 4¢ to 7¢ higher through the front three contracts, and then mostly 1¢ to 2¢ higher.

KC HRW Wheat futures closed mostly 12¢ to 16¢ higher.

Soybean futures closed 13¢ to 21¢ higher through the front six contracts, and then mostly 5¢ to 7¢ higher.

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Major U.S. financial indices rose Thursday, supported by more domestic economic growth than expected.

Real gross domestic product (GDP) increased at an annual rate of 2.9% in the fourth quarter of 2022, after increasing 3.2% in the third quarter, according to the U.S. Bureau of Economic Analysis. The increase in the fourth quarter primarily reflected increases in inventory investment and consumer spending that were partly offset by a decrease in housing investment.

The Dow Jones Industrial Average closed 205 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 199 points.

West Texas Intermediate Crude Oil futures (CME) closed 64¢ to 86¢ higher through the front six contracts.

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The Creighton University Rural Mainstreet Index (RMI) rose to 53.8 — above growth neutral — in January from 50.1 the previous month. The index was below growth neutral the previous six months. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. 

“The Rural Mainstreet economy continues to experience improving, but slow, economic growth,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “Almost 85% of bankers ranked rising input prices as the top economic challenge or threat to farmers in their area.”

The RMI is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

The region’s farmland price index climbed to 66.0 in January from December’s 65.4. This was the 28th straight month that the index registered above 50.0.

“Higher input costs are the only major problem on the near time horizon,” says James Brown, CEO of Hardin County Savings Bank in Eldora, Iowa.

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

Cattle Current Daily—Jan. 26, 2023

Cattle futures edged higher Wednesday with fundamental support and simmering ahead of cash direction.

Feeder Cattle futures closed an average of 40¢ higher, except for 5¢ lower in the back contract.

Live Cattle futures closed an average of 23¢ higher, except for 25¢ lower in spot Feb.

Corn futures closed mostly 2¢ to 3¢ lower.

KC HRW Wheat futures closed 5¢ to 9¢ higher.

Soybean futures closed mostly 5¢ to 9¢ higher.

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

Last week, live prices were $155/cwt. in the Southern Plains and Nebraska, and $156-$158 in the western Corn Belt. Dressed prices were $248-$250.

Choice boxed beef cutout value was $1.36 lower Wednesday afternoon at $268.28/cwt. Select was 59¢ lower at $251.80/cwt.

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Major U.S. financial indices closed narrowly mixed Wednesday.

The Dow Jones Industrial Average closed 9 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 20 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts, from 10¢ lower to 2¢ higher.

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Total pounds of beef in freezers Dec. 31 were 4% more than the previous month and 7% more than the previous year, according to the monthly Cold Storage report from USDA’s National Agricultural Statistics Service.

Frozen pork supplies were up 1% from the prior month and up 16% from last year.

Combined, total red meat supplies in freezers were 2% more than the previous month and 11% more than last year.

Total frozen poultry supplies were up 7% from the prior month and up 23% from a year earlier.

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

Cattle Current Daily—Jan. 25, 2023

Cattle futures closed narrowly mixed Tuesday in the face of higher grain futures and the lack of cash direction.

Feeder Cattle futures closed an average of 18¢ lower, except for unchanged and 32¢ higher toward the front.

Live Cattle futures closed an average of 35¢ higher.

Corn and Wheat futures rebounded Tuesday with likely short covering.

Corn futures closed 5¢ to 10¢ higher through Jly ‘24 and then mostly 2¢ higher.

KC HRW Wheat futures closed mostly 14¢ higher.

Soybean futures firmed, too, closing fractionally lower to 2¢ lower through Sep ‘24 and then 1¢ to 5¢ higher.

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

Last week, live prices were $155/cwt. in the Southern Plains and Nebraska, and $156-$158 in the western Corn Belt. Dressed prices were $248-$250.

Choice boxed beef cutout value was $1.80 lower Tuesday afternoon at $269.64/cwt. Select was $2.10 lower at $252.39/cwt.

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Major U.S. financial indices wobbled to a mixed close Tuesday amid up-and-down quarterly earnings reports.

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 30 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.45 to $1.49 lower through the front six contracts, from 2¢ lower to 37¢ higher.

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With the national hay supply 9% less year over year Dec. 1, and 6% less than the previous record low, analysts with the Livestock Marketing Information Center (LMIC) say record and near-record hay prices will likely continue through most of this year.

“Hay prices have reached record levels in the last two years, outpacing the last drought. The hay stock data confirmed supplies are now tighter than they were back in 2012,” LMIC analysts say, in the latest Livestock Monitor. “Absent an exceptional early hay crop, prices are expected to hold near or above record levels through most of 2023. This will add to the decision of cow-calf producers and affect their ability to maintain/expand/contract their breeding herds. Our assessment is that forage/feed availability conditions are unlikely to allow for expansion in 2023.”

As it is, LMIC analysts explain hefty feedlot placements last year, may have left relatively few cattle to place after winter grazing, which could create a significant hole in supplies.

“During the last major drought season in 2011, cattle on feed dropped 1.2 million head over the summer compared to January 1 levels, and in 2012, cattle on feed numbers dropped about 800,000 head. If cattle on feed this year drops similar to those years, that would put the summer low between 9.0-9.4 million head on feed,” according to the LMIC folks.

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

Cattle Current Daily—Jan. 24, 2023

Cattle futures extended gains Monday, buoyed by sharply lower Corn futures, and an apparently neutral view of Friday’s Cattle on Feed report.

Feeder Cattle futures closed an average of $1.47 higher (85¢ to $2.30 higher).

Live Cattle futures closed an average of 63¢ higher.

Corn and Soybean futures eroded Monday, apparently mostly due to moisture in South America over the weekend.

Corn futures closed 8¢ to 10¢ lower through Jly ‘24 and then mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 10¢ to 13¢ lower.

KC Wheat on the CME closed 22¢ to 29¢ lower.

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

Last week, live prices were $155/cwt. in the Southern Plains and Nebraska, and $156-$158 in the western Corn Belt. Dressed prices were $248-$250.

Choice boxed beef cutout value was 28¢ lower Monday afternoon at $271.44/cwt. Select was $1.94 lower at $254.49/cwt.

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Major U.S. financial indices bounced higher Monday with more investor speculation that the Fed may be ready to begin easing interest rate increases.

The Dow Jones Industrial Average closed 254 points higher. The S&P 500 closed 47 points higher. The NASDAQ was up 223 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts, from 2¢ lower to 37¢ higher.

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Reflecting on Friday’s Cattle on Feed report, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out the feedlot heifer inventory Jan. 1 was 0.5% less year over year, the first decrease since July 2021.

“Large heifer numbers in feedlots supported the 4.8% year over year increase in heifer slaughter in 2022 and was the largest heifer slaughter total since 2004,” Peel says. “The decrease in feedlot heifers does not, at this point, reflect heifer retention but simply a lack of heifers due to large heifer slaughter the past two years.”

Peel also notes feedlot inventories have declined four consecutive months. The Jan. 1 inventory for feedlots with 1,000 head or more capacity was 11.68 million head, which was 2.9% less than the prior year.

“It looks increasingly like the early November seasonal peak will hold,” Peel says. “If so, the November total was 4.1% below the previous seasonal peak in February 2022 and suggests sharply tighter feedlot numbers going forward.”

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

Cattle Current Daily—Jan. 23, 2023

Cattle futures mainly gained Friday helped along by higher outside markets.

Feeder Cattle futures closed an average of 74¢ higher (30¢ to $1.42 higher), except for 17¢ lower in spot Jan.

Live Cattle futures closed an average of 48¢ higher (12¢ higher at the back to 80¢ higher near the front).

Corn futures firmed and closed fractionally mixed with stronger weekly U.S. export sales.

Soybean futures were down again — mostly 12¢ to 13¢ lower — with more favorable moisture in Argentina.

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

For the week, live prices were $1 lower in the Southern Plains at $155/cwt. and $1-$2 lower in Nebraska at $155. Dressed sales in Nebraska were $2-$4 lower at $248. Live and dressed sales in the Western Corn Belt the previous week were $158 and $250-$252, respectively.

Choice boxed beef cutout value was 21¢ higher Friday afternoon at $271.72/cwt. Select was 74¢ higher at $256.43/cwt.

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Major U.S. financial indices rebounded Friday, perhaps with some bargain hunting.

The Dow Jones Industrial Average closed 330 points higher. The S&P 500 closed 73 points higher. The NASDAQ was up 288 points.

West Texas Intermediate Crude Oil futures (CME) closed 94¢ to $1.04  higher through the front six contracts.

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Markets could view Friday’s monthly Cattle on Feed report as neutral, to a touch bearish with slightly more placements and cattle on feed than expected and slightly fewer cattle marketed. The report reflects feedlots with 1,000 head or more one-time capacity.

Placements in December of 1.80 million head were 156,000 head fewer (-7.9%) than the previous year. That was 0.6% more than pre-report estimates.

In terms of placement weights, 49% went on feed weighing 699 lbs. or less, 40% weighing 700-899 lbs. and 11% weighing 900 lbs. or more.

Marketings in December of 1.74 million head were 113,000 head fewer (-6.1%). That was 0.8% fewer than expectations ahead of the report.

Cattle on feed Jan. 1 of 11.68 million head were 355,000 head fewer (-2.9%) than the prior year, but 0.3% more than estimates ahead of the report.

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

Cattle Current Daily—Jan. 20, 2023

Cattle futures softened Thursday with the lack of direction in weekly cash fed cattle prices and perhaps with some positioning ahead of Friday’s monthly Cattle on Feed report.

Feeder Cattle futures closed an average of 82¢ lower (2¢ lower toward the back to $1.40 lower near the front), except for 35¢ higher in the back contract.

Live Cattle futures closed an average of 75¢ lower.

Corn futures continued to soften — mostly 4¢ to 5¢ lower — with the wetter outlook for Argentina.

Soybean futures closed 8¢ to 10¢ lower through Jan ‘24. And then mostly 2¢ to 5¢ lower.

Negotiated cash fed cattle trade was limited on light demand through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. There were some early live trades in Kansas at $155/cwt., as well as some early dressed sales at $248-$249 in Nebraska and $248 in the western Corn Belt.

Last week were $156/cwt. on a live basis in the Southern Plains, $156-$157 in Nebraska and $158 in the western Corn Belt. Dressed prices were $250-$252.

Choice boxed beef cutout value was $2.57 lower Thursday afternoon at $271.51/cwt. Select was $1.83 higher at $255.69/cwt.

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Major U.S. financial indices continued lower Thursday as investors fretted over the Fed maintaining its hawkish stance on interest rates, despite recent signs of easing inflation. Strong employment reflected in weekly initial jobless claims added to their angst. The advance figure for seasonally adjusted initial unemployment insurance claims for the week ending Jan. 14 was 190,000, which was 15,000 fewer than the previous week.

The Dow Jones Industrial Average closed 252 points lower. The S&P 500 closed 30 points lower. The NASDAQ was down 104 points.

West Texas Intermediate Crude Oil futures (CME) closed 81¢ to 85¢ higher through the front six contracts.

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USDA’s Economic Research Service (ERS) increased projected feeder steer prices (750-800 lbs., Oklahoma City) for the first two quarters of the year, based on more November feedlot placements than expected, and tighter anticipated supplies available for placement early this year.

In the monthly Livestock Dairy and Poultry Outlook, ERS increased the projected first-quarter price by $5 to $182/cwt. and the second-quarter price by $2 to $192. Projected prices are $214 in the third quarter and $224 in the fourth quarter for an annual average of $203.

ERS also increased projected 2023 beef production 170 million lbs. to 26.4 billion lbs. based on the temporal shift in fed cattle marketings and an outlook for higher cow slaughter.

“The anticipated cow slaughter outlook for 2023 was raised on early January slaughter data and persistent poor forage conditions,” ERS analysts say. “Lighter carcass weights in fourth-quarter 2022 are carried over into early 2023. As a result, the increase in expected marketings and cow slaughter in 2023 more than offset lighter anticipated weights.”

Estimated beef production this year would be 1.8 billion lbs. less (-6.6%) than last year’s projected total.

As reported in Cattle Current last week, ERS projected the annual average five-area direct fed steer price for this year at $158.50/cwt., in the January World Agricultural Supply and Demand Estimates. That was $2.50 more than the previous month’s estimate, based on expected demand strength. By quarter and compared to the previous month, ERS increased projected prices by $4 to $157 in the first quarter, by $3 to $157 in the second quarter and by $2 to $157 in the third quarter.

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

Cattle Current Daily — Jan. 19, 2023

Weaker Corn futures — mostly 1¢ to 4¢ lower — helped lift Feeder Cattle futures an average of 95¢ higher Wednesday (42¢ to $1.55 higher), except for 15¢ lower in spot Jan.

Live Cattle futures closed an average of 17¢ higher, except for an average of 10¢ lower in three contracts.

Soybean futures closed 13¢ to 19¢ lower.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on very light demand in the North through Wednesday afternoon, with too few transactions to trend. Trade was at a standstill in the Southern Plains, according to the Agricultural Marketing Service.

Last week, prices were $156/cwt. on a live basis in the Southern Plains, $156-$157 in Nebraska and $158 in the western Corn Belt. Dressed prices were $250-$252.

Choice boxed beef cutout value was $2.58 lower Wednesday afternoon at $274.08/cwt. Select was 67¢ lower at $253.86/cwt.

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Major U.S. financial indices closed lower Wednesday. Profit taking and less of a decline in wholesale prices than expected were likely part of the pressure

The Producer Price Index for final demand declined 0.5% in December, seasonally adjusted, according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 613 points lower. The S&P 500 closed 62 points lower. The NASDAQ was down 138 points.

West Texas Intermediate Crude Oil futures (CME) closed 40¢ to 70¢ lower through the front six contracts.

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Recent moisture is helping dial back dryness and drought in some areas.

According to the latest U.S. Drought Monitor (USDM-Jan. 10), abnormally dry and drought conditions impacted 66.5% of the lower 48 states. That’s the least since the week of Sept. 13 last year when those same conditions covered 66.2% of the country. Current conditions are also more favorable than the same week last year when abnormally dry conditions and drought covered 71.8% of the nation.

Approximately 57% of the nation’s cattle inventory was in areas experiencing drought versus about 69% a year earlier.

“A series of atmospheric rivers led to heavy rain and high-elevation snow across parts of the West, especially across California. Precipitation totals exceeding 4 inches (liquid-equivalent) were widespread, and several areas in and near the Sierra Nevada, Cascades, and coastal ranges recorded over one foot of precipitation,” according to the weekly Drought Summary.

USDM analysts note, “Precipitation totals generally exceeded 1.5 inches along the coast and in the higher elevations of the Pacific Northwest, some higher elevations in the central and northern Rockies, part of the upper Midwest, portions of the lower Mississippi Valley, the interior Southeast, and scattered locales across the Ohio Valley and the Northeast.

“Much of the precipitation fell on areas experiencing dryness and drought, so across the country, improvement was much more common than deterioration.” 

The latest La Niña Advisory from the National Weather Service Climate Prediction Center says there is an 82% chance North America transitions from La Niña to ENSO-neutral during February to April this year.

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

Cattle Current Daily—Jan. 18, 2023

Cattle futures closed lower to start the trading week, pressured by last week’s softer cash fed cattle prices, the lack of direction so far this week and stronger Corn futures.

Live Cattle futures closed an average of 35¢ lower.

Feeder Cattle futures closed an average of $1.08 lower (70¢ to $1.60 lower).

Corn futures closed mostly 3¢ to 5¢ higher.

Soybean futures closed 6¢ to 12¢ higher through Aug ‘23 and then mostly unchanged to 3¢ lower.

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

Last week prices were $156/cwt. on a live basis in the Southern Plains, $156-$157 in Nebraska and $158 in the western Corn Belt. Dressed prices were $250-$252.

Choice boxed beef cutout value was 77¢ lower Tuesday afternoon at $276.66/cwt. Select was $2.02 lower at $254.53/cwt.

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Major U.S. financial indices closed mixed Tuesday. Pressure included less than expected fourth-quarter earnings from Goldman Sachs.

The Dow Jones Industrial Average closed 391 points lower. The S&P 500 closed 8 points lower. The NASDAQ was up 15 points.

West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 35¢ higher through the front six contracts.

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Estimated feedlot returns are positive through September for both steers and heifers, according to the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University.

For steers, estimated net returns range from $27.73 per head in February to $212.49 in May. Feeding cost of gain ranges from $117.78/cwt. in September to $141.13 in January.

On the heifer side of the fence, estimated net returns range from $27.35 per head in July to $189.79 in May. Feeding cost of gain ranges from $128.89/cwt. in September to $147.39 in February.

Projections reflect a cash market situation without implementation of price risk management strategies.

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

Cattle Current Daily—Jan. 17, 2023

Note: Futures and equity markets were closed yesterday. As well, some AMS reports were unavailable due to the holiday.

Negotiated cash fed cattle prices last week were $156/cwt. on a live basis in the Southern Plains and Nebraska, where dressed prices were $252. Live prices in the western Corn Belt were $157-$159.

Choice boxed beef cutout value was 81¢ higher Monday afternoon at $277.43/cwt. Select was 34¢ lower at $256.55/cwt.

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Historically low hay stocks could prompt more beef cow liquidation this winter, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

He points out Dec. 1 hay stocks for the nation were 16.4% less than the previous 10-year average at 71.9 million tons, in the recent USDA Crop Production report. It was the least on record going back to 1973. Peel notes hay production last year was the lowest on record in data that began in 1974.

“Each of the top 10 states for hay stocks was down compared to the 10-year average and collectively were down 20.8% from the 2012-2021 average Dec. 1 stocks level,” Peel says. “The largest hay stocks on December 1 were in Texas — 25.8% below the 10-year average for the state. Other top 10 states were down from the 10-year average ranging from Tennessee (down 10.9%) to Oklahoma (down 32.7%).” 

Combined total hay production in the top 10 states represents 43% of U.S. total hay production and was down 18.7% compared to the 10-year average for those states, according to Peel. He adds that eight of the top 10 beef cow states are among the top 10 hay production states.

“The December storm already will have taken a chunk out of the reported Dec. 1 hay stocks,” Peel says. “New forage production is several months away in the south and even farther away in northern regions.”

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

Cattle Current Daily—Jan. 16, 2023

Negotiated cash fed cattle trade ranged from slow to moderate on moderate demand in the Southern Plains and Nebraska through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was limited on light demand.

For the week, in a light test, live prices were $1 lower at $156/cwt. in the Southern Plains and Nebraska, and at $157-$159 in the western Corn Belt. Dressed prices in Nebraska were generally steady at $252; they were $252 in the western Corn Belt a week earlier.

Choice boxed beef cutout value was 87¢ lower Friday afternoon at $276.62/cwt. Select was 12¢ lower at $256.89/cwt.

Live cattle futures firmed Friday despite lower cash fed cattle prices and the seasonal turn lower in wholesale beef prices.

Live Cattle futures closed an average of 31¢ higher, except for 7¢ lower in near Apr.

However, higher Corn futures pressured Feeder Cattle futures an average of 86¢ lower (2¢ to $1.40 lower).

Corn and Soybean futures continued to gain Friday on the bullish WASDE.

Corn futures closed mostly 1¢ to 4¢ higher.

Soybean futures closed 3¢ to 8¢ higher through Aug ‘23 and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices rose again Friday with follow-through support from suggestions of easing inflation.

The Dow Jones Industrial Average closed 112 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 78 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.29 to $1.47 higher through the front six contracts.

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Despite the significantly different year-over-year economic environment in December, consumers were slow to begin spending differently, according to data trends in Consumer Food Insights Reports from Purdue University’s Center for Food Demand Analysis and Sustainability.

The survey-based report assesses food spending, consumer satisfaction and values, support of agricultural and food policies and trust in information sources.

Household food expenditures were up more than 15% in December compared to the previous January. “But it is worth pointing out that our indicators like food security and food satisfaction have not similarly moved in any one direction, which is a good sign that wellbeing has likely not decreased on average,” says Jayson Lusk, the head and Distinguished Professor of Agricultural Economics at Purdue, who leads the center.

Consumer shopping behaviors were similar to July, but consumers were shopping at discount stores more and spending less on discretionary expenses, according to the latest report. As well, 22% said they were switching to cheaper brands, compared to 17% in July.

“Broadly speaking, consumers faced some budget constraints this holiday season,” Lusk says. “About a third said they were worried about being able to afford gifts, but this was far from the majority. When we compare responses to inflation in December to this past summer, most of these behaviors have not increased in frequency.”

The survey results also show that where people spend their dollars has not shifted. However, Lusk notes that the popularity of online grocery shopping appears to be declining, which raises questions about the lower limits of online food shopping and whether it was largely buoyed by the COVID pandemic.

Report data also suggests consumers could readily access most desired food items as supply chain disruptions eased.

“This year, chicken was the most reported item that people were unable to find at the grocery store,” says Sam Polzin, a food and agriculture survey scientist for the center and co-author of the report. “Given that we are in the middle of the deadliest bird flu outbreak, this is unsurprising.”

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

Cattle Current Daily—Jan. 13, 2023

Cattle futures closed lower Thursday, with pressure from the continued lack of cash fed cattle direction and the Corn-friendly World Agricultural Supply and Demand Estimates (see below).

Corn futures closed to 13¢ to 15¢ higher through the front three contracts, then 5¢ to 7¢ higher through Jly ’24.

Soybean futures closed 14¢ to 25¢ higher through Aug ‘23 and then mostly 1¢ to 3¢ higher.

Feeder Cattle futures closed an average of $1.06 lower through the front half of the board, and then unchanged to an average of 17¢ higher.

Live Cattle futures closed an average of 26¢ lower, except for unchanged and 7¢ higher in two away contracts.

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

Although too few to trend, there were some early dressed sales in Nebraska at $252/cwt. and a few on a live basis in the western Corn Belt at $158-$159.

Live prices last week were $157/cwt. in the Southern Plains and Nebraska and $158-$160 in the western Corn Belt. Dressed prices were $252.

Choice boxed beef cutout value was $3.24 lower Thursday afternoon at $277.49/cwt. Select was $1.09 lower at $257.01/cwt.

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Major U.S. financial indices rose Thursday with support from the monthly Consumer Price Index, which indicated easing inflation.

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1% in December on a seasonally adjusted basis, after increasing 0.1% in November, according to the U.S. Bureau of Labor Statistics. The all items index increased 6.5% over the last 12 months before seasonal adjustment.

The Dow Jones Industrial Average closed 216 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 69 points.

West Texas Intermediate Crude Oil futures (CME) closed 88¢ to 98¢ higher through the front six contracts.

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ERS projected the annual average five-area direct fed steer price for this year at $158.50/cwt., in the January World Agricultural Supply and Demand Estimates. That was $2.50 more than the previous month’s estimate, based on expected demand strength. The price would be $14.10 more than the projected annual average last year. By quarter and compared to the previous month, ERS increased projected prices by $4 to $157 in the first quarter, by $3 to $157 in the second quarter and by $2 to $157 in the third quarter.

Among other WASDE highlights…

Corn

The 2022/23 U.S. corn outlook was reduced for production, food, seed and industrial use, feed and residual use, exports, and ending stocks. Corn production was estimated 200 million bushels lower than the previous month’s estimate, harvested area was trimmed by 1.6 million acres and ending stocks were lowered 15 million bushels. The season-average corn price received by producers was unchanged at $6.70 per bushel.

Soybeans

Soybean production was estimated 69 million bushels lower with estimated harvested area 0.3 million acres less. The U.S. season-average soybean price for 2022/23 was projected 20¢ higher at $14.20 per bushel. Soybean meal was projected $15 higher at $425 per short ton. The soybean oil price was unchanged at 68¢ per pound.

Wheat

The 2022/23 U.S. wheat outlook was for increased supplies, larger domestic use, unchanged exports, and lower ending stocks. The season-average farm price was unchanged at $9.10 per bushel.

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

Cattle Current—Jan. 12, 2023

Cattle futures closed lower Wednesday with the lack of cash fed cattle direction and firmer Corn futures prices.

Feeder Cattle futures closed an average of 65¢ lower, from 7¢ to $1.17 lower.

Live Cattle futures closed an average of 19¢ lower, except for unchanged in spot Feb.

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

Live prices last week were $157/cwt. in the Southern Plains and Nebraska and $158-$160 in the western Corn Belt. Dressed prices were $252.

Choice boxed beef cutout value was $3.80 lower Wednesday afternoon at $280.73/cwt. Select was 23¢ lower at $258.10/cwt

Corn futures closed fractionally higher to 1¢ higher through Sep ’23 and then mostly 2¢ lower

Soybean futures closed 2¢ to 8¢ higher through Aug ‘23 and then mostly 3¢ to 6¢ lower.

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

Cattle Current Daily—Jan. 12, 2023

Cattle futures closed lower Wednesday with the lack of cash fed cattle direction and firmer Corn futures prices.

Feeder Cattle futures closed an average of 65¢ lower, from 7¢ to $1.17 lower.

Live Cattle futures closed an average of 19¢ lower, except for unchanged in spot Feb.

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

Live prices last week were $157/cwt. in the Southern Plains and Nebraska and $158-$160 in the western Corn Belt. Dressed prices were $252.

Choice boxed beef cutout value was $3.80 lower Wednesday afternoon at $280.73/cwt. Select was 23¢ lower at $258.10/cwt.

Corn futures closed fractionally higher to 1¢ higher through Sep ’23 and then mostly 2¢ lower

Soybean futures closed 2¢ to 8¢ higher through Aug ‘23 and then mostly 3¢ to 6¢ lower.

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Major U.S. financial indices climbed Wednesday with traders apparently betting that the CPI report will reflect cooling inflation.

The Dow Jones Industrial Average closed 268 points higher. The S&P 500 closed 50 points higher. The NASDAQ was up 189 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.12 to $2.31 higher through the front six contracts.

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Eyes Thursday will focus on the monthly World Agricultural Supply and Demand Estimates, with many interested to see if USDA makes further adjustments on the demand side of the corn ledger, and if so, to what degree.

“Exports for corn and soybeans have been sluggish for the U.S. and tend to pause ahead of the South American crop in an effort to avoid paying high U.S. prices for corn and soybeans,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Corn exports for the 2022/2023 marketing year are off last year’s pace more than 25%.”

Daniel O’Brien, Extension agricultural economist at Kansas State University, explained in last month’s Grain Market Outlook newsletter, “It is possible that in coming USDA WASDE reports U.S. export demand could remain so weak that the USDA is forced to reduce its U.S. corn export projection further yet, which all else being equal would lead to higher forecasts of U.S. corn ending stocks in the current Marketing Year (2022-23).”

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

Cattle Current Daily—Jan. 11, 2023

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

Live prices last week were $157/cwt. in the Southern Plains and Nebraska and $158-$160 in the western Corn Belt. Dressed prices were $252.

Choice boxed beef cutout value was $1.61 lower Tuesday afternoon at $284.53/cwt. Select was $1.27 lower at $258.33/cwt.

Cattle futures closed narrowly mixed Tuesday, despite early Corn futures momentum.

Feeder Cattle futures closed from an average of 16¢ lower to an average of 26¢ higher.

Live Cattle futures closed an average of 17¢ higher, except for unchanged in spot Feb.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed widely mixed.

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Major U.S. financial indices eased higher Tuesday with little conviction.

The Dow Jones Industrial Average closed 186 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 106 points.

West Texas Intermediate Crude Oil futures (CME) closed 30¢ to 49¢ higher through the front six contracts.

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Without a doubt, most market fundamentals point to a considerably stronger cattle market across all sectors this year, says Kenny Burdine, Extension livestock economics specialist at the University of Kentucky, in the latest Cattle Market Notes Weekly.

“The calf market improved in 2022, but higher production costs kept most cow-calf operators from fully enjoying the price improvement. Reduced fall pasture growth and poor wheat grazing conditions also prevented the fall calf market from reaching levels it would have seen otherwise,” Burdine explains. “As we move into spring, the impacts of expensive feed will be somewhat overshadowed by grazing opportunities. In truth, the calf market has improved quite a bit since fall. However, with fall 2023 CME Feeder cattle futures well above $2/lb., we are likely to see calf price levels that we have not seen since 2015 once we start seeing some spring pasture growth.”

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

Cattle Current Daily—Jan. 10. 2023

Cattle futures strengthened Monday with firm to bullish fundamental support.

Feeder Cattle futures closed an average of 84¢ higher.

Live Cattle futures closed an average of 96¢ higher.

Corn and Soybean futures wavered to start the week as traders await the WASDE this week.

Corn futures closed mostly 1¢ lower.

Soybean futures closed mostly 4¢ to 7¢ lower.

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

Live prices last week were $157/cwt. in the Southern Plains and Nebraska and $158-$160 in the western Corn Belt. Dressed prices were $252.

Choice boxed beef cutout value was $3.15 higher Monday afternoon at $286.14/cwt. Select was 26¢ higher at $259.60/cwt.

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Major U.S. financial indices closed mixed Monday.

The Dow Jones Industrial Average closed 112 points lower. The S&P 500 closed 2 points lower. The NASDAQ was up 66 points.

West Texas Intermediate Crude Oil futures (CME) closed 86¢ to $1.02 higher through the front six contracts.

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Calf and feeder cattle buyers are rolling into the new year with a bang.

Demand was good to very good at auctions last week, according to the Agricultural Marketing Service (AMS). Volume was heavy, as is typically the case during the first week of the year — 262,300 head at auction and 338,700 head when combined with direct and video-internet sales.

Prices so far are generally $15-$20/cwt. higher than the previous year, according to AMS.

As an example, the price of 500-lb. Medium and Large #1 steers at Oklahoma auctions averaged $227.50/cwt. the first week of 2023, up 19.3% year over year, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. The price of 800-lb. steers averaged $180.97/cwt., which was 14.7% more than a year earlier.

“The cattle and beef market momentum at the end of 2022 has carried over into the first week of the new year,” Peel says. “The new year looks to contrast with last year with noticeably tighter cattle numbers, especially at the feedlot level, driven by previous herd liquidation and sharply lower feeder cattle supplies.”

Peel notes Feeder Cattle futures anticipate higher prices and tightening supply fundamentals, given the $26 price increase from the nearby Jan contract of about $182 to the $209 price for Nov.

“Drought remains the biggest issue for many producers aggravated by persistently high feed costs,” Peel says. “The revenue side of cattle production will be less of a concern in 2023, at least as far as cattle prices go. However, managing and maintaining production and managing the rising cost of production will continue to be major challenges for cattle producers this year.”

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

Cattle Current Daily—Jan. 9, 2023

Negotiated cash fed cattle trade was slow on light demand in Nebraska through Friday afternoon, according to the Agricultural Marketing Service. Live prices for the week were $1 lower at $157/cwt., and dressed prices were steady at $252.

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

For the week, live prices were steady in the Southern Plains at $157 and steady to $1 higher in the western Corn belt at $158-$160, where dressed prices were steady to $2 higher at $252.

Choice boxed beef cutout value was $1.36 higher Friday afternoon at $282.99/cwt. Select was $2.39 higher at $259.34/cwt.

Cattle futures eased lower Friday pressured in part by firming Corn futures and static cash trade.

Feeder Cattle futures closed an average of 65¢ lower, from 22¢ lower at the back to $1.10 lower in spot Jan, except for 22¢ higher in the back contract.

Live Cattle futures closed an average of 44¢ lower (20¢ to 72¢ lower).

Export announcements helped Corn and especially Soybean futures close higher Friday.

Corn futures closed 1¢ higher in the front three contracts and then mostly fractionally mixed to 2¢ lower.

Soybean futures closed 13¢ to 34¢ higher through Jan ‘24 and then mostly 3¢ to 6¢ higher.

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For brief year-end perspective…

The five-area direct average steer price for 2022 was $144.52/cwt. on a live basis. That was $21.35 more (+17.3%) than the previous year and $36.33 more (+33.6%) than in 2020. The five-area average fed steer price for the year was $229.74 in the beef, which was $36.06 more than the previous year (+18.6%) and $57.47 more (+33.4%) than in 2020.

Based on the last report of the year, estimated beef production for 2022 was 27.8 billion pounds, which was 369.7 million pounds more (+1.3%) year over year. Estimated total cattle slaughter for the year was estimated to be 33.7 million head, which was 499,000 head more (+1.5%) than the previous year.

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Major U.S. financial indices surged higher Friday with a couple of reports suggesting that inflation may be cooling.

Although more jobs than expected were added in December, wage growth declined slightly from the previous month.

Total non-farm payroll employment increased by 223,000 in December, according to the U.S. Bureau of Labor Statistics. Average hourly earnings for all employees on non-farm payrolls increased 9¢ (+0.3%) to $32.82.

As well, the Institute for Supply Management purchasers index for services declined for the first time in more than two years.

The Dow Jones Industrial Average closed 700 points higher. The S&P 500 closed 86 points higher. The NASDAQ was up 264 points.

West Texas Intermediate Crude Oil futures (CME) closed 10¢ to 18¢ higher through the front six contracts.

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Economic and logistical headwinds finally caught up to U.S. beef exports in November, however export value through the first 11 months of the year already exceeded the record of $10.58 billion achieved the previous year.

November beef exports totaled 115,777 mt, down 6% from the previous year’s large volume, while export value declined nearly 20% to $846.6 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

For the first 11 months of the year, beef export value increased 14% year-over-year to $10.9 billion. January-November export volume was 1.36 million mt, up 3% from the record pace of 2021.

November beef export value equated to $382.46 per head of fed slaughter, down 20% from a year ago, but the January-November average was up 13% to $452.42.

“Similar to the previous month, November results for U.S. beef exports reflected severe headwinds in our large Asian markets,” explains Dan Halstrom, USMEF president and CEO. “Key currencies in the region were still slumping, which impacted the buying power of importers and consumers. COVID cases and lockdowns in China were also intensifying, prompting widespread protests and the eventual lifting of many restrictions. But the U.S. dollar mainly peaked in late October and early November and global demand has remained relatively strong. Even with a high level of economic uncertainty, 2022 has been a fantastic year for U.S. beef exports and the outlook for the coming year remains positive.”

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

Cattle Current Daily—Jan. 6, 2023

Negotiated cash fed cattle trade was light on light to moderate demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service. Early live sales were steady with last week at $157/cwt.

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

Last week, live prices were $158 in Nebraska and $157-$160 in the western Corn Belt. Dressed prices were $250-$252.

Cattle futures traders took a breather Thursday, and likely some profits, following the strong session a day earlier and awaiting more cash direction.

Feeder Cattle futures closed an average of 96¢ lower, from 65¢ lower at the back to $1.67 lower toward the front.

Live Cattle futures closed an average of 36¢ lower, except for 7¢ higher in spot Feb.

Nearby grain and Soybean futures continued to drift lower.

Corn futures closed mostly 1¢ to 4¢ lower.

Soybean futures closed mostly 12¢ lower through Aug ‘23 and then 7¢ to 9¢ lower.

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Major U.S. financial indices closed lower Thursday, with much of the pressure attributed to stronger employment numbers than expected and the notion that leaves the Fed no quarter to ease up on interest rates.

Private sector employment increased by 235,000 jobs in December and annual pay was up 7.3% year-over-year, according to the December ADP® National Employment ReportTM produced by the ADP Research Institute® in collaboration with the Stanford Digital Economy Lab.

“The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size,” says Nela Richardson, ADP chief economist. “Business segments that hired aggressively in the first half of 2022 have slowed hiring, and in some cases cut jobs in the last month of the year.”

The Dow Jones Industrial Average closed 339 points lower. The S&P 500 closed 44 points lower. The NASDAQ was down 153 points.

West Texas Intermediate Crude Oil futures (CME) closed 77¢ to 83¢ higher through the front six contracts. 

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Competition from both inside and outside of the industry suggest land values will remain strong this year, according to Farmers National Company (FNC), a leading landowner services provider.

“What we are seeing is a true supply/demand scenario. There are simply more buyers willing to bid on the limited amount of land coming to the market,” says Paul Schadegg, FNC Senior Vice President of Real Estate Operations. “Current commodity markets and strong cash rents provide buyers with the necessary returns to meet their investment criteria while giving them the opportunity to expand operations or add land to their investment portfolio. Our anticipation is that these values will remain strong coming into the new year with continued strength in the ag economy although we may see less and less of the record sales.”

Traditional local farmer-operators are successful buyers of farmland 75% of the time, but with plenty of active bidding from land investors, according to FNC.

“While the investor may not always be the buyer of land, they are part of the competition driving the values higher,” Schadegg says. “We also expect this trend to continue as many investors see the long-term value of farmland, the opportunity to diversify investments and the value of land as a hedge against rising inflation.”

However, Schadegg also points to escalating inflation and interest rates as caution signs.

“These factors have the impact to decrease net farm income, erode operator equity and subsequently pressure farmland value,” Schadegg explains. “So, we sit at a somewhat precarious point in time where opportunity exists for both land sellers and buyers but is dependent on the continued strength of the agriculture economy to stabilize or grow.”

Farmers National Company manages more than 5,000 farms and ranches in 30 states comprising more than 2 million acres.

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

Cattle Current Daily—Jan. 5, 2023

Feeder Cattle futures surged higher Wednesday, buoyed by early-week cash strength and sharply lower grain futures prices. Live Cattle followed along to a lesser degree.

Feeder Cattle futures closed an average of $2.42 higher, from $1.22 higher at the back to $3.45 higher toward the front.

Live Cattle futures closed an average of 50¢ higher.

Grain and soybean futures wilted beneath the weight of paltry U.S. export inspections, the high U.S. dollar and rains in South America.

Corn futures closed 11¢ to 16¢ lower through Jly ‘24 and then mostly 6¢ lower.

Soybean futures closed 6¢ to 9¢ lower through Nov ‘23 and then mostly 2¢ to 4¢ lower.

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

Last week, live prices were $157/cwt. in the Southern Plains, $158 in Nebraska and $157-$160 in the western Corn Belt. Dressed prices were $250-$252.

Choice boxed beef cutout value was $4.05 lower Wednesday afternoon at $282.89/cwt. Select was $1.77 higher at $256.40/cwt.

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Major U.S. financial indices closed higher Wednesday, amid mixed economic news.

The Dow Jones Industrial Average closed 133 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 71 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.51 to $4.09 lower through the front six contracts, pressured by worries about economic contraction in China. 

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Although cash calf and feeder cattle markets were thinly traded over the holidays, Stephen Koontz, agricultural economist at Colorado State University points out prices for 400-500 lb. calves in the Southern Plains increased from less than $200/cwt. in October to about $230 in December.

“Many of the market watchers that I talk with had anticipated a strong counter-seasonal market but not of this magnitude,” Koontz explains, in the most recent issue of In the Cattle Markets. “While calf prices have rallied and cow prices have been strong through the fall, there are certainly warning signs in the system.”

“Likewise, beef primal prices have showed good seasonal demand but not the quantum improvements of the prior years,” Koontz says. “Higher fed cattle prices and flat boxed beef values have resulted in packer margins being squeezed. The live-to-cutout spread was about $250 per head in November and there’s no post-COVID packer that I know of that can make money with that margin.”

In terms of technicals, Koontz explains cattle chart patterns are persistent.

“There are long-term uptrends in place and resistance planes are being broken as most contracts push into life-of-contract highs,” Koontz says. “But the cattle markets do not chart like the corn or soybean markets. Cattle do not jump to new higher levels. Rather, there are persistence moves higher with periods of sharp down moves. Live Cattle contracts have trends in place and have broken resistance – these are buy signals. Feeder Cattle look similar, but it will be interesting to see contracts test life-of-contract highs from last August.”

By | January 4th, 2023|Daily Market Highlights|

Cattle Current Daily—Jan. 4, 2023

Cattle futures closed lower Tuesday, in correction mode after the long holiday weekend, and with softer outside markets.

Live Cattle futures closed an average of 66¢ lower (5¢ lower near the back to $1.05 lower in new spot Feb), not counting newly minted away Jun.

Feeder Cattle futures closed an average of 55¢ lower, from 7¢ lower at the back to $1.45 lower toward the front.

That was despite last week’s stronger cash fed cattle prices and persistent increases in wholesale beef prices.

Last week, live prices were $1 higher in the Southern Plains at $157/cwt., $1-$2 higher in Nebraska at $158 and steady to $3 higher in the western Corn Belt at $157-$160. Dressed prices were $3 higher in Nebraska at $252 and $2-$3 higher in the western Corn Belt at $250-$252. Negotiated cash fed cattle trade was at a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $4.97 higher Tuesday afternoon at $286.95/cwt. Select was $3.70 higher at $254.63/cwt.

Corn and grain futures closed sharply lower in nearby contracts amid the overall risk-off atmosphere of the day, as well as positive rains in South America.

Corn futures closed 3¢ to 8¢ lower through Jly ‘24 and then mostly 2¢ to 4¢ higher.

Soybean futures closed 23¢ to 32¢ lower through Sep ‘23 and then mostly 4¢ to 5¢ lower.

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Major U.S. financial indices closed slightly lower Tuesday, but the market had a more bearish feel as investors size up inflation and the risk of recession.

The Dow Jones Industrial Average closed 10 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 79 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.84 to $3.33 lower through the front six contracts.

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Agricultural producer sentiment rebounded in December, as measured by the Purdue University/ CME Group Ag Economy Barometer. It climbed 24 points month to month to 126 following two months of decline.

The Current Conditions Index jumped 37 points to a reading of 135, while the Future Expectations Index increased 18 points to a reading of 122.

“The improvement in current sentiment was motivated by producers’ stronger perception of current financial conditions on their farms and could be attributed to producers taking time to estimate their farms’ 2022 income following the completion of the fall harvest,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The Farm Financial Performance Index climbed 18 points to a reading of 109 in December, the only time in it was above 100 in 2022. The turnaround was driven by a sharp increase in the percentage of producers who expect better performance than the previous year.

Looking to the year ahead, the December survey asked producers to compare their expectations for their farm’s financial performance in 2023 to 2022. Producers indicated they expect lower financial performance in 2023 and cited rising costs and narrowing margins as key reasons. Concerns about costs continue to be top of mind for producers. Nearly half (47%) of crop producers said they expect farmland cash rental rates in 2023 to rise above the previous year. Other top concerns for 2023 include higher input costs (45% of respondents), rising interest rates (22% of respondents) and lower crop or livestock prices (13% of respondents).

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 from December 5-9.

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

Cattle Current Daily—Jan. 2 and 3, 2023

Negotiated cash fed cattle trade was light to moderate on moderate demand in the Southern Plains and Nebraska through Friday afternoon, according to the Agricultural Marketing Service. Trade was light on light to moderate demand in the western Corn Belt.

For the week, live prices were $1 higher in the Southern Plains at $157/cwt., $1-$2 higher in Nebraska at $158 and steady to $3 higher in the western Corn Belt at $157-$160. Dressed prices were $3 higher in Nebraska at $252. Dressed prices in the western Corn Belt the previous week were $248-$249.

Total estimated cattle slaughter last week was 547,000 head, which was 15,000 head fewer than the previous week but 23,000 head more than the same week a year earlier. Year-to-date total estimated cattle slaughter of 33.68 million head was 499,000 head more (+1.5%) than the same time last year. Year-to-date estimated beef production of 27.85 billion lbs. was 369.7 million lbs. more (+1.3%).

Choice boxed beef cutout value was $3.12 higher Friday afternoon at $281.98/cwt. Select was 23¢ higher at $250.93/cwt. Week to week on Friday, Choice was up $10.03.

Cattle futures sagged lower Friday amid a general lack of trader interest and year-end position squaring. 

Live Cattle futures closed an average of 71¢ lower (2¢ lower near the back to $3.67 lower in expiring Dec on scant trade).

Feeder Cattle futures closed an average of 36¢ lower, except for unchanged and 2¢ higher in the back two contracts.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed 4¢ to 10¢ higher through Sep ‘23 on drier weather in Argentina and hopes of increased exports to China. The rest of the board was mostly 4¢ to 5¢ lower.

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Major U.S. financial indices closed lower Friday as investors closed the books on a down year for stocks with more uncertainty ahead.

The Dow Jones Industrial Average closed 73 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 11 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.86 to $1.99 higher through the front six contracts.

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The difference between formula net prices and formula base prices increased the past couple of years, according to recent research by Sheppard Rogers, a graduate research assistant in agricultural economics at Kansas State University (K-State) and Ted Schroeder, K-State agricultural economist and director of the Center for Risk Management Education and Research.

Specifically, the K-state researchers compare formula base and net prices over 2016 to 2021. Marketing agreements and formula pricing accounted for more than 60% of fed cattle transactions in 2022.

“Formula trade refers to fed cattle transactions that are not negotiated cash, negotiated grids, or forward contracts,” explain the authors, in Formula Base and Net Pricing Differentials for U.S. Fed Cattle. “Formula base price are the base to which grid premiums and discounts are generally applied to determine net price paid. Formula base prices are not negotiated for each transaction, but rather utilize an externally discovered reference price. Reference prices may include: 1) plant average base prices for fed cattle purchased by a specific plant one or more weeks prior to the expected week of slaughter; 2) USDA reported national or area negotiated cash prices; 3) live cattle futures prices; or 4) wholesale beef prices.”

From 2016 through 2018, Rogers and Schroeder say the net-to-weighted-average base price differential was about $2/cwt., whereas the difference between formula net and base prices during 2020 through 2021 averaged about $3.86/cwt. It averaged about $4.51/cwt. from 2021 through October of 2022 — more than double the value five years earlier.

The economists say the increase over time likely is associated with several contributing factors, including:

  • “…on average pens of cattle sold on a formula with a grid received premiums net exceeding discounts in recent years. This could be in part due to cattle feeders getting better at targeting cattle production and marketing to match grid incentives, avoiding substantial discounts.”
  • “…the percentage of formula transactions that received adjustments for quality grade increased from 70% to 80%; yield grade from 64% to 74%; weight 44% to 49%; and other 33% to 46% (Schroeder, Coffey & Tonsor 2021). This indicates more transactions are associated over time with grids increasing the opportunity for receiving premiums as well as risks for experiencing discounts. Logically if producers are getting better at netting premiums exceeding discounts, the producers would also strive to increase use of grids to determine net prices.”
  • “…Perhaps premiums offered have changed over time creating greater incentives to use grid adjustments…From 2016 to June 2019, premiums for Prime quality grade remained relatively flat, averaging $12.65/cwt. From July 2019 to October 2021 premiums for Prime quality jumped to an average of $14.09/cwt, and in 2021-22 averaged $15.68/cwt. Premiums for Certified Angus Beef (CAB) averaged $3.72/cwt from 2016 to June 2019 and increased slightly to $4.32/cwt from July 2019 to October 2021. CAB premiums from January to October 2021 averaged $4.89/cwt. So, clearly premiums for high quality have increased over time.”

“With more cattle being sold using formula pricing including grid adjustments, not only are strong value signals being sent to producers, but with greater premiums recently for high quality beef, these value signals are also larger than previously,” the authors explain. “Thus, average net formula prices have increased in economically important magnitudes relative to base prices in recent years.”

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

Cattle Current Daily—Dec. 30, 2022

Cattle futures continued to gain Thursday with expectations of higher cash prices and softer nearby Corn futures.

Live Cattle futures closed an average of 40¢ higher (5¢ higher near the back to $1.05 higher in the front two contracts).

Feeder Cattle futures closed an average of 49¢ higher.

Negotiated cash fed cattle trade was light on moderate demand in the Southern Plains and Northern Plains through Thursday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, there were some early live sales in the Southern Plains at $157/cwt.

Last week, live prices were $156 in the Southern Plains, $156-$157 in Nebraska and $157 in the western Corn Belt. Dressed prices were $248-$249.

Choice boxed beef cutout value was 55¢ lower Thursday afternoon at $278.86/cwt. Select was $3.42 higher at $250.70/cwt.

Corn futures closed 2¢ to 3¢ lower in the front three contracts and then 1¢ lower to 1¢ higher.

Soybean futures closed 1¢ to 3¢ higher through Sep ‘24 and then fractionally lower.

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Major U.S. financial indices closed higher Thursday. Analysts credited some of the firmer tone to more jobless claims than expected.

Initial weekly unemployment insurance claims for the week ending Dec. 24 were 9,000 more than the previous week at 225,000, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 345 points higher. The S&P 500 closed 66 points higher. The NASDAQ was up 264 points.

West Texas Intermediate Crude Oil futures (CME) closed 56¢ to 60¢ lower  through the front six contracts.

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Despite economic shocks and uncertainties during the last several years, there is no strong indication that softer global economics have weakened U.S. beef demand in East Asia, according to a recent International Agricultural Trade Report — U.S. Beef Exports to East Asia on Record Pace — from USDA’s Foreign Agricultural Service (FAS).

In spite of supply chain disruptions for U.S. fresh or chilled beef, longer shipping times, and higher costs, FAS analysts say East Asian import demand for beef products should remain steady. Demand from the region was record large in 2021 (both volume and value) and was on pace to set a new record in 2022.

“East Asia’s relatively robust middle class has supported the demand for high-quality beef, and a developed e-commerce retail sector has provided flexible avenues for suppliers to promote beef products during the pandemic,” according to the report.

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

Cattle Current Daily—Dec. 20, 2022

Cattle futures mostly gained Wednesday, supported by recently stronger wholesale beef prices and expectations from some that cash prices should strengthen this week.

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

Last week, live prices were $156/cwt. in the Southern Plains, $156-$157 in Nebraska and $157 in the western Corn Belt. Dressed prices were $248-$249.

Choice boxed beef cutout value was 63¢ lower Wednesday afternoon at $279.41/cwt. Select was $1.64 higher at $247.28/cwt.

Live Cattle futures closed an average of 57¢ higher (5¢ to 92¢ higher), except for an average of 6¢ lower in two contracts toward the front.

Feeder Cattle futures closed an average of 57¢ higher (5¢ to 92¢ higher).

That was with stronger feed prices.

Corn and Soybean futures gained Wednesday with support from the drier forecast in Argentina and notions that exports could get a boost from China’s easing Covid restrictions.

Corn futures closed 4¢ to 8¢ higher through Jly ‘24 and then mostly fractionally higher to 1¢ higher.

Soybean futures closed 15¢ to 25¢ higher through Jan ‘24 and then mostly 7¢ to 8¢ higher.

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Major U.S. financial indices stumbled lower Wednesday with more indicators of economic slowdown.

Pending home sales slid for the sixth consecutive month in November, according to the National Association of REALTORS® (NAR). All four U.S. regions recorded month-over-month decreases, and all four regions saw year-over-year declines in transactions.

“Pending home sales recorded the second-lowest monthly reading in 20 years as interest rates, which climbed at one of the fastest paces on record this year, drastically cut into the number of contract signings to buy a home,” says NAR Chief Economist Lawrence Yun. “Falling home sales and construction have hurt broader economic activity.”

The Pending Home Sales Index — a forward-looking indicator of home sales based on contract signings — fell 4.0% to 73.9 in November. Year-over-year, pending transactions dropped by 37.8%. An index of 100 is equal to the level of contract activity in 2001.

“The residential investment component of GDP has fallen for six straight quarters,” Yun explains. “There are approximately two months of lag time between mortgage rates and home sales. With mortgage rates falling throughout December, home-buying activity should inevitably rebound in the coming months and help economic growth.”

The Dow Jones Industrial Average closed 365 points lower. The S&P 500 closed 46 points lower. The NASDAQ was down 139 points.

West Texas Intermediate Crude Oil futures (CME) closed 45¢ to 57¢ lower  through the front six contracts.

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Food sales at convenience stores increased during the last three months, ending in November, according to the NPD Group (NPD).

Year over year, during the period, visits to convenience stores for foodservice items, like beverages and prepared foods, were up 2%. Consumer spending on foodservice menu items at convenience stores was up 8%. Units and dollars of foodservice products shipped from broadline foodservice distributors to convenience stores increased by 3% and 13%, respectively.

“Convenience store foodservice is benefitting by more people commuting to and from school and work and generally out and about more,” says David Portalatin, NPD Food Industry Advisor. “The growth in convenience store foodservice visits is a positive sign for the U.S. foodservice industry overall.”

The breakfast and morning snack periods, or morning meal daypart, which accounted for almost 25% of foodservice visits to convenience stores, grew traffic by 3% and was a key contributor to total visit growth in the most recent quarter ending in November. The evening snack period, which increased by 4%, was also vital to foodservice traffic growth at convenience stores during the period. Traffic at lunch, typically most popular for convenience store foodservice, was up 2% compared to a year ago. At dinner, foodservice visits also increased by 2% year-over-year. Traffic at the afternoon snack daypart was flat compared to a year ago. 

Beverage-only orders represent over half of convenience store foodservice visits and drive growth for the channel overall. However, the popularity of burgers and breakfast sandwiches ordered at convenience stores throughout the day has also spurred growth. Burgers are a popular convenience store foodservice item for lunch, dinner, and the afternoon snack period. Burger servings increased by 12% in the quarter ending November compared to a year ago. Servings of different varieties of prepared breakfast sandwiches from convenience stores increased by 8% over a year ago.

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

Cattle Current Daily—Dec. 28, 2022

Feeder Cattle futures faltered Tuesday, pressured by more feedlot placements than expected in the latest Cattle on Feed report and pricier Corn futures. Feeder Cattle closed an average of 72¢ lower (30¢ to $1.35 lower).

Live Cattle futures paddled on either side of steady, helped along by surging wholesale beef prices and notions that cash trade could be higher this week. They closed from unchanged to an average of 12¢ lower to an average of 11¢ higher.

Choice wholesale beef prices continue to churn higher as buyers scramble to fill orders amid decreased packer production. Choice boxed beef cutout value was $8.09 higher Tuesday afternoon at $280.04/cwt. Select was 17¢ higher at $245.64/cwt. The Choice-Select spread was a whopping $34.40.

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

Last week, live prices were $156/cwt. in the Southern Plains, $156-$157 in Nebraska and $157 in the western Corn Belt. Dressed prices were $248-$249.

The five-area direct weighted average fed steer price last week was 57¢ higher on a live basis at $156.25/cwt. The weighted average steer price in the beef was 90¢ higher at $248.70.

Corn futures surged higher Tuesday, buoyed by the weaker U.S. dollar, weather concerns in South America and perhaps some year-end positioning. They closed 5¢ to 8¢ higher through Dec ‘23 and then mostly 3¢ to 4¢ higher.

Soybean futures closed 3¢ to of 6¢ higher through Aug ‘23 and then mostly fractionally lower to 2¢ lower.

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Major U.S. financial indices closed mixed Tuesday with the most pressure in tech stocks.

The Dow Jones Industrial Average closed 37 points higher. The S&P 500 closed 15 points lower. The NASDAQ was down 144 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed, from 3¢ lower to 25¢ higher through the front six contracts.

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Reflecting on the recent Cattle on Feed report, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out in his weekly market comments that both feedlot placements and the number of cattle on feed were lower year over year for the third consecutive month.

“Drought pushed more cattle into feedlots earlier this year and kept feedlot totals higher for longer,” Peel says. “Monthly inventories from February through June of 2022 were not only higher year over year but were at record monthly levels in the cattle on feed data series that began in 1996.” 

On average, Peel explains feedlot inventories peaked in December and hit their low in September (2016-20). However, in 2021, the peak came in February and the ebb in September. This year, the ebb came in September and peak numbers may already have been established for a long while.

“Feedlot inventories decreased from November to December. This may signal that the seasonal peak is already in place, although it is too early to be sure,” Peel says. “The last time that December feedlot inventories were lower than November occurred in 2016. In that instance, feedlot inventories decreased in December and January before jumping higher to a belated peak in June 2017. I believe it is unlikely that feedlot inventories will move higher anytime in 2023 and the November 2022 total may be the peak for many months. Time will tell.”

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

Cattle Current Daily—Dec 26-27, 2022

Negotiated cash fed cattle trade had a firmer feel through Friday afternoon.

Live prices in the Texas Panhandle were $1 higher at $156/cwt.

Although too few to trend, there were some live sales in Kansas at $156 and at $157 in the western Corn Belt. Prices the previous week were $155 in Kansas and $155-$157 in the western Corn Belt where dressed prices were $248.

For the week, dressed prices in Nebraska were $1 higher at $249. Live prices there the previous week were $155-$157.

Choice Boxed beef cutout value was $6.74 higher Friday afternoon at $271.95/cwt. Select was $3.66 higher at $245.47/cwt. Both were helped by packers throttling back production.

Total weekly estimated cattle slaughter was 562,000 head, which was 63,000 head fewer than the previous week. However, the estimated total was 75,000 head more than the same week last year. Year-to-date total estimated cattle slaughter of 33.13 million head was 479,000 head more (+1.5%) more than a year earlier. Year-to-date estimated beef production of 27.40 billion lbs. was 363 million lbs. more (+1.3%) than the same time last year.

Cattle futures closed mainly higher Friday, supported by the higher tone to cash prices and the bounce in wholesale beef prices.

Live Cattle futures closed an average of 51¢ higher (20¢ to $1.00 higher), except for unchanged and 17¢ lower in the back two contracts.

Feeder Cattle futures closed an average of 24¢ higher, except for an average of 18¢ lower in the back two contracts.

Grain and Soybean futures found some technical support Friday with positive export news and positioning ahead of the holiday.

Corn futures closed 3¢ to of 5¢ higher through the front three contracts and then mostly fractionally higher.

Soybean futures closed 10¢ to of 14¢ higher through Jan ‘24 and then mostly 6¢ to 8¢ higher.

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Major U.S. financial indices recovered some lost ground Friday with likely week-end positioning and despite another gauge suggesting more work lies ahead to curb inflation.

The personal consumption expenditures (PCE) index increased 0.1% in November, compared to the previous month, according to the U.S. Bureau of Economic Analysis. That was more than expected. Year over year, the index was up 5.5%. Excluding food and energy, the index was 0.2% higher month to month.

The Dow Jones Industrial Average closed 176 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 21 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.07 to $2.46 higher through the front six contracts, supported by chatter that Russia will cut production.

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Markets will likely view Friday’s Cattle on Feed report as neutral to a touch bearish, with slightly more feedlot placements than analysts expected ahead of the report. Keep in mind the report accounts for feedlots with 1,000 head or more one-time capacity.

Placements in November of 1.92 million head were 42,000 head less (-2.1%) than the previous year. Average expectations ahead of the report were for a decline of about 4%.

In terms of placement weights, 52% went on feed weighing 699 lbs. or less, 36% weighing 700-899 lbs. and 12% weighing 900 lbs. or more.

Marketings in November of 1.89 million head were 22,000 head more (+1.2%), which was in line with estimates. Marketings were the most for the month since the series began in 1996, according to USDA’s National Agricultural Statistics Service.

Cattle on feed Dec. 1 of 11.67 million head were 312,000 head less (-2.6%) than the same time last year, which was close to pre-report projections.

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

Cattle Current Daily—Dec. 23, 2022

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

Although too few to trend, there were some live sales in the Southern Plains at $155/cwt. and in the western Corn Belt at $157. There were a few dressed trades in Nebraska at $249.

Last week, live prices were $155/cwt. in the Southern Plains and $155-$157 in Nebraska and the western Corn Belt. Dressed prices were $248.

Choice Boxed beef cutout value was 35¢ higher Thursday afternoon at $265.21/cwt. Select was $5.52 higher at $241.81/cwt.

Cattle futures mostly maintained the previous session’s strong gains.

Live Cattle futures closed an average of 18¢ higher, except for an average of 36¢ lower in the front two contracts.

Feeder Cattle futures closed an average of 35¢ higher.

Corn futures closed mostly 1¢ lower.

Soybean futures closed 10¢ to 13¢ lower through Aug ‘23 and then mostly 5¢ to 6¢ lower.

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Major U.S. financial indices closed lower Thursday, led by tech stocks, amid renewed market bearishness.

The Dow Jones Industrial Average closed 348 points lower. The S&P 500 closed 56 points lower. The NASDAQ was down 233 points.

West Texas Intermediate Crude Oil futures (CME) closed 80¢ to 83¢ lower through the front six contracts.

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Farm and ranch operators paid hired workers an average gross wage of $17.72/hour during the October 2022 reference week (Oct. 9-15), up 7% from the October 2021 reference week, according to the latest Farm Labor report from USDA’s National Agricultural Statistics Service (NASS).

Livestock workers earned $16.52/hour during the period, which was 7% more. Field workers received an average of $17.04/hour, up 6%.

Farm and ranch operators hired 785,000 workers during the period, which was 2% more than the October 2021 reference week.

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

Cattle Current Daily—Dec. 22, 2022

Cattle futures surged higher Wednesday, led by Live Cattle, supported by recent wholesale boxed beef strength, performance-depressing winter weather forecast across the Northern Plains, as well as bullish expectations for Friday’s Cattle on Feed report. Evidence of tightening cattle numbers also continues to grow (see below).

Live Cattle futures closed an average of 98¢ higher (25¢ higher at the back to $2.12 higher toward the front).

Feeder Cattle futures closed an average of 56¢ higher.

That was with Corn futures closing mostly 6¢ to 10¢ higher through Jly ‘24, supported by the drier outlook in South America. Soybean futures closed 1¢ to 4¢ higher through Nov ‘23 and then mostly 2¢ to 5¢ lower.

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

Last week, live prices were $155/cwt. in the Southern Plains and $155-$157 in Nebraska and the western Corn Belt. Dressed prices were $248.

Choice Boxed beef cutout value was 19¢ lower Wednesday afternoon at $264.86/cwt. Select was $2.39 higher at $236.29/cwt.

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Major U.S. financial indices climbed Wednesday amid positive economic news that included strong earnings reports from bellwethers Nike and FedEx, as well as stronger consumer confidence.

The Conference Board Consumer Confidence Index® increased 6.9 points in December to 108.3, following back-to-back monthly declines.

“Consumer confidence bounced back in December, reversing consecutive declines in October and November to reach its highest level since April 2022,” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation and Expectations Indexes improved due to consumers’ more favorable view regarding the economy and jobs. Inflation expectations retreated in December to their lowest level since September 2021, with recent declines in gas prices a major impetus. Vacation intentions improved but plans to purchase homes and big-ticket appliances cooled further. This shift in consumers’ preference from big-ticket items to services will continue in 2023, as will headwinds from inflation and interest rate hikes.”

The Dow Jones Industrial Average closed 526 points higher. The S&P 500 closed 56 points higher. The NASDAQ was up 162 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.63 to $2.06 higher through the front six contracts.

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Auction market volume in Oklahoma during the past few months suggest declining cattle numbers are adding lift to feeder cattle prices.

“Weekly volumes were larger year over year from July through mid-October and have been mostly smaller since,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in is weekly market comments.  “From July to mid-October, the cumulative additional weekly feeder volume was up an average of 18%, totaling over 71,000 additional head of feeder cattle marketed in auctions during this period. The year-over-year decreases since mid-October have reduced the cumulative total by about half, meaning that the total feeder cattle auction volume in the second half of 2022 is up over 35,000 head at the end of the year, with all of that increase occurring prior to mid-October. Smaller auction volumes since mid-October are no doubt contributing to the strong feeder prices at the end of the year.”

Peel also points to the fact that average prices for Medium and Large #1 steers reached their annual high in mid-December at weights less than 550 lbs. and weights heavier than 850 lbs.

“Prices for steers from 550-850 lbs. were at the maximum in August/September but are above the annual average at the end of the year,” Peel says.  “In general, feeder cattle markets are finishing 2022 strong with momentum going into the new year.”

Looking ahead, Peel notes the number of stocker cattle on wheat pasture are significantly fewer than typical, well below normal suggesting a muted run of wheat-pasture feeder cattle into March and for graze-out into May. 

You can watch Peel sharing some of his market outlook here.

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

Cattle Current Daily—Dec. 21, 2022

Feeder Cattle futures retraced the previous session’s losses, perhaps with support from early positioning ahead of Friday’s monthly Cattle on Feed report (see below). They closed an average of 96¢ higher (60¢ to $1.52 higher).

Live Cattle futures softened an average of 21¢ lower, except for an average of 17¢ higher in the back three contracts. Pressure included reduced packer production last week and likely again this week, diluting some opportunity for cash prices to advance.

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

Soybean futures closed 11¢ to 17¢ higher through Sep ‘23 and then mostly 7¢ to 8¢ higher.

Choice wholesale beef prices continued their recent surge higher, due in part to the aforementioned reduction in packer production. Choice Boxed beef cutout value was $1.22 higher Tuesday afternoon at $265.05/cwt. However, Select was $4.67 lower at $233.90/cwt.

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

Last week, live prices were $155/cwt. in the Southern Plains and $155-$157 in Nebraska and the western Corn Belt. Dressed prices were $248.

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Major U.S. financial indices firmed Tuesday, ending the recent losing streak. Perhaps bargain hunting was part of the support, given the Bank of Japan’s surprise decision to let its 10-year government bond interest rate to rise — fueling the yen higher.

The Dow Jones Industrial Average closed 92 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 1 point.

West Texas Intermediate Crude Oil futures (CME) closed 72¢ to 90¢ higher through the front six contracts.

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Many analysts expect this Friday’s monthly Cattle on Feed report to be decidedly bullish.

“Early pre-report estimates have placements ranging from 94% to 98% of a year ago,” says David Anderson, Extension livestock economist with Texas A&M AgriLife Extension Service. “Lower placements are driven by fewer feeder cattle available than last year and seasonal declines. The feeder cattle index, calf and feeder cattle sales data, and cattle imports from Mexico all indicate smaller placements than last year.”

With November marketings pegged to be 1% more year over, year, Anderson says the Dec. 1 on-feed inventory is estimated at about 97.5% of last year.

“That would be the fewest December on-feed numbers since 2017,” Anderson says, in the latest issue of In the Cattle Markets. “Supplies for next year and beyond are tightening.”

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

Cattle Current Daily—Dec. 20, 2022

Recently stronger wholesale beef prices and last week’s mostly steady-to-firmer cash fed cattle trade helped Live Cattle futures edge an average of 15¢ higher Monday.

Despite lower Corn futures, Feeder Cattle futures meandered to a mostly lower close Monday, presumably pressured in part by the lack of cash direction with many auction barns closed for the holidays. Feeder Cattle futures closed an average of 84¢ lower (15¢ to $1.67 lower), except for an average of 35¢ higher in the back two contracts.

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

Last week, live prices were $155/cwt. in the Southern Plains and $155-$157 in Nebraska and the western Corn Belt. Dressed prices were $248.

Choice Boxed beef cutout value was $1.00 higher Monday afternoon at $263.83/cwt. Select was $3.12 higher at $238.57/cwt.

Corn futures weakened on positive South American moisture. They closed 2¢ to 5¢ lower through May ‘24 and then mostly fractionally mixed.

Soybean futures closed 12¢ to 20¢ lower through Sep ’23 and then mostly 2¢ to 8¢ lower.

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Major U.S. financial indices closed lower again Monday with carry-over pressure from continued recessionary fears. 

The Dow Jones Industrial Average closed 162 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 159 points.

West Texas Intermediate Crude Oil futures (CME) closed 75¢ to 90¢ higher through the front six contracts.

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Although steer byproduct values softened recently, they remain significantly higher than the five-year average, according to the Livestock Marketing Information Center (LMIC).

“Last week it was $14.67/cwt., down 2% from the same week last year but 49% above the five-year average,” according to LMIC analysts, in the latest Livestock Monitor. “Since September, the value has averaged $14.73/cwt., slightly lower than the same period last year, which ranged from $15-16. The five-year average is typically below $10/cwt. during the latter part of the year.”

According to the LMIC folks, prices for livers, tongues and cheek meats provided support during the last several months. They add that hide prices held relatively steady over the same period.

The cow byproduct price remains elevated, too.

“Last week, the cow by-product value was $13.59/cwt., down 6% from last year but 51% higher than the five-year average. During the last year, the weekly cow by-product value has ranged from $12.54 to $15.19 with an average of $13.55/cwt.,” say LMIC analysts.

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

Cattle Current Daily—Dec. 19, 2022

Firmer late-week cash prices and the bounce higher in wholesale beef prices helped push Cattle futures mostly higher on Friday.

Choice Boxed beef cutout value was $8.53 higher Friday afternoon at $262.83/cwt. Select was $6.94 higher at $235.45/cwt.

Feeder Cattle futures closed an average of 26¢ higher (2¢ to 72¢ higher), except for 12¢ lower in Apr. They closed an average of 24¢ lower week to week, except for an average of 30¢ higher in two away contracts.

Live Cattle futures closed an average of 48¢ higher (5¢ higher at the back to $1.00 higher in spot Dec, except for unchanged in away Feb. Week to week, they closed from unchanged to an average of 65¢ higher through the front four contracts week to week on Friday (22¢ to $1.37 higher), and then an average of 26¢ lower.

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

For the week, live prices were steady to $2 higher in the Texas Panhandle at $155/cwt., steady to $1 lower in Kansas at $155 and $1 lower to $1 higher in Nebraska and the western Corn Belt at $155-$157. Dressed prices were $1-$2 higher at $248.

Estimated total weekly cattle slaughter last week was 629,000 head, which was 23,000 head fewer than the previous week and 29,000 head fewer than the same week a year earlier. Year-do-date estimated total cattle slaughter of 32.58 million head was 412,000 head more (+1.3%) than the same time last year. Year-to-date estimated beef production of 26.93 billion lbs. was 307.7 million lbs. more (+1.1%) than a year earlier.

Corn futures closed mostly fractionally lower to 1¢ lower, but the front six contracts closed an average of 6’5¢ higher week to week on Friday.  

On Friday, Soybean futures closed 3¢ to 7¢ higher through Sep ’23 and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices closed lower again Friday with extended pressure from investor fears that the Fed’s hawkish stance on interest rates will lead to a recession.

The Dow Jones Industrial Average closed 281 points lower. The S&P 500 closed 43 points lower. The NASDAQ was down 105 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.34 to $1.82 lower through the front six contracts.

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Cow-calf producers’ sensitivity to feeder cattle prices has declined over time (1987-2022), according to a recent factsheet authored by Amber Oerly, a graduate research assistant in agricultural economics at Kansas State University (K-State) and Glynn Tonsor, K-State agricultural economist.

“While price is still an important factor for cow-calf producers when they are making their herd adjustment decisions, other factors may be influencing their decisions more than they did in the past,” say the authors. “For industry analysts, these findings are relevant because when analysts attempt to project future inventory changes, a larger percentage change in price is needed to change inventory than in the past.”

The report — Cow-Calf Level Supply Response: How Has the Industry Responded to Elevated Uncertainty? — points to the declining distance between cattle inventory highs and lows during recent cattle cycles.

“This could occur if cow-calf producers are less sensitive to changes in expected feeder cattle prices (output prices), when making herd adjustment decisions, than they were in the past,” say the authors. “Further, producers may be less likely to invest in herd expansion during times of decreased return on investment and/or increased volatility or uncertainty. Other factors that may reduce the price sensitivity of cow-calf producers are evolving producer and operation demographics; technology and efficiency gains; unexpected weather events; and barriers to entry.”

As well, authors explain increased volatility and uncertainty due to the pandemic and other unexpected events, “…may contribute to reduced price sensitivity of producers when making their herd adjustment decisions.”

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

Cattle Current Daily—12-16-22

Cattle feeder patience paid off Thursday as packers paid mostly steady to higher money.

Negotiated cash fed cattle trade was slow on moderate demand in the Southern Plains through Thursday afternoon at $155/cwt. That was steady to $2 higher in the Texas Panhandle but steady to $1 lower in Kansas.

Trade was slow to moderate on moderate demand in Nebraska and the western Corn Belt. Dressed prices were $248, which was $1 higher in Nebraska and $1-$2 higher in the western Corn Belt, where live prices were unevenly steady at $155-$157. Live prices in Nebraska last week were $156-$158.

In Colorado, trade was mostly inactive on very light demand, with too few transactions to trend, according to the Agricultural Marketing Service. Live prices there last week were $157.

Choice Boxed beef cutout value was $4.23 higher Thursday afternoon at $254.30/cwt. Select was $1.82 higher at $228.51/cwt.

Bearish outside markets, firmer Corn futures and light trade helped pressure Cattle futures Thursday.

Feeder Cattle futures closed an average of 50¢ lower.

Live Cattle futures closed an average of 45¢ lower (7¢ to 85¢ lower).

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 3¢ to 8¢ lower.

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Major U.S. financial indices closed sharply lower Thursday with follow-through pressure from the previous session tied to investor fears that the Fed’s hawkish stance on interest rates will lead to a recession. Weaker monthly retails sales added pressure. Advance estimates of U.S. retail and food services sales for November were 0.6% less than the previous month, according to the U.S. Commerce Department.

The Dow Jones Industrial Average closed 764 points lower. The S&P 500 closed 99 points lower. The NASDAQ was down 360 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.17 to $1.43 lower through the front six contracts.

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USDA’s Economic Research Service (ERS) left projected feeder steer prices for next year unchanged, in December’s monthly Livestock, Dairy and Poultry Outlook (LDPO).

ERS projects the average feeder steer price (750-800 lbs., Oklahoma City) to be $177/cwt. in the first quarter of 2023, $190 in the second quarter and $214.00 in the third quarter for an annual average price of $201.25. The annual average this year was projected to be $165.68.

“After nearly three months of feeder cattle prices averaging around $174/cwt., tighter supplies of feeder steers likely helped support higher prices in November and early December,” say ERS analysts. “For November, prices for feeder steers 750–800 lbs. at the Oklahoma City National Stockyards recorded a weighted average of $177.35/cwt.  The average price of feeder steers from the December 5 report sales was $177.18. Lower projected corn prices for the fourth quarter also likely supported firm feedlot demand.”

As mentioned recently in Cattle Current, ERS projected the five-area direct weighted average fed steer price at $153.00 in the first quarter, $154 in the second and $155 in the third quarter for an annual average of $155.50. This year’s annual average price was estimated to be $144.15.

ERS analysts explain the negotiated cash fed steer price the first week of December (five-area) averaged $156.42/cwt., the highest weekly price for any December since 2014.

“Saturday slaughter volumes in early December are lighter than last year at this time and may portend a slight pullback from relatively high fed cattle prices through the end of the year,” ERS analysts say. “Estimated slaughter in early December suggests a slowing year-over-year pace of fed cattle slaughter. The slower expected pace is carried over into early 2023, as a portion of expected fed cattle marketings were shifted from the first to the second quarter. Heavier expected carcass weights in fourth-quarter 2022 are also carried over into early 2023. The temporal shift in expected marketings and heavier anticipated weights are offsetting, keeping the 2023 beef production forecast unchanged at 26.3 billion pounds.”

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

Cattle Current Daily—Dec. 15, 2022

Cattle futures ran out of steam Wednesday as traders were apparently waiting for more cash direction.

Feeder Cattle futures closed an average of 24¢ lower.

Live Cattle futures closed an average of 34¢ lower.

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

Last week, live prices were at $153-$155/cwt. in the Texas Panhandle, $155-$156 in Kansas, $156-$158 in Nebraska and $156 in the western Corn Belt. Dressed prices were $246-$247.

Choice Boxed beef cutout value was $4.88 lower Wednesday afternoon at $250.07/cwt. Select was $1.23 higher at $226.69/cwt.

Corn futures closed 2¢ to 4¢ lower through Jly ‘23 and then mostly fractionally mixed.

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

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Major U.S. financial indices closed lower Wednesday, pressured by hawkish comments from Federal Reserve Chair, Jerome Powell, taking wind from the sails of those who had hoped the central bank would begin taking a softer monetary stance.

“The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time,” according to an FOMC statement. Although less than recent increases, the Fed raised the target range for the federal funds rate another half-point to 4.25% to 4.50%.

The Dow Jones Industrial Average closed 142 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 85 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.37 to $1.89 higher through the front six contracts.

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Last year, 26% of U.S. beef production came from small family operations and 57% came from mid-size and large-scale family operations, according to the 2022 edition of America’s Farms and Ranches at a Glance.

Most U.S. operations are small family farms (89%) that operate on nearly 50% of U.S. agricultural land and account for 18% of the total value of production. Large-scale family farms accounted for 46% of the total value of production and 27% of agricultural land in 2021. Mid-size family farms accounted for 18% of agricultural land and 18% of the total value of production.

Small family farms had gross cash farm income of less than $350,000 for the year. For mid-size operations, the range of gross cash farm income was $350,000 to $999,999. It was $1 million or more for large-scale family operations.

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

Cattle Current Daily—Dec. 14, 2022

Higher outside markets and recently surging wholesale beef prices helped Cattle futures mostly extend gains Tuesday.

Feeder Cattle futures closed an average of 36¢ higher.

Live Cattle futures closed narrowly mixed, from an average of 24¢ higher in the front four contracts to an average of 17¢ lower through the back, except for unchanged in Aug.

Choice Boxed beef cutout value was $2.07 lower Tuesday afternoon at $254.95/cwt. Select was 22¢ lower at $225.46/cwt. But, Choice was $3.31 higher in the morning report and the previous day’s CME Boxed Beef Index was $1.52 higher.

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

Last week, live prices were at $153-$155/cwt. in the Texas Panhandle, $155-$156 in Kansas, $156-$158 in Nebraska, $157 in Colorado and $156 in the western Corn Belt. Dressed prices were $246-$247.

Corn futures closed mostly 1¢ lower.

Soybean futures closed 15¢ to 19¢ higher through Aug ‘23, and then 4¢ to 8¢ higher.

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Major U.S. financial indices rose again Tuesday with another hopeful sign that inflation is easing. The Consumer Price Index for All Urban Consumers rose 0.1% in November on a seasonally adjusted basis, after increasing 0.4% in October, according to the U.S. Bureau of Labor Statistics. The index was 7.1% higher over the last 12 months, less than the trade expected.

The Dow Jones Industrial Average closed 103 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 113 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.83 to $2.22 higher through the front six contracts.

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Global beef production is forecast to decrease slightly in 2023, as declining beef production in the U.S. and European Union will more than offset increasing beef production in Australia, Mexico and India, says Derrell Peel, Extension livestock Marketing specialist at Oklahoma State University, in his weekly market comments. He adds that changing beef production and consumption will impact global beef exports and imports.

Brazil is expected to remain the largest beef exporter with beef production increasing slightly next year, according to Peel. He explains Brazilian exports are limited by decreased beef imports to China.

“Australia, after drought in recent years decreased cattle numbers and beef production, is now in rebuilding mode,” Peel explains. “Cattle prices are falling from historically high levels in Australia and beef exports are forecast to increase, helping Australia regain the number two spot.” 

Declining beef production, higher beef prices and a continued strong dollar will likely make the U.S. the fourth largest beef exporter in 2023, according to Peel.

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

Cattle Current Daily—Dec. 13, 2022

Cattle futures mostly edged higher Monday with carryover support from last week’s strong close and the bounce higher in wholesale beef prices.

Choice Boxed beef cutout value was $8.09 higher Monday afternoon at $257.02/cwt. Select was $4.42 higher at $225.68/cwt.

Live Cattle futures closed an average of 39¢ higher.

Feeder Cattle futures closed an average of 14¢ higher, except for unchanged to 27¢ lower in three contracts.

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 $153-$155/cwt. in the Texas Panhandle, $155-$156 in Kansas, $156-$158 in Nebraska and $156 in the western Corn Belt. Dressed prices were $246-$247.

The five-area direct weighted average fed steer price last week was 63¢ lower at $155.79/cwt. The average steer price in the beef was $1.73 lower at $246.82.

Corn futures closed 3¢ to 10¢ higher. Reportedly, bargain hunting was a primary driver.

Soybean futures closed 18¢ to 23¢ lower through Sep ‘23, and then mostly 10¢ to 14¢ lower., pressured by positive rains in South America.

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Major U.S. financial indices closed higher Friday, recovering some recent losses. The main driver appeared to be bets on the next CPI indicating a touch lower inflation.

The Dow Jones Industrial Average closed 528 points higher. The S&P 500 closed 56 points higher. The NASDAQ was up 139 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.82 to $2.15 higher through the front six contracts.

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Volatility continues in wholesale beef prices as buyers dust up holiday shopping and prepare for the calendar to turn, with a stronger floor than many would have expected.

For perspective, the precipitous drop in Choice boxed beef cutout values early last week spooked the market. Week to week on Monday, though, it was $13.71 higher at $257.02/cwt., following a decline of $11.22 for the same period a week earlier. Select was $4.57 higher week to week on Monday at $225.68.

Along the way, Andrew P. Griffith, agricultural economist at the University of Tennessee says the Choice-Select spread underscores consumer demand for higher quality beef.

“The Choice-Select spread typically narrows during the winter months when consumers begin using the slow cooker more frequently. The retail to consumer market is not quite to that point, but the wholesale to retail market should be trading for retailers needs during the winter months,” Griffith explains, in his weekly market comments. “Retailers are demonstrating the demand consumers will have for beef grading higher than Select during the winter months. Consumers have determined that a chuck roast that grades Choice is better than one that grades Select. The Choice-Select spread will narrow in January and February, but it is unlikely those spreads will narrow as much as has been seasonally typical the past decade.”

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

Cattle Current Daily—12-12-22

Higher wholesale beef values and some stronger cash prices in the North helped lift Live Cattle futures Friday, which drug Feeder Cattle along.

Choice Boxed beef cutout value was $1.65 higher Friday afternoon at $248.93/cwt. Select was 71¢ higher at $221.26/cwt.

Live Cattle futures closed an average of 84¢ higher (2¢ to $1.62 higher), except for 7¢ lower in the back contract.

Feeder Cattle futures closed an average of 29¢ higher.

Negotiated cash fed cattle trade was light to moderate on moderate demand in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Prices were mixed with live sales in the Texas Panhandle steady to $2 lower at $153-$155/cwt. and steady to $1 higher in Kansas at $155-$156.

Trade was light on moderate demand in Colorado at steady money of $157.

Elsewhere, trade was light on light to moderate demand with too few transactions to trend. For the week, live prices were $1-$3 lower in Nebraska at $156 and steady in the western Corn Belt at $157-$158. Dressed prices were $1-$2 lower in Nebraska at $247 but steady in the western Corn Belt at $249.

Estimated total cattle slaughter last week was 652,000 head, which was 11,000 head fewer than the previous week and 16,000 head fewer than the same week last year. Estimated total year-to-date cattle slaughter of 31.95 million head was 443,000 more (+1.4%) than the same time last year. Year-to-date estimated beef production of 26.41 billion lbs. was 334.5 million lbs. more (+1.3%).

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

Soybean futures closed 2¢ lower through Aug ‘23, and then fractionally lower to 1¢ lower.

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Major U.S. financial indices closed lower Friday with another set of data indicating stronger inflation than expected. The Producer Price Index for final demand advanced 0.3% in November, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. Final demand prices also rose 0.3% in both October and September.

The Dow Jones Industrial Average closed 305 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 77 points.

West Texas Intermediate Crude Oil futures (CME) closed 19¢ to 44¢ lower through the front six contracts.

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USDA’s Economic Research Service left the projected five-area direct weighted average fed steer price unchanged in the December World Agricultural Supply and Demand Estimates (WASDE). Prices were forecast at $153/cwt. in the first quarter of next year, $154 in the second and $166 in the third quarter with an annual average price of $156. This year’s annual average price was projected at $144.15.

Estimated beef production for next year was unchanged at 26.27 billion lbs., which would be 2.14 billion lbs. less (-7.5%) than this year’s production of 28.42 billion lbs.

Among other WASDE highlights…

Corn

The 2022/23 U.S. corn outlook was for lower exports and increased ending stocks. Exports were lowered 75 million bu. from the previous month’s estimate as competition from other exporters and relatively high U.S. prices have resulted in slow sales and shipments through early December. Corn ending stocks were raised 75 million bu. The season-average corn price received by producers was lowered 10¢ to $6.70/bu. based on observed prices to date.

Soybeans

Soybean supply and use projections for 2022/23 were unchanged from last month. Based on a review of EPA’s recent proposed rule for renewable fuel obligation targets, soybean oil used for biofuel for 2022/23 was reduced 200 million lbs. to 11.6 billion. Soybean oil exports were reduced on historically low export sales through November. With reduced use of soybean oil for biofuel and exports, food use and ending stocks were raised. The U.S. season-average soybean price forecast was unchanged at $14.00.bu. The soybean oil price was lowered 1¢/lb. to 68¢. The soybean meal price forecast was increased $10.00 to $410.00/short ton.

Wheat

The 2022/23 U.S. wheat supply and use outlook was unchanged. The 2022/23 season-average farm price was forecast 10¢/bu. lower at $9.10, based on prices received to date and expectations for futures and cash prices for the remainder of 2022/23.

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

Cattle Current Daily—Dec. 9, 2022

Cattle futures firmed and gained Thursday with more trader interest and perhaps more confidence wholesale price volatility may be gentler.

Feeder Cattle futures closed an average of $1.62 higher ($1.15 to $2.75 higher).

Live Cattle futures closed an average of 42¢ higher (10¢ to 57¢ higher), except for 10¢ lower in the back contract.

Corn futures closed mostly 1¢ lower, except for 1¢ to 4¢ higher in the front four contracts.

Soybean futures closed mixed, 2¢ to 14¢ higher through Sep ’23 and then mostly 1¢ to 3¢ lower.

Negotiated cash fed cattle trade ranged from light on moderate demand in the Texas Panhandle to limited on moderate demand in the other regions through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

Live prices were $1 lower in Nebraska on Wednesday at $156/cwt. and dressed prices were $1-$2 lower at $247.

Last week, live prices were at $155 in the Southern Plains and $157-$158 in the western Corn Belt where dressed prices were $248-$249.

Choice Boxed beef cutout value was $1.68 lower Thursday afternoon at $247.28/cwt. Select was 78¢ higher at $220.55/cwt.

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Major U.S. financial indices ended their recent skid Thursday. Apparently, it was a situation of bad news being good news. In this case, weekly unemployment insurance claims were a bit higher than expected.

Seasonally adjusted initial claims for the week ending Dec. 3 were 4,000 more than the previous week at 230,000. The advance number for seasonally adjusted insured unemployment during the week ending Nov. 26 was 1.67 million, which was 62,000 more than the previous week’s revised level, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 183 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 123 points.

West Texas Intermediate Crude Oil futures (CME) closed 55¢ to 82¢ lower through the front six contracts.

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Earlier this week, the U.S. Department of Agriculture published the final rule that will require packers to submit contractual information for the purchase of cattle. The rule applies to beef packers that slaughtered an average of not less than 5% of the number of fed cattle slaughtered nationally during the immediately preceding five calendar years.

The rule stems from the Consolidated Appropriations Act of 2022, which directed the Agricultural Marketing Service (AMS) to create a Cattle Contracts Library Pilot Program (library) to increase market transparency for cattle producers.

Publication of the final rule, which goes into effect on Jan. 6, 2023, aims to ensure complete reporting of contractual information and volumes purchased against the contracts, including: supplemental information on cattle requirements; associated schedules of premiums and discounts; delivery and transportation terms and payments; appendices and agreements of financing, risk-sharing, or profit sharing; or other financial arrangements associated with such contracts, whenever new contracts are offered, or existing contracts are updated.

“We are pleased that USDA listened to feedback from stakeholders like NCBA while crafting the final rule on the Cattle Contract Library Pilot Program. We are hopeful that this pilot program will strike an appropriate balance between offering cattle producers additional insight into the market while also protecting their proprietary business information,” says Tanner Beymer, Senior Director of Government Affairs for the National Cattlemen’s Beef Association (NCBA). “A Cattle Contract Library is just one of many tools NCBA has advocated for to help producers make informed business decisions and capture the most value possible for their cattle.”

All information related to the library pilot is posted on the AMS Cattle Contract Library webpage here.

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

Cattle Current Daily— Dec. 8, 2022

Bearish sentiment from the sharp volatility in Choice boxed beef cutout values helped pressure negotiated cash fed cattle prices lower Wednesday. Live prices in Nebraska were $1 lower on a live basis at $156/cwt. and $1-$2 lower in the beef at $247, on slow trade and light to moderate demand.

Elsewhere, trade was limited on light demand with too few transactions to trend, according to the Agricultural Marketing Service. Last week, live prices were $155 in the Southern Plains, $157 in Colorado and $157-$158 in the western Corn Belt, where dressed prices were $249.

Choice Boxed beef cutout value was $6.31 higher through Wednesday afternoon at $248.96/cwt. It was $6.62 lower on Monday. Select was 63¢ higher at $219.66/cwt.

Live Cattle futures found some footing Wednesday, while a bounce in Corn futures weighed on Feeder Cattle.

Feeder Cattle futures closed an average of 56¢ lower (25¢ to 90¢ lower).

Live Cattle futures closed an average of 35¢ higher, except for unchanged to 12¢ lower in four contracts.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 11¢ to 15¢ higher.

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Major U.S. financial indices closed little changed Wednesday as investors retrenched and assessed the likelihood of a recession.

The Dow Jones Industrial Average closed 1 point higher. The S&P 500 closed 7 points lower. The NASDAQ was down 56 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.91 to $2.24 lower through the front six contracts.

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U.S. beef exports remain resilient and on a record annual pace, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

October beef exports totaled 125,466 metric tons (mt), which was 8% more than a year ago. Export value was $929.8 million, down 3% from the large total reported in October 2021.

In the first 10 months of 2022, beef export value increased 18% from last year’s record pace to reach $10.05 billion – topping $10 billion in a single year for only the second time. January-October export volume was 1.25 million mt, up 4% from a year ago. October beef export value equated to $424.82 per head of fed slaughter, down 3% from a year ago, but the January-October average was still up 17% to $459.50.

“The October results were remarkable considering the headwinds facing U.S. beef, especially in our large Asian markets,” says Dan Halstrom, USMEF president and CEO. “Key currencies such as the Japanese yen and Korean won had sunk to their lowest levels in decades versus the U.S. dollar, which obviously affected importers’ buying power. COVID lockdowns in China were also a concerning factor, especially for buyers in the foodservice sector. But despite all that, U.S. beef still performed very well in Asia and achieved solid growth in North America and the Middle East. With some recent improvement in exchange rates, beef exports are well-positioned to surpass last year’s records.”

China/Hong Kong was the leading destination for U.S. beef in October, with export value topping $240 million. Export volume to Japan was steady with last year and shipments increased to South Korea, but export value to both markets was negatively impacted by slumping currencies. October beef exports achieved strong growth to the ASEAN, Middle East and Canada.

Also of note, October’s U.S. pork exports were the most in 16 months.

Pork exports reached 238,198 mt in October, up 5% from a year ago and the largest since June 2021. Pork export value increased 13% to $697.3 million, the highest since May 2021.

Halstrom notes that the October pork results were bolstered by outstanding growth in variety meat exports, which set a new value record at $126.2 million.

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

Cattle Current Daily—Dec. 7, 2022

Cattle futures and some other ag commodities lost ground Tuesday with much of the pressure apparently tied to recessionary fears in outside markets. The recent sharp decline in wholesale beef prices didn’t help.

Feeder Cattle futures closed an average of $2.08 lower ($1.75 to $2.25 lower).

Live Cattle futures closed an average of $1.69 lower ($1.32 to $2.20 lower).

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed 14¢ to 17¢ higher through Aug ‘23 and then mostly 4¢ to 6¢ higher.

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

Last week, live prices were at $155/cwt. in the Southern Plains, $157 in Nebraska, $157 in Colorado and $157-$158 in the western Corn Belt. Dressed prices were $248-$249.

Choice Boxed beef cutout value was 66¢ lower Tuesday afternoon at $242.65/cwt. Select was $1.97 lower at $219.14/cwt.

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Major U.S. financial indices closed sharply lower again Tuesday as investors seemed to grow increasingly concerned about the threat of a recession as the Fed tries to rein back inflation.

The Dow Jones Industrial Average closed 350 points lower. The S&P 500 closed 57 points lower. The NASDAQ was down 225 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.48 to $2.68 lower through the front six contracts.

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Agricultural producer sentiment was static month to month, according to the latest Purdue University/CME Group Ag Economy Barometer. The index in November was unchanged from the prior month at 102. However, the Current Conditions Index declined 3 points to a reading of 98 while the Future Expectations Index increased 2 points to a reading of 104.

“Even though sentiment remained relatively unchanged in November, producers are continuing to look at their bottom line,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Rising interest rates combined with high input and energy costs are creating a lot of uncertainty at the farm level.” 

The Farm Financial Performance Index improved modestly, up 5 points from October to 91, but it remains 14% lower year over year. Nearly a third of producers continue to express concern that their farms’ financial performance this year will be worse than the prior year. But the remainder expect their farms’ 2022 financial performance to be equal to or exceed 2021’s. Still, high input costs continue to weigh on producers’ minds with 42% of respondents in this month’s survey citing that as their top concern in the year ahead. Other concerns include rising interest rates, input availability and declining commodity prices.

Given the sharp rise in energy prices this year, the latest survey asked producers how they’ve responded to the cost increase. Just over a fourth (27%) of this month’s respondents indicated they’ve made changes in their operation because of rising prices for energy. Of those who indicated they made changes, 33% indicated they reduced tillage, 24% reduced nitrogen rates and/or changed application timing, 11% increased their use of no-till, and 8% said they reduced crop drying.

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 after the U.S. mid-term elections from November 14-18.

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

Cattle Current Daily—Dec. 6, 2022

Cattle futures gained again Monday, supported by further erosion in Corn futures.

Feeder Cattle futures closed an average of 79¢ higher (27¢ to $1.32 higher).

Live Cattle futures closed mixed, from an average of 7¢ lower to an average of 11¢ higher.

Corn futures closed mostly 2¢ to 6¢ lower.

Soybean futures closed fractionally mixed 1¢ lower.

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

For the week, live prices were at $155/cwt. in the Southern Plains, $157-$159 in Nebraska, $157 in Colorado and $157-$158 in the western Corn Belt. Dressed prices were $248-$249.

Choice Boxed beef cutout value was $6.62 lower Monday afternoon at $243.31/cwt. Select was $3.45 lower at $221.11/cwt.

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Major U.S. financial indices closed sharply lower Monday with carryover concerns from last week that recently strong economic data will encourage the Fed to continue its aggressive stance on raising interest rates.

The Dow Jones Industrial Average closed 482 points lower. The S&P 500 closed 72 points lower. The NASDAQ was down 221 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.39 to $3.05 lower through the front six contracts.

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“Cattle slaughter and beef production are tightening in the final weeks of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Total weekly beef production was down 1.0% in the most recent weekly data. This is the largest weekly decline in weekly beef production since the first few weeks of the year. The expectations are to begin seeing consistent week-over-week decreases in beef production.”

The most recent weekly data continued pointing to fewer heifers being retained with steer slaughter down 6.4% compared to the same week last year, while heifer slaughter was up 4.6%, according to Peel.

“Beef production in 2022 has also been boosted by increased cow slaughter,” Peel says. “Beef cow slaughter is up 12.1% year over year for the year to date. However, beef cow slaughter has been up only about 3% the past two weeks, suggesting that herd liquidation may be slowing down.”

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

Cattle Current Daily—Dec. 5, 2022

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

For the week, live prices were steady to $1 higher in the Southern Plains at $155/cwt., steady to $1 higher in Nebraska at $157-$159 and $1-$2 higher in the western Corn Belt at $157-$158. Dressed prices were $4 higher at $249.

Choice Boxed beef cutout value was $3.64 lower Friday afternoon at $249.93/cwt. Select was 44¢ lower at $224.56/cwt.

Cattle futures gained more ground Friday, led by Feeder Cattle and supported by lower Corn futures.

Feeder Cattle futures closed an average of 88¢ higher (65¢ to $1.37 higher).

Live Cattle futures closed an average of 30¢ higher.

Corn futures closed 9¢ to 15¢ lower through the front four contracts and then mostly 1¢ to 3¢ lower.

Soybean futures closed mostly 8¢ to 11¢ higher.

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Major U.S. financial indices closed little changed Friday after pressure early in the session from a stronger jobs report than expected, elevating concerns it would encourage the Fed to maintain its aggressive interest rate hikes.

Total nonfarm payroll employment increased by 263,000 in November, according to the U.S. Bureau of Labor Statistics. The unemployment rate was unchanged at 3.7%.

Average hourly earnings for all employees on private nonfarm payrolls rose by 18¢ cents in November to $32.82.

The Dow Jones Industrial Average closed 34 points higher. The S&P 500 was unchanged. The NASDAQ was down 20 points.

West Texas Intermediate Crude Oil futures closed 59¢ to $1.24 lower through the front six contracts.

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The U.S. government averted a railroad strike on Friday with President Biden’s signature to legislation passed by the U.S. House and Senate that implemented most of the contract brokered in September.

“A rail shutdown would have had significant and long-lasting effects on American food and agriculture and would have been devastating to the nation’s economy,” said U.S. Agriculture Secretary, Tom Vilsack,.

Likewise, Colin Woodall, CEO of the National Cattlemen’s Beef Association said in a statement, “A rail shutdown would have been disastrous to our supply chain, and would have interrupted the essential feed, fuel, and fertilizer shipments cattle producers need. We are pleased that this joint resolution was swiftly passed by Congress and signed into law.”

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

Cattle Current Daily—Dec. 1, 2022

Feeder Cattle futures bounced an average of $2.01 higher Wednesday, helped along by lower Corn futures and bullish outside markets. Live Cattle futures closed an average of 53¢ higher.

Corn futures closed mostly 3¢ to 5¢ lower.

Soybean futures closed mostly 3¢ to 5¢ higher, supported by stronger Crude Oil prices.

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales in the Texas Panhandle steady at $155/cwt. Prices in Kansas last week were $154-$155.

Elsewhere, trade ranged from inactive on light demand to a standstill. Live prices last week were $157-$158 in Nebraska and $155-$157 in the western Corn Belt. Dressed prices were $245.

Choice Boxed beef cutout value was 14¢ higher Wednesday afternoon at $254.88/cwt. Select was 81¢ lower at $225.01/cwt.

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Major U.S. financial indices surged higher Wednesday, apparently mainly fueled by dovish comments from Federal Reserve Chair, Jerome Powell, suggesting the central bank may become less aggressive with interest rate hikes.

“Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt. Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” Chairman Powell explained in a speech at the Brookings Institution in Washington, D.C. “The time for moderating the pace of rate increases may come as soon as the December meeting.”

The Dow Jones Industrial Average closed 737 points higher. The S&P 500 closed 122 points higher. The NASDAQ was up 484 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.35 to $2.50 higher through the front six contracts.

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Although achievable, it’s likely going to be tougher than earlier imagined for cash feeder cattle prices to intersect with current late spring and early summer Feeder Cattle futures prices, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

“The dichotomy of feeder cattle prices lies in the optimism displayed in Feeder Cattle futures prices and the less optimistic CME Feeder Cattle Index,” Griffith explains. “The Feeder Cattle Index price has been stuck in the mid to low $170s for two months while Feeder Cattle futures have the May contract near $190 and the August contract near $200.”

Moreover, Griffith says the general economy and consumers’ ability to purchase beef will play a much larger role in beef and cattle prices than in recent history.

“As interest rates and inflation continue to rage, the quantity of disposable income available for beef purchases is likely to diminish given that income growth has not kept pace with inflation rates,” Griffith explains “The past 15 years have been filled with homeowners refinancing mortgages to reduce their monthly payments and thus result in more disposable income for other goods. However, the current interest rate environment will not provide many opportunities to refinance to reduce the monthly payment. This again begs the question if cattle prices can actually achieve the levels predicted by the futures market. Prices will certainly increase, but they may not reach current expectations.”

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

Cattle Current Daily—Nov. 30, 2022

Cattle futures firmed and closed mostly higher Tuesday, supported by recently lower Corn futures and cash fed cattle demand strength.

Feeder Cattle futures closed an average of 53¢ higher (7¢ to $1.12 higher), except for an average of 37¢ lower in the back three contracts.

Live Cattle futures closed an average of 18¢ higher.

Corn futures closed 1¢ to 3¢ lower in the front four contracts, and then mostly fractionally higher.

Soybean futures closed fractionally higher to 5¢ higher through Sep ‘24 and then fractionally lower.

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

Last week, live prices were $154-$155/cwt. in the Texas Panhandle, $155 in Kansas, $157-$158 in Nebraska and $155-$157 in the western Corn Belt. Dressed prices were $245.

Choice Boxed beef cutout value was 21¢ higher Tuesday afternoon at $254.74/cwt. Select was $2.71 lower at $225.82/cwt.

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Major U.S. financial indices closed little changed Tuesday with investors apparently awaiting key economic data this week.

The Dow Jones Industrial Average closed 3 points higher. The S&P 500 closed 6 points lower. The NASDAQ was down 65 points.

West Texas Intermediate Crude Oil futures (CME) closed 95¢ to $1.01 higher through the front six contracts.

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U.S. agricultural exports next year are projected at $190.0 billion, according to the latest quarterly Outlook for U.S. Agricultural Trade from USDA’s Economic Research Service (ERS) and the Foreign Agricultural Service (FAS). The projection is $3.5 billion less than the August forecast, mostly driven by lower export expectations for soybeans, cotton and corn.

Beef exports were forecast $500 million higher to $10.3 billion on increased higher unit values with expectations domestic beef production will decline.

“The global economic outlook for calendar year 2023 remains uncertain due to inflation, changing monetary policy conditions, and trade disruptions caused by the Russian invasion of Ukraine,” explains ERS-FAS analysts. “Previous growth projections are moderated due to tempered economic growth in Europe and North America.”

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

Cattle Current Daily—Nov. 29, 2022

Lackluster interest in Cattle futures carried over from last week.

Feeder Cattle futures closed an average of 92¢ lower.

Live Cattle futures closed an average of 39¢ lower.

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

Last week, live prices were $154-$155/cwt. in the Texas Panhandle, $155 in Kansas, $157-$158 in Nebraska and $155-$157 in the western Corn Belt. Dressed prices were $245.

Choice Boxed beef cutout value was $2.70 higher Monday afternoon at $254.53/cwt. Select was $5.84 lower at $228.53/cwt.

Corn futures closed mostly fractionally higher.

Soybean futures closed 19¢ to 21¢ higher through Aug ‘23 and then 12¢ to 16¢ higher, supported by chatter about OPEC cutting production.

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Major U.S. financial indices closed lower Monday with pressure from weekend COVID-policy demonstrations in China raising supply chain concerns.

The Dow Jones Industrial Average closed 497 points lower. The S&P 500 closed 62 points lower. The NASDAQ was down 176 points.

West Texas Intermediate Crude Oil futures (CME) closed 61¢ to 96¢ higher through the front six contracts.

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Year-to-date beef cow and beef heifer slaughter represent the steepest decline of female beef cattle inventories in more than three decades, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Specifically, beef cow slaughter is up 12.3% year over year, Peel says. “If beef cow slaughter were to decline to equal year-ago levels for the remaining weeks of the year, total beef cow slaughter for the year would be up 10.5% year over year,” Peel explains. “This would be a net beef cow herd culling rate of 13.1% for the year, a new record level. The actual culling rate is likely to be a little higher.”

Weekly beef cow slaughter has been higher year over year for 70 consecutive weeks, according to Peel. During that time, he says there were only four weeks when the year-over-year increase was less than 3%. Beef cow slaughter was 2.7%, according to the latest weekly data.

Peel points out beef heifer slaughter remains higher year over year, as well.

“The Oct. 1 quarterly Cattle on Feed report showed that the number of heifers in feedlots was still up 1.7% year over year,” Peel says. “Since that report, weekly heifer slaughter has continued to be up over 4% year over year with the most recent week up 5.8% over the same week one year ago.”  He adds that lower feedlot placements in October presumably mean fewer heifers entering feedlots and reduced heifer slaughter in the future.

“With drought continuing, it is not clear what to expect for cow and heifer slaughter going forward,” Peel says. “It seems likely that many producers have adjusted herd inventories, given hay and feed supplies, to be able get through the winter. This might mean that cow culling will slow down through the winter. If La Niña persists next spring, more liquidation can be expected going into the next growing season.” 

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

Cattle Current Daily—Nov. 28, 2022

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

For the week, live prices were $4-$5 higher in the Texas Panhandle at $154-$155/cwt., $3-$5 higher in Kansas at $155, $3-$4 higher in Nebraska at $157-$158 and $2-$5 higher in the western Corn Belt at $157. Dressed prices were $3 higher at $245.

Choice Boxed beef cutout value was 73¢ lower Friday afternoon at $251.83/cwt. Select was $1.04 higher at $234.37/cwt.

Estimated total cattle slaughter for the holiday-shortened week was 93,000 head fewer than the previous week at 581,000 head. Year-to-date estimated total cattle slaughter of 30.6 million head was 472,000 head more (+1.6%) than the same time last year. Year-to-date estimated beef production of 25.3 billion lbs. was 356.3 million lbs. more (+1.4%).

Cattle slaughter in October of 2.9 million head was 2% more than a year earlier, according to USDA’s Livestock Slaughter report. Commercial beef production was also 2% more year over year at 2.4 billion lbs.

Cattle futures drifted lower on holiday-lightened trade again Friday, despite fundamental strength for the week. Higher Corn futures prices added pressure.

Feeder Cattle futures closed an average of 76¢ lower (17¢ to 95¢ lower), except for 27¢ higher and unchanged in the back two contracts.

Live Cattle futures closed an average of 19¢ lower, except for 10¢ higher in away Dec.

Corn futures closed 4¢ to 5¢ higher through Jly ’23 and the mostly 1¢ to 2¢ higher.

Soybean futures closed fractionally higher to 3¢ higher.

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Major financial indices closed narrowly mixed after a short trading session Friday.

The Dow Jones Industrial Average closed 152 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 58 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.35 to $1.66 lower through the front six contracts.

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Annual rural population growth was near zero over the last decade, the percentage of the working age population decreased and rural employment growth increased in service areas such as health care and professional services.

Those are among conclusions in the 2022 edition of Rural America at a Glance from USDA’s Economic Research Service (ERS).

“The overall decline in population growth and increase in average age in rural areas affect the makeup and availability of the rural labor force. In 2021, people 65 years and older made up more than 20% of the nonmetro population for the first time in U.S. census history, up from 16% in 2010,” according to ERS analysts. “In metro areas, just 16% of the population was 65 and older in 2021. During the 2010–20 decade, the nonmetro working-age population declined by 4.9% and the population under age 18 declined by 5.7%, while the population 65 years and older grew by 22%.”

There were 23.6 million rural (nonmetropolitan) jobs in 2019, versus 178 million metro Jobs, according to the report.

“Rural America has become more economically diverse over time, with increasing employment in health care, hospitality, and other service industries,” ERS analysts say. “Since 2001, the number of jobs in agriculture, retail, and manufacturing all declined, but a slight recovery occurred in manufacturing after 2010. Government jobs, which include Federal, State, and local government, remained steady over the last two decades.”

By | November 26th, 2022|Daily Market Highlights|

Cattle Current Daily—Nov. 24 to 25, 2022

Packers were aggressive buyers Wednesday, pushing negotiated cash fed cattle prices $3-$5/cwt. higher on a live basis with moderate trade and good demand in all regions, according to the Agricultural Marketing Service.

Live prices were mostly $4-$5 higher in the Texas Panhandle at $154-$155, $3-$5 higher in Kansas at $154 to mostly $155, $3 higher in Nebraska at $156-$158 and $2 higher in the western Corn Belt at $155-$157. Dressed prices were $3 higher at $245.

Choice Boxed beef cutout value was $4.07 lower Wednesday afternoon at $252.56/cwt. Select was 85¢ lower at $233.33/cwt.

Higher Corn futures and light holiday trade pressured Cattle futures Wednesday.

Feeder Cattle futures closed an average of $1.66 lower ($1.10 to $2.43 lower).

Live Cattle futures closed an average of 51¢ lower, except for 5¢ higher in the back contract.

Corn futures closed 2¢ to 7¢ higher.

Soybean futures closed 1¢ to 6¢ higher through Nov ‘23 and then 1¢ to 2¢ lower.

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Major financial indices closed higher Wednesday, buoyed by a more dovish tone in the latest Federal Reserve minutes, suggesting less aggressive interest rate hike may be coming soon.

The Dow Jones Industrial Average closed 95 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 110 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.66 to $3.01 lower through the front six contracts.

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“The price of beef at all levels is expected to be supported the next few years as the domestic beef supply is expected to decline due to fewer breeding females,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, if inflation slows or consumers transition discretionary spending away from beef, then those factors will pressure prices lower.”

Although 30¢/lb. less than a year earlier, Griffith points out the average all fresh retail beef price in October remained at $7.25/lb. For perspective, he says the price in 2019 was $5.80/lb

“Seasonal tendencies have the ability to push retail prices higher or lower from month to month but strong demand and inflation are what have pushed prices to the levels experienced in 2022,” Griffith says.

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

Cattle Current Daily, Nov. 23, 2022

Cattle futures traded mostly narrowly lower Tuesday after early support, pressured by holiday-lightened trade.

Feeder Cattle futures closed an average of 45¢ lower, except for 15¢ higher in May.

Live Cattle futures closed an average of 15¢ lower, except for unchanged to 25¢ higher in three contracts.

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, with too few transactions to trend.

Last week, live prices were $150/cwt. in the Texas Panhandle, $150-$152 in Kansas, $153-$155 in Nebraska and $152-$155 in the western Corn Belt. Dressed prices were $242.

Choice Boxed beef cutout value was $1.06 higher Tuesday afternoon at $256.63/cwt. Select was 95¢ higher at $234.18/cwt.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed mostly 2¢ to 4¢ lower.

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Major financial indices closed higher Tuesday, supported by positive quarterly earnings reports, lower bond yields and, according to some, investors betting on easing inflation.

The Dow Jones Industrial Average closed 397 points higher. The S&P 500 closed 53 points higher. The NASDAQ was up 149 points.

West Texas Intermediate Crude Oil futures (CME) closed 54¢ to 91¢ higher through the front six contracts.

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Economic growth in rural areas continues to decline, according to the latest monthly Creighton University Rural Mainstreet Index (RMI). It fell below growth neutral for the sixth consecutive month in November, although it did increase from 44.2 in October to 45.7. The RMI is based on a survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. It ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“The Rural Mainstreet economy is now experiencing a downturn in economic activity. Last month, almost one in four bankers, or 23.1%, reported that the economy was already in a recession,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The November loan volume index dropped to a still-strong 65.8 from 76.8 in October. “Higher farm input costs, greater farm equipment sales, and drought conditions in portions of the region supported strong borrowing from farmers,” Goss explains.

The farm equipment-sales index jumped to a strong 59.5 from October’s weak 47.8. The index has risen above growth neutral for 22 of the last 24 months.

Bankers were asked if their banks were asking for increased upfront financial commitments for farm loans. Only 13.6% indicated an increase; the remaining 86.4% reported no change in upfront commitments for farm loans.

Slowing economic activity, strong energy prices, higher borrowing costs and elevated agriculture input costs pushed the business confidence index down to 27.3 from 30.8 in October. That was the lowest reading for the confidence index since May 2020, according to Goss.

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

Cattle Current Daily—Nov. 22, 2022

Cattle futures closed higher Monday, buoyed by the bullish Cattle on Feed report, stronger cash prices last week and weaker Corn futures on the day.

Feeder Cattle futures closed an average of $1.65 higher.

Live Cattle futures closed an average of 85¢ higher (47¢ to $1.17 higher).

Corn futures closed 5¢ to 8¢ lower through Jly ‘23, and then mostly 1¢ to 3¢ lower, pressured in part by worries about economic growth in China, due to rising COVID cases.

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

Last week, live prices were mainly steady in the Texas Panhandle at mostly $150, steady to $2 higher in Kansas at $150-$152, steady to $2 higher in Nebraska at $153-$155 and steady to $2 higher in the western Corn Belt at $152-$155. Dressed prices were steady to $2 higher at $242.

Choice Boxed beef cutout value was 70¢ higher Monday afternoon at $255.57/cwt. Select was 40¢ higher at $233.23/cwt.

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Major financial indices closed lower on fears of more COVID-hampered economic growth in China.

The Dow Jones Industrial Average closed 45 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 121 points.

West Texas Intermediate Crude Oil futures (CME) closed mixed, from 35¢ lower to 51¢ higher through the front six contracts.

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Feedlot inventories appear to have peaked, and cattle slaughter should begin to decline in the next several months, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“On October 1, 2022, the inventory of heifers in feedlots was higher than the previous year, with the heifer percentage of total feedlot inventories the highest in 21 years,” Peel says. “The number of heifers in feedlots should begin to decline and will drop sharply when herd rebuilding begins. Feedlot inventories are beginning to reflect the fact that feeder cattle supplies have been declining since 2019.”

Peel explains both the drought and lingering effects of the pandemic pushed peak feedlot numbers into this year, well beyond the 2018 cyclical peak in calf production.

“The pandemic in 2020 caused a backlog of cattle in feedlots and in the country. As a result, the estimated feeder supply on Jan. 1, 2021 was higher than 2020,” Peel explains. “The drought in 2021 and 2020 caused cattle to be marketed earlier than usual and resulted in reduced heifer retention and increased heifer and cow slaughter in 2021 and 2022. Early marketing of cattle, reduced heifer retention and herd liquidation have kept feedlot inventories higher in 2022 and temporarily increased beef production. Beef production is projected at a record large 28.4 billion lbs. in 2022 as a result of the highest total cattle slaughter in 15 to 20 years.”

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

Cattle Current—Nov. 21, 2022

Cattle futures edged higher Friday, helped along by firm to stronger cash fed cattle prices and likely anticipation of a bullish Cattle on Feed report (see below).

Feeder Cattle futures closed an average of 54¢ higher.

Live Cattle futures closed an average of 44¢ higher.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on very light demand through Friday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some live sales in the western Corn Belt at $155/cwt.

The last established live prices for the week were steady to $1 higher in the Texas Panhandle at $150-$151, $1-$2 higher in Kansas at $151-$152, steady to $2 higher in Nebraska at $153-$155 and $2 higher in the western Corn Belt at $154-$155. Dressed prices were steady to $2 higher at $242.

Estimated total cattle slaughter last week was 674,000 head, which was 3,000 head more than the previous week, but 6,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 30.1 million head was 459,000 head more (+1.5%) than the same period last year. Estimated year-to-date beef production of 24.8 billion lbs. was 346.8 million lbs. more (+1.4%).

Choice Boxed beef cutout value was $2.23 lower Friday afternoon at $254.87/cwt. Select was $1.09 higher at $232.83/cwt.

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

Soybean futures closed 10¢ to 11¢ higher through Aug’23, and then mostly fractionally higher to 4¢ higher.

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Major financial indices mostly paddled in place Friday.

The Dow Jones Industrial Average closed 199 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 1 point.

West Texas Intermediate Crude Oil futures (CME) closed 96¢ to $1.56 lower through the front six contracts.

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As many expected, the latest monthly Cattle on Feed report (feedlots with capacity of 1,000 head or more) was decidedly bullish, reflecting the turn toward tighter supplies.

October placements of 2.1 million head were 138,000 head fewer than a year earlier (-6.1%) and the least for the month since the data series began in 1996.

In terms of placement weights, 48% went on feed weighing 699 lbs. or less, 39% weighing 700-899 lbs. and 13% weighing 900 lbs. or more.

October marketings of 1.8 million head were 11,000 head more (0.6%) than the prior year.

Cattle on feed Nov. 1 of 11.7 million head were 242,000 head less (-2.0%) year over year.

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

Cattle Current Daily—Nov. 18, 2022

Cattle futures closed higher Thursday, helped along by lower Corn futures through much of the session, firm to stronger cash fed cattle prices and likely anticipation of a bullish Cattle on Feed report. The trend continued through mid-day on Friday.

Feeder Cattle futures closed an average of $1.79 higher.

Live Cattle futures closed an average of 78¢ higher.

Corn futures closed mixed, from fractionally higher to 2¢ higher through Jul ’23 then 1¢ to 3¢ lower.

Soybean futures closed mostly 10¢ to 22¢ lower through Aug’24, then down 2¢ to 5¢.

Negotiated cash fed cattle trade was slow to moderate on moderate demand in Kansas through Thursday afternoon with prices mostly $1 higher at $151/cwt., but a few up to $152, according to the Agricultural Marketing Service.

Elsewhere, trade was slow on light demand. So far this week, established live prices are steady to $1 higher in the Texas Panhandle at $150-$151, steady in Nebraska at $153 and steady to $1 lower in the western Corn Belt at $153. Dressed prices are steady at $240-$242.

Choice Boxed beef cutout value was 1¢ higher Thursday afternoon at $257.10/cwt. Select was 39¢ higher at $231.74/cwt.

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Rising bond yields pressured major financial indices on Thursday. They were treading water through mid-day Friday.

The Dow Jones Industrial Average closed 8 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 39 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.46 to $3.94 lower through the front six contracts.

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Based on actual and estimated slaughter for October, weekday fed cattle slaughter was almost 1% more than last year and cow slaughter was up about 5%.

“With the poor pasture and higher operating costs than last year, beef cow slaughter is expected to remain higher than previously assumed through the end of the year,” say analysts with USDA’s Economic Research Service, in the latest Livestock, Dairy and Poultry Outlook. “In addition, anticipated fed cattle marketings were raised on a relatively strong pace of fed cattle slaughter through early November, as well as relatively high numbers of 150-plus-day cattle in feedlots. As a result, the beef production forecast for fourth-quarter 2022 was raised by 215 million lbs. on higher expected total cattle slaughter, along with slightly heavier carcass weights.”

The 2023 beef production forecast was lowered by 90 million lbs to 26.3 billion lbs., more than 7% below the 2022 projection.

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

Cattle Current Daily—Nov. 17, 2022

Negotiated cash fed cattle trade got off to a slow start for the week on Wednesday, but a start none the less. Established trade was steady at $150 in the Texas Panhandle on light demand and slow to limited trade.

Although too few to trend, there were some live sales in Kansas at $150 and some in Nebraska at $153/cwt.

Choice Boxed beef cutout value (p.m.): $1.27 lower at $257.09/cwt. Select was 41¢ lower at $231.35/cwt.

Cattle futures firmed and edged higher Wednesday. Feeder Cattle futures closed an average of 48¢ higher. Live Cattle futures closed an average of 56¢ higher.

Corn futures closed mixed, down fractionally to 1¢ through Sep ’23 then up fractionally to 1¢.

Soybean futures closed mostly 13¢ to 28¢ lower.

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Major U.S. financial indices closed lower Wednesday, on strongest retail sales in eight months, raising doubts the Federal Reserve will pause efforts to tamp down inflation.

The Dow Jones Industrial Average closed 39 points lower. The S&P 500 closed 33 points lower. The NASDAQ was down 175 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.25 to $1.33 lower through the front six contracts.

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USDA’s Economic Research Service (ERS) increased expected feeder steer prices (750-800 lbs., Oklahoma City) for the fourth quarter of this year and the first quarter of next year, in the latest Livestock, Dairy and Poultry Outlook.

“Despite higher operating costs, firm feedlot demand is expected for the remainder of 2022, and with current price data the fourth-quarter 2022 price forecast for feeder steers is raised $3 to $176/ per cwt.,” say ERS analysts. “Based on current price strength, the price projection in first-quarter 2023 is raised $2 to $177 per cwt. However, expected feeder calf prices were unchanged for the remainder of the year.”

ERS projects next year’s feeder steer prices to be $190 in the second quarter and $214 in the third quarter for an annual average price of $201.25. This year’s estimated annual price is $165.68.

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

Cattle Current Daily—Nov. 16, 2022

Grain futures gained late in Tuesday’s session, apparently on reports that Russian missiles landed in Poland, causing fatalities.

Corn futures closed mostly 4¢ to 9¢ higher and Soybean futures closed mostly 12¢ to 16¢ higher.

Feeder Cattle futures closed an average of $1.84 lower. Live Cattle futures closed narrowly mixed, from an average of 15¢ lower in six contracts to an average of 27¢ higher.

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

Last week, live prices were $150/cwt. in the Southern Plains $153 in Nebraska and $153-$154 in the western Corn Belt. Dressed prices were $240-$242.

Choice Boxed beef cutout value was 38¢ higher Tuesday afternoon at $258.36/cwt. Select was $1.45 lower at $231.76/cwt.

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Major U.S. financial indices closed higher Tuesday, apparently supported by another indicator that inflation may be easing.

The Producer Price Index for final demand, which reflects wholesale prices, increased 0.2% in October, according to the U.S. Bureau of Labor Statistics. That was less than expected.

The Dow Jones Industrial Average closed 56 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 162 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.05 to $1.43 higher through the front six contracts.

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Through October, approximately 765,000 more beef cows and heifers were slaughtered than the same time last year, according to Josh Maples, Extension livestock economist at Mississippi State University, in the latest Cattle Market Notes Weekly.

To get a sense of how much the beef cow herd might decline this year, Maples ran a regression analysis developed by the Livestock Marketing Information Center that looks at the relationship between beef cow and heifer slaughter during the calendar year, relative to the beef cow inventory at the start of the same calendar year.

Assuming cow and heifer slaughter for the remainder of the year is similar to last year, Maples says the regression analysis suggests the beef cow herd declining 4-5% in 2022.

“We will know more when the next Cattle Inventory report is released in January. There could also be revisions to data from prior years that could affect the year-over-year changes. Regardless, all signs point to fewer cows and heifers to calve next year and continued supply-side support for stronger cattle prices,” Maples says.

As reported in Cattle Current last week, early-release tables for USDA’s Agricultural Projections report from the Economic Research Service ERS project the beef cow inventory to be 1.1 million head fewer year over year when the new year begins at about 29 million head. That would be 3.6% less than the same time a year earlier.

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

Cattle Current Daily—Nov. 15, 2022

Feeder Cattle futures closed mixed on Monday, from an average of 27¢ lower to unchanged to an average of 48¢ higher. They were supported by weaker Corn futures but challenged by softer Live Cattle futures which closed an average of 59¢ lower, except for 5¢ higher in spot Dec.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed mostly 5¢ to 9¢ lower.

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

Last week, live prices were $150/cwt. in the Southern Plains $153 in Nebraska and $153-$154 in the western Corn Belt. Dressed prices were $240-$242.

Choice Boxed beef cutout value was 96¢ lower Monday afternoon at $257.98/cwt. Select was $2.06 lower at $233.21/cwt.

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Major U.S. financial indices closed lower Monday, with skittishness ahead of further reads on inflation this week.

The Dow Jones Industrial Average closed 211 points lower. The S&P 500 closed 35 points lower. The NASDAQ was down 127 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.31 to $3.09 lower through the front six contracts.

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Domestic beef demand strength continues despite higher retail prices.

“Beef demand considers retail beef prices as well as the quantity of beef consumption,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Total commercial beef production is projected for 2022 at a record level of 28.3 billion lbs. After adjusting for beef trade, per capita retail beef consumption is projected at 59.3 lbs., up year over year from 58.9 lbs. per capita in 2021. The fact that retail beef prices this year are averaging higher at the same time as consumption is increasing is an indication of strong beef demand.”

The all-fresh retail beef price has remained in a narrow range from $7.37/lb. to $7.25/lb. this year, averaging $7.33/lb. through October, according to Peel. It was $6.95/lb. during the same period last year.

“Wholesale boxed beef prices, similar to retail prices, have traded in a narrow range for most of 2022,” Peel says. “Since March, Choice boxed beef has averaged $261.77/cwt. with a weekly maximum of 272.48/cwt. and a minimum of $246.31/cwt., leading to a range of $26.17/cwt. This follows very strong wholesale demand in 2021, which led to an average Choice boxed beef price of $279.81/cwt. with a weekly maximum of $347.02/cwt., a minimum of $206.73/cwt. and a range of $140.29/cwt. for the year.”

USDA projects domestic beef production significantly lower next year, which suggests higher beef prices.

“Consumers, thus far, have absorbed large supplies of beef at record prices,” Peel says. “As beef supplies tighten, some consumers may begin to ‘trade down’ as market prices ration a smaller supply of beef. Per capita beef consumption is expected to decrease in the coming year, not because beef demand is weak but simply because the available supply of beef will decrease.

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

Cattle Current Daily—Nov. 14, 2022

Cattle futures sagged on Friday. Pressure included higher Corn and Soybean futures, sharply lower boxed beef prices and static cash prices. Still, it was hard to square the degree of decline with fundamentals.

Feeder Cattle futures closed an average of $2.13 lower ($1.32 lower at the back to $3.12 lower toward the front).

Live Cattle futures closed an average of $1.00 lower (52¢ lower at the back to $1.77 lower toward the front).

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

For the week, live prices were steady in the Southern Plains at $150, steady to $3 lower in Nebraska at $150-$153 and steady to $2 higher in the western Corn Belt at $153-$155. Dressed prices were steady to $2 higher at $242.

Estimated total cattle slaughter last week of 671,000 head was 4,000 head more than the previous week and 12,000 head more than the same week last year. Year-to-date estimated total cattle slaughter of 29.38 million head was 464,000 head more (+1.6%) than the same time last year. Year-to-date estimated beef production of 24.25 billon lbs. was 350 million lbs. more (+1.5%).

Choice Boxed beef cutout value was $4.33 lower Friday afternoon at $258.94/cwt. Select was $1.56 lower at $235.27/cwt.

Grain and Soybean futures rebounded Friday, helped along by the significant decline in the U.S. dollar in the latter part of the week, making U.S. exports more competitive.

Corn futures closed mostly 2¢ to 3¢ higher through Jly ‘24, and then mostly fractionally higher.

Soybean futures closed mostly 18¢ to 25¢ higher.

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Major U.S. financial indices edged higher Friday, maintaining the previous session’s steep gains, tied to thoughts inflation may be easing.

The Dow Jones Industrial Average closed 32 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 209 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.32 to $2.50 higher through the front six contracts.

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Although challenging times lie ahead, Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF) says market diversification helped keep beef exports on a record pace through the first three quarters of this year.

Speaking to participants at the USMEF Strategic Planning Conference in Oklahoma City last week, Halstrom explained market diversification has long been an organization priority. He noted that the often-tense relationship between the U.S. and China underscores the importance of this strategy. Halstrom explained that while China is a major U.S. red meat customer, on pace to purchase $4 billion in U.S. beef and pork this year, the U.S. is not nearly as dependent on China as most other suppliers.

“Uruguay exports 58% of its beef production to China, New Zealand 44%, Brazil 18% and Australia 14%,” Halstrom said. “But even with our recent growth, just 3% of U.S. beef production is exported to China.”

Halstrom cited several mounting obstacles for U.S. exports, including global inflation, ongoing supply chain challenges and the strengthening U.S. dollar. As an example, Halstrom noted that devaluation of the Japanese yen has pushed prices for U.S. meat products 30% higher than a year ago in an extremely competitive market.

“Global demand is strong, even record-breaking, despite rising prices,” said Halstrom, “But at what point do international consumers scale back?”

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

Cattle Current Daily—Nov. 11, 2022

Grain and Soybean futures closed lower Thursday, apparently due in part to more money flowing into equities for the day.

Corn futures closed 6¢ to 11¢ lower through Jly ‘24. Soybean futures closed mostly 20¢ to 29¢ lower.

Softer grain futures helped boost Cattle futures.

Feeder Cattle futures closed an average of $1.52 higher (90¢ to $2.05 higher).

Live Cattle futures closed an average of 90¢ higher (70¢ to $1.50 higher).

Cattle futures were lower through mid-day today as grain futures trended higher.

Negotiated cash fed cattle trade and demand were slow through Thursday afternoon, according to the Agricultural Marketing Service.

Although too few to trend, there were some live sales at $149/cwt. in the Texas Panhandle, $153.00-$153.50 in Nebraska and $153-$154 in the western Corn Belt.

So far this week, live prices are steady in the Southern Plains at $150, steady in Nebraska at $153 and steady to $1 higher in the western Corn Belt at $153. Dressed prices are steady to $2 higher at $242.

Choice Boxed beef cutout value (p.m.): $1.40 lower at $263.27/cwt. Select was $1.61 higher at $236.83/cwt.

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Major U.S. financial indices roared back Thursday, after the Consumer Price Index report for October beat expectations. The CPI showed a 7.7% increase over last year and 0.4% increase over last month, but the rate of increase was less than expected. The result on Wall Street was the biggest jump for stocks in two years as investors anticipate a potential easing in monetary policy by the Federal Reserve as it tries to rein in inflation.

The Dow Jones Industrial Average closed 1,201 points higher. The S&P 500 closed 208 points higher. The NASDAQ was up 761 points.

West Texas Intermediate Crude Oil futures (CME) closed 62¢ to 69¢ higher through the front six contracts.

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Randy Blach, CEO of CattleFax, offered market insights to the crowd gathered in Oklahoma City this week for the U.S. Meat Export Federation (USMEF) Strategic Planning Conference.

“If you’re putting an animal in a feedyard anywhere in the Central Plains – let’s say Kansas or Oklahoma – your cost to put on a pound of gain is between $1.30 and $1.40,” Blach explained. “We have not seen that historically, not even back in 2008 when we had the ethanol mandate and for a period of time corn was at $8/bu. This is an interesting time, when the market needs more corn and where it’s needed most, the corn just isn’t there.”

Blach also highlighted the remarkable efficiency and sustainability of the U.S. beef industry, which he maintains is well positioned for success even in this challenging environment.

“Whenever I ask an audience ‘who’s the biggest beef producer in the world?’ – everyone says Brazil because it has 300 million cattle,” Blach said. “But we’re producing more beef than Bazil with only one-third the number of cattle. Why? Because of our high-quality, grain-fed beef. The U.S. has the best carbon footprint of anybody on the list of top beef producers, because of the way our production systems work and the amount of production that we get on a per-head basis.”

Blach added that the U.S. achieved record beef production in 2022 with 30 million fewer cattle than in the 1970s.

“That’s what sustainability is – doing more with less, and doing it better with great animal husbandry,” Blach said.

Blach noted that larger-than-expected contraction of the cattle herd helped drive U.S. beef production and exports to record highs this year but will be a significant constraint for U.S. exporters next year.

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

Cattle Current Daily—Nov. 10, 2022

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

Live prices were steady to $1 higher in the Texas Panhandle at $150.00/cwt. and steady in Kansas at $150.

Last week, live prices were $153 in Nebraska and the western Corn Belt. Dressed prices were $242 in Nebraska and $240-$242 in the western Corn Belt.

Choice Boxed beef cutout value was 27¢ lower Wednesday afternoon at $264.67/cwt. Select was 83¢ lower at $235.22/cwt.

Lower outside markets helped pressure Cattle futures on Wednesday.

Feeder Cattle futures closed an average of 24¢ lower, except for an average of 11¢ higher in the back two contracts.

Live Cattle futures closed an average of 49¢ lower (20¢ to $1.47 lower).

Corn futures closed mostly 3¢ to 5¢ lower.

Soybean futures closed mostly 3¢ to 5¢ higher through Jly ‘23 and then mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices sank Wednesday amid uncertainty about the ultimate outcome of the mid-term elections.

The Dow Jones Industrial Average closed 646 points lower. The S&P 500 closed 79 points lower. The NASDAQ was down 263 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.77 to $3.08 lower through the front six contracts.

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USDA’s Economic Research Service (ERS) increased the forecast annual fed steer price for this year and next, in the latest World Agricultural Supply and Demand Estimates (WASDE).

ERS projected the annual average five-area direct fed steer price for this year $1 higher than the previous month at $144.15, with the fourth-quarter average at $152.00. The forecast average annual price for next year was $2 higher $156. For 2023, prices were forecast at $153 in the first quarter, $154 in the second quarter and $155 in the third. Price increases were based on stronger expected demand.

ERS increased estimated beef production for this year slightly to 28.35 billion lbs. Beef production next year was forecast at 26.27 billion lbs., which would be 2.1 billion lbs. less (-7.3%) than this year.

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

Cattle Current Daily—Nov. 9, 2022

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

Last week, live prices were $149-$150/cwt. in the Texas Panhandle, $150 in Kansas and $153 in Nebraska and the western Corn Belt. Dressed prices were $242 in Nebraska and $240-$242 in the western Corn Belt.

Choice Boxed beef cutout value was 39¢ higher Tuesday afternoon at $264.94/cwt. Select was 13¢ higher at $236.05/cwt.

Cattle futures softened Tuesday, perhaps on election defensiveness.

Feeder Cattle futures closed mixed, from an average of 38¢ lower to an average of 4¢ to higher.

Live Cattle futures closed an average of 18¢ lower, except for unchanged and  22¢ higher in two contracts.

Corn futures closed mostly 3¢ to 8¢ lower.

Soybean futures closed mostly 3¢ to 6¢ lower.

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Major U.S. financial indices closed higher again Tuesday with investors apparently betting on a more market-friendly landscape following the midterm elections. 

The Dow Jones Industrial Average closed 333 points higher. The S&P 500 closed 21 points higher. The NASDAQ was up 51 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.25 to $2.88 lower through the front six contracts.

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Early-release tables for USDA’s Agricultural Projections report from the Economic Research Service ERS project the beef cow inventory to be 1.1 million head fewer year over year when the new year begins at about 29 million head. That would be 3.6% less than the same time a year earlier. ERS projects the nation’s beef cow herd declining another 387,000 head (-1.3%) to 28.6 million head by Jan. 1 2024 before rebounding back to 29.1 million head Jan. 1, 2025. From there the herd grows slowly to 31.3 million head at the beginning of 2032.

Total cattle inventory in the projections decline 2.5 million head this year (-2.7%) to 89.4 million head and another 800,000 head next year (-0.9%) to 88.6 million head at the beginning of 2024.

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

Cattle Current Daily—Nov. 8, 2022

Live Cattle futures closed higher Monday, supported by apparent front-end currentness.

They were up an average of 59¢ higher, except for down 33¢ and unchanged in the back two contracts.

Strength in Live Cattle and softer Corn futures helped Feeder Cattle close an average of 53¢ higher (30¢ to 70¢ higher).

Corn futures closed mixed, down 2¢ to 5¢ through May ’24, then mostly 1¢ to 2¢ higher.

Soybean futures closed 8¢ to 12¢ lower.

Choice Boxed beef cutout value was 80¢ higher Monday afternoon at $264.55/cwt. Select was $4.02 higher at $235.92/cwt.

There was no afternoon cash fed cattle report from AMS.

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Major U.S. financial indices closed higher for a second day ahead of Tuesday’s midterm elections.

The Dow Jones Industrial Average closed 424 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 89 points.

West Texas Intermediate Crude Oil futures (CME) closed closed 28¢ to 82¢ lower through the front six contracts.

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Drought continues to impact about 63% of the United States (D1-D4), according to the latest U.S. Drought Monitor.

74% of winter wheat production was in areas experiencing drought, as was 68% of hay acreage. Approximately 76% of the nation’s cattle inventory was in drought areas.

According to the latest Crop Progress report, 30% of winter wheat was in Good or Excellent condition, compared to 45% a year earlier. 34% was Poor or Very Poor versus 22% the prior year.

As for crops, 87% of corn was harvested as of Nov. 6. 94% of soybeans were in the bin.

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

Cattle Current Daily—Nov. 7, 2022

Cattle futures closed mixed Friday with little added short-term support and plenty of uncertainty.

Feeder Cattle futures closed mixed, from an average of 20¢ lower to an average of 51¢ higher.

Live Cattle futures closed mixed from an average of 24¢ lower to an average of 11¢ higher.

Corn futures closed mostly 1¢ to 2¢ higher.

Kansas City Wheat futures closed 10¢ to 17¢ higher.

Soybean futures closed 22¢ to 25¢ higher through Aug ’23 and then mostly 9¢ to 12¢ higher.

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

For the week, live sales were steady in the Southern Plains at $150/cwt., steady to $1 higher in Nebraska at $152-$153 and steady in the western Corn Belt at $152-$153. Dressed prices were $2 higher in Nebraska at $242 and steady to $2 higher in the western Corn Belt at $240-$242.

Choice Boxed beef cutout value was $1.43 lower Friday afternoon at $263.75/cwt. Select was $1.16 lower at $231.90/cwt.

Total estimated cattle slaughter last week of 667,000 head was 1,000 head fewer than the previous week but 15,000 head more than the same week last year. Year-to-date estimated total cattle slaughter of 27.71 million head was 452,00 head more (+1.6%) than the same time last year. Year-to-date estimated beef production of 23.69 billion lbs. was 338.8 million lbs. more (+1.5%).

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Major U.S. financial indices closed higher Friday, presumably lifted in part by the monthly Employment Situation Summary. While strong, unemployment crept slightly higher, leading some to think it would help the Fed be less aggressive on interest rates.

The Dow Jones Industrial Average closed 401 points higher. The S&P 500 closed 50 points higher. The NASDAQ was up 132 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.53 to $4.44 higher through the front six contracts.

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September beef exports were lower year over year — the first monthly decline in 2022 — but remain on a record pace through the first three quarters of the year, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

September beef exports totaled 115,487 metric tons (mt), valued at $890.3 million, down 7% from a year ago in both volume and value. For the first nine months of 2022, beef exports were still 4% above last year at 1.12 million mt. Export value reached $9.12 billion, up 20% and already achieving the second highest total for any calendar year, trailing only the 2021 record ($10.58 billion).

Despite China’s zero-COVID policies that result in travel restrictions and periodic lockdowns in metropolitan areas, September beef exports to China/Hong Kong were still above last year. Shipments also increased year-over-year to the ASEAN region and Caribbean, but declined to Korea, Japan and Taiwan.

While beef exports remain well-positioned to reach new heights in 2022, the September results reflected significant headwinds that have been building for some time.

“Demand for U.S. beef has been extremely resilient, but inflationary pressure on consumers and weakened currencies in key markets have definitely created a more challenging environment,” says Dan Halstrom, U.S. Meat Export Federation president and CEO. “Exports also continue to face logistical challenges, lockdowns in China and mounting inventories in some destinations. Still, it’s hard to view September sales of nearly $900 million as a disappointment, when this would have been an all-time record just 18 months ago. That really drives home what a remarkable year this has been for U.S. beef exports.”

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

Cattle Current Daily—Nov. 4, 2022

Negotiated cash fed cattle trade was slow on light demand through Thursday afternoon, according to the Agricultural Marketing Service. Live sales were steady in the Southern Plains at $150/cwt. and steady with the prior week in the western Corn Belt at $152-$153. Dressed prices in the western Corn Belt last week were $240.

Although too few to trend, there were some dressed trades $2-$3 higher in Nebraska at $242-$243. Live prices there last week were $152-$153.

Choice Boxed beef cutout value was $1.71 higher Thursday afternoon at $265.18/cwt. Select was 10¢ lower at $233.06/cwt.

Cattle futures wobbled Thursday as traders appeared to take a wait-and-see breather after the previous session’s gains.

Feeder Cattle futures closed an average of 59¢ lower, except for 12¢ higher in the back contract.

Live Cattle futures closed narrowly mixed from an average of 12¢ lower to an average of 22¢ higher.

Corn futures closed 7¢ to 8¢ lower through Jly ‘23 and then narrowly mixed.

Soybean futures closed mostly 12¢ to 17¢ lower.

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Major U.S. financial indices closed lower again Thursday with follow-through pressure from the Fed’s bearish interest rate outlook.

The Dow Jones Industrial Average closed 146 points lower. The S&P 500 closed 39 points lower. The NASDAQ was down 181 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.20 to $1.83 lower through the front six contracts.

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Higher expected sale prices and moderating cost of gain are expected to exceed the higher cost of feeder cattle, leading to positive cattle feeding returns from now through June, according to the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University (K-State).

Projected returns for steers range from $42.68 per head in June 2023 to $148.06 in December this year. Feeding cost of gain ranges from $120.37/cwt. in May to $135.49 in October.

Projected returns for heifers range from $31.50 per head in June to $148.56 in May. Feeding cost of gain ranges from $129.12/cwt. in May to $142.90 in October.

Glynn Tonsor, K-State agricultural economist who prepares the monthly feedlot outlook emphasizes the projection process reflects a cash basis with no price risk management.

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

Cattle Current Daily—Nov. 3, 2022

Feeder Cattle futures gained Wednesday on declining Corn futures. They closed an average of $1.18 higher (77¢ to $2.00 higher).

Corn and Wheat futures reversed direction as Russia reversed course and claimed it is rejoining the initiative that enabled Ukraine exports from the Black Sea.

Corn futures closed 8¢ to 10¢ lower through Jly ‘23 and then mostly 3¢ to 5¢ lower. Kansas City Wheat futures closed 34¢ to 49¢ lower through May ‘24. Soybean futures closed mostly 8¢ to 9¢ higher.

Live Cattle futures tread water, awaiting weekly cash direction. They closed narrowly mixed from an average of 29¢ lower to an average of 21¢ higher.

Negotiated cash fed cattle trade was limited on light demand through Wednesday afternoon, with too few transactions to trend in any region, according to the Agricultural Marketing Service. There were a few early live sales in the Texas Panhandle at $149/cwt. and a few in the western Corn Belt at $154. There were early dressed trades in Nebraska at $243.

Last week, live prices were $150/cwt. in the Southern Plains and $152-$153 in Nebraska and the western Corn Belt. Dressed prices were $240.

Choice Boxed beef cutout value was 84¢ higher Wednesday afternoon at $263.47/cwt. Select was 43¢ higher at $233.16/cwt.

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Major U.S. financial indices closed lower after the Fed raised interest rates by another 0.75 points and signaled more hikes to come.

“Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low,” according to a Fed statement. “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”

The Dow Jones Industrial Average closed 505 points lower. The S&P 500 closed 97 points lower. The NASDAQ was down 366 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.63 to $1.77 higher through the front six contracts.

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USDA announced Wednesday that the Biden Administration is investing $73 million in 21 grant projects through the first round of the Meat and Poultry Processing Expansion Program (MPPEP), which aims to support small to mid-size packing companies and expand the nation’s meat and poultry processing capacity.

For instance, Greater Omaha Packing Company in Nebraska received a $20 million MPPEP grant that the company will use as part of a planned $100 million investment to upgrade and automate freezers, expand its wastewater system for increased capacity, remodel key areas for value-added further processing, and increase its carcass holding coolers. In total, the Greater Omaha team estimates the capacity expansions will help the company process an additional 700 head of cattle per day.

“This significant investment will allow the company to remain competitive in the marketplace and continue to support our small family feeder operators while providing incremental value back to the producers,” says Henry Davis, CEO of Greater Omaha. “We believe the production expansions will keep us at the forefront of an ever-changing industry.”

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

Cattle Current Daily—Nov. 2, 2022

Cattle futures lost steam after early support Tuesday, as grain and soybean futures continued to gain and traders awaited weekly cash direction.

Corn futures closed mostly 3¢ to 6¢ higher. Kansas City Wheat futures closed mostly 9¢ to 11¢ higher. Soybean futures closed 22¢ to 28¢ higher through Aug ‘23.

Feeder Cattle futures closed an average of $1.02 lower (70¢ lower to $1.32 lower).

Live Cattle futures closed an average of 22¢ lower, except for 5¢ higher in Aug and $2.37 higher in new away-Apr.

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

Last week, live prices were $150/cwt. in the Southern Plains and $152-$153 in Nebraska and the western Corn Belt. Dressed prices were $240.

Choice Boxed beef cutout value was $1.02 lower Tuesday afternoon at $262.63/cwt. Select was $1.73 lower at $232.73/cwt.

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Major U.S. financial indices edged lower Tuesday, ahead of the Fed’s next interest rate move.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 97 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.51 to $1.84 higher through the front six contracts.

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Agricultural producer sentiment weakened again in October, as measured by the Purdue University/CME Group Ag Economy Barometer. It declined 10 points from the prior month to a reading of 102. Both of the barometer’s sub-indices also declined. The Current Conditions Index dipped 8 points to a reading of 101 while the Future Expectations Index dropped 11 points to a reading of 102.

“Concern over rising interest rates grew once again in October and is adding to the unease among producers who are worried about its impact on their farm operations,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Additionally, challenging shipping conditions throughout the Mississippi river valley have hampered exports recently and the corresponding widespread weakening of corn and soybean basis levels could be contributing to heightened unease about financial performance.”

Producers’ concerns about their farm’s financial performance were one of the primary drivers of weakening sentiment in October. The Farm Financial Performance Index fell 13 points to 86, reflecting producer concerns about high input costs combined with weaker commodity prices. Looking ahead to next year, more than 40% of producers viewed high input costs as their top concern, followed by 21% who chose rising interest rates, 13% who chose lower output prices, and 13% who chose input availability.

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 Oct. 10-14.

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

Cattle Current Daily—Nov. 1, 2022

Russia’s announcement over the weekend that it is suspending its participation in the Black Sea Grain Initiative (BSGI) propelled grain futures significantly higher Monday. The BSGI, brokered by the United Nations earlier this year, enabled resumption of Ukraine grain exports via the Black Sea as Russia’s war on Ukraine continued.

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

Kansas City Wheat futures closed mostly 39¢ to 53¢ higher.

As logic would suggest, Feeder Cattle futures wilted in the face of the spike up in grain futures, closing an average of 81¢ lower (25¢ lower to $1.00 lower), except for an average of 9¢ higher in the back three contracts.

Added uncertainty came with the fact that there were no reports from the Agricultural Marketing Service during trading hours Monday, presume Bly due to technical difficulties.

Last week’s stronger cash fed cattle prices and higher wholesale beef values muted losses in Live Cattle futures, which closed an average of 27¢ lower, except for $3.60 lower in expiring Oct.

Last week, negotiated cash fed cattle prices were $2 higher on a live basis in the Southern Plains at $150/cwt.; they were $1-$2 higher in Nebraska at $152-$153 and $1-$3 higher in the western Corn Belt at $151-$153. Dressed prices were $4 higher in Nebraska at $240 and $4-$8 higher in the western Corn Belt at $240.

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Major U.S. financial indices softened Monday with likely month-end position squaring as investors await the Fed’s next interest rate move later this week.

The Dow Jones Industrial Average closed 128 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 114 points.

West Texas Intermediate Crude Oil futures (CME) closed 74¢ to $1.37 lower through the front six contracts.

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“Market fundamentals are generally positive for cattle markets going forward,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Improved futures prices, stronger boxed beef and fed cattle prices are all supportive for feeder cattle markets. Cattle slaughter is still running large but should taper off toward the end of the year. Unless unexpected external market pressure develops, cattle prices are expected to finish the year strong and the highest prices of the year may be recorded before the end of the year.”

Peel offers Oklahoma auction volume as an example of how drought altered cattle marketing. Across 14 weeks from mid-July to mid-October he notes the volume of feeder cattle flowing through auction markets in the state was 19.7% more year over year. The last two weeks, feeder auction volume was 6.1% less than the same period last year.

“Feeder cattle prices at Oklahoma auctions increased counter-seasonally through the summer to August peaks, nearly equal to the spring seasonal peaks before dropping through September into early October,” Peel says. “A sharp decrease in Feeder futures contract prices over this period was the major factor in the cash market decrease. Since mid-October, Feeder futures prices and cash auction prices have moved higher.”

Peel offers insights to the market impacts of recent rains here.

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

Cattle Current Daily—Oct. 31, 2022

Negotiated cash fed cattle prices continued to gain last week amid aggressive cattle slaughter, resilient beef demand, and narrowing supplies.

For the week, live prices were $2 higher in the Southern Plains at $150/cwt., $1-$2 higher in Nebraska at $152-$153 and $1-$3 higher in the western Corn Belt at $151-$153. Dressed prices were $4 higher in Nebraska at $240 and $4-$8 higher in the western Corn Belt at $240.

Choice Boxed beef cutout value was 77¢ higher Friday afternoon at $263.26/cwt. Select was $2.58 higher at $234.49/cwt.

Cattle futures closed narrowly mixed to marginally lower Friday with week-end positioning and traders apparently reluctant to advance prices.

Feeder Cattle futures closed narrowly mixed from an average of 12¢ lower to an average of 11¢ higher.

Live Cattle futures closed an average of 44¢ lower (22¢ lower at the back to $1.02 lower in nearly-spent spot Oct).

Estimated total cattle slaughter last week of 668,000 head was 5,000 head less than the previous week and on par with the same week last year. Year-to-date total estimated cattle slaughter of 28.04 million head was 436,000 head more (+1.6%) than the same period last year. Year-to-date beef production of 23.13 billion lbs. was 320.9 million lbs. more (+1.4%).

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed mostly 6¢ to 9¢ higher.

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Major U.S. financial indices rallied higher Friday with more data suggesting inflation is easing. Excluding food and energy, the Personal Consumption Index (PCE) increased 0.5% month over month and 5.1% year over year, which was in line with expectations.

The Dow Jones Industrial Average closed 828 points higher. The S&P 500 closed 93 points higher. The NASDAQ was up 309 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.18 to $1.26 lower higher through the front six contracts.

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First the pandemic and then the onslaught of consumer price inflation continue to disrupt what were once fairly predictable consumer eating behaviors according to the latest Eating Patterns in America from the NPD Group (NPD).

“The rate of change in U.S. consumers’ eating behaviors continues at a dizzying pace,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “Anyone hoping to return to normal must understand that there is no normal, only an ongoing evolution as we respond to new realities.”

Portalatin points to six macro themes currently shaping the new realities of food and beverage consumption behaviors: economic transition, inflation, income bifurcation, sticky behaviors, total wellness, and the return to convenience. 

Economic transition: Consumer spending in 2020 and 2021 experienced a stimulus-fueled surge that extended into the first quarter of 2022. But, the spending spree ended by the second quarter when stimulus money dried up, and inflation and economic uncertainty took hold. The positive and negative disruptions of the past few years may mean year-over-year economic metrics aren’t as straightforward as they’d ordinarily be in explaining the consumer’s health.

Inflation: Consumers are unlikely to reduce food and beverage consumption in the face of inflationary pressure. But, they will find ways to manage and allocate their food dollars. While inflation is more moderate for food away from home than food at home, the typical restaurant meal costs 3.4 times more than in-home food sourced from retail. To offset rising food costs, consumers are bargain-hunting when grocery shopping, eating more meals at home, and cutting back on restaurant visits.

Income bifurcation: One of the key themes currently shaping the food and beverage landscape is the difference in behaviors among income groups. Trends of upper- and lower-income consumers are starkly divergent. In the food and beverage industry, income bifurcation has profound implications for the total share of stomach trends, retailer and restaurant choice, dealing and promotions, and brands vs. private labels.

Sticky behaviors: Many eating behaviors adopted during the pandemic reflect a rapid acceleration of behaviors established long before the pandemic, like consumers eating most meals at home. Food and beverage behaviors may continue to “normalize,” but the consumer landscape has been transformed as consumers created new capacities and restaurant operators expanded capabilities to serve a more home-centric consumer.

Total wellness: Due to the pandemic, consumers are finding a balance between foods that contribute to physical wellbeing and those that serve more emotional needs. They’re increasingly in tune with the functional attributes of various foods and beverages that can contribute to both sides of this equation.

Return to convenience: Back to school and work create time pressures for home cooks and foodservice customers. And while home-centricity remains more prevalent, the return of mobility reintroduced the need for speed and convenience. For some occasions, this means a trip to a quick service restaurant, but for others, we want to retain our new at-home capacity, just with some shortcuts or time-saving techniques.

“America’s eating patterns are shifting to adjust to new realities, and food manufacturers, foodservice operators, and retailers will need to adjust their offerings and services accordingly,” Portalatin says. “Although the one constant is change, there is a constant to count on, the U.S. consumer will always need to eat, and then it’s a matter of figuring out what, how, when, and where.”

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

Cattle Current Daily—Oct. 28, 2022

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

Live prices were $2 higher in the Southern Plains at $150/cwt.

Although too few to trend, there were some early live sales at $152 in Nebraska and $151-$152 in the western Corn Belt; early dressed sales at $240 in Nebraska and $236 in the western Corn Belt.

Last week, live sales were $150-$152 in Nebraska and $150 in the western Corn Belt. Dressed prices were $236 in Nebraska and $232-236 in the western Corn Belt.

Choice Boxed beef cutout value was $1.63 higher Thursday afternoon at $262.49/cwt. Select was $3.31 higher at $231.91/cwt.

Cattle futures softened Thursday despite higher wholesale beef values and early stronger cash fed cattle prices.

Feeder Cattle futures closed an average of 50¢ lower (5¢ to 17¢ lower).

Live Cattle futures closed an average of 23¢ lower.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 1¢ to 2¢ lower, except for fractionally higher in the front contracts.

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Major U.S. financial indices closed mixed again Thursday, with tech stocks pressuring the NADAQ and S&P 500. On the other hand, higher domestic economic growth than expected in the third quarter buoyed the Dow Jones Industrial Average.

Third-quarter GDP grew at an annual rate of 2.6%, according to the U.S. Bureau of Economic Analysis. Those analysts say, “The increase in the third quarter primarily reflected increases in exports and consumer spending that were partly offset by a decrease in housing investment.”

The Dow Jones Industrial Average closed 194 points higher. The S&P 500 closed 23 points lower. The NASDAQ was down 178 points.

West Texas Intermediate Crude Oil futures (CME) closed 86¢ to $1.17 higher through the front six contracts.

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Although domestic economic growth was stronger than expected in the third quarter, the global economic outlook continues to weaken, according to the latest quarterly World Economic Outlook (WEO) from the International Monetary Fund (IMF).

“More than a third of the global economy will contract this year or next, while the three largest economies — the United States, the European Union and China — will continue to stall,” say WEO authors. “In short, the worst is yet to come, and for many people 2023 will feel like a recession.”

High inflation and central banks’ monetary tightening to contain it remain a primary headwind. COVID and the Russian war on Ukraine are others.

The IMF shaved 0.2% from its outlook for 2023 global economic growth, compared to the July projection. IMF forecasts global GDP to be 3.2% this year and to be 2.7% next year.

“This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic and reflects significant slowdowns for the largest economies: a U.S. GDP contraction in the first half of 2022, a euro area contraction in the second half of 2022, and prolonged COVID-19 outbreaks and lockdowns in China with a growing property sector crisis,” say IMF analysts.

Projections peg U.S. economic growth at 1.6% this year and 1.0% next year.

IMF analysts say risks to their latest outlook remain unusually large and to the downside.

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

Cattle Current Daily—Oct. 27, 2022

After retrenching in the previous session, Cattle futures mostly gained Wednesday with expectations of higher cash prices again this week.

Feeder Cattle futures closed an average of 81¢ higher, except for 17¢ lower in waning spot Oct.

Live Cattle futures closed an average of 28¢ higher, except for unchanged to an average of 16¢ lower in three contracts.

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

Live prices last week were $148/cwt. in the Southern Plains, $150-$152 in Nebraska and $150 in the western Corn Belt. Dressed prices were $236 in Nebraska and $232-$236 in the western Corn Belt.

Choice Boxed beef cutout value was 57¢ lower Wednesday afternoon at $260.86/cwt. Select was $1.25 higher at $228.60/cwt.

Corn futures closed 1¢ to 2¢ lower.

Soybean futures closed mostly 1¢ to 4¢ lower.

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Major U.S. financial indices closed mixed Wednesday, weighed down by big tech stocks with lower quarterly earnings than expected from the likes of Microsoft and Alphabet.

The Dow Jones Industrial Average closed 2 points higher. The S&P 500 closed 28 points lower. The NASDAQ was down 228 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.71 to $2.59 higher through the front six contracts.

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Economic conditions continue to deteriorate in rural areas a 10-state region dependent on agriculture and/or energy, as measured by the Creighton University Rural Mainstreet Index (RMI).

The October RMI declined from 46.3 a month earlier to 44.2. It was the sixth decline in the past seven months, sinking below growth neutral for a fifth consecutive month. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“The Rural Mainstreet economy is now experiencing a downturn in economic activity. Almost one in four bankers, or 23.1%, reported that the economy was already in a recession. Approximately, three of four bankers expect a recession to begin in 2023,” says Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The region’s farmland price index for October declined to 58.0 from September’s 61.1 but was above growth neutral for the 25th straight month.

The slowing economy, strong energy prices, higher borrowing costs and elevated agriculture input costs pushed the business confidence index down to 30.8 from 40.7 in September. “This is the lowest reading for the confidence index since May 2020,” said Goss.

By | October 26th, 2022|Daily Market Highlights|

Cattle Current Daily—Oct. 26, 2022

Recent momentum in Cattle futures stalled Tuesday amid higher Corn futures, likely profit taking and apparently waiting to see if this week’s cash fed cattle trade supports another step higher.

Feeder Cattle futures closed an average of $1.60 lower, except for 92¢ higher in waning spot Oct.

Live Cattle futures closed an average of 45¢ lower, except for 7¢ higher in spot Oct.

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

Live prices last week were $148/cwt. in the Southern Plains, $150-$152 in Nebraska and $150 in the western Corn Belt. Dressed prices were $236 in Nebraska and $232-$236 in the western Corn Belt.

Corn futures closed mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 10¢ to 12¢ higher.

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Major U.S. financial indices closed higher again Tuesday. Support included lower bond yield rates and chatter that the Fed may see enough weakness in the economy to make future interest rate hikes less aggressive.

The Dow Jones Industrial Average closed 337 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 246 points.

West Texas Intermediate Crude Oil futures (CME) closed 74¢ to 89¢ higher through the front six contracts.

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Total pounds of beef in freezers Sept. 30 were 2% more than the previous month, 19% more than the same time last year and record large for the date, according to the latest USDA Cold Storage report. 

Frozen pork supplies were slightly less than the previous month but 14% more than the previous year.

Total red meat supplies in freezers were up 1% from the previous month and up 17% from last year.

Total frozen poultry supplies were up slightly from the previous month and up 10% from a year ago.

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

Cattle Current Daily—Oct. 25, 2022

Cattle futures continued to climb Monday on higher cash fed cattle prices, stronger wholesale beef values and Friday’s friendly Cattle on Feed report.

Feeder Cattle futures closed an average of $1.23 higher (40¢ to $1.57 higher).

Live Cattle futures closed an average of $1.18 higher.

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

Live prices last week were $148/cwt. in the Southern Plains, $150-$152 in Nebraska and $150 in the western Corn Belt. Dressed prices were $236 in Nebraska and $232-$236 in the western Corn Belt.

Choice Boxed beef cutout value was $4.21 higher Monday afternoon at $257.92/cwt. Select was $1.25 higher at $225.61/cwt.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 14¢ to 23¢ lower.

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Major U.S. financial indices extended gain Monday. 

The Dow Jones Industrial Average closed 417 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 92 points.

West Texas Intermediate Crude Oil futures (CME) closed 5¢ to 47¢ lower through the front six contracts.

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Through the first week of October, female beef cattle slaughter was approaching 750,000 head more than last year, according to the Livestock Marketing Information Center (LMIC). Beef cow slaughter was 336,000 head more and heifer slaughter was up 364,000 head.

“Given the pace of current slaughter, a reasonable estimate would conclude U.S. female slaughter will be over 800,000 head by the end of the year,” LMIC analysts say, in the latest Livestock Monitor. “Using a simple regression analysis of data back to 1987, that would imply a Jan. 1 beef cow herd number down 4.8%, greater than the largest decline seen in the 2011-2015 time period. The difference has been the larger number of heifers moving through slaughter channels. It would suggest an unprecedented proportion of female slaughter in the last several decades relative to herd inventory.”

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

Cattle Current DailyOct. 24, 2022

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

For the week, live prices were $3 higher in the Southern Plains at $148/cwt., $3-$4 higher in Nebraska at $151-$152 and $2-$4 higher in the western Corn Belt at $150-$152. Dressed prices were $4 higher at $236.

Stronger cash prices and higher wholesale beef prices helped Cattle futures gain Friday.

Feeder Cattle futures closed an average of 79¢ higher, except for 30¢ lower in spot Oct.

Live Cattle futures closed an average of 54¢ higher

Choice Boxed beef cutout value was 9¢ higher Friday afternoon at $253.71/cwt. Select was $2.28 higher at $224.36/cwt.

Total estimated cattle slaughter last week of 673,000 head was 13,000 head more than the previous week. Total year-to-date estimated cattle slaughter of 27.37 million head was 433,000 head more (+1.6%) than the same period last year. Total year-to-date beef production of 22.56 billion lbs. was 3.2 million lbs. more (+1.4%).

Corn futures closed mostly fractionally mixed.

Soybean futures closed 4¢ to 5¢ higher through Aug ’23 and then mostly 1¢ to 4¢ higher.

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Major U.S. financial indices closed sharply higher Friday led by bank stocks and perhaps some thoughts that peak inflation is near. 

The Dow Jones Industrial Average closed 748 points higher. The S&P 500 closed 86 points higher. The NASDAQ was up 244 points.

West Texas Intermediate Crude Oil futures (CME) closed 54¢ to 66¢ higher through the front six contracts.

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Markets will likely view the latest Cattle on Feed report — feedlots with 1,000 head or more capacity — as at least neutral.

Placements in September of 2.08 million head were 3.8% less than the previous year. In terms of placement weights, 37% went on feed weighing 699 lbs. or less, 44% weighing 700-899 lbs. and 19% weighing 900 lbs. or more.

Marketings in September of 1.86 million head were 4.0% more year over year.

Cattle on Feed Oct. 1 of 11.45 million head were 1.0% less than the previous year.

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

Cattle Current Daily—Oct. 21, 2022

Snug supplies and demand-based aggressive slaughter helped negotiated cash fed cattle prices pull ahead with more gusto this week.

Live prices were $3 higher in the Texas Panhandle at $148/cwt. on moderate trade and light to moderate demand, according to the Agricultural Marketing Service. Prices were $4 higher in Nebraska at mostly $152 on moderate demand and trade. Dressed prices in Nebraska were $4 higher at $236.

There were some live sales in the western Corn Belt at $150 and $236 in the beef, but too few to trend. Live prices there Wednesday were $2 higher at $150. Dressed prices last week were $230-$232.

Choice Boxed beef cutout value was 23¢ higher Thursday afternoon at $253.62/cwt. Select was 11¢ lower at $222.08/cwt.

Cattle futures closed mixed, though, between resurgent Corn futures but stronger cash fed cattle prices.

Feeder Cattle futures closed an average of 79¢ lower (52¢ to $1.02 lower), except for 35¢ higher in spot Oct.

Live Cattle futures closed narrowly mixed, from an average of 22¢ lower in four contracts to an average 34¢ higher.

Corn futures closed mostly 3¢ to 5¢ higher.

Soybean futures closed 14¢ to 19¢ higher through Jly ‘23.and then mostly 9¢ higher.

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Major U.S. financial indices closed lower Thursday amid mixed quarterly corporate earnings and rising bond yields. 

The Dow Jones Industrial Average closed 90 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 65 points.

West Texas Intermediate Crude Oil futures (CME) closed 1¢ to 49¢ lower through the front six contracts, except for 43¢ higher in spot Nov.

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Beef production in September was record large for the month at 2.39 billion lbs., according to the monthly Livestock Slaughter report from USDA’s National Agricultural Statistics Service. Year-over-year cattle slaughter was 4% more at 2.9 million head.

Commercial red meat production totaled 4.67 billion lbs. in September, up 2% from the same time last year.

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

Cattle Current Daily—Oct. 20, 2022

Cattle futures extended gains Wednesday, buoyed by stronger wholesale beef prices, upward cash momentum and weaker Corn futures.

Feeder Cattle futures closed an average of 89¢ higher (25¢ to $1.65 higher).

Live Cattle futures closed an average of $1.20 higher (88¢ to $1.83 higher).

Choice Boxed beef cutout value was $2.61 higher Wednesday afternoon at $253.39/cwt. Select was 91¢ higher at $222.19/cwt.

Negotiated cash fed cattle trade ranged from very limited on moderate demand to inactive on light to moderate demand through Wednesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. There were some early live sales at $147/cwt. in the Southern Plains and at $150 in the western Corn Belt

Last week, live prices were $145/cwt. in the Southern Plains and $148 in Nebraska and the Western Corn Belt. Dressed prices were $232 in Nebraska and $230-$232 in the western Corn Belt.

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Major U.S. financial indices paused the recent rally Wednesday as the U.S. 10-year treasury note traded at its highest level in 14 years.

The Dow Jones Industrial Average closed 99 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 91 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.60 to $2.73 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) raised estimated U.S. beef exports for next year — compared to the previous month’s forecast — based on strong Asian demand.

“Demand for U.S. beef in East and Southeast Asia has been especially strong this year,” explains ERS analysts in the monthly Livestock, Dairy and Poultry Outlook. The increase in exports to the top 10 Asian markets has accounted for 85% of the year-over-year increase in exports through August. The increase in exports to China alone has accounted for 76% of the overall increase and was more than enough to offset the decrease in exports to Hong Kong and Japan. Exports to South Korea, Taiwan, and the Philippines have also shown significant increases.”

ERS increased the third-quarter U.S. beef export forecast 10 million lbs. to 925 million based on August trade data showing stronger-than-expected shipments to China. The fourth-quarter projection was unchanged. Based on expected global demand for next year, the forecast for first-quarter 2023 was raised 50 million lbs. to 740 million and the second-quarter forecast was raised 15 million lbs. to 775 million. The annual forecast was raised to 3.070 billion lbs.

 

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

Cattle Current DailyOct. 19, 2022

Stronger cash fed cattle prices last week, the prospect for further gains this week and recently higher wholesale beef prices helped Cattle futures extend gains Tuesday.

Feeder Cattle futures closed an average of $1.73 higher, except for 7¢ higher in spot Oct.

Live Cattle futures closed an average of 50¢ higher (15¢ to 60¢ higher), except for unchanged in the back contract.

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

Last week, live prices were $145/cwt. in the Southern Plains and $148 in Nebraska and the Western Corn Belt. Dressed prices were $232 in Nebraska and $230-$232 in the western Corn Belt.

Choice Boxed beef cutout value was $2.64 higher Tuesday afternoon at $250.78/cwt. Select was $1.67 higher at $221.28/cwt.

Corn futures closed 2¢ to 3¢ lower. Soybean futures closed mostly 9¢ to 13¢ lower through Jly ’23 and then mostly 4¢ lower.

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Major U.S. financial indices extended gains Tuesday with positive quarterly corporate earnings reports, led by tech stocks.

The Dow Jones Industrial Average closed 337 points higher. The S&P 500 closed 42 points higher. The NASDAQ was up 98 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.47 to $2.64 lower through the front six contracts.

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Despite firm feedlot demand expected for the remainder of this year, between current price data and higher projected feed prices than in last month’s forecast, USDA’s Economic Research Service lowered the fourth-quarter price projection for feeder steers $4 to $173/cwt. with an annual average price of $164.93. That’s basis 750-800 lbs. steers selling at Oklahoma City.

“Based on a weaker outlook than last month for winter grazing on small grains, expected feeder calf placements were raised for the remainder of 2022, tempering expectations for supplies of stocker cattle entering feedlots in early 2023,” ERS analysts say, in the latest Livestock, Dairy and Poultry Outlook. “The price projection in first-quarter 2023 is raised $3 to $175. However, feed prices are forecast to be slightly higher for the 2022-23 crop year and expected feeder calf price increases in the second half of the year were moderated.”

ERS projects feeder steer prices next year at $190 in the second quarter, $214 in the third quarter with an annual average price of $200.75.

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

Cattle Current Daily—Oct. 18, 2022

Cattle futures caught some wind Monday as traders seemed to focus more on the fundamentals, including recently stronger cash fed cattle prices and the likelihood that wholesale beef prices will begin their seasonal advance.

Feeder Cattle futures closed an average of $2.00 higher (95¢ higher in spot to $2.60 higher).

Live Cattle futures closed an average of 78¢ higher (55¢ to $1.42 higher).

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

Last week, live prices were $145/cwt. in the Southern Plains and $148 in Nebraska and the Western Corn Belt. Dressed prices were $232 in Nebraska and $230-$232 in the western Corn Belt.

The five-area direct weighted average fed steer price last week was $146.99/cwt., which was 76¢ more than the previous week. The average fed steer price in the beef was $1.32 higher at $231.60.

Choice Boxed beef cutout value was $1.16 higher Monday afternoon at $248.14/cwt. Select was $2.67 higher at $219.61/cwt.

Cattle futures were also helped along by Corn futures closing mostly 4¢ to 6¢ lower. Soybean futures closed mostly 3¢ to 7¢ lower.

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Major U.S. financial indices rebounded on Monday with positive corporate earnings reports from key banks.

The Dow Jones Industrial Average closed 550 points higher. The S&P 500 closed 94 points higher. The NASDAQ was up 354 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts (15¢ lower to 9¢ higher).

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Drought continues to intensify across the U.S., according to the latest U.S. Drought Monitor (Oct. 13) with 82% of the nation classified from abnormally dry to exceptional drought.

“This level of arid conditions is the highest on record since the data series began in 2000 and higher than the drought of 2012,” according to analysts with the Agricultural Marketing Service (AMS). “Preliminary year-to-date cattle slaughter numbers for the first three quarters of the year were available this week and are very startling … In 2021, during this same time frame, beef cow slaughter was 9.1% higher than 2020. In 2022, it is 13.1% higher than last year and is now largest on record.”

AMS analysts add that year-to-date heifer slaughter is the largest since 2004 and 750,000 head more than the previous five-year average, as the widespread drought continues pushing replacement heifers into feed yards.

“Not surprisingly, we are tight on hay this year,” says James Mitchell, Extension livestock economist at the University of Arkansas, in the latest Cattle Market Notes Weekly. “The October Crop Production report forecasts hay production (excluding alfalfa) at 63.24 million tons or 11% lower year over year. In the August Crop Production report, USDA expected a 5% decline in hay production. This month’s report reflects a significant departure from earlier estimates.”

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

Cattle Current Daily—Oct. 17, 2022

Volatile and bearish outside markets weighed on most commodities Friday as shorter supplies battle with demand concerns stemming from steamy inflation, higher interest rates and slowing economic growth.

Feeder Cattle futures closed an average of 79¢ lower (25¢ lower at the back to $1.32 lower toward the front).

Live Cattle futures closed an average of 62¢ lower, except for 50¢ higher in spot Oct.

Corn futures closed mostly 5¢ to 8¢ lower.

Soybean futures closed mostly 8¢ to 12¢ lower.

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

For the week, live prices were $1 higher in the Southern Plains at $145/cwt., steady to $2 higher in Nebraska at $148 and unevenly steady in the western Corn Belt at $148. Dressed prices were $2 higher at $232.

Choice Boxed beef cutout value was 45¢ higher Friday afternoon at $246.98/cwt. Select was $1.08 higher at $216.94/cwt.

Total estimated cattle slaughter last week of 660,000 head was 4,000 head fewer than the previous week but 21,000 head more than the same week last year. Total estimated year-to-date cattle slaughter of 26.7 million head was 417,000 head more (+1.6%) than the same time last year. Total estimated year-to-date beef production of 22.0 billion lbs. was 306.9 million lbs. more (+1.4%).

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Major U.S. financial indices on Friday gave back much of what was gained in the previous session as the focus returned to current and expected inflation.

The Dow Jones Industrial Average closed 403 points lower. The S&P 500 closed 86 points lower. The NASDAQ was down 327 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.68 to $3.50 lower though the front six contracts.

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Kroger and Albertsons Companies — two of the nation’s top-10 grocery retailers — announced a definitive merger agreement last week. Depending on which list of top grocers in the U.S. by sales you look at, the merger would place the new entity ahead of Costco and in a head-to-head battle with Amazon, while still trailing Walmart by a long way.

Together, Albertsons Cos. and Kroger currently employ more than 710,000 associates and operate a total of 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers, according to joint new release.

“We are bringing together two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders,” says Rodney McMullen, Kroger Chairman and Chief Executive Officer, who will continue serving as Chairman and CEO of the combined company. “Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores. This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors…”

“We have been on a transformational journey to evolve Albertsons Cos. into a modern and efficient omnichannel food and drug retailer focused on building deep and lasting relationships with our customers and communities. I am proud of what our 290,000 associates have accomplished, delivering top-tier performance while furthering our purpose to bring people together around the joys of food and to inspire well-being. Today’s announcement is a testament to their success,” says Vivek Sankaran, CEO of Albertsons Cos.

In connection with obtaining the requisite regulatory clearance necessary to consummate the transaction, Kroger and Albertsons Cos. expect to make store divestitures.

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

Cattle Current Daily—Oct. 14, 2022

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

So far this week, live prices are $1 higher in the Southern Plains at $145/cwt., steady to $2 higher in Nebraska at $147-$148 and unevenly steady in the western Corn Belt at $148. Dressed prices are $2 higher at $232.

Choice Boxed beef cutout value was 13¢ lower Thursday afternoon at $246.53/cwt. Select was $1.60 higher at $215.86/cwt.

Cattle futures softened Thursday amid volatile outside markets and despite higher cash trade.

Feeder Cattle futures closed an average of 65¢ lower, except for 5¢ higher in Aug.

Live Cattle futures closed an average of 23¢ lower, except for 27¢ higher in spot Oct.

Corn futures closed mostly 3¢ to 4¢ higher.

Soybean futures closed mostly 4¢ to 6¢ higher, except for fractionally lower to 2¢ higher in the front four contracts.

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Major U.S. financial indices sank early Thursday and then boomeranged back in dramatic fashion. Pressure stemmed from higher inflation than expected in the monthly Consumer Price Index (CPI). Apparently, the same information provided support later with speculation that it was the last gasp for price hikes. Energy also provide support.

The CPI for all urban consumers rose 0.4% month to month in September, according to the U.S. Bureau of Economic Analysis. CPI was up 8.2% over the last 12 months.

The Dow Jones Industrial Average closed 827 points higher. The S&P 500 closed 92 points higher. The NASDAQ was up 232 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.81 to $1.91 higher  though the front six contracts.

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Here’s something from the For What It’s Worth Department:

Land O’Lakes, in partnership with Wakefield Research, recently polled a nationally representative sample of U.S. consumers seeking to find out what they know about where their food comes from.

Among the findings:

On average, Americans believe that less than half of U.S. farms are family owned and operated, although the fact is that 98% are. Similarly, just 43% of respondents believe the food they buy comes from these family-owned operation, when in fact 88% does.

Despite some prevailing misconceptions, most Americans express interest in the source of their food with 87% of respondents at least somewhat interested in knowing where their groceries were grown or produced. Millennials were most likely to be extremely or very interested in knowing where their food comes from.

Finally, 94% of respondents say it’s at least somewhat important that their groceries be grown or sourced sustainably — yet when it comes to sustainable farming, 26% are unaware of the potential for sustainability in farming to increase farmers’ profits.

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

Cattle Current Daily—Oct. 13, 2022

Weekly negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $144/cwt. in the Southern Plains, $145-$148 in Nebraska and $145-$149 in the western Corn Belt. Dressed prices were $230.

Cattle futures edged higher, though, with the mainly friendly World Agricultural Supply and Demand Estimates (see below).

Feeder Cattle futures closed an average of 29¢ higher, except for unchanged and 12¢ lower in two away contracts.

Live Cattle futures closed an average of 31¢ higher, except for 12¢ lower in near Dec.

Corn futures closed mostly fractionally mixed through May ‘24 then mostly 1¢ to 3¢ higher.

Soybean futures closed 12¢ to 19¢ higher through Jly ‘23, and then mostly fractionally lower to 2¢ lower.

Choice Boxed beef cutout value was 9¢ lower Wednesday afternoon at $246.66/cwt. Select was $1.41 higher at $214.26/cwt.

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Major U.S. financial indices closed little changed again Wednesday after another whipsaw session.

The Dow Jones Industrial Average closed 28 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 9 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.54 to $2.08 lower through the front six contracts.

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USDA raised the expected annual five-area direct fed steer price for this year to $143.15/cwt., in the latest World Agricultural Supply and Demand Estimates (WASDE). That was 35¢ more than the previous month’s estimate, based on current strength in packer demand

Projected fed steer prices are $148 in the fourth quarter. Next year’s annual price projection is $154, with prices at $151 in the first quarter and $152 in the second quarter.

Beef production next year is projected to be 1.77 billion lbs. less than this year (-6.3%) at 26.43 billion lbs.

Compared to the previous month’s estimates:

Corn

USDA reduced expected 2022-23 corn production 49 million bu. to 13.895 billion bu. with reduced yield of 171.9 bu./acre. Corn ending stocks for 2022-23 were cut 47 million bu.

The season-average price received by producers was raised 5¢ to $6.80/bu.

Soybeans

Soybean production was forecast at 4.3 billion bu., down 65 million bu. on lower yields. Soybean yield was projected 0.7 bu. less at 49.8 bu./acre.

The U.S. season-average soybean price for 2022-23 was forecast at $14.00/bu., down 35¢. Soybean meal and oil prices were unchanged at $390.00/short ton and 69¢/lb., respectively.

Wheat

Production for 2022-23 was reduced 133 million bu. to 1,650 million on lower harvested area and yield. Projected ending stocks were lowered 34 million bu. to 576 million, which would be the lowest since 2007-08.

The season-average farm price was raised 20¢/bu. to $9.20 on reported NASS prices to date and expectations for futures and cash prices for the remainder of 2022-23.

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

Cattle Current Daily—Oct. 12, 2022

Feeder Cattle futures bounced an average of $2.34 higher Tuesday, regaining some of the recent losses. Support included Corn futures closing 3¢ to 5¢ lower through Sep ’23 and then mostly 1¢ lower.

Feeder Cattle also received support from Live Cattle futures closing an average of 91¢ higher (22¢ higher at the back to $1.57 higher toward the front), likely due in part to notions that cash fed cattle prices can build on last week’s advance.

Negotiated cash fed cattle trade ranged from a standstill to limited on light demand through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few early live sales in the western Corn Belt at $146/cwt., but too few to trend.

Last week, live prices were $144/cwt. in the Southern Plains, $145-$148 in Nebraska and $145-$149 in the western Corn Belt. Dressed prices were $230.

Choice Boxed beef cutout value was $2.12 higher Tuesday afternoon at $246.75/cwt. Select was 97¢ lower at $212.85/cwt.

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Major U.S. financial indices closed little changed Tuesday with investors apparently waiting for more direction from weekly economic reports.

The Dow Jones Industrial Average closed 36 points higher. The S&P 500 closed 23 points lower. The NASDAQ was down 115 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.75 to $1.84 lower though the front six contracts.

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Drought continues to expand and deepen, according to the latest U.S. Drought Monitor for the week of Oct. 4.

77.4% of the nation was classified from abnormally dry (D0) to exceptional drought (D4), compared to 62.4% at the same time last year. 52.6% was ranged from moderate (D1) to exceptional drought compared to 47.5% a year earlier. However, 32.4% was classified as severe (D2) to exceptional drought compared to 36.5% for the same week in 2021.

Approximately 66% of the U.S. cattle inventory was in areas experiencing drought, according to U.S. Crop and Livestock in Drought from NOAA and the National Integrated Drought Information System. At the same time last year, 35% of the nation’s cattle were in areas experiencing drought.

Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides some state perspective in his weekly market comments; virtually all of Oklahoma was in some stage of drought.

“There is little prospect for winter wheat grazing this fall. Hay supplies are very tight and a wide range of hay types and qualities are being offered. Failed summer crops are being baled for hay including grain sorghum and soybeans,” Peel says. “The water situation may soon be the most critical, even more than forage, for many producers. Water quantity and quality is low and decreasing rapidly. Oklahoma relies heavily on surface water ponds, which are filled by spring and summer thunderstorms. Ponds rarely get replenished in the winter, even in a normal year.” 

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

Cattle Current Daily—Oct. 11, 2022

Surging Corn futures prices took Feeder Cattle futures down a peg Monday.

Feeder Cattle futures closed an average of $2.10 lower (80¢ lower toward the back to $2.75 lower toward the front).

Grain futures spiked higher with heightened concerns about Russia’s ongoing war on Ukraine.

Corn futures closed 10¢ to 15¢ higher through Sep ’23 then mostly 8¢ to 9¢ higher.

Soybean futures closed 5¢ to 7¢ higher through Sep ’23 and then mostly 2¢ to 3¢ higher.

Live Cattle futures were unable to fade the strong pressure, closing an average of 75¢ lower (52¢ to $1.05 lower).

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

Last week, live prices were $144/cwt. in the Southern Plains, $145-$148 in Nebraska and $145-$149 in the western Corn Belt. Dressed prices were $230.

Choice Boxed beef cutout value was $1.44 lower Monday afternoon at $244.63/cwt. Select was $2.31 lower at $213.82/cwt.

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Major U.S. financial indices continued to soften Monday with hangover pressure from the previous week’s bullish employment summary prompted further concern about the aggressiveness of Fed interest rate increases.

The Dow Jones Industrial Average closed 93 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 110 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.42 to $1.51 lower  though the front six contracts.

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Cattle grading and increased cattle slaughter imply Choice beef production is 4% higher year over year, which is one reason for lower Choice beef prices in recent weeks, according to David Anderson, livestock economist with Texas A&M AgriLife Extension Service.

“The Choice beef cutout has been sliding lower for a number of weeks. Last week’s average Choice cutout was $247/cwt., which is an $18/cwt. decline over the last eight weeks. It is also the lowest since the first week of April 2021,” Anderson says, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center. “Increasing supplies of Choice beef may be one reason for the decline, but it can also be an implication of some shifting demand.”

On the other hand, even with increased cattle slaughter, Prime beef production declined over the last eight weeks, leading to a $16/cwt. increase in Prime cutout value, according to Anderson.

“While consumers may be switching around between cuts of beef and other meats based on relative prices and budget constraints, available supplies certainly provide ample reason for changing cutout values,” Anderson says.

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

Cattle Current Daily—Oct. 10, 2022

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

For the week, live prices were $1 higher in the Southern Plains at $143/cwt. and $1-$3 higher in Nebraska and the western Corn belt at $146-$148. Dressed prices were $2 higher at $230.

Choice Boxed beef cutout value $1.29 lower Friday afternoon at $246.07/cwt. Select was 86¢ lower at $216.13.

Cattle futures limped to a narrowly mixed close on Friday.

Feeder Cattle futures closed mixed from an average of 38¢ lower through May ’23, then up 13¢ to 38¢.

Live Cattle futures closed mixed, down 15¢ to up 28¢.

The strong U.S. dollar capped Grain and Soybean futures Friday.

Corn futures closed mixed, 4¢ to 8¢ higher through Jul ’24 then down 1¢.

Soybean futures closed 3¢ to 9¢ higher through Sep ’24 and then 3¢ lower.

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Major U.S. financial indices sank Friday with investors apparently viewing the strong as another reason for the Fed to keep aggressively shoving interest rates higher.

Total non-farm payroll employment increased by 263,000 in September, and the unemployment rate edged down to 3.5%, according to the U.S. Bureau of Labor Statistics.

In September, average hourly earnings for all employees on private non-farm payrolls rose by 10¢ to $32.46. Over the past 12 months, average hourly earnings have

increased by 5.0%.

The Dow Jones Industrial Average closed 630 points lower. The S&P 500 closed 105 points lower. The NASDAQ was down 421 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.50 to $4.19 higher higher though the front six contracts.

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“The lack of available grazing and a low hay supply is likely to bring cattle to market a few weeks early as many producers are facing conditions that may force them to begin feeding hay earlier than is typical,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The price of freshly weaned calves has been declining the past several weeks and will likely continue to decline through the month of October. The driver of lower prices is not simply the seasonal tendency due to the seasonal increase in supply. Higher feed prices and increased concern of the general economy have many folks concerned about the consumers ability to purchase beef, which has resulted in a softening of price expectations for calves and feeder cattle moving through the spring months.”

Although declining cattle supplies ahead will support prices, Griffith explains continuing high feed costs and lower cash fed cattle prices than previously suggested by Cattle futures pose headwinds.

“If feed costs continue to maintain current price levels and finished cattle prices do not increase considerably then cattle feeders will be forced to continue leaning on lower feeder cattle prices,” Griffith says. “There should be some positive price movement closer to the end of the year, but prices are unlikely to make a large move through the month of October and early November.”

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

Cattle Current Daily—Oct. 7, 2022

Negotiated cash fed cattle trade ranged from limited on light demand in the western Corn Belt to light to moderate on moderate demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are $1 higher in the Southern Plains at $143/cwt. and $1-$2 higher in Nebraska at $146-$147. Dressed prices are $2 higher at $230. Live prices in the western Corn Belt last week were $145.

Despite stronger cash prices, Cattle futures faded a bit.

Feeder Cattle futures closed an average of 37¢ lower (17¢ to 82¢ lower) except for an average of 25¢ higher in the back two contracts.

Live Cattle futures closed an average of 10¢ lower except for unchanged in one contract and 65¢ higher in spot Oct.

Choice Boxed beef cutout value was 30¢ higher Thursday afternoon at $247.36/cwt. Select was $2.23 lower at $216.99/cwt.

Grain futures weakened Thursday, pressured by slowing exports impeded by the strength of the U.S. Dollar.

Corn futures closed 6¢ to 8¢ lower through Jly ‘23 and then mostly 1¢ lower to 3¢ higher.

Soybean futures closed 7¢ to 11¢ lower through Jly ‘23 and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices softened Thursday with jitters ahead of Friday’s national employment summary. 

The Dow Jones Industrial Average closed 346 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 75 points.

West Texas Intermediate Crude Oil futures (CME) closed 69¢ to $1.04 higher though the first six contracts.

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U.S. beef export value topped $1 billion in August for the seventh time this year, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

August beef exports totaled 133,832 mt, up 1% year-over-year and the second largest volume on record – trailing only May 2022. Export value was just under $1.04 billion, slightly below the then-record total achieved in August 2021, which was the first time monthly exports topped the $1 billion mark.

“We speak often about the importance of developing a wide range of markets for U.S. red meat, and the August export results are a great illustration of that,” says USMEF President and CEO Dan Halstrom. “Exports face significant headwinds in some key destinations, with weakened currencies topping the list. But the emphasis on broad-based growth really pays dividends in these situations, allowing the overall export picture to remain very positive. I also cannot say enough about the loyalty of our international customers, many of whom have diminished purchasing power but continue to show a strong preference for U.S. red meat.”

For the first eight months of 2022, beef exports increased 5% from a year ago to 1.004 million mt, valued at $8.23 billion – a remarkable 24% above last year’s record pace. August beef export value equated to $437.98 per head of fed slaughter, down 7% from a year ago, but the January-August average was up 23% to $471.18.

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

Cattle Current Daily—Oct. 6, 2022

Cattle futures rose Wednesday as fundamental strength returned.

Feeder Cattle futures closed an average of $1.52 higher (57¢ higher at the back to $2.12 higher toward the front).

Live Cattle futures closed an average of 46¢ higher.

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

Live prices last week were $143/cwt. in the Southern Plains and $145 in Nebraska and the western Corn Belt. Dressed prices were $228.

Choice Boxed beef cutout value was 98¢ lower Wednesday afternoon at $247.06/cwt. Select was $2.69 lower at $219.22.

Corn futures closed 1¢ to 2¢ higher.

Soybean futures closed 10¢ to 13¢ lower through Sep ‘23 and then mostly 7¢ lower.

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Major U.S. financial indices settled slightly lower Wednesday as investors took a breather and profits, apparently, in a volatile session that started out sharply lower before recovering most of the ground by the end. 

The Dow Jones Industrial Average closed 42 points lower. The S&P 500 closed 7 points lower. The NASDAQ was down 27 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.24 to $1.86 higher higher though the first six contracts.

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Less beef is grading Choice in recent months and the Choice-Select spread is growing due in part to less beef production from steers and heifers and more from cows, says Brenda Boetel, extension livestock economist at the University of Wisconsin-River Falls.

In the latest issue of In the Cattle Markets, Boetel explains beef production was 1.7% higher year over year through the first three quarters of 2022, but steer slaughter is down 1.7%, while heifer slaughter is up 0.9% and cow slaughter is up 0.7%.

“Combining weekly slaughter and dressed weights leaves fed beef production about 1.6% higher than a year ago while cow beef is up 4.3%,” Boetel says. “The percent of carcasses presented for grading over the last month that are grading Prime and Choice are running about 1.4% and 0.7% below a year ago, respectively. About 0.7% more carcasses are grading Select than a year ago.”

The Choice-Select spread since September 1 has averaged $24.26/cwt. since Sept. 1, compared to $31.69 last year, according to Boetel.

“The Choice-Select spread tends to increase seasonally from the end of January until mid-June and then decrease until end of September, before resuming an increase until before the December holidays,” Boetel explains. “Except for a short-lived dip after Labor Day, the Choice-Select spread has been steadily increasing since the end of February when the spread was at a negative $2.00 on February 23, 2022 (meaning Select boxed cutout was higher than Choice boxed cutout).”

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

Cattle Current Daily—Oct. 5, 2022

Feeder Cattle futures closed an average of 64¢ lower Tuesday, pressured by higher Corn futures.

Live Cattle futures closed narrowly mixed, from an average of 24¢ lower to an average of 17¢ higher, supported by wholesale beef prices showing signs of reaching the seasonal bottom.

Choice Boxed beef cutout value was $2.10 higher Tuesday afternoon at $248.04/cwt. Select was 60¢ higher at $221.91/cwt.

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

Live prices last week were $143/cwt. in the Southern Plains and $145 in Nebraska and the western Corn Belt. Dressed prices were at $228.

Corn futures closed 2¢ to 4¢ higher, helped along by the export-positive decline in the Dollar.

Soybean futures closed mostly 11¢ to 16¢ higher with support from the rally in Crude Oil futures.

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Major U.S. financial indices continued to rally for a second consecutive session Tuesday. Although the weaker Dollar and lower bond yields were supportive, there’s no making sense of investors’ collective day-to-day whims. 

The Dow Jones Industrial Average closed 825 points higher. The S&P 500 closed 112 points higher. The NASDAQ was up 360 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.66 to $2.89 higher though the first six contracts.

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Agricultural producer sentiment declined from August to September, according to the latest Purdue University/CME Group Ag Economy Barometer. It declined 5 points to a reading of 112 in September, driven mostly by producers’ weakened perception of current conditions. The Current Conditions Index declined 9 points to 109. However, the Index of Future Expectations also weakened, declining 3 points from a month earlier to a reading of 113.

“Concerns about input costs and, in some cases, availability are key factors behind the relative weakness in this month’s sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “However, a growing number of producers are also concerned about the impact of rising interest rates on their farm operations.”

Higher input costs remain the primary concern. In September, 44% of respondents chose “higher input costs” as their number one concern, while 23% chose “rising interest rates,” and 14% chose “availability of inputs.”

When asked to look ahead to 2023, the largest share (38%) of respondents expect input prices to rise from 1% to 9%, compared to 2022 prices. Nearly a fourth (24%) of producers expect input prices to rise from 10% to 19%; and 9% of survey respondents said they expect an input price rise of 20% or more.

The Farm Capital Investment Index declined to a record low of 31 in September, as producers continue to indicate now is not a good time to make large investments in their operations. Among respondents indicating now is a bad time to make large investment, 46% said increasing prices for farm machinery and new construction was the reason. As well, 21% indicated that rising interest rates were a primary reason, up from 14% in August.

Producers’ perspective on farmland values continues to soften. The Short-Term Farmland Value Expectations Index fell 5 points to 123. The Long-Term Farmland Value Expectations Index fell 7 points to 139. Compared to a year ago, the short-term index is down 21%, while the long-term index is 12% lower. 

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 September 19-23.

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

Cattle Current Daily—Oct. 4, 2022

Cattle futures bounced back Monday, helped along by higher wholesale beef values.

Choice Boxed beef cutout value was $2.19 higher Monday afternoon at $245.94/cwt. Select was $1.18 higher at $221.31/cwt.

Feeder Cattle futures closed an average of $1.23 higher.

Live Cattle futures closed an average of 89¢ higher.

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 $143/cwt. in the Southern Plains and $145 in Nebraska and the western Corn Belt. Dressed prices were at $228.

Corn futures closed 3¢ higher through Jly ‘23 and then 1¢ to 2¢ lower.

Soybean futures closed 5¢ to 9¢ higher.

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Major U.S. financial indices rallied back Monday with the start of the new week and quarter. Support included oversold conditions and a decline in bond yields.

The Dow Jones Industrial Average closed 765 points higher. The S&P 500 closed 92 points higher. The NASDAQ was up 239 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.91 to $4.14 higher though the first six contracts.

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As the last leg of the current cattle cycle unfolds with herd contraction since 2018-19, Josh Maples, Extension livestock economist at Mississippi State University, offers insights to the current cattle cycle, likely cyclically high prices ahead and the trigger for expansion.

“How long we continue to contract will be directly impacted by drought and pasture conditions. The current drought draws comparisons to the 2011-2013 and has led to similar liquidation impacts on the cattle inventory. Herd expansion will be difficult until the drought abates,” Maples explains in the latest Cattle Market Notes Weekly.

“Producer profitability will be the key driver of when the next expansion phase occurs and when the next cattle cycle begins.”

Maples offers 2014-15 as an example. Record high prices were achieved during the last cycle low for cattle numbers, which was driven by drought and seven years of herd contraction.

“Just a few years ago, the thought of reaching those record price levels again seemed far-fetched. However, we are again experiencing many of the same ingredients that led to the 2014-15 market,” Maples says. “Cattle futures markets for 2023 are at levels not seen since 2015. The timing is still up in the air, and beef demand will certainly matter, but the end of the current cattle cycle may ultimately not look all that different from the end of the last one.”

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

Cattle Current Podcast—Oct. 3, 2022

Feeder Cattle futures tanked Friday with pressure from Corn futures surging in response to USDA’s Grain Stocks report Friday (see below).

Corn futures closed 5¢ to 8¢ higher through Jly ’23 and then 2¢ to 3¢ higher.

Feeder Cattle futures closed an average of $2.68 lower.

Live Cattle futures closed an average of 53¢ lower (17¢ to 85¢ lower), except for unchanged in the back contract.

Soybean futures closed 32¢ to 46¢ lower through Aug. ’23 and then mostly 21¢ to 25¢ lower, reacting to softer oil prices and the Grain Stocks report.

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

For the week, live prices were steady at $143/cwt. in the Southern Plains and at $144-$145 in Nebraska. Prices were steady to $3 lower in the western Corn Belt at $145. Dressed prices were steady to $1 higher in Nebraska at $228-$233 and at the bottom of last week’s range in the western Corn Belt at $228.

Choice boxed beef cutout value was $2.33 lower Friday afternoon at $243.75/cwt. Select was 35¢ higher at $220.13.

Estimated total cattle slaughter was 3,000 head less week over week at 664,000 head, but was 24,000 head more than the same week last year. Year-to-date estimated total cattle slaughter of 25.36 million head was 385,000 head more (+1.5%) than the same time last year. Estimated total year-to-date beef production of 20.91 billion lbs. was 282 million lbs. more (+1.4%).

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Major U.S. financial indices continued to fall Friday with growing concerns about inflation and tightening monetary policy squelching economic growth here and abroad. The Personal Consumption Expenditure (PCE) Index excluding food and energy grew 0.6% from July to August, which was more than anticipated. Year over year, the PCE was 4.9% higher, according to the U.S. Bureau of economic analysis.

The Dow Jones Industrial Average closed 500 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 161 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.61 to $1.74 lower through the front six contracts.

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Old crop corn stocks stored in all positions on Sept. 1 totaled 1.38 billion bu., up 12% year over year, but less than trade expectations, according to USDA’s quarterly Grain Stocks report. Of the total stocks, 510 million bu. were stored on farms, which was 29%. more than a year earlier. Off-farm stocks of 867 million bu. were 3% more than the prior year.

NASS analysts say 2021 corn production was revised 41.4 million bu. lower with downward revisions in planted area (93.3 million acres), harvested area (85.3 million acres) and grain yield (176.7 bu./acre).

Old crop soybean stocks of 274 million bu. stored in all positions on Sept. 1 were 7% more than the previous year and more than the trade expected.

Soybean stocks stored on farms totaled 62.9 million bu., down 8% from a year ago. Off-farm stocks of 211 million bu. were 12% more year over year.

Soybean production was 30.2 million bu. more with harvested area revised higher (86.3 million acres), as well as yield (51.7 bu./acre).

All wheat stored in all positions Sept. 1 totaled 1.78 billion bu., which was less than 1% more than the previous year and in line with trade expectations.

On-farm wheat stocks were estimated at 591 million bu., up 41% from last September. Off-farm stocks of 1.18 billion bu. were 13% less than a year earlier.

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

Cattle Current Daily—Sept. 30, 2022

Cattle futures finally rallied back Thursday, supported by oversold conditions.

Feeder Cattle futures closed and average of $2.19 higher. Live Cattle futures closed an average of $1.02 higher.

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

So far this week, live prices are steady at $143/cwt. in the Southern Plains and at $144-$145 in Nebraska. Prices are steady to $3 lower in the western Corn Belt at $145. Dressed prices are steady to $1 higher in Nebraska at $228-$233 and at the bottom of last week’s range in the western Corn Belt at $228.

Choice boxed beef cutout value was $1.47 lower Thursday afternoon at $246.08/cwt. Select was 57¢ higher at $219.78.

Corn futures closed mostly fractionally higher toward the front and then 2¢ to 3¢ higher.

Soybean futures closed mostly 4¢ to 5¢ higher.

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Major U.S. financial sold off Thursday, basically giving back what was gained in the previous session with investors apparently returning their focus to a slowing economy.

The Dow Jones Industrial Average closed 458 points lower. The S&P 500 closed 78 points lower. The NASDAQ was down 314 points.

West Texas Intermediate Crude Oil futures (CME) closed 78¢ to 92¢ lower through the front six contracts.

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

Cattle Current Daily—Sept. 29, 2022

Negotiated cash fed cattle trade was active on very good demand in Nebraska Wednesday with live prices steady at $144-$145/cwt. and dressed prices mainly steady to $4 lower at $228.

Trade was slow on moderate demand in the western Corn Belt, where there were a few live sales at $144-$145 and a few in the beef at $228, but too few to trend, according to the Agricultural Marketing Service. Prices there last week were $145-$148 and $227-$234, respectively.

Trade in the Southern Plains ranged from limited to mostly inactive on light demand. Live prices there the previous day were steady at $143.

Choice boxed beef cutout value was 88¢ lower Wednesday afternoon at $247.55/cwt. Select was $2 lower at $219.21.

Cattle futures weakened again Wednesday with hangover pessimism from recent sessions.

Feeder Cattle futures closed an average of 72¢ lower (32¢ to $1.12 lower).

Live Cattle futures closed an average of 50¢ lower except for 15¢ higher in the back contract.

Corn and Soybean futures crawled higher, perhaps on increasing Russian rhetoric and positioning ahead of Friday’s Grain Stocks report.

Corn futures closed mostly 3¢ higher.

Soybean futures closed 5¢ to 9¢ higher.

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Major U.S. financial indices rallied Wednesday, apparently based mainly on oversold conditions. 

The Dow Jones Industrial Average closed 549 points higher. The S&P 500 closed 72 points higher. The NASDAQ was up 222 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.82 to $3.65 higher through the front six contracts.

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Economic conditions continue to deteriorate in the 10-state region dependent on agriculture and/or energy, monitored by the Rural Mainstreet Index (RMI).    

“The Rural Mainstreet economy is now experiencing a downturn in economic activity. Supply chain disruptions and inflationary pressures from higher farm input costs continue to constrain growth,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “Farmers and bankers are bracing for escalating interest rates, higher farm input costs, and drought.”

The Creighton University Rural Mainstreet Index (RMI) fell for the fifth straight month, sinking below growth neutral for a fourth consecutive month, according to the monthly survey of bank CEOs.

Four of 10 bankers indicated that high and escalating farm input costs were the greatest economic challenge to their bank and area over the next 12 months.

More than one of five, or 21.4%, of bank CEOs reported drought impacts were the greatest economic challenge going forward.

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

Cattle Current Daily—Sept. 28, 2022

Cattle futures continued lower with outside markets Tuesday.

Feeder Cattle futures closed an average of $1.02 lower.

Live Cattle futures closed an average of 67¢ lower.

Negotiated cash fed cattle trade was steady in the Southern Plains Tuesday at $143/cwt. on slow trade and moderate demand.

Elsewhere, trade was inactive on light demand.

Last week, live prices were $144-$145 in Nebraska and $145-$148 in the western Corn Belt. Dressed prices were $228-$232 in Nebraska and $227-$243 in the western Corn Belt.

Choice Boxed beef cutout value was $1.07 higher Tuesday afternoon at $248.91/cwt. Select was 1.27 lower at $222.08/cwt.

Corn futures closed 1¢ to 2¢ higher through Jly ‘23 and then mostly unchanged to fractionally lower.

Soybean futures closed 1¢ to 3¢ lower through Aug ‘23 and then mostly fractionally higher.

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Major U.S. financial indices closed mixed Tuesday as a relief rally from recent steep losses fell short. 

The Dow Jones Industrial Average closed 125 points lower. The S&P 500 closed 7 points lower. The NASDAQ was up 26 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.14 to $1.79 higher through the front six contracts.

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Winter wheat planting increased 10% week to week (Sept. 25), according to the latest USDA Crop Progress report.

31% of winter wheat was planted, which was 10% more than the previous week, 1% less than last year but 1% more than the five-year average. 9% was emerged, which was 7% more than the previous week, 2% more than last year and 3% more than average.

26% of pasture and range was rated as Good (22%) or Excellent (4%), which was 2% less than a week earlier but 3% more than a year earlier. Conversely, 43% was rated as Poor (23%) or Very Poor (20%), which was the same as the previous week but 3% less than a year earlier.

92% of corn was dented, which was 4% less than last year and 2% less than the five-year average. 58% was mature, which was 14% less than a year earlier and 3% less than average. 12% was harvested, which was 5% less than last year and 2% less than the average. 52% was rated as Good (42%) or Excellent (10%), which was the same as the prior week but 7% less than a year earlier. 21% was rated Poor (12%) or Very Poor (9%) the same as a week earlier but 6% more than a year earlier.

63% of soybeans were dropping leaves, which was 10% less than last year and 2% less than the average. 8% were harvested, compared to 15% last year and 13% for average. 55% were rated as Good (46%) or Excellent (9%) which was the same as the previous week and 3% less than the prior year. 15% were rated Poor (10%) or Very Poor (5%), which was the same as the previous week but 1% more than the prior year.

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

Cattle Current Daily—Sept. 27, 2022

Cattle futures weakened further Monday, along with other commodities and financial markets as fears about a contracting economy, high unabated inflation and increasing interest rates ruled the day.

Feeder Cattle futures closed an average of $1.75 lower ($1.20 lower toward the front to $2.40 lower in the back contract.

Live Cattle futures closed an average of $1.32 lower (77¢ to $1.70 lower).

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

Last week, live prices were $143/cwt. in the Southern Plains, $144-$145 in Nebraska and $145-$148 in the western Corn Belt. Dressed prices were $228-$232 in Nebraska and $227-$243 in the western Corn Belt.

Choice boxed beef cutout value was 79¢ lower Monday afternoon at $247.84/cwt. Select was $4.04 higher at $223.35.

Corn futures closed 8¢ to 11¢ lower through Sep ’23 and then mostly 5¢ lower.

Soybean futures closed mostly 11¢ to 15¢ lower.

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Major U.S. financial indices closed sharply lower again Monday with the surging dollar and continued   worries about climbing interest rates and recessionary fears.

The Dow Jones Industrial Average closed 329 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 65 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.03 to $2.14 lower through the front six contracts.

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“Both feedlot inventories and cattle slaughter have remained stubbornly high this year due to drought-forced movement of cattle out of the country. Total fed cattle slaughter thus far in 2022 is up 0.8% as the 1.7% decrease in steer slaughter for the year to date is offset by a 4.9% increase in heifer slaughter,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Total cow slaughter is up 5.6% so far this year, driven by a 13.4% increase year over year in beef cow slaughter. Total cattle slaughter is up 1.8% year over year thus far in 2022, with female (cow plus heifer slaughter) accounting for 50.9% of total cattle this year. Cattle slaughter and beef production are projected to decrease year over year in the fourth quarter but higher than expected beef production in the first three quarters of the year likely mean that annual totals for beef production will be steady or fractionally higher year over year. Feedlot production, cattle slaughter and beef production are all expected to decrease sharply in 2023.”

Referencing Friday’s Cattle on Feed report, Peel explains, feedlot inventories grow seasonally in the fall but are expected to increase less this year and trail last year’s record levels.

“In the past four months — May – August — total placements were down 0.6% year over year with placements under 700 lbs. up 5.3% and placements over 700 pounds down 3.7% compared to last year. Past placements of lightweight cattle suggest fewer cattle available for placement going forward,” Peel says.

By | September 26th, 2022|Daily Market Highlights|

Cattle Current Daily—Sept. 26, 2022

Cattle futures softened again Friday amid sharply lower outside markets, rising interest rates and perhaps some prescient defensiveness ahead of the monthly Cattle on Feed report.

Feeder Cattle futures closed an average of 61¢ lower, except for an average of 28¢ higher in two contracts.

Live Cattle futures closed an average of 89¢ lower.

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

Based on the last established trends, live prices for the week were $1 higher in the Southern Plains at $143/cwt., steady to $4 higher in the western Corn Belt at $148 and $1 higher in Nebraska at $144. Dressed prices were $2-$8 higher in the western Corn Belt at $228-$234 and $2-$5 higher in Nebraska at $228-$232.

Choice Boxed beef cutout value was 23¢ higher Friday afternoon at $248.63/cwt. Select was $2.80 lower at $219.31/cwt.

Corn and Soybean futures softened Friday with outside market concerns, including the impact the climbing U.S. dollar will have on exports.

Corn futures closed 10¢ to 13¢ lower.

Soybean futures closed 28¢ to 31¢ lower through Aug ‘23 and then 20¢ to 25¢ lower.

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Major U.S. financial indices closed sharply lower Friday as investors focused on climbing interest rates and recessionary fears.

The Dow Jones Industrial Average closed 468 points lower. The S&P 500 closed 64 points lower. The NASDAQ was down 198 points.

CME WTI Crude Oil futures closed $4.29 to $4.78 lower through the front six contracts.

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Feedlot placements were higher than expected again in August, according to the latest monthly Cattle on Feed report for feedlots with 1,000 head or more capacity. Placements in August of 2.11 million head were 9,000 head more year over year (+0.4%) but almost 2% more than pre-report expectations.

In terms of placement weights, 35% went on feed weighing 699 lbs. or less, 47% were 700-899 lbs. and 18% weighed 900 lbs. or more.

Marketings in August of 2.00 million head were 120,000 head more (+6.4%), which was in line with expectations.

Cattle on feed Sept 1 of 11.3. million head were 45,000 head more (+0.4%) than the previous year, which also mirrored expectations ahead of the report. It was the second largest inventory for the date since the data series began in 1996.

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

Cattle Current Daily—Sept. 23, 2022

Negotiated cash fed trade ranged from slow to moderate on moderate demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service. Prices so far this week are $1 higher at $143/cwt.

Elsewhere, trade was moderate on moderate to good demand.

Dressed trade in Nebraska was $2-$5 higher at $228-$232. Live prices there last week were $143.

In the western Corn Belt, live prices this week are steady to $1 higher at $144-$145 and $2 higher in the beef at $228

Even so, Cattle futures continued to weaken Thursday with pressure from struggling outside markets and likely positioning ahead of Friday’s Cattle on Feed report. Pre-report estimates expect placement to be down 1% or so compared to last year and on-feed numbers to be about even.

Feeder Cattle futures closed an average of $1.41 lower, except for 2¢ higher in spot Sep.

Live Cattle futures closed an average of 85¢ lower (30¢ to $1.40 lower).

Cattle futures are weaker again through noon today.

Corn and Soybean futures paddled in place Thursday with ongoing pressure from lower outside markets and the higher U.S. dollar, but also speculation about lower yields.

Corn futures closed mostly fractionally higher to 2¢ higher.

Soybean futures closed 2¢ to 4¢ lower through Jly ‘23 and then mostly fractionally mixed.

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Major U.S. financial indices closed lower again Thursday with growing concern about recession as the Fed battles inflation.

The Dow Jones Industrial Average closed 107 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 153 points.

CME WTI Crude Oil futures closed 55¢ to 66¢ higher through the front six contracts.

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“August cutout data showed a strong resurgence in interest for Prime graded beef, approaching levels not seen since January of 2022,” according to analysts with the Livestock Marketing information Center, in its Livestock Monitor. “The Prime cutout value was $330.57/cwt., up from July’s $317.51 value, and just short of January’s peak for the year of $341.12. Interestingly, other grades of beef cutout failed to rally and were even with the month before. Branded, Choice, and Select cutout values have held the $275-$250 range since March 2022.”

The loin and rib drove increased Prime cutout value.

“The strong interest in prime rib and loin values is associated with a seasonal component that has become much more pronounced since 2017 in the premiums between Prime and other grades of beef,” LMIC analysts say. “Fall of 2021 was one of the largest historical cutout spreads, in which Prime commanded more than $80/cwt. over Choice. Prime Rib values are on pace to approach last year’s high point, while Prime loin values are slightly weaker.” 

LMIC analysts point out 7.6% of carcasses graded Prime in August versus 8.7% the prior year.

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

Cattle Current Daily—Sept. 22, 2022

Cattle futures weakened Wednesday with likely spillover pessimism from lower outside markets, the lack of cash direction and perhaps some defensiveness in the face of Friday’s Cattle on Feed report.

Feeder Cattle futures closed an average of 74¢ lower, except for 57¢ higher in the back contract.

Live Cattle futures closed an average of 25¢ lower, except for 17¢ higher in the back contract.

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. There were a few trades at $145/cwt. in Nebraska and the western Corn Belt but too few to trend.

Live prices last week were $142/cwt. in the Southern Plains, $143 in Nebraska and $143-$145 in the western Corn Belt. Dressed prices were $226-$227 in Nebraska and $226 in the western Corn Belt.

Choice Boxed beef cutout value was $2.51 lower Wednesday afternoon at $249.13/cwt. Select was $1.09 lower at $226.14/cwt.

Corn futures closed 3¢ to 6¢ lower Wednesday with pressure from lower outside markets and the export-adverse rise in the U.S. dollar.

Soybean futures closed 13¢ to 17¢ lower through Aug ‘23 and then mostly 8¢ to 9¢ lower.

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Major U.S. financial indices closed sharply lower Wednesday after a volatile trading session as investors first awaited the Fed’s latest interest rate decision and then parsed through the announcement.

As widely expected, the Federal Operating Markets Committee (FOMC) increased interest rates by 75 basis points and anticipated further tightening to rein back inflation.

“Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures,” according to the FOMC statement. “Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks.”

The Dow Jones Industrial Average closed 522 points lower. The S&P 500 closed 66 points lower. The NASDAQ was down 204 points.

CME WTI Crude Oil futures closed 63¢ to $1.00 lower through the front six contracts.

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Nearly three in four beef-eating Americans can’t imagine giving up the taste of beef, according to new research from Midan Marketing, a full-service agency dedicated to meat industry clients.

“Recent data from Mintel shows that 81% of American consumers eat beef,” says Bridget Wasser, associate director of customer insights at Midan. “We know that consumers are seeking out several attributes when shopping for beef, so we set out to determine which claims are most impactful.”

According to Midan’s newest proprietary research, 68% of consumers purchase beef with production claims at least some of the time.

The survey, which was fielded in April 2022, presented a nationally representative sample of U.S. beef consumers with 28 different product attributes. Claims tested ranged from quality claims including USDA Prime or Choice grade, production claims like grass-fed or carbon neutral, and sourcing claims such as locally raised or product of the U.S.

Claims that carry the most weight with consumers vary generationally. For instance, most shoppers search first for beef carrying a USDA Choice grade. When it comes to the second attribute they look for: Baby Boomers — Raised in the USA; Gen X — USDA Prime; Millennials — Raised with no added hormones or growth promotants.

As for Gen Z — they ranked No added hormones or growth promotants as their leading attribute, followed by High in protein. USDA Choice ranked fourth on the list for them.

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

Cattle Current Daily—Sept. 21, 2022

Feeder Cattle futures gave back the previous session’s gains and then some Tuesday, pressured by higher Corn futures.

Feeder Cattle futures closed an average of $1.80 lower Tuesday (35¢ lower at the back to $2.27 lower toward the front), giving back the previous session’s gains and then some. Much of the pressure came from Corn futures bouncing 12¢ to 13¢ higher through Jly ‘23 and then mostly 8¢ to 9¢ higher, supported by bleaker condition ratings than expected. Soybean futures closed 15¢ to 17¢ higher through Jly ‘23. and then mostly 7¢ to 9¢ higher.

Live Cattle futures closed an average of 12¢ lower, except for 27¢ higher in three contracts with firmness from growing optimism for higher cash fed cattle prices this week.

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

Live prices last week were $142/cwt. in the Southern Plains, $143 in Nebraska and $143-$145 in the western Corn Belt. Dressed prices were $226-$227 in Nebraska and $226 in the western Corn Belt.

Choice Boxed beef cutout value was 81¢ lower Tuesday afternoon at $251.64/cwt. Select was $1.34 higher at $227.23/cwt.

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Major U.S. financial indices closed lower Tuesday with traders fretting over the Fed’s interest rate decision Wednesday.

The Dow Jones Industrial Average closed 313 points lower. The S&P 500 closed 43 points lower. The NASDAQ was down 109 points.

CME WTI Crude Oil futures closed $1.28 to $1.42 lower through the front six contracts.

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

Cattle Current Daily—Sept. 20, 2022

Cattle futures rose Monday, helped along by last week’s slightly stronger cash fed cattle prices.

Feeder Cattle futures closed an average of 87¢ higher.

Live Cattle futures closed an average of 37¢ higher., except for 7¢ lower in near Dec.

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

Last week, live prices were $1 higher in the Southern Plains at $142, steady to $1 higher in Nebraska at $143 and steady to $1 lower in the western Corn Belt at $143-$145. Dressed prices were steady to $1 higher in Nebraska at $226-$227 and unevenly steady in the western Corn Belt at $226.

Choice Boxed beef cutout value was 5¢ higher through Monday afternoon at $252.45/cwt. Select was 76¢ lower at $225.89/cwt.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 13¢ to 19¢ higher.

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Major U.S. financial indices closed higher at the end of a volatile session Monday. Investors are awaiting the Fed’s next interest rate decision this week.

The Dow Jones Industrial Average closed 197 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 86 points.

CME WTI Crude Oil futures closed 44¢ to 62¢ higher through the front six contracts.

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Budgets currently look favorable for winter stocker grazing if forage is available, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

For instance, Peel calculates the value of gain for adding 300 lbs. to a 475-lb. steer at $1.29/lb., using current Oklahoma feeder prices. He notes that price also reflects current feedlot cost of gain for steers in the Southern Plains of $1.25-$1.30/lb.

“Stocker budgets are driven by the overall level of cattle prices and the relationship between purchase prices for lightweight stockers and the expected price of heavy feeder cattle later,” Peel explains. “The difference in the purchase price and selling price of stocker cattle is the rollback that determines the gross value of gain for adding weight to feeder cattle. The stocker price rollback is the mirror image of the cost of gain for feedlots because feeder markets reflect whether it is cheaper to put weight on feeder cattle in forage-based stocker programs before they arrive at the feedlot or with grain-based rations after placement in the feedlot.” He adds the $7 increase between nearby and Mar Feeder Cattle contracts adds more value.

Unfortunately, at least for producers depending on wheat pasture in the Southern Plains, grazing prospects appear limited due to persistent dryness and drought.

“I traveled across much of western Oklahoma last week and did see several planted fields and even a couple with wheat emerged. In many cases the wheat is being “dusted in”, planted in dry soil, hoping that rain will be forthcoming to germinate the wheat,” Peel says. “Whether wheat is planted with enough moisture to germinate or is waiting for rain to emerge, the dry soil profile means that additional timely rains will be needed to sustain a wheat stand. The forecast for the next week or more is for unseasonably (maybe record!) warm temperatures with little chance of precipitation. Wheat grazing prospects look dim and risky this fall.”

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

Cattle Current Daily—Sept. 19, 2022

Estimated total cattle slaughter last week was 667,000 head, which was 63,000 more than the previous holiday-shortened week. Year-to-date estimated total cattle slaughter of 24.0 million head was 328,000 (+1.4%) more than last year. Estimated year-to-date beef production of 19.8 billion lbs. was 226.9 million lbs. more (+1.2%).

Cattle futures meandered Friday amid the heavy beef production, high Corn price outlook and recently lower wholesale beef values.

Live Cattle futures closed an average of 23¢ lower (5¢ to 35¢ lower).

Feeder Cattle futures closed mixed, from an average of 60¢ lower to 33¢ higher.

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

For the week, live prices were $1 higher in the Southern Plains at $142/cwt., steady to $1 higher in Nebraska at $143 and steady to $2 lower in the western Corn Belt at $143-$144. Dressed prices were steady to $1 higher in Nebraska at $226-$227. Dressed prices in the western Corn Belt the previous week were $225-$230.

Choice Boxed beef cutout value was 6¢ higher through Friday afternoon at $252.40/cwt. Select was $3.30 lower at $226.65/cwt.

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

Soybean futures closed an average of 2¢ lower through Sept. ‘23 and then unchanged to fractionally higher.

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Major U.S. financial indices lost more ground Friday amid growing global recession fears.

Preliminary quarterly results from FedEx late the previous day underscored the worries.

First-quarter FedEx results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter, according to the company’s update. FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe.

As a result of the preliminary first quarter financial performance and expectations for a continued volatile operating environment, FedEx withdrew its fiscal year 2023 earnings forecast issued in June.

The Dow Jones Industrial Average closed 139 points lower. The S&P 500 closed 28 points lower. The NASDAQ was down 104 points.

West Texas Intermediate Crude Oil futures on the CME closed 7¢ to 20¢ higher through the front six contracts.

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USDA’s Economic Research Service (ERS) raised expected feeder steer prices (750-800 lbs., Oklahoma City) in the latest Livestock, Dairy and Poultry Outlook, compared to the previous month. Forecast prices were $2 higher in the third quarter at $173/cwt. and $4 higher in the fourth quarter to $177. The 2022 annual average prices increased $1.50 to $166.10. Projected prices for the first and second quarters next year increased $3 and $4, respectively to $172 and $190. The forecast 2023 average annual price increased $1.75 to $201.

“Calf prices are raised for 2022 and early 2023 as expected placements in feedlots reach deeper into tight supplies outside feedlots … Based on recent NASS Cattle on Feed reports, average placement weights are declining, suggesting fewer yearlings are available for placement. This has likely improved demand for calves weighing over 700 lbs.,” say ERS analysts. “The price for feeder steers 750-800 lbs. at the Oklahoma City National Stockyards averaged $174.18/cwt. in August, up nearly $5 from last month and $18 from last year. The most recent available price from Sept. 12 reports sales of yearling feeder steers at $180.35, a jump of more than $6 from the previously reported week.”

ERS analysts explain more feedlot placements in July than anticipated, as well as   weekly reported sticker and feeder cattle sales in August supports raising anticipated placements in the third quarter of this year.

“This has further resulted in raising expected fed cattle marketings in early 2023 and subsequently raising projected first-quarter 2023 beef production,” ERS analysts say. “As the drought pushes more calves into feedlots at a quicker pace than normal, this will likely pull feeder cattle forward next year, decreasing expected marketings in late 2023.”

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

Cattle Current Daily—Sept. 16, 2022

Steady to higher cash prices helped lift Live Cattle futures an average of 64¢ higher (22¢ to $1.27 higher) on Thursday.

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service. So far this week, live prices are $1 higher at $142/cwt.

Trade was slow on moderate demand in Nebraska with live prices steady to $1 higher at $143. Dressed prices are steady to $1 higher at $226-$227.

In the western Corn Belt, trade was limited on light demand. So far this week, live prices are steady to $2 lower at $143-$144. Dressed prices last week were $225-$230.

Choice Boxed beef cutout value was $1.13 lower Thursday afternoon at $252.34/cwt. Select was 16¢ lower at $229.95/cwt.

Feeder Cattle futures wobbled Thursday with more strength through the back half of the board. They closed mixed, from an average of 34¢ lower to an average of 41¢ higher.

That was despite softer grain futures with Corn following wheat and closing 4¢ to 8¢ lower. Soybean futures closed mostly 3¢ lower through Jly ‘23 and then mostly 9¢ lower.

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Major U.S. financial indices closed lower Wednesday amid mixed economic news and lingering worries about slowing economic growth.

The Dow Jones Industrial Average closed 173 points lower. The S&P 500 closed 44 points lower. The NASDAQ was down 167 points.

West Texas Intermediate Crude Oil futures on the CME closed $3.38 to $3.60 lower through the front six contracts, pressured by demand concerns.

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Freight railroads and unions reached a tentative agreement late to avert a worker strike.

According to a statement from the Association of American Railroads, the new contracts would provide rail employees a 24% wage increase during the five-year period from 2020 through 2024, including an immediate payout on average of $11,000 upon ratification by the unions.

“This tentative agreement provides for the highest general wage increases over the life of the agreement in over 45 years,” according to a joint statement by the Brotherhood of Locomotive Engineers and Trainmen (BLET), a Division of the Rail Conference of the International Brotherhood of Teamsters, and the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD).

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

Cattle Current Daily—Sept. 15, 2022

Feeder Cattle futures closed an average of 52¢ higher Wednesday as Corn Futures retreated 8¢ to 10¢ lower through Jly ’23 and then mostly 2¢ to 4¢ lower.

Soybean futures closed mostly 18¢ to 23¢ lower.

Live Cattle futures closed an average of 26¢ lower except for unchanged to an average of 12¢ higher in three contracts.

The looming railroad strike continues to add uncertainty to the mix.

Negotiated cash fed cattle trade ranged from a standstill to limited on light demand through Wednesday afternoon, according to the Agricultural Marketing Service. There were a few dressed trades in Nebraska at $226-$227/cwt. and a few live trades in the western Corn Belt at $143, but too few to trend.

Last week, live prices were $141/cwt. in the Southern Plains, $142-$143 in Nebraska and $143-$146 in the western Corn Belt. Dressed prices were $226 in Nebraska and $225-$230 in the western Corn Belt.

Choice Boxed beef cutout value was $3.19 lower through Wednesday afternoon at $253.47/cwt. Select was $3.47 lower at $230.11/cwt.

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Major U.S. financial indices firmed Wednesday following the previous session’s steep selloff

The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 86 points.

West Texas Intermediate Crude Oil futures on the CME closed 70¢ to $1.17 higher through the front six contracts.

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American Foods Group (AFG), LLC broke ground this week on the a beef processing facility in Warren County, Missouri.

The family-owned company plans to process 2,400 cattle per day and intends to be fully operational by the end of 2024.

AFG is investing $800 million in the new 775,000 sq. ft. facility. The company plans to create more than 1,300 new jobs in the region with an annual payroll of approximately $80 million. Currently, AFG employs more than 4,500 across the U.S.

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

Cattle Current Daily—Sept. 14, 2022

Sharply lower outside markets pressured by higher inflation than expected compounded the previous day’s lower corn yield estimates, weighing on Cattle futures.

Feeder Cattle futures closed an average of $1.88 lower ($1.10 to $2.60 lower).

Live Cattle futures closed an average of 77¢ lower.

That was with Corn futures retreating on the same macroeconomic news.

Corn futures closed 1¢ to 3¢ lower through Sep ‘23, then mostly fractionally higher.

Soybean futures closed mostly 3¢ to 9¢ lower through Jly ‘23 and then mostly 1¢ higher.

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

Last week, live prices were $141/cwt. in the Southern Plains, $142-$143 in Nebraska and $143-$146 in the western Corn Belt. Dressed prices were $226 in Nebraska and $225-$230 in the western Corn Belt.

Choice Boxed beef cutout value was $2.28 lower through Tuesday afternoon at $256.66/cwt. Select was $2.18 lower at $233.58/cwt.

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As alluded to, Major U.S. financial indices plunged Tuesday on a steamier inflation reading than expected.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1% in August on a seasonally adjusted basis after being unchanged in July, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 8.3% before seasonal adjustment. The all-items less food and energy index rose 6.3% over the last 12 months.

The Dow Jones Industrial Average closed 1,276 points lower. The S&P 500 closed 177 points lower. The NASDAQ was down 632 points.

West Texas Intermediate Crude Oil futures on the CME closed 47¢ to 78¢ lower through the front six contracts.

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The latest World Agricultural Supply and Demand Estimates (WASDE) underscored elevated heifer and cow slaughter by increasing expected beef production this year to 26.33 billion lbs. That’s 70 million lbs. more than the previous month’s projection, with higher anticipated slaughter in the second half of the year offset slightly by lower expected third-quarter carcass weights.

“While increased cow and heifer slaughter totals are contributing to higher beef production this year, the longer-run implications are tighter supplies,” explains Josh Maples, Extension livestock economist at Mississippi State University, in a recent issue of Cattle Market Notes Weekly. “The higher slaughter totals imply fewer cows and fewer replacement heifers to produce calves. The current WASDE projection for 2023 beef production would be about 6% below the current 2022 projection. Price expectations are reflecting these tighter supplies.”

WASDE analysts estimated this year’s annual weighted average five-area direct fed steer price 70¢ higher at $142.80/cwt. Prices are forecast to be $143 in the third quarter and $147 in the fourth quarter. Next year’s projected average price was unchanged at $154.

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

Cattle Current Daily—09-13-22

Corn futures climbed 9¢ to 13¢ through July ’23 Monday, in response to the latest monthly World Agricultural Supply and Demand Estimates, which reduced expected production (see below).

Soybean futures closed 60¢ to 76¢ higher through Jly ‘23 and then mostly 32¢ to 40¢ higher.

Feeder Cattle futures closed an average of $1.32 lower (30¢ lower at the back to $2.45 lower toward the front).

Live Cattle edged an average of 19¢ higher, maintaining the previous session’s gains with some optimism for cash trade this week.

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

Last week, live prices were steady to $1 higher in the Southern Plains at $141/cwt., steady to $3 lower in Nebraska at $142-$143 and steady to $1 higher in the western Corn Belt at $143-$146. Dressed prices were $2-$4 lower in Nebraska at $226 and $2-$3 lower in the western Corn Belt at $225-$230.

The five-area direct fed steer price last week was $142.48 on a live basis, which was 40¢ less than the previous week. The average five-area direct steer price in the beef was $2.10 lower at $226.68.

Choice Boxed beef cutout value was $1.68 higher through Monday afternoon at $258.94/cwt. Select was $1.03 higher at $235.76/cwt.

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Major U.S. financial indices extended gains Monday on what some are terming a relief rally. 

The Dow Jones Industrial Average closed 229 points higher. The S&P 500 closed 43 points higher. The NASDAQ was up 154 points.

West Texas Intermediate Crude Oil futures on the CME closed 99¢ to $1.21 higher  higher through the front six contracts.

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The latest World Agricultural Supply and Demand Estimates (WASDE) provided price support for corn with the estimated season average farm price (SAFP) received by producers 10¢ higher than the previous month’s estimate at $6.75/bu.

WASDE reduced projected 2022-23 production 415 million bu. less at 13.9 billion bu. based on yields down 2.9 bu./acre at 172.5. Harvested area for grain was forecast at 80.8 million acres, down 1.0 million. Ending stocks were projected 169 million bu. less at 1.2 billion.

U.S. soybean production for 2022-23 was projected 152 million bu. less than the previous month at 4.4 billion bu., on yield forecast at 50.5 bu./acre, which was 1.4 bu. less than the previous estimate. Harvested area was also projected to be 0.6 million acres less.

Even so, the projected SAFP remained unchanged with soybeans at $14.35/bu., soybean meal at $390/short ton and soybean oil at 69.0¢/lb.

The outlook for wheat supply and use was unchanged. The expected SAFP declined 25¢ to $9.00/bu., which would be record high.

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

Cattle Current Daily—Sept. 12, 2022

Corn futures closed 11¢ to 24¢ higher through Sep ’23, then 6¢ to 8¢ higher on expectations Monday’s USDA crop report will show a reduction in yields.

Soybean futures closed mostly 17¢ to 26¢ higher.

Feeder Cattle futures closed an average of 66¢ higher, helped along by strong cash demand.

Live Cattle futures closed an average of $1.00 higher, apparently with some speculation that cash prices will move higher next week, given ho-hum interest from packers the last couple of weeks.

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

Regionally, negotiated cash fed cattle prices last week were mainly steady to lower. Live prices were steady to $1 higher in the Southern Plains at $141/cwt., steady to $2 lower in Nebraska at $143 and steady in the western Corn Belt at $143-$145. Dressed prices were $2-$4 lower in Nebraska at $226. The previous week, dressed prices were $228-$232 in the western Corn Belt.

Choice Boxed beef cutout value was 75¢ lower at $257.26/cwt. Select was $1.31 lower at $243.73/cwt.

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Major U.S. financial indices closed higher on Friday.

The Dow Jones Industrial Average closed 377 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 250 points.

West Texas Intermediate Crude Oil futures on the CME closed $3.14 to $3.29 higher through the front six contracts.

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In a recent issue of Cattle Market Notes Weekly, Burdine also notes beef cow slaughter levels remain 14% higher year over year. It is significantly more in the Southern Plains and surrounding states.

David Anderson, Extension livestock economist with Texas A&M AgriLife Extension Service provided perspective in the early-September issue of In the Cattle Markets from the Livestock Marketing Information Center. He looked at federally inspected beef and dairy cow slaughter for region 6, which includes Texas, Oklahoma, Louisiana, Arkansas, and New Mexico. He also compared cow slaughter in the region this year to levels during the last major drought (2011-12) in Texas and parts of other states.

“Cow packing plants in region 6 have processed 668,000 beef cows this year, up 31% (or 157,000 head) from last year. They have processed 217,000 dairy cows this year, just slightly below last year,” Anderson explains. “The states in region 6 reported 8.4 million beef cows on January 1, 2022. Those states had 8.8 million beef cows on January 1, 2011. While cows may come into the region for slaughter, it’s likely that a larger proportion of the herd has been culled this year than in the last major drought.”

So far this year, Anderson says 8,000 more beef cows in region 6 have been slaughtered than in 2011; 164,900 head more than in 2012.

Recent rain and moderate temperatures across Texas could slow culling in the near term, according to Anderson.

“Watch national and regional beef cow culling over the next six weeks to better gauge the impact of these storms,” Anderson says. “Seasonally, the largest cow culling weeks of the year nationally occur in October and November. Rain and earlier heavy culling rates could pull back slaughter and boost prices.”

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

Cattle Current Daily—Sept. 9. 2022

Feeder Cattle futures edged an average of 36¢ higher Thursday, supported by weaker Corn futures that were mostly 2¢ lower.

Live Cattle futures closed mixed, from an average of 27¢ lower to an average of 8¢ higher with pressure from the steady to lower cash trade.

Live prices were steady in the Texas Panhandle and $1 higher in Kansas at $141/cwt. They were $1 lower in Nebraska at $142-$144 with dressed prices mostly $2-$4 lower at $226. Trade and demand were moderate in both regions, according to the Agricultural Marketing Service.

Trade was slow on light to moderate demand in the western Corn Belt. There were a few live trades at $143, but too few to trend. Last week, live prices were $143-$145 and dressed prices were $228-$232.

Choice Boxed beef cutout value was $3.33 lower Thursday afternoon at $258.01/cwt. Select was $1.47 lower at $236.04/cwt.

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Major U.S. financial indices extended gains Thursday for the second consecutive session, but trade was volatile as investors wrestle with inflation wonderments in tandem with economic growth. 

The Dow Jones Industrial Average closed 193 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 70 points.

West Texas Intermediate Crude Oil futures on the CME closed 84¢ to $1.60 higher through the front six contracts.

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U.S. beef exports topped $1 billion in July — for the sixth time this year — and posted the fifth-largest volume on record, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

July beef exports totaled 126,567 metric tons (mt), up 3% year-over-year. Export value increased 7% to $1.006 billion.

For the first seven months of the year, beef exports increased 6% from a year ago to 870,471 mt, valued at $7.2 billion (up 29%). Export value per head of fed slaughter is on a record pace at more than $475.00.

“Global demand for U.S. beef continues to be amazingly resilient, especially at the retail level,” said USMEF President and CEO Dan Halstrom. “Exports have also benefited from a partial rebound in the foodservice sector but this recovery is far from complete. Many markets are still gradually easing COVID restrictions, so we definitely see opportunities for further growth as restaurant traffic returns. Headwinds remain formidable, however, including further devaluation of key trading partner currencies.”

Japan was the pacesetter for July exports, but volumes also increased year over year to China/Hong Kong, the ASEAN region, Central America, the Caribbean and Colombia. July exports eased for South Korea and Taiwan, though both markets remain on a record pace in 2022.

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

Cattle Current Daily—Sept. 8, 2022

Cattle futures lost some steam Wednesday with the lack of cash direction and likely profit taking.

Feeder Cattle futures closed an average of $1.34 lower (70¢ lower at the back to $2.15 lower at the front).

Live Cattle futures closed an average of 59¢ lower.

Negotiated cash fed cattle trade continued at a standoff through Wednesday afternoon, but popular sentiment expected at least steady prices this week.

Last week, live prices were $140-$141/cwt. in the Southern Plains and $143-$145 in Nebraska and the western Corn Belt. Dressed prices were $228-$232.

Choice Boxed beef cutout value was 87¢ higher Wednesday afternoon at $261.34/cwt. Select was $1.79 lower at $237.51/cwt.

Corn futures weakened Wednesday — 4¢ to 6¢ lower through Jly ‘23 and then mostly 1¢ 3¢ lower — presumably due mostly to profit taking.

Soybean futures closed mostly 12¢ to 15¢ lower through Jly ‘23 and then mostly 5¢ lower, pressured by Crude Oil once again.

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Major U.S. financial indices rebounded Wednesday with support including lower bond yields on the day.

The Dow Jones Industrial Average closed 435 points higher. The S&P 500 closed 71 points higher. The NASDAQ was up 246 points.

West Texas Intermediate Crude Oil futures on the CME closed $4.38 to $4.94 lower through the front six contracts, pressured by global demand concerns.

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“It is becoming more apparent that the supply of calves is going to be very tight this fall,” says Kenny Burdine, Extension livestock marketing and management specialist at the University of Kentucky. “Given the continued reduction in the size of the beef cow herd, this was likely to be a smaller fall calf run had weather not been a challenge. But, when combining that with the drought implications, fundamentals are setting up for a seller’s market for feeder calves.”

In a recent issue of Cattle Market Notes Weekly, Burdine notes beef cow slaughter levels remain 14% higher year over year.

Similarly, in is weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University explains, “Typically, calf prices reach the seasonal low around October. However, calf prices have moved counter-seasonally higher this summer as part of a general trend of higher cattle prices. That trend is expected to continue and is reflected in Feeder Cattle futures prices … The futures prices show a roughly $14/cwt. uptrend in prices in the next year.”

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

Cattle Current Daily—Sept. 7, 2022

Stronger recent wholesale beef values helped lift Cattle futures Tuesday.

Choice Boxed beef cutout value was $1.05 higher through Tuesday afternoon at $260.47/cwt. Select was 72¢ higher at $239.30/cwt.

Live Cattle futures closed an average of 79¢ higher (50¢ higher at the front to $1.37 higher at the back).

Feeder Cattle futures closed an average of 56¢ higher (30¢ at the back to $1.15 higher).

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

Last week, live prices were $140-$141/cwt. in the Southern Plains and $143-$145 in Nebraska and the western Corn Belt. Dressed prices were $228-$232.

The five-area direct weighted average steer price last week was $1.91 lower on a live basis at $142.88. The average steer price in the beef was $4.10 lower at $228.78.

Corn futures gained Tuesday, mostly 8¢ to 11¢, perhaps with some positioning ahead of next Monday’s Crop Production report which could include changes to expected yield.

Soybean futures faded with lower outside markets and weak Crude Oil futures. They closed mostly 19¢ to 21¢ lower through Aug ‘23 and then mostly 13¢ 14¢ lower.

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Major U.S. financial indices weakened Tuesday amid more investor squeamishness over rising interest rates and the slowing global economy.

The Dow Jones Industrial Average closed 173 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 85 points.

West Texas Intermediate Crude Oil futures on the CME closed 1¢ to 37¢ higher through the front six contracts.

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Agricultural producer sentiment increased in August, according to the Purdue University/CME Group Ag Economy Barometer. The overall producer sentiment index rose 14 points to a reading of 117. It was driven by increases in both the Index of Current Conditions, which rose 9 points to 118 and the Index of Future Expectations, which climbed 16 points to 116.

“Producers in the August survey were less worried about their farm’s financial situation than in July, although they remain concerned about a possible cost/price squeeze,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The Farm Financial Performance Index improved 11 points to a reading of 99, indicating more producers expect better financial performance for their farms this year and next. Corn and soybean prices rallied from their July lows into mid-August which, along with expectations for good yields, helped explain some of the improved outlook.

At the same time, producer uncertainty continues regarding the future cost of items purchased both for operations and family usage. When asked about their biggest concerns for the next year, more than half (53%) of respondents chose higher input costs, followed by rising interest rates (14%), input availability (12%), and lower output prices (11%).

Approximately four out of 10 producers expect crop input prices in 2023 to be either unchanged or possibly decline by as much as 10%, compared to 2022. On the other hand, just over half of all producers expect input prices to rise from 1 to 20%.

In August, 9% of respondents said they have engaged in discussions with companies offering payments for carbon capture — the highest percentage of respondents since the question was first included in the survey. Of those who engaged in discussions, 75% said the payment rate per metric ton of carbon offered was less than $20 and just 1% said they have signed a carbon contract. Respondents who engaged in discussions and chose not to sign a contract were asked the minimum payment per acre they would accept to enroll their farm in a carbon capture program. Two-thirds of those respondents said the payment rate needed to be at least $30 per acre, suggesting that payment rates need to rise to encourage more participation in carbon capture programs.

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 August 15-19, after USDA released both the August Crop Production report and World Agricultural Supply and Demand Estimates.

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

Cattle Current Daily—Sept 5-6, 2022

Cattle futures extended gains Friday with support from higher wholesale beef prices and despite higher Corn futures.

Feeder Cattle futures closed an average of 61¢ higher (25¢ at the back to 75¢ higher).

Live Cattle futures closed an average of 92¢ higher (25¢ higher at the back to $1.75 higher at the front).

Choice Boxed beef cutout value was $1.35 higher Friday afternoon at $259.42/cwt. Select was $1.99 higher at $238.58/cwt.

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

For the week, live prices were $1 lower in the Southern Plains at $141/cwt., $2 lower in Nebraska at $143 and $4 lower in the western Corn Belt at $143-$144. Dressed prices were $4 lower in Nebraska at $228 and $2-$4 lower in the western Corn Belt at $228-$232.

Estimated year-to-date total cattle slaughter Sept. 2 was 22.7 million head, which was 282,000 head more (+1.3%) than the same time last year. Estimated year-to-date beef production was 18.74 billion lbs., which was 192.1 million lbs. more (+1.0%) than a year earlier.

Corn and Soybean futures bounced back Friday with support including positive export announcements.

Corn futures closed mostly 6¢ to 7¢ higher. Soybean futures closed mostly 21¢ to 25¢ higher through Aug. 23 and then mostly 14¢ higher.

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Major U.S. financial indices closed lower Friday after early support from the anticipated bullish jobs report.

Total non-farm employment increased by 315,000 in August, according to the U.S. Bureau of Labor Statistics. That was slightly less than estimates ahead of the report. The nation’s unemployment rate edged higher to 3.7%.

Average hourly earnings for all employees on private non-farm payrolls increased 10¢ in August to $32.36.

The Dow Jones Industrial Average closed 337 points lower. The S&P 500 closed 42 points lower. The NASDAQ was down 154 points.

West Texas Intermediate Crude Oil futures on the CME closed 16¢ to 26¢ higher through the front six contracts.

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Walmart and Sustainable Beef LLC announced last week that Walmart signed an agreement to acquire a minority stake in Sustainable Beef LLC, a rancher-owned company based in North Platte, Neb. Walmart’s equity investment is part of a broader strategic partnership to source top-quality Angus beef from Sustainable Beef LLC’s new beef processing facility, according to a Walmart news release.

“We set out on a journey two years ago to create a new beef processing plant to add some capacity to the industry and provide an opportunity for producers to integrate their business of raising quality cattle with the beef processing portion of the industry and do it in a sustainable manner, said David Briggs, CEO of Sustainable Beef LLC. “During this journey we found that Sustainable Beef and Walmart aligned on continuing to improve how we care for our animals and crops and provide consumers the positive experience of enjoying quality beef.”

Walmart’s investment will help Sustainable Beef LLC open their beef processing facility in North Platte, Neb. The facility is expected to break ground next month and open by late 2024, creating more than 800 new jobs. As part of the investment, Walmart will also have representation on Sustainable Beef’s board.

“At Walmart, we are dedicated to providing high-quality, affordable beef to our customers, and an investment in Sustainable Beef LLC will give us even more access to these products,” says Tyler Lehr, senior vice president of merchandising for deli services, meat and seafood, Walmart U.S. “We know Sustainable Beef LLC has a responsible approach to beef processing, one that includes creating long-term growth for cattle ranchers and family farmers. This investment provides greater visibility into the beef supply chain and complements Walmart’s regeneration commitment to improve grazing management.”

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

Cattle Current Daily—Sept. 2, 2022

Sharply lower Corn futures helped lift Feeder Cattle futures an average of $1.15 higher (70¢ to $1.37 higher).

Corn and Soybean futures continued lower Thursday as it appeared funds continued to liquidate positions on concerns about slowing demand. Corn futures closed mostly 11¢ to 12¢ lower. Soybean futures closed mostly 19¢ to 27¢ lower.

Live Cattle futures closed an average of 24¢ higher, except for unchanged to 17¢ lower in three contracts, despite the week’s softer cash market.

So far this week, live prices are $1 lower in the Southern Plains at $141, $2 lower in Nebraska at $143 and $4 lower in the western Corn Belt at $143-$144. Dressed prices are $4 lower in Nebraska at $228 and $2-$4 lower in the western Corn Belt at $228-$232.

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

Choice Boxed beef cutout value was 27¢ lower Thursday afternoon at $258.07/cwt. Select was $1.15 lower at $236.59/cwt.

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Major U.S. financial indices closed mixed Thursday with more optimism late in the session, perhaps tied to speculation about Friday’s employment report.

The Dow Jones Industrial Average closed 145 points higher. The S&P 500 closed 11 points higher. The NASDAQ was down 31 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.37 to $2.94 lower through the front six contracts.

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The recent Baseline Update for U.S. Agricultural Markets from the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri offers added perspective regarding potential cattle numbers and prices over the next five years.

FAPRI pegs the beef cow inventory at 29.3 million Jan. 1 of next year, which would be 800,000 fewer (-2.7%) year over year. FAPRI projects the inventory at 28.7 million head in 2024 and then 28.5 million head the next two years before rising to 28.7 million in 2027.

Forecast cattle prices increase during most of the next five years — all higher than this year.

FAPRI forecasts the weighted average five-area direct fed steer price this year at $142.35/cwt. For 2023 through 2027, projected prices are, respectively, $150.98, $156.53, $158.87, $159.39 and $157.81.

FAPRI estimates this year’s average price for feeder steers (600-650 lbs., Oklahoma City) to be $180.54. For 2023 through 2027, projected prices are, respectively, $197.54, $211.62, $219.03, $220.45 and $218.22.

Updated projections are based on information available in mid‐August 2022 this year.

Among other update highlights:

  • Drought conditions in important cow‐calf areas are causing producers to send animals to slaughter early, lifting beef production in the short term but leading to fewer cows and higher prices in the years to come.
  • Sharply higher feed and other input costs help keep projected total U.S. meat production nearly flat in 2022 and 2023. The last time meat production failed to grow in consecutive years was 2003 and 2004. Strong U.S. consumer demand for meat offsets a decline in exports.
  • Tight global supplies result in record prices for wheat and cotton and near‐record prices for corn and soybeans. For the 2022/23 marketing year, wheat prices are projected to exceed $9/bu., corn tops $6/bu. and soybean prices are more than $14/bu. 
  • Prices for fertilizer, fuel and many other farm inputs are also up sharply in 2022. For example, variable corn production expenses increase by an estimated $164 per acre in 2022. Projected input costs moderate in the years ahead but remain well above the 2021 level.
  • If better growing conditions result in trendline crop yields in 2023 and later years, crop prices could decline from current levels. In 2023/24, projected average corn prices drop to $5.22/bu., wheat falls to $7.11/bu. and soybean prices decline to $12.36/bu.
  • The CPI for food is projected to increase 9.0% in 2022. Food‐at‐home prices increase 10.6%, well above the increase in prices of food away‐from‐home for the first time since 2011.
  • The increase in the food CPI moderates to 2.3% in 2023, as commodity prices and food marketing costs decline. This still outpaces the 1.7% average annual increase from 2010‐2019.
By | September 1st, 2022|Daily Market Highlights|

Cattle Current Daily—Sept. 1, 2022

Sluggish cash trade with weaker undertones and recent significant declines in wholesale beef value pressured Cattle futures Wednesday.

Feeder Cattle futures closed an average of 40¢ lower, except for an average of 24¢ higher in the front two contracts.

Live Cattle futures closed an average of 77¢ lower (32¢ to $1.32 lower).

Negotiated cash fed cattle trade ranged from slow on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. Live sales on Tuesday were steady in Nebraska at $145/cwt.

Last week, live prices were $142 in the Southern Plains and $147-$148 in the western Corn Belt. Dressed prices were $232 in Nebraska and $232-$234 in the western Corn Belt.

Choice Boxed beef cutout value was $1.45 lower Wednesday afternoon at $258.34/cwt. Select was $1.94 lower at $237.74/cwt.

Corn futures continued to weaken Wednesday, closing 2¢ to 6¢ lower with pressure including concerns about global economic growth. Soybean futures closed mostly 5¢ to 9¢ lower.

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Major U.S. financial indices and Crude Oil futures closed lower again Wednesday with resurgent concerns about possible recession as central banks boost interest rates to combat inflation.

The Dow Jones Industrial Average closed 280 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 66 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.61 to $2.15 lower through the front six contracts.

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Retail food prices increased 8.9% in the first seven months of this year, higher than the rate over the same period in 2021 (1.9%) and 2020 (3.1%), according to USDA’s Economic Research Service (ERS). The 20-year historical average for the same months from 2001 to 2020 was 1.7%.

All food categories saw price increases of at least 4% in the first seven months of this year.

“Prices for three food categories increased by more than 10%: eggs (20.9%), fats and oils (13.4%), and poultry (11.8%),” ERS analysts explain. “Inflationary pressures differ by food category. For example, eggs and poultry prices are currently much higher than their historical average in part because of an outbreak of highly pathogenic avian influenza (HPAI). Fresh vegetables historically experienced higher midyear average price increases compared to most categories, but prices for fresh vegetables increased the least of all categories over the first seven months of both 2022 (4.9%) and 2021 (0.4%).”

ERS projects food-at-home prices will increase between 10% and 11% in 2022.

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

Cattle Current Daily—Aug. 31, 2022

Corn futures eased mostly 3¢ to 4¢ lower, providing some lift to Cattle futures.

Feeder Cattle futures closed an average of $1.26 higher (75¢ at the back to $2.25 in spot Sep). Live Cattle futures closed an average of 67¢ higher.

Negotiated cash fed cattle trade ranged from slow on light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few early live sales in Nebraska at $145/cwt.

Last week, live prices were $142 in the Southern Plains, $145 in Nebraska and $147-$148 in the western Corn Belt. Dressed prices were $232 in Nebraska and $232-$234 in the western Corn Belt.

Choice Boxed beef cutout value was $3.25 lower Tuesday afternoon at $259.79/cwt. Select was $3.07 lower at $239.68/cwt.

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Major U.S. financial indices continued lower with carryover pressure from more interest rate hikes on the horizon here and abroad. 

The Dow Jones Industrial Average closed 308 points lower. The S&P 500 closed 44 points lower. The NASDAQ was down 134 points.

West Texas Intermediate Crude Oil futures on the CME closed $3.65 to $5.37 lower through the front six contracts. Pressure appeared to include a new COVID outbreak reported in China. 

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“The global economic outlook for 2022 and 2023 is growing more uncertain due to the continued materialization of downside risks. Previous growth projections are moderated due to ongoing trade disruptions, above-target inflation rates, and rising energy prices,” says analysts with USDA’s Economic Research Service (ERS), in the latest quarterly Outlook for U.S. Agricultural Trade.

ERS analysts say global real gross domestic product (GDP) is projected to increase by 3.2% this year, down 0.4% from the previous forecast. Global GDP is projected to increase by 2.9% in 2023.

“The Russian invasion of Ukraine is ongoing and continues to impose far-reaching economic disruptions. The disruptions have thus far led to elevated energy prices that continue to disproportionately affect the European market,” ERS analysts explain. “Supply chain complications have slowly abated, but spot shipping rates remain elevated compared with their pre-pandemic levels. Central banks around the world, including the Federal Reserve, have begun monetary tightening cycles to combat rising inflation rates. The tightening of monetary policy counters inflation but also typically presents short-term barriers to economic growth.”

Against this economic backdrop, U.S. agricultural exports in fiscal year (FY) 2023 are projected at $193.5 billion, down $2.5 billion from the revised forecast for FY 2022.

“This decrease is primarily driven by lower exports of cotton, beef, and sorghum that are partially offset by higher exports of soybeans and horticultural products,” say ERS analysts.

Beef exports are forecast down $1.1 billion to $9.8 billion as higher prices fail to offset lower volumes driven by tight U.S. supplies.

“Evidence of declining consumer confidence in the face of slowing economies and rising inflation is building. In general, beef markets are resilient to changes in economic conditions. However, we see movement within supply channels and price points that tend to favor cheaper options, such as ground beef and quick-service restaurants, over more expensive cuts and consumption channels,” says RaboBank analysts, in the third-quarter Beef Quarterly from RaboResearch.

“With economic conditions slowing, we expect consumers to favor lower-priced beef cuts in second-half 2022, which is positive for trimmings demand. If the US cow kill slows, there is pricing upside potential for lean trimmings…” explain RaboBank analysts.

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

Cattle Current Daily—Aug. 30, 2022

Corn futures continued higher Monday with carryover support from last week’s significantly lower yield estimates by the Pro Farmer Tour, compared to USDA’s most recent forecast.

Corn futures closed 11¢ to 18¢ higher through Sep ‘23 and then mostly 4¢ to 7¢ higher.

Another day of rising Corn futures took Feeder Cattle future down another peg, an average of $2.05 lower (70¢ lower at the back to $2.32 lower).

Steady to higher beef values helped Live Cattle futures trickle an average of 22¢ lower., except for 75¢ higher in waning spot Aug.

Choice Boxed beef cutout value was 28¢ higher Monday afternoon at $263.04/cwt. Select was $3.99 higher at $242.75/cwt.

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

Last week, live prices were steady to $1 higher in the Southern Plains at $142/cwt., $1 to $3.50 lower in Nebraska at $145 and $1-$2 lower in the western Corn Belt at $147-$148. Dressed prices were $2 lower in Nebraska at $232 and steady to $2 lower in the western Corn Belt at $232-$234.

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Major U.S. financial indices extended the previous session’s steep decline, which was fueled by hawkish comments from Federal Reserve Chair Jerome Powell, regarding further interest rate hikes.

The Dow Jones Industrial Average closed 184 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 127 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.75 to $3.95 higher through the front six contracts, spurred on by supply concerns related to geopolitical tensions.

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Recent rains improved the opportunity to plant winter wheat in a few parts of the Southern Plains but more is needed for broader opportunity.

In Oklahoma, for instance, there are a few areas with sufficient topsoil moisture to support winter wheat planting soon, but just a few areas, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. He explains wheat for forage or for dual-purpose grazing and grain is typically planted in September.

“If wheat pasture does become available, it may be used somewhat differently than usual this fall and winter,” Peel says. “Given the limited hay supply, proportionally more wheat pasture is likely to be used for cow herds than for stocker production. Even if there is wheat pasture, stocker demand may be somewhat lighter than usual this year. However, the fall run of calves may also be smaller than usual. In the past seven weeks, the Oklahoma combined auction total for feeder cattle has been up 13.6% year over year as feeder cattle have been marketed earlier than usual. Additionally, the auction volume of cull cows has been up 108.1% year over year in the same period as producers continue to adjust cow herds to match the limited forage supplies available for fall and winter.” 

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

Cattle Current Daily—Aug. 29, 2022

Corn futures surged mostly 9¢ to 13¢ higher Friday, fueled by significantly lower yield estimates by the Pro Farmer Tour, compared to USDA’s most recent forecast. Soybean futures closed mostly 20¢ to 30¢ higher.

Resurgent Corn futures pressured Feeder Cattle an average of $1.63 lower, except for 67¢ higher in the newly minted back contract.

Generally softer cash trade pressured Live Cattle futures an average of 55¢ lower.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on light demand through Friday afternoon, according to the Agricultural Marketing Service. There were a few live trades in the western Corn Belt at $147/cwt., but too few to trend.

For the week, live prices were steady to $1 higher in the Southern Plains at $142/cwt., generally steady to $1 lower in Nebraska at $145-$148 and $2 lower in the western Corn Belt at $146-$148. Dressed prices in Nebraska were $1-$2 lower at $232-$233. Dressed prices in the western Corn Belt the previous week were $234.

Through Thursday, the five-area direct average fed steer price was $2.22 lower on a live basis at $144.54. The average steer price in the beef was $1.15 lower at $232.88.

Choice Boxed beef cutout value was 78¢ lower Friday afternoon at $262.76/cwt. Select was $1.22 higher at $238.76/cwt.

Total estimated cattle slaughter last week was 17,000 head more than the previous week at 678,000 head. Year-to-date estimated total cattle slaughter of 22.1 million head was 262,000 head more (+1.2%) than the same time last year. Estimated year-to-date beef production of 18.2 billion lbs. was 175.3 million lbs. more (+0.97%) than the prior year.

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Major U.S. financial indices plunged Friday, apparently in reaction to hawkish comments from Federal Reserve Chair Jerome Powell, regarding further interest rate hikes.

“Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance,” Powell explained at the closely watched economic policy symposium in Jackson Hole, WY. “Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”

The Dow Jones Industrial Average closed 1,008 points lower. The S&P 500 closed 141 points lower. The NASDAQ was down 497 points.

West Texas Intermediate Crude Oil futures on the CME closed mixed, from 34¢ lower to 54¢ higher through the front six contracts.

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Total pounds of beef in freezers July 31 were 1% less than the previous month but 27% more year over year, according to USDA’s latest Cold Storage report. The 510.8 million lbs. of beef in cold storage were record high for the date.

“To put this in perspective, this is less than one week of federally inspected beef production,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, the quantity of beef in cold storage in July 2022 exceeded the previous July’s quantity by 110 million lbs., and the quantity of beef in cold storage this year has not experienced its typical second-quarter decline. This simply means the marketplace started the second half of the year with more beef in cold storage than is typical and that quantity is expected to continue increasing through the fourth quarter of the year.”

If heifer and cow slaughter remain elevated, Griffith explains beef in cold storage could exceed 600 million lbs. by the end of the year. “This is not necessarily a bad thing as beef supplies will begin to tighten the second half of 2023,” Griffith says.

Frozen pork supplies were 2% less than the prior month but 20% higher year over year.

Total red meat supplies in freezers were 1% less than the previous month but 23% more than the same time last year.

Total poultry supplies on cold storage were 5% more than the previous month and 6% more than the prior year.

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

Cattle Current Daily—Aug. 26, 2022

Feeder Cattle futures closed an average of 95¢ higher Thursday, strengthened by lower Corn futures.

Grain futures softened with likely profit taking. Corn futures closed mostly 4¢ to 8¢ lower. Soybean futures closed mostly 16¢ to 25¢ lower.

Live Cattle futures closed an average of 19¢ higher, except for an average of 15¢ lower in the front three contracts. 

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

So far this week, live prices are steady to $1 higher in the Southern Plains at $142/cwt., generally steady to $1 lower in Nebraska at $145-$148 and $2 lower in the western Corn Belt at $146-$148. Dressed prices in Nebraska are $1-$2 lower at $232-$233. Dressed prices in the western Corn Belt last week were $234.

Choice Boxed beef cutout value was 71¢ higher Thursday afternoon at $263.54/cwt. Select was 8¢ lower at $237.54/cwt.

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Major U.S. financial indices closed higher Thursday. Support included fewer weekly initial unemployment insurance claims than expected, as well as a slight improvement to previous-quarter GDP.

Initial unemployment insurance claims were 2,000 less week to week at 243,000 for the week ending Aug. 20, according to the U.S. Department of Labor.

As for domestic GDP, the U.S. Bureau of Economic Analysis revised its second quarter estimate to a decline of 0.6%, versus a decline of 0.9% in the initial estimate.

The Dow Jones Industrial Average closed 322 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 207 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.98 to $2.37 lower through the front six contracts.

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There were 34.9 million beef cows in the U.S. and Canada July 1, according to the semiannual United States and Canadian Cattle report from USDA’s National Agricultural Statistics Service (NASS). That was 812,000 head fewer (-2.3%) than a year earlier. The beef cow inventory was 750,000 head fewer (-2.4%) in the U.S. at 30.3 million head and 62,500 head fewer (-1.6%) in Canada at 3.7 million head.

Beef heifers retained for replacement in Canada of 622,100 head were 49,500 fewer (-7.4%) less than a year earlier. In the U.S., there were 150,000 head fewer (-3.5%) fewer beef replacements year over year at 4.1 million head.

Total cattle inventory in Canada of 12.3 million head was 355,000 head fewer (-2.8%) than a year earlier. Total U.S. inventory of 98.8 million head was 2.0 million head fewer (-2.0%). The combined total cattle inventory in the U.S. and Canada was 111.1 million head, which was 2.3 million head less (-2.1%) year over year.

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

Cattle Current Daily-Aug. 25, 2022

Cattle futures edged lower Wednesday, with technical pressure and the week’s higher grain futures prices.

Live Cattle futures closed an average of 38¢ lower.

Feeder Cattle futures closed an average of 51¢ lower, except for unchanged to an average of 45¢ higher up front.

Negotiated cash fed cattle trade ranged from mostly inactive on light demand to slow on moderate demand with too few transactions to trend in any region, according to the Agricultural Marketing Service. There were a few live sales in Nebraska at $145/cwt. and a few in the western Corn Belt at $147. There were also some early dressed trades in Nebraska at $232-$233.

On Tuesday, live sales in the Southern Plains were steady to $1 higher at $142.

Last week, live prices were $146.00-$148.50 in Nebraska and $148-$150 in the western Corn Belt. Dressed prices were $234.

Choice Boxed beef cutout value was 3¢ higher Wednesday afternoon at $262.83/cwt. Select was $1.18 lower at $237.62/cwt.

Grain futures softened Wednesday with likely profit taking from the recent price surge.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 7¢ to 11¢ lower.

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Major U.S. financial indices shifted gears and closed a touch higher Wednesday with support including higher energy prices. 

The Dow Jones Industrial Average closed 59 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 50 points.

West Texas Intermediate Crude Oil futures on the CME closed 80¢ to $1.528 higher through the front six contracts.

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While inflation is more moderate for food away-from-home (7.6% versus a year ago) compared to food-at-home (13.1% versus a year ago), the typical away-from-home eating occasion still costs 3.4 times more than in-home food sourced from retail, according to analysts with the NPD Group (NPD) and Information Resources, Inc. To offset rising food costs, they say consumers are bargain hunting when grocery shopping, eating more meals at home and cutting back on restaurant visits.

“With inflation hitting 8.5% in July, it’s no surprise that consumers are trading down to lower-priced options and opting for more value, especially when dining out,” says Krishnakumar (KK) Davey, president of CPG and Retail Thought Leadership for IRI and NPD. “While the pandemic and recent inflationary pressures shifted demand, restaurants and foodservice outlets offering value, convenience and at-home indulgence are top of mind for consumers and will continue to grow.”

“Even with the impact of elevated grocery prices, dining out is still much more expensive than eating at home,” explains David Portalatin, senior vice president and industry advisor for Food and Foodservice for The NPD Group. “As we head into 2023, restaurant recovery will be slow and steady, as traffic begins to return to pre-pandemic levels. Current demand suggests that culinary trends are shifting to incorporate more bold flavors inspired by global and regional influences.”

The nearly $1.5 trillion at-home and away-from-home food market is forecast to grow around 8% in 2022, with at-home food (8.7% sales growth versus a year ago) outpacing away-from-home (6% versus a year ago), according to inaugural IRI and NPD inaugural joint research. It offers the first-ever comprehensive view of the Complete Food™ market, examining how consumers buy and consume food at home, use restaurants and foodservice outlets and uncovers new insights about consumers’ trade-offs to save money and splurge in the current inflationary environment. The research forecasts the Complete Food market to grow by 3-5% in 2023.

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

Cattle Current Daily—Aug. 24, 2022

The grain complex roared ahead Tuesday, fueled by mounting concerns about yields based on recent crop ratings and private-company assessments (see Crop Progress below).

Corn futures closed 22¢ to 26¢ higher through Jly ‘23 and then mostly 13¢ to 16¢ higher.

Soybean futures closed mostly 17¢ to 25¢ higher.

Feeder Cattle futures sagged beneath the weight of sharply higher grain futures, closing an average of $1.71 lower (50¢ to $2.25 lower).

Live Cattle futures edged an average of 26¢ higher, except for unchanged in two contracts, supported by recently stronger cash prices and the aggressive packing pace.

Choice Boxed beef cutout value was $1.72 lower Tuesday afternoon at $262.80/cwt. Select was 44¢ higher at $238.80/cwt.

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

There were some live sales in the Southern Plains steady to $1 higher at $142/cwt. There were a few live trades in the western Corn Belt at $148 but too few to trend.

Last week, live prices were $146.00-$148.50 in Nebraska and $148-$150 in the western Corn Belt. Dressed prices were $234.

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Major U.S. financial indices extended losses Tuesday but firmed as investors sift through concerns about global economic growth and inflation. 

The Dow Jones Industrial Average closed 154 points lower. The S&P 500 closed 9 points lower. The NASDAQ was fractionally lower.

West Texas Intermediate Crude Oil futures on the CME closed $2.56 to $3.38 higher through the front six contracts. Support included a slightly weaker dollar and suggestions the previous day that OPEC might cut production.

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National pasture and range conditions the week ending Aug. 21 continued to deteriorate compared to the prior year, according to the latest USDA Crop Progress report.

23% of pasture and range was rated as Good (20%) or Excellent (3%), which was 2% less than a week earlier and 6% less than a year earlier. Conversely, 49% was rated as Poor (24%) or Very Poor (25%), which was 2% more than a week earlier and 6% more than a year earlier.

97% of corn was silking, which was 3% less than last year and 2% less than the five-year average. 75% was in the dough stage, compared to 83% last year and 79% for average. 31% was dented, which was 7% less than last year and 4% less than the five-year average. 4% was mature, the same as last year and the average. 55% was rated as Good (43%) or Excellent (12%), which was 2% less than the prior week and 5% less than a year earlier. 18% was rated Poor (11%) or Very Poor (7%) versus 16% a week earlier and 14% a year earlier.

97% of soybeans were blooming, which was the same as last and the average. 84% were setting pods, compared to 87% last year and 86% for average. 57% were rated as Good (47%) or Excellent (10%) which was 1% less than the previous week but 1% more than the prior year. 13% were rated Poor (9%) or Very Poor (4%), which was 2% more than the previous week but 3% less than the prior year.

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

Cattle Current Daily—Aug. 23, 2022

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

Last week, live prices were $141-$142/cwt. in the Southern Plains, $146.00-$148.50 in Nebraska and $148-$150 in the western Corn Belt. Dressed prices were $234.

The five-area direct weighted average fed steer price last week was $146.88/cwt. on a live basis, which was $2.49 more than the previous week. The weighted average price in the beef was $4.30 higher at $234.23.

Choice Boxed beef cutout value was 24¢ higher Monday afternoon at $264.52/cwt. Select was 42¢ higher at $238.36/cwt.

Apparently, bullish supply fundamentals were enough to help Cattle futures mainly fade the bearish Cattle on Feed report, especially given higher Corn futures prices.

Live Cattle futures closed mixed, from an average of 42¢ lower to an average of 22¢ higher.

Feeder Cattle futures closed an average of 16¢ lower, except for unchanged to an average of 20¢ higher in the back two contracts.

Grain and Soybean futures gained more traction with concerns about drought in China.

Corn futures closed mostly 5¢ to 7¢ higher.

Soybean futures closed mostly 28¢ to 31¢ higher.

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Major U.S. financial indices closed sharply lower Monday amid growing concerns about global economic growth and how more interest rate hikes will impact domestic growth.

The Dow Jones Industrial Average closed 643 points lower. The S&P 500 closed 90 points lower. The NASDAQ was down 323 points.

West Texas Intermediate Crude Oil futures on the CME closed 8¢ to 54¢ lower through the front six contracts.

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Higher-trending feeder cattle prices could significantly reduce or offset the typical seasonal decline in calf prices this fall, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel notes 750 lb. steers at Oklahoma auctions reached their highest levels for the year in mid-August, while 500 lb. steer calves revisited the highs of mid-March. Supplies will continue to tighten, given cow liquidation longer term and increased lightweight feedlot placements in the near term.

“Increased lightweight placements, especially since May, likely includes fall calves marketed right off the cow, early-weaned spring calves and summer stockers marketed ahead of schedule,” Peel says. “Pasture and range conditions are currently rated at 52% poor/very poor, the worst level for this time of year since 2012. It appears that the supply of calves and feeder cattle available this fall will likely be significantly smaller because many cattle have already moved to market.”

For perspective, Peel explains feedlot placements the past six months of 10.91 million head were 0.8% more than the same time in 2021.

“In those six months, placements weighing under 700 lbs. were up 3.5% year over year, while placements over 700 lbs. were down 0.7%. All of this suggests that feedlots are somewhat back-loaded with relatively tighter numbers finishing in the August – October period and recent lightweight placements finishing in November and later,” Peel says.

As noted in the last issue of Cattle Current, placements in July of 1.77 million head were 32,000 head more (+1.8%) than a year earlier and about 3% more than expectations, according to the monthly Cattle on Feed report.

Cattle on feed Aug. 1 of 11.22 million head were 150,000 head more year over year (+1.4%), which was 0.6% more than expectations ahead of the report. Inventory was the second largest for the date since the data series began in 1996.

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

Cattle Current Daily—Aug. 22, 2022

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

For the week, live prices were $2 higher in the Southern Plains at $142/cwt., 50¢ to $1 higher in Nebraska at $145.00-$148.50 and $2 higher in the western Corn Belt at $148-$150. Dressed prices were $4-$5 higher at $234.

Choice Boxed beef cutout value was 11¢ lower Friday afternoon at $264.28/cwt. Select was 47¢ higher at $237.94/cwt.

Estimated total cattle slaughter last week of 661,000 head was 14,000 head more than the previous week. Estimated total year-to-date total cattle slaughter of 21.4 million head was 239,000 head more (+1.1%) year over year. Estimated year-to-date beef production of 17.65 billion lbs. was 156.1 million lbs. (+0.9%) more.

Stronger cash prices helped Live Cattle edge an average of 22¢ higher on Friday, except for an average of 6¢ lower in two contracts. Week to week they closed an average of 49¢ higher (17¢ to $1.37 higher), except for an average of 7¢ lower in two contracts.

Resurgent Corn futures prices and likely defensiveness ahead of the Cattle on Feed report pressured Feeder Cattle futures an average of 46¢ lower on Friday, except for 12¢ higher in the back contract. Week to week, they closed an average of $1.66 higher (77¢ to $2.32 higher).

Starting the week, traders will likely try to balance recent rains and improved fall grazing prospects in the Southern Plains with Friday’s bearish Cattle on Feed report (see below).

Grain and Soybean futures continued to gain Friday but remained lower week to week with concerns about economic growth in China, as well as the stronger U.S. Dollar.

Corn futures closed 6¢ to 8¢ higher through Sep ‘23 on Friday and then 1¢ to 4¢ higher. They closed an average of 16’6¢ lower through the front six contracts week to week on Friday.

Soybean futures closed mixed, mostly 1¢ lower to 1¢ higher on Friday. Week to week they closed an average of 45’7¢ lower through the front six contracts.

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Major U.S. financial indices closed lower Friday. Pressure appeared to be heightened concern over future interest rate hikes and profit taking ahead of the weekend.

The Dow Jones Industrial Average closed 292 points lower. The S&P 500 closed 55 points lower. The NASDAQ was down 260 points.

West Texas Intermediate Crude Oil futures on the CME closed 27¢ to 56¢ higher through the through the front six contracts.

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Markets will likely view Friday’s monthly Cattle on Feed report as bearish, with July placements and cattle on feed Aug. 1 (feedlots with 1,000 head or more capacity) higher than pre-report expectations.

Placements in July of 1.77 million head were 32,000 head more (+1.8%) than a year earlier and about 3% more than expectations.

In terms of placements, 23.2% went on feed weighing less than 600 lbs., 16% weighing 600-699 lbs., 23% weighing 700-799 lbs., 23% weighing 800-899 lbs., 11% weighing 900-999 lbs and 4% weighing 1,000 lbs. or more.

Marketings in July of 1.82 million head were 74,000 head fewer (-4.0%) less than last year, which was in line with estimates ahead of the report.

Cattle on feed Aug. 1 of 11.22 million head were 150,000 head more year over year (+1.4%), which was 0.6% more than expectations ahead of the report. Inventory was the second largest for the date since the data series began in 1996.

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

Cattle Current Daily—Aug. 19, 2022

Negotiated cash fed cattle prices continued $2 higher Thursday at $142/cwt. in the Southern Plains and $148-$150 in the western Corn Belt. That was on slow trade and moderate demand, according to the Agricultural Marketing Service. There were a few dressed trades in the western Corn Belt $5 higher than last week at $234, but too few to trend.

Trade was also slow on moderate demand in Nebraska. There were some early live sales at $146-$148 and a few in the beef at $234, but too few to trend. Last week, prices there were at $144-$148 and $229-$230.

Choice Boxed beef cutout value was 5¢ higher Thursday afternoon at $264.39/cwt. Select was 42¢ lower at $237.47/cwt.

Cattle futures softened Thursday amid over-bought conditions and likely positioning ahead of Friday’s Cattle on Feed report. 

Live Cattle futures closed an average of 58¢ lower with most pressure in front contracts.

Feeder Cattle futures closed an average of $1.10 lower, from 10¢ lower at the back to $1.87 lower.

Grain and Soybean futures continued to gain Thursday, supported by international weather concerns for corn and higher oil prices for soybeans.

Corn futures closed mostly 3¢ to 8¢ higher.

Soybean futures closed mostly 12¢ to 16¢ higher.

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Major U.S. financial indices closed marginally higher Thursday.    

The Dow Jones Industrial Average closed 18 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 27 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.95 to $2.42 higher through the through the front six contracts.

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USDA’s Economic Research Service (ERS) increased projected feeder steer prices (750-800 lbs., Oklahoma City) based on recent price strength, in the latest monthly Livestock, Dairy and Poultry Outlook.

Based on anticipated firm feedlot demand in second-half 2022 and current price data, the feeder steer price was forecast $3 higher in the third quarter at $171 and $2 higher in the fourth quarter at $173 for an annual average of $164.60. Prices are forecast at $169 and $186 in the first and second quarters of next year, respectively, with an annual average of $199.25.

ERS analysts point out the Oklahoma City feeder steer price averaged $169.26/cwt. in July, up more than $16 from last year.

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

Cattle Current Daily—Aug. 18, 2022

Cattle futures extended gains Wednesday, buoyed by strong cash feeder cattle prices and the growing prospects of higher money for cash fed cattle this week.

Feeder Cattle futures closed an average of $1.60 higher. Live Cattle futures edged an average of 36¢ higher.

Negotiated cash fed cattle trade was limited on light demand through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some live trades in the Southern Plains at $141/cwt. and a few in the western Corn Belt at $147.

Last week, live prices were $140/cwt. in the Southern Plains, $144-$148 in Nebraska and $146-$148 in the western Corn Belt. Dressed prices were $229-$230.

On Wednesday, slaughter steers and heifers sold steady to $2 higher at Sioux Falls Regional in South Dakota. At Tama Livestock in Iowa, Choice slaughter steers and heifers sold $3.50-$4.50 higher amid a light offering.

Choice Boxed beef cutout value was $1.10 lower Wednesday afternoon at $264.34/cwt. Select was $1.23 lower at $237.89/cwt.

Grain and Soybean futures firmed Wednesday.

Corn futures closed fractionally higher to 4¢ higher through Jly ‘23 and then 2¢ to 3¢ lower.

Soybean futures closed mostly 6¢ to 9¢ higher through Aug. ’23 and then mostly 1¢ higher.

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Major U.S. financial indices closed lower Wednesday, as investors took a breather from the recent rally. News for the day included mixed quarterly earnings reports for retailers.    

The Dow Jones Industrial Average closed 171 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 164 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.24 to $1.58 higher through the through the front six contracts.

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Plenty of eyes will focus on July feedlot placements in the monthly Cattle on Feed report due out Friday.

“So far, 2022 feedlot placements are averaging 0.4% above 2021. However, when you remove February (Feb. 2021 winter storm), 2022 feedlot placements are averaging 1.5% below 2021,” says James Mitchell, livestock economist at the University of Arkansas, in the latest Cattle Market Notes Weekly. “In June, placements were 2.5% lower year over year. July 1 cattle on feed totaled 11.3 million head or 0.4% above July 1, 2021. Drought-induced placements in July could hold Aug. 1 cattle on feed numbers close to or slightly above August 2021 feedlot inventories.”

Seasonally speaking, Mitchell explains larger placements of feeder cattle weighing more than 700 lbs. usually come in August and September. He notes national feeder and stocker cattle auction receipts in July of 529,000 head were 1.2% less year over year.

“While total auction receipts are lower for July, the breakout by weight group suggests that we are seeing cattle come off summer pasture earlier than normal,” Mitchell says. “Last month 63% of feeder cattle auction receipts were for cattle weighing over 600 lbs. Cattle weighing over 600 lbs. accounted for 58% of auction receipts in July 2021. Auction receipt totals and these percentages imply that we sold 25,421 more head of heavy feeder cattle last month than in July 2021…The longer we delay the decline in feedlot inventories, the more significant it will become.”

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

Cattle Current Daily—Aug. 17, 2022

Cattle futures rallied Tuesday, helped along by another day of lower Corn futures, recently stronger wholesale beef prices and improving supply fundamentals.

Live Cattle futures closed an average of $1.13 higher (60¢ higher at the back to $1.87 higher toward the front).

Feeder Cattle futures closed an average of $2.03 higher ($1.60 to $2.47 higher).

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

Last week, live prices were $140/cwt. In the Southern Plains, $144-$148 in Nebraska and $146-$148 in the western Corn Belt. Dressed prices were $229-$230.

Choice Boxed beef cutout value was 98¢ higher Tuesday afternoon at $265.44/cwt. Select was 60¢ lower at $239.12/cwt.

Grain and Soybean futures continued lower Tuesday with continued pressure from uncertain Chinese demand, given slower economic growth in that nation and heightened tension with the U.S.

Corn futures closed 14¢ to 18¢ lower through Sep ‘23 and then 6¢ to 12¢ lower.

Soybean futures closed 22¢ to 39¢ lower through Aug ‘23 and then 10¢ to 17¢ lower.

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Major U.S. financial indices closed mainly higher Tuesday, led by retail stocks and positive quarterly results from the likes of Walmart and Home Depot.    

The Dow Jones Industrial Average closed 239 points higher. The S&P 500 closed 8 points higher. The NASDAQ was down 25 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.17 to $2.88 lower through the through the front six contracts.

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If beef prices are strong and beef supplies are reasonably abundant, as they are currently, then the reason is demand, says Stephen Koontz, agricultural economist at Colorado State University. That’s how he responds to the number of inquiries he receives about why wholesale beef prices remain elevated.

“From a market fundamentals perspective, monthly beef production is strong, running better than 1% above the year prior. The total volume for 2022 will be slightly smaller than 2021 and comparable to 2019. These are large volumes of beef,” Koontz explains, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center. “Forecasts for the third and fourth quarters reveal drops in production but current weekly slaughter remains strong. Those declines have not yet materialized. Domestic consumption was likely flat in the second quarter but was large in the first. Again, the third and fourth quarters are forecast to be lower especially if strong beef exports persist. Current monthly beef net exports for 2022 are on path to be record large.”

Koontz points out retail beef prices remain higher than many expected following the COVID price spike, and retail margins remain strong.

“Fed cattle are trading in the high $144-$148/cwt. with some trades reported at $150. These are levels not seen since 2015,” Koontz says. “And cash prices for feeder animals across a number of regional markets – Oklahoma City, Montana, and Colorado – in the week of August 12 were also at levels not seen since 2015.” As an example, he mentions the $180.60/cwt. price for 700-750 lb. Medium and Large Number 1 feeder steers at Oklahoma City.

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

Cattle Current Daily—Aug. 16, 2022

Cattle futures weakened Monday, apparently under technical pressure.

Live Cattle futures closed an average of 70¢ lower (25¢ to $1.07 lower). Feeder Cattle futures closed an average of 58¢ lower (37¢ to 87¢ lower), except for 30¢ higher in spot Aug.

That was despite a down day in the grain complex, where prices were challenged by the stronger dollar, weaker oil prices, positive weather and slowing economic growth in China.

Corn futures closed 12¢ to 14¢ lower through Jly ‘23 and then mostly unchanged to 3¢ lower.

Soybean futures closed 34¢ to 42¢ lower through Jly ‘23 and then mostly 20¢ to 23¢ lower.

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

Last week, live prices were $140/cwt. in the Southern Plains, $144-$148 in Nebraska and $146-$148 in the western Corn Belt. Dressed prices were $229-$230.

Choice Boxed beef cutout value was $1.09 higher Monday afternoon at $264.46/cwt. Select was 13¢ higher at $239.72/cwt.

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Major U.S. financial indices closed higher Monday, extending gains despite weaker oil and energy.  

The Dow Jones Industrial Average closed 151 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 80 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.98 to $2.68 lower through the through the front six contracts.

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Reduced hay stocks and production help illustrate the degree of herd liquidation this year, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Based on USDA’s recent Crop Production report, Peel explains total alfalfa hay production this year was forecast at 49.1 million tons, which would be 0.3% less year over year and 13.6% less than the 10-year average for 2011-2020. All other hay production for this year was forecast at 67.7 million tons, down 4.6% year over year and down 7.4% from the 10-year average. So, Peel says, total U.S. hay production for 2022 was forecast at 116.8 million tons, down 2.9% from last year and down 10.1% from the 10-year average. He points out alfalfa and other hay prices are forecast at record levels this year.

At the same time, Peel explains last year’s drought led to reduced hay stocks this year.

“May 1 hay stocks were down 6.9% year over year but were down 16.9% from the 2011-2020 average,” according to Peel. “The total hay supply for the 2022-2023 hay crop year (May-April) is the sum of May 1 (beginning) hay stocks and 2022 hay production. The total hay supply is projected to be down 3.4% year over year and is down 11.0% from the 10-year average.”

Next consider the fact that Eight of the top-10 ten hay states are also among the top-10 states for beef cows: Texas, Oklahoma, Missouri, Nebraska, South Dakota, Kansas, Montana and Kentucky.

“These eight states had 15.7 million beef cows on Jan. 1, 2022. The other two, California and Idaho, are the number one and three dairy cow states, respectively,” Peel says. “With the growing season winding down amid continuing drought, the 2022 hay supply data illustrate why so much herd liquidation has occurred this year. It also speaks to the continuing challenges that cattle producers will face to get through the winter before the 2023 growing season could provide the next opportunity for improved forage conditions.”

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

Cattle Current Daily—Aug. 15, 2022

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

For the week, live prices were $4-$5 higher in the Southern Plains at $140/cwt., $4-$5 higher in Nebraska at $144-$148 and $1-$4 higher in the western Corn Belt at $145-$148. Dressed prices were $2-$3 higher in Nebraska at $229-$230 and near the top of the previous week’s trade in the western Corn Belt at $229.

Choice Boxed beef cutout value was 27¢ higher Friday afternoon at $263.37/cwt. Select was $2.13 higher at $239.59/cwt.

Estimated total cattle slaughter last week of 647,000 was 4,000 fewer than the previous week but 11,000 head more than the previous year. Total estimated year-to-date cattle slaughter of 20.77 million head was 246,000 head more (+1.2%) than a year earlier. Total estimated year-to-date beef production of 17.12 billion lbs. was 171.3 million lbs. more (+1.0%).

Although supported by the week’s stronger cash prices, Live Cattle futures wobbled Friday — an average of 37¢ lower in the front five contracts and then unchanged to an average of 4¢ higher. 

Feeder Cattle futures closed an average of $1.02 lower, pressured by Corn futures, which were 10¢ to 14¢ higher through Jly ‘23, fueled by the latest World Agricultural Supply and Demand Estimates (see below).

Soybean futures closed mostly 1¢ to 5¢ higher after 40¢ lower in spot Aug and 14¢ higher in near Sep.

Despite the latest pressure from feed prices, Feeder Cattle futures mainly maintained the previous two week’s strong gains, week to week on Friday. Week to week on Thursday, The CME Feeder Cattle Index closed $2.85 higher at $178.28/cwt. That’s almost $6 higher over the last two weeks.

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Major U.S. financial indices closed sharply higher Friday as investors speculated inflation may be at the peak.

The Dow Jones Industrial Average closed 424 points higher. The S&P 500 closed 72 points higher. The NASDAQ was up 267 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.45 to $2.25 lower through the through the front six contracts.

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USDA’s Economic Research Service (ERS) increased the expected weighted average five-area direct steer price for this year 80¢ to $142.10/cwt., on current price strength. That’s from the latest World Agricultural Supply and Demand Estimates (WASDE). Next year’s projected annual price was $1 higher than the previous month’s estimate at $154. Prices were estimated at $140 in the third quarter and $147 in the fourth quarter. Prices in the first and second quarter next year were projected at $151 and $152, respectively.

Beef production for this year was projected at 27.99 billion lbs., which was 68 million lbs. more than the previous month’s estimate, based on higher expected placements in the second half of this year. Estimated beef production next year of 26.26 billion lbs. would be 1.7 billion lbs. less (-6.2%) than this year.

Total red meat and poultry production is estimated to be 106.48 billion lbs. this year, which would be 334 million lbs. less than last year (-0.3%). Projected total red meat and poultry production of 105.8 billion lbs. next year would be 673 million lbs. less (-0.6%) than this year.

Corn

Estimated 2022-23 production was reduced 146 million bu. to 14.4 billion based on yield estimates of 175.4 bu./acre, which was 1.6 bu./acre less than the previous estimate. Projected ending stocks were lowered by 82 million bu. to 1.4 billion.

The season-average farm price (SAFP) received by producers for corn was unchanged at $6.65/bu.

Soybeans

Although harvested soybean area was reduced 0.3 million acres from the previous estimate, average yield was projected 0.4 bu. higher at 51.9 bu./acre. Soybean supplies for 2022-23 were estimated to be 20 million bu. more at 2.16 billion bu. Ending stocks were projected 15 million bu. more at 245 million bu.

The U.S. season-average soybean price for 2022-23 was forecast at $14.35/bu., down 5¢ from last month. Soybean meal and oil price forecasts were unchanged at $390 per short ton and 69.0¢/lb., respectively.

Wheat

Estimated U.S. wheat production for 2022-23 was raised 2 million bu. from the previous month to 1,783 million bu. with all wheat yield projected 0.2 bu. more than the previous months at is 47.5 bu./acre. Projected 2022-23 ending wheat stocks were lowered 29 million bu. to 610 million.

The projected 2022-23 season-average farm price was reduced by $1.25 to $9.25/bu., based on prices received for marketings to date, which are lower than previously expected. However, the projected SAFP would still surpass the record of $7.77/bu. in 2012-13.

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

Cattle Current Daily—Aug. 12, 2022

Negotiated cash fed cattle trade was moderate on moderate demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service. Live prices were $4-$5 higher in the Texas Panhandle at $140/cwt. and $4 higher in Kansas at $140.

Elsewhere, trade was limited on light demand with too few transactions to trend. On Wednesday, live prices were $4-$5 higher in Nebraska at $144-$148 and mostly $4 higher in the western Corn Belt at $145-$148. Dressed prices were $2-$3 higher in Nebraska at $229-$230 and toward the top of last week’s trading range in the western Corn Belt at $229.

Choice Boxed beef cutout value was 13¢ lower Thursday afternoon at $263.10/cwt. Select was 38¢ higher at $237.46/cwt.

Cattle futures closed narrowly mixed Thursday, up for Live Cattle with stronger cash prices and lower for Feeder Cattle amid higher Corn futures.

Feeder Cattle futures closed an average of 37¢ lower.

Live Cattle futures closed an average of 35¢ higher (7¢ higher toward the back to $1.40 higher in spot Aug).

Corn and soybean futures rose Thursday, with likely positioning ahead of Friday’s World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 4¢ to 8¢ higher.

Soybean futures closed mostly 19¢ to 20¢ higher.

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Major U.S. financial indices wobbled after an early run and then closed narrowly mixed, on likely profit taking, but they retained a lion’s share of the previous session’s strong gains.

The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 74 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.92 to $2.41 higher through the through the front six contracts.

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

Cattle Current Daily—Aug. 11, 2022

Cattle futures closed higher Wednesday, buoyed by higher outside markets and the positive outlook for cash prices this week.

Feeder Cattle futures closed an average of $1.56 higher ($1.22 to $2.50 higher). Live Cattle futures closed an average of 99¢ higher (57¢ to $1.30 higher).

Negotiated cash fed cattle trade ranged from mostly inactive on light demand to slow on light to moderate demand, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales at $146/cwt. in Nebraska and the western Corn Belt and some early dressed sales in Nebraska at $229.

Last week, live prices were $135-$136/cwt. in the Texas Panhandle, $136 in Kansas, $140-$143 in Nebraska and $141-$147 in the western Corn Belt. Dressed prices were $227 in Nebraska and $225-$232 in the western Corn Belt.

Choice Boxed beef cutout value was $1.50 lower Wednesday afternoon at $263.23/cwt. Select was 62¢ lower at $237.08/cwt.

Corn futures closed mostly 3¢ to 4¢ higher. Soybean futures closed mixed but mostly fractionally higher to 3¢ higher.

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Major U.S. financial indices closed sharply higher Wednesday, fueled by one inflation gauge that was lower than expected.

The Consumer Price Index for all consumers was unchanged in July according to the U.S. Bureau of Labor Statistics. The index is up 8.5% over the last 12 months.

The Dow Jones Industrial Average closed 535 points higher. The S&P 500 closed 87 points higher. The NASDAQ was up 360 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.43 to $1.63 higher through the through the front six contracts.

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U.S. beef imports were 18.1% higher than last year through June but were 15.3% less year over year for the month of June at the lowest level since 2019, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. He explains imports declined in the face of increased domestic cow slaughter and lean beef production.

On the other side of the scale, as mentioned in Cattle Current, U.S. beef exports through June were 6% more year over year for volume and 33% more for value, according to data released by USDA and compiled by the U.S. Meat Export Federation.

“Beef trade has been generally supportive thus far this year, but the future is uncertain,” Peel says. “Global and U.S. economic forecasts have been reduced as global economies continue to struggle. The U.S. dollar continues strong, which will be a headwind for future exports. U.S. beef production is expected to decline in the last part of the year and beyond reducing available beef supplies. All of these will likely impact beef trade going forward.”

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

Cattle Current — Aug. 10, 2022

Corn futures rallied Tuesday, apparently fueled by more negative crop conditions (see below). They closed 5¢ to 7¢ higher through Jly ‘23 and then 2¢ to 3¢ higher. Soybean futures closed mostly 22¢ to 28¢ higher through Aug ‘23, except for sharply higher in the two front contracts, and then 15¢ to 19¢ higher.

Higher grain Futures and oversold conditions pressured Feeder Cattle futures an average of $1.73 lower (90¢ lower at the back to $3.15 lower toward the front). Live Cattle futures closed an average of 47¢ lower (25¢ to $1.05 lower).

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

Last week, live prices were $135-$136/cwt. in the Texas Panhandle, $136 in Kansas, $140-$143 in Nebraska and $141-$147 in the western Corn Belt. Dressed prices were $227 in Nebraska and $225-$232 in the western Corn Belt.

Choice Boxed beef cutout value was $1.51 lower Tuesday afternoon at $264.73/cwt. Select was $1.16 lower at $237.70/cwt.

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Major U.S. financial indices faltered Tuesday, led lower by tech stocks in general and chip makers specifically.

The Dow Jones Industrial Average closed 58 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 150 points.

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National pasture and range conditions the week ending Aug. 7 continued to deteriorate compared to the prior year, according to the latest USDA Crop Progress report.

24% of pasture and range was rated as Good (21%) or Excellent (3%), which was 1% less than a week earlier and 6% less than a year earlier. Conversely, 49% was rated as Poor (23%) or Very Poor (26%), which was the same as a week earlier but 6% more than a year earlier.

90% of corn was silking, which was 4% less than last year and 3% less than the five-year average. 45% was in the dough stage, compared to 53% last year and 49% for average. 6% was dented, which was 1% less than last year and 2% less than the five-year average. 58% was rated as Good (46%) or Excellent (12%), which was 3% less than the prior week and 6% less than a year earlier. 16% was rated Poor (10%) or Very Poor (6%) versus 14% a week earlier and 11% a year earlier.

89% of soybeans were blooming, which was 1% less than last year but 1% more than the average. 61% were setting pods, compared to 70% last year and 66% for average. 59% were rated as Good (49%) or Excellent (10%) which was 1% less than the previous week and year. 11% were rated Poor (8%) or Very Poor (3%), the same as a week earlier and 2% less than the prior year.

86% of winter wheat was harvested, compared to 94% the previous year and 91% for the average.

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

Cattle Current Daily—Aug. 9, 2022

Last week’s stronger cash prices for feeder and fed cattle, along with softer Corn futures helped Cattle futures extend gains Monday, especially Feeder Cattle, which closed an average of $1.49 higher. Live Cattle futures closed an average of 31¢ higher, except for unchanged in the back contract.

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

Last week, live prices were $135-$136/cwt. in the Texas Panhandle, $136 in Kansas, $140-$143 in Nebraska and $141-$147 in the western Corn Belt. Dressed prices were $227 in Nebraska and $225-$232 in the western Corn Belt.

The five-area direct weighted average steer price last week was $140.84/cwt. on a live basis, which was $1.01 more than the previous week. The weighted average price in the beef was $2.20 higher at $227.83.

Choice Boxed beef cutout value was $1.62 higher Monday afternoon at $266.24/cwt. Select was 19¢ higher at $238.86/cwt.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 3¢ to 8¢ lower.

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Major U.S. financial indices closed little changed Monday as investors paddled in place awaiting further data direction.

The Dow Jones Industrial Average closed 29 points higher. The S&P 500 closed 5 points lower. The NASDAQ was down 13 points.

CME WTI Crude Oil futures closed $1.75 to $2.06 higher through the through the front six contracts.

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The United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,800 per acre for 2022, up $420 per acre (12.4%) from 2021, according to the latest Land Values Summary from USDA’s National Agricultural Statistics Service.

United States cropland value averaged $5,050 per acre, an increase of $630 per acre (14.3%) from the previous year.

United States pasture value averaged $1,650 per acre, an increase of $170/ acre (11.5%) from 2021. From a percentage standpoint, pasture value was up the most — 17.7% — in the Northern Plains, where average value per acre was $1,330: Kansas (+23.3% to $1,850/acre); South Dakota (+16.0% to $1,230/acre); Nebraska (+14.8% to $1,240/acre); and North Dakota (+10.7% to $930/acre).

Regionally, average pasture value increases were among the least — 6.3% — in the Delta states, where average pasture value was $2,870/acre: Louisiana (+5.1% to $3,100/acre); Arkansas (+5.6% to $2,850/acre); and Mississippi (+8.9% to $2.700/acre).

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

Cattle Current Daily — Aug, 8, 2022

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

For the week, live prices were 50¢ to $1 higher in the Southern Plains at $136/cwt., $2 higher at $140 in Nebraska and at $143-$147 in the western Corn Belt. Dressed prices were $2 higher in Nebraska at $227 and $1-$4 higher in the western Corn Belt at $225-$232.

Cattle futures edged higher Friday, supported by stronger cash prices.

Live Cattle futures closed an average of 24¢ higher.

Feeder Cattle futures closed an average of 37¢ higher, except for 12¢ lower in Mar.

Choice Boxed beef cutout value was $1.66 lower Friday afternoon at $264.62/cwt. Select was $1.68 lower at $238.67/cwt.

Corn and Soybean futures were mixed Friday amid weather speculation and biding time for next week’s USDA yield estimates.

Corn futures closed mostly 3¢ to 8¢ higher.

Soybean futures closed mostly 6¢ to 9¢ lower through Aug ‘23 and then mostly 1¢ to 2¢ lower.

Total estimated cattle slaughter last week of 651,000 head was 18,000 fewer than the previous week but 7,000 head more than the same week last year. Total year-to-date estimated cattle slaughter of 10.1 million head was 238,000 head more (+1.2%) than a year earlier. Total estimated year-to-date beef production of 16.6 billion lbs. was 168.9 million lbs. more (+1.0%) than a year earlier.

The five-area direct weighted average steer price in July was $142.16/cwt. on a live basis. That was 62¢ less than the prior month but $20.13 higher year over year. The average steer price in the beef was $228.25 for July, which was $1.51 less than the previous month but 30.63 higher than the previous year.

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Major U.S. financial indices closed mixed Friday as investors weighed the positive jobs report against further potential monetary tightening by the Federal reserve.

Total non-farm payroll employment rose by 528,000 in July, according to the Employment Situation Summary from the U.S. Bureau of Labor Statistics. The number shattered expectations ahead of the report. The nation’s unemployment rate edged down to 3.5%. Both total non-farm employment and the unemployment rate have returned to their February 2020 pre-pandemic levels. Average hourly earnings for all employees on private non-farm payrolls rose by 15¢ to $32.27.

The Dow Jones Industrial Average closed 76 points higher. The S&P 500 closed 6 points lower. The NASDAQ was down 63 points.

CME WTI Crude Oil futures closed 37¢ to 52¢ higher through the through the front six contracts.

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U.S. beef exports topped $1 billion in June for the fifth time this year, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

June beef exports of 130,638 metric tons (mt), were slightly less than the record volume posted in May but were 16% more year-over-year and the fourth largest on record. Export value was $1.05 billion in June, also slightly less than the May record but 31% above last year. For the first half of 2022, beef exports increased 6% from a year ago to 743,904 mt, valued at $6.19 billion (up 33%).

While beef export growth has been largely driven by major Asian markets such as South Korea, China/Hong Kong, Japan and Taiwan, exports are also trending higher to the ASEAN region, the Caribbean, Central America, Europe and the Middle East.

“The first-half performance for U.S. beef exports was nothing short of remarkable, especially considering the growing economic headwinds in many key markets and continued shipping and logistical challenges,” says USMEF President and CEO Dan Halstrom. “The rebound in the global foodservice sector has provided a tremendous lift in 2022, even though it is still far from a full recovery in many Asian and European destinations. We definitely see opportunities for further growth, though inflationary pressure and the stronger U.S. dollar continue to raise concerns about consumer spending power.”

June beef export value averaged $447.45 per head of fed slaughter, up 27% from a year ago. Through June, per-head value averaged $476.98, up 33% from the first half of 2021. Exports accounted for 15.5% of total June beef production and 13.3% for muscle cuts, up significantly from 13.6% and 11.5%, respectively, in June 2021. First-half exports accounted for 15.4% of total production and 13.2% for muscle cuts, up from 14.7% and 12.5%, respectively.

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

Cattle Current Daily—Aug. 5, 2022

Negotiated cash fed cattle trade was moderate with light to moderate demand in the Southern Plains through Thursday afternoon. Prices were 50¢ to $1 higher at $135.50 to $136/cwt.

Elsewhere, trade was limited on light demand with too few transactions to trend, according to the Agricultural Marketing Service.

So far this week, live prices are $2 higher in Nebraska at $140 and generally steady in the western Corn Belt at $141-$145. Dressed prices are steady to $7 higher in Nebraska at $225-$232.

Choice Boxed beef cutout value was $1.66 lower Thursday afternoon at $266.28/cwt. Select was 95¢ lower at $240.35/cwt.

Firm to stronger cash fed cattle prices helped Live Cattle futures mostly edge higher and Feeder Cattle futures mostly fade higher Corn futures.

Live Cattle futures closed narrowly mixed from an average of 18¢ lower in the front three contracts to an average of 41¢ higher.

Feeder Cattle futures closed an average of 18¢ lower, except for an average of 17¢ higher in the back two contracts.

Corn futures closed mostly 6¢ to 10¢ higher and Soybean futures closed mostly 40¢ to 57¢ higher, apparently buoyed by technical buying and weather speculation.

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Major U.S. financial indices closed narrowly mixed Thursday as investors seemed in hover mode ahead of the jobs report due out Friday.

The Dow Jones Industrial Average closed 85 points lower. The S&P 500 closed 3 points lower. The NASDAQ was up 52 points.

CME WTI Crude Oil futures closed $2.12 to $2.41 lower through the through the front six contracts.

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“The August 2022 contract is currently the lowest price of any (see chart below), and every consecutive contract is higher than the previous. This is a clear signal that traders are expecting feeder cattle prices to increase into 2023,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest Cattle Market Notes Weekly.

Maples points out Feeder Cattle contract prices (solid line, July 29) are approximately $10/cwt. higher across all contracts since June 1 (dotted line).

“The spring 2023 contracts are currently trading near $190 which, if actually observed, would mean feeder cattle prices not seen since 2015,” Maples explains. “Strong market expectations also mean there may be some attractive risk management opportunities for producers depending on your goals … The December Corn futures contract is down more than $1/bu. since mid-June, which also has a positive impact on cattle market expectations.”

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

Cattle Current Daily—Aug. 4, 2022

Steady to firmer cash prices helped Live Cattle futures close an average $1.17 higher on Wednesday (67¢ higher at the back to $1.82 higher in spot Aug).

Negotiated cash fed cattle trade was slow on moderate demand in Nebraska through Wednesday afternoon with live prices at $140-$142/cwt. but mostly $2 higher at $140. Dressed trade there last week was at $225.

Elsewhere, trade ranged from limited on light demand to mostly inactive on light demand with too few to trend.

On Tuesday, live prices were steady at $135 in the Southern Plains and unevenly steady in the western Corn Belt at $143. Dressed prices there last week were $224-$228.

Choice Boxed beef cutout value was 52¢ lower Wednesday afternoon at $267.94/cwt. Select was 25¢ lower at $241.30/cwt.

Recently lower Corn futures and continued cash strength helped boost Feeder Cattle futures an average of $1.62 higher ($1.22 higher at the front to $2.15 higher at the back).

Corn futures firmed Wednesday and closed mostly fractionally higher to 2¢ higher, following the previous session’s steep decline.

Soybean futures closed 11¢ to 16¢ lower, pressured by lower oil prices.

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Major U.S. financial indices closed higher Wednesday supported by strong corporate earnings reports.

The Dow Jones Industrial Average closed 416 points higher. The S&P 500 closed 63 points higher. The NASDAQ was up 319 points.

CME WTI Crude Oil futures closed $2.72 to $3.76 lower through the through the front six contracts.

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Compared to its last quarterly World Economic Outlook, the International Monetary Fund (IMF) paints a bleaker outlook for the global and domestic economies in its July update.

“A tentative recovery in 2021 has been followed by increasingly gloomy developments in 2022 as risks began to materialize. Global output contracted in the second quarter of this year, owing to downturns in China and Russia, while U.S. consumer spending undershot expectations,” according to the report. “Several shocks have hit a world economy already weakened by the pandemic: higher-than-expected inflation worldwide –– especially in the United States and major European economies –– triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID-19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine.”

IMF’s baseline forecasts global economic growth this year to be 3.2%, compared to 6.1% last year — 0.4% less than the previous estimate. U.S. economic growth is projected at 2.3% this year versus 5.7% in 2021 — 1.4% less than the previous outlook. IMF projects global economic growth next year at 2.9% and 1.0% for the U.S.

“The risks to the outlook are overwhelmingly tilted to the downside,” according to the report. “The war in Ukraine could lead to a sudden stop of European gas imports from Russia; inflation could be harder to bring down than anticipated, either if labor markets are tighter than expected or inflation expectations unanchor; tighter global financial conditions could induce debt distress in emerging market and developing economies; renewed COVID-19 outbreaks and lockdowns as well as a further escalation of the property sector crisis might further suppress Chinese growth; and geopolitical fragmentation could impede global trade and cooperation.”

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

Cattle Current Daily—Aug. 3, 2022

Cattle futures weakened Tuesday, pressured by lower wholesale beef prices, the weaker cash outlook and worries about House Speaker Nancy Pelosi’s visit to Taiwan potentially straining the already frayed relationship between the U.S. and China.

Feeder Cattle futures closed an average of $1.08 lower (57¢ to $1.65 lower).

Live Cattle futures closed an average of 17¢ lower, except for 2¢ higher in Jun.

Grain and Soybean futures closed lower again Tuesday with weather pressure and steady crop condition ratings week to week and year over year.

Corn futures closed 11¢ to 15¢ lower through Sep ‘23 and then mostly 5¢ to 8¢ lower.

Soybean futures closed mostly 12¢ to 19¢ lower.

Negotiated cash fed cattle trade was slow on light demand in the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few live trades at $143/cwt. but too few to trend. Elsewhere, trade was at a standstill.

Last week, live prices were $135/cwt. in the Southern Plains, $138 in Nebraska and $141-$145 in the western Corn Belt. Dressed prices were $225 in Nebraska and $224-$228 in the western Corn Belt.

Choice Boxed beef cutout value was $2.14 lower Tuesday afternoon at $268.46/cwt. Select was $1.35 lower at $241.55/cwt.

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Major U.S. financial indices settled lower Tuesday with the aforementioned concerns about increased tension between the U.S. and China.

The Dow Jones Industrial Average closed 402 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 20 points.

CME WTI Crude Oil futures closed 53¢ to $1.17 higher through the through the front six contracts.

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Agricultural producer sentiment increased 6 points from June to July to a reading of 103, according to the latest Purdue University/CME Group Ag Economy Barometer. The Index of Current Conditions rose 10 points to 109 and the Index of Future Expectations rose 4 points to 100. All three indices were still 23-24% lower than a year earlier.

“Even though we saw a slight uptick in sentiment this month, there is still a tremendous amount of uncertainty in the agricultural economy,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Key commodity prices, including wheat, corn and soybeans, all weakened during the month and producers remain concerned over rising input prices and input availability.”

Producers’ views on farmland values diverged this month as the Short-Term Farmland Value Index declined 9 points to 127, while the long-term index rose 9 points to 150. The short-term index is down 20% from its peak reading in 2021, while the long-term index is only 6% lower than the peak reached last year. Short-term there was a shift away from expectations that farmland values will go higher, with more producers in July expecting values to remain about the same.

“The short-run and long-term farmland indices don’t always move in tandem, but the magnitude of this month’s divergence between the short and long-term indices is unusual,” Mintert says. “Producers who expect values to rise over the upcoming five years continue to say that non-farm investor demand and inflation are the two primary reasons they expect values to rise.”

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 11-15.

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

Cattle Current Daily—Aug. 2, 2022

A reprieve in Corn futures helped Feeder Cattle climb an average of $1.64 on Monday, further bolstered by last week’s strong cash trade.

Corn futures closed 9¢ to 10¢ lower through new-crop contracts and then mostly 1¢ to 2¢ lower. Pressure was likely due in part to reports that the first load of Ukraine grain exports in too many months left from the port at Odessa.

Live Cattle futures closed an average of 66¢ higher, with another day of higher wholesale beef prices.

Choice Boxed beef cutout value was $1.36 higher Monday afternoon at $270.60/cwt. Select was 65¢ higher at $242.90/cwt.

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

Last week, live prices were $135/cwt. in the Southern Plains, $138 in Nebraska and $141-$145 in the western Corn Belt. Dressed prices were $225 in Nebraska and $224-$228 in the western Corn Belt.

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Major U.S. financial indices closed narrowly lower Monday, with pressure from energy stocks.

The Dow Jones Industrial Average closed 46 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 21 points.

CME WTI Crude Oil futures closed $3.04 to $4.73 lower through the through the front six contracts.

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Nationally, year-to-date beef cow slaughter was 14.1% more year over year through mid-July, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“Beef cow slaughter would have to drop to a level less than 6% higher year over year for the remainder of the year before the annual beef cow slaughter would not be double-digit higher for the entire year,” Peel says. 

Further, Peel explains heifer slaughter is up 3.9% year over year so far in 2022. 

“The July 1 inventory of heifers in feedlots was up 2.9% over last year and confirms that heifers continue to be diverted into feeder channels rather being retained for breeding,” Peel explains. “The mid-year cattle inventory showed that the beef cow herd was down 2.4% year over year and the inventory of beef replacement heifers was down 3.5% from last year. The beef industry is poised to see the largest single year beef cow herd decrease in more than 35 years.”

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

Cattle Current Daily—Aug. 1, 2022

Feeder Cattle futures closed an average of 98¢ higher on Friday with continued cash strength and stabilizing Corn futures. Week to week, though, they were an average of $3.37 lower, pressured by surging Corn futures, which were an average of 52’1¢ higher through the front six contracts.

Live Cattle futures closed an average of 32¢ higher on Friday, supported by firmer wholesale beef values.

Choice Boxed beef cutout value was $1.47 higher Friday afternoon at $269.24/cwt. Select was $1.44 higher at $242.25/cwt.

Negotiated cash fed cattle trade ranged from slow on light to moderate demand to mostly inactive on light demand through Friday afternoon, according to the Agricultural Marketing Service. There were a few live sales in the western Corn Belt at $144-$145/cwt., but too few to trend.

For the week, live prices were $1 lower in the Southern Plains at $135/cwt., $1.00-$5.50 lower in Nebraska at $139.00-$143.50 and steady in the western Corn Belt at $141-$145. Dressed prices were $2 lower in Nebraska at $225 and $3-$5 lower in the western Corn Belt at $224-$225.

Estimated total cattle slaughter for the week of 669,000 head was 4,000 head more than the previous week and 23,000 head more than the same week last year. Total estimated year-to-date cattle slaughter of 19.48 million head was 234,000 head more (+1.2%) than the previous year. Estimated total year-to-date beef production of 16.07 billion lbs. was 169.5 million lbs. more (+1.1%) than a year earlier.

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Major U.S. financial indices closed higher Friday, led by tech and energy stocks, and supported by a slight improvement in the closely watched University of Michigan Index of Consumer Sentiment.

The Dow Jones Industrial Average closed 315 points higher. The S&P 500 closed 57 points higher. The NASDAQ was up 228 points.

CME WTI Crude Oil futures closed $1.89 to $2.20 higher through the through the front six contracts.

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The CME Feeder Cattle Index closed $1.30 higher week to week on Thursday at $172.31/cwt. Andrew P. Griffith, agricultural economist at the University of Tennessee notes in his weekly market comments the Feeder Cattle Index increased $19/cwt. between June 1 and July 27, while spot Feeder Cattle futures increased about $8.

“The cash feeder cattle market and the Feeder Cattle futures are jockeying for position in an attempt to determine where prices should be,” Griffith says. “The basis, or the difference between cash prices and futures prices, has narrowed considerably as the market is moving into August. This is to be expected as cash prices and futures prices should converge. Part of the narrowing of basis has been from futures declining slightly, but most of the narrowing of the basis has come from higher cash prices. Prices will continue to converge through August. It is unknown if it will be through higher cash prices or lower futures prices. Producers should hope for the former.”

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

Cattle Current Daily—July 29, 2022

Feeder Cattle futures closed an average of $1.55 lower Thursday beneath the weight of higher Corn futures, which were 14¢ to 16¢ higher through new-crop contracts and then mostly 9¢ to 11¢ higher. Soybean futures closed mostly 27¢ to 31¢ higher — both supported by the hotter, drier weather forecast in the Corn Belt.

Live Cattle futures closed narrowly mixed, from an average of 37¢ lower to an average of 15¢ higher, supported by positive weekly exports but pressured from lower cash prices and weaker wholesale beef values.

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

So far, this week, live prices are $1 lower in the Southern Plains at $135/cwt., $1.00-$5.50 lower in Nebraska at $138 and steady in the western Corn Belt at $141-$145. Dressed prices are $2 lower in Nebraska at $225 and $3-$7 lower in the western Corn Belt at $224-$225.

Choice Boxed beef cutout value was 22¢ lower Thursday afternoon at $267.77/cwt. Select was $1.00 lower at $240.81/cwt.

Net U.S. beef export sales of 25,300 metric tons were 6% more than the previous week and 66% more than the prior four-week average, according to the U.S. Export Sales report for the week ending July 21. Increases were primarily for South Korea, Japan, China, Taiwan and Mexico.

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Major U.S. financial indices closed higher again Thursday, apparently driven by strong quarterly earnings reports from Apple and Amazon.

The Dow Jones Industrial Average closed 332 points higher. The S&P 500 closed 48 points higher. The NASDAQ was up 130 points.

CME WTI Crude Oil futures closed 43¢ to 84¢ lower through the through the front six contracts.

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U.S. consumers reduced their restaurant visits in the second quarter of 2022, amid rising inflation and menu prices, according to The NPD Group (NPD).

Physical and online restaurant traffic declined 2% year over year in the second quarter and was 6% below the pre-pandemic level in the second quarter of 2019. Consumer restaurant spending for the quarter, which reflects higher costs in contrast to increased visits, was 2% higher year over year and 3% more than the same quarter in 2019.

“We see three ways consumers respond to higher menu prices. They trade down to lower-priced items, cut back on the number of items ordered, or reduce restaurant visits altogether,” says David Portalatin, NPD Food Industry Advisor. “Operators and manufacturers can win in this environment by differentiating value, understanding that value doesn’t always translate to the lowest price. Quality and value become a critical differentiator when consumers spend on a restaurant meal during these challenging times.”

Visits to quick service restaurants (QSRs), represented 82% of total restaurant traffic in the second quarter. They were 2% less year over year and 3% less than the pre-pandemic level for the same period in 2019. QSR fast casual restaurant traffic was 1% less than a year ago but was 8% more than same quarter in 2019.

Full service restaurant (FSR) visits, represented 18% of restaurant visits in the second quarter. They were 3% less than a year earlier and 20% less than the second quarter of 2019.

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

Cattle Current Daily—July 28, 2022

Feeder Cattle futures rose an average of $1.08 Wednesday, bolstered by strong cash demand.

Live Cattle futures edged an average of 13¢ higher, except for an average of 6¢ lower in the front two contracts, despite the weaker cash outlook for the week and wobbly beef prices.

Negotiated cash fed cattle trade was moderate on moderate demand in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were $1.00-$5.50 lower at $138/cwt. Dressed prices were $2 lower at $225.

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

Prices in the Southern Plains were $1 lower on Tuesday at $135.

In the western Corn Belt last week, prices were $141-$145 on a live basis and $227-$232 in the beef.

Choice Boxed beef cutout value was $1.12 lower Wednesday afternoon at $267.99/cwt. Select was $2.07 lower at $241.81/cwt.

Higher oil prices helped lift Soybean futures mostly 15¢ to 26¢ higher while Corn futures were up mostly 3¢.

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Major U.S. financial indices closed higher Wednesday, after the Fed raised lending rates by another 75 basis points. Apparently, a wide swath of investors believe that inflation can be controlled while avoiding a recession.

The Dow Jones Industrial Average closed 436 points higher. The S&P 500 closed 102 points higher. The NASDAQ was up 469 points.

CME WTI Crude Oil futures closed $2.28 to $2.50 higher through the front six contracts.

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Inflation is now the key risk to meat and poultry consumption, as the impact of COVID-19 on consumer food spending is diminishing, according to The Quarterly from CoBank’s Knowledge Exchange. Retail meat and poultry prices were 18% higher in May compared to 2021 and both spot market supplies and freezer inventories are below pre-pandemic levels. The combination of tight supplies and steady demand kept meat prices 20% higher than the five-year average for the March-May period, say CoBank analysts.

Among the report highlights:

  • Effects from the pandemic and Ukraine war continue to reverberate through the global economy. Food and energy prices remain high, though prices for underlying commodities have lost upward momentum as economic fears rise.
  • After more than two years, Covid-related supply chain complications are finally easing and various metrics indicate improvements to supply chain performance both domestically and globally. However, those improvements have been modest and agricultural supply chains in particular remain broadly mired in dysfunction.

“Warehouse and inventory costs are still rising at near-peak levels, and transportation costs are rising at a much higher rate than pre-pandemic,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange. “Grain rail car availability and prices were at multi-year lows and highs, respectively, in the second quarter. Although as consumer purchases of goods continues to soften, supply chains will slowly recover.”

  • Declining cattle supplies are expected to converge with excess processing capacity over the next 12-18 months, which should contribute to more favorable conditions for producers.
By | July 27th, 2022|Daily Market Highlights|

Cattle Current—July 27, 2022

Feeder Cattle futures closed an average of $1.79 lower Tuesday, pressured by Corn futures that were 15¢ to 17¢ higher through new-crop contracts as traders added weather premium based on the latest crop conditions, along with further uncertainty regarding Ukrainian exports.

Soybean futures closed 31¢ to 59¢ higher through Jly ‘23 and then mostly 20¢ to 22¢ higher.

Live Cattle futures closed an average of 61¢ lower, uninspired by early cash direction.

Negotiated cash fed cattle trade was slow on light demand in the Texas Panhandle through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few live trades $1 lower at $135/cwt.

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

Last week, live prices were $136 in Kansas, $139.00-$143.50 in Nebraska and $141-$145 in the western Corn Belt. Dressed prices were $227-$232.

Choice Boxed beef cutout value was $1.00 higher Tuesday afternoon at $269.11/cwt. Select was $1.12 lower at $243.88/cwt.

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Major U.S. financial indices closed lower Tuesday, with much of the pressure attributed to Walmart cutting its profit forecast based on food inflation.

The Dow Jones Industrial Average closed 228 points lower. The S&P 500 closed 45 points lower. The NASDAQ was down 20 points.

CME WTI Crude Oil futures closed 78¢ to $1.72 lower through the front six contracts.

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The Creighton University Rural Mainstreet Index (RMI) fell for the fourth straight month — from 49.8 in June to 46.0 in July — sinking below growth neutral for a second consecutive month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“The Rural Mainstreet economy is now experiencing a downturn in economic activity. Supply chain disruptions from transportation bottlenecks and labor shortages continue to constrain growth. Farmers and bankers are bracing for escalating interest rates — both long-term and short-term,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Bankers were asked to identify the greatest risk for ranchers and farmers over the next 12 months. These were the leading responses: rising input prices (53.9%), falling grain and livestock prices (34.6%) and drought (11.5%).

“It’s the combination of higher input costs and a potential fall in commodity prices that are the biggest risks to farmers. Not just one or the other,” says James Brown, CEO of Hardin County Savings Bank in Eldora, IA.

Even with significant input price increases this year, bankers expect a half percentage point decline in farm loan delinquencies over the next 12 months.

Among other highlights:

The region’s farmland price index for July declined to 66.0 from 76.8 in June, marking the 22nd straight month that the index was above growth neutral.

On average, bank CEOs expect farmland prices to advance by 2.1% over the next 12 months.

By | July 26th, 2022|Daily Market Highlights|

Cattle Current Daily—July 26, 2022

Feeder Cattle futures closed an average of $1.76 lower Monday, pressured by higher Corn futures, bearish feedlot placements in Friday’s Cattle on Feed report and likely profit taking.

Corn futures reversed direction and closed 15¢ to 19¢ higher through new-crop contracts after Russia attacked one of Ukraine’s deep seaports before the ink dried on the agreement signed Friday which was supposed to enable resumption of Ukraine grain exports in the Black Sea region. Soybean futures closed mostly 28¢ to 30¢ higher.

Live Cattle futures closed narrowly mixed, from an average of 22¢ lower in three contracts to an average of 25¢ higher, supported by stronger wholesale beef prices.

Choice Boxed beef cutout value was 99¢ higher Monday afternoon at $268.11/cwt. Select was $2.50 higher at $245.00/cwt.

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

Last week, live prices were $136 in the Southern Plains, $139.00-$143.50 in Nebraska and $142-$144 in the western Corn Belt. Dressed prices were $227 in Nebraska and $227-$230 in the western Corn Belt.

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Major U.S. financial indices closed narrowly mixed Monday, as investors awaited earnings reports from some corporate giants later this week, as well as key economic data.

The Dow Jones Industrial Average closed 90 points higher. The S&P 500 closed 5 points higher. The NASDAQ was down 51 points.

CME WTI Crude Oil futures closed $1.94 to $2.00 higher through the front six contracts.

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Cattle producers are de-stocking at a rapid pace in the Southern Plains as pasture conditions deteriorate, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

For instance, in Oklahoma, where pasture and range rated poor or very poor jumped from 18% in early July to 34% by mid-month, Peel explains the volume of feeder cattle trading at auction increased 24% year over year the last two weeks.

“Prices for Oklahoma steers dropped an average of 3.5% this past week with prices for 400-500 lb. steers down 7.9%,” Peel says. “Feeder heifer prices were down an average of 2.5% with prices for 400-500 lb. heifers down 6.3%. The auction volume of cull cows and bulls jumped nearly 124% over last year in the past two weeks. Prices for average dressing Boning cows decreased by nearly 22% from $85.22/cwt. in early July to $66.62 this past week. Anecdotal reports indicate that auctions in the Southern Plains and regional cow slaughter plants are being overwhelmed with volumes of cattle sales.”

Peel notes last week’s semiannual USDA Cattle report confirmed accelerated beef cow herd liquidation due to the cumulative effects of drought the past two years.

As mentioned in Cattle Current, there were 30.35 million beef cows in the national inventory July 1, which was 750,000 fewer (-2.4%) than the same time last year.

The 4.15 million beef heifers retained as replacements were 150,000 fewer (-3.5%) than a year earlier.

The calculated number of calves outside feedlots July 1 of 35.7 million head was 1 million head fewer (-2.7%) than the same time last year.

Total cattle and calves of 98.8 million head were 2 million fewer (-2.0%) year over year.

You can find more market insight from Peel here.

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

Cattle Current Daily—July 25, 2022

Cattle futures took a step higher Friday, apparently buoyed by bullish expectations for the USDA reports that came out later that day (see below).

Feeder Cattle futures closed an average of $2.38 higher.

Live Cattle futures closed an average of $1.42 higher (85¢ higher at the back to $2.02 higher toward the front).

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

For the week, live prices were $1 lower in the Southern Plains at $136/cwt. and $1.00 to $1.50 lower at $139.00-$143.50 in Nebraska and $142-$144 in the western Corn Belt. Dressed prices in Nebraska were $3 lower at $227.

Choice Boxed beef cutout value was 64¢ lower Friday afternoon at $267.12/cwt. Select was $1.97 higher at $242.50/cwt.

Estimated total cattle slaughter last week of 665,000 head was 9,000 head fewer than the previous week, but 10,000 head more than the same week last year. Estimated year-to-date cattle slaughter of 18.8 million head was 212,000 more (+1.1%). Estimated year-to-date beef production of 15.5 billion lbs. was 152.6 million lbs. more (+1.0%).

Corn futures closed 9¢ to 11¢ lower through new-crop contracts and then mostly 4¢ to 5¢ lower, apparently pressured by favorable weather and the agreement between Ukraine and Russia which is supposed to enable resumption of Ukraine grain exports in the Black Sea region.

Soybean futures closed mostly 12¢ to 16¢ higher.

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Major U.S. financial indices closed lower Friday, led by tech stocks, but closed higher week to week.

The Dow Jones Industrial Average closed 137 points lower. The S&P 500 closed 37 points lower. The NASDAQ was down 225 points.

CME WTI Crude Oil futures closed 94¢ to $1.65 lower through the front six contracts.

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USDA’s semiannual Cattle report published Friday provided some clarity to how much the nation’s beef cow herd is contracting, and how fast.

There were 30.35 million beef cows in the national inventory July 1, which was 750,000 fewer (-2.4%) than the same time last year.

There were 4.15 million beef heifers retained as replacements, which was 150,000 fewer (-3.5%) than a year earlier.

Dairy cows numbered 9.45 million head, which was 50,000 head fewer (-0.5%)

Total cattle and calves of 98.8 million head were 2 million fewer (-2.0%) year over year.

The calculated number of calves outside feedlots July 1 of 35.7 million head was 1 million head fewer (-2.7%) than the same time last year.

The 2022 calf crop is projected to be 34.6 million head, which would be 485,400 head fewer (-1.4%).

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Markets will likely view Friday’s monthly Cattle on Feed report as neutral to slightly bearish, due to more placements than expected.

Cattle feeders placed 1.63 million head on feed in June (feedlots with 1,000 head or more capacity). That was 40,000 head fewer (-2.4%) than the same time last year but about 3% more than analysts expected ahead of the report.

In terms of placements weights, 39% went on feed weighing 699 lbs. or less, 45% weighing 700-799 lbs. and 16% weighing 900 lbs. or more.

Cattle feeders marketed 2.06 million head in June, which was 40,000 head more (+2.0%) year over year, in line with expectations.

There were 11.34 million head of cattle on feed July 1, which was 45,000 head more (+0.4%) than the same time last year.

According to the semiannual Cattle report, cattle on feed in feedlots with more than 1,000 head capacity accounted for 84.6% of the cattle on feed July 1.

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

Cattle Current Daily—July 22, 2022

Corn futures dredged 15¢ to 16¢ lower through new-crop contracts and then mostly 12¢ to 13¢ lower, pressured by favorable weather and reports suggesting Ukraine, Russia, Turkey and the UN would sign an agreement Friday that would enable resumption of Ukraine Black Sea grain exports.

Soybean futures closed mostly 24¢ to 30¢ lower, also pressured by lower Crude Oil.

Feeder Cattle futures gained an average of 49¢ with the lower Corn futures, although reluctantly.

Live Cattle futures closed an average of 41¢ lower, except for 20¢ higher in the back contract, on the week’s lower cash tone and perhaps with some deference to Friday’s semiannual Cattle report and monthly Cattle on Feed report.

Negotiated cash fed cattle trade was limited on light trade through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some live trades in Kansas at $136/cwt. and a few dressed sales in the western Corn Belt at $232.

In established trade for the week, live prices are $1 lower in the Texas Panhandle at $136 and $1.00-$1.50 lower in Nebraska at $139.00-$143.50, where dressed prices are $3 lower at $227.

Last week, live prices were $137 in Kansas and $143.50-$145.00 in the western Corn Belt, where dressed prices were $228-$230.

Wholesale beef values resumed the seasonal decline. Choice Boxed beef cutout value was $2.77 lower Thursday afternoon at $267.76/cwt. Select was $1.72 lower at $240.53/cwt.

U.S. net beef export sales of 23,800 metric tons for the week of July 14 were up noticeably from the previous week and were 97% more than the prior four-week average, according to the weekly U.S. Export Sales report. Increases were primarily for South Korea, Japan, China, Mexico and Hong Kong.

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Major U.S. financial indices extended gains Thursday, buoyed by tech stocks and despite a negative labor report. Initial weekly unemployment insurance claims for the week ending July 16 were 7,000 more than the previous week at 251,000, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 162 points higher. The S&P 500 closed 39 points higher. The NASDAQ was up 161 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.11 to $3.53 lower through the front six contracts. 

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The U.S. Chamber of Commerce (USCC) agrees with those in the cattle business who oppose the Cattle Price Discovery and Transparency Act circulating in Congress, which would mandate minimum regional cash fed cattle trade.

“…the cattle price bill would displace free market fundamentals with government-controlled pricing. In a nutshell, the bill would require cattle feeders to sell cattle to packers, and packers to buy from feeders a mandatory minimum of fed cattle on a cash, spot market. As a result, the bill would reduce the ability of all levels of the supply chain to negotiate freely through formula and contract sales, also known as alternative marketing arrangements—a system that has helped to increase consumer demand and improve beef quality by effectively transmitting market signals about consumers’ preferences to producers,” says Sean Heather, USCC senior vice president of international regulatory affairs and antitrust, in a recent blog.

“In other words, the bill would replace a market structure that has evolved naturally over time with one created and managed by bureaucrats in Washington,” Heather continued. “When has that ever been a good idea? Instead, Congress should let these post-COVID markets adjust naturally. Indeed, fed cattle prices reached a seven-year high earlier this year, benefitting suppliers up and down the chain, and these price signals ultimately will work to expand production and keep prices in check for consumers.”

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

Cattle Current Daily—July 21, 2022

Negotiated cash fed cattle prices were $1-$3 lower in Nebraska Wednesday at $139-$142/cwt. Dressed prices were $3 lower at $227. That was on slow trade and light demand, according to the Agricultural Marketing Service.

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

Live sales were $1 lower in the Texas Panhandle on Tuesday at $136.

Last week, live sales were $137 in Kansas and $143.50-$145.00 in the western Corn Belt, where dressed prices were $228-$230.

Despite the softer cash tone, recently firmer wholesale beef values helped Live Cattle close narrowly mixed, from 32¢ lower to 25¢ higher.

However, Choice Boxed beef cutout value was $2.04 lower Wednesday afternoon at $270.53/cwt. Select was $1.48 lower at $242.25/cwt.

Feeder Cattle futures closed an average of 80¢ lower with likely profit taking and retrenching ahead of Friday’s semiannual Cattle report and the monthly Cattle on Feed report.

Favorable weather pressured Corn and Soybean futures Wednesday.

Corn futures closed 3¢ to 5¢ lower through new-crop contracts and then mostly fractionally lower to 1¢ lower.

Soybean futures closed mostly 22¢ to 25¢ lower.

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Major U.S. financial indices closed higher Wednesday, maintaining steep gains from the previous session and buoyed by mostly positive quarterly corporate earnings.

The Dow Jones Industrial Average closed 47 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 184 points.

WTI Crude Oil futures on the CME closed mixed through the front six contracts, from 18¢ higher in Dec to $1.96 lower in spot Aug. 

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More calves headed to market earlier will change the complexion of available supplies in the Southern Plains this fall, as producers respond to drought and dwindling supplies of high-priced feed.

For instance, drought continues to encompass virtually the entire state of Texas — much of it extreme (D3) or exceptional (D4) — according to the July 12 U.S. Drought Monitor. Sale barns across Texas reported higher sale volumes over the last few months, including historically wetter parts of the state, according to Texas A&M AgriLife Extension.

Mark Welch, AgriLife Extension grain economist says feed-use numbers remain high for all livestock this year, but cattle producers around the state are experiencing below-average hay and grazing capacity. 

“The question is how long that can continue before cattle producers work the numbers or run out of grazing and supplemental feed substitutes they can use to efficiently feed grain?” Welch wonders. “Cash prices for feed-grade grain in Texas are still at a premium. We’re still living on supplies, and harvests in southern parts of the state are trickling in, but yields are below average.”

Of course, extreme heat in the Corn Belt has folks concerned about overall U.S. corn production this year.

Welch notes USDA’s recent corn harvest-area adjustment based on the June Acreage report, while holding expected yield steady at 177 bu./acre.

“Further down the road is more uncertain,” Welch says. “We need every bushel and every acre. The umbrella over all the markets is the economic slowdown and what that could do to demand on everything from corn to crude oil and cattle. That is an overarching concern.”

Approximately 56% of the nation’s cattle were in drought areas July 12, according to USDA’s Ag in Drought report.

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

Cattle Current Daily—July 20, 2022

Feeder Cattle futures rallied an average of $2.13 higher Tuesday, propelled by lower Corn futures and ongoing cash demand strength.

Corn futures closed 13¢ to 15¢ lower through new-crop contracts on weather pressure and then mostly 7¢ to 8¢ lower.

Soybean futures closed 17¢ to 22¢ lower through Jly ‘23 and then mostly 9¢ to 12¢ lower.

Positive outside markets, Feeder Cattle and higher wholesale beef values helped pull Live Cattle futures an average of 48¢ higher.

Choice Boxed beef cutout value was $2.02 higher Tuesday afternoon at $272.57/cwt. Select was $1.07 higher at $243.73/cwt.

Negotiated cash fed cattle trade was $1 lower in the Texas Panhandle on Tuesday at $136/cwt. with moderate trade and light to moderate demand.

Elsewhere, trade was mostly inactive on light demand with too few transactions to trend, according to the Agricultural Marketing Service.

Last week, live prices were $137 in Kansas, $140-$145 in Nebraska and $143.50 to $145.00 in the western Corn Belt. Dressed prices were $230 in Nebraska and $228-$230 in the western Corn Belt.

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Major U.S. financial indices rallied Tuesday, with various analysts attributing the surge to investors betting the bottom is in or near.

The Dow Jones Industrial Average closed 754 points higher. The S&P 500 closed 105 points higher. The NASDAQ was up 353 points.

West Texas Intermediate Crude Oil futures on the CME closed 73¢ to $1.62 higher through the front six contracts. 

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USDA’s Economic Research Service (ERS) raised the expected feeder steer price (750-800 lbs., Oklahoma City) for the remainder of this year based on stronger than expected placements in May, current price data and tighter supplies than expected.

In the latest Livestock, Dairy and Poultry Outlook, ERS forecast the average feeder steer price $2 higher for the third quarter at $168/cwt., $1 higher in the fourth quarter at $171 and $1 higher for the annual average price at $163. Likewise, the expected first-quarter price increased $1 to $169. Next year’s annual average price is $199.25.

As for fed steer prices, ERS analysts point out the five-area average price July 10 was $22 higher year over year at $144.35/cwt., supported by the faster slaughter pace, lighter carcass weights and strong beef prices.

The fed steer price was projected at $139/cwt. in the third quarter and at $141.30 for the annual average. Next year’s annual average price was forecast at $153.

“Conditions continue to elevate beef cow culling rates and placement of calves on feed at a faster than expected pace,” ERS analysts say. “Lower expected carcass weights in second-half 2022 are more than offset by higher expected fed cattle slaughter in the fourth quarter. This raised projected 2022 production slightly, however, lower weights were carried into first-quarter 2023, marginally reducing next year’s production.”

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

Cattle Current Daily—July 19, 2022

Soybean futures closed sharply higher Monday, boosted by a bounce in oil prices, carrying Corn along for the ride. Extreme heat in the short-term forecast added support.

Soybean futures closed 31¢ to 38¢ higher through Sep ‘23 and then mostly 26¢ to 27¢ higher.

Corn futures closed mostly 5¢ to 6¢ higher.

Even so, Cattle futures firmed Monday, supported by stronger wholesale beef values.

Choice Boxed beef cutout value was $1.64 higher Monday afternoon at $270.55/cwt. Select was 87¢ higher at $242.66/cwt.

Live Cattle futures closed an average of 42¢ higher (42¢ to $1.05 higher).

Feeder Cattle futures closed an average of 37¢ higher, except for an average of 18¢ lower in two nearby contracts.

There was no established negotiated cash fed cattle trade through Monday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $137/cwt. in the Southern Plains, $140-$145 in Nebraska and $143.50-$145.00 in the western Corn Belt. Dressed prices were $228-$230.

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Major U.S. financial indices gave back some of the previous session’s gains on Monday, with mixed earnings reports and lingering concerns about inflation and economic growth.

Builder confidence plunged month to month in July as high inflation and increased interest rates stalled the housing market by dramatically slowing sales and buyer traffic. In a further sign of a weakening housing market, builder confidence in the market for newly built single-family homes posted its seventh straight monthly decline in July, falling 12 points to 55, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This is the lowest HMI reading since May 2020 and the largest single-month drop in the history of the HMI, except for the 42-point drop in April 2020.

“Production bottlenecks, rising home building costs and high inflation are causing many builders to halt construction because the cost of land, construction and financing exceeds the market value of the home,” says NAHB Chairman Jerry Konter, a home builder and developer from Savannah, Ga. “In another sign of a softening market, 13% of builders in the HMI survey reported reducing home prices in the past month to bolster sales and/or limit cancellations.”

“Affordability is the greatest challenge facing the housing market,” explains NAHB Chief Economist Robert Dietz. “Significant segments of the home buying population are priced out of the market. Policymakers must address supply-side issues to help builders produce more affordable housing.”

The Dow Jones Industrial Average closed 215 points lower. The S&P 500 closed 32 points lower. The NASDAQ was down 92 points.

West Texas Intermediate Crude Oil futures on the CME closed $3.99 to $5.01 higher through the front six contracts, supported by snug supplies and indications that Saudi Arabia will not increase production.

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When USDA issues the mid-year cattle report this Friday, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, expects to see the beef cow inventory 2.5% to 3.0% less year over, and the smallest since 2015. In his weekly market comments, Peel points out beef cow slaughter was 14.6% more than 2021 through the first half of this year. Last year’s beef cow slaughter was 9% more year over year.

“Fed cattle slaughter was up 0.6% year over year in the first half of the year. However, fed steer slaughter was down 1.4% while fed heifer slaughter was up 3.8%. Heifer slaughter in the first half of the year was 52.1% of the January 1 inventory of other heifers. That is the highest rate of heifer slaughter in the first half of the year since 2004 and has averaged 48.3% in the past 15 years. Reduced beef heifer retention may lead to a decrease in the beef replacement heifer inventory of 2.5% or more,” Peel says.

So, it will take time to begin expanding the herd when drought eases.

“Cow culling can drop rather quickly if conditions improve but the availability of replacement heifers, especially bred heifers, may take a year or more,” Peel explains. “Heifer liquidation this year may mean that a limited supply of bred heifers is available next year.  If drought conditions improve this summer/fall, it may be possible to save some additional replacement heifer calves, but most will not calve until 2024. Even if we can and want to, the ability to rebuild the beef cow herd may be limited in 2023.  Hopefully, the upcoming report will provide some indication of what lies ahead.”

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

Cattle Current Daily—July 18, 2022

Cattle futures continued to soften Friday on the week’s lower cash fed cattle prices and ongoing recession fears.

Pressure could have also included uncertainty regarding the railroad strike set to begin Monday. Ultimately the strike was averted, at least for now, when President Biden signed an executive order Friday, creating a Presidential Emergency Board (PEB). The PEB has 30 days to recommend a resolution. The railroads and the unions then have another 30 days to negotiate a settlement.

Feeder Cattle futures closed an average of $1.29 lower (57¢ to $2.55 lower).

Live Cattle futures closed an average of 64¢ lower.

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

For the week, live prices were steady in the Southern Plains at $137/cwt., steady to $4 lower in Nebraska at $144-$145 and $2-$5 in the western Corn Belt at $145. Dressed prices were $2 lower in Nebraska at $230 and $2-$4 lower in the western Corn Belt at $228-$230.

Choice Boxed beef cutout value was $1.16 higher Friday afternoon at $268.91/cwt. Select was 12¢ lower at $241.79/cwt.

Estimated total cattle slaughter last week of 677,000 head was 84,000 head more than the previous holiday-shortened week. Total estimated year-to-date cattle slaughter of 18.2 million head was 211,000 head more (+1.2%) than last year. Estimated year-to-date beef production of 15.0 billion lbs. was 153.5 million lbs. more (+1.0%).

Corn and Soybean futures closed narrowly mixed Friday as traders positioned following the massive selloff earlier in the week.

Corn futures closed mixed from fractionally lower to 2¢ higher through Sep ‘23, and then 1¢ to 2¢ lower.

Soybean futures closed mostly fractionally mixed to 1¢ higher through Sep ‘23 and then 1¢ to 2¢ lower.

Net U.S. beef export sales for the week ending July 7 were a market-year low, down 17% from the previous week and 35% lower than the prior four-week average, according to the U.S. Export Sales report.

Increases were primarily for Japan, Mexico, Canada, China and Taiwan.

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Major U.S. financial indices bounced higher Friday, supported by major bank earnings and stronger consumer spending than expected.

Advance estimates of U.S. retail and food services sales for June were 1% more than the previous month — slightly more than expected — and 8.4% more year over year, according to the U.S. Census Bureau. Also, though still near record lows, the University of Michigan Index of Consumer Sentiment rose from 50.0 in June to 51.1 in July.

The Dow Jones Industrial Average closed 658 points higher. The S&P 500 closed 72 points higher. The NASDAQ was up 201 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.51 to $1.81 higher through the front six contracts.

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Greenhouse gas (GHG) emissions from U.S. agriculture declined from 2019 to 2020, according to data from USDA’s Economic Research Service (ERS). Agricultural production accounted for 699 metric tons of carbon dioxide equivalent in 2019 versus 670 million metric tons in 2020. Farming and ranching accounted for 11.2 % of U.S. GHG emissions in 2020 (see chart below).

“The Environmental Protection Agency estimated that in 2020 agriculture produced 5.6% (of GHG) as nitrous oxide. 4.2% as methane, 0.8% as on-farm carbon dioxide, and 0.6% emitted indirectly through the electricity that agriculture consumes,” according to ERS. “Emissions come from cropping activities that emit nitrous oxide, such as fertilizer application and manure storage and management, and enteric fermentation (a normal digestive process in animals), which produces methane.”

Industry (excluding agriculture) accounted for most of the nation’s GHG emissions in 2020 (30.3%) followed by transportation (27.3%).

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

Cattle Current Daily—July 15, 2022

Cattle futures ran out of steam Thursday amid higher Corn futures, softer cash fed cattle prices and continued volatility in outside markets. Perhaps the possibility of a U.S. railroad strike on Monday also played a role.

Feeder Cattle futures closed an average of $1.29 lower (87¢ to $1.90 lower).

Live Cattle futures closed an average of $1.33 lower through the front four contracts, then an average of 79¢ lower.

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

So far this week, live prices are steady in the Southern Plains at $137/cwt., steady to $4 lower in Nebraska at $144-$145 and $2-$5 lower in the western Corn Belt at $145. Dressed prices are $2 lower in Nebraska at $230 and $2-$4 lower in the western Corn Belt at $228-$230.

Choice Boxed beef cutout value was 30¢ lower through Thursday afternoon at $267.75/cwt. Select was 65¢ lower at $241.91/cwt.

A hotter, drier forecast helped lift Corn futures mostly 5¢ to 8¢ higher, except for 45¢ lower in spot Jly. However, declining oil prices weighed on Soybean futures, which were mostly 7¢ to 13¢ lower, except for 22¢ higher in spot Jly.

So far Friday, Cattle futures are trending lower.

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Major U.S. financial indices finished mixed on Thursday, with investors processing the unexpected inflation increase, and the real possibility of a more aggressive rate hike by the Federal Reserve.

The Dow Jones Industrial Average closed 143 points lower. The S&P 500 closed 11 points lower. The NASDAQ was up 4 points.

West Texas Intermediate Crude Oil futures on the CME closed 52¢ to $1.43 lower through the front six contracts.

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Consumers returned to spending more money for food away from home than at home last year, according to the Weekly Spotlight from USDA’s Economic Research Service (ERS).

Annual food spending (real or inflation-adjusted) in the United States increased every year since 1997, except in 2008, 2009 and 2020, according to ERS. Sales for food at home (FAH) and food away from home (FAFH) increased from 1997 to 2019. During the same period, real FAH spending increased at a slower rate (43.5%) than for FAFH (73.9%). In 2020, during the Coronavirus (COVID-19) pandemic, real total food expenditures declined 6.6% year over year.

“U.S. consumers’ food-spending patterns changed as efforts were made to limit the spread of COVID-19, which included stay-at-home orders,” ERS analysts explain. “FAFH spending decreased by 15.8% in 2020, while FAH spending increased by 3.9%. In 2021, real total food expenditures increased 12.2% from 2020. With increased household income during the economic recovery and relaxed safety measures around indoor dining and social distancing, FAFH spending increased by 21.1% in 2021 from the previous year and was the primary driver of the overall food spending increase.” FAH spending increased by 4% during the same period.

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

Cattle Current Daily—July 14, 2022

Strong cash demand continued to bolster Feeder Cattle futures, Wednesday, helping Live Cattle to continue edging higher.

Feeder Cattle futures closed an average of $1.17 higher. Live Cattle futures closed an average of 30¢ higher, except for unchanged in one contract.

Negotiated cash fed cattle trade was moderate in the Southern Plains and Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were steady in the Southern Plains at $137/cwt. and steady to $4 lower in Nebraska at $144-$145, where dressed prices were $2 lower at $230.

Trade was limited on light demand in the western Corn Belt with too few transactions to trend. Last week, live prices were $145-$150 on a live basis and $232 in the beef.

Choice Boxed beef cutout value was 46¢ lower through Wednesday afternoon at $268.05/cwt. Select was 91¢ lower at $241.26/cwt.

Grain markets firmed Wednesday as traders retrenched following recent steep losses.

Corn futures closed mostly 7¢ to 8¢ higher. Soybean futures closed mostly 6¢ to 12¢ higher.

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Major U.S. financial indices closed lower Wednesday, pressured by higher inflation than the trade expected in the Consumer Price Index (CPI). It increased 1.3% month to month in June and was 9.1% higher over the last 12 months before seasonal adjustment. That was the largest 12-month increase since the period ending Nov. 1981.

The Dow Jones Industrial Average closed 208 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 17 points.

West Texas Intermediate Crude Oil futures on the CME closed 46¢ to 97¢ higher through the front six contracts.

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Despite sizzling hype the last few years surrounding plant-based alternatives to real meat, investor interest appears to be fizzling.

Consider that the share price for Beyond Meat® — the publicly traded posterchild for alternative meat protein — was about $30.62 on Wednesday. A year earlier, it was approximately 76% more at $127.92.

According to the company’s financial results for the first quarter, net revenues increased 1.2% year over year to $109.5 million and the total volume of products sold increased 12.4%. But, net loss was $100.5 million compared to $27.3 million in the first quarter last year. That was before a couple of recent lawsuits filed against the company, alleging the company’s products contain significantly less protein than advertised and are not all-natural as claimed.

Elsewhere, in its first-quarter financials, Maple Leaf Foods — Canada’s largest prepared meats and poultry producer — told investors it no longer expects spectacular growth in its alternative meat category, but does anticipate slower, steadier growth.

According to data from the Good Food Institute and data company, SPINS, sales of plant-based meat alternatives in the United States last year total $1.4 billion, the same as a year earlier.

Perhaps the most logical conclusion is that minor consumer interest will continue for alternatives, but the gleam for investors has faded amid increasing competition within the category, alongside the lack of explosive sales growth and underwhelming profit potential. In other words, the alternative may not be going anywhere, but then again, it appears they really aren’t going to go anywhere.

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

Cattle Current Daily—July 13, 2022

Grain markets were the story once again on Tuesday, melting down beneath the weight of bearish outside markets, the climbing U.S. dollar, a more optimistic weather outlook and apparently little impact from the latest monthly World Agricultural Supply and Demand Estimates (WASDE-see below).

Corn futures closed 36¢ to 48¢ lower through Jly ‘23 and then mostly 15¢ to 19¢ lower.

Soybean futures closed 48¢ to 63¢ lower through Sep ’23, then mostly 38¢ to 43¢ lower.

Sharply lower Corn futures and strong cash demand boosted Feeder Cattle an average of $3.48 higher, (from $2.98 higher to $4.70 higher).

That and firm wholesale Choice beef value helped Live Cattle edge an average of 41¢ higher, except for unchanged and down 25¢ in two contracts.

Last week, live prices were $137/cwt. in the Southern Plains, $144-$149 in Nebraska and $147-$150 in the western Corn Belt. Dressed prices were $232.

Choice Boxed beef cutout value was 37¢ higher through Tuesday afternoon at $268.51/cwt. Select was 83¢ lower at $242.17/cwt.

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Major U.S. financial indices closed lower Tuesday, pressured by falling Crude Oil futures and investor uneasiness over Wednesday’s consumer inflation report.

The Dow Jones Industrial Average closed 193 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 108 points.

West Texas Intermediate Crude Oil futures on the CME closed $6.45 to $8.25 lower through the front six contracts.

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USDA’s Economic Research Service increased the forecast average fed steer price for this year $1.20 higher than the previous month at $141.30/cwt., in the monthly World Agricultural Supply and Demand Estimates (WASDE). That was based on prices reported in the second quarter and expected packer demand strength in the third quarter. Prices are forecast to be $139 in the third quarter and $145 in the fourth quarter.

The annual expected average fed steer price for next year was unchanged at $153.

Among other WASDE highlights:

Corn

The 2022-23 U.S. corn outlook was for larger supplies and 70 million bu. more ending stocks. Corn production was forecast 45 million bu. higher based on increased planted and harvested area from the June 30 Acreage report. Yield was unchanged at 177.0 bu./acre. The season-average farm price received by producers was lowered 10¢ to $6.65.

Soybeans

Soybean production was projected 135 million bu. lower at 4.5 billion bu. on lower harvested area — 2.6 million acres less than expected the previous month, based on the June Acreage report. Ending stocks for 2022-23 were projected 50 million bu. less at 230 million. The U.S. season-average soybean price was forecast 30¢ lower at $14.40/bu. The soybean meal price was projected $10 lower at $390/short ton. The soybean oil price was forecast 1¢ lower at of 69¢/lb.

Wheat

Supplies of 2022-23 U.S. wheat were raised 44 million bu. to 1,781 million based on increased harvested area and higher yields. The projected season-average farm price for wheat was lowered 25¢/bu. to $10.50 on declines in futures and cash prices.

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

Cattle Current Daily—July 12, 2022

Strong cash demand for calves and feeder cattle, with snugger supplies looming, helped boost

Feeder Cattle futures an average of $2.09 higher Monday ($1.60 higher toward the back to $3.15 higher in spot Aug).

Live Cattle futures closed an average of $1.26 higher (82¢ higher toward the back to $2.20 higher in spot Aug), helped along by firm wholesale beef values.

Choice Boxed beef cutout value 25¢ higher through Monday afternoon at $268.14/cwt. Select was $1.15 higher at $243.00.

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

Last week, live prices were steady to $1 lower in the Southern Plains at $137/cwt., $1-$2 lower in Nebraska at $144-$149 and steady in the western Corn Belt at $147-$150. Dressed prices were $2 lower at $232.

The average five-area direct fed steer price last week was $144.35/cwt. on a live basis, which was $1.81 less than the previous week. The average price in the beef was $1.74 less at $232.22.

Corn futures closed 1¢ to 5¢ higher through new-crop contracts on Monday and then mostly 6¢ to 8¢ lower.

Soybean futures closed mostly 7¢ to 8¢ higher.

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Major U.S. financial indices closed lower as investors appeared to be skittish at the start of earnings season.

The Dow Jones Industrial Average closed 164 points lower. The S&P 500 closed 44 points lower. The NASDAQ was down 262 points.

West Texas Intermediate Crude Oil futures on the CME closed narrowly mixed through the front six contracts

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Auction receipts will likely continue down the seasonal path this year — dipping in July and then growing through the end of the year — but with fewer numbers, says Josh Maples, Extension livestock economist at Mississippi State University. In the latest Cattle Market Notes Weekly, he points out year-to-date stocker and feeder cattle auction receipts are about 3% less than the same time last year, according to

“While the drop in auction receipts for 2022 is one indicator of tighter supplies, the mix of steers and heifers is also of interest,” Maples explains. “The percentage of heifers (in the auction mix) has ticked higher in recent years, which is another signal that herd expansion is not occurring. The average weekly heifer percentage is 44% so far in 2022. For reference, this average was 39% during the first six months of 2015 when the U.S. herd was in a rapid expansion phase and more heifers were being retained for breeding.”

The next USDA Cattle report July 22 should provide more clarity to the number of calves born this year.

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

CattleCurrent Daily—July 11, 2022

Grain and Soybean futures rallied higher Friday, apparently mostly due to a wetter, drier forecast. 

Corn futures closed mostly 25¢ to 31¢ higher through Jly ‘23 and then mostly 10¢ to 22¢ higher.

Soybean futures closed mostly 24¢ to 39¢ higher through Aug ’24 and then mostly 10¢ to 21¢ higher.

Stronger grain futures pressured Feeder Cattle futures an average of $1.28 lower, (from 75¢ lower to $1.58 lower).

Live Cattle futures closed mixed, from an average of 53¢ lower through the front four contracts to an average of 21¢ higher, except for unchanged in the back contract. The anemic weekly export sales report could have provided some pressure. Net U.S. beef export sales the week ending the week of June 30 were 3% less than the previous week and 23% less than the prior four-week average, according to USDA.

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.

For the week, live prices were steady to $1 lower in the Southern Plains at $137/cwt., $1-$2 lower in Nebraska at $144-$149 and steady in the western Corn Belt at $147-$150. Dressed prices in Nebraska were $2 lower at $232.

Choice Boxed beef cutout value 18¢ lower through Friday afternoon at $267.89/cwt. Select was 73¢ lower at $241.85

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Major U.S. financial indices closed narrowly mixed on Friday. The June jobs report was stronger expected, but it remains to be seen if the recent rally can overcome bearish news and technical resistance. 

The Dow Jones Industrial Average closed 46 points lower. The S&P 500 closed 3 points lower. The NASDAQ was up 14 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.06 to $2.39 higher through the front six contracts.

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U.S. beef exports set new volume and value records in May, topping $1 billion for the fourth time this year, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

May beef exports reached 135,006 metric tons (mt), up 1% from the previous high posted in May 2021. Export value climbed 20% to $1.09 billion, breaking the March 2022 record. For January through May, beef exports increased 4% from a year ago to 613,266 mt, valued at $5.14 billion (up 34%). Exports to leading markets South Korea, Japan and China/Hong Kong already topped $1 billion each through May, while shipments also trended significantly higher to Taiwan, the Caribbean, the ASEAN region, the Middle East and Central America.

“For U.S. beef exports to maintain a $1 billion-per-month pace is tremendous under any circumstances, but it is especially remarkable given the strong U.S. dollar, continued shipping and logistical challenges and the economic uncertainty our industry and international customers face today,” said USMEF President and CEO Dan Halstrom. “Across a wide range of markets, the momentum for retail beef sales achieved during the pandemic continues, and it’s now complemented by a strong rebound in the foodservice sector. May volume was actually down slightly to both Japan and South Korea, and yet exports still set a new record. That’s a great indication of soaring, broad-based demand for U.S. beef.”

May beef export value averaged $505.02 per head of fed slaughter, up 17% from a year ago, breaking the previous record ($503.68) set in January 2022. Through May, per-head value averaged $483.49, up 34% from the first five months of 2021.

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

Cattle Current Daily—July 8, 2022

Negotiated cash fed cattle trade was moderate on moderate demand through Thursday afternoon in the Southern Plains and Nebraska. Live prices were steady to $1 lower in the Texas Panhandle at $137/cwt., mostly $1 lower in Kansas at $137 and $1-$2 lower in Nebraska at $144-$149, where dressed prices were $2 lower at $232.

Trade was limited on light to moderate demand in the western Corn Belt. Live prices the previous day were $150 — the top of last week’s range — and dressed prices were steady at $234.

Choice Boxed beef cutout value was 2¢ higher Thursday afternoon at $268.07/cwt. Select was 35¢ lower at $242.58.

Stronger grain futures pressured Feeder Cattle Thursday, while firmer beef values helped Live Cattle stay the course.

Feeder Cattle futures closed an average of 82¢ lower (42¢ to $1.05 lower).

Live Cattle futures closed an average of 18¢ higher, except for 10¢ lower in near Oct.

Grain and Soybean futures rallied back Thursday on oversold conditions and supportive outside markets.

Corn futures closed mostly 9¢ to 11¢ higher through Jly ‘23 and then mostly 2¢ to 5¢ higher.

Soybean futures closed mostly 38¢ to 43¢ higher through Jly ‘23 and then mostly 12¢ to 20¢ higher.

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Major U.S. financial indices rallied higher Thursday, buoyed by a bounce-back in crude oil prices and perhaps optimism about the nation’s monthly employment report due out Friday.   

The Dow Jones Industrial Average closed 346 points higher. The S&P 500 closed 57 points higher. The NASDAQ was up 259 points.

West Texas Intermediate Crude Oil futures on the CME closed $3.56 to $4.27 higher through the front six contracts.

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The Purdue University/CME Group Ag Economy Barometer continued to decline in June, down 2 points to a reading of 97. The Index of Future Expectations fell 5 points to a reading of 96, marking the lowest level since October 2016. However, producers were slightly more optimistic regarding current conditions — the Index of Current Conditions improved 5 points to 99.

“Rising input costs and uncertainty about the future continue to weigh on farmer sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Many producers remain concerned about the ongoing escalation in production costs as well as commodity price volatility, which could lead to a production cost/income squeeze in 2023.”

The Farm Financial Performance Index, which is primarily reflective of income expectations for the current year, improved 2 points to a reading of 83 in June, yet remains at one of the index’s lowest readings over the past two years. When asked about expectations for their farm’s financial condition in June 2023 compared to June 2022, 51% of survey respondents said they expect their farms to be worse off financially. That was the most negative response to the benchmark question since data collection began in 2015.

Primary producer concerns continue to be input prices (43%), followed by input availability (21%), government policies (18%), and lower output prices (17%). Looking ahead to 2023, a majority of farmers expect to see another round of large input cost increases with 63% of producers expecting higher costs in 2023, on top of the large increases experienced in 2022.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between June 13-17.

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

Cattle Current Daily—July 7, 2022

Cattle futures gained Wednesday, helped along by a bounce higher in wholesale beef values.

Choice Boxed beef cutout value was $3.39 higher Wednesday afternoon at $268.05/cwt. Select was $3.06 higher at $242.93.

Feeder Cattle futures closed an average of $1.17 higher (60¢ higher in spot Aug to $1.32 higher at the back).

Live Cattle futures closed an average of 96¢ higher ($1.57 higher in spot Aug to 12¢ higher at the back).

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

Last week, live prices were $137-138/cwt. in the Southern Plains, $145 in Colorado, $145-$151 in Nebraska and $147-$150 in the western Corn Belt. Dressed prices were $234.

Grain and Soybean futures firmed Wednesday as traders re-trenched after recent steep losses.

Corn futures closed 5¢ to 7¢ higher through new-crop contracts and then 2¢ to 5¢ higher.

Soybean futures closed 4¢ to 7¢ higher through Jan ‘23 and then mostly fractionally higher to 1¢ higher.

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Major U.S. financial indices eased higher Wednesday as some investors were apparently cheered by comments in the latest Federal Reserve minutes reaffirming commitment to containing inflation.  

The Dow Jones Industrial Average closed 69 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 39 points.

West Texas Intermediate Crude Oil futures on the CME closed 97¢ to $1.59 lower through the front six contracts.

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Willingness to pay (WTP) decreased for five evaluated retail products in June compared to the previous month, according to the latest Meat Demand Monitor from Kansas State University, funded in part by the beef checkoff. WTP declined 23¢ for ribeye steak to $17.42/lb. and 26¢ for ground beef to $8.78/lb. WTP also declined 25¢ for pork chop to $7.09/lb., 7¢ for chicken breast to $8.29/lb., 45¢ for shrimp to $9.16/lb. and 17¢ for beans and rice to $2.93/lb.

“Meanwhile, WTP decreased for seven evaluated Food Service meals,” according to the report. “Combined this broadly confirms weakening consumer demand consistent with increased general discussion around consumers being more conservative in their spending.”

Even so, in ad hoc questioning, when questioned about their response to higher retail meat prices, 31% of respondents (the most common response) said they were not making any changes in purchasing.

“Among those indicating changes, the most prevalent noted adjustment remains reducing the volume of items purchased while being steadfast in product type (brand, cut, and package size),” according to the report.

The Meat Demand Monitor tracks U.S. consumer preferences, views, and demand for meat with separate analysis for retail and food service channels. It is a monthly online survey with a sample of over 2,000 respondents reflecting the national population.

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

Cattle Current Daily—July 7, 2022

Another round of heavy fund selling — tied to recessionary fears — held sway in commodity markets Tuesday.

Corn futures closed mostly 24¢ to 29¢ lower. Soybean futures closed 70¢ to 79¢ lower through Aug ‘23 and then mostly 55¢ to 60¢ lower. Both were also pressured by favorable weather.

Cattle futures were caught in the commodity backwash with Feeder Cattle futures closing an average of $1.49 lower and Live Cattle futures closing an average of $1.65 lower.

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

Last week, live prices were $137-138/cwt. in the Southern Plains, $145 in Colorado, $145-$151 in Nebraska and $147-$150 in the western Corn Belt. Dressed prices were $234.

Choice Boxed beef cutout value was 84¢ higher Tuesday afternoon at $264.66/cwt. Select was 60¢ lower at $239.87.

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Major U.S. financial indices closed mixed Tuesday. Support included more durable goods orders and factory orders than expected in May. Also, the U.S. and China held discussions about easing the tariffs on Chinese goods imposed by President Trump. Reducing the tariffs could lower prices on consumer goods. However, the threat of a recession continues. Bloomberg Economics forecasts the odds of a recession in the U.S. at 38% over the next year.

The Dow Jones Industrial Average closed 129 points lower. The S&P 500 closed 6 points higher. The NASDAQ was up 194 points.

West Texas Intermediate Crude Oil futures on the CME closed $8.74 to $8.93 lower through the front six contracts.

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“The general direction of cattle and beef market forecasts for this year has not changed but annual forecasts have been modified by the way the first half of the year has played out, with implications for a significantly different second half of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.  

For instance, Peel explains beef production through the first two quarters was higher year over year but is still expected to be less than last year across the full calendar. Likewise, he points out total cattle slaughter in 2022 is expected to be about 1% less than 2021 but was 1.4% higher through the first six months.

“The increase is due to more female slaughter with total cow and heifer slaughter up 4.5% in the first half of the year,” Peel says. “Thus far, increased female slaughter more than offsets the 1.6% year-over-year decrease in steer and bull slaughter. Total cow slaughter is up 6.1% so far this year with dairy cow slaughter down 3.1% year over year, partially offsetting the 14.6% year-over-year increase in beef cow slaughter. For the remainder of the year, total beef cow slaughter is likely to remain higher year over year by double-digits and total cow slaughter is likely to increase by 5-6% year over year. This means that reduced cattle slaughter will be realized by less steer and heifer slaughter.”

This reality implies reduced feedlot marketing rates, Peel explains.

“Feedlots, as of June 1 had record inventories of cattle on feed, which seems to be at odds with the idea of reduced marketings in the coming months. However, feedlots have been placing larger numbers of lightweight cattle, which leads to more days on feed and slower turnover rates … slower marketing rates,” Peel explains. “Feedlots will work through current inventories in the second half of the year. May placements were down by the largest year-over-year monthly decrease since last September. Smaller placements in the coming months will lead to lower feedlot inventories by the end of the year unless drought forces even larger numbers of cattle into feedlots.”

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

Cattle Current Daily—July 4 and 5-2022

Weaker grain futures and strong country trade helped Feeder Cattle futures take another step higher Friday.

Feeder Cattle futures closed an average of $1.57 higher, while Live Cattle futures closed an average of $1.14 higher (55¢ to $2.62 higher).

Grain and Soybean futures were down again on extended fund liquidation and plummeting open interest.

Corn futures closed mostly 7¢ to 12¢ lower. Soybean futures closed 47¢ to 62¢ lower through Aug. ‘23 and then mostly 25¢ to 37¢ lower.

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

For the week (last established) live prices were $1 lower in the Texas Panhandle at $137/cwt., steady to $1 higher in Kansas at $138, steady in Colorado at $145, steady to $3 higher in Nebraska at $145-$151 and unevenly steady ($2 lower to $3 higher) in the western Corn Belt at $148. Dressed prices were steady in Nebraska at $234 and steady to $6 lower in the western Corn Belt at $234.

The average five-area direct fed steer price was $1.60 higher on a live basis at $146.10/cwt. The average steer price in the beef was 97¢ lower at $233.94.

Choice Boxed beef cutout value was 18¢ lower Friday afternoon at $263.82/cwt. Select was 10¢ lower at $240.47.

Estimated total cattle slaughter last week of 636,000 head was 30,000 head fewer than the previous week but 8,000 more than the same week last year, according to USDA. Estimated year-to-date total cattle slaughter of 16.9 million head was 168,000 head more than the same time last year. Estimated year-to-date beef production of 13.96 billion lbs. was 127.6 million lbs. more (+0.9%) than last year.

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Major U.S. financial indices rallied late in Friday’s session to close higher, despite the lowest Manufacturing Purchasing Managers Index since June of 2020, according to the Institute of Supply Management.

The Dow Jones Industrial Average closed 321 points higher. The S&P 500 closed 39 points higher. The NASDAQ was up 99 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.60 to $2.67 higher through the front six contracts.

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Opponents to the nation’s beef checkoff came up short in their latest multi-year challenge.

The Supreme Court of the United States last week denied R-CALF’s lawsuit against 13 state beef councils and the Beef Checkoff. This ruling effectively ends yet another R-CALF attack on the Beef Checkoff and prevents the activist attorneys at Public Justice, from further diverting Checkoff and beef industry resources.

“For too long we have allowed R-CALF and their attorneys to divide our industry and draw attention away from the important job of beef promotion and research. The Supreme Court’s rejection of R-CALF’s petition confirms the Beef Checkoff, and its overseers, are adhering to the letter and spirit of the laws that protect and guide producer investments in the program,” says NCBA CEO Colin Woodall.

NCBA intervened in the lawsuit in its early days to help defend state beef councils from R-CALF and their activist attorneys, who falsely attacked state beef councils and the cattlemen and women who volunteer their time to support the industry as Checkoff leaders. Multiple court decisions rejected these allegations and reaffirmed the work and direction of the Beef Checkoff and those who guide it.

“R-CALF has repeatedly attacked the Beef Checkoff, engaging lawyers who are closely aligned with extremist animal rights groups like PETA and others, in an attempt to further their efforts,” Woodall says. “It’s time that our industry stands up to R-CALF and insists that they end these attacks on the Beef Checkoff and the volunteer cattle producers who direct it.”

As an editorial aside, folks can always find details of a program they disagree with, but when you look at how much the beef checkoff accomplishes each year and over time, its mind boggling that anyone would want to derail the program. Never mind the promotion, naysayers should look at the long list of necessary product research, which has helped create new products and beef demand, and describe an alternative that would have done more.

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

Cattle Current Daily—July 1, 2022

Grain markets were the story on Thursday as Corn and Soybean futures tumbled, likely having more to do with quarter-end fund liquidation than the latest USDA Grain Stocks and Acreage reports (see below), which were likely regarded as neutral overall.

On Thursday, Corn futures closed 24¢ to 35¢ lower through new-crop contracts and then mostly 11¢ to 20¢ lower.

Soybean futures closed mostly 19¢ to 29¢ lower.

Feeder Cattle futures climbed an average of $2.17 higher Thursday, from $1.50 higher at the back to $2.87 higher in spot August.

Expiring spot June Live Cattle futures closed $1.20 higher at $138 and then an average of 32¢ higher, except for unchanged to an average of 21¢ lower in three contracts.

Cattle futures are higher again so far today.

Negotiated cash fed cattle trade in the Texas Panhandle Thursday was $1 lower than the previous day at $137/cwt.; steady to $1 lower for the week.

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

For the week, live prices are steady to $1 higher in Kansas at $138, steady in Colorado at $145, steady to $3 higher in Nebraska at $145-$151 and steady to $2 higher in the western Corn Belt at $147-$150. Dressed prices are steady in Nebraska at $234 and steady to $6 lower in the western Corn Belt at $234.

Choice Boxed beef cutout value was 88¢ lower through Thursday afternoon at $264.00/cwt. Select was 24¢ lower at $240.57.

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Major U.S. financial indices closed lower Thursday on continued investor concern about recession and positioning at the end of the quarter.

The Dow Jones Industrial Average closed 254 points lower. The S&P 500 closed 33 points lower. The NASDAQ was down 149 points.

The indexes were lower through noon today with pressure including the lowest Manufacturing Purchasing Managers Index since June of 2020, according to the Institute of Supply Management.

West Texas Intermediate Crude Oil futures on the CME closed $3.63 to $4.02 lower through the front six contracts.

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Corn planted area for all purposes in 2022 was estimated at 89.9 million acres, in USDA’s Acreage report. That would be 3.44 million acres less (-4%) than last year. However, it was more than the estimate in the Prospective Plantings report and more than the trade expected.

Compared with last year, planted acreage is expected to be down or unchanged in 35 of the 48 estimating States.

Corn stocks in all positions on June 1, totaled 4.35 billion bu., up 6% year over year, according to USDA’s Grain Stocks report. Of the total stocks, 2.12 billion bu. were stored on farms, which was 22% more than a year earlier. Off-farm stocks, at 2.23 billion bu., were 6% less.

Soybean planted area for 2022 was estimated at 88.3 million acres, which would be 1% more than last year. Still, Soybean acreage was significantly less than the Prospective Plantings report and below trade expectations.

Compared with last year, planted acreage is up or unchanged in 24 of the 29 estimating States.

Soybeans stored in all positions on June 1 totaled 971 million bu., up 26% from a year earlier. On-farm stocks totaled 331 million bu., up 51% from a year ago. Off-farm stocks of 640 million bu. were 17% more than a year ago.

All wheat planted area for 2022 was estimated at 47.1 million acres, up 1% from 2021. If realized, this represents the fifth lowest all wheat planted area since records began in 1919.

Old crop all wheat stored in all positions on June 1 totaled 660 million bu., down 22% from a year ago. On-farm stocks were estimated at 93.0 million bu., down 34% from last year. Off-farm stocks of 567 million bu. were 19% less than a year ago.

Acreage for all hay was estimated at 51.5 million acres, which would be 771,000 acres more (+1.5%) than last year.

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

Cattle Current Daily—June 30, 2022

Negotiated cash fed cattle trade was light to moderate on moderate demand in Nebraska and the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service.

Live prices were steady in the Texas Panhandle at $138/cwt, steady to $1 higher in Kansas at $138 and steady to $3 higher in Nebraska at $145-$151. Dressed prices in Nebraska were steady at $234.

Elsewhere, trade was limited on moderate demand with too few transactions to trend. Last week live prices were $145 in Colorado and $145-$150 in the western Corn Belt, where dressed prices were $234-$240.

Choice Boxed beef cutout value was $2.26 lower through Wednesday afternoon at $264.88/cwt. Select was $2.50 lower at $240.81.

Cattle futures extended losses Wednesday, with a lack of cash direction early in the session. 

Feeder Cattle futures closed an average of 66¢ lower (7¢ lower toward the back to $1.17 lower toward the front).

Live Cattle futures an average of 53¢ lower, except for 50¢ higher in expiring spot Jun.

Corn and Soybean futures closed mixed ahead of Thursday’s much-anticipated USDA Grain Stocks and Acreage reports. 

Corn futures closed 5¢ to 6¢ lower through new-crop contracts and then mostly fractionally higher to 1¢ higher. 

Soybean futures closed 10¢ to 15¢ higher through Aug ‘23. And then 8¢ to 9¢ higher.

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Major U.S. financial indices were little changed Wednesday as investor pessimism continued regarding inflation, uncertainty and volatility.

The Dow Jones Industrial Average closed 82 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 3 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.86 to $1.98 lower through the front six contracts.

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“…feedlot inventories are declining seasonally and typically bottom-out in the late summer. That trend is expected this year, too, but it remains to be seen just how quickly the inventory numbers decline through the summer or increase during the fall,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest issue of Cattle Market Notes Weekly. “The number of calves born in the U.S. has declined annually since 2018, and 2022 is expected to be smaller again.”

Reflecting on another month of record-large feedlot inventories June 1, Maples explains more heifers and cattle placed at lighter weights, among other factors, makes it difficult to pinpoint when feedlot inventories will begin to decline.

“Lighter cattle typically stay in feedlot inventory longer, and an increase in heifers in the feedlot mix means higher feedlot totals now but fewer replacements to produce calves later,” Maples says. “Both of these factors are likely contributing to higher feedlot totals today, but do not suggest sustained high inventories in the future.”

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

Cattle Current Daily—June 29, 2022

Cattle futures closed lower Tuesday, basically giving back what was gained the previous session as Corn futures gained and cash fed cattle prices for the week remained unestablished.

Feeder Cattle futures closed an average of $1.42 lower (77¢ lower at the back to $2.30 lower in spot Aug).

Live Cattle futures an average of 44¢ lower, except for 5¢ higher in waning spot Jun.

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

Last week, live prices were $137-$138/cwt. in the Southern Plains, $145-$148 in the Northern Plains and $145-$150 in the western Corn Belt. Dressed prices were $234-$240.

Choice Boxed beef cutout value was $1.54 lower Tuesday afternoon at $267.14/cwt. Select was $1.93 lower at $243.31.

Corn and Soybean futures closed higher on lower week-to-week crop ratings.

Corn futures closed mostly 5¢ to 8¢ higher through new-crop contracts and then mostly fractionally higher to 1¢ lower.

Soybean futures closed mostly 25¢ to 29¢ higher.

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Major U.S. financial indices closed sharply lower Tuesday amid another volatile day of wide swings up and then down. Perhaps some profit taking and early positioning ahead of the quarter’s end played a role.

The Dow Jones Industrial Average closed 491 points lower. The S&P 500 closed 78 points lower. The NASDAQ was down 343 points.

West Texas Intermediate Crude Oil futures on the CME closed another $2.19 to $2.75 higher through the front six contracts.

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Amid inflation and rising costs, consumers are eating more dinners at home as a way to cut expenses, according to the NPD Group (NPD).

Although dinners at home peaked during the pandemic, out of necessity — and have normalized — they are expected to remain above pre-pandemic levels through 2024, according to NPD’s Future of Dinner report.

As consumers resume their busy lifestyles, however, the report suggests they will look for more convenience — little or no prep and fast dinner fixes, like frozen meals and ready-to-eat snacks, especially during the work week, will grow through 2024, according to the report. NPD analysts say consumers will also increasingly turn to retail on-the-go meals like ready-to-eat entrees from the grocery store to help with meal prep.

Also, according to the report:

  • Retail ready-to-eat foods are forecast to grow by double-digits through 2024.
  • Restaurant meals eaten at home are also forecast to grow.
  • Blended meals — pairing foods prepared and purchased away from home with dishes prepared at home — will continue through the near future.
  • Foods that require more effort and time will face headwinds through 2024.

“More dinner meals at home are here to stay. The shifting population life stages and economic situation will create greater reliance on dinner at home,” says Darren Seifer, NPD food and beverage industry analyst. “Consumers across all ages will look for breaks from routine, like making the same dishes out of habit. Food manufacturers and retailers can help consumers with dinner prep fatigue with convenient new foods and dishes that fit various cooking skill sets and needs. Value will also be top-of-mind with consumers during this time of high inflation.”

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

Cattle Current Daily—June 28, 2022

Feeder Cattle futures rallied back Monday, closing an average of $1.63 higher (65¢ higher at the back to $2.20 higher). They recovered the previous session’s losses, helped along by lower Corn futures and carried Live Cattle along.

Live Cattle futures an average of an average of 47¢ higher, also helped by higher wholesale values.

Choice Boxed beef cutout value was $3.70 higher Monday afternoon at $268.68/cwt. Select was 22¢ higher at $245.24.

Corn futures closed 18¢ to 20¢ lower through new-crop contracts on the positive weather outlook.

Higher crude oil and vegetable oil prices helped boost Soybean futures mostly 5¢ to 8¢ higher through Jly ‘23 

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

Last week, live prices were $137-$138/cwt. in the Southern Plains, $145-$148 in the Northern Plains and $145-$150 in the western Corn Belt. Dressed prices were $234-$240.

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Major U.S. financial indices closed lower Monday as investors appeared to await further direction from weekly data before taking the recent rally another step.

The Dow Jones Industrial Average closed 62 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 83 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.51 to $1.95 higher through the front six contracts.

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Given another month of record-large on-feed numbers, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says, “It is reasonable to ponder why feedlots have maintained record inventories this year despite declining cattle numbers since 2019. 

In his weekly market comments, he explains, generally speaking, expectations would have pegged peak feeder supplies in 2019 and peak feedlot production in 2020.

Then came delays due to the pandemic, less heifer retention —more heifers directed to the feedlot — stemming from cyclical herd contraction and then drought. Likewise, placement weights in recent months suggest feedlots have been pulling available supplies forward.

“It will take much of the remainder of the year for feedlots to work through the current inventory and we can’t be sure what additional impacts the drought may have in the coming months,” Peel says. He explains, we may continue to see feedlot placements pulled ahead and more heifers shifted into feedlots for a period, but it is inevitable that cattle supplies will tighten significantly in the coming months and feedlot inventories will fall.  The longer it takes to see that process begin, he says the more sudden and dramatic it will be. Although the timing is always tricky, Peel says the latest placement data may indicate that process has begun.

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

Cattle Current Daily—June 27, 2022

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

For the week, live prices were $3-$4 lower in the Southern Plains at $137/cwt., steady in Colorado at $145, steady to $5 higher in Nebraska at $145-$150 and $2-$5 higher in the western Corn Belt at $147-$150. Dressed prices were $4-$8 higher at $234-$238.

Through Thursday, the five-area direct average fed steer price was 77¢ higher on a live basis at $144.50/cwt. The average price in the beef was $5.18 higher at $234.91.

Estimated total cattle slaughter last week of 666,000 head was 1,000 head fewer than the previous week but 6,000 head more than the same week last year. Estimated year-to-date total cattle slaughter of 16.24 million head was 159,000 more than last year. Estimated year-to-date beef production of 13.45 billion lbs. was 127.10 million lbs. more than the same time last year.

Live Cattle futures closed narrowly mixed, from an average of 26¢ lower to an average of 16¢ higher.

Choice Boxed beef cutout value was 32¢ higher Friday afternoon at $264.98/cwt. Select was 8¢ higher at $245.02.

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Major U.S. financial indices rallied higher Friday. That was despite the closely watched University of Michigan Consumer Sentiment Index declining 0.2 points to a record low 50.0. Apparently, investors were emboldened by a slight easing of long-term inflation expectations within the report.

The Dow Jones Industrial Average closed 823 points higher. The S&P 500 closed 116 points higher. The NASDAQ was up 375 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.70 to $3.35 higher through the front six contracts.

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On the surface, markets could view the latest monthly Cattle on Feed report as neutral to slightly bearish with another record number of cattle on feed but fewer placements than analyst expectations ahead of the report.

Beneath the surface, some will likely question the accuracy of on-feed numbers continuing the record pace when cash markets in the North suggest cattle feeders are pulling green cattle forward.

Feedlots with 1,000 head or more capacity placed 1.87 million head on feed in May, which was 41,000 head fewer (-2.1%) than last year and 1.9% less than expectations ahead of the report.

In terms of placement, weights, 34% went on feed weighing 700 lbs. or less, 50% weighing 700-899 lbs. and 16% weighing 900 lbs. or more.

Marketings in May of 1.91 million head were 44,000 head more (+2.4%) than last year.

Cattle on feed June 1 of 11.70 head was 142,000 head more (+1.2%) than the previous year and 0.3% less than pre-report expectations. As mentioned, the number was record large for the date.

By | June 26th, 2022|Daily Market Highlights|

Cattle Current Daily—June 24, 2022

Feeder Cattle futures gained Thursday, closing an average of $1.11 higher and supported by the selloff in Corn futures, which closed 26¢ to 38¢ lower. Soybean futures closed 55¢ to 61¢ lower through Aug ’23 and then mostly 41¢ to 45¢ lower. Grain futures were pressured by the crop-friendly weather forecast in the Corn Belt and an overall meltdown in commodities.

Despite higher cash prices in the North, lower wholesale beef values and looming larger supplies helped pressure Live Cattle an average of 96¢ lower.

Premiums for fed cattle up north continued to climb Thursday.

Negotiated cash fed cattle trade and demand were moderate in Nebraska on Thursday with live prices steady to $3 higher at $145-$148/cwt. Dressed prices were $4 higher at $234.

Trade in the western Corn Belt was slow to moderate with moderate demand. Live prices were $2-$3 higher than the previous day at $150. Dressed prices the previous day were $8-$10 higher than last week at $238-$240.

In Colorado, trade was slow on light demand with live prices steady at $145.

Trade in Kansas was slow on light demand. Live prices were steady to $4 lower than previous day at $137. Prices in the region last week were $140.

Trade was mostly inactive on light demand in the Texas Panhandle. So far this week, prices are mainly $3 lower at $137.

The average dressed steer weight for the week ending June 11 was 879 lbs., which was 3 lbs. less than the prior week and year, according to the USDA Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 814 lbs. was the same as the previous week but 3 lbs. heavier than the prior year. Total fed cattle slaughter of 528,748 head was 5,089 head fewer than the same week last year. Beef production of 542.8 million lbs. was 4 million lbs. less year over year.

Choice Boxed beef cutout value was $1.91 lower through Thursday afternoon at $264.66/cwt. Select was $1.05 lower at $244.94.

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Major U.S. financial indices closed higher Thursday.

The Dow Jones Industrial Average closed 194 points higher. The S&P 500 closed 35 points higher. The NASDAQ was up 179 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.92 to $3.27 lower through the front six contracts, on concerns of slowing economic growth.

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Total pounds of beef in freezers May 31 were 2% less than the previous month but 25% more than last year, according to the latest USDA Cold Storage report. The total of 519.8 million lbs. was record large for the month.

Frozen pork supplies were up 2% month over month and 17% higher year over year.

Total red meat supplies in freezers were slightly less than the previous month but were 20% more than last year.

Total frozen poultry supplies were 2% more than the previous month and 1% more than last year.

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

Cattle Current Daily—June 23, 2022

Negotiated cash fed cattle prices were mostly $2 lower on a live basis in Kansas through Wednesday afternoon at $138/cwt. That was on slow trade and moderate demand, according to the Agricultural Marketing Service. Prices were $2 lower to $2 higher at $138 in the Texas Panhandle on Tuesday.

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

Last week, live prices were $145/cwt. in the Northern Plains and western Corn Belt. Dressed prices were $230.

Softer cash prices, wavering outside markets and anemic technical support pressured Cattle futures.

Feeder Cattle futures closed an average of $1.38 lower.   

Live Cattle futures closed an average of $1.26 lower.

Choice Boxed beef cutout value was 99¢ lower through Wednesday afternoon at $266.57/cwt. Select was 71¢ lower at $245.99.

Corn and Soybean futures mainly extended losses, pressured by crop progress and lower Crude Oil. 

Corn futures closed 7¢ lower through new crop contracts and then 1¢ to 4¢ lower.

Soybean futures closed 30¢ to 34¢ lower through Jly ’23 and then mostly 20¢ to 27¢ lower.

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

The Dow Jones Industrial Average closed 47 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 16 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.79 to $3.35 lower through the front six contracts, on concerns of slowing economic growth.

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The U.S. Senate Agriculture Committee advanced two bills on Wednesday related to the cattle markets: the Meat and Poultry Special Investigator Act of 2022 and the Cattle Price Transparency Act of 2022.

The National Cattlemen’s Beef Association (NCBA) once again voiced opposition to both.

Among other things, the Cattle Transparency Act would mandate minimum levels of regional cash fed cattle trade, which would restrict use of the alternative marketing arrangements producers utilize to reduce risk, differentiate carcass value and earn premiums or discounts, accordingly.

“The U.S. cattle industry is home to one of the most complex set of markets in the world. Rather than embrace the freedom of that marketing system, Congress is instituting a one-size-fits-all policy that will hurt cattle producers’ livelihoods,” says Ethan Lane, NCBA vice president of government affairs. “Cattle markets are finally returning to normal after pandemic-fueled uncertainty, but these heavy-handed mandates will stifle innovation and limit marketing opportunities.”

The Meat and Poultry Special Investigator Act of 2022 would create a new special investigator position at the U.S. Department of Agriculture.

“NCBA supports oversight of the market, but creating a duplicative, bureaucratic new special investigator role is the wrong approach. Congress should be focused on the issues that are hurting producer profitability now — rising food, fuel, and feed prices,” Lane says.

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

Cattle Current Daily—June 22, 2022

Feeder Cattle futures extended gains Tuesday, closing an average of $2.37 higher on Corn futures that were 23¢ to 29¢ lower through Jly ’23, pressured by a favorable short-term weather outlook and positive crop progress and conditions. Soybean futures closed 20¢ to 28¢ lower through Mar ’23.  

Live Cattle hovered ahead of the week’s cash direction closing an average of 19¢ lower, except for an average of 35¢ higher in the back two contracts.

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

Last week, live prices were $145/cwt. in the Northern Plains and western Corn Belt. They were $140 in Kansas and $136-$140 in the Texas Panhandle. Dressed prices were $230.

Choice Boxed beef cutout value was $1.06 higher through Tuesday afternoon at $267.56/cwt. Select was 31¢ higher at $246.70.

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Major U.S. financial indices closed sharply higher Tuesday, perhaps a relief rally after last week’s steep losses.

The Dow Jones Industrial Average closed 641 points higher. The S&P 500 closed 89 points higher. The NASDAQ was up 270 points.

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Creighton University’s Rural Mainstreet Index (RMI) for May declined to the lowest level since Feb. 2021 but remained above growth neutral for the eighteenth consecutive month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Among highlights from the recent report: 

  • Escalating costs of farm inputs pushed borrowing up to its highest reading since May 2020.
  • On average, cash rents rose 9.6% to $250 per acre for non-irrigated crop land over the past 12 months.
  • Approximately 40% of bankers expect 2022 farm income to be greater than 2021 farm income, while 25.9% of bankers expect 2022 farm income to be less than last year’s farm income.
  • The depreciation of the U.S. dollar against the Mexican peso has been a stimulus to exports to Mexico, the top destination for the region’s farm products.
By | June 21st, 2022|Daily Market Highlights|

Cattle Current—June 20-21, 2022

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 ended up $3-$4 higher in the Southern Plains at $140/cwt., $2-$4 higher in the Northern Plains at $145 and mostly steady to $4 higher in the western Corn Belt at $140-$146. Dressed prices were $4-$5 higher at $230.

The five-area direct fed steer price through Thursday was $3.21 higher at $143.73. The average steer price in the beef was $3.71 higher at $229.73.

Estimated total cattle slaughter last week of 667,000 head was 7,000 fewer than the previous week but 3,000 head more than the same week last year. Year-to-date total estimated cattle slaughter of 15.58 million head was 156,000 more (+1.0%) than the same period last year. Total estimated year-to-date beef production of 12.92 billion lbs. was 130.5 million lbs. more (+0.8%).

Choice Boxed beef cutout value was 90¢ lower through Friday afternoon at $266.26/cwt. Select was $1.15 higher at $246.53.

Cattle futures continued to gain Friday with the week’s higher cash prices, aggressive fed cattle slaughter and weaker Corn futures.

Feeder Cattle futures closed an average of $1.32 higher (40¢ higher at the back to $1.65 higher in spot Aug). 

Live Cattle futures closed an average of 38¢ higher.

Corn futures closed mostly 4¢ to 7¢ lower.

Soybean futures closed mostly 5¢ to 7¢ lower.

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Major U.S. financial indices closed mixed Friday after a volatile back-and-forth session.

The Dow Jones Industrial Average closed 38 points lower. The S&P 500 closed 8 points higher. The NASDAQ was up 152 points.

West Texas Intermediate Crude Oil futures on the CME tumbled Friday, $6.28 to $8.03 lower in the front six contracts, presumably on fears about economic slowdown as central banks around the work raise interest rates and inflation continues unabated.

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“Drought and pasture conditions improved from last month, but the situation is still very poor compared to last year and previous years,” say analysts with USDA’s Economic Research Service, in the recent monthly Livestock, Dairy and Poultry Outlook. They explain, drought and increased input costs are likely much of the impetus behind the 15% year-over-year increase in beef cow slaughter so far this year.

“Based on weekly actual slaughter data reported by the Agricultural Marketing Service through May 28, the pace of beef cow slaughter was almost 10,000 head per week on average above last year for the first four weeks of May,” ERS analysts say. “Based on the pace of beef cow slaughter to date, the anticipated slaughter of beef cows is raised in the second and third quarters of 2022. However, that should leave fewer beef cows available for slaughter in the fourth quarter.”

At the same time, those analysts note weekly fed cattle slaughter is finally back to pre-COVID levels, reducing the need for heavy Saturday slaughter.

“Further, weekday highs have hit thresholds not seen since 2013. Subsequently, it appears that limits to packers’ processing capacity is improving to a point where the fed cattle market is emerging from what may have restricted the market these past two years,” ERS analysts say.

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

Cattle Current Daily—June 17, 2022

Grain and soybean futures rallied Thursday with extreme heat and dry conditions forecast for the Corn Belt.

Corn futures closed 11¢ to 14¢ higher through Jly ‘23, and then mostly 3¢ to 5¢ higher.

Soybean futures closed mostly 14¢ to 19¢ higher.

Stouter corn prices helped pressure Feeder Cattle futures an average of $1.66 lower.

Live Cattle futures mostly held their ground, supported by stronger cash prices, closing an average of 30¢ lower, except for unchanged to an average of 13¢ higher in three contracts.

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. Live sales were $3 higher than last week in Kansas at $140 and $2-$4 higher than Tuesday in the Texas Panhandle at $140.

Elsewhere, for the week, live prices are $2-$4 higher in the Northern Plains at $145 and $3 higher in the western Corn Belt at $144-$146. Dressed prices are $4-$5 higher at $230.

Choice Boxed beef cutout value was $1.06 lower through Thursday afternoon at $267.16/cwt. Select was 30¢ lower at $267.16.

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Major U.S. financial indices closed sharply lower Thursday on more data indicating slowing economic growth.

Privately owned housing starts in May of 1.55 million were 14.4% less than the revised April estimate, according to the U.S. Census Bureau. That was significantly more bearish than the trade expected and 3.5% less year over year.

The Dow Jones Industrial Average closed 741 points lower. The S&P 500 closed 123 points lower. The NASDAQ was down 453 points.

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USDA’s Economic Research Service (ERS) lowered the expected average feeder steer price for the second quarter $2 to $157/cwt., based on recent price data. In the latest Livestock, Dairy and Poultry Outlook, ERS forecast the average feeder steer price (basis 750-800 lbs., Oklahoma City) at $166 in the third quarter, and $170 in the fourth quarter for an annual average price of $162.76. Next year, the first-quarter price is projected at $170 and the annual average price is forecast to be $198.25.

As for fed steers, ERS analysts note the weekly five-area average price peaked the first part of May at $143.42. Although prices declined since then, they explain the weekly average price of $138.07 for the week ending June 5 was $18 higher year over year.

“A generally faster pace of slaughter from packers may keep fed steer prices relatively stable for the remainder of the second quarter,” ERS analysts say. “Based on the May 2022 average monthly price of $141.34/cwt. and current daily price data, the 2022 fed steer price is forecast unchanged at $140.10. The 2023 fed steer price is also unchanged from last month at $153.00.”

ERS also left forecast beef production for this year unchanged.

“However, current poor forage conditions and high operating costs continue to push producers’ beef cow culling rates up, and calves are being placed on feed at a faster-than-expected pace,” say ERS analysts. “Higher anticipated cow slaughter and higher expected second-half 2022 fed cattle marketings more than offset lower expected carcass weights, resulting in a marginal increase in 2022 production to 27.9 billion pounds.”

ERS projects next year’s beef production to be 7% less.

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

Cattle Current Daily—June 16, 2022

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

So far this week, live prices are steady to $2 higher in the Texas Panhandle at $136-$138/cwt., $4 higher in Colorado at $145, $2-$4 higher in Nebraska at $145 and $2-$3 higher in the western Corn Belt at $144-$145. Dressed prices are $4-$5 higher at $230. Live prices in Kansas last week were $137-$138.

Cash price strength helped boost Cattle futures.

Feeder Cattle futures closed an average of $1.22 higher (55¢ to $1.97 higher).

Live Cattle futures closed an average of $1.22 higher (20¢ higher toward the back to $2.72 higher toward the front).

Choice Boxed beef cutout value was $1.22 lower through Wednesday afternoon at $268.22/cwt. Select was $1.14 lower at $245.68.

Corn futures closed mostly fractionally mixed, except for 5¢ higher in the spot month.

Soybean futures closed mostly 1¢ to 2¢ lower through Sep ‘23 and then mostly fractionally lower.

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Major U.S. financial indices closed higher Wednesday after the Fed increased the federal lending rate by 75 basis points, as was widely expected.

The Dow Jones Industrial Average closed 303 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 270 points.

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Bipartisan legislation passed by the U.S. House of Representative this week — headed to the White House for President Biden’s signature — aims to ease ongoing ocean transportation and supply chain congestion.

If signed into law, as expected, the Ocean Shipping Reform Act would strengthen the authority of the Federal Maritime Commission (FMC) by providing it with new tools to help level the playing field for American exporters and counteract anticompetitive behavior. The bill would also help FMC more efficiently resolve disputes between ocean carriers and shippers, while also taking actions at the U.S. Department of Transportation to alleviate strain across the supply chain.

“Foreign flagged ocean carriers are playing games with American agriculture exports and our bill puts an end to it,” says U.S. Rep. Dusty Johnson (R-SD) Johnson. “The Ocean Shipping Reform Act is the strongest fix to our maritime laws in a generation. Americans are facing record inflation, our bill isn’t a silver bullet, but help is on the way.”

“In these times of rising input costs, it has never been more important to maximize the value of our agricultural products, and the best way to do that is to ensure access to the international marketplace. This legislation takes important steps forward in improving the shipping services available to U.S. exporters,” according to a statement from the U.S. Meat Export Federation.

“The common-sense improvements made by this bill will provide the FMC with the tools necessary to address unreasonable practices by ocean carriers and hold them accountable for any bad-faith efforts that disenfranchise American producers, including those throughout South Dakota, who feed the world,” says U.S. Sen. John Thune (R-SD).

The Ocean Shipping Reform Act will:

  • Prohibit ocean carriers from unreasonably refusing cargo space accommodations for U.S. exports and from discriminating against U.S. exporters;
  • Promote transparency by requiring ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and twenty-foot equivalent units (loaded/empty) per vessel that makes port in the United States;
  • Authorize the FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate; and
  • Establish new authority for the FMC to register shipping exchanges to improve the negotiation of service contracts.
By | June 15th, 2022|Daily Market Highlights|