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

Daily Market Highlights

Stay in the Market

Cattle Current Daily-Feb. 15, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. A few live trades were reported in the western Corn Belt at $124/cwt., but too few to trend.

Cattle futures leaked mostly slightly higher, apparently tied to expectations of further cash support for fed cattle. Lower grain prices also provided support to Feeder Cattle.

Except for 5¢ and 17¢ lower in Dec and away Feb, respectively, Live Cattle futures closed an average of 29¢ higher. 

Feeder Cattle futures closed an average of 39¢ higher (5¢ to 60¢ higher).

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

Soybean futures closed 10¢ to 13¢ lower through Jul ‘20, and then 8¢ to 9¢ lower, amid chatter about fewer year-over-year exports to China and early expectations for the next domestic crop weighing on stocks. 

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

Choice boxed beef cutout value was 37¢ lower Thursday afternoon at $216.07/cwt. Select was $1.60 lower at $210.41. 

*******************************

Major U.S. financial indices closed mixed Thursday. Pressure included a month-to-month decline in retail sales of 1.2% in December, according to the U.S. Commerce Department. 

The Dow Jones Industrial Average closed 103 points lower. The S&P 500 closed 7 points lower. The NASDAQ was up 6 points.

*******************************

Despite expectations of falling land values over the past few surveys, quality farmland values rose 3.4% in the fourth quarter from a year earlier, according to the latest Agricultural Finance Monitor published by the Federal Reserve Bank of St. Louis.

Ranchland or pastureland values increased by 6.5% in the fourth quarter after increasing 1.5% in the third quarter. Cash rents for quality farmland rose 2.9% in the fourth quarter, following a 2% gain in the third quarter. Cash rents for ranchland or pastureland rose by 1.3%, after increasing by 0.8% in the third quarter.

At the same time, lenders continue to report declines in farm income relative to a year earlier. The current index value marks the 20th consecutive quarter with a value below 100. Results above 100 indicate proportionately more bankers report higher income compared with the same quarter a year ago, while results lower than 100 indicate proportionately more bankers report lower income from a year earlier.

The fourth-quarter index value for farm income was 41. Expectations for farm income in the first quarter of 2019 were slightly more optimistic with an index value of 48. 

The survey was conducted from Dec. 15-31 last year. The results are based on responses from 22 agricultural banks within the boundaries of the Eighth Federal Reserve District, which includes all or parts of: Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

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

Cattle Current Daily—Feb. 14, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon, but packer interest seemed to pick up, at least on a token basis. Although too few transactions to trend, a few western Corn Belt trades were reported at $123-$124/cwt. on a live basis and at $199-$200 in the beef.

There were 785 head offered in the weekly Fed Cattle Exchange auction. There were no sales, but three lots passed out at $125/cwt.

Cattle futures closed lower, amid likely overall position squaring and beneath the umbrella of uncertainty regarding if and when a trade deal will be completed with China. Aside from light trade, recently firmer grain prices added drag to Feeder Cattle.

Live Cattle futures closed an average of 47¢ lower. 

Feeder Cattle futures closed an average of 74¢ lower. 

Corn futures closed mostly fractionally mixed. 

Soybean futures closed mostly 1¢ lower, following the previous session’s strong gains. 

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

Choice boxed beef cutout value was 72¢ lower Wednesday afternoon at $216.44/cwt. Select was 99¢ lower at $212.01. 

*******************************

Major U.S. financial indices closed higher Wednesday, with optimism over a tentative plan that would avoid another government shutdown, as well as reports that the U.S. may be flexible in its Mar. 1 deadline with China as the two nations toward a trade deal.

The Dow Jones Industrial Average closed 117 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 5 points.

*******************************

Aggressive herd expansion for the past five years—and expectations of continued minimal expansion for another year or two—will continue to provide cyclical price risk, explained Kevin Good, CattleFax analyst, at that organization’s recent Outlook Seminar.

Along the way, Good noted that growing supplies of cattle will shift leverage to the feeding sector from cow-calf producers and stocker operators.

“Cattle producers, on average, will receive a smaller percentage of the retail beef dollar as larger cattle supplies increase price pressure across all segments of the industry,” Good said. “Retail beef prices will likely see some inflation in 2019, but larger beef, pork and poultry production will be price limiting.”

CattleFax projects the all-fresh retail beef price to average $5.73/lb. this year, up 6¢ from last year, with the composite carcass cutout value increasing $4 to average $216/cwt.

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

Cattle Current Daily—Feb. 13, 2019

There was no cash fed cattle trade to speak of through Tuesday afternoon, as expected.

Cattle futures closed mainly narrowly mixed, amid likely profit taking and position squaring, buoyed by sharply higher outside markets.

After $1.00 lower in spot Feb, Live Cattle futures an average of 19¢ lower to an average of 11¢ higher. 

Feeder Cattle futures closed from 27¢ lower to 30¢ higher. 

Grain futures closed mainly higher on speculation that the U.S. and China will reach a resolution on trade sooner rather than later.

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

Soybean futures closed mostly 10¢ to 12¢ higher. 

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

Choice boxed beef cutout value was 28¢ higher Tuesday afternoon at $217.16/cwt. Select was 86¢ lower at $213.00. 

*******************************

Major U.S. financial indices closed sharply higher Tuesday, with investors cheering a tentative plan that would avoid another government shutdown.

The Dow Jones Industrial Average closed 372 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 106 points.

*******************************

Hay stocks Dec. 1 were 5.4 million tons less than the previous year (-6.4%) according to USDA’s February Crop Production report issued last week. The decline is accentuated in areas like the Southern Plains, where stocks are down a combined 16.0% in Arkansas, Kansas, Missouri, Oklahoma and Texas, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

Since then, Peel says there’s little doubt winter storms chewed further into stocks.

“Around Oklahoma, anecdotal reports suggest that some producers are concerned about having adequate hay supplies for the winter and are finding, in many cases, that hay is in tight hands and, if available to purchase at all, is increasingly expensive,” Peel explains, in his most recent market comments. 

If Art Douglas, professor emeritus at Creighton University is correct, El Niño conditions should provide above-normal precipitation to these areas through the summer.

“La Niña conditions are unlikely in the next eight months as the equatorial current shows only slow cooling,” Douglas explained during the recent 2019 CattleFax Outlook Seminar. “The residual warmth along the equator will lead to a wetter summer in the southern half of the U.S., while warm waters off the coast of Mexico will favor an active monsoon season in the Southwest.”

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

Cattle Current Daily—Feb. 12, 2019

Negotiated cash fed cattle trade ended up last week $1 higher on a live basis at $125/cwt. in the Southern Plains and $1.00-$1.50 higher in the north at $124.50-$126.00. Dressed sales were up to $3 higher at $200. 

Cattle futures trickled higher Monday, after narrow mixed trade early, supported by last week’s cash trade and stronger wholesale beef values.

Live Cattle futures closed 42¢ higher. 

Except for 50¢ lower in the back contract, Feeder Cattle futures closed an average of 64¢ higher. 

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed 6¢ to 9¢ lower. 

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

Choice boxed beef cutout value was $1.53 higher Monday afternoon at $216.88/cwt. Select was $2.69 higher at $213.86. 

*******************************

Major U.S. financial indices closed narrowly mixed again on Monday, with lingering worries about the lack of resolution to trade issues between the U.S. and China.

The Dow Jones Industrial Average closed 53 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 9 points.

Indices are sharply higher in early trade today on signs the government may have a plan in place to avoid another shutdown.

*******************************

“The wet winter weather in entre cattle feeding region, from the upper Midwest and all the way south through the Southern Plains will hold weights down and likely create some variability in finishing times,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “Regardless, beef and slaughter prices are holding strong through this first two-month window into the year.”

On the other side of the fence, Koontz points out steer calves (500-600 lbs.) are trading $5-$15/cwt. lower than a year earlier while feeder weights (700-800 lbs.) are selling for about $10 less.

“The current feeder cattle cash and futures prices and the deferred Live Cattle futures prices suggest strong concerns about the coming summer,” Koontz says. “We are starting the year expecting big supplies of beef through the summer and it will take surprise good news for optimism. The solid domestic demand and demand due to international trade in protein is, for me, much less of a given this year.” 

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

Cattle Current Daily—Feb. 11, 2019

Negotiated cash fed cattle trade remained undeveloped through late Friday afternoon, based on USDA reports, which cited a few trades in Nebraska and the western Corn Belt at $124-$125/cwt. on a live basis. The Agricultural Marketing Service reported dressed sales $2 higher in Nebraska at $200. Chatter increased that trade was headed higher by the end of the day.

Expectations of steady to higher cash and firm fundamentals helped lift Cattle futures Friday. Those fundamentals include winter-depressed cattle weights.

Dressed steers weights for the week ending Jan. 5 were 6 lbs. lighter year over year at 896 lbs., according to the Actual Slaughter Under Federal Inspection report from USDA. Dressed heifer weights were 8 lbs. lighter at 892 lbs. A week earlier, year over year, dressed steer weights were 9 lbs. lighter and dressed heifer weights were 13 lbs. lighter.

As well, the slug of USDA reports released Friday—offering the year’s first grain supply and usage estimates—proved to be market neutral.

Live Cattle futures closed 61¢ higher (10¢ to $1.10 higher).

Feeder Cattle futures closed an average of 74¢ higher (50¢ to $1.02 higher).  

Corn futures closed mostly fractionally lower to 2¢ lower.

Soybean futures closed mostly 1¢ higher. 

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

Choice boxed beef cutout value was $1.36 lower Friday afternoon at $215.35/cwt. Select was 36¢ lower at $211.17. 

*******************************

Major U.S. financial indices closed narrowly mixed Friday, recovering from strong pressure early in the session, tied to lingering worries about the lack of resolution to trade issues between the U.S. and China.

The Dow Jones Industrial Average closed 63 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 9 points.

*******************************

“Beef production (2018) is reduced on lower cattle slaughter and lighter carcass weights through late December,” say ERS analysts, in the latest World Agricultural Supply and Demand Estimates (WASDE). “The 2019 beef production forecast is reduced on lower projected slaughter as smaller anticipated placements in late 2018 and early 2019 are expected to result in lower fed cattle marketings and slaughter in the first half of the year.”

The annual average fed steer price (5-area Direct) for last year was estimated at $117.12/cwt., which was 21¢ higher than the December projection.

Fed steer prices for this year are estimated at $122-$126 in the first quarter, $119-$127 in the second, $109-$119 in the third and at $108-$118 in the fourth.

Total beef production for last year was revised down 75 million lbs. from the December estimate to 26.86 billion lbs. Likewise, estimated beef production for this year was revised down by 175 million lbs. to 27.61 billion lbs.

“Total red meat and poultry production for 2018 was lowered from December as beef and broiler production more than offsets slightly higher pork production,” say ERS analysts. “For 2019, the total red meat and poultry production forecast is lowered from December on lower expected beef, pork, and broiler production.”

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

Cattle Current Daily-Feb. 8, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. 

Cattle futures mostly tread water, pressured early by sharply lower Lean Hog futures, but recovering as trade picked up.

Live Cattle futures closed narrowly mixed (17¢ lower to 11¢ higher). 

Except for unchanged in the back contract, Feeder Cattle futures closed an average of 26¢ higher. 

Corn and soybean futures came under pressure Thursday, perhaps in part to negative rhetoric regarding a trade resolution with China, as well as defensive positioning ahead of USDA reports Friday that will provide the first glimpse at grain stocks and usage estimates in more than a month.

Corn futures closed 2¢ to 3¢ lower through Sep ’20 and then fractionally lower to 1¢ lower.

Soybean futures closed 3¢ to 8¢ lower. 

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

Choice boxed beef cutout value was 86¢ lower Thursday afternoon at $216.71/cwt. Select was 84¢ lower at $211.53. 

*******************************

Major U.S. financial indices closed lower Thursday, pressured mostly by renewed concerns about global economic growth. Worries were spurred by reports that the U.S. and China are still wide apart in trade negotiations. Pressure also came from the European Commission (EU) lowering its projections for economic growth to 1.5% for this year.

“Our forecast is revised downwards, in particular for the largest euro area economies,” says Valdis Dombrovskis, in charge of Financial Stability, Financial Services and Capital Markets Union. “This reflects external factors, such as trade tensions and the slowdown in emerging markets, notably in China. Concerns about the sovereign-bank loop and debt sustainability are resurfacing in some euro area countries. The possibility of a disruptive Brexit creates additional uncertainty…”

The Dow Jones Industrial Average closed 220 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 86 points.

*******************************

U.S. beef exports continued on a record pace in November according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Note that these are the latest statistics, about a month late, due to the government shutdown.

Beef exports totaled 112,842 metric tons (mt) in November, up 1% from a year earlier, while value climbed 6% to $709.2 million. For January through November of last year, exports reached 1.24 million mt, up 8% year-over-year and 6% above the record pace of 2011. At $7.63 billion, beef export value was up 16% and broke the full-year record set in 2017 ($7.27 billion).

Beef export value per head of fed slaughter is also on a record pace, averaging $322.97 in November, which was 5% more than a year earlier. Value per head of fed slaughter through the first 11 months of 2018 was $320.72, which was 14% more than the same period a year earlier.

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

Cattle Current Daily-Feb. 7, 2019

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon, but early sings pointed to at least steady trade.

For instance, although too few to trend, there was some live trade in Nebraska at $124/cwt., steady with last week. 

Likewise, two lots of steers from Kansas brought a weighted average price of $124.11 in the weekly Fed Cattle Exchange auction. That was steady with the region’s country price a week earlier. There were only 294 head offered, but 161 head sold. Another lot was passed out at $124.

Cattle futures edged lower Wednesday with the lack of cash direction and light trade, especially light in Feeder Cattle.

Other than unchanged to an average of 3¢ higher in the back three contracts, Live Cattle futures closed an average of 19¢ lower.

Feeder Cattle futures closed an average of 48¢ lower.  

Corn futures closed mostly unchanged to fractionally lower.

Soybean futures closed mostly 2¢ to 4¢ higher. 

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

Choice boxed beef cutout value was 55¢ higher Wednesday afternoon at $217.57/cwt. Select was 73¢ lower at $212.37. 

*******************************

Major U.S. financial indices leaked lower Wednesday, pressured by mixed quarterly earnings results and little betting direction from the State of the Union address. 

The Dow Jones Industrial Average closed 21 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 26 points.

*******************************

“Plant-based proteins are no longer just a meat replacement, it’s now its own category,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “It’s possible that protein overall is evolving into a category, whether animal meat, beans, nuts, soy, wild game or other proteins, in forms ranging from beverage to center-of-plate.”  

Case shipments of plant-based protein from broadline foodservice distributors to foodservice operators increased 20% year to year in November, according to The NPD Group.

Burgers represent the largest plant-based foodservice category and have year-over-year double-digit growth in pounds shipped to foodservice operators, and plant-based burgers are showing up the most on many restaurant menus.  Although plant-based burgers are popular across demographics, an analysis done with NPD’s receipt mining service, Checkout, shows that smaller, more affluent ($100,000 and up) households are the top buyers of plant-based burgers.   

About a quarter of the U.S. population, many of whom aren’t vegan or vegetarian, say that they eat and drink plant-based beverages and foods as well as animal protein on a regular basis, according to NPD.

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

Cattle Current Daily-Feb. 6, 2019

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon.

Live Cattle futures edged higher with the firm fundamental outlook—at least static demand levels and weather-dampened beef production—for the near term. Feeder Cattle softened, likely due most to positioning after the previous session’s strong gain.

Live Cattle futures closed an average of 30¢ higher (5¢ higher to 97¢ higher in spot Feb).

Other than an average of 12¢ higher in Sep and Oct, Feeder Cattle futures closed an average of 32¢ lower. 

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed 1¢ to 2¢ higher. 

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

Choice boxed beef cutout value was 63¢ lower Tuesday afternoon at $217.02/cwt. Select was 31¢ lower at $213.10. 

*******************************

Major U.S. financial indices closed higher again Tuesday, buoyed by positive quarterly earnings reports. Also, there may have been some betting on the President’s State of The Union address scheduled for Tuesday night.

The Dow Jones Industrial Average closed 172 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 54 points.

*******************************

Agricultural producers were more optimistic about the agricultural economy in January, but they remain concerned about farmland values, according to results from the January Purdue University/CME Group Ag Economy Barometer

The barometer rebounded 16 points from December, to 143 in January. It’s based on 400 survey responses from agricultural producers across the country.

“This survey provided us with the first opportunity to measure farmers’ sentiment following the announcement of USDA’s second round of Market Facilitation Program (MFP) payments and the passage of the 2018 Farm Bill,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “It appears that these two announcements provided a significant boost to producer sentiment regarding both current and future economic conditions.”

In January, both of the barometer’s two sub-indices increased month to month. The Index of Current Conditions rose 3 points to 132. The Index of Future Expectations increased 13 points to 148. Pessimism about farmland values increased, though. According to the January survey, the percentage expecting higher farmland values over the next 12 months declined 4 points to 13%. Those expecting higher values in the next five years declined 2 points to 48%.

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

Cattle Current daily-Feb. 5, 2019

Negotiated cash fed cattle prices ended up last week at steady money to a little higher with moderate trade and demand on Friday. Live prices were $1 higher at $124/cwt., except for steady in the western Corn Belt at $123-$126. Dressed sales were steady to $3 higher at $197-$200.

Cattle futures closed higher Monday, led by Feeder Cattle and supported by higher cash prices and resurgent wholesale beef values.

Live Cattle futures closed an average of 67¢ higher.

Feeder Cattle futures closed an average of $1.46 higher ($1.12 to $1.82 higher).

Corn futures closed mostly unchanged to fractionally mixed.

Soybean futures closed mostly fractionally higher to 1¢ higher.

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

Choice boxed beef cutout value was $3.39 higher Monday afternoon at $217.65/cwt. Select was 26¢ higher at $213.41.

*******************************

Major U.S. financial indices closed higher Monday, supported by tech stocks and positive quarterly earnings reports.

The Dow Jones Industrial Average closed 175 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 87 points.

*******************************

“Total commercial beef production for 2018 is projected at 26.9 billion lbs., up 2.6% from one year ago and just fractionally smaller than the record U.S. beef production of 27.1 billion lbs. in 2002,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Beef production in 2019 is forecast at a record 27.4 billion lbs, up 1.8% year over year. Total beef production is likely to grow through 2020 at least.”

Along the way, Peel says total cattle slaughter last year was 2.5% more, with steer slaughter 0.7% less than in 2017 and heifer slaughter 6.5% more. Total cow slaughter was 6.5% more year over year, including 8.6% more beef cows.

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

Cattle Current Daily-Feb. 4, 2019

Negotiated cash fed cattle trade was undeveloped through Friday afternoon, based on USDA reports, though expectations were for steady to higher prices.

Cattle futures closed narrowly mixed, following the previous session’s correction.

Except for 2¢ lower in near Apr, Live Cattle futures closed an average of 32¢ higher.

Except for $1.35 lower in the back contract and 15¢ higher in Nov, Feeder Cattle futures closed an average of 19¢ lower.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 1¢ to 2¢ higher.

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

Choice boxed beef cutout value was $1.13 lower Friday afternoon at $214.26/cwt. Select was 27¢ higher at $213.15.

*******************************

Major U.S. financial indices closed mostly higher Friday, supported by energy stocks and the positive employment outlook.

Total nonfarm payroll employment increased by 304,000 in January, according to the U.S. Bureau of Labor Statistics. The unemployment rate edged up to 4.0%.

Hourly earnings for all employees on private non-farm payrolls in January rose by 3¢ to $27.56, following a 10¢ gain in December. Over the year, average hourly earnings have increased by 85¢, or 3.2%.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 2 points higher. The NASDAQ was down 17 points.

*******************************

Between 1979 and 1998, U.S. consumer beef demand declined by 50%, reminded Randy Blach, CattleFax CEO, at that organization’s annual Outlook Seminar last week.

Since then, demand increased, in part, because the industry increased product quality and consistency. For instance, Blach pointed out the percentage of Choice and Prime cattle increased 50% since 2004 to 79% last year.

“We finally started listening to the consumer and they rewarded us,” Blach says. He explains if beef demand hadn’t grown for the last two decades, fed steer prices today would be $20/cwt. less and steer calf prices would be $50 less.

“We have a changing consumer today. Are we willing to make the next changes to assure we’re providing consumer with what is important to them?” Blach asked. Among growing consumer demands, he cites things such as traceability and verification.

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

Cattle Current Daily-Feb 1, 2109

Negotiated cash fed cattle trade was undeveloped through Thursday afternoon.

Month-end positioning appeared to be the primary pressure on cattle futures Thursday. For the short term, there was also chatter about this week’s extreme cold dampening consumer demand across impacted areas.

Live Cattle futures closed an average of $1.36 lower.

After 27¢ lower in expiring Jan, Feeder Cattle futures closed an average of $1.38 lower.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed 3¢ to 5¢ lower through Jul ’20 and then 1¢ to 2¢ lower. 

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

Choice boxed beef cutout value was $2.66 lower Thursday afternoon at $215.39/cwt. Select was 12¢ lower at $212.88.

*******************************

Major U.S. financial indices closed mostly higher Thursday, buoyed by strong quarterly earnings reports and spillover support from the steep increases in the previous session.

The Dow Jones Industrial Average closed 15 points lower. The S&P 500 closed 23 points higher. The NASDAQ was up 98 points.

*******************************

Although increasing cattle supplies will likely pressure cattle prices across all sectors this year, Kevin Good, CattleFax analyst says robust economic demand, U.S. job growth and higher wages will remain supportive.

“The relatively strong calf market we saw in 2018 will be under pressure this year,” explained Good, at Thursday’s CattleFax Outlook Seminar in New Orleans. “However, values in the spring should have the potential to reach the mid-$180s. On the other hand, a larger calf crop and softer demand have the potential to erode prices to the $140-level next fall, so there is certainly more price risk in feeder cattle and calves than in the fed cattle markets in 2019.”

CattleFax projects 750 lb. steer prices at $130-$160/cwt., with an average at $147/cwt.

Fed cattle prices are expected to be steady this year, averaging $117/cwt., with market resistance at the $130-level and downside risk to $100/cwt. at the low end of the trading range, according to Good.

As for cull cows, Good says, “Years of expansion and poor operating margins in the dairy sector are generating more cull cows, which weighs on the markets. The additional supply and the limited packing capacity for non-fed cattle will result in a market which averages approximately $55/cwt. during 2019, with a spring high near $60/cwt. and a fall low in the lower $40s.”

Look for more insights from the CattleFax Outlook in Monday’s Cattle Current

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

Cattle Current Daily-Jan. 31, 2019

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon. There were 1,684 head offered in the weekly Fed Cattle exchange auction and no takers.

Limited trading interest held Cattle futures to a narrow, though mostly slightly higher trading range.

Except for 32¢ lower in spot Feb, Live Cattle futures closed an average of 17¢ higher.

Other than 27¢ and 2¢ lower at either end of the board, Feeder Cattle futures closed an average of 15¢ higher, except for unchanged in Oct.

Corn futures closed mostly 2¢ to 3¢ higher through Jul ’20 and then mostly 1¢ higher.

Soybean futures closed 1¢ to 2¢ higher through Aug ’20 and then unchanged to fractionally lower. 

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

Choice boxed beef cutout value was 8¢ lower Wednesday afternoon at $218.05/cwt. Select was 43¢ higher at $213.00.

*******************************

Major U.S. financial indices closed sharply higher Wednesday. Along with strong quarterly earnings from the likes of Boeing and Apple, support included the Fed standing pat on interest rates.

“The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective as the most likely outcomes,” according to a statement from the FOMC. “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”

The Dow Jones Industrial Average closed 434 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 154 points.

*******************************

“While the need for increasing exports is clear, it’s frequently met with concern or skepticism among some producers and others in the supply chain,” says Will Sawyer, animal protein economist with CoBank’s Knowledge Exchange Division. He explains “Concerns lie primarily in the fear that themore exports play a role in supply and demand, themore exposure producers and industry participants have to increased market volatility and lower margins.”

Look to other protein sectors and other countries, however, and the reward of growing export markets outweighs the risk.

Greater reliance on export markets has resulted in higher prices for the animal protein sectors in other exporting nations, including Australia, Brazil and Canada, according to C0Bank. Analysis shows that greater profitability has offset price volatility for beef, pork and poultry producers in each of those countries, despite declining domestic consumption in both Australia and Canada.

“Profitable growth has always been at the core of the industry, and has enabled producers and processors to recover from the historic volatility and costs from 2007 through 2012,” Sawyer says. He adds, “The groundwork has already been laid from the supply chain, to industry representation, to let trade drive the industry forward over the next decade. Long-term, he says exports will be the key driver for further expansion across the animal protein sector.”

A video synopsis, and the full report, “Protein Passport: Exporting Your Way to Growth,” are available at cobank.com.

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

Cattle Current Daily-Jan. 30, 2019

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon.

Higher wholesale beef values and likely less beef production than anticipated so far this year, due to weather helped Cattle futures mostly edge higher.

Live Cattle futures closed an average of 17¢ higher (7¢ to 42¢ higher).

After 82¢ and 10¢ lower in the front two contracts, Feeder Cattle futures closed an average of 15¢ higher.

Corn futures closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 3¢ to 4¢ lower. 

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

Choice boxed beef cutout value was 73¢ higher Tuesday afternoon at $218.13/cwt. Select was 96¢ higher at $212.57.

*******************************

Major U.S. financial indices closed mixed Tuesday as investors fretted about looming Apple quarterly earnings and the Fed meeting on Wednesday.

The Dow Jones Industrial Average closed 51 points higher. The S&P 500 closed 3 points lower. The NASDAQ was down 57 points.

*******************************

Heading into Wednesday’s Fed meeting, few analysts expect another increase in interest rates, given recent market volatility and the apparent drag lingering trade issues are having on global and domestic GDP.

In the recent 2019 outlook report from CoBank’s Knowledge Exchange Division, analysts say, “The FOMC is no longer locked into a tightening cycle aimed at returning to ‘neutral’ conditions. Instead, we expect the Fed to lean dovish as it

attempts to take its foot off the gas and coast safely through 2019. The greatest threat to this approach will be the risk of stagflation–a slowing economy and

a resurgence in inflation. Under such circumstances, the Fed may allow inflation to move higher than 2% if longer run inflation expectations remain anchored and their economic projections indicate that inflation is likely to normalize back to 2% over the intermediate term.”

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

Cattle Current Daily-Jan. 29, 2019

Recently firm wholesale beef values, near-steady cash prices and continued performance-dampening weather helped Cattle futures gain some ground Monday, led by Feeder Cattle.

Live Cattle futures closed an average of 33¢ higher.

After 10¢ higher in spot Jan, Feeder Cattle futures closed an average of 70¢ higher.

Corn futures closed unchanged to fractionally mixed.

Soybean futures closed 1¢ to 2¢ lower. 

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

Choice boxed beef cutout value was 39¢ higher Monday afternoon at $217.40/cwt. Select was 42¢ lower at $211.61.

*******************************

Major U.S. financial indices closed lower Monday, basically retracing upward steps taken in the previous session. Pressure included the likes of Caterpillar and chipmaker Nvidia attributing part of their weaker forecasts to softer Chinese trade.

The Dow Jones Industrial Average closed 208 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 79 points.

*******************************

The federal government is open for business again, at least temporarily, meaning USDA agencies can begin providing market data. The exception during the shutdown was price data that continued to flow from the Agricultural Marketing Service. That information is why some livestock economists attribute little market impact to the missing data up to this point.

But, in his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says, “Among many repercussions of the federal government shutdown, agricultural data has been severely disrupted. Some reports will resume after a delay and some may be completely skipped. Numerous crop, livestock and trade reports were missed in January, which are important for cattle and beef markets.

“Missing from delayed or skipped January reports are the monthly crop production (including the December 1 hay stocks by state) and the annual crop production report that will confirm 2018 production of corn and other feed grains, soybeans and hay. The grain stocks report provides information about crop market conditions for the current marketing year. The winter wheat/canola seedings report will provide information about winter wheat pasture.”

During the shutdown, the World Agricultural Supply and Demand Estimates for January, actual daily slaughter data and the January Cattle on Feed report went missing. The Jan 1 Cattle inventory report was originally scheduled to go out the end of this week; presumably it will be delayed, at the least.

“As well, the January livestock trade data (for November) was not reported and will be important to close out 2018 livestock and meat import and export totals,” Peel says. “Detailed weekly cattle slaughter data has not been reported since early December, along with carcass weights by slaughter class. These are important to finalize 2018 beef production totals and also to assess the current status of cattle markets, including weather impacts.”

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

Cattle Current Daily-Jan. 28, 2019

Negotiated cash fed cattle sold steady in the beef on Friday at $197/cwt. Live sales were steady to mostly $1 lower at $123 in Kansas and Nebraska and at $123.00 to $125.50 in the western Corn Belt. The Texas Cattle Feeders Association reported its members selling steers at $123, which was $1 less than the previous week.

Softer cash trade and pressure in Lean Hog futures helped pressure Cattle futures on Friday.

Other than 70¢ and 37¢ higher in the front two contracts, Live Cattle futures closed an average of 37¢ lower.

Feeder Cattle futures closed an average of 45¢ lower.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 5¢ to 9¢ higher. 

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

Choice boxed beef cutout value was 74¢ lower Friday afternoon at $217.01/cwt. Select was 11¢ lower at $212.02.

*******************************

Major U.S. financial indices closed higher Friday with the announcement that Congress and President Trump reached a resolution to reopen the government, at least temporarily—until Feb. 15—with hopes all sides can come to agreement on a national budget and border security.

The Dow Jones Industrial Average closed 183 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 91 points.

*******************************

USDA’s monthly Cattle on Feed report was due to be published Friday, but went missing due to the partial government shutdown. Even when government reopens for business, the report may go unpublished.

According to various pre-report estimates, December feedlot placements—feedlots with 1,000 head or more capacity—were likely about 2% more year over year.

For instance, David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets, says “December saw an increase in cattle imports from Mexico and larger calf and feeder sales. Placements in December are typically much lower than in November, as much as 500,000 fewer in some years.”

The Livestock Marketing Information Center (LMIC) is more conservative, though, expecting placements to be 0.6% more.

“Feeder cattle imports from Mexico and Canada were about 25,000 head higher year-over-year. Auction receipts showed strong volumes relative to a year ago, both pointing to more placements,” LMIC analysts say in the latest Livestock Monitor. “The headwind to placements has been extremely muddy conditions in feedlots, especially in Kansas and Nebraska.

All of the sources mentioned here expect December marketings to be about on par with the previous year.

“Actual weekly slaughter has not been released since Dec. 8, so this estimate relies on estimated daily slaughter,” LMIC analysts explain. “While the estimated slaughter data is better than no data, there is a large difference in precision. Estimated daily slaughter for steers and heifers are rounded to the nearest 1,000 head, while actual slaughter is down to the number of head. Over the course of an entire month, estimated versus actual can vary.”

For Anderson, and the majority of analysts in the Urner Barry Survey—reported by the Daily Livestock Report—that leaves estimated inventory of cattle on feed Jan. 1 about 2% higher than a year earlier.

“That represents a relatively large number of cattle on feed, as have the last several reports,” Anderson says. “It also continues to represent a narrowing of the growth in on-feed numbers compared to months earlier in the year.”

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

Cattle Current Daily-Jan. 25, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Pressure in Lean Hog futures, undeveloped cash trade and light interest held Cattle futures to minimal gains.

Other than 20¢ and 2¢ lower in the front two contracts, Live Cattle futures closed an average of 28¢ higher.

Feeder Cattle futures closed an average of 50¢ higher.

Corn futures closed mostly fractionally lower to 1¢ lower.

Soybean futures closed mostly unchanged to fractionally mixed. 

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

Choice boxed beef cutout value was 54¢ higher Thursday afternoon at $217.75/cwt. Select was 10¢ higher at $212.14.

*******************************

Major U.S. financial indices closed narrowly mixed Thursday, with strong quarterly earnings reports tempered by continued fretting over the ongoing trade dispute between China and the U.S.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 3 points higher. The NASDAQ was up 47 points.

*******************************

“Wholesale beef markets are starting 2019 with a continuation of generally strong prices seen last year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his recent market comments. “For the first three weeks of the year, boxed beef cutout prices are up 2.9% for Choice and 3.4% for Select compared to the same period last year.” 

Week to week on Thursday, Choice boxed beef cutout value was $5.25 higher at $217.75/cwt. Select was at $4.50 higher at $212.14.

“In 2018, weekly boxed beef prices averaged 2.2% higher year over year compared to 2017,” Peel explains. “Wholesale beef prices were higher in 2018 despite a projected 2.8% increase in beef production and larger pork and poultry supplies.”

Middle meats provided the most support to cutout values in recent months, according to Peel. He explains, “Current Choice rib primal price is $344.79/cwt., up 9.8% year over year. Last year, rib primal prices averaged 6.2% higher compared to 2017. Choice loin primal price is currently $280.80/cwt., up 4.7% compared to the same week last year. In 2018, Choice loin primal prices averaged 1.5% higher year over year.”

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

Cattle Current Daily-Jan. 24, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. Although too few to trend, there were a few live trades in the western Corn Belt at $122-$125.

Prices were higher at some fat cattle auctions. For instance, Ch 2-4 steers brought $127.29 to $128.87/cwt. at Tama, IA, which was $2-$3 higher than last week’s negotiated trade in the region. On the other hand, Ch 2-3 steers brought $120.00 to $123.25 at Sioux Falls.

There were 4,139 head offered in the weekly Fed Cattle Exchange Auction. One lot of Texas steers (63 head) sold for 1-9 day delivery at $123/cwt. One lot of Kansas heifers (116 head) were passed out at $123 for 1-9 day delivery.

Feeder Cattle futures led Live Cattle higher Wednesday. Support included firmer outside markets and resurgent wholesale beef values.

Live Cattle futures closed an average of 53¢ higher.

Feeder Cattle futures closed an average of $1.60 higher ($1.37 to $2.15 higher).

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed mostly 2¢ to 5¢ higher. 

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

Choice boxed beef cutout value was 87¢ higher Wednesday afternoon at $217.21/cwt. Select was 32¢ higher at $212.04.

*******************************

Major U.S. financial indices closed higher Wednesday, gathering back some of the previous session’s losses. Support included strong quarterly earnings reports from the likes of IBM and Procter and Gamble.

The Dow Jones Industrial Average closed 171 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 5 points.

*******************************

“Trade uncertainty, rising debt levels and market volatility are threatening to derail the global economy and creating difficult operating environments for U.S. agriculture,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division (KED). “Trade is the outsized risk. Unresolved disputes with Mexico, Canada, Europe and China are the greatest collective threat to the U.S. economy in 2019.”

Although the U.S. economy is still performing well by most key measures, global and U.S. economic prospects are weakening and the agricultural economy shows few signs of an imminent comeback, according to a comprehensive 2019 outlook report from CoBank’s KED.

The CoBank report examines 10 key factors that will shape agriculture and markets sectors that serve rural communities throughout the U.S. Among them:

Global Economy—World economic output hit an 8-year high in 2018, powered by both advanced economies and emerging markets. Challenges mounted in late 2018 and risks are decisively weighted to the downside for the coming year… Trade policy between the U.S. and China will remain the leading risk to the global economy. Increasing debt levels is another undercurrent that threatens to derail the global economy. Total global debt levels (all public and private debt) are now more than three times greater than in 2001.

U.S. Economy—The U.S. economic expansion is set to become the lengthiest in history this summer, but clouds forming on the horizon suggest more modest growth in 2019 and greater concerns for 2020.

Dairy and Animal Protein—In 2018, the U.S. animal protein sector began suffering from the same oversupply and weak margins that have plagued U.S. dairy producers since 2015. Despite the less favorable profitability environment, the protein and dairy sectors will continue to expand production in 2019, prolonging the margin squeeze.

Of the three major animal protein species, beef appears to be weathering the animal protein oversupply situation best, with favorable fed cattle prices and historically high packer margins resulting from tight processing capacity.

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

Cattle Current Daily-Jan. 23, 2019

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon. Although too few to trend, there was a limited number of sales in Kansas at $122/cwt. on a live basis and at $123 in Nebraska.

Despite stronger wholesale beef values and recent firmness in cash fed cattle prices, Cattle Futures closed lower Tuesday, led by Feeder Cattle. Pressure included sharply lower outside markets, perhaps less weather impact from the weekend than anticipated and concerns about longer term demand strength (see “financial indices” below).

Live Cattle futures closed an average of $1.24 lower through the front three contracts and then an average of 61¢ lower.

After 40¢ lower in spot Jan, Feeder Cattle futures closed an average of $1.35 lower.

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

Soybean futures closed 5¢ to 7¢ lower through Sep ’20 and then 2¢ to 3¢ lower.

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

Choice boxed beef cutout value was $1.08 higher Tuesday afternoon at $216.34/cwt. Select was 86¢ higher at $211.72.

*******************************

Major U.S. financial indices closed sharply lower Tuesday, erasing gains from the previous session. Pressure included news from the International Monetary Fund the previous day, suggesting that global economic growth is slowing. Investors also seemed to be rattled by reports of slowing economic growth in China, specifically.

The Dow Jones Industrial Average closed 301 points lower. The S&P 500 closed 37 points lower. The NASDAQ was down 136 points.

*******************************

“Interest in purchasing breeding stock has been cautious, relative to current spot and futures market pricing for calves and yearlings…Bred cow prices at auctions during the last quarter of 2018 were down 10-20% from a year earlier in key cattle production regions,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

Based on average prices reported by the Agricultural Marketing Service (AMS), LMIC analysts say prices in Georgia were 19% less for cows weighing 1,200-1,300 lbs. and bred 4-6 months. They brought $912.30/head in December, versus $1,119.89 a year earlier.

For the same month, mid-age cows in Montana weighing 1,200-1,300 lbs. sold 6% less year over year.

“Not surprisingly, Midwest auction cow price changes from late 2017 to late 2018 posted a drop between that of Montana and Georgia; prices at Saint Joseph, MO were down 15%,” say LMIC analysts.

Keep in mind, breeding stock markets in some areas, like Missouri, were pressured by drought.

As for calf prices, LMIC projects Southern Plains steer calf prices (500-600 lbs.) to average $167-$174/cwt. this year, compared to the 2018 calf price average of $171.39 last year. LMIC forecasts yearling steer prices (700-800 lbs.) at $145-$150/cwt., compared to $150 last year. LMIC analysts point out that in mid-January, the November Feeder Cattle futures contract closed at $149.85, versus $144.93 a year earlier.

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

Cattle Current Daily-Jan. 22, 2019

When all was said and done, negotiated cash fed cattle trade was mostly steady last week at $124/cwt. on a live basis in the Southern Plains and Nebraska, but $1 higher in the western Corn Belt at $123-$125. Dressed trade was steady at $197.

Futures and equity markets were closed Monday in honor of Martin Luther King Day.

*******************************

Global economic growth continues to weaken, according to the latest World Economic Outlook Update from the International Monetary Fund (IMF).

IMF projects global economic growth at 3.5% this year and 3.6% next year; 0.2% and 0.1% less than October’s estimate.

“Even as the world economy continues to move ahead, it is facing significantly higher risks, some of them related to policy,” explained Christine Lagarde, IMF chair and managing director, at press conference for the update. “These risks are now increasingly intertwined: think of how higher tariffs and rising uncertainty over future trade policy fed into lower asset prices and higher market volatility. This in turn contributed to tightening financial conditions, including for advanced economies, which is a major risk factor in a world of high debt burdens.”

*******************************

Even if the partial government shutdown—the longest in history—ended this week, odds are against the monthly Cattle on Feed report going out Jan. 25, as originally planned.

To their credit, and understanding the limitations of available data, the Livestock Marketing Information Center (LMIC) provided its estimates on Friday.

“Placements (feedlots with a capacity of 1,000 head or more) are expected to be slightly larger than a year ago. Feeder cattle imports from Mexico and Canada were about 25,000 head higher year-over-year. Auction receipts showed strong volumes relative to a year ago, both pointing to more placements,” say LMIC analysts, in the latest Livestock Monitor. “The headwind to placements has been extremely muddy conditions in feedlots, especially in Kansas and Nebraska. LMIC estimates that placements during December were 0.6% more than a year ago. This would be the highest December placement number since 2010.”

LMIC projects December marketings at 0.5% less than a year ago. Analysts emphasize this is the most difficult projection, based on missing data.

“Actual weekly slaughter has not been released since Dec. 8, so this estimate relies on estimated daily slaughter,” LMIC analysts explain. “While the estimated slaughter data is better than no data, there is a large difference in precision. Estimated daily slaughter for steers and heifers are rounded to the nearest 1,000 head, while actual slaughter is down to the number of head. Over the course of an entire month, estimated versus actual can vary.”

Between placement and marketing estimates, LMIC projects the inventory of cattle on feed Jan. 1 to be 2.1% more than a year earlier.

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

Cattle Current Daily-Jan. 21, 2019

Negotiated cash fed cattle trade remained undeveloped through Friday afternoon, with prices for the week looking to be steady to higher.

Lower feedlot performance tied to winter weather, and apparent short covering ahead of the holiday weekend, helped boost Live Cattle futures Friday; Feeder Cattle tagged along to a lesser degree. Strong gains in Lean Hog futures also provided support.

Except for 57¢ lower in spot Feb, Live Cattle futures closed an average of 45¢ higher.

Except for 10¢ lower in March, Feeder Cattle futures closed an average of 20¢ higher.

Soybean futures moved higher Friday, presumably on adverse South American weather and hopes for trade talks; corn followed along.

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

Soybean futures closed 7¢ to 9¢ higher through Sep ’20 and then 4¢ to 5¢ higher.

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

Choice boxed beef cutout value was 65¢ higher Friday afternoon at $213.15/cwt. Select was $1.81 higher at $209.45.

*******************************

Major U.S. financial indices closed sharply higher Friday on reports that China pledged to boost U.S. imports for the next six years.

The Dow Jones Industrial Average closed 336 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 72 points.

*******************************

Choice wholesale beef value never ran as high as some anticipated heading into the holidays, but they remain higher year over year.

Through the front half of January, Choice boxed beef cutout value ranged from $212.02 to $216.64/cwt. compared to $205.14 to $210.49 a year earlier.

“The higher cutout (Choice) value stems from higher middle meat prices and remains higher despite lower end meat prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “As an example, the wholesale beef ribeye price is $53/cwt. higher (+7.7%) than the same time one year ago. Similarly, the wholesale beef full tender price is $62 higher (+6.4%) than January one year ago. Despite the support provided by middle meats, end meat prices such as the bottom round are $18/cwt. lower (-8.6%) than last year. Despite the struggles in the round and chuck, the brisket and short plate are also providing support to overall value.”

Griffith reminds that beef cutout values—composite values—are calculated by multiplying the prices of individual beef cuts by the percentage of the carcass that comprises them.

 For perspective, Griffith share this breakdown of primals and the percentage of the carcass they represent: rib (11.40%), chuck (29.62%), round (22.32%), loin (21.26%), brisket (4.95%), short plate (7.10%), and flank (3.35%).

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

Cattle Current Daily-Jan. 18, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Spot Feeder Cattle futures pressured the entire cattle complex. Factors included stronger grain prices and the continued erosion in cash calf and feeder cattle prices, tied to weather.

Live Cattle futures closed an average of 65¢ lower.

Feeder Cattle futures closed an average of $1.25 lower (72¢ lower to $2.35 lower in spot Jan).

Corn futures closed 3¢ to 6¢ higher through Sep ’20 and then 1¢ to 2¢ higher.

Soybean futures closed 10¢ to 13¢ higher through Jan ’20 and then mostly 6¢ to 7¢ higher.

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

Choice boxed beef cutout value was 57¢ higher Thursday afternoon at $212.50/cwt. Select was 70¢ higher at $207.64.

*******************************

Major U.S. financial indices closed higher again Thursday, reportedly mostly due to disputed news that the White House might ease tariffs on China during current trade negotiations.

The Dow Jones Industrial Average closed 162 points higher. The S&P 500 closed 19 points higher. The NASDAQ was up 49 points.

*******************************

Beef is healthier and more sustainable today than at any point in time, according to a recent study conducted by the USDA’s Agricultural Research Service and The Beef Checkoff, published in the journal Agricultural Systems.

For instance, the study found that data commonly used to depict beef cattle’s environmental impact in the U.S. is often overestimated. The study, which is the most comprehensive beef lifecycle assessment to date, evaluated greenhouse gas emissions, feed consumption, water use and fossil fuel inputs. In all these areas, beef’s environmental impacts were found to be less than previously reported.

Among the findings:

Beef production, including the production of animal feed, is responsible for only 3.3% of greenhouse gas emissions in the U.S.

Per pound of beef carcass weight, cattle only consume 2.6 lbs. of grain, which is similar to pork and poultry.

Corn used to feed beef cattle only represents approximately 9% of harvested corn grain in the U.S., or 8 million acres. By way of contrast, 37.5% of corn acreage in the U.S. is used for producing fuel ethanol.

On average, it takes 308 gallons of water, which is recycled, to produce a pound of boneless beef. In total, water use by beef is only around 5% of U.S. water withdrawals.

“Cattle are natural upcyclers, which means most of what cattle eat can’t be consumed by humans and would otherwise end up in the landfill,” says Sara Place, Ph.D., senior director of sustainable beef production research for the National Cattlemen’s Beef Association, a contractor to the Beef Checkoff. “At the end of the day, cattle generate more protein for the human food supply than would exist without them because their unique digestive system allows them to convert human-inedible plants into high-quality protein.”

Moreover, beef continues to become more sustainable in the U.S. thanks to innovation and production efficiencies. In the U.S. today, the same amount of beef is produced with one-third fewer cattle as compared to the mid-1970s, according to USDA’s National Agricultural Statistics Service. If the rest of the world were as efficient as the U.S., global beef production could double while cutting the global cattle herd by 25%. 

You can find the report—Environmental Footprints of Beef Cattle Production in the United States—HERE.

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

Cattle Current Daily-Jan. 17, 2019

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon.

There were 542 head offered in the weekly Fed Cattle Exchange auction, and no takers.

Except for spot Feeder Cattle, Cattle futures ended up little changed, despite a fair bit of pressure for much of the session.

Other than an average of 21¢ lower in the back two contracts, Live Cattle futures closed an average of 25¢ higher.

Except for 97¢ lower in spot Jan and 5¢ lower in Mar, Feeder Cattle futures closed an average of 27¢ higher.

Corn futures closed 1¢ to 2¢ higher.

Except for 1¢ higher in the front three contracts, Soybean futures closed mostly unchanged to fractionally lower.

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

Choice boxed beef cutout value was 28¢ lower Wednesday afternoon at $211.93/cwt. Select was $1.07 higher at $206.94.

*******************************

Major U.S. financial indices closed higher again Wednesday, helped along by strong quarterly earnings from banks, including Goldman Sachs.

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 10 points.

*******************************

The market for alternative proteins—fake meat—is growing but still miniscule.

For instance, in a late 2017 CoBank report, Euromonitor International projected U.S. sales of meat substitutes would rise steadily to $863 million in 2021, about 17% more than estimated sales in 2017. At the time, the retail market size was $49 billion is sales for the U.S. meat and poultry category.

Similarly, a study released by Research and Markets last summer, valued the global meat substitute market size at $4,175 million in 2017, and projected it to reach $7,549 million by 2025

Fake meat products built with plant protein dominate the market currently. Fake meat products cultured from animal cells remain unavailable for a host of reasons, including the lack of regulatory framework.

For perspective, according to NPD research, 14% of U.S. consumers—more than 43 million consumers—regularly use plant-based alternatives such as almond milk, tofu, and veggie burgers, and 86% of these consumers do not consider themselves vegan or vegetarian.

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

Cattle Current Daily-Jan. 16, 2019

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon. Last week’s stronger cash trade and another winter storm looming for the Plains and Midwest later this week suggest steady to higher prices.

Those factors supported nearby Live Cattle futures, while lower grain prices boosted Feeder Cattle.

After $1.52 higher in spot Feb, Live Cattle futures closed narrowly mixed (an average of 36¢ lower to an average of 36¢ higher).

Except for 10¢ lower in spot Jan, Feeder Cattle futures closed an average of 45¢ higher.

Grain pressure on Tuesday included, reportedly, more promising weather in South America and the dearth of public data.

Corn futures closed 5¢ to 7¢ lower through Jul ’20 and then mostly 2¢ lower.

Soybean futures closed 9¢ to 10¢ lower through Mar ‘20 and then mostly 4¢ to 7¢ lower.

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

Choice boxed beef cutout value was 19¢ higher Tuesday afternoon at $212.21/cwt. Select was 41¢ higher at $205.87.

*******************************

Major U.S. financial indices closed higher Tuesday, led by tech stocks and supported by early quarterly earnings that were mostly stronger than expected.

The Dow Jones Industrial Average closed 155 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 117 points.

*******************************

“Recent weather may delay fed cattle marketing enough to help support fed cattle prices or push prices higher,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Whether or not weather impacts are widespread enough to noticeably impact overall market conditions, cattle producers in many areas face significant management headaches due to the weather.”

Peel says the weekend storm dealt heavy snow to some cattle feeding regions in eastern Colorado, Kansas, southeastern Nebraska, southern Iowa and the eastern Corn Belt.

“Feedlots typically post the lowest seasonal average daily gains (ADG) for cattle marketed in March to May, which reflects cattle fed over the previous four to six months. This likely includes the negative impacts of winter weather on feedlot performance but also partly reflects the fact that feedlots place the highest proportion of lightweight cattle (which have lower ADG) in the fall and feed them through the winter,” Peel explains. “Feedlots also experience poorer feeding efficiency in the winter with the highest feed-to-gain ratios of the year posted for cattle marketed in February and March. This occurs despite the fact that lightweight cattle placed in the fall have lower feed-to-gain ratios relative to heavier feedlot placements. This again indicates the impact of winter weather on cattle feeding. Not surprisingly, feedlots post the highest animal morbidity and mortality rates for cattle fed through the winter.”

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

Cattle Current Daily-01-15-19

Negotiated cash fed cattle traded ended up mostly $1 higher on a live basis last week at $124/cwt. in Nebraska and the Southern Plains; $1-$2 higher in the western Corn Belt at $122-$124. Dressed trade was $2-$3 higher at $197.

Early support in grain futures helped pressure Feeder Cattle, while stronger cash prices and the weather helped cap losses in Live Cattle.

Except for an average of 37¢ higher in the front two contracts, Live Cattle futures closed an average of 22¢ lower. 

Except for $1.27 lower in spot Jan, Feeder Cattle futures closed an average of 59¢ lower.

Corn futures closed mostly fractionally higher.

Soybean futures closed mostly 5¢ to 6¢ lower (8¢ lower in spot Jan).

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

Choice boxed beef cutout value was 44¢ lower Monday afternoon at $212.02/cwt. Select was 81¢ lower at $205.46.

*******************************

Major U.S. financial indices closed lower Monday, led by tech stocks. Depending on the analysts you listen to, pressure included lingering uncertainty about trade issues and the government shutdown, as well as queasiness about the next round of corporate earnings.

The Dow Jones Industrial Average closed 86 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 65 points.

*******************************

In lieu of USDA market reports derailed by the partial government shutdown, markets will make assumptions about the missing data, says Brenda Boetel, Extension agricultural economist at the University of Wisconsin-River Falls.

“The longer the lack of information prevails, the greater the market correction may be when the reports resume, especially if the reports say something different than the market assumed,” Boetel explains, in the latest issue of In the Cattle Markets. “The cattle markets care about last week’s missing reports, because they gave the final information on the size of the 2018 corn harvest, the speed in which corn is being used, and the first hint of information regarding how many acres of each crop will be planted in 2019. The market is trading on old information, a less than desirable situation.”

Specifically, she’s referring to the monthly World Agricultural Supply and Demand Estimates (WASDE) that were supposed to be issued last week, along with Quarterly Grain Stocks, Winter Wheat and Canola Seedings and weekly export sales.

“The WASDE report likely would have shown a decrease in 2018 corn yield,” Boetel says. “Additionally, poor harvest conditions affected acreage as well as yield. The USDA would likely have lowered 2018 corn production from 14.626 billion bu. to around 14.545 billion bu. The February report will begin to adjust the demand side of the equation and examine more closely whether usage estimates for ethanol or exports needs to be adjusted.”

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

Cattle Current Daily-Jan. 14, 2019

Cattle feeders and packers continued their standoff through late Friday afternoon, with negotiated cash fed cattle trade undeveloped, according to USDA reports. However, according to AMS, there was a smattering of dressed sales in the Northern Plains at $197/cwt., which was $2 more than the previous week. 

Adverse pen conditions and another winter storm over the weekend point to continued erosion in feedlot performance and more price leverage for cattle feeders.

Cattle futures closed near steady Friday, maintaining week-to-week gains as traders waited cash direction.

Except for 17¢ lower in June, Live Cattle futures closed an average of 15¢ higher. 

Except for 7¢ and 12¢ higher in April and May, Feeder Cattle futures closed an average of 33¢ lower.

Corn futures closed mostly 2¢ higher.

Soybean futures closed 3¢ to 4¢ higher.

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

Choice boxed beef cutout value was $1.50 lower Friday afternoon at $212.46/cwt. Select was $1.50 lower at $206.27.

*******************************

Major U.S. financial indices edged slightly lower Friday amid persistent concerns about the partial government shutdown and the lack of trade resolution with China.

The Dow Jones Industrial Average closed 5 points lower. The S&P 500 closed fractionally lower. The NASDAQ was down 14 points.

*******************************

Impacts from muddy feedlot pens and winter weather continue to cut both ways in the market.

“Heavy rain and snow has most of the trade area in very muddy conditions and these conditions are discouraging calf buyers from buying at this time,” according to the Agricultural Marketing Service (AMS) reporter on hand for Monday’s auction at Oklahoma National Stockyards.

Between demand pressure and heavy post-holiday volume, steers and heifers sold from $4/cwt. lower to $1 higher last week, according to the Agricultural Marketing service (AMS).

Heading into the weekend, a wide swath of the nation was gearing up for Winter Storm Gia

“Feedyards that were already wet will see more moisture fall from the sky, dashing any hopes that they will dry out anytime soon. Said AMS analysts on Friday. “Muddy feedyards in Kansas, Nebraska and Iowa want to get cattle moved out of the poor pen conditions, as cattle performance has been seriously impeded due to above average moisture recently.”  

Lost pounds to weather are supporting Cattle futures and the uptick in cash fed cattle prices. On the other hand, costs are increasing.

Feeder Cattle futures closed an average of $1.60 higher week to week on Friday. Live Cattle futures closed an average of $1.70 higher.

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

Cattle Current Daily-Jan. 11, 2019

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. Current indications continue to suggest steady to higher prices when it does occur.  Wet, muddy condition in major cattle feeding areas continue to hinder cattle performance and add support to the market.

Cattle futures traded mainly sideways.

Except for 25¢ lower in the back contract, Live Cattle futures closed an average of 11¢ higher. 

Feeder Cattle futures closed 10¢ lower to 20¢ higher.

Grains closed lower on the day, presumably on a less bearish outlook than traders expected to see for soybeans in South America. Chatter also picked up a notch regarding the growing dearth of publicly available market data, due to the ongoing partial government shutdown.

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

Soybean futures closed 11¢ to 17¢ lower.

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

Choice boxed beef cutout value was 12¢ higher Thursday afternoon at $213.96/cwt. Select was $1.30 higher at $207.77.

*******************************

Major U.S. financial indices edged higher again on Thursday, with follow-through support regarding the potential pause for interest rate increases, along with lingering hopes of a trade resolution with China. Pressure on retail stocks helped cap gains.

The Dow Jones Industrial Average closed 122 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 28 points.

*******************************

Despite the fact that there are fewer farms and ranches today, and a growing generational gap between the general population and agriculture, the children of Baby Boomers are more likely than their parents to know much about agriculture. That’s according to the latest Feed4Thought survey from Cargill.

Specifically, Cargill found that twice as many Generation Y respondents (ages 18–34) in the U.S. and China reported knowing a livestock or seafood farmer, compared to those over 55 years old. Trends were similar in Mexico and France. While 81% of 18-to-34-year-old Chinese participants said they have visited a livestock or seafood farm during their lifetime, only 50% of their older compatriots had. Young respondents in every country surveyed were more likely to have visited a farm than those over 55.

Generation Y (born between the early 1980s and about 2000) is also acting on what they learn about farming practices, according to the survey. Almost three times as many Gen Y participants (52%) said they had changed their eating habits for sustainability reasons in the past year versus older U.S. respondents (19%). Mexico, France and China showed a similar age correlation, with 80% of young Chinese reporting changes. Having kids at home made participants in all four sample countries more likely to make values-based changes.

“We know people increasingly care about animal welfare, the healthfulness of foods and sustainability,” says Marina Crocker, head of Cargill Animal Nutrition market insights. “By pairing Cargill’s understanding of what our customers need with state-of-the-art analytics about what people want, we can anticipate and serve emerging consumer expectations in the solutions we provide our customers.”

More than 80% of survey respondents said the way an animal is raised is important, and almost half of them were willing to pay more as a result. Chinese survey participants (59%) were the most open to paying a premium based on factors such as animal feed and housing; Americans (31%) the least.

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

Cattle Current Daily-Jan. 10, 2019

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. There were only 571 head offered in the weekly Fed Cattle Exchange auction, with none sold.

Cattle futures softened some, likely on profit taking and awaiting the week’s cash direction.

Live Cattle futures closed an average of 26¢ lower through the front six contracts and then an average of 27¢ higher.

Except for 10¢ higher in the back contract, Feeder Cattle futures closed an average of 58¢ lower.

Corn futures closed mostly unchanged to 1¢ higher.

Soybean futures closed 5¢ higher across the board. 

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

Choice boxed beef cutout value was 14¢ lower Wednesday afternoon at $213.84/cwt. Select was 79¢ lower at $206.47.

*******************************

Major U.S. financial indices closed higher for the fourth session in a row, buoyed by confirmation the FOMC plans to be patient with future interest rate increases.

According to the FOMC minutes, “… many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming. A number of participants noted that, before making further changes to the stance of policy, it was important for the Committee to assess factors such as how the risks that had become more pronounced in recent months might unfold and to what extent they would affect economic activity, and the effects of past actions to remove policy accommodation, which were likely still working their way through the economy.”

Crude oil prices continued to climb as well, with West Texas Intermediate Crude on the CME closing $2.36 to $2.58 higher for the next 12 months.

The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 60 points.

*******************************

Lots went right and little went wrong for cattle markets last year or the year before, according to Stephen Koontz, agricultural economist at Colorado State University. He notes strong wholesale margins, efficient movement of increased production through the supply chain and exceptional U.S. beef export levels, particularly to Japan and Korea.

“But forecasts for 2019 suggest a further 1.8% increase in beef production, a further 2.4% increase in pork production, a 1.3% increase in broiler production, and 0.5% increase in milk production,” Koontz explains, in the most recent issue of In the Cattle Markets.  “There will be plenty of protein and fats. While the stock market has been volatile, the underlying indicators of the macro economy have largely remained strong. That is not the case for the rest of the world. There are clear weaknesses in the world economy. There is plenty of protein. And, there appears to be plenty of downside price risk.”

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

Cattle Current Daily-Jan. 9, 2019

Negotiated fed cattle trade was undeveloped through Tuesday afternoon, but Cattle futures suggest steady to higher prices for the week. They closed sharply higher, especially Feeder Cattle, buoyed by increasing open interest and trade activity.

Live Cattle futures closed an average of 84¢ higher (40¢ higher to $2.10 higher in spot Feb), with the most active trade since September.

Feeder Cattle futures closed an average of $1.30 higher, with the most active trade since October.

Corn futures closed mostly 1¢ lower.

Soybean futures closed 3¢ to 6¢ lower through Jan ’20 and then mostly 1¢ lower.

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

Choice boxed beef cutout value was 30¢ lower Tuesday afternoon at $213.98/cwt. Select was 95¢ lower at $207.26.

*******************************

Major U.S. financial indices close higher for the third consecutive day as investors seemed to grow more optimistic that ongoing trade talks with China may bear fruit. Resurgent tech stocks added support, as did the recent rebound in oil prices. Crude Oil futures (CME-WTI) are about $3 higher since last Wednesday.

The Dow Jones Industrial Average closed 256 points higher. The S&P 500 closed 24 points higher. The NASDAQ was up 73 points.

*******************************

Agricultural producer sentiment declined in December as farmers’ perception of both current and future economic conditions weakened, according to results from the Purdue University-CME Group Ag Economy Barometer. The December barometer reading of 127 was 7 points lower than November. The barometer is based on 400 survey responses from agricultural producers across the country.

Both of the barometer’s two sub-indices declined in December. The Index of Current Conditions fell 6 points to 109, which was 30 points less than a year earlier. The Index of Future Expectations fell 8 points in December to 135, but was 15 points higher than a year earlier.

“Over the course of the last year, producers’ impression of current economic conditions on their farms has declined markedly,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “But at the same time, their expectations for future economic conditions have held steady. As a result of this mixed view, farmers appear to be cautious about making large investments in their farming operations.”

Mintert points to December’s Large Farm Investment Index as an example. That index measures whether producers feel this is a good time to make large farm investments. It dropped 5 points month to month at 51 and was 29 points lower than a year earlier.

Similarly, 42% said now was a good time to bring a new generation of family into the business, versus about 50% during the past two years. Looking ahead five years, 65% expect conditions to be more favorable for bringing in a new generation.

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

Cattle Current Daily-Jan. 8, 2019

There were a few early negotiated fed cattle sales in Nebraska Monday at $122.50/cwt., but too few to trend. Live sales there last week were at mostly $123.

Cattle futures closed higher, buoyed by firmer outside markets and oversold conditions. There’s also the most open interest in Live Cattle for at least nine months.

Live Cattle futures closed an average of 76¢ higher (37¢ higher at the back to $1.27 higher in spot Feb).

Feeder Cattle futures closed an average of 98¢ higher.

Corn futures closed fractionally mixed.

Soybean futures closed mostly 1¢ to 2¢ higher.

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

Choice boxed beef cutout value was 23¢ lower Monday afternoon at $214.28/cwt. Select was 55¢ higher at $208.21.

******************************

Follow-through support helped major U.S. financial indices close higher Monday, maintaining robust gains from the previous session. Optimism included Friday’s employment report and hopes concerning trade talks with China.

The Dow Jones Industrial Average closed 98 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 84 points.

*******************************

“Evolving market dynamics make it easy to underestimate how the impacts and costs of trade issues will continue to grow in 2019,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. 

Direct impacts from tariffs are the most visible. In particular, Peel mentions the impact on U.S. pork and soybeans, resulting from reciprocal tariffs with China. There’s also the impact on U.S. pork and dairy products from tariffs imposed by some countries in retaliation for U.S. tariffs on steel and aluminum imports.

“Economic impacts of tariffs may be initially limited mostly to changes in margins if the disruptions are perceived to be short-lived,” Peel explains. “Later, the impacts will evolve from the initial market shock to larger and more permanent adjustments. With more time and ongoing uncertainty about trade issues, more and more of the cost of tariffs are passed on to buyers; alternative product flows develop; lost market shares become much more difficult to undo. The direct costs of tariffs are difficult to measure but certainly grow over time.”

Less visible is lost opportunity.

For instance Peel says, “The U.S. withdrew from the Trans-Pacific Partnership (TPP) two years ago. The remaining 11 countries continued and launched the revised TPP (CPTPP) in January 2019. Not only does the U.S. not have the benefit of tariff adjustments and increased market access with TPP; going forward the U.S. will be increasingly less competitive and likely lose ground relative to TPP participants. The stated U.S. intention to negotiate bilateral trade deals with Japan and others has so far not resulted in new agreements or even serious discussions.”

All of that is before considering the toll tariffs levy on the overall U.S. economy.

“It is nearly impossible to know how much trade and investment has been postponed or abandoned as a result of trade uncertainty the past two years,” Peel says. “The combined direct impacts, lost trade opportunities and ongoing uncertainty are reducing growth potential for U.S. and global economies, and those impacts are likely to grow in 2019, barring improvement in trade issues.”

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

Cattle Current Daily-Jan. 7, 2019

Negotiated cash fed cattle trade for the week was generally steady in Nebraska and the Southern Plains at $123/cwt. ($122.00-$122.50 in Nebraska). Live sales were $1-$2 higher in the western Corn Belt at $121-$122. Dressed trade was steady in Nebraska at $195; steady to $4 higher in the western Corn Belt at $194-$195.

Higher grain prices helped pressure Feeder Cattle, while softer wholesale beef values and volatile outside markets weighed on Live Cattle.

Live Cattle futures closed an average of 98¢ lower (67¢ to $1.40 lower).

Feeder Cattle futures closed an average of $1.40 lower.

Corn futures closed 2¢ to 3¢ higher through Sep ‘20 and then 1¢ to 2¢ higher.

Soybean futures closed 7¢ to 10¢ higher through Sep ’20 and then mostly 4¢ higher.

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

Choice boxed beef cutout value was $1.98 lower Friday afternoon at $214.51/cwt. Select was $1.72 lower at $207.66.

*******************************

Major U.S. financial indices rocketed higher Friday, buoyed by a monthly jobs report that shattered expectations to the upside, as well as comments from the Fed, suggesting they may be more patient in making further increases to interest rates.

Total non-farm payroll employment increased by 312,000 in December, according to the U.S. Bureau of Labor Statistics. That left the unemployment rate at 3.9%, which was 0.2% more than the previous month.

In December, average hourly earnings for all employees on private non-farm payrolls rose 11¢ to $27.48. Over the year, average hourly earnings increased by 84¢, or 3.2%.

The Dow Jones Industrial Average closed 746 points higher. The S&P 500 closed 84 points higher. The NASDAQ was up 275 points.

*******************************

With the partial government shutdown dragging into the third week, analysts with the Livestock Marketing Information Center (LMIC) note the absence of some market reports and the risk of delayed key pending reports are adding to uncertainty.

“Actual slaughter data has been among the most missed weekly market data. That data is compiled by the National Agricultural Statistics Service (NASS) but is released by the Agricultural Marketing Service. It provides valuable information on weights, production, and the number of head slaughtered,” LMIC analysts explain. “The next couple of weeks hold several vital reports that could affect the tone of the entire year. For example, the annual Cattle Inventory is scheduled to be published at the end of this month. That report provides one of only two point estimates in the size of the beef herd, and the number of replacement animals producers are holding. The monthly Cattle on Feed report also is at risk. Without that type of information, cattle markets will be flying blind.”

Other reports scheduled soon include November trade data from the Foreign Agricultural Service, as well as the monthly World Agricultural Supply and Demand Estimates from USDA’s Economic Research Service.

“The most extended government shutdown occurred in 1995 to 1996 and lasted three weeks,” say LMIC analysts. “In the past, some data has been recovered and released at a later date. However, in cases where the data is done by survey, as with many of the USDA NASS reports, that data is usually not recoverable because the survey was not sent or collected.”

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

Cattle Current Daily-Jan. 4, 2019

Negotiated cash fed cattle trade was steady at $123/cwt. in the Southern Plains through Thursday afternoon, with moderate demand and slow trade in the Texas Panhandle; moderate trade and demand in Kansas. There were a few live sales in Nebraska at the same price and steady with the prior week, but too few to trend.

Sharply lower outside markets and higher grain prices pressured Feeder Cattle futures on Thursday. Live Cattle softened some, but received support from steady cash fed cattle and wholesale beef values.

Except for 5¢ higher in away Feb, Live Cattle futures closed an average of 25¢ lower.

Feeder Cattle futures closed an average of $1.24 lower.

Corn futures closed mostly 3¢ to 4¢ higher through Sep ‘20 and then fractionally higher to 1¢ higher.

Soybean futures closed mostly 3¢ to 6¢ higher.

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

Choice boxed beef cutout value was 15¢ lower Thursday afternoon at $216.49/cwt. Select was $1.53 lower at $209.38.

******************************

Major U.S. financial indices plunged Thursday, fueled by increasing worries about slowing global economic growth. A letter from Apple to investors seemed to fuel the selloff. Apple sees its first-quarter revenue at $84 billion, significantly lower than previous estimates and about $7 billion short of analyst expectations, according to various reports.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” explained Apple CEO, Tim Cook, in the letter. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

Domestically, investors also appeared rattled by a softer Purchasing Managers Index (PMI®) than expected. The December PMI was 54.1%, down 5.2% from the previous month, according to the latest Manufacturing ISM® Report On Business®.

The Dow Jones Industrial Average closed 660 points lower. The S&P 500 closed 62 points lower. The NASDAQ was down 202 points.

*******************************

“Beef production in 2018 is projected to total nearly 27 billion lbs. of beef products resulting from the slaughter of 33 million head of cattle. The economic system that connects cattle production to beef consumption is remarkably complex and is a challenge for producers and consumers alike to understand and appreciate,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel points to the diverse markets for beef, geographic production diversity, the array of demand factors affecting individual beef items, let lone beef overall, as well as beef’s perishability. Plus, meeting fresh beef demand requires a continuous flow of slaughter-ready cattle, despite the fact that about 80% of the nation’s calves are born in the spring.

“As we wrap up 2018, it’s worth a moment to pause and consider the amazing day-to-day performance and accomplishments of the U.S. cattle and beef industry,” Peel says. “Cow-calf and stocker producers, feedlots, packers, further processors and a host of other workers in transportation, stocking, cooking, serving and countless other industry participants work every day to make sure that restaurant diners and grocery shoppers don’t have to think about where and how beef came to be available at that moment…or indeed that it would be there at all. It truly is a miracle.” 

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

Cattle Current Daily-Jan.3, 2019

Negotiated cash fed cattle prices end up sharply higher in late trade last week: $4 higher at $123/cwt. in the Southern Plains and Nebraska; $1-$3 higher in the western Corn Belt at $119-$121. Dressed sales were $5 higher in Nebraska at $195; steady to $5 higher in the western Corn Belt at $190-$195.

Recently higher cash fed cattle prices and continued firmness in wholesale beef values continue to support Cattle futures. They were pressured on Wednesday by likely profit taking; added pressure for Feeder Cattle early from stronger grain prices.

Live Cattle futures closed narrowly mixed (from an average of 29¢ lower to an average of 22¢ higher), with a sharp increase in open interest.

Feeder Cattle futures closed an average of 71¢ lower through the front four contracts, but well off of session lows, erasing Monday’s gains. They were 7¢ lower to 2¢ higher across the back half of the board.

Corn futures closed fractionally higher to 2¢ higher.

Soybean futures closed 10¢ to 12¢ higher through Sep ‘19 and then mostly 6¢ to 9¢ higher.

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

Choice boxed beef cutout value was $1.29 higher Wednesday afternoon at $216.64/cwt. Select was 25¢ higher at $210.91.

*******************************

Major U.S. financial edged higher after early pressure on Wednesday. Support included higher crude oil prices, stronger tech stocks and bank shares.

The Dow Jones Industrial Average closed 18 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 30 points.

*******************************

“The past few years have been a demand-driven environment where stronger than expected beef demand led to stronger than expected calf and yearling prices,” says Josh Maples, Extension livestock economist at Mississippi State University. “These have been important transition years that coped with the sharp supply increases. Looking ahead, slower herd growth numbers begin to paint a brighter price picture for 2019 and 2020 if domestic demand and exports continue to grow.”

In the most recent issue of In the Cattle Markets, Maples explains beef production, including about 2% expected growth this year, would be about 15% more in 2019 than it was in 2015.

“This would be the fastest four-year growth since 1973-1977,” Maples says. “With respect to the cattle cycle, recent cowherd trends suggest 2020 could potentially mark the end of the current U.S. cattle inventory build-up. But, it is worth noting that this is looking like a unique cattle cycle. History might suggest that after herd growth stops, herd declines will follow, but the ingredients for near-term herd declines are not obvious at this point. Prices have mostly remained at or above profitable levels for cow-calf producers, which does not provide much incentive for liquidation.” He expects herd growth to be flat this year.

On the other side of the ledger, Maples emphasizes the strong domestic economy and international demand continue to support beef and cattle prices, despite increasing supplies of beef, pork and chicken.

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

Cattle Current Daily-Dec. 31 to Jan. 2-2019

Negotiated cash fed cattle trade remained undeveloped through Friday afternoon. Though too few to trend, there were a few live sales reported in the western Corn Belt on Thursday at $119.00-$121.50/cwt., which was about $1 higher than the previous week.

Front-month Live Cattle set the tone for firm to higher futures prices, supported by expectations of steady to higher cash fed cattle prices.

Except for $1.15 higher in spot Dec and 22¢ lower in the back contract, Live Cattle futures closed an average of 27¢ higher.

Feeder Cattle futures closed narrowly mixed (10¢ lower to 22¢ higher).

Corn futures closed 1¢ higher.

Soybean futures closed 10¢ to 13¢ higher through March ’20 and then 8¢ to 9¢ higher.

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

Choice boxed beef cutout value was 89¢ lower Friday afternoon at $214.41/cwt. Select was 30¢ higher at $207.52.

*******************************

Major U.S. financial indices closed mainly lower Friday, amid another day of volatile trade.

The Dow Jones Industrial Average closed 76 points lower. The S&P 500 closed 3 points lower. The NASDAQ was up 5 points.

*******************************

Most auctions were closed for the holiday last week, so there were no price trends for calves and feeder cattle. When sales start in the new year, they should receive support from recently stronger cash fed cattle and futures prices. Snugger front-end supplies and harsh winter weather in some cattle-feeding areas suggest that support should continue for a while.

Near-term wildcards continue to include volatile equity markets, tied to worries about rising interest rates and slowing global economic growth, as well as the government shutdown.

Depending on your abacus, cattle prices this past year were unsurprising and mostly on par with the previous year. As long as weather and demand hold up, it’s hard to argue that prices will be much different in 2019.

The Livestock Marketing Information Center (LMIC) projected calf prices for the first quarter of 2019 at $168-$172/cwt., according to Glynn Tonsor, agricultural economist at Kansas State University, in December. Yearling prices were projected at $147-$150 and fed prices at $118-$121.

By | December 29th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 28, 2018

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon, but Live Cattle futures bounced higher, pulling Feeder Cattle along. Apparently, traders expect solid consumer demand heading into the new year. That’s hard to argue against, given snugger front-month fed cattle supplies and wholesale beef values holding their ground.

After an average of $1.39 higher in the front two contracts, Live Cattle futures closed an average of 45¢ higher (an average of 69¢ higher overall).

Feeder Cattle futures closed an average of 52¢ higher (12¢ higher at the back of the board to 90¢ higher in spot Jan).

Corn futures closed 1¢ lower to 1¢ higher.

Soybean futures closed fractionally mixed to 1¢ higher.

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

Choice boxed beef cutout value was 39¢ lower Thursday afternoon at $215.30/cwt. Select was 38¢ lower at $207.22. Both remained higher week to week.

******************************

Major U.S. financial indices closed higher Thursday after a sharp drop early, following the previous session’s steep gains. Given fundamentals, apparently raw emotion and the vagaries of electronic trading are firmly in charge.

The Dow Jones Industrial Average closed 260 points higher. The S&P 500 closed 21 points higher. The NASDAQ was up 25 points.

*******************************

Since 2015, one in every five bushels of added feed demand for corn is due to beef and pork exports, according to a recently updated study—The Intersection of U.S. Meat Exports and Domestic Corn Use—conducted by World Perspectives, Inc. (WPI), on behalf of the U.S. Meat Export Federation.

The original study concluded that in 2015 exports of U.S. red meat accounted for 11.7 million tons of combined corn and Dried Distillers Grains with Solubles (DDGS) use. In the update, WPI analysts say that 2018 beef and pork exports will use a combined total of 14.9 million tons of corn and DDGS, which equates to an additional 459.7 million bu. of corn produced, an increase of 29% over the 2015 projections.

“While the original study utilized 2015 export numbers, combined U.S. beef and pork exports this year should be about 26% above the 2015 totals,” explains Dave Juday, WPI senior analyst. “If you look forward, we’re projecting that the baseline over the next 10 years will grow about 10% more than USDA had projected back in 2016.”

Beef and pork exports also have a direct impact on the utilization and value of DDGS, according to the updated study. Overall, the value of DDGS sold for feed to livestock represents about 23% percent of the value of ethanol per bushel of corn.

“Over the baseline period of 2018-2027, the combined value of beef and pork exports to corn and DDGS is projected to reach $22.2 billion—$19 billion for corn and $3.2 billion for DDGS. This cumulative 10-year total is almost 19% more than the $18.7 billion projected in 2016 using USDA’s 2016-2025 long term baseline meat export forecast,” Juday says.

Among other study highlights:

  • About 11% of the price of corn this year will be derived from red meat exports.
  • Red meat exports’ impact on corn price is 39¢/bu. (based on annual average price of $3.53/bu.).
  • There would be a loss of $5.7 billion in corn value without red meat exports.

By | December 27th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 27, 2018

Negotiated cash fed cattle trade was undeveloped Wednesday, as expected. There was chatter about steady to higher prices this week, though, based on current demand and an estimated holiday harvest larger than many expected.

Cash fed cattle prices last week were steady to a touch higher. Live prices were $119/cwt. in Kansas and Nebraska ($118-$120 in the western Corn Belt). Dressed prices were $190.

Cattle futures closed narrowly mixed to higher (Feeder Cattle), supported by firm fed cattle prices and boxed beef cutout values.

After 47¢ higher in spot Dec, Live Cattle futures closed narrowly mixed (17¢ lower to 7¢ higher). On Monday, except for unchanged in the spot month, they were an average of 22¢ higher.

Feeder Cattle futures closed an average of 34¢ higher. They were an average of 32¢ higher on Monday.

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

Choice boxed beef cutout value was $1.64 higher Wednesday afternoon at $215.69/cwt. Select was 10¢ higher at $207.60.

*******************************

Major U.S. financial indices blasted sharply higher Monday, regaining the steep losses from Monday’s short session, and then some. Support included retail and energy stocks. Crude oil prices (WTI-CME) closed $3.51 to $3.72 higher through the front 12 contracts. On Monday, spot Feb plunged to $42.53; it ended Wednesday at $46.22.

On the other side of the equation, plenty of worry continues over an assortment of issues, including slowing global economic growth, the trade standoff with China, rising interest rates and the domestic government shutdown.

On Wednesday, the Dow Jones Industrial Average closed 1,086 points higher. The S&P 500 closed 116 points higher. The NASDAQ was up 361 points.

By way of review, the DJIA plummeted 653 points in Monday’s holiday-shortened session. The NASDAQ closed 140 points lower Monday; 65 points lower for the S&P 500.

*******************************

Feedlot returns appear positive from now through the first quarter of the new year, based on the most recent Historical and Projected Kansas Feedlot Net Returns, from Kansas State University (KSU).

Currently, the net returns projected for closeouts in November are +$4.88 per head for steers and -$1.18 per head for heifers, according to Glynn Tonsor, KSU agricultural economist, who prepares the report. He reminds that the estimates assume no price risk management.

Projected returns for steers jump to +78.11 per head for December with an estimated feedlot cost of gain of $83.19/cwt. From there, projected returns remain in the black (+$29.46 to +$80.71) through March of 2019.

Likewise, projected returns for heifers bounce to +$62.46 per head for December with an estimated feedlot cost of gain of $90.83/cwt. Projected returns fall to -$13.17 in January, then climb to +$8.05 and +$33.54 in February and March, respectively.

Improved projections compared to the previous month are mostly due to about $5 more in forecast sales prices, according to Tonsor.

By | December 26th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 24-26, 2018

Cash fed cattle continued steady to a touch higher than the previous week, through late Friday afternoon. For the week, live sales were steady at $119/cwt. in Kansas and Nebraska. Dressed trade in Nebraska was $3 higher at $190. Live sales in the western Corn belt were $1-$2 higher at $118-$120, while dressed sales were $3 higher at $190.

Cattle futures closed narrowly mixed to end the week, with no reaction to the previous day’s monthly Cattle on Feed report and amid stronger wholesale beef prices.

Live Cattle futures closed narrowly mixed (an average of 42¢ higher through the front three contracts and then an average of 23¢ lower).

Feeder Cattle futures closed marginally mixed (17¢ lower to 7¢ higher).

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

Soybean futures closed 7¢ to 8¢ lower through Sep ’19 and then mostly 2¢ to 5¢ lower.

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

Choice boxed beef cutout value was $1.58 higher Friday afternoon at $214.05/cwt. Select was $2.24 higher at $207.50.

*******************************

Major U.S. financial indices closed sharply lower again on Friday, amid continuing concerns about slowing global economic growth, domestic economic recession, trade issues and the likelihood of a partial government shutdown.

The Dow Jones Industrial Average closed 414 points lower. The S&P 500 closed 50 points lower. The NASDAQ was down 195 points.

*******************************

Total pounds of beef in freezers Nov. 30 were down slightly from the previous month but up 6% percent from last year, according to the monthly USDA Cold Storage report.

Frozen pork supplies were 11% less than the previous month but 1% more than the previous year. 

Total red meat supplies in freezers were down 6% from the previous month but up 4% from last year.

Total frozen poultry supplies were 13% less than the previous month but 2% more than a year ago.

By | December 22nd, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 21, 2018

Early dressed trade picked up a couple of dollars in the North Thursday…feedlot placements in November were almost 5% fewer than a year earlier… coming up on your Cattle Current Market Update with Wes Ishmael.

Cash fed cattle trade started Thursday at $190/cwt. in Nebraska, which was $2 more than last week. Though too few to trend, there were also some early live sales in the western Corn Belt at $120 and early dressed sales at $190, both $3 more than last week.

Cattle futures closed mostly higher ahead of the monthly Cattle on Feed report (see below), which will likely be viewed as neutral to a touch bearish.

Except for 50¢ higher in spot Dec and 17¢-27¢ lower at the back, Live Cattle futures closed 10¢ to 30¢ higher.

Other than 30¢ higher in the back two contracts, Feeder Cattle futures closed an average of $1.02 higher.

Corn futures closed mostly 5¢ to 6¢ lower through Jul ’20 and then fractionally lower to 2¢ lower.

Soybean futures closed 4¢ to 6¢ lower.

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

Choice boxed beef cutout value was 77¢ higher Thursday afternoon at $212.47/cwt. Select was 41¢ higher at $205.26.

*******************************

Major U.S. financial indices took another sharp turn south on Thursday. The growing likelihood of a partial government shutdown roiled already volatile markets. According to various reports, President Trump will veto any stopgap funding measure that doesn’t include money for a border wall. The deadline for a resolution is at midnight Friday.

The Dow Jones Industrial Average closed 464 points lower. The S&P 500 closed 39 points lower. The NASDAQ was down 108 points.

*******************************

Cattle feeders placed 4.91% fewer cattle on feed in November (1.996 million head), according to the monthly Cattle on Feed report. The report accounts for feedlots with 1,000 head or more capacity. A majority of estimates ahead of the report projected a decrease of about 6%.

As for placement weights, 52.36% went on feed weighing less than 700 lbs.; 36.62% weighing 700-899 lbs.; 11.02% weighing more than 900 lbs.

November marketings of 1,869 million head were 1.36% more than a year earlier, which was in line with most pre-report estimates. That’s the most for the month since the data series began in 1996.

Cattle on feed Dec. 1 of 11.739 million head were 1.94% more than last year, a touch more than pre-report estimates.

By | December 20th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 20, 2018

Cash fed cattle trade remained undeveloped through Wednesday afternoon.

There were only 250 head offered in the weekly Fed Cattle Exchange auction, and no takers.

Cattle futures closed either side of steady with no direction from the cash market, biding time for Thursday’s monthly Cattle on Feed report and little trading interest.

Live Cattle futures closed marginally mixed, (an average of 13¢ lower through the front three contracts and then an average of 12¢ higher).

Other than unchanged in spot Jan, Feeder Cattle futures closed an average of 24¢ lower.

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

Soybean futures closed most 5¢ to 7¢ lower.

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

Choice boxed beef cutout value was 98¢ lower Wednesday afternoon at $211.70/cwt. Select was 12¢ higher at $204.85.

*******************************

Major U.S. financial indices closed sharply lower Wednesday in turbulent trade that turned from positive to negative following the Fed announcement it was raising interest rates another 0.25%, marking the fourth increase this year. Though anticipated, the market seemed to be hoping for a reprieve, given the recent volatility of markets and expectations for slower global economic growth.

“A statement from the FOMC explained, in part: “Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2%. Indicators of longer-term inflation expectations are little changed, on balance.”

The Dow Jones Industrial Average closed 351 points lower. The S&P 500 closed 39 points lower. The NASDAQ was down 147 points.

*******************************

Live cattle are also contributing to the positive U.S. beef export picture.

“October cattle exports were about 29% higher than a year ago at 44,203 head,” say analysts with USDA’s Economic Research Service (ERS), in the December Livestock, Dairy and Poultry Outlook. “Despite exports to Mexico of less than half year-earlier levels, significantly higher exports to Canada resulted in the highest monthly export volume recorded since October 2001.”

Apparently Canadian cattle feeders are backfilling needed placements resulting from increasing fed cattle slaughter demand in tandem with continued flat herd growth.

“November through December is the peak placement season in Canada, which might support continued strong U.S. cattle shipments there as feedlots are sourcing cattle from the United States,” ERS analysts explain.

Besides Canada and Mexico, live cattle in October were exported to Qatar (2,184 head) and Russia (1,850 head), according to ERS. 

The cattle export forecast for 2018 was revised upward by 40,000 head to 250,000 head. The cattle export forecast for 2019 increased by 40,000 head to 255,000 head.

On the other side of the ledger, October cattle imports to the U.S.—primarily from Canada and Mexico—were 167,968 head, which was 20% more than a year earlier. For January through October, there were 1.497 million head of cattle imported to the U.S., about 82,000 head more than the previous year.

By | December 19th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 19, 2019

While volatility continued in outside markets Tuesday, Cattle futures managed to retrace some of the previous session’s losses …There’s a wide gap in expectations for placements in the looming Cattle on Feed report… coming up on your Cattle Current Market Update with Wes Ishmael.

As expected, negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Cattle futures firmed, amid continued light trade, apparently spurred along by short covering, more than anything.

Live Cattle futures closed an average of 62¢ higher.

Feeder Cattle futures closed an average of 91¢ higher.

Corn futures closed most 1¢ higher.

Soybean futures closed mostly 2¢ to 3¢ higher.

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

Choice boxed beef cutout value was 1¢ higher Tuesday afternoon at $212.68/cwt. Select was 97¢ higher at $204.73.

*******************************

Major U.S. financial indices eked out gains Tuesday, amid another stormy day of trading. Pressure continued to stem, in part, from worries about slowing global economic growth, tied to unresolved trade issues.

Domestically, the angst was compounded by an expected rise in interest rates Wednesday, another slide in crude oil prices

Spot CME crude oil (WTI) closed at $46.24, the lowest in more than a year. Contracts for the next 12 months were down $3.36 to $3.64.

Pressure also included an anemic outlook from the National Association of Home Builders (NAHB).

Builder confidence in the market for newly built single-family homes fell four points to 56 in December on the NAHB/Wells Fargo Housing Market Index (HMI) with persistent concerns about housing affordability. Although this is the lowest HMI reading since May 2015, builder sentiment remains in positive territory.

“We are hearing from builders that consumer demand exists, but that customers are hesitating to make a purchase because of rising home costs,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, LA “However, recent declines in mortgage interest rates should help move the market forward in early 2019.”

The Dow Jones Industrial Average closed 82 points higher. The S&P 500 closed fractionally higher. The NASDAQ was up 30 points.

*******************************

When the monthly Cattle on Feed report comes out Thursday, it will show either a few more November cattle placements or lots fewer, depending on which analysts and surveys you follow.

For instance, Allendale, Inc. sees November placements 0.9% more than last year. According to the Daily Livestock Report, though, the average estimate of the Urner Barry survey is for a decrease of 6.3%. That represents an estimated difference of 153,000 head.

As for estimated marketings in November, both sources project a year-over-year increase of about 1%.

For Allendale, that leaves an estimated 3.2% more cattle on feed Dec. 1, versus 1.7% more for the average of estimates in the Urner Barry survey.

By | December 18th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 18, 2018

Cattle futures softened to start the week, especially Feeder Cattle. Pressure likely included the anticipated packer slowdown during the next two holiday-shortened weeks, as well as technical correction.

Live Cattle futures closed an average of 77¢ lower.

Feeder Cattle futures closed an average of $1.70 lower ($1.20 to $2.45 lower).

Corn futures closed fractionally lower through Dec ’10 and then mixed.

Soybean futures closed 2¢ to 4¢ higher.

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

Choice boxed beef cutout value was $1.71 higher Monday afternoon at $212.67/cwt. Select was 62¢ higher at $203.76.

*******************************

Major U.S. financial indices closed sharply lower again Monday, down about the same amount they were in the previous session. Concerns continued about slowing global economic growth and unresolved trade issues, in tandem with expectations the Fed will raise interest rates again Wednesday.

The Dow Jones Industrial Average closed 507 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 156 points.

*******************************

“Packer demand has increased seasonally, and strong margins this year have likely encouraged packers to be strong buyers of cattle,” say analysts with USDA’s Economic Research Service (ERS), in the December Livestock, Dairy and Poultry Outlook. “For the week ending December 8, the weekly slaughter estimate was 667,000 head. This would be the highest weekly slaughter total since the week ending May 19. This demand is also reflected in prices offered for fed steers in the 5-area marketing region. In November, monthly prices finally broke out of the 5-month narrow price window of $109.90 to 112.20/cwt. to reach over $115. Further, for the week ending December 9, fed steer prices climbed to $118.11, though still below year-earlier levels. From last month, the forecast for fourth-quarter 2018 price for fed steers in the 5-area marketing region was raised to $113-$116/cwt. However, the annual forecast for 2019 fed steer prices was left unchanged $114-$122/cwt.

The aggressive slaughter pace pushed estimated beef production for this year 25 million lbs. higher to 26.9 billion lbs. ERS analysts note lighter carcass weights and less projected cow slaughter in the fourth quarter partially offset increased steer and heifer slaughter. Likewise, beef production for 2019 was reduced slightly based on the expectation of lighter carcass weights. Estimated beef production for next year was reduced by 25 million lbs. to 27.8 billion lbs.

By | December 17th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 17, 2018

Negotiated cash fed cattle prices in the Southern Plains on Friday were mainly steady with the previous week at $119/cwt. on a live basis. Early dressed sales in Nebraska were $1 higher at $188. Though too few to trend, early live sales in the western Corn Belt were $1 higher at $117, while early dressed sales of $187 were at the upper end of the prior week’s trading range in the region.

Cattle futures meandered to a marginally softer close.

Other than 12¢ higher in spot Dec, Live Cattle futures closed an average of 29¢ lower.

Feeder Cattle futures closed an average of 22¢ lower.

Corn futures closed mostly unchanged to fractionally mixed.

Soybean futures closed 4¢ to 6¢ lower.

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

Choice boxed beef cutout value was $1.51 lower Friday afternoon at $210.96/cwt. Select was $2.14 higher at $203.14.

*******************************

Major U.S. financial indices closed sharply lower Friday, pressured by weak European and Chinese economic data pointing toward slowing global economic growth.

The Dow Jones Industrial Average closed 496 points lower. The S&P 500 closed 50 points lower. The NASDAQ was down 159 points.

*******************************

Despite some notions to the contrary, the nation’s beef cow herd likely continued to expand a mite this year, according to the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor. Specifically, LMIC analysts expect to see 0.2-0.4% growth as of January 1.

Yes, growth is anticipated despite federally inspected heifer slaughter through October running 7.3% more than the previous year; 10.7% more for federally inspected beef cow slaughter.

“The number of beef cows that calved has grown over the last four years, adding 2.6 million head since 2014,” says LMIC analysts. “This incredible growth pattern led to larger calf crops, and the economics has supported retaining a large number of heifers in recent years to continue adding to that beef cow number.”

By | December 16th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 14, 2018

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon. Although too few to trend, there were some early live sales in the western Corn Belt at $117/cwt., which was $1 higher than last week. Early dressed sales at $187, were at the top of last week’s range for the region.

Live Cattle futures edged mostly higher, while recent pressure on grain prices added lift to Feeder Cattle.

Other than an average of 7¢ lower in near Feb, and Apr, Live Cattle futures closed an average of 27¢ higher.

Feeder Cattle futures closed an average of 60¢ higher.

Corn futures closed mostly fractionally mixed.

Soybean futures closed 10¢ to 13¢ lower through 2019.

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

Choice boxed beef cutout value was 22¢ higher Thursday afternoon at $212.47/cwt. Select was 57¢ lower at $201.00.

*******************************

Major U.S. financial indices settled mixed Thursday. Support included perceptions that U.S. and China trade talks are progressing, including various reports suggesting China purchased a significant volume of U.S. soybeans.

The Dow Jones Industrial Average closed 70 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 27 points.

*******************************

“There are two overriding themes in livestock markets: generally low feed costs and record meat production,” says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets. “On the beef side, booming exports and strong domestic beef demand have cushioned the blow of increasing beef production. Record pork production in 2018 and again in 2019 will pressure pork prices lower. The chicken industry has continued to increase production, but prices have fallen to extremely low levels, which is likely to lead to some production restraint in the coming year. On the turkey side, falling demand has led to unprofitable prices for producers.”

By | December 13th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 13, 2018

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon.

There were only 156 head (two lots) offered in the weekly Fed Cattle Exchange auction. One lot (97 heifers) sold for delivery at 1-9 days for an average of $119/cwt.

Cattle futures continued to build on recent gains Wednesday, buoyed by last week’s large fed cattle harvest, as a barometer of domestic demand strength, in tandem with stronger cash prices.

Live Cattle futures closed an average of 39¢ higher.

Feeder Cattle futures closed an average of 34¢ higher.

Corn futures closed mostly unchanged to fractionally mixed.

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

Choice boxed beef cutout value was $2.21 lower Wednesday afternoon at $212.25/cwt. Select was 18¢ higher at $201.57.

*******************************

Although closing off of session highs, major U.S. financial indices settled higher Wednesday, reportedly fueled by increasing optimism regarding U.S.-China trade talks.

The Dow Jones Industrial Average closed 157 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 66 points.

*******************************

Congress passed the new Farm Bill, overwhelmingly in both the Senate and House of Representatives. All that’s left is President Trump’s, signature, which seems likely, based on his remarks ahead of the congressional vote.

“America’s cattlemen and women want common sense and certainty from Congress this holiday season and throughout the year; today, they received that through the passage of the Farm Bill,” said Kevin Kester, president of the National Cattlemen’s Beef Association. “Certainty that a Foot-and-Mouth Disease vaccine bank will be authorized and funded. Certainty that important conservation programs will be reauthorized and funded. And certainty that trade promotion and access to foreign markets will remain a priority in the years to come.”

“The passage of the 2019 Farm Bill is good news because it provides a strong safety net for farmers and ranchers, who need the dependability and certainty this legislation affords,” says U.S. Agriculture Secretary, Sonny Perdue. “This Farm Bill will help producers make decisions about the future, while also investing in important agricultural research and supporting trade programs to bolster exports. While I feel there were missed opportunities in forest management and in improving work requirements for certain SNAP recipients, this bill does include several helpful provisions and we will continue to build upon these through our authorities. I commend Congress for bringing the Farm Bill across the finish line and am encouraging President Trump to sign it.”

“Feeding an increasing global population is not simply an agriculture challenge, it is a national security challenge,” said Senator Pat Roberts (Rep, KS) after the Senate passed the conference report. “This means we need to grow more and raise more with fewer resources. That will take investments in research, new technology, lines of credit, and proper risk management. It takes the government providing tools, and then getting out of the producer’s way.”

By | December 12th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 12, 2018

Last week’s higher fed cattle prices and firmer wholesale beef values appeared to finally offer some spark to Cattle futures on Tuesday, especially Feeder Cattle.

Live Cattle futures closed an average of 77¢ higher.

Feeder Cattle futures closed an average of $1.68 higher ($1.15 higher to $2.27 higher in spot Jan).

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

Choice boxed beef cutout value was 96¢ lower Tuesday afternoon at $214.46/cwt. Select was 45¢ higher at $201.39.

*******************************

Wild market swings continued on Wall Street Tuesday, apparently driven by continued kneejerk reactions to the headlines. By the end, major U.S. financial indices settled narrowly mixed.

The Dow Jones Industrial Average closed 53 points lower. The S&P 500 closed fractionally lower. The NASDAQ was up 11 points.

*******************************

“The 2018 forecast for total red meat and poultry production is raised from last month as higher beef and poultry production forecasts more than offset lower pork production,” according to analysts with USDA’s Economic Research Service, in the monthly World Agricultural Supply and Demand Estimates (WASDE). “The increase in beef production reflects a faster pace of steer and heifer slaughter. However, this is slightly offset by lower carcass weights.”

Fed steer prices (5-area Direct) are projected at $119-$125/cwt. in the first quarter next year, $118-$128 in the second quarter and $109-$119 in the third.

Other WASDE highlights:

Corn

Lower corn used for ethanol, reduced imports and larger ending stocks.

The season-average corn price received by producers was unchanged at a midpoint of $3.60/bu., but the range was narrowed 5¢ cents on each end to $3.25 to $3.95/bu.

Wheat

Unchanged supplies, lower exports, and higher ending stocks.

The projected season-average farm price is up 5¢/bu. at the midpoint with the range narrowed to $5.05 to $5.25.

Soybeans

Supply and use projections for 2018-19 were unchanged. Soybean ending stocks were projected at a record 955 million bu.

The U.S. season-average soybean price for 2018-19 was forecast at $7.85 to $9.35/bu., unchanged at the midpoint. Soybean meal price was unchanged at $290 to $330 per short ton. Soybean oil price was unchanged at 28.0¢ to 32.0¢/lb.

By | December 11th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 11, 2018

Negotiated cash fed cattle trade last week ended up $1-$3 higher at $119/cwt. ($116 in the western Corn Belt). Dressed trade was steady to $4 higher at $187.

Feeder Cattle futures gained some ground Monday, amid limited trade, while Live Cattle closed narrowly mixed, despite stronger cash prices and wholesale beef values.

Live Cattle futures closed 32¢ lower to 32¢ higher.

Feeder Cattle futures closed an average of 67¢ higher

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

Choice boxed beef cutout value was $1.13 higher Monday afternoon at $215.42/cwt. Select was 44¢ higher at $200.94.

*******************************

Extreme volatility continued on Wall Street Monday with steep losses early and then recovery later on, led by tech stocks.

The Dow Jones Industrial Average closed 34 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 51 points.

*******************************

“The latest meat trade data shows that meat exports are continuing to help offset record meat production in 2018,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in December market comments.  “Each of the major meats—beef, pork and poultry—are projected to reach record levels in 2018 and will combine to push total U.S meat production to a record level of 102.3 billion lbs., up 2.6% year over year. However, 2018 per capita meat consumption in the U.S. is projected at 218.7 lbs., up 1.0% year over year. The smaller increase in meat consumption compared to production is largely due to the net movement of meat offshore through meat exports. Thus far in 2018 (January-October), total meat exports of 13.3 billion lbs. consist of broiler (44.0%); pork (36.3%); and beef (19.7%).

Moreover, Peel explains U.S. meat exports are forecast to increase next year, while total meat imports are forecast to decrease. 

“Continued improvements in the net trade balance will be critical to partially offset total 2019 meat production forecast at 103.7 billion lbs., up 1.4% year over year and another record level,” Peel says. “Domestic per capita total meat consumption is forecast to hold steady in 2019.”

However, Peel also pointed out earlier this fall, “There is general agreement that trade disruptions will likely reduce U.S. and global macroeconomic growth in 2019. While the beef industry has avoided most of the direct tariff impacts thus far, indirect tariff impacts will continue to grow unless the trade situation is resolved very soon. Consumers will see growing tariff impacts that may impact consumer spending and beef demand…Tariff-driven price increases could push consumers to cheap and abundant pork and poultry at the expense of beef demand.”

By | December 10th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 10, 2018

Negotiated cash fed cattle trade remained mostly undeveloped through Friday afternoon, according to USDA reports. There was some light to moderate trade in the western Corn Belt at $115-$117/cwt., which was $1 higher than the previous week. Early dressed sales were steady at $183-$185. By late in the day, AMS reported some dressed trade in Nebraska at $187, which was $2-$4 more than the previous week.

Cattle futures closed narrowly mixed in choppy trade.

Live Cattle futures closed an average of 22¢ higher, except for 5¢ to 27¢ lower at either end of the board.

Other than 17¢ higher in spot Jan, Feeder Cattle futures closed unchanged to an average of 22¢ lower. 

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

Choice boxed beef cutout value was $1.62 higher Friday afternoon at $214.29/cwt. Select was $2.28 higher at $200.50.

*******************************

Major U.S. financial indices plunged again to end the week.

Pressure included ongoing worries about global economic growth and trade, as well as fewer jobs than expected in the monthly national employment report.

Total nonfarm payroll employment increased by 155,000 in November, according to the U.S. Bureau of Labor Statistics. The unemployment rate remained unchanged at 3.7%. 

Average November hourly earnings for all employees on private nonfarm payrolls rose by 6¢ to $27.35. Over the year, average hourly earnings have increased by 81¢ cents, or 3.1%.

The Dow Jones Industrial Average closed 558 points lower. The S&P 500 closed 62 points lower. The NASDAQ was down 129 points.

*******************************

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

October beef exports totaled 117,838 metric tons (mt), up 6% from a year ago, valued at $727.4 million, which was 10% more year over year and the second-highest monthly total on record.

For January through October, beef exports totaled 1.13 million mt, 9% more than last year, while value was 17% more at $6.92 billion. For beef muscle cuts only, exports increased 12% percent in volume (867,714 mt) and 19% in value ($6.19 billion).

 “Demand for U.S. beef continues to climb in nearly every region of the world, with annual records already falling in some markets,” says Dan Halstrom, USMEF president and CEO. “Per-head export value will also easily set a new record in 2018, which illustrates the strong returns exports are delivering for cattle producers and for the entire supply chain.”

Beef export value equated to $317.53 per head of fed slaughter in October, up 5% from a year ago. For January through October, the per-head average was up 15% to $320.50.

By | December 8th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 7, 2018

Negotiated cash fed cattle trade was undeveloped through Thursday afternoon.

Cattle futures softened but closed well off of session lows that came early, driven in part by the plummeting stock market (see below).

Live Cattle futures closed an average of 48¢ lower

Except for an average of 35¢ lower in the back two contracts, Feeder Cattle futures closed an average of $1.22 lower

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

Choice boxed beef cutout value was 59¢ lower Thursday afternoon at $212.67/cwt. Select was $1.36 higher at $198.22.

*******************************

Maybe it still pays to leave that cash in the coffee can. Wall Street took a wild ride Thursday, with the Dow plunging nearly 800 points early on—driven in part by the overnight free fall in stock index futures —before ultimately recovering most of the loss. That followed the previous session’s steep losses.

Recent pressure includes the yield curve inversion, as a possible barometer of looming domestic economic recession, as well as fears of a global economic slowdown, tied to lingering trade issues. Support for the day included reports that the Fed may be less aggressive in raising interest rates after the December meeting.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed 4 points lower. The NASDAQ was up 29 points.

*******************************

“On average, bankers estimated that farmland prices declined by 4.0% over the past 12 months and expect farmland prices to fall by another 3.2% over the next 12 months,” according to the most recent Rural Mainstreet Economy Report from Creighton University.

“More than ever, farmland values are extremely dependent upon quality, and location, location, location,” says Fritz Kuhlmeier, CEO of Citizens State Bank at Lena, IL.

The monthly report is built from surveys of rural community bank CEOs in a 10-state region dependent on agriculture and/or energy. It includes the Rural Mainstreet Index (RMI), a real-time measure of rural economic health. The overall index expanded to 54.3 in October from 51.5 in September. The index ranges between 0 and 100 with 50.0 representing growth neutral. That’s the ninth consecutive month the index climbed above growth neutral. 

“Our surveys over the last several months indicate that the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of tariffs and low agriculture commodity prices continue to weaken the farm sector,” says Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. 

By | December 6th, 2018|Daily Market Highlights|

Cattle Current Market Update-Dec. 6, 2018

Major U.S. stock exchanges were closed Wednesday, saluting the life of patriot and former president George Herbert Walker Bush.

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon, but early signs pointed to at least steady money.

For instance, there were only two lots of steers from Kansas (219 head) offered in the weekly Fed Cattle Exchange auction. Both sold at a weighted average price of $117.83/cwt. for delivery at 1-9 days. That price was right at last week’s average country trade for the region.

Likewise, prices for Ch 2-4 steers ($115.58-$116.63) at the Tama fat cattle auction in Iowa were at the upper end of country prices in the western Corn Belt last week.

Cattle futures closed higher Wednesday—led by Feeder Cattle—building on gains from the previous session, although trade and overall direction were limited.

Live Cattle futures closed an average of 71¢ higher

Feeder Cattle futures closed an average of $1.02 higher

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

Choice boxed beef cutout value was 60¢ lower Wednesday afternoon at $213.26/cwt. Select was 65¢ lower at $196.86.

*******************************

“Restaurant operators are somewhat more optimistic about sales growth in the coming months, with their outlook rising to a six-month high,” according to the National Restaurant Association (NRA), in that organization’s most recent Restaurant Performance Index (RPI) report. “However, restaurant operators remain generally less bullish about the direction of the overall economy.”

Stronger same-store sales and customer traffic pushed the RPI to a slight gain in October at 101.2; it was 101.1 a month earlier. Index values above 100 indicate key industry indicators are in a period of expansion.

The RPI is comprised of the Current Situation Index (CSI) and the Expectations Index (EI). Month to month, the CSI increased from 100.6 to 100.9. The EI was stable at 101.6.

By | December 5th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 5, 2018

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon.

Cattle futures gained some traction, in the face of sharply lower outside markets. Feb Live Cattle led the way. Ultimately, Feeder Cattle tagged along to a lesser degree.

Except for 15¢ lower in the back contract, Live Cattle futures closed an average of 95¢ higher (30¢ to $1.47 higher).

Except for 10¢ lower in spot Jan, Feeder Cattle futures closed an average of 59¢ higher. 

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

Choice boxed beef cutout value was 78¢ higher Tuesday afternoon at $213.86/cwt. Select was $1.67 lower at $197.51.

*******************************

Major U.S. financial indices dove lower Tuesday, reportedly pressured by a flattening yield curve, which investors fear portend an economic slowdown.

The Dow Jones Industrial Average closed 799 points lower. The S&P 500 closed 90 points lower. The NASDAQ was down 283 points.

*******************************

Agricultural producer sentiment held steady in November with producers remaining optimistic about the state of the agricultural economy, according to results from the Purdue University-CME Group Ag Economy Barometer.

The barometer reading of 134 was 1% lower than in October, but remains similar to levels last spring before trade disruptions began. The barometer utilizes a survey of 400 agricultural producers from across the country.

“Although there was a modest decline in the barometer this month, there was some evidence that producers are becoming more confident regarding the U.S. agricultural economy’s future,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The barometer’s two sub-indices remained mostly unchanged from October. The Index of Current Conditions held at 115, and the Index of Future Expectations dropped 3 points to a reading of 143.

Other Barometer Survey Highlights

50% expect higher farmland values over the next five years, significantly more than a month earlier when 21% said they expected farmland values to increase.

13% expect farm profitability to improve in the next 12 months.

44% expect to see equity diminish in the coming year.

75% said they were either ‘somewhat or very concerned’ that Congress had not passed new farm bill legislation.

By | December 4th, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 4, 2018

Negotiated cash fed cattle trade ended up mostly $1-$2 higher on a live basis last week at $118/cwt. in the Southern Plains, $114-$116 in the western Corn Belt and $116-$118.50 in Nebraska. Dressed trade was $3-$6 higher in the western Corn Belt at $183-$186. In Nebraska, it was steady to $2 less than the bulk of the previous week’s trade at $183-$185.

Despite stronger cash prices, firmer wholesale beef values and positive news regarding U.S.-China trade (see below), Cattle futures softened to start the week. Pressure included the decline in Lean Hog futures, as well as recently strengthening grain prices, where Feeder Cattle are concerned.

Live Cattle futures closed an average of 49¢ lower (5¢ to 72¢ lower).

Feeder Cattle futures closed an average of $1.40 lower, (72¢ lower in spot Jan to $1.72 lower at the back).

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

Choice boxed beef cutout value was 47¢ higher Monday afternoon at $213.08/cwt. Select was 77¢ higher at $199.18.

*******************************

Major U.S. financial indices closed higher Monday, boosted by comments following the weekend meeting between President Trump and President Xi Jinping of China, during the G20 Summit in Argentina.

Included in a statement from President Trump’s press secretary:

“On Trade, President Trump has agreed that on Jan. 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time. China will agree to purchase a not-yet-agreed-upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately.

“President Trump and President Xi have agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%.”

The Dow Jones Industrial Average closed 287 points higher. The S&P 500 closed 30 points higher. The NASDAQ was up 110 points.

*******************************

Cull cow prices likely reached their seasonal low in November, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. However, he emphasizes making sense of the cull market has been challenging this year.

From May through October this year, Peel says cull cow prices averaged 13-15% less than the previous year. In his weekly market comments, he explains, Cull cow prices typically begin a slight recovery in December following the November seasonal low.

From current levels, he says seasonal trends suggest breaking cow prices of $53.47/cwt. in January; $58.26 in February; $59.53 in March; $59.94 by April; and $60.85 by May.

“One of the big factors contributing to weak cull cow prices has been weak cow boxed beef prices in the second half of 2018,” Peel says. “In the last week of November, cow boxed beef prices were 7.8% lower than year-earlier levels and have averaged 8.3% lower year over year since mid-year.”

Although overall beef demand remains strong, Peel explains cow beef demand is more uncertain, with most going into ground beef. So, along with total cow slaughter being 7.2% more than last year, he says it’s possible that large supplies of pork and poultry are applying more pressure to ground beef demand.

Even so, Peel expects a relative tightening of cow beef supplies to support a near-normal increase in cull cow prices heading into the new year.

By | December 3rd, 2018|Daily Market Highlights|

Cattle Current Daily-Dec. 3, 2018

Negotiated cash fed cattle trade remained largely undeveloped through USDA’s late-afternoon report Friday. There were some live sales in the western Corn Belt at $115/cwt., unevenly steady with Wednesday’s $114-$116, which was $1-$2 higher than the previous week. There was some early dressed trade in Nebraska at $183, but too few transactions to trend; prices the previous week were at $180-$185, mostly $185.

Live Cattle futures firmed on Friday (17¢ lower to 32¢ higher), supported by the steady to higher feel in the cash market.

Feeder Cattle futures softened amid continued lackluster trade and perhaps some month-end position squaring. Except for 7¢ lower in the back two contracts, Feeder Cattle futures closed an average of 60¢ lower.

Though futures prices remain channel-bound, there continue to be expectations for a secondary boost, if and when China and the U.S. settle their trade differences. The notion is that China’s ongoing problems with African Swine Fever mean that nation needs to import lots more pork, potentially significantly more from the U.S. President Trump and China’s President Xi Jingping were scheduled to meet over the weekend during the G20 Summit.

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

Choice boxed beef cutout value was even with the previous day Thursday afternoon at $212.61/cwt. Select was 12¢ lower at $198.41.

*******************************

Major U.S. financial indices closed higher Friday, apparently boosted by optimism that the U.S. and China would make headway in solving their trade issues when leaders meet during the G20 Summit in Argentina over the weekend.

The Dow Jones Industrial Average closed 199 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 57 points.

*******************************

Leaders of the United States, Mexico, and Canada signed the U.S.-Mexico-Canada Agreement (USMCA) on Friday, during the G-20 meeting in Argentina. The USMCA maintains unrestricted, duty-free trade for beef and cattle in North America. It also maintains science-based trade standards.

All three countries must complete their own domestic processes before the USMCA comes into force. In the U.S., Congress will need to pass legislation to implement the deal. The U.S. International Trade Commission is currently conducting an investigation into the likely impacts of USMCA.

“With the signing of the, U.S. beef producers are one step closer to knowing that unrestricted, science-based trade will continue in North America,” says Kevin Kester, president of the National Cattlemen’s Beef Association. “The agreement brings the trading relationship with our neighbors into the 21st century – and clearly rejects the failed beef and cattle trade policies of the past. Open markets have helped U.S. producers flourish and created billion-dollar markets for U.S. beef. We look forward to working with Congress to get USMCA passed into law as quickly as possible.”

By | December 1st, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 30, 2018

Other than early live sales in the western Corn Belt Wednesday, which were $1-$2 higher than last week at $114-$116/cwt., negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Cattle futures dipped, recovering some from the strongest early pressure. Other than, arguably, more interest flowing to Lean Hogs, there seemed no apparent fundamental reason for the decline. Given the current support of fed cattle prices, it was one of those sessions that left you wondering exactly what components comprise electronic-trading algorithms, and perhaps more important, how far ahead.

After 17¢ lower in spot Dec and 27¢ lower in near Feb, Live Cattle futures closed an average of 97¢ lower (52¢ to $1.30 lower).

Feeder Cattle futures closed an average of $1.46 lower.

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

Choice boxed beef cutout value was 67¢ lower Thursday afternoon at $212.61/cwt. Select was 3¢ higher at $198.53.

*******************************

Major U.S. financial indices trickled lower Thursday, as investors digested the interest rate news and trade hopes that boosted markets the previous day.

Battered nearby Crude Oil futures (WTI-CME) bounced about $1 higher.

The Dow Jones Industrial Average closed 27 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 18 points.

*******************************

Judging by projections in the latest Outlook for U.S. Agricultural Trade, beef exports will continue to lead the way next year.

Projected beef exports for fiscal year 2019 (October-September) were projected $500 million higher than the August forecast at $7.6 billion. That would be about $278 million more than this year. According to analysts with USDA’s Economic Research Service (ERS), the increase is driven mostly by higher unit values.

Overall, the projection for total livestock, dairy, and poultry exports are forecast $200 million less than the August projection at $30.1 billion, pressured by weaker demand for dairy, poultry and products, hides and skins, as well as rendered products.

For context, according to ERS analysts, “Per capita world GDP growth is expected to be robust at 2.1% in 2018 and to remain healthy at 2.0% percent in 2019, led by a thriving U.S. economy…Per capita GDP growth in the United States of 2.2% in 2018 is expected to be sustained in 2019. In 2018, the U.S. economy is bolstered by strong consumer spending and favorable business investment. Income growth is expected to slow during 2019, due to diminishing effects of fiscal stimulus, rising inflation and slower economic growth outside the United States.”

By | November 29th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 29, 2018

Notions grew stronger yesterday for steady to higher cash fed cattle prices this week.

Early live sales in the western Corn Belt were $1-$2 higher at $114-$116/cwt., on slow trade and light demand.

There were 620 head (seven lots) offered in the weekly Fed Cattle Exchange auction. One lot (148 head) of steers from Kansas sold at $116.75/cwt. for delivery at 1-9 days. That’s toward the top of the price range for country trade in the region last week.

Live Cattle futures closed marginally mixed Wednesday, while Feeder Cattle softened slightly, amid light trade and a lack of direction.

Live Cattle futures closed narrowly mixed, from an average of 5¢ higher in three contracts to an average of 12¢ lower.

Feeder Cattle futures closed an average of 54¢ lower.

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

Choice boxed beef cutout value was 72¢ lower Wednesday afternoon at $213.28/cwt. Select was $1.74 lower at $198.50.

*******************************

Major U.S. financial indices closed sharply higher Wednesday, propelled by comments from Federal Reserve Chairman, Jerome Powell, suggesting interest rate increases may be nearing an end.

“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy—that is, neither speeding up nor slowing down growth,” Powell explained in prepared remarks at the Economic Club of New York Wednesday. “My FOMC colleagues and I, as well as many private-sector economists, are forecasting continued solid growth, low unemployment, and inflation near 2%.”

The Dow Jones Industrial Average closed 617 points higher. The S&P 500 closed 61 points higher. The NASDAQ was up 208 points.

*******************************

“Declining unemployment rates and a small increase in population ages 16 and older corresponded to the addition of more than 650,000 jobs in rural counties between 2013 and 2017,” according to the recently released Rural America at a Glance, from USDA’s Economic Research Service (ERS).

“At the same time, falling labor force participation (due primarily to an aging population among non-Hispanic Whites) corresponded to a decline in employment of nearly 280,000, leaving a net increase in jobs of roughly 370,000,” ERS analysts say.

In 2016-2017, rural counties added population for the first time in a decade, according to the report, though the total rural population has remained close to 46.1 million since 2013.

“The recent upturn in rural population comes from increasing rates of net migration as opposed to natural change (births minus deaths). Increased net migration has coincided with declining rural unemployment, rising incomes, and declining poverty since 2013,” say ERS analysts.

By | November 28th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 28, 2018

Cattle futures closed mainly narrowly lower Tuesday, with little direction one way or the other.

Except for 5¢ higher in away Dec and unchanged at the back, Live Cattle futures closed an average of 21¢ lower.

Feeder Cattle futures closed an average of 28¢ lower.

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

Choice boxed beef cutout value was 45¢ lower Tuesday afternoon at $214.00/cwt. Select was 45¢ higher at $200.24.

*******************************

Major U.S. financial indices gained for the second consecutive day, reportedly buoyed by chatter about a U.S.-China trade truce.

The Dow Jones Industrial Average closed 108 points higher. The S&P 500 closed 8 points higher. The NASDAQ was fractionally higher.

*******************************

Although boxed beef cutout values never received as much seasonal pop as some expected, they continue to be strong in the face of increased production.

“The wholesale price of beef remained fairly strong through the holiday week. There may still be some end-of-the-year holiday beef buying on the table, which could provide support to the beef cutout,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. How much buying is left to be completed will determine the amount of support provided as retailers will soon be moving their focus to end cuts.”

Analysts with USDA’s Economic Research Service note that since early August, Choice wholesale beef cutout prices stayed well above year-earlier levels. 

“In fact, the weekly beef cutout price for the week ending Nov. 9 climbed to within June price levels despite higher year-over-year beef production for third-quarter 2018 and higher expected production in fourth-quarter 2018,” ERS analysts say in the latest monthly Livestock, Dairy and Poultry Outlook.

By | November 27th, 2018|Daily Market Highlights|

Cattle Current Podcast-Nov. 27, 2018

Cattle futures closed marginally mixed but mostly higher Monday, supported by last week’s friendly Cattle on Feed report and a recent bump in wholesale beef values.

Live Cattle futures closed an average of 21¢ lower through the front four contracts and then unchanged to 5¢ higher.  

Other than 22¢ lower in spot Jan, Feeder Cattle futures closed an average of 24¢ higher.

Corn futures closed mostly 1¢ to 2¢ lower.

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

Choice boxed beef cutout value was 60¢ higher Monday afternoon at $214.45/cwt. Select was $1.28 higher at $199.79.

*******************************

Major U.S. financial indices rallied higher on Monday, supported by a rebound in key tech stocks like Apple and Amazon. Retail stocks and higher oil prices also provided support.

West Texas Intermediate futures (CME) closed $1.05 to $1.21 higher through the front 12 contracts.

The Dow Jones Industrial Average closed 354 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 142 points.

*******************************

“The beef cow herd likely increased less than 1% year over year in 2018 to a projected Jan. 1, 2019 level of about 31.9 million head,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “This may be the cyclical peak in herd inventory or very close to it. From the 2014 low of 29.1 million head, this cyclical expansion has increased the beef cow herd by 2.8 million head or 9.6% over five years. The last full cyclical herd expansion occurred in 1990-1996 resulting in an 8.8% herd expansion in six years.”

Moreover, Peel explains beef cowherd dynamics are finally returning to normal, following the unprecedented market forces that drove volatility during the past decade. That included the drought-induced herd liquidation of 2011-2013 that took more cows out of production than would otherwise be expected, followed by the recent rapid expansion.

For instance, Peel says heifer retention projected at 19.3% this year and 18-18.5% are nearing the previous 30-year average of 17.6%. It was as low as 16.6% in 2011 and as high as 21% in 2016.

Similarly, Peel points to the steer-to-heifer ratio of the slaughter mix, which averaged 1.71 during the past 30 years. He explains the ratio increased to 2.14 in 2016, the highest since the early 1970s. It was 1.95 last year and is projected at 1.83 this year.

Finally, at its current rate, Peel says cow slaughter this year will be around 9.7%, close to the long-term average.

By | November 26th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 26, 2018

Negotiated cash fed cattle trade for the week ended up mostly $2-$3 higher on a live basis at $116-$117/cwt. ($113-$114 in the western Corn Belt), and $2-$7 higher in the beef at $180-$185.

Cattle futures continued higher on Friday, amid light holiday trade and continued support from the friendly Cattle on Feed report and stronger cash fed cattle prices.

Live Cattle futures closed an average of 37¢ higher (7¢ to 70¢ higher).  

Except for unchanged to 20¢ lower in the back three contracts, Feeder Cattle futures closed an average of 83¢ higher.

Corn futures closed mostly 1¢ to 2¢ lower.

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

Choice boxed beef cutout value was 16¢ higher Friday afternoon at $213.85/cwt. Select was 25¢ higher at $198.51.

*******************************

Major U.S. financial indices closed lower on Friday, weighed down by trade concerns and the continuing slide of oil prices. West Texas Intermediate (CME) closed $3.84 to $4.21 lower through the next 12 contracts. Week to week, they closed an average of $6.33 lower through the front six contracts.

The Dow Jones Industrial Average closed 178 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 33 points.

*******************************

Total pounds of beef in freezers Oct. 31 were up 2% from the previous month and up 2% from the previous year, according to the latest Cold Storage report from USDA.

Frozen pork supplies were 3% less than the previous month and 5% less than last year.

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

Total frozen poultry supplies were down 9% from the previous month, but up 4% from a year ago.

By | November 25th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 22-23, 2018

Between late Tuesday and yesterday, negotiated cash fed cattle trade kicked off at higher money. Live trade was $2.50 higher in the Texas Panhandle at $116.50/cwt. and $1-$2 higher in the western Corn Belt at $113-$114. Dressed trade in the North was $2-$4 higher at $180.

Incidentally, there were 459 head offered in the weekly Fed Cattle Exchange auction and no takers.

Cattle futures closed higher on Wednesday, buoyed by stronger cash fed cattle and a much friendlier Cattle on Feed report than many expected (see below).

Live Cattle futures closed an average of 76¢ higher

Feeder Cattle futures closed an average of $1.21 higher.

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

Choice boxed beef cutout value was 40¢ lower Wednesday afternoon at $213.69/cwt. Select was 17¢ lower at $198.26.

*******************************

Although closing even to a little higher Wednesday, Major U.S. financial indices were unable to sustain early positive momentum, amid light holiday trade.

The Dow Jones Industrial Average closed fractionally lower. The S&P 500 closed 8 points higher. The NASDAQ was up 63 points.

*******************************

Cattle Markets got a boost from Wednesday’s monthly Cattle on Feed report with fewer cattle placed in October than most expected (feedlots with 1,000 head or more capacity). There were 2.25 million head placed in October, which was 6.06% less than last year. Analyst estimates ahead of the report were for an increase of 1% more.

As for placement weights: 51.82% went on feed weighing less than 700 lbs.; 36.17% weighing 700-899 lbs.; 12.00% weighing 900 lbs. or more.

Cattle marketings in October were a touch more than expected at 1.89 million head, which was 4.78% more than last year.

Cattle on feed Nov. 1 of 11.69 million head were 3.18% more than last year, about 1% less than many expected.

By | November 21st, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 21, 2018

As suspected, negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Cattle futures closed mixed (Live Cattle) to a touch lower (Feeder Cattle) on Tuesday, pressured by sharply lower outside markets and light trade volume, as much as anything. There was also wait-and-see for Wednesday’s monthly Cattle on Feed report (see below).

Live Cattle futures closed 45¢ lower to 20¢ higher.

Feeder Cattle futures closed an average of 18¢ lower.

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

Choice boxed beef cutout value was 70¢ higher Tuesday afternoon at $214.09/cwt. Select was 14¢ lower at $198.43.

*******************************

Major U.S. financial indices fell hard on Tuesday, pressured by everything from tech stocks, to retail, to another plunge in crude oil prices. The underlying concern appears to be notions of slower global economic growth, tied to both trade issues and higher interest rates.

Futures prices for West Texas Intermediate Crude (CME) declined $3.72 to $3.85 over the next 12 months. Spot Jan closed at $53.43, which was $10 lower than where it started the month.

The Dow Jones Industrial Average closed 551 points lower. The S&P 500 closed 48 points lower. The NASDAQ was down 119 points.

*******************************

Judging by various estimates and surveys, most analysts expect the monthly Cattle on Feed report on Wednesday (12 p.m. EST) to show higher October placements and marketings, as well as more cattle on feed Nov. 1 than a year ago.

For instance, analysts at Allendale, Inc. expect placements to be 4.3% higher at 2.496 million head, the most for the month in eight years. They estimate marketings 3.4% more at 1.862 million head, the most for the month in 11 years. Finally, they project cattle on feed Nov. 1 to be 11.961 million head, which would be 5.6% more than last year, the most for the month in 12 years, and the second largest since the data series began in 1996.

You can also find other pre-report estimates that are a few points less bearish on placements.

By | November 20th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 20, 2018

Negotiated cash fed cattle sales were mainly steady last week on a live basis at $114/cwt. ($112 in the western Corn Belt). Dressed trade was $1-$2 lower at $176-$178.

Except for the back half of Live Cattle, futures prices on Monday eked out minimal gains following pressure early in the session.

Live Cattle futures closed an average of 40¢ higher through the front five contracts, and then unchanged to 35¢ lower.

Feeder Cattle futures closed an average of 38¢ higher, amid extremely thin trade. 

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

Choice boxed beef cutout value was 48¢ higher Monday afternoon at $213.39/cwt. Select was $1 higher at $198.57.

*******************************

Major U.S. financial indices closed sharply lower Monday with tech stocks leading the sell-off.

Pressure also came from declining builder confidence, as measured by the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The index was 8 points lower month to month in November, pressured by concerns about affordability—home prices and interest rates.

The Dow Jones Industrial Average closed 395 points lower. The S&P 500 closed 45 points lower. The NASDAQ was down 219 points.

*******************************

“Beef markets have largely been a case of ‘so far, so good’ in 2018. I’m cautiously optimistic that this will continue in 2019 but the risks to beef demand will be higher in the coming year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. 

Although slowing, Peel explains beef production next year is forecast to be 1.5-2.0% higher at a record 27.5 billion lbs., following the estimated 3.3% increase this year to 27.0 billion lbs.

“Through 2018, total beef production has increased 14.2% (3.4 billion lbs.) since the recent 2015 low,” Peel says. “Strong beef demand has supported prices and margins at all levels of the beef and cattle industry as beef production expanded. Continued strong beef demand will be critical in 2019 as beef production pushes to new record levels.”

Among the challenges to beef demand, Peel cites:

Record poultry and pork production

“Thus far, beef has maintained good demand relative to pork and poultry, as indicated by the fact that beef retail prices are at near record ratios compared to retail pork and poultry prices,” Peel says.

Likewise, Peel explains beef imports are about steady with last year, while U.S. beef exports are 13.3% higher.

Domestic and global economic conditions

“The U.S. economy has supported beef demand thus far, but recent stock market volatility highlights fragile macroeconomic conditions going forward,” Peel says.  “Rising interest rates and growing budget deficits will add to inflationary pressures and contribute to a stronger dollar. A rising dollar could add to export headwinds in the coming months.”

Trade issues

“The uncertain global trade situation continues to hang over beef and other agricultural markets,” Peel explains. “There is general agreement that trade disruptions will likely reduce U.S. and global macroeconomic growth in 2019.  While the beef industry has avoided most of the direct tariff impacts thus far, indirect tariff impacts will continue to grow unless the trade situation is resolved very soon. Consumers will see growing tariff impacts that may impact consumer spending and beef demand…Tariff-driven price increases could push consumers to cheap and abundant pork and poultry at the expense of beef demand.”

By | November 19th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 19, 2018

Negotiated cash fed cattle trade remained largely undeveloped through late Friday afternoon, at least in term of trades reported to USDA. Although too few to trend, early prices in Nebraska and the western Corn Belt were unevenly steady to a touch softer than the previous week. Early dressed sales were at $178/cwt. in both regions. Early live sales in the western Corn Belt were at $111.50-$112.00.

Late Friday, the Texas Cattle Feeders Association reported its members trading at $114, just a touch lower than the previous week’s weighted average.

Live Cattle futures mainly paddled sideways on Friday as traders awaited direction from the cash market. Feeder Cattle softened a bit, amid anemic trade volume.

Live Cattle futures closed mostly higher, from an average of 26¢ lower to an average of 45¢ higher.

Other than $1.32 lower in spot Jan and 15¢ lower in the back two contracts, Feeder Cattle futures closed an average of 69¢ lower.

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

Choice boxed beef cutout value was 64¢ lower Friday afternoon at $212.91/cwt. Select was 01¢ lower at $197.57.

*******************************

Cash bids were mixed for grains and soybeans Friday.

“Export sales for the week ending Nov. 8 were all within trade expectations,” said analysts with the Daily National Grain Market Summary. “Corn sales totaled 35.1 million bu., which was at the highest end of the range. Soybean sales totaled 17.3 million bu., which was on the low end of estimates.

Wheat bids were 3½¢ lower to 2¾¢ higher. Soybean bids were ½¢ lower to 3½¢ higher. Sorghum bids were 5¢ lower. Corn bids were 2¾¢ to 3¢ lower.

Corn futures closed mostly fractionally lower to 2¢ lower.

*******************************

Major U.S. financial indices closed mixed Friday, pressured by tech stocks, but buoyed by hopes regarding trade talks with China.

The Dow Jones Industrial Average closed 123 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 11 points.

*******************************

If the most recent USDA Farm Labor report is in the ballpark, job competition is helping to push farm wages higher.

“Farm operators paid their hired workers an average wage of $14.47 per hour during the October 2018 reference week (Oct. 7-13), up 8% from the October 2017 reference week,” according to the report from the National Agricultural Statistics Service (NASS). “Field workers received an average of $13.74 per hour, an increase of 7%. Livestock workers earned $13.38 per hour, up 9%. The field and livestock worker combined wage rate, at $13.64 per hour, was up 8% from the 2017 reference week. Hired laborers worked an average of 41.5 hours during the October 2018 reference week, down slightly from the hours worked during the October 2017 reference week.”

According to NASS, farm and ranch operators hired (directly) 784,000 workers during the October reference week, which was 7% less than a year earlier.

By | November 18th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 16, 2018

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Cattle futures gained a little ground, with some attributing part of the strength to rumors that Japan will remove its age restriction on U.S. beef—implemented in the wake of BSE discovered here in 2003.

Other than 20¢ lower in the back contract, Live Cattle futures closed an average of 27¢ higher.

Other than 35¢ lower in expiring Nov, Feeder Cattle futures closed an average of 85¢ higher.

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

Choice boxed beef cutout value was 39¢ higher Thursday afternoon at $213.55/cwt. Select was 40¢ higher at $197.58.

*******************************

Major U.S. financial indices closed higher Thursday, buoyed by tech stocks and reports that the U.S. and China were inching closer on trade talks.

The Dow Jones Industrial Average closed 208 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 122 points.

*******************************

The estimated number of cattle outside feedlots Oct. 1—cattle available to place on feed— was 30.1 million head, just 0.6% more than a year earlier, according to the most recent monthly Livestock, Dairy and Poultry Outlook.

“Winter forage seems to be in better condition than last year, which could provide a home for these calves to stock over the winter. While this may be a positive sign for feeder calf prices in the coming months, limiting factors are the record numbers of cattle already on feed at the beginning of October and expectations of higher feed prices,” say analysts with USDA’s Economic Research Service (ERS). “In addition, cattle are staying on feed longer than last year.”

The estimated percentage of cattle on feed for more than 150 days in October was around 17%, which was approximately 3% more than last year; slightly above the average for 2013-2017, but less than in 2016.

“The higher number of cattle already in feedlots may limit the competition from feedlots for ownership of these calves, and higher feed prices may limit feedlot management’s willingness to pay higher prices for calves,” say ERS analysts.

ERS left the projected fourth-quarter feeder steer price unchanged from the previous month at $151-$155/cwt. The 2019 annual price forecast was lowered to $140-$151 on slightly higher anticipated feed costs and continued large feedlot numbers.

By | November 15th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 15, 2018

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. If some of the fed cattle auctions—and a smattering of country sales—are any indication, though, steady money may be a hopeful stretch this week.

For instance, Choice 2-3 steers brought $110.00-$111.25/cwt. at Sioux Falls Regional in South Dakota. Choice 3-4 steers brought $109.00-$111.60.

Although too few to trend, there were some early live country sales in the western Corn Belt at $110, which was $1-$3 lower than last week’s trade in the region.

There were only 620 head offered in the weekly Fed Cattle Exchange auction Wednesday, and no takers.

As for Cattle futures, adjusting to the previous session’s rally seemed to be the main business.

Other than unchanged in June, Live Cattle futures closed an average of 35¢ lower.

After unchanged in the front two contracts, Feeder Cattle futures closed an average of 54¢ lower.

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

Choice boxed beef cutout value was 92¢ lower Wednesday afternoon at $213.16/cwt. Select was $1.80 lower at $197.18.

*******************************

Major U.S. financial indices closed lower on Wednesday, with pressure from tech stocks, led by Apple—tied to reports of softer iPhone sales. Banking shares also declined.

The Dow Jones Industrial Average closed 205 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 64 points.

*******************************

Culling decisions and the timing of them could be more complex for some this year, given the state of cull cow prices, says Josh Maples, Extension economist at Mississippi State University.

For price examples, Maples says average cull cow prices reported by AMS were about 12% lower year over year in South Dakota (July-October). Prices at San Angelo, Texas were 18% lower. They were 17% lower in Kentucky.

“While prices have been low already, we are now in the time of year when we typically expect lower cull prices,” Maples explains, in the latest issue of In the Cattle Markets. “Cow slaughter is seasonally higher during the last three months of the year as producers make culling decisions prior to winter. Combined with winter usually being a slower ground beef-demand time of the year, there usually is not much cull market strength until we get closer to Spring.”

For perspective, total cow slaughter this year is averaging 18.9% of total cattle slaughter, compared to a long-term average of 17.7% of total slaughter, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“Total cow slaughter is up 7.3% year to date with beef cow slaughter up 10.5% year over year as beef cow culling returns to long-term average levels,” Peel says.

“Dairy cow slaughter is currently up 4.3% year over year.”

Using NASS data, analysts with the Livestock Marketing Information Center (LMIC) say the average dairy cow price for the quarter ending Oct. 1 was $1,230. That’s $380 less (-24%) year over year. In the latest Livestock Monitor, they explain the NASS data reflect only cows sold to be used as dairy herd replacements.

Add it all up and Maples says deciding whether to sell cull beef cows now or carry them through the winter could be less straightforward than usual, at least for some.

“Culling, even at current prices, will still make sense for many (probably even most) producers once the cost of carrying a cow through the winter is considered,” Maples says. “But, for producers with relatively low marginal wintering costs, this is at least a year to crunch the numbers.”

By | November 14th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 14, 2018

Cattle futures got some spark Tuesday—especially Feeder Cattle— credited in part to oversold conditions.

Other than unchanged in the back contract, Live Cattle futures closed an average of 57¢ higher.

Except for 60¢ higher in spot Nov, Feeder Cattle futures closed an average of $2.12 higher ($1.32 to $3.15 higher).

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

Choice boxed beef cutout value was $1.47 lower Tuesday afternoon at $214.08/cwt. Select was $1.41 lower at $198.98.

*******************************

Major U.S. financial indices tried but failed on Tuesday to regain steep losses from the previous session. Along with tech stocks, the continuing decline in crude oil prices continued to weigh on the market.

West Texas Intermediate Crude Oil futures (CME) closed $4.02 to $4.24 lower through next November. Spot Dec closed at $55.69. It was $71.18 a month ago; $76.24 about six weeks ago. At least part of the recent slide in prices has to do with increased production by OPEC countries and the softer outlook for global economic growth.

The Dow Jones Industrial Average closed 100 points lower. The S&P 500 closed 4 points lower. The NASDAQ was just a tick to the positive side.

*******************************

Consumer spending for food and beverages (purchased for off-premises consumption—mainly grocery stores) increased 2.8% and 4.0% in the spring and summer quarters, respectively, according to analysts with the Livestock Marketing Information Center (LMIC).

Those increases fall into the middle range of growth for this sector during the last two years,” say LMIC analysts, in the latest Livestock Monitor. “Meanwhile, the spending category of ‘food services and accommodations’ jumped 8.1% and 6.9% during the spring and summer quarters, capturing the preference for away-from-home meals (e.g., restaurants).”

For overall context, the LMIC folks explain the net value of goods and service produced by the U.S. economy increased by an annual rate of 3.5% in the summer quarter and by 4.2% in the spring quarter.

“Wholesale market measures of beef demand were consistent with trends in consumer spending choices,” LMIC analysts say. “The Choice beef cutout this summer was up 3% from a year ago, even as beef supplies from steers and heifers increased by 0.5%. More product selling at a higher price is the essence of favorable demand. Impressive export growth also played a role in this situation.”

By | November 13th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 13, 2018

Bottom picking and a rally in Lean Hog futures were credited with some of the support that helped Cattle futures regain some stability in the wake of Friday’s sharp decline.

Other than an average of 27¢ higher in the front two contracts and 50¢ higher at the back, Live Cattle futures closed an average of 11¢ lower.

Except for 15¢ higher in the back contract, Feeder Cattle futures closed an average of 65¢ lower.

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

Choice boxed beef cutout value was 35¢ higher Monday afternoon at $215.55/cwt. Select was $1.67 higher at $200.39.

*******************************

Major U.S. financial indices closed sharply lower Monday, pressured by tech stocks—led by Apple— and continued worries about global economic growth and trade.

The Dow Jones Industrial Average closed 602 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 206 points.

*******************************

“Steer slaughter continues to run below year-ago levels so far this year. This despite the fact that the quarterly feedlot inventories have shown more steers on feed in 2018 compared to last year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “For the year to date, steer slaughter is about 1% below last year, but in the last four weeks has averaged very close to year-ago levels. Steer slaughter has averaged 51.6% of total cattle slaughter so far this year, down from 52.9% of total cattle slaughter in 2017. As heifer and cow slaughter return to normal levels, steer slaughter will move closer to the long-term average of 50.6% of total slaughter.”

So far this year, Peel says heifer slaughter is averaging about 7% more than last year, but has been only 1.5% more over the past four weeks.

“Heifer slaughter thus far in 2018 has averaged 27.8% of total cattle slaughter, up from 27.2% in 2017,” according to Peel. “As heifer retention continues to slow, heifer slaughter will approach the long-term average of just under 30% of total cattle slaughter.”

By | November 12th, 2018|Daily Market Highlights|

Cattle Current Podcast-Nov. 12, 2018

Negotiated cash fed cattle prices lost ground. Live sales were mainly $1-$2 lower at mostly $114-$115/cwt. ($111-$113 in the western Corn Belt). Dressed trade was steady to $3 lower at $177-$180.

Those lower prices were made possible, in part by the sharp erosion in Cattle futures on Friday. Pressure for the board included faltering wholesale beef values, declining open interest and growing chatter that the top may already be in for beef prices this season.

Live Cattle futures closed an average of $1.21 lower (35¢ to $2.07 lower).

Feeder Cattle futures closed an average of $2.04 lower ($1.17 to $2.47 lower).

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

Choice boxed beef cutout value was 87¢ lower Friday afternoon at $215.20/cwt. Select was 39¢ lower at $198.72.

*******************************

Major U.S. financial indices closed lower Friday, with weakness widely attributed to concerns about slowing global economic growth.

The Dow Jones Industrial Average closed 201 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 123 points.

*******************************

“When factoring in slaughter and weights, the grading data continues to indicate larger supplies of Prime and Select beef and a little less Choice than a year ago,” says David Anderson, Extension livestock economist at Texas A&M University, in the most recent issue of In the Cattle Markets. “It looks like steer slaughter is starting to pick up a little, so we might expect growing beef supplies in the coming months, especially when considering more cattle on feed than a year ago.”

For perspective, Anderson explains that for the week ending Oct. 20, 70.8% of cattle (presented for grading) graded Choice, compared to 71.6% for the same week a year earlier. There were 8.9% Prime-grading carcasses, which was 7.1% more than a year earlier. Likewise, 17.4% of carcasses graded Select, compared to 15.3% last year.

By | November 10th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 9, 2018

Although cash fed cattle trade remained undeveloped through Thursday afternoon, and wholesale beef values were sharply lower, Cattle futures eked out slight gains. Some credited part of the support to the lack of bounce in grain prices, following the monthly World Agricultural Supply and Demand Estimates.

Except for 2¢ lower in the back contract, Live Cattle futures closed an average of 44¢ higher.

Except for unchanged in the back contract, Feeder Cattle futures closed an average of 22¢ higher.

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

Choice boxed beef cutout value was $2.15 lower Thursday afternoon at $216.07/cwt. Select was $2.66 lower at $199.11.

*******************************

Major U.S. financial indices closed narrowly mixed Thursday. Election-based optimism the previous day was tempered by indications the Federal Reserve will continue to increase interest rates, albeit gradually. They left the rate unchanged for the time being.

According to a statement from the FOMC. “The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective over the medium term. Risks to the economic outlook appear roughly balanced.”

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 7 points lower. The NASDAQ was down 39 points.

*******************************

Estimated beef production for this year was lowered by 30 million lbs. to 26.91 billion lbs., according to the latest monthly World Agricultural Supply and Demand Estimates (WASDE). For next year, beef production was reduced by 100 million lbs. to 27.81 billion lbs.

The estimated fed steer price for the fourth quarter is projected to be $112-$116/cwt., with an annual average for this year of $116.79, 50¢ more than the previous month’s projection. Fed steer prices for next year are estimated at $118-$126 in the first quarter; $118-$128 in the second quarter; $109-$119 in the third.

By | November 8th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 8, 2018

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. There were just 310 head offered in the weekly Fed Cattle Exchange auction, and no takers.

Despite sharply higher outside markets, Cattle futures continued to erode on Wednesday, led by Feeder Cattle, as traders seem to be concentrating on increased beef supplies down the road, rather than relative snugness through the end of the year.

Other than 67¢ higher in spot Nov, Live Cattle futures closed an average of 40¢ lower.

Other than 5¢ lower in spot Nov, Feeder Cattle futures closed an average of 98¢ lower.

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

Choice boxed beef cutout value was 54¢ lower Wednesday afternoon at $218.22/cwt. Select was $2.89 lower at $201.77.

*******************************

Major U.S. financial indices bolted ahead Wednesday, with investors apparently cheering the outcome of the mid-term elections.

The Dow Jones Industrial Average closed 545 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 194 points.

*******************************

Increasing producer optimism about current and future conditions drove the Purdue University-CME Group Ag Economy Barometer sharply higher last month.

Specifically, the October barometer reading of 136 was 22 points higher than September, which was the lowest reading for the survey since 2016.

“We continue to see large month-to-month variations in the barometer readings as a result of swings in major commodity prices and emerging news about trade negotiations with key ag trade partners,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The barometer is based on a survey of 400 agricultural producers from across the country. It’s comprised of two sub-indices: the Index of Current Conditions rose 19 points in October to 115; the Index of Expectations rose 24 points to a reading of 146.

By | November 7th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 7, 2018

Cattle futures stabilized Tuesday, retaining the previous session’s steep losses, but holding ground. Trade was light with many apparently remaining on the sidelines to see the election results.

Live Cattle futures closed narrowly mixed (37¢ lower to 20¢ higher).

Other than 47¢ and 17¢ higher in the front two contracts, Feeder Cattle futures closed an average of 20¢ lower.

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

Choice boxed beef cutout value was 17¢ higher Tuesday afternoon at $218.76/cwt. Select was $2.31 higher at $204.66.

*******************************

Major U.S. financial indices closed higher Tuesday with investors awaiting the outcome of mid-term elections.

The Dow Jones Industrial Average closed 173 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 47 points.

*******************************

“Yearling cattle ready for the feedlot remain in strong demand and will likely do so through the end of the year and into 2019,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

As for calves, Griffith says it’s reasonable to assume that prices will decline another 2-3% in November.

“The slaughter cow market further exacerbates the situation,” Griffith explains. “Good-conditioned slaughter cows weighing 1,300 lbs. would have resulted in about $560 per head this week based on weekly auction averages (TN), which is about $120 per head lower than what the same cows averaged in September. These value losses are sometimes phantom losses because many producers do not consider what could have been attained during a different marketing period.”

On the other end of the scale, Griffith points to seasonally higher wholesale beef values, which should provide support to fed cattle.

“Stronger beef prices generally result in packers being willing to pay higher money for finished cattle but they continue to fight with cattle feeders to maintain those strong margins,” Griffith says. “The price increase in wholesale beef was to be expected as holiday buying is underway, but beef demand continues to impress and further support prices.”

By | November 6th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 6, 2018

Negotiated cash fed cattle trade last week ended up steady to higher in late trade.

Live sales were $1-$2 higher in the Southern Plains at $116/cwt. They were steady to $1 higher in the Northern Plains at $114-$116. Live trade was steady in the Western Corn belt at $113-$114. Dressed trade was fully steady at $180.

Despite that, seasonally higher wholesale beef values and apparently snugger packer inventories, Cattle futures headed hard south on Monday. There were no easy explanations, at least not from a fundamental standpoint. Part of it could have been defensive positioning ahead of Tuesday’s election.

Live Cattle futures closed an average of $1.47 lower, from an average of (62¢ to $1.75 lower).

Feeder Cattle futures closed an average of $2.65 lower ($2.20 to $3.32 lower).

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

Choice boxed beef cutout value was 9¢ higher Monday afternoon at $218.59/cwt. Select was 88¢ higher at $202.35.

*******************************

Major U.S. financial indices closed mixed Monday. Financial institutions and some energy companies provided support, while tech stocks, including Apple, applied pressure.

The Dow Jones Industrial Average closed 190 points higher. The S&P 500 closed 15 points higher. The NASDAQ was down 28 points.

*******************************

U.S. beef exports continued at a stronger year-over-year pace in September, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

September beef exports of 110,160 metric tons (mt), were 6% more than a year earlier. Export value was 11% more at $687.1 million.

For January through September, beef exports were just over 1 million mt, up 9% from a year ago, while value surged 18% to $6.2 billion.

“With a full quarter still to be reported, beef export value records are already being surpassed in some markets and global value is on track for $8 billion by year’s end,” says USMEF President and CEO Dan Halstrom.

Beef export value equated to $334.63 per head of fed slaughter in September and $320.85 for January through September, each 16% more than a year ago.

For the first three quarters of 2018, exports accounted for 13.5% of total production (up from 12.8%) and 11.1% for muscle cuts, up one full percentage point from last year.

Among the highlights:

Exports to Korea were up 22% from a year ago in volume (19,116 mt) and were 29% percent higher in value ($143.1 million). January-September exports reached 180,495 mt, up 37% from a year ago, while export value soared 51% to $1.29 billion, already breaking last year’s full-year value record.

September beef exports to leading market Japan were up 4% from a year ago in both volume (28,086 mt) and value ($172.3 million). For the first three quarters of 2018, exports to Japan were up 7% from a year ago in volume (252,871 mt), while value increased 10% to $1.59 billion.

Exports to Mexico were up 1% from a year ago in volume (177,906 mt) and 8% higher in value ($783.1 million). With a strong fourth quarter, exports to Mexico should top $1 billion for the first time since 2015.

 

By | November 5th, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 5, 2018

Negotiated cash fed cattle trade remained mostly undeveloped through late Friday afternoon, although there continued to be chatter that inventory needs would push packers to the trough before the end of the day. The lack of cash direction helped to hold Cattle futures in check, with Feeder Cattle getting extra pressure from rising corn prices.

Live Cattle futures closed narrowly mixed, from an average of 9¢ lower to an average of 37¢ higher.

Feeder Cattle futures closed an average of 46¢ lower in flea-thin trade.

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

Choice boxed beef cutout value was 5¢ lower Friday afternoon at $218.50/cwt. Select was $2.78 lower at $201.47.

*******************************

Major U.S. financial indices closed lower Friday, in volatile trade. Pressure included uncertainty surrounding trade issues. Support included a monthly employment report that beat expectations. Non-farm payroll employment increased by 250,000 in October, according to the U.S. Bureau of Labor Statistics. That left the nation’s unemployment rate at 3.7% for the second consecutive month, the lowest rate since 1969.

“…we have a total of 4.5 million new jobs since November 2016. Jobs were added across all industries. Employment hit a record high of 156,562,000,” says U.S. Secretary of Labor Alexander Acosta.

The Dow Jones Industrial Average closed 109 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 77 points.

*******************************

Early tables from USDA for the Agricultural Projections to 2028 that will be published in February suggest the nation’s beef cowherd will peak in 2021 at 32.00 million head, which would be 111,000 head more than the projected inventory on Jan. 1 of next year of 31.89 million head.

Those same projections estimate feeder steer prices (OKC) next year to average $146.50/cwt., compared to this year’s estimate of $148.20. The 5-area Direct fed steer price for next year is estimated at $117.75, compared to this year’s estimate of $116.29.

For this year, analysts with the Livestock Marketing Information Center (LMIC) noted earlier this week, higher costs—including winter feed, fuel, utilities and interest—along with lower cull cow prices are pressuring cow-calf returns.

“Last year had a positive return over cash costs, due to calf prices that strengthened during the second half of the year,” say LMIC analysts, in the latest Livestock Monitor. They estimate cash returns per cow this year at slightly less than breakeven.

By | November 3rd, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 2, 2018

Negotiated cash fed cattle trade for the week began to take shape Thursday, on light to moderate trade and moderate demand in the western Corn Belt. Early live sales were $1 higher at $113-$114/cwt., with dressed sales steady at $180. Although too few to trend, there were a few early live trades in Nebraska at $114, which was steady to $1 lower than last week.

Cattle futures firmed on Thursday, mostly retaining gains from the previous session. Along with increasing whole beef values and the promise of steady to higher cash fed cattle prices, strength was also attributed to lighter carcass weights, as a barometer of marketing currentness. According to USDA’s Actual Slaughter Under Federal Inspection report yesterday, steer carcass weights of 894 lbs. (week ending Oct. 20) were 5 lbs. lighter than the previous week and previous year. Heifer carcass weights of 826 lbs. were 5 lbs. lighter than the previous week and 3 lbs. lighter than the previous year.

Live Cattle futures closed an average of 49¢ higher.

Except for 17¢ lower in spot Nov, Feeder Cattle futures closed an average of 49¢ higher.

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

Choice boxed beef cutout value was $1.62 higher Thursday afternoon at $218.55/cwt. Select was 22¢ higher at $204.25.

*******************************

Cash bids for grains and soybeans were higher Thursday.

“Corn shipments are up 76% in 2018-19, still a bullish pace, but sales have dropped off the past few weeks,” said analysts with the Daily National Grain market Summary. They add that sales and shipments of soybeans were bearish last week. As well, wheat exports remain 21% below last year’s pace.

Wheat bids were steady to 8¢ higher. Soybean bids were 30¢ lower to 44¢ higher. Sorghum bids were 6¼¢ higher. Corn bids were 3½¢ to 10½¢ higher.

Corn futures closed mostly 1¢ to 3¢ higher.

*******************************

Major U.S. financial indices closed sharply higher again Thursday, buoyed by positive quarterly earnings, as well as a more positive outlook for trade talks with China.

The Dow Jones Industrial Average closed 264 points higher. The S&P 500 closed 28 points higher. The NASDAQ was up 128 points.

*******************************

Lower same-store sales and lighter traffic pressured the Restaurant Performance Index (RPI) 0.9% lower to 101.1 in September, according to the National Restaurant Association (NRA).

More specifically, according to the report, “The RPI’s September decline was primarily the result of a pullback in the current situation indicators.” The Current Situation Index—one sub-index comprising the RPI—declined 1.7% in September to 100.6. That index accounts for same-store sales, traffic, labor and capital expenditures.

“In addition, 23% of operators expect economic conditions to worsen in six months–the highest level in two years,” according to NRA.

The other sub-index that informs the RPI is the Future Expectations Index. It was 0.1% lower in September at 101.6. That index measure restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.

By | November 1st, 2018|Daily Market Highlights|

Cattle Current Daily-Nov. 1, 2018

Only 209 head were offered in the weekly Fed Cattle Exchange Auction on Wednesday—no takers.

Cattle futures closed higher Wednesday, led by Feeder Cattle. Increasing wholesale beef values continued to provide support, as did increasing open interest and expectations for cash fed cattle prices this week to be at least steady with last week’s higher level.

After $1.95 higher in expiring Oct, Live Cattle futures closed an average of 40¢ higher, except for an average of 14¢ lower in two contracts.

Feeder Cattle futures closed an average of $1.35 higher (97¢ to $2.02 higher).

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

Choice boxed beef cutout value was $1.33 higher Wednesday afternoon at $216.93/cwt. Select was $1.15 higher at $204.03.

*******************************

Major U.S. financial indices closed sharply higher Wednesday, for a second consecutive day. Support included better than expected quarterly earnings from the likes of General Motors and Facebook.

The Dow Jones Industrial Average closed 241 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 144 points.

*******************************

African Swine Fever (ASF) could impact U.S. beef markets a couple of ways.

On one hand, and arguably, strength in Lean Hog futures in recent weeks can be attributed at least partly to speculation that the ASF outbreak in China and other countries will mean more international demand for U.S. pork, ultimately.

“The U.S. produces approximately 32% of world pork exports,” explains Brenda Boetel, an Extension economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “U.S. pork export quantities have increased in 2018, although prices have not held up as well. One country where U.S. export quantities have decreased steadily since April 2018 is China. China imports approximately 26% of the world trade, and in September 2018 China increased pork imports by 8.4% over September 2017. Yet, volume of U.S. pork exports to China and Hong Kong are down 9% from 2017. Given the African Swine Fever issues in China, and increasing Chinese demand for pork, one can assume the decrease in U.S. exports to China is related to tariff issues.”

On the other hand, U.S. pork exports could suffer if ASF to occur in this nation.

“Given that the U.S. will produce over 26 billion lbs. of pork in 2018, and over 22% will be exported, an incident of ASF in the U.S. would be challenging with regionalization and devastating without regionalization. Should the U.S. become infected with ASF, the impact on pork prices would be severe even if we can keep some of our export trade with regionalization.”

Regionalization refers to the notion of countries not infected with ASF or some other Foreign Animal Disease, continuing to accept exports from uninfected regions within ‘infected’ countries.

“The incidence of ASF in China has both the potential to increase U.S. pork exports, if we can work out a trade agreement with China to lower tariffs on U.S. pork, while also providing huge risk should ASF make the jump to the US,” Boetel says. “Cattle producers need to pay attention, as significant changes in pork prices will impact beef prices and eventually cattle prices.”

By | October 31st, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 31, 2018

Despite seasonally higher wholesale beef values and last week’s higher cash market, Cattle futures closed lower on Tuesday, led by Feeder Cattle, but still basically paddling sideways.

Live Cattle futures closed mostly an average of 51¢ lower.

Feeder Cattle futures closed an average of $1.39 lower.

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

Choice boxed beef cutout value was $1.52 higher Tuesday afternoon at $215.28/cwt. Select was $1.77 higher at $202.88.

*******************************

Major U.S. financial indices closed sharply higher Tuesday, with a rebound in tech stocks and some positive quarterly earnings reports, such as those from Coca-Cola.

The Dow Jones Industrial Average closed 431 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 111 points.

*******************************

“With ample wheat pasture virtually assured at this point, producers may stock wheat pastures a bit heavier than usual, leading to additional stocker demand in the coming weeks,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in is weekly market comments

In the meantime, wheat planting and development remain behind the average.

78% of winter wheat is planted, according to the most recent Crop Progress report (week ending Oct. 29), which is 5% less than last year and 7% less than the average. 63% has emerged, which the same as last year, but 4% less than the average. 53% is rated in Good or Excellent condition, which is 2% more than a year earlier.

Overall, pasture and range conditions continue more favorable than last year, as well. 50% was in Good (42%) or Excellent (8%) condition compared to 40% a year earlier. 20% was rated as Poor (13%) or Very Poor (7%), which was 5% less than last year.

As for crops, corn harvest caught up with the average of 63%, which is 11% behind last year.

Soybean harvest remains behind, though, with 72% in the bin, which is 9% less than last year and the average.

By | October 30th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 30, 2018

Cattle futures settled mainly narrowly mixed on Monday, unable to build on last week’s strong cash markets and the seasonal uptick in wholesale beef values. Though trade was light, some analysts pinned part of the weakness on shifting fund positions, from the long side.

Live Cattle futures closed mostly narrowly mixed (from an average of 73¢ lower in three contracts to an average of 24¢ higher).

Except for 90¢ lower in spot Nov, Feeder Cattle futures closed narrowly mixed (25¢ lower to 15¢ higher).

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

Choice boxed beef cutout value was 29¢ higher Monday afternoon at $213.76/cwt. Select was $2.28 higher at $201.11.

*******************************

Major U.S. financial indices closed sharply lower again on Monday, amid a volatile day of trading with pressure from tech stocks and continuing trade worries, relative to China.

The Dow Jones Industrial Average closed 245 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 116 points

*******************************

Higher costs—including winter feed, fuel, utilities and interest—along with lower cull cow prices are pressuring cow-calf returns this year, according to the Livestock Marketing Information Center (LMIC).

“On a per cow basis, cash return for 2018 is expected to be slightly negative (about -$10 per cow),” say LMIC analysts, in the latest Livestock Monitor. “Last year had a positive return over cash costs, due to calf prices that strengthened during the second half of the year. Estimated loss per cow in 2018 was smaller than 2016’s. The preliminary 2019 LMIC forecast is for positive returns over cash costs. That situation may further improve in 2020.”

For context, LMIC emphasizes their annual calculations are for market analysis; they don’t reflect any individual operation.

“The estimates only incorporate cash production costs plus pasture rent. A commercial size herd that weans and sells calves in the fall is assumed,” LMIC analysts explain. “…These estimates are best interpreted in a broad context, focusing on the direction of change.”

By | October 29th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 29, 2018

Negotiated cash fed cattle prices surged higher on Friday. Live prices were mainly $3-$4 higher at mostly $114-$115/cwt., except for $2-$3 higher in the western Corn Belt at $112-$113. Dressed sales were $6 higher at $180.

Higher fed cattle prices, strengthening wholesale beef values and apparent position squaring helped lift Cattle futures.

Live Cattle futures closed an average of 86¢ higher (50¢ to $1.32 higher).

Feeder Cattle futures closed an average of 58¢ higher.

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

Choice boxed beef cutout value was 37¢ higher Friday afternoon at $213.47/cwt. Select was 52¢ higher at $198.83.

*******************************

Major U.S. financial indices slid sharply on Friday, with continued investor jitters about rising interest rates and global trade. The decline came in spite of positive economic news that included the economy growing at 3.5% in the third quarter, according to the U.S. Commerce Department.

The Dow Jones Industrial Average closed 296 points lower. The S&P 500 closed 46 points lower. The NASDAQ was down 151 points.

*******************************

“Year-to-date cattle slaughter through September was 2.6% above last year and 8.6% above the previous 3-year average. Year-to-date steer and heifer slaughter is 1.2% below and 7.6% above last year respectively,” according to analysts with the Agricultural Marketing Service. “Year-to-date beef cow slaughter is 10.7% above a year ago and 22.8% above the previous 3-year average. With that many beef cows moved to slaughter this year, some analysts are looking at late 2019 futures to see if current $114-$116 prices are realistic.”

By | October 28th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 26, 2018

Cattle futures, led by Feeder Cattle, mostly softened Thursday, with no change in fundamentals but uncertainty surrounding the level of cash fed cattle trade this week in terms of both volume and price.

Except for 7¢ higher in spot Oct, Live Cattle futures closed an average of 78¢ lower (52¢ to $1.27 lower).

Feeder Cattle futures closed an average of $1.38 lower (65¢ to $2.30 lower).

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

Choice boxed beef cutout value was $1.71 higher Thursday afternoon at $213.10/cwt. Select was 49¢ higher at $198.31.

******************************

Major U.S. financial indices surged on Thursday, recovering a fair portion of the previous session’s steep losses. Support was attributed to mainly oversold conditions, as well as positive quarterly earnings from folks like Microsoft and Amazon.

The Dow Jones Industrial Average closed 401 points higher. The S&P 500 closed 49 points higher. The NASDAQ was up 209 points.

*******************************

Another chapter in the regulation of fake meat unfolded the past couple of days at a joint public meeting hosted by the United States Department of Agriculture (USDA) and the U.S. Food and Drug Administration (FDA). The meeting—Use of Animal Cell Culture Technology to Develop Products Derived from Livestock and Poultry—included discussions about the safety and marketing of cell-based fake meat, as well as which agency will ultimately have regulatory control.

The North American Meat Institute (NAMI) continued to argue that the USDA Food Safety and Inspection Service (FSIS) has primary jurisdiction for regulation of new cell-based meat products.

FSIS oversight includes the USDA mark of inspection, providing consumer confidence that a product has been deemed wholesome by the agency.

Likewise, Jennifer Houston, president-elect of the National Cattlemen’s Beef Association (NCBA) explained, “Ensuring lab-grown fake meat products are subject to strong, daily inspection by USDA’s trained professionals is essential. The health of consumers is on the line, and USDA is far better suited to ensure the safety of lab-grown products.”

Mark Dopp, NAMI senior vice president of Regulatory and Scientific Affairs, also detailed the importance and benefits of USDA’s label approval process, which protects companies from frivolous lawsuits and gives consumers confidence that products are accurately labeled and not represented to be something they are not.

“USDA can be trusted to enforce truthful, transparent labeling of the products under its jurisdiction,” explained Kevin Kester, NCBA president. “Beef producers welcome competition, but product labels and marketing must be based on sound science, not the misleading claims of anti-animal agriculture activists.”

By | October 25th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 25, 2018

Although cash fed cattle trade remained undeveloped through Wednesday afternoon on light to moderate demand, there were some early live sales in the western Corn Belt on Tuesday at $112/cwt., which was $2 more than last week.

There were only 1,051 head offered in the weekly Fed Cattle Exchange Auction, and no takers. There were two lots passed out at $105.

Stronger wholesale beef prices, notions of steady-to-higher fed cattle prices, as well as a surge in Lean Hog futures, helped Cattle futures firm Wednesday.

Live Cattle futures closed an average of 71¢ higher (50¢ to $1.20 higher).

Except for 45¢ lower in spot Oct, Feeder Cattle futures closed an average of 48¢ higher.

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

Choice boxed beef cutout value was $1.11 higher Wednesday afternoon at $211.39/cwt. Select was 96¢ higher at $197.82.

*******************************

Major U.S. financial indices plunged Wednesday. Pressures appeared to be many and varied, everything from declining tech and bank stocks to concerns about economic growth, tied to worries about trade and rising interest rates.

For instance, sales of new single-family houses in September were 5.5% less than the prior month’s adjusted rate, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Although home sales were 3.5% more year over year, September sales represented the slowest pace since December of 2016, according to the National Association of Home Builders (NAHB).

The Dow Jones Industrial Average closed 608 points lower. The S&P 500 closed 84 points lower. The NASDAQ was down 329 points.

*******************************

“Stocker budgets for winter grazing still look quite favorable, unless grazing delays stretch out too long and cut days available for winter grazing down excessively,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

On the one hand, Peel explains precipitation in Oklahoma for the past month is the second most on record (187% of normal); the most all time in the last 90 days. That provides lots of promise.

“Producers may, in fact, be looking to stock a bit heavier than usual with potential for better than average wheat forage production this winter,” Peel says.

On the other hand, the extraordinary moisture is delaying some planting and development.

“For the first time in many years, turnout for wheat grazing is likely to be delayed by excess moisture across many regions of the state,” Peel explains. “Some wheat that was planted early is getting close to being ready to graze but some producers have struggled to get cattle ready for grazing. Wet, sloppy conditions make health challenges worse and producers have backed off of purchases recently. Some cattle sellers have also had difficulty gathering and getting cattle to market.”

By | October 24th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 24, 2018

Cattle futures softened Tuesday, following the previous session’s strong gains, apparently pressured mostly by the lower outside markets.

Live Cattle futures closed an average of 48¢ lower (2¢ to 92¢ lower).

Feeder Cattle futures closed an average of 75¢ lower.

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

Choice boxed beef cutout value was $1.00 higher Tuesday afternoon at $210.28/cwt. Select was 80¢ lower at $196.86.

*******************************

Major U.S. financial indices closed lower again Tuesday, pressured by quarterly earnings reports from the likes of Caterpillar and 3M.

The Dow Jones Industrial Average closed 125 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 31 points.

*******************************

Total pounds of beef in freezers Sept. 30 were 1% more than the previous month and 3% more than the same time a year earlier, according to the latest USDA Cold Storage report. That appears to be a demand win, given the significant production increase through the summer.

Frozen pork supplies were 1% more than the previous month but 5% less than the same time a year earlier.

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

Total frozen poultry supplies were down slightly from the previous month but up 10% from a year ago.

By | October 23rd, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 23, 2018

Apparently, traders viewed Friday’s Cattle on Feed report as bullish overall (see below), helping to boost Cattle futures Monday.

Live Cattle futures closed an average of $1.10 higher (55¢ to $1.32 higher).

Feeder Cattle futures closed an average of $1.92 higher ($1.00-$2.97 higher).

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

Choice boxed beef cutout value was $1.35 higher Monday afternoon at $209.28/cwt. Select was $3.42 higher at $197.66.

*******************************

Major U.S. financial indices closed lower Monday, pressured by bank stocks and trade worries.

The Dow Jones Industrial Average closed 126 points lower. The S&P 500 closed 11 points lower. The NASDAQ was up 19 points.

*******************************

From an expectations perspective, Stephen Koontz, agricultural economist at Colorado State University says Friday’s Cattle on Feed report is long-term bullish but short-term bearish.

Although September placements were less than expected (4.6% less than a year earlier), so were marketings (3.59% less).

“The drop off in marketings, regardless of placements, suggests the need for strong slaughter volumes the next two months,” Koontz explains, in the most recent issue of In the Cattle Markets. “On-feed numbers are nothing short of enormous, and placements in July and August were close to 7% above the prior year. The availability of market-ready cattle come the end of this year and the first of next will be substantial. However, the marketplace has handled the large volume of beef so far this year, and much of last, perfectly. Saturday slaughter volumes have been strong, packer and retailer margins have been excellent, slaughter weight increases are typical for the season but not excessive, and domestic demand is appearing to favor beef while exports have been excellent.”

By | October 22nd, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 22, 2018

Cattle futures continued to soften Friday, pressured in part by a lack of positive news, deterioration in Lean Hog futures and perhaps positioning ahead of the monthly Cattle on Feed report (see below).

Live Cattle futures closed an average of 47¢ lower.

Feeder Cattle futures closed an average of 66¢ lower.

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

Choice boxed beef cutout value was $1.11 higher Friday afternoon at $207.93/cwt. Select was $1.89 higher at $194.24.

*******************************

Major U.S. financial indices closed narrowly mixed Friday. Strong quarterly earnings reports provided support, while worries about global trade and higher interest rates continued to pressure.

The Dow Jones Industrial Average closed 64 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 36 points.

*******************************

Both bears and bulls can likely find support in Friday’s monthly Cattle on Feed report, with fewer placements and slightly fewer cattle on feed than expected, but also fewer marketings.

Cattle on feed Oct. 1 were the most since the data series began in 1996 at 11.40 million head, which was 5.43% (+587,000 head) more than last year. Most analysts expected to see about 6% more. That’s for feedlots with a capacity of 1,000 head or more.

While most analysts ahead of the report expected September placements to be about even with last year, the 2.05 million head placed were 4.60% less (-99,000 head) than a year earlier.

“High placements have been seen despite profitability concerns,” explained analysts with Allendale, Inc., ahead of Friday’s report. “Kansas State estimates a $110 loss per head on finished cattle in September. First-half 2019 marketings are slated for $122-$125 breakevens. August placements determine a part of the March through early August beef supply.”

In terms of weights, 36.81% went on feed weighing 699 lbs. or less; 43.69% weighing 700-899 lbs.; 19.5% weighing 900 lbs. or more. That continues the trend of recent months.

September marketings of 1.72 million head were 3.59% less (-64,000 head) than the previous year. Expectations ahead of the report were for marketings to be about even.

Of the 12 major cattle feeding states listed in the report, South Dakota was the only one with fewer cattle on feeder Oct. 1, year over year. There were 2.30% more steers on feed than a year earlier and 11.03% more heifers.

By | October 21st, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 19, 2018

There was limited negotiated cash fed cattle trade Thursday with light to moderate demand in all major cattle feeding regions, but too few transactions to trend in any region. So far this week, trade has been at $109-$111/cwt. on a live basis in Nebraska and the western Corn Belt, with dressed sales in those regions at $174.

Cattle futures closed mostly narrowly mixed Thursday.

Other than 15¢ higher in spot Oct, Live Cattle futures closed an average of 17¢ lower.

Feeder Cattle futures closed mixed but mostly higher. The front two contracts were an average of $1.12 higher and then 7¢ lower to 35¢ higher across the rest of the board.

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

Choice boxed beef cutout value was $2.26 higher Thursday afternoon at $206.82/cwt. Select was $1.16 higher at $192.35.

*******************************

Wall Street continued to search for a bottom in the recent sell-off as major U.S. financial indices closed steeply lower Thursday. Among pressures cited by analysts are lingering worries about the trade impasse with China and higher interest rates, as well as some thoughts that tech stocks are valued too high.

The Dow Jones Industrial Average closed 327 points lower. The S&P 500 closed 40 points lower. The NASDAQ was down 157 points.

*******************************

“Fourth-quarter 2018 is likely to be characterized by feedlots feeding cattle longer than previously expected, lowering expected fourth-quarter fed cattle slaughter,” say analysts with USDA’s Economic Research Service (ERS), in this month’s Livestock, Dairy and Poultry Outlook. “This is largely responsible for reducing the 2018 commercial beef production forecast from the previous month. The beef production forecast for 2019 was raised on greater expected placements in second-half 2018 and first-half 2019.”

Projected beef production for this year was lowered by 150 million lbs. to 26.9 billion lbs., based on expectations of fewer steers and heifers to be slaughtered more than offsetting additional cows in the slaughter mix.

Projected beef production for next year was raised by 190 million lbs. to 27.9 billion lbs., based aforementioned projections for more placements than expected.

“The expected higher number of fed cattle to be slaughtered was partially offset by an expectation of lower dressed weights in early 2019,” ERS analysts say.

By | October 18th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 18, 2018

Negotiated cash fed cattle trade picked up in the North Wednesday with moderate demand and slow to moderate trade. Live prices were steady to $2 lower in Nebraska at $109-$111/cwt., and steady to $1 higher in the western Corn Belt at $109-$110. Dressed trade was steady in Nebraska at $174; steady to $1 lower in the western Corn Belt at $173-$174.

There were 1,103 head offered in the weekly Fed Cattle Exchange Auction, but no takers.

Cattle futures softened Wednesday, led by Feeder Cattle.

Other than 27¢ higher in spot Oct, Live Cattle futures closed an average of 31¢ lower.

Other than 5¢ higher in spot Oct, Feeder Cattle futures closed an average of 67¢ lower.

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

Choice boxed beef cutout value was 5¢ lower Wednesday afternoon at $204.56/cwt. Select was $1.36 lower at $191.19.

*******************************

Major U.S. financial indices wobbled lower Wednesday, amid mixed quarterly earnings reports and continued angst over higher interest rates.

The Dow Jones Industrial Average closed 91 points lower. The S&P 500 closed fractionally lower. The NASDAQ was down 2 points.

*******************************

Analysts with USDA’s Economic Research Service raised expected feeder cattle prices (OKC, 750-800 lbs.) to $150-$156/cwt. for the fourth quarter, based on expectations of continued strong demand.

“Price information from Oklahoma National Stockyards for feeder steers weighing 750-800 lbs. suggests that there is competition for ownership of these animals,” ERS analysts say, in the latest monthly Livestock, Dairy and Poultry Outlook. “Coupled with counter-seasonal gains in prices for lighter-weight feeder cattle, this may suggest that winter forage conditions have improved over last year.”

ERS estimates feeder prices at $141-$149 in the first quarter next year, $143-$153 in the second quarter and $145-$155 in the third quarter.

Likewise, ERS raised the expected fourth-quarter price for fed steers (5-area Direct) to $110-$114 on a projected slower marketing pace.

“The slower pace is likely in part a reflection of lighter placement weights during the spring months, but may also reflect a desire by feedlots to capture premiums implied by October and December futures,” ERS analysts explain. “Although fed steer prices in the 5-area marketing region for September averaged above year-earlier levels, expected increased supplies of cattle available for slaughter in fourth-quarter 2018 are likely to pressure prices relative to last year.”

By | October 17th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 17, 2018

Cattle futures closed mostly lower Tuesday, buoyed by support late in the day, but amid limited trade and interest overall.

Except for 12¢ and 10¢ higher, in near Feb and Apr, respectively, Live Cattle futures closed an average of 30¢ lower.

Feeder Cattle futures closed an average of 63¢ lower.

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

Choice boxed beef cutout value was 19¢ lower Tuesday afternoon at $204.61/cwt. Select was 66¢ higher at $192.55.

*******************************

Major U.S. financial indices surged higher Tuesday, lifted by strong quarterly earnings across a broad base of companies, including Morgan Stanley, Netflix and United Health.

The Dow Jones Industrial Average closed 547 points higher. The S&P 500 closed 59 points higher. The NASDAQ was up 214 points.

*******************************

Although most expectations are for September feedlot placements to be about even with last year, in this Friday’s monthly Cattle on Feed report, a majority of analysts expect the on-feed number Oct. 1 to be about 6% more.

For instance, analysts at Allendale, Inc. expect placements to be 0.2% more than last year (2.154 million head). If so, they say that would be the largest placement for the month in seven years and mark the fifth consecutive month of higher year-over-year placements.

“High placements have been seen despite profitability concerns,” say Allendale analysts. “Kansas State estimates a $110 loss per head on finished cattle in September. First-half 2019 marketings are slated for $122-$125 breakevens. August placements determine a part of the March through early August beef supply.”

The folks at Allendale expect marketings in September to be 0.7% less than last year at 1.771 million head. They look for the number of cattle on feed Oct. 1 to be 5.9% more than a year earlier at 11.446 million head, which would be record high for the month since the data series that began in 1996.

By | October 16th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 16, 2018

Sharply higher wholesale Choice beef cutout values helped boost Live Cattle futures Monday. That provided support to Feeder Cattle, after follow-through pressure tied in part to higher gain prices.

Live Cattle futures closed an average of 95¢ higher (55¢ higher to $1.80 higher in near Dec).

Feeder Cattle futures closed an average of 70¢ higher.

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

Choice boxed beef cutout value was $2.09 higher Monday afternoon at $204.80/cwt. Select was 39¢ lower at $191.89.

*******************************

Despite positive quarterly earnings reports, investors started the week with renewed pessimism; pushing U.S. financial indices lower Monday.

The Dow Jones Industrial Average closed 89 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 66 points.

*******************************

Retail prices for beef and pork drifted lower in September, reversing a trend from the summer months, according to the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. Retail chicken prices moved lower, too, but within a narrow range established early last year.

“The biggest retail price decline from August to September was for Choice Beef, falling 15¢ per pound,” say LMIC analysts. “Even with the drop in price, compared to 12 months earlier, prices were still 2% higher. That compares with retail pork prices that were 5% lower than a year earlier and chicken prices that were lower by a fraction of a percent.” They note the prices are based on Bureau of Labor Statistics survey data that is compiled by USDA’s Economic Research Service (ERS).

By | October 15th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct 15, 2018

Negotiated cash fed cattle trade for the week was mainly steady to weak with live sales at $111/cwt. in the Northern and Southern Plains; mostly $2 lower in the western Corn Belt at $108. Dressed sales were $1 lower at $174.

Firming grain prices helped pressure Feeder Cattle futures sharply lower Friday. In turn, Live Cattle closed lower to a much lesser degree.

Live Cattle futures closed an average of 55¢ lower.

Feeder Cattle futures closed an average of $1.63 lower ($1.27 to $2.12 lower).

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

Choice boxed beef cutout value was 20¢ higher Friday afternoon at $202.71/cwt. Select was 21¢ lower at $192.28.

*******************************

Gains in Asian and European shares overnight helped plug the recent sell-off as major U.S. financial indices closed higher Friday.

The Dow Jones Industrial Average closed 287 points higher. The S&P 500 closed 38 points higher. The NASDAQ was up 167 points.

*******************************

Strong growth in both the U.S. and global economies will support increased demand in domestic and export markets through the end of the year. However, according to the latest Quarterly Rural Economic Review (QRER) from CoBank’s Knowledge Exchange Division (KED), U.S. competitiveness is currently constrained by trade uncertainties and the elevated value of the U.S. dollar, further placing pressure on the agricultural economy as output in most industries rises.

“Agricultural markets are being squeezed as prices remain weak,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division. “While recently negotiated trade deals show some upside for agriculture, global demand for output from the U.S. agriculture sector is being outpaced by current U.S. production.”

CoBank’s latest QRER indicates that any significant farm price improvements over last year’s prices will be limited, particularly with record U.S. yields for many of the major crop commodities adding to available supply levels. Meanwhile, the animal protein and dairy sectors continue to benefit from strong domestic demand and the promise of better access to Mexico and Canada, but will need more export market growth to absorb their current pace of output and expansion.

By | October 14th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 12, 2018

Negotiated cash fed cattle trade was steady in the Southern Plains Thursday at $111/cwt. It was steady to weak in the North at $108 in the western Corn Belt, $110.50-$111.50 in Nebraska and $111 in Colorado. Dressed trade was steady to $1 lower at $174.

Other than some support at the front of the board, Cattle futures continued to trend lower Thursday.

Except for 55¢ and 30¢ higher in the front two contracts, Live Cattle futures closed an average of 15¢ lower.

Except for 82¢ higher and 57¢ higher in the front two contracts, Feeder Cattle futures closed an average of 60¢ lower.

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

Choice boxed beef cutout value was 40¢ higher Thursday afternoon at $202.51/cwt. Select was 72¢ higher at $192.49.

*******************************

Worries about rising interest rates continued to fuel the plunge in major U.S. financial indices Thursday.

The Dow Jones Industrial Average closed 545 points lower. That’s a decline of 1,376 points in the last two sessions. The S&P 500 closed 57 points lower (151 points lower in the last two days). The NASDAQ was down 92 points (407 points lower in the last two sessions).

*******************************

“The forecast for 2018 total red meat and poultry production is lowered from last month,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). “Beef production is reduced from the previous month, largely due to lower expected fourth-quarter fed cattle slaughter. Carcass weights are forecast lower on a higher expected proportion of cows in the slaughter mix.”

Beef projection for this year was projected 150 million lbs. less than the previous month at 26.94 billion lbs. Next year’s beef production is estimated to be 970 million lbs. more than this year at 27.91 billion lbs.

The fourth-quarter fed steer price (5-area direct) is estimated at $110-$114/cwt. Next year: $117-$125 in the first quarter; $118-$128 in the second; $109-$119 in the third.

“For 2019, the total red meat and poultry production forecast is raised from the previous month as higher expected beef production more than offsets lowered forecasts for pork and broiler production,” say ERS analysts. “Beef production is raised from last month as larger placements in late 2018 and early 2019 are marketed during 2019. However, carcass weights are lowered for the early part of the year.”

Red meat and poultry production this year was estimated 477 million lbs. less at 102.61 billion lbs. Red meat and poultry production next year was estimated to be 3.2 billion lbs. more than this year at 105.85 billion lbs.

By | October 11th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 11, 2018

Negotiated cash fed cattle trade remained mostly undeveloped through Wednesday afternoon.

There were a few early dressed sales in the western Corn Belt for steady to $1 lower than last week at $174/cwt. A few live sales there were at $109-$111, but too few to trend.

There were 1,246 head offered in the weekly Fed Cattle Exchange auction Wednesday, and no sales.

A steep plunge on Wall Street helped pressure Cattle futures lower Wednesday.

Live Cattle futures closed an average of 60¢ lower (32¢ to $1.27 lower in spot Oct).

Feeder Cattle futures closed an average of $1.16 lower.

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

Choice boxed beef cutout value was 74¢ lower Wednesday afternoon at $202.11/cwt. Select was 95¢ lower at $191.77

*******************************

Major U.S. financial indices closed steeply lower Wednesday amid a massive sell-off led by tech stocks and fears about rising interest rates.

The Dow Jones Industrial Average closed 831 points lower. The S&P 500 closed 94 points lower. The NASDAQ was down 315 points.

*******************************

Overall, pasture and range conditions improved again, according to the latest weekly Crop Progress report (week ending Oct. 9). Among states with 35% or more of pasture and range rated as Poor or Very Poor the previous week, conditions improved or stayed the same everywhere, except in Colorado and Idaho.

Nationally, 48% of pasture and range is in Good (40%) or Excellent (8%) condition, 1% more than a week earlier and 7% more than a year earlier. 22% is rated as Poor (14%) or Very Poor (8%), which is 1% less than a week earlier and 3% less than last year.

States with 35% or more pasture and range rated as Poor or Very Poor in the recent report include: Arizona (68%), California (60%), Colorado (62%), Idaho (43%), New Mexico (45%), Oregon (73%), Utah (63%) and Washington (56%). 

Crop progress and harvest continues at a positive pace.

93% of the corn crop is mature, which is 13% more than last year and 10% more than the average. 34% is harvested, which is 13% more than last year and 8% more than average.

91% of soybeans are dropping leaves, which is 3% more than last year and 6% ahead of the average. 32% are harvested, which is 2% less than last year and 4% less than the average.

73% of sorghum is mature, which is 5% more than last and 1% more than average. 39% is harvested, which is 4% more than last year but 3% less than the average.

57% of winter wheat is planted, which is 11% more than last year and 3% more than the average. 30% has emerged, which is 7% more than last year and 2% more than the average.

By | October 10th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 10, 2018

Cattle futures softened Tuesday as wholesale beef values continue to languish ahead of the expected seasonal uptick.

Live Cattle futures closed an average of 69¢ lower.

Feeder Cattle futures closed an average of $1.02 lower.

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

Choice boxed beef cutout value was 36¢ lower Tuesday afternoon at $202.85/cwt. Select was 91¢ higher at $192.72.

*******************************

Major U.S. financial indices closed mostly lower Tuesday as benchmark Treasury Note yields climbed to the highest level in several years, continuing recent investor angst about rising interest rates.

The Dow Jones Industrial Average closed 56 points lower. The S&P 500 closed 4 points lower. The NASDAQ was up 2 points.

*******************************

U.S. beef exports topped $750 million in August for the first time, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Specifically, August beef export value was $751.7 million, which was 11% more than the previous year, easily exceeding the previous record of $722.1 million reached in May 2018. In terms of volume, August beef exports were 7% more than the previous year at 119,850 metric tons (mt).

For January through August, beef exports totaled 899,300 mt, up 9% from a year ago, while value climbed 18% to $5.51 billion.

“U.S. beef exports continue to achieve tremendous growth, not only in our mainstay Asian markets but in the Western Hemisphere as well,” says Dan Halstrom, USMEF President and CEO. “USMEF is excited about the recent market access developments achieved by the Office of the U.S. Trade Representative (USTR) and USDA, with favorable terms being preserved in Mexico, Canada and South Korea and trade talks getting underway with Japan. A trade agreement with Japan would bring opportunities for even greater expansion as U.S. beef becomes more affordable for Japanese consumers and is back on a level playing field with Australian beef.”

Beef export value averaged $320.92 per head of fed slaughter in August, up 11% from a year ago. The January-August average was $318.66 per head, up 16%. Through August, beef exports accounted for 13.5% of total U.S. beef production, which was 0.7% more than the previous year.

Conversely, U.S. pork exports were pressured by retaliatory tariffs in China and Mexico. August pork export volume was down 1% from last year at 182,372 mt, while export value fell 3% to $494.1 million.

China’s duty rate on pork muscle cuts and variety meat increased from 12% to 37% in April and from 37% to 62% in July. Mexico’s duty rate on pork muscle cuts increased from 0% to 10% in June and then jumped to 20% in July (pork variety meats continue to enter Mexico duty-free). Beginning in June, Mexico also imposed a 15% duty on sausages and a 20% duty on some prepared or preserved hams and shoulders.

“Pork exports have posted an impressive performance in 2018, but the retaliatory duties are a clearly a significant obstacle,” Halstrom explains. “The fact that U.S. trade officials were able to secure duty-free access for U.S. red meat in the new U.S.-Mexico-Canada Agreement is critically important, and we are hopeful that duty-free access for U.S. pork entering Mexico will be restored soon. Tariff relief in China may not come as quickly, but USMEF continues to work with industry partners to keep as much product as possible moving to China while also working aggressively to expand exports in other key markets, including Korea, Central and South America, the ASEAN region and Australia.”

Keep in mind that U.S. beef still faces retaliatory duties in China and Canada. China’s duty rate increased from 12% to 37% in July, with the higher rate applying to all eligible products. Canada’s 10% duty, which also took effect in July, applies to cooked/prepared beef products. All other U.S. beef still enters Canada duty-free.

By | October 9th, 2018|Daily Market Highlights|

Cattle Current daily-Oct. 9, 2018

Negotiated cash fed cattle trade last week was mainly steady at $110-$112/cwt. on a live basis and at $174-$175 in the beef.

Despite continued early pressure in equity markets—tied to worries about rising interest rates—Cattle futures managed to eke out gains to start the week.

Other than 2¢ lower in the back contract, Live Cattle futures closed an average of 24¢ higher.

Except for 10¢ lower in spot Oct and unchanged in the back contract, Feeder Cattle futures closed an average of 19¢ higher.

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

Choice boxed beef cutout value was 4¢ lower Monday afternoon at $203.21/cwt. Select was 7¢ lower at $191.81.

*******************************

Major U.S. financial indices closed mixed Monday after stronger pressure early in the session, tied to continued worries over rising interest rates. Bond markets were closed Monday, perhaps providing a reprieve.

The Dow Jones Industrial Average closed 39 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 52 points.

*******************************

Restaurant sales and traffic increased in August (latest data available), according to the National Restaurant Association’s (NRA) most recent Restaurant Performance Index (RPI), which is comprised of two sub-indices: Current Situation Index (CSI) and the Expectations Index (EI).

The August RPI rose 1% from the prior month to 102.0 in August, driven mostly by more optimism surrounding current conditions. The CSI was 1.6% higher month to month at 102.3, the highest level since December of last year. That index accounts for same-store sales, traffic, labor and capital expenditures. August was the seventh consecutive month the CSI was above 100. According to NRA, measures above 100 indicate expansionary industry indicators.

“Restaurant operators reported a net increase in same-store sales for the 10th consecutive month, with customer traffic also turning positive in August,” according to the NRA report.

The Expectations Index in August was 0.4% more than the previous month at 101.7. It measures restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.

By | October 8th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct 8, 2018

Negotiated cash fed cattle trade was mainly steady through late Friday afternoon at $110-$112/cwt. on a live basis and at $174-$175 in the beef. Trade remained undeveloped in the Southern Plains.

Steady cash and surging Lean Hog futures helped cap pressure in Cattle futures.

Other than narrowly mixed through the front four contracts, Live Cattle futures closed an average of 36¢ higher.

Except for 12¢ lower in Jan, Feeder Cattle futures closed an average of 45¢ higher.

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

Choice boxed beef cutout value was 61¢ lower Friday afternoon at $203.25/cwt. Select was 24¢ lower at $191.74.

******************************

Major U.S. financial indices closed sharply lower again Friday, pressured by higher interest rates and fewer jobs than expected in the monthly employment report.

Total non-farm employment increased by 134,000 in September as the nation’s unemployment rate decline 0.2% to 3.7%. Average hourly earnings are 73¢ higher (+28%) over the year to $27.24/hour.

The Dow Jones Industrial Average closed 180 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 91 points.

*******************************

The United States-Mexico-Canada Agreement (USMCA) announced last week offers added market certainty, but leaves some tariffs in place.

“Canada and Mexico are the first and third largest export markets for U.S. agriculture, accounting for more than a quarter of all U.S. agriculture exports,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division (KED). “This agreement will advance the ball for some sectors, but for others, the deal represents a return to the status quo. Market access gains will be modest, but we expect the increased certainty to boost domestic and cross-border investment. However, Canada and Mexico still have tariffs in place that affect the U.S. dairy, pork and beef sectors. U.S. agriculture will have much more to celebrate when those barriers are removed.”

A new KED report—From NAFTA to USMCA—breaks down the impacts of the new agreement on U.S. agriculture by sector, and assesses the issues facing those sectors going forward.

“In many respects, the new North American free trade pact will look very similar to the old one,” according to the KED report. “It will lead to significant change in the auto industry, but changes to other industries will be marginal, including agriculture. While modest, the vast majority of impacts to agriculture will be positive. Access to the Canadian dairy and animal protein sectors will improve, and more importantly, the risk of NAFTA being dismantled will be eliminated.

This will clear the way for domestic investment that is dependent on cross-border demand, as well as cross-border investment by firms that are active in two or all three of the markets.

“The modest benefits that U.S. agriculture will gain from USMCA, however, will continue to be overshadowed by the remaining retaliatory tariffs imposed by Mexico and Canada. The impact of Mexico’s tariffs on cheese and pork, and Canada’s tariffs on prepared beef, far outweigh the benefits laid out in USMCA. Therefore, an agreement on steel and aluminum trade, whenever it is struck, will offer much more for U.S. agriculture to celebrate.”

By | October 7th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 5, 2018

Lower outside markets helped push Feeder Cattle futures lower Thursday; mixed for Live Cattle. However, futures closed off of session lows, helped along by increasing odds that negotiated cash fed cattle prices will be steady to higher this week.

Although trade remained undeveloped through late Thursday afternoon, and there were too few to trend, some early dressed sales in Nebraska traded at $175/cwt., which was $1 higher than the bulk of last week’s trade.

Live Cattle futures closed narrowly mixed (30¢ lower to 42¢ higher).

Feeder Cattle futures closed an average of 85¢ lower.

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

Choice boxed beef cutout value was 56¢ lower Thursday afternoon at $203.86/cwt. Select was 32¢ lower at $191.98.

*******************************

Major U.S. financial indices closed sharply lower Thursday, pressured by investors fretting over higher interest rates.

The Dow Jones Industrial Average closed 200 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 145 points.

*******************************

“As history has taught us, open markets and science-based trade are the key ingredients for export success in the U.S. beef industry,” says Kevin Kester, a fifth-generation rancher from Parkfield, CA, who serves as president of the National Cattlemen’s Beef Association (NCBA). “Once passed, the new U.S.-Mexico-Canada Agreement will build on over two decades of unrestricted, science-based, duty free trade for U.S. beef in North America. The results have been outstanding: Today the U.S. exports around $2 billion worth of beef to Canada and Mexico each year.”

In a recent op-ed, Kester goes on to explain, “Similarly, KORUS reduced tariffs on U.S. beef exports and removed many trade restrictions. Our sales have skyrocketed under KORUS. Global retail giant Costco, who previously sourced Australian beef for their stores in South Korea, is now importing every single ounce of their chilled beef from the United States. Some aspects of previous trade agreements were in serious need of modernization, but the established framework for beef trade works remarkably well.”

By | October 4th, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 4, 2018

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon.

There were 358 head offered in the weekly Fed Cattle Exchange Auction: no sales  but one P.O. at $111/cwt.

Cattle futures closed lower Wednesday on apparent technical correction, profit taking and an overall lack of interest, but remained narrowly mixed week to week.

Live Cattle futures closed an average of 78¢ lower (47¢ to $1.07 lower).

Feeder Cattle futures closed an average of 94¢ lower.

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

Choice boxed beef cutout value was 47¢ lower Wednesday afternoon at $204.42/cwt. Select was $1.68 lower at $192.30.

*******************************

Major U.S. financial indices edged higher Wednesday, capped in part by increasing interest rates.

The Dow Jones Industrial Average closed 54 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 25 points.

*******************************

Although Quality Grade Choice and Prime beef continues at the sustained higher level of recent years, David Anderson, Extension livestock economist at Texas A&M University points out the recent, relative decline is adding support to Choice prices.

“Choice beef production over the last four weeks is about 3.2% below a year ago. The effect of fewer carcasses grading Choice is compounded by fewer steers and relatively more heifers in the slaughter mix,” Anderson says, in the most recent issue of In the Cattle Markets. “Fed steer weights are about the same as a year ago while heifers are reflecting heavier weights. This lack of Choice beef is showing up in prices with the Choice cutout at about $204/cwt. compared to about $192 a year ago.”

For broader perspective on beef quality trends over time, Anderson explains that of the carcasses graded in September of 1997, 2% were Prime, 51% were Choice and 37% were Select. In September this year, nearly 8% were Prime, 70% Choice and 18% Select.

“Federally inspected beef production over the last month is up 1.1% over the same period last year. During the same period fed steer slaughter is down almost 2%, while heifer and cow slaughter are 4.4% and 7% higher than a year ago, respectively,” Anderson says. “So, all the increase in beef production in recent weeks is coming from heifers and cull cows. It’s worth a reminder that cull cow beef goes to a different (but related) market than beef from fed steers and heifers.  Cull cow beef most often goes to ground beef.”

By | October 3rd, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 3-2018

After some early pressure, Cattle futures firmed and closed a touch higher Tuesday.

Except for 12¢ lower in the back contract, Live Cattle futures closed an average of 29¢ higher.

Feeder Cattle futures closed an average of 60¢ higher.

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

Choice boxed beef cutout value was 19¢ lower Tuesday afternoon at $204.89/cwt. Select was 65¢ lower at $193.98.

*******************************

Major U.S. financial indices closed mixed Tuesday with the DJIA continuing to receive support from the announced United States-Mexico-Canada Agreement.

The Dow Jones Industrial Average closed 122 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 37 points.

*******************************

Agricultural producer sentiment dropped to its lowest level since October 2016 as producers expressed concern over worsening farm financial conditions, according to the latest Purdue University/CME Group Ag Economy Barometer. That barometer is based on a monthly survey of 400 agricultural producers from across the country.

The September barometer reading of 114 declined 15 points from the previous month. As for the sub-indices that comprise the Barometer, the Index of Future Expectations declined 10 points and the Index of Current Conditions dropped 25 points.

“The barometer readings have been unusually volatile over the past few months,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Concerns about the ongoing impact of trade conflicts, and especially China’s tariffs on imports of U.S. ag products, continue to reverberate throughout the U.S. agricultural sector.”

Producers indicated that financial conditions on their farms deteriorated significantly as 2018 unfolded and their expectations for the future also weakened. In September, 54% of farmers surveyed said their farm’s financial condition was worse than a year earlier, up from 38% who felt that way in June. The September survey also indicated that 33% of producers expect their farm’s financial condition to be worse a year from now, up 15 points compared to responses received to the same question in June.

By | October 2nd, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 2, 2018

News that Canada will join the U.S. and Mexico and a new North American trade agreement—the United States-Mexico-Canada Agreement (USMCA)— fueled optimism in commodity and equity markets to start the week.

Between the news, firmer wholesale beef values and last week’s steady negotiated cash fed cattle trade, Cattle futures moved higher.

Live Cattle futures closed an average of 34¢ higher.

Feeder Cattle futures closed an average of $1.24 higher (47¢ to $1.52 higher).

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

Choice boxed beef cutout value was $1.20 higher Monday afternoon at $205.08/cwt. Select was $1.19 higher at $194.63.

*******************************

Major U.S. financial indices mostly surged higher Monday with the late weekend news about the United States-Mexico-Canada Agreement (see below). CME Crude Oil futures (WTI) closed $2.05 to $2.19/bbl. higher through the next 12 months. Spot Nov closed $6.62 higher than two weeks ago at $75.30.

The Dow Jones Industrial Average closed 192 points higher. The S&P 500 closed 10 points higher. The NASDAQ was down 9 points.

Regarding announcement of a United States-Mexico-Canada Agreement (USMCA), U.S. Secretary of Agriculture Sonny Perdue issued the following statement:

“The new USMCA deal is important for our economy as a whole, including the agricultural sector, which counts Canada and Mexico in our top three trading partners. I have long said that I believe our country is located in the best neighborhood on Earth – North America – with valuable allies to our north and south. We have secured greater access to these vital markets and will maintain and improve the highly productive integrated agricultural relationship we have as nations. Notably, as one of the President’s top goals, this deal eliminates Canada’s unfair ‘Class 7’ milk pricing scheme, cracks open additional access to U.S. dairy into Canada, and imposes new disciplines on Canada’s supply management system. The agreement also preserves and expands critical access for U.S. poultry and egg producers and addresses Canada’s discriminatory wheat grading process to help U.S. wheat growers along the border become more competitive.”

*******************************

“Numerous factors will affect the likelihood of a seasonal stocker calf price low in the next month,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Supplies will grow as feeder volumes increase to a seasonal peak by early to mid-November. With the larger 2018 calf crop, the fall run of calves is expected to exceed last year. However, demand for wheat pasture stockers may partially or totally offset increased stocker calf supplies. 

“I really don’t expect much more increase in stocker prices, but additional increases are possible in the next couple of weeks. As we move through October into November, feeder prices are likely to stabilize or perhaps move lower, but the seasonal low may be quite muted.”

By | October 1st, 2018|Daily Market Highlights|

Cattle Current Daily-Oct. 1, 2018

Negotiated cash fed cattle trade was mainly steady with the previous week at $110-$111/cwt. on a live basis and mostly $174 in the beef.

Cattle futures closed little changed Friday but mostly to the upside.

Live Cattle futures closed an average of 20¢ higher.

Except for 95¢ lower in newly minted away Sep, Feeder Cattle futures closed an average of 59¢ higher.

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

Choice boxed beef cutout value was 83¢ lower Friday afternoon at $203.88/cwt. Select was 88¢ higher at $193.44.

*******************************

Major U.S. financial indices closed little changed Friday as investors squared the books for the week, month and quarter.

The Dow Jones Industrial Average closed 18 points higher. The S&P 500 closed fractionally lower. The NASDAQ was up 4 points.

*******************************

Heading into fall, availability of winter wheat pasture looks to be well above normal, say analysts with the Livestock Marketing Information Center (LMIC), noting the planting pace is ahead of last year and the 5-year average.

“Early planting and quick germination will grant cattle earlier access to those fields and allow for longer grazing without sacrificing harvesting wheat for grain,” LMIC analysts say, in the latest Livestock Monitor.

In fact, there likely will be the most cattle grazing wheat pasture since 2007 in Kansas, Oklahoma and Texas, according to LMIC. Analysts there say the number of winter-grazing cattle in those three states averaged about 2.1 million head over the last 18 years (based on Jan. 1 numbers). There were 1.50 million head last year, the least since 2013.

“As of Jan. 1, 2019, the 3-state total could be 1.8 to 2.0 million head,” AMS analysts say. “At that midpoint (1.9 million head), it would indicate the number of head winter grazing has increased from the prior year by 400,000 head (up 27%). That number would go a long way in absorbing the growth in this year’s national calf crop, but it may also bunch-up sales of short yearling animals coming off those pastures as early as mid-February.”

By | September 30th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 28, 2018

Dressed beef sales trended $1 lower in Nebraska and the western Corn Belt through Thursday afternoon at $174/cwt. Live sales in those regions thus far are near steady to steady at $110.00-$110.50.

Cattle futures recovered from the worst of the early pressure Thursday, closing lower but still within the recently established higher, narrow channel.

Other than 12¢ higher at the back of the board, Live Cattle futures closed an average of 26¢ lower.

Other than 25¢ higher in expiring Sep, Feeder Cattle futures closed an average of 60¢ lower, amid extremely light trade.

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

Choice boxed beef cutout value was 14¢ lower Thursday afternoon at $204.71/cwt. Select was 39¢ lower at $192.56.

*******************************

Major U.S. financial indices closed higher Thursday. Support included tech stocks like Apple and Amazon, as well as Crude Oil futures continuing to edge higher.

The Dow Jones Industrial Average closed 54 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 51 points.

*******************************

“Despite more cattle on feed, the market price of finished cattle remains strong and continues to outperform year-ago prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his most recent market comments. “Cattle feeders continue to fill pens and the strong feeder cattle prices demonstrate how much cattle feeders want to purchase cattle. It would appear cattle feeders are expecting finished cattle prices to remain strong in the near term and escalate moving into 2019. This thought process may not be as wild as many think it is as beef demand remains strong, which supports prices. Does this mean finished cattle prices will only escalate through the end of the year? One should probably not be so bold at this juncture, but the market does appear to be holding its own plus some at this time.”

For demand perspective, Griffith notes the retail value for Choice beef in August was the highest since July of last year at 608.2¢/lb.

By | September 27th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 27, 2018

There were only 242 head offered and no takers in the weekly Fed Cattle Exchange auction.

Cattle futures continued to firm Wednesday, closing higher on reportedly increased commercial interest.

Live Cattle futures closed an average of $1.39 higher through the front four contracts and then an average of 74¢ higher.

Feeder Cattle futures closed an average of $1.28 higher (42¢ to $1.82 higher).

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

Choice boxed beef cutout value was 88¢ lower Wednesday afternoon at $204.85/cwt. Select was $1.92 lower at $192.95.

*******************************

Major U.S. financial indices closed lower Wednesday. Many attributed the lion’s share of pressure to remarks made by Federal Reserve Chairman Jerome Powell, indicating the Fed didn’t foresee inflation surprising to the upside, i.e. less growth in interest rates over the long haul. That dampened bank stocks. Powell’s remarks came following the Fed’s decision to raise the federal funds rate for the third time this year to 2.00 to 2.25%.

The Dow Jones Industrial Average closed 106 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 17 points.

*******************************

A day following completion of the revised Korea-U.S. Trade agreement, the United State and Japan announced they would begin negotiating a trade pact.

“This is welcome news, since we know that export income is critical to the financial health of agriculture and is a key contributor to rural prosperity,” said Agriculture Secretary, Sonny Perdue. “Japan is an important customer for our agricultural products and we look forward to the great potential this breakthrough represents.”

Earlier this year, President Trump withdrew the U.S. from the Tran Pacific Partnership (TPP), which includes Japan.

According to a joint statement made by the two nations, President Trump and Japanese Prime Minister Shinzo Abe, affirmed the importance of a strong, stable, and mutually beneficial trade and economic relationship, recognizing that together, the two economies represent approximately 30% of global Gross Domestic Product.

By | September 26th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 26, 2018

Negotiated cash fed cattle trade was light on light to moderate demand in Nebraska and the western Corn Belt through Tuesday afternoon. There were a few live trades in both regions at $110.50/cwt.—steady with last week—but too few to trend.

Live Cattle futures closed an average of 14¢ higher.

Feeder Cattle futures closed an average of 24¢ higher.

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

Choice boxed beef cutout value was 43¢ lower Tuesday afternoon at $205.73/cwt. Select was 52¢ lower at $194.87.

*******************************

Except mixed for soybeans and wheat, cash bids for grains were higher Tuesday.

“Most of the Midwest is at a standstill in regards to harvest due to precipitation,” explained analysts with the Daily National Grain Market Summary. “The 10-day forecast is calling for more precipitation, which could slow harvest further.” 

Wheat bids were 7¢ lower to 1¢ higher. Soybean bids were ¼¢ lower to 16¾¢ higher. Sorghum bids were 5¾¢ higher. Corn bids were 3¢ lower to 5¼¢ higher.

Corn futures closed mostly 2¢ to 3¢ higher through March’20 and then fractionally higher to 1¢ higher.

*******************************

Major U.S. financial indices closed mostly lower on Tuesday. Pressure included more tough trade talk from the White House and higher 10-year Treasury yield.

The Dow Jones Industrial Average closed 69 points lower. The S&P 500 closed 3 points lower. The NASDAQ was up 14 points.

*******************************

 “We are entering into a new KORUS (Korea-U.S.) agreement that is a better deal for the entire United States economy, including the agricultural sector,” said Agriculture, Sonny Perdue on Tuesday. “This represents an important improvement in trade relations between our two nations, building on long-standing cooperation we have enjoyed. This agreement adds to the momentum building for President Trump’s approach to trade, which is to stand strong for America’s interests and strike better deals. I am optimistic that the dominoes will continue to fall: KORUS, then a new NAFTA, and new agreements with the European Union, Japan, and, most notably, China. As an avid sportsman, I would say ‘put this one in the bag and keep hunting for more.’”       

“Signing of the revised KORUS agreement (Korea-U.S. trade agreement) is reassuring news for the U.S. beef and pork industries,” said Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF), following Tuesday’s announcement of the agreement. “The market access terms secured in the original KORUS not only helped increase U.S. red meat’s market share in South Korea, but also bolstered consumption by making our beef and pork products more affordable and accessible to Korean consumers.”

The U.S. is the world’s largest beef supplier to Korea and second largest supplier of pork, according to Halstrom.

“U.S. red meat exports to Korea set a record last year of $1.7 billion, up 19% year-over-year and up 69% from 2012, when KORUS entered into force,” Halstom explains. “This trend continues in 2018, with both U.S. beef and pork export value increasing more than 50% percent compared to a year ago. Korea is now the second-largest value market for U.S. beef (after Japan) and fourth largest for U.S. pork (after Japan, Mexico and China/Hong Kong).

The duty rate on U.S. beef has been reduced from 40% to 21.3% and will continue to decline each year until it is eliminated by 2026.

By | September 25th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 25, 2018

Negotiated cash fed cattle trade ended up being steady to $1 lower last week at $110-$111/cwt. on a live basis and mostly $175 in the beef.

Higher feedlot placements in August weighed on Cattle futures Monday.

Except for 15¢ lower in the back contract, Live Cattle futures closed an average of 79¢ lower (42¢ to $1.45 lower).

Except for 50¢ lower in the front contract, Feeder Cattle futures closed an average of $1.19 lower (75¢ to $1.87 lower).

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

Choice boxed beef cutout value was $1.36 higher Monday afternoon at $206.16/cwt. Select was 68¢ higher at $195.39.

*******************************

Major U.S. financial indices closed mostly lower on Monday. Pressure included cancellation of trade talks between the U.S. and China as counter tariffs begin this week.

The Dow Jones Industrial Average closed 181 points lower. The S&P 500 closed 10 points lower. The NASDAQ was up 6 points.

*******************************

 “Lightweight placements since May will result in lighter and later fed cattle marketings and may contribute to relatively tighter fed cattle supplies for the remainder of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

As noted in the last issue of Cattle Current, placements in feedlots with more than 1,000 head capacity were 7.36% more than the previous year at 2.07 million head, according to Friday’s Cattle on Feed report.

“Increased August placements largely consisted of cattle under 700 lbs., with the under-600 lb. category up 19.4% year over year and cattle placed weighing 600-700 lbs. up 17.5% compared to last year,” Peel says. “In the last four months, placements of cattle under 700 lbs. has been up 13.2% year over year, while placements weighing over 700 lbs. were down 1.0% year over year. Lightweight feedlot placements likely include lighter-weight steer placements, as well as continued high proportions of heifers in the feedlot total. Heifers are typically placed 50-100 lbs. lighter in weight compared to steers.”

Although total cattle slaughter is 3.2% more so far this year, Peel notes heifer slaughter is 8.3% higher for the year to date.

“However, heifer slaughter is expected to show much smaller year-over-year increases in the fourth quarter, thereby moderating the annual increase,” Peel explains. “Beef cow slaughter is 11.4% larger year over year so far this year. Dairy cow slaughter continues to inch higher and is up 4.5% so far this year. Steer slaughter continues below year-ago levels and is down 0.8% year over year for the year to date. Steer slaughter will likely increase some relative to last year and result in an annual total slightly larger than last year.”

By | September 24th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 24, 2018

Other than Nebraska, negotiated cash fed cattle trade remained mostly undeveloped through late Friday afternoon. Live trades there were $1 lower than the previous week at $110-$110.50/cwt. Dressed trade was steady at $175.

Late Friday, the Texas Cattle Feeders Association reported its members trading cattle at steady money of $111.

Cattle futures firmed on Friday with apparent positioning ahead of the monthly Cattle on Feed report (see below).

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

Feeder Cattle futures closed an average of 87¢ higher across the front half of the board, and then an average of 10¢ higher.

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

Choice boxed beef cutout value was 28¢ higher Friday afternoon at $204.80/cwt. Select was 20¢ lower at $194.71.

*******************************

Major U.S. financial indices closed mixed on Friday, with investors squaring the books amid little market-moving news.

The Dow Jones Industrial Average closed 85 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 41 points.

*******************************

Friday’s monthly Cattle on Feed report will likely be viewed as bearish, with more August placements than average estimates ahead of the report.

Placements in feedlots with more than 1,000 head capacity were 7.36% more than the previous year at 2.07 million head. That’s 2-4% more than expected.

Most cattle went on feed weighing less than 800 lbs. Specifically, 20.8% weighed less than 600 lbs.; 16.2% weighed 600-699 lbs.; 22.2% at 700-799 lbs.; 22.9% weighing 800-899 lbs.; 11.6% weighing 900-999 lbs.; 6.3% at weights of 1,000 lbs. or more.

Marketings in August of 1.98 million head were just about even with the previous year, but 4,000 head more.

All told, 11.125 million head were on feed Sept. 1, which was 5.9% more (+621,000 head) than the same time last year. That’s the largest inventory for the month since the data series began in 1996.

By | September 23rd, 2018|Daily Market Highlights|

Cattle Current-Sept. 21, 2018

Negotiated cash fed cattle trade was slow on light to moderate demand in Nebraska through Thursday afternoon, with a few dressed trades at $175/cwt.; steady with last week, but too few to trend.

Early support faded in Cattle futures Thursday, ending with a mainly narrowly mixed to narrowly lower close.

Except for 65¢ lower in spot Oct, Live Cattle futures closed narrowly mixed, from 2¢ to 25¢ lower across the front half of the board, then 5¢ to 15¢ higher the rest of the way.

Other than 15¢ higher in spot Sep, Feeder Cattle futures closed an average of 29¢ lower, with most pressure in the front contracts.

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

Choice boxed beef cutout value was 27¢ higher Thursday afternoon at $204.52/cwt. Select was 73¢ higher at $194.91.

*******************************

Major U.S. financial indices surged higher Thursday, fueled by global bell-weather stocks such as Boeing, Caterpillar and Apple, presumably on optimism over what traders gauged as a muted response by China to the most recent tariffs imposed by the U.S.

The Dow Jones Industrial Average closed 251 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 78 points.

*******************************

“A strong domestic economy and robust exports have buffered beef, and hence, cattle prices against near record large U.S. beef production and all-time highs in competing meats and poultry supplies,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “There are unknowns and potential headwinds for cattle markets during the next few years, not the least of which is the potential for U.S. beef, pork, and chicken exports to falter under a cycle of tariffs and retaliation. Also, any significant weakness in the domestic or global economy compared to the healthy conditions of the last 12 months could dampen demand for beef, and therefore cattle.”

In the meantime, LMIC analysts point out projected beef production this year of 27.5 billion lbs.—assuming normal weather conditions—will be the smallest year-to-year increase since 2015 at 1-2%.   

“In the first quarter of 2019, fed cattle prices could be below 2018’s. In subsequent quarters prices are forecast to be similar to a year earlier,” say LMIC analysts.  “A normal 2019 Midwest corn crop would set the stage for steady to modestly higher yearling and calf cattle prices in the second half of 2019, compared to the corresponding quarters in 2018.”

By | September 21st, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 20, 2018

Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. Depending on the snugness of packer inventories, odds appear to favor at least steady money.

There were only 528 head offered in the weekly Fed Cattle Exchange auction. No takers.

Cattle futures continued to putter along, holding on to most of last week’s gains, closing narrowly mixed to a touch lower and awaiting cash direction.

Live Cattle futures closed unchanged to an average of 10¢ lower.

Feeder Cattle futures closed from 42¢ lower to 50¢ higher.

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

Choice boxed beef cutout value was $1.04 lower Wednesday afternoon at $204.25/cwt. Select was $1.29 lower at $194.18.

*******************************

Major U.S. financial indices closed mixed Wednesday, with bank shares pushing the Dow higher with support from the higher 10-year treasury yield.

The Dow Jones Industrial Average closed 158 points higher. The S&P 500 closed 3 points higher. The NASDAQ was down 6 points.

*******************************

“Feeder cattle prices have shown strength through the summer, but seasonal pressures will likely take hold, moving prices lower in the fourth quarter,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “Prices typically decrease when the spring-born calves (about two-thirds of the annual calf crop) are brought to market in the fall. Assuming normal weather in the Great Plains, availability of winter forages for backgrounding could bolster prices in fourth-quarter 2018.”

Prices for the rest of this year and next were forecast slightly higher than the previous month at $148-$151/cwt. in the third quarter; $143-$151 in the fourth quarter; $139-$151 for the 2019 annual price, based on lower projected corn prices.

“Regarding fed cattle prices in second-half 2018, feedlots seem to have resisted recent lower prices from packers, which may be reflected in a greater proportion of cattle on feed over 120 days. To the extent these cattle are remaining on feed longer as producers respond to the prospects of higher future prices, there could be a shift of some marketings from the third quarter to the fourth,” say ERS analysts. “The fed steer price forecast for the 5-area marketing region in third-quarter of 2018 is $108-$111/cwt., but the fourth-quarter forecast is lowered to $108-$114/cwt., in line with expectations of increased marketings.”

By | September 19th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 19, 2018

Live Cattle futures meandered to a narrowly lower close Tuesday, with pressure and support apparently capped by strong trader interest in surging Lean Hog futures. Feeder Cattle closed lower on light trade, across a wide range.

Live Cattle futures closed an average of 29¢ lower.

Feeder Cattle futures closed an average of 80¢ lower, (7¢ lower in the back contract to $1.50 lower in spot Sep).

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

Choice boxed beef cutout value was 75¢ lower Tuesday afternoon at $205.29/cwt. Select was $1.91 lower at $195.47.

*******************************

Major U.S. financial indices closed higher Tuesday, with investors reportedly less concerned about the recently announced added tariffs on Chinese imports.

The Dow Jones Industrial Average closed 184 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 60 points.

*******************************

Byproduct values continue to languish, pressured by significantly lower hide prices.

“Heavy steer hides set the lowest weekly average value since 2012 this July, at $68.40 per piece,” according to analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “The average weekly value during this five-year timeframe is $104.67 per piece. In the second week of September, the price hit $69.33, nearly 35% off the average weekly value…That in part could be related to certain companies moving away from real leather in favor of synthetics, dampening demand. Also, the supply of hides has grown as slaughter rates have increased…On a per-head basis, the weakness in hide prices is knocking off more than $25 per animal compared to the five-year average.”

Hides are the primary contributor to the cattle by-product calculation.

For the most recent week (ending Sept. 7), steer by-product value was down 12%/cwt., compared to last year, according to LMIC. For the last year, the daily reported steer byproduct value has ranged from $9.01 to $10.86/cwt.

By | September 18th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 18, 2018

The late-week surge in Cattle futures ultimately helped negotiated cash fed cattle prices take a strong step higher. Live sales were mainly $3-$4 higher at $110.00-$111.50/cwt. Dressed trade was $2-$5 higher at $172-$175.

Cattle futures mostly held on to Friday’s strong gains, closing narrowly mixed to mostly a touch higher.

Live Cattle futures closed narrowly mixed (37¢ lower to 40¢ higher), with the most open interest since July.

After 10¢ higher in spot Sep, Feeder Cattle futures closed an average of 46¢ higher, except for unchanged to 37¢ lower in the back three contracts.

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

Choice boxed beef cutout value was $1.77 higher Monday afternoon at $206.04/cwt. Select was 91¢ higher at $197.38.

*******************************

Major U.S. financial indices closed lower Monday, with most of the pressure attributed to sliding tech shares, tied to more sabre rattling about trade between the U.S. and China.

The Dow Jones Industrial Average closed 92 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 114 points.

*******************************

“There is still a likelihood that calf prices will hold steady or decline some into October, but the seasonal pressure may be muted with strong stocker demand,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The market appears to be developing a typical fall market pattern for mid-weight steers with a sharp break on prices from 475 to 525 lbs. and prices relatively flat for steers weighing 525-700 lbs. Heifer calf prices continued a modest seasonal decline last week. Stocker producers should evaluate a range of possible purchase weights and look at steers versus heifers to determine the best purchase opportunity.”

With recent moisture, Peel says there’s plenty of chatter about wheat grazing prospects this winter.

“Budgets for winter grazing appear to pencil out quite attractively at this point.  Feeder futures have remained remarkably strong, with March feeder futures trading near $153/cwt. at the end of last week,” Peel explains. “With normal basis, these contract levels offer an opportunity to price spring cattle above projected break-evens for winter grazing. However, this may be a fleeting opportunity as there several factors that might drive a futures market correction.  One is that current feeder price levels result in negative projected feedlot margins in coming months. The reality is that feeder cattle supplies are still plentiful and the September Cattle on Feed report, due out September 21, could indicate a large feedlot placement level with implications for spring feeder markets.”

Running the numbers for Oklahoma, Peel says, given expected wheat price, along with fertilizer and seed cost, the projected cost of wheat pasture (above other wheat production costs) is estimated at near $70/acre. 

“The cost per pound of gain depends on cattle average daily gain, number of days of grazing and wheat pasture stocking rate. Across a range of these assumptions, wheat pasture breakeven cost calculates out to a range from 30¢ to 45¢/lb. gain for winter grazing,” Peel says.

By | September 17th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 17, 2018

Cattle feeders and beef packers continued their weekly standoff through late Friday afternoon, based on USDA reports. However, the strong rally in Cattle futures had most betting for higher fed prices when all was said and done.

In fact, Live Cattle futures for spot Oct closed at the highest level since March, finally breaking out of the month’s long, sideways trend. That dragged the rest of the complex higher.

There didn’t seem to be a simple explanation for the surge in futures prices. Looking beyond the third quarter, supply fundamentals improve, of course. There was also chatter that some of the spark came from reports that more Foot and Mouth Disease had been confirmed in a Chinese cattle herd.

Except for 60¢ and 37¢ higher in the back two contracts, Live Cattle futures closed an average of $1.93 higher ($1.12 higher to $3.00 higher in spot Oct).

Feeder Cattle futures closed an average of $2.58 higher ($1.77 to $3.47 higher).

“This week’s price movement is working against the seasonal tendency of calf prices as are feeder cattle futures contracts,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The calf and feeder cattle market have remained strong through the late summer months and the futures market is suggesting continued strength while seasonal price trends would suggest lower prices. Prices are strong now with most of the price risk being to the downside.”

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

Choice boxed beef cutout value was 23¢ higher Friday afternoon at $204.27/cwt. Select was 77¢ lower at $196.47.

*******************************

Major U.S. financial indices closed narrowly mixed Friday, between strength from chipmakers and more angst about U.S.-China trade.

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

*******************************

Wholesale beef values continue to ride seasonal trends lower, but Andrew P. Griffith, agricultural economist at the University of Tennessee, points out demand remains relatively strong in the face of increased beef production.

“Beef demand the past several years has been relatively strong based on the demand index computed by the Livestock Marketing Information Center (LMIC). Demand for beef in 2015 was at its highest level since 1991, based on LMIC calculations. Demand softened slightly in 2016 and 2017 based on the same calculations, but remained relatively strong compared to the previous decade,” Griffith explains, in his weekly market comments. “Demand in 2018 appears to be rounding into form similar to the previous two years with continued strong demand that has supported beef and cattle prices through the entire production chain. Several factors are contributing to strong beef demand, with the most likely being increased income levels, consumers preference for beef, and exports.”

By | September 16th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 14, 2018

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon, with most indications for at least steady money this week.

Although there was pressure early in the session, Cattle futures closed mostly narrowly mixed in the Live pit and a touch higher for Feeder Cattle.

After 67¢ and 12¢ lower in the front two contracts, Live Cattle futures closed an average of 26¢ higher, except for 10¢ lower in away Dec.

Feeder Cattle futures closed an average of 51¢ higher.

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

Choice boxed beef cutout value was 75¢ lower Thursday afternoon at $204.04/cwt. Select was 3¢ lower at $197.24.

*******************************

Continued pressure from the latest World Agricultural Supply and Demand Estimates pushed cash bids for grains and soybeans lower Thursday, according to the Daily National Grain Market Summary.

Wheat bids were mostly 5¢ to 10¢ lower. Soybean bids were mostly 6¾¢ lower. Sorghum bids were 3½¢ lower. Corn bids were mostly 2¢ lower.

Corn futures closed 1¢ to 5¢ lower through next July and then mostly fractionally lower.

*******************************

Major U.S. financial indices closed higher Thursday. Support included tech stocks, led by Apple, as well as a slower rising Consumer Price Index (CPI) than expected. According to the Bureau of Labor Statistics, the CPI rose 0.2% in August. The index for all items less food and energy rose by 0.1%, the least since April.

The Dow Jones Industrial Average closed 147 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 59 points.

*******************************

Although current feedlot closeout projections are forecast to continue in negative triple digits this month, the most recent Historical and Projected Kansas Feedlot Net Returns suggests significant improvement on the horizon.

For example, estimated net return for steers closed out in August was -$104.20 per head. The estimate for September is -$108.96. For the next eight months after that, estimated returns range from -$63.24 in April to +$18.75 in March.

Keep in mind the projections are on a cash-to-cash basis without any price risk management assumed.

The outlook for heifers is similar. After projected losses of $105-$106 per head in August and September, estimated returns range from -$89.49 in April to +$24.04 in December.

By | September 13th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 13, 2018

Negotiated cash fed cattle trade remained undeveloped Wednesday, though auctions began providing some indicators, albeit mixed.

For instance, Ch 2-4 steers brought $109.74 to $110.00 on a jag of 205 head. But,

Ch 2-3 steers brought $106-$109 at Sioux Falls Regional Livestock in South Dakota.

Only 444 head were offered in the weekly Fed Cattle Exchange auction Wednesday, with no takers. There were three lots passed out at $108.00-$108.25/cwt.

Cattle futures took a strong step higher Wednesday. Lower grain prices—tied to the World Agricultural Supply and Demand Estimates—helped lift Feeder Cattle, dragging Live Cattle along.

Live Cattle futures closed an average of $1.14 higher (85¢ to $2.17 higher in spot Oct).

Feeder Cattle futures closed an average of $2.00 higher ($1.32 to $2.57 higher).

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

Choice boxed beef cutout value was $1.28 lower Wednesday afternoon at $204.79/cwt. Select was $1.04 lower at $197.27.

*******************************

Major U.S. financial indices closed narrowly mixed Wednesday. Support included reports that the U.S. is in the process of proposing new trade talks with China.

The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed 1 point higher. The NASDAQ was down 18 points.

*******************************

Projected beef production of 27.09 billion lbs. was unchanged in the latest monthly World Agricultural Supply and Demand Estimates (WASDE), with anticipated increases in slaughter during the second half of the year offset by an expected decrease in carcass weights.

Fed steer prices (5-area Direct) are projected at $108-$111/cwt. for the third quarter and at $108-$114 in the fourth quarter. Forecast prices for the first and second quarter next year are projected to be $116-$126 and $118-$128, respectively.

Beef production is forecast at 27.72 billion next year. Total red meat production is projected at 55.81 billion next year. Total red meat and poultry production next year is estimated at 105.76 billion lbs., which would be 2.7 billion lbs. more than this year’s estimate.

By | September 12th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 12, 2018

Cattle futures closed slightly lower to mixed Tuesday, amid limited trade and a lack of cash direction.

Except for unchanged in Apr, Live Cattle futures closed an average of 43¢ lower.

Feeder Cattle futures closed narrowly mixed, 45¢ lower to 22¢ higher.

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

Choice boxed beef cutout value was 23¢ lower Tuesday afternoon at $206.07/cwt. Select was 62¢ lower at $198.31.

*******************************

Major U.S. financial indices closed higher Tuesday, with trade worries applying pressure, but higher crude oil prices and further recovery in tech stocks—led by Apple—providing support.

The Dow Jones Industrial Average closed 113 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 48 points.

*******************************

Overall, pasture and range conditions improved last week, according to the latest weekly Crop Progress report (week ending Sept. 9). Among states with 35% or more of pasture and range rated as Poor or Very Poor, week-to-week conditions improved in Arizona, Colorado, Missouri, New Mexico and Texas. Conditions eroded in Idaho, Nevada, Oregon, Utah and Washington.

Nationally, 43% of pasture and range is in Good (36%) or Excellent (7%) condition, 1% more than a week earlier, but 4% less than a year earlier. 26% is rated as Poor (17%) or Very Poor (9%), which is 2% less than a week earlier and 4% more than last year.

States with 35% or more pasture and range rated as Poor or Very Poor include: Arizona (59%), California (45%), Colorado (45%), Idaho (38%); Missouri (44%), Nevada (45%), New Mexico (45%), Oregon (74%), Texas (45%), Utah (64%) and Washington (62%). 

Crop progress continues mostly ahead of last year and the 5-year average.

86% of the corn crop is dented, which is 13% more than last year and 11% more than the average. 35% is mature, which is 15% more than last year and 14% more than average. 5% is harvested, the same as last year, but 2% more than average. 68% is in Good (47%) or Excellent (21%) condition, compared to 61% last year. 12% is in Poor (8%) or Very Poor (4%) condition, which is 1% less than last year.

31% of soybeans are dropping leaves, which is 11% more than last year and 12% ahead of the average. 68% is in Good (50%) or Excellent (18%) condition, compared to 60% last year. 10% is in Poor (7%) or Very Poor (3%) condition, compared to 12% a year earlier.

79% of sorghum is coloring, which is 7% more than last year and 5% more than average. 34% is mature, which is the same as last year but 4% less than average. 24% is harvested, which is the same as last year but 2% less than average. 53% is rated in Good (41%) or Excellent condition (11%), compared to 66% last year. 17% is in Poor (12%) or Very Poor (5%) condition, compared to 7% last year.

93% of spring wheat is harvested, which is 1% less than last year but 8% more than the average.

5% of winter wheat is planted, which is the same as last year and the average.

By | September 11th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 11, 2018

When the final counting was done last week, negotiated cash fed cattle prices were steady to $1 higher at mostly $107-$108/cwt. on a live basis and at $170 in the beef.

Those steady to higher prices helped Live Cattle futures firm on Monday, while Feeder Cattle closed narrowly mixed.

Except for unchanged in near Dec, Live Cattle futures closed an average of 32¢ higher.

Feeder Cattle futures closed narrowly mixed, 45¢ lower to 22¢ higher.

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

Choice boxed beef cutout value was 26¢ lower Monday afternoon at $206.30/cwt. Select was $1.84 higher at $198.93.

*******************************

Major U.S. financial indices closed mixed Monday, between some recovery in tech stocks, but lingering concerns about trade.

The Dow Jones Industrial Average closed 59 points lower. The S&P 500 closed 5 points higher. The NASDAQ was up 21 points.

*******************************

“Cattle prices decline from 2018 to 2020 as production continues to increase. Live hog prices remain below $45 cwt. for three straight years, as production continues to expand and tariffs slow growth in U.S. exports,” say analysts with the Food and Agricultural Policy Institute (FAPRI) at the University of Missouri.

That’s one of the conclusions from the recently released Baseline Update for U.S. Agricultural Markets. The update is to the annual U.S. Baseline Outlook published each spring, which provides 10-year projections. The Update looks through 2023.

FAPRI estimated the average price of a 600-650 lb. feeder steer (basis Oklahoma City) at $158.51/cwt. this year, declining as low as $141.06 in 2020; rising each year after that to $162.14 in 2023.

Prices for fed steers (5-area Direct) are projected at $116.59 this year, declining as low as $110.19 in 2020, then ultimately increasing to $119.99 in 2023.

For context, FAPRI forecasts peak beef cow numbers in 2019 at 31.8 million head, just 100,000 head more than the start of this year. Then numbers continue to decline through 2023 at 30.8 million head.

Likewise, total cattle and calves are projected to plateau next year at 94.6 million head—200,000 more than this year—before declining to 91.4 million head in 2023.

Incidentally, peak beef production is estimated to plateau at 28.32 billion lbs. in 2021, then decline to 28.01 billion in 2023. That would still be more than next year’s estimated production of 27.92 billion lbs.

By | September 10th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 10, 2018

Negotiated cash fed cattle trade ended last week generally steady with the previous week, with live sales at mostly $107/cwt. and dressed sales at $170.

Cattle futures closed higher, led by Feeder Cattle. There was some chatter about part of the support coming from traders expecting African Swine Fever in China to support the hog market and beef by extension (see below).

Live Cattle futures closed an average of 53¢ higher (15¢ to $1.05 higher in spot Oct).

Other than unchanged and 17¢ higher at the back of the board, Feeder Cattle futures closed an average of $1.06 higher.

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

Choice boxed beef cutout value was $2.19 lower Friday afternoon at $206.56/cwt. Select was 74¢ lower at $197.09.

*******************************

Major U.S. financial indices closed lower Friday. Pressure included reports the White House could levy tariffs on another $267 billion worth of Chinese imports. Reportedly, investors were also concerned about tighter monetary policy ahead, given last month’s wage growth.

According to the monthly employment report from the U.S. Bureau of Labor Statistics, non-farm payroll employment increased by 201,000 in August, leaving the nation’s unemployment rate unchanged at 3.9%. Through the year, average hourly wage earnings are 2.9% higher at $27.16.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 20 points.

*******************************

“Beef trade has been supportive of beef prices. The bigger trade concern for cattle is the indirect effects from decreased trade opportunities for pork,” says Brenda Boetel, Extension livestock economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets.

Although U.S. beef exports remain at a heady pace this year, analysts with USDA’s Economic Research Service (ERS), lowered the expected value next year based on lower values as volume increases. According to USDA’s quarterly Outlook for U.S. Agricultural Trade, next year’s estimate of $7.1 billion worth of beef and veal exports is $100 million less than this year’s projection.

Based on expectations for weaker demand and retaliatory tariffs pressuring prices lower, the estimated value from pork exports next year was reduced by $300 million to $5.1 billion.

Boetel notes export markets so far this year absorbed large amounts of increased beef and pork production.

“Increasing or decreasing market export opportunities is similar to increasing or decreasing the size of the cattle herd,” Boetel explains. “It takes a long time to increase the number, but we can lose our markets very quickly.”

Consequently, there is urgency for the U.S. to resolve outstanding trade issues preventing or reducing export trade.

“The short-term excitement over the U.S.—Mexico agreement has worn off as people realize the agreement isn’t finalized or ratified,” Boetel explains. “Getting NAFTA finalized would free up trade negotiators for more discussions with China. Beginning those negotiations with China now may possibly have fortuitous timing as China will start needing U.S. soybeans in the next few months, as well as U.S. pork. The Chinese demand for U.S. soybeans and pork will depend on trade as well as impacts felt from the African Swine Fever.”

By | September 9th, 2018|Daily Market Highlights|

Cattle Current-Sept. 7, 2018

Negotiated cash fed cattle trade remained undeveloped through late Thursday afternoon. There was some light trade on light to moderate demand in the western Corn Belt. Though too few transactions to trend, early live sales were $1 higher than last week’s low price in the region at $107.00-$108.50/cwt. Early dressed sales were steady to $2 higher at $170.

Limited trade and pressure on wholesale beef values helped hold Cattle futures in check Thursday, narrowly mixed and range-bound.

Other than 15¢ and 2¢ lower in the front two contracts, Live Cattle futures closed unchanged to 20¢ higher.

Other than unchanged and 5¢ higher in the front two contracts, Feeder Cattle futures closed 15¢ to 32¢ lower.

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

Choice boxed beef cutout value was $1.65 lower Thursday afternoon at $208.75/cwt. Select was $3.08 lower at $197.83.

*******************************

Major U.S. financial indices closed mixed again Thursday, mirroring the previous session. Tech stocks applied pressure, as did another day of lower crude oil prices.

The Dow Jones Industrial Average closed 20 points higher. The S&P 500 closed 10 points lower. The NASDAQ was down 72 points.

*******************************

U.S. beef exports posted another near-record month in July, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

U.S. beef exports in July climbed 12% in volume compared to the previous year at 116,575 metric tons (mt). Value for July was 16% more than the previous year at $722 million, just slightly below the May 2018 record of $722.1 million. For January through July, beef exports established a record pace in both volume (10% more year over year at 779,450 mt) and value, which was 20% more than the same period year ago at $4.76 billion.

Beef export value in July averaged $326.18 per head of fed slaughter, up 9% from a year ago. Through July this year, per-head export value was up 16% to $318.31.

“The worldwide momentum for U.S. beef has rarely been as strong as it is today,” says Dan Halstrom, USMEF president and CEO.  “To a large degree our mainstay Asian markets are driving this growth, but emerging markets in Asia and in the Western Hemisphere are also displaying a tremendous appetite for U.S. beef and contributing significantly to the surge in export value. From high-end restaurants to convenience stores, U.S. beef is gaining new fans across the globe on a daily basis.”

Beef exports in July accounted for 14% of total beef production. For January through July, exports accounted for 13.5% of total beef production, up from 12.8% last year.

By way of comparison, July U.S. pork exports were 1.5% more than the previous year for volume but 5% less for value at $465.3 million. Retaliatory duties imposed by Mexico and China are behind the decline.

By | September 6th, 2018|Daily Market Highlights|

Cattle Current-Sept. 6, 2018

Odds are improving for at least steady cash fed cattle prices this week.

For instance, Choice 2-4 steers sold $1 higher at Sioux Falls Regional in South Dakota at $106-$108/cwt.

There were 512 head offered in the weekly Fed Cattle Exchange auction and no takers. One lot of Kansas heifers was passed out at $106.

In the country, trade was very limited on light to moderate demand in Nebraska and the western Corn Belt through Wednesday afternoon. There were a few early dressed sales at $170/cwt.—too few to trend—which was steady with last week.

Despite light trade and early pressure, notions of firm to higher cash bids for fed cattle helped Feeder Cattle futures close mostly higher; mostly narrowly mixed for Live Cattle.

Other than an average of 74¢ lower in the front two contracts, Live Cattle futures closed narrowly mixed, 15¢ lower to 7¢ higher.

Other than unchanged and 35¢ lower at the front of the board, Feeder Cattle futures closed an average of 50¢ higher (7¢ to 92¢ higher).

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

Choice boxed beef cutout value was 42¢ lower Wednesday afternoon at $210.40/cwt. Select was $1.30 lower at $200.91.

*******************************

Major U.S. financial indices closed mixed Wednesday, with pressure from tech stocks. Support included reports that the U.S. and Canada renewed trade talks.

The Dow Jones Industrial Average closed 22 points higher. The S&P 500 closed 8 points lower. The NASDAQ was down 96 points.

*******************************

Overall, pasture and range conditions improved slightly last week, according to the latest weekly Crop Progress report (week ending Sept. 2). Among states with 35% or more of pasture and range rated as Poor or Very Poor, week-to-week conditions improved in Arizona, Colorado, Missouri, New Mexico and Texas.

Nationally, 42% of pasture and range is in Good (36%) or Excellent (6%) condition, 2% more than a week earlier, but 5% less than a year earlier. 28% is rated as Poor (18%) or Very Poor (10%), which is 2% less than a week earlier and 7% more than last year.

States with 35% or more pasture and range rated as Poor or Very Poor include: Arizona (64%), California (45%), Colorado (48%), Missouri (54%), Nevada (35%), New Mexico (46%), Oregon (73%), Rhode Island (70%), Texas (53%), Utah (57%) and Washington (57%). 

*******************************

With conditions generally favorable for early to mid September winter wheat planting in his state, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, offers some thoughts about stocker opportunities, in his weekly market comments

“Profitability of winter stockers (purchased in October) will depend on numerous budget factors including purchase price, length of grazing period, rate of stocker gain, wheat pasture cost and, of course, selling price in late February or early March,” Peel explains.

On the buy side of the equation, Peel says seasonal and futures price projections suggest an October low price range in Oklahoma of $163-$168/cwt. for a steer calf (Med. and Large 1) weighing 475 lbs.

“Exceptionally good wheat pasture demand could hold prices at the upper end of the range or higher, while any delays in wheat pasture development could allow prices to drop to the low end of the range or below,” according to Peel.

As for marketing, Peel points to the March Feeder Cattle futures contract of $145-$146.

“This implies an Oklahoma price for 750 lbs. steers in early March of $146-$148/cwt. given an expected basis of roughly $1.50/cwt.,” Peel says. “Budget assumptions can vary widely, but this appears to be a price that more than covers breakeven cost of production for winter grazing. Producers should develop and evaluate budgets which reflect their particular situation. It may be that current futures prices offer an opportunity to protect a decent margin for winter grazing programs.”

By | September 5th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 5, 2018

Negotiated cash fed cattle traded ended up generally $2.00 to $2.50 lower on a live basis last week at mostly $107 (range of $106.00 to $108.50). Dressed trade was $3-$4 lower at $170.

Despite softer cash prices, Cattle futures gained strength Monday, surprising more than a few folks. Support likely included firming wholesale beef values and opening the books on a new month.

Live Cattle futures closed an average of $1.20 higher.

Feeder Cattle futures closed an average of $2.09 higher ($1.62 to $2.70 higher).

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

Choice boxed beef cutout value was $1.13 higher Monday afternoon at $210.82/cwt. Select was 94¢ higher at $202.21.

*******************************

Major U.S. financial indices closed marginally lower Monday, pressured by trade worries once again, concerning Canada and China.

The Dow Jones Industrial Average closed 12 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 18 points.

*******************************

Agricultural producer sentiment increased by 12 points in August to 129, according to the latest Purdue University/CME Group Ag Economy Barometer. That was still significantly lower than sentiment in May and June.

The advance was due mostly to a 22-point rise in the Index of Current Conditions, versus an increase of 6 points in the Index of Future Expectations. The barometer is based on a monthly survey of 400 agricultural producers from across the country.

“Farmer sentiment improved over the past month, but producers are uncertain about the (tariff) aid package’s ability to offset income losses on their farm,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Before the August survey, USDA announced intentions to provide aid to farmers impacted by importers’ tariffs. When asked specifically about the relief plan’s expected impact, farmers were split on whether they believed the plan addressed concerns about tariffs’ impact on their farm’s income.

In August, producers were again asked how likely they thought it was that a trade war would reduce their farm’s net income. While 71% (virtually unchanged from July) felt their farm income would be negatively impacted, respondents who expect to see an income reduction of 20% or more fell from 35% in July to 26% in August.

By | September 4th, 2018|Daily Market Highlights|

Cattle Current Daily-Sept. 3-4, 2018

Negotiated cash fed cattle trade remained undeveloped through Friday afternoon, with too few transactions to trend on limited trade and light demand up north—a standstill in Colorado and the Texas Panhandle. There were a few early live sales reported in the western Corn Belt Thursday at $106.00-$108.50/cwt.; a few early dressed sales at $170.

Cattle futures softened Friday, pressured by lower wholesale beef values and thoughts that negotiated cash fed cattle prices could lose ground.

However, Monday’s strong surge—due in part to the announced trade pact between the U.S. and Mexico—was enough to boost Cattle futures slightly higher week to week.

Other than $3 lower in expiring spot Aug, Live Cattle futures closed an average of 34¢ lower.

Feeder Cattle futures closed an average of $1.23 lower.

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

Choice boxed beef cutout value was $2.04 lower Friday afternoon at $209.69/cwt. Select was 94¢ lower at $201.27.

*******************************

Major U.S. financial indices closed narrowly mixed Friday, following strong pressure early from reports that the U.S. and Canada had yet to reach a trade deal. Tech stocks, including Apple and Amazon, provided support.

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

*******************************

Wholesale beef values appeared to begin their seasonal slide last week with Choice boxed beef cutout value $3.63 lower week to week on Friday at $209.69/cwt. and Select $2.55 lower at $201.27.

“Demand for beef can and likely will remain strong, but wholesale beef prices will still succumb to downward pressure,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Lower wholesale prices should not be interpreted negatively as this is a seasonal trend and prices are expected to be relatively strong for the time of year and the quantity of beef products available.”

By | September 2nd, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 31, 2018

Though too few to trend, early live sales in the western Corn Belt so far this week are at $106.00-$108.50/cwt. with early dressed sales at $170. Prices in that region last week were at $108-$109 and $172-$174, respectively.

Although indications pointed toward lower cash fed cattle prices, Cattle futures firmed on Thursday as traders prepare for the end of the week and month.

Live Cattle futures closed an average of 64¢ higher.

Except for 15¢ lower in expiring spot Aug, Feeder Cattle futures closed an average of 79¢ higher.

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

Choice boxed beef cutout value was 95¢ lower Thursday afternoon at $211.73/cwt. Select was $1.34 lower at $202.21.

*******************************

Major U.S. financial indices closed lower Thursday, reportedly pressured by concerns about looming U.S. tariffs on additional Chinese imports, as well as angst about whether Canada will join the recently announced trade pact between the U.S. and Mexico.

The Dow Jones Industrial Average closed 137 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 21 points.

*******************************

Although the latest monthly USDA Cold Storage report noted a 12% increase in year-over-year frozen beef supplies, David Anderson, Extension livestock economist at Texas A&M University points out most of the increase (89%) was boneless beef, versus beef cuts.

“It seems likely that the increase in boneless beef stored supplies is related to increases in cull cow slaughter and beef imports. The small growth in cuts would suggest that beef demand is keeping up with large beef supplies,” Anderson explains, in the latest issue of In the Cattle Markets.

By | August 30th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 30, 2018

If fat cattle auctions are any indication, negotiated cash fed cattle prices are shaping up to be lower this week.

For instance, fed steers and heifers traded $2-$3 lower at Sioux Falls Regional in South Dakota where Ch 2-4 steers brought $105.60-$107.25/cwt.

Likewise, Choice steers were $2.00-$2.25 lower at Tama, IA, bringing $107.25-$108.36

There were 751 head offered in the weekly Fed Cattle Exchange auction Wednesday, but no takers.

Cattle futures were lightly traded again Wednesday, closing mostly narrowly mixed, with no apparent impact from the USDA announcement about a confirmed case of atypical BSE. It was found in a 6-year-old mixed-breed beef cow in Florida. The animal never entered slaughter channels and never presented a risk to the food supply, or to human health in the United States. Atypical BSE generally occurs in older cattle, usually 8 years of age or older. It seems to arise rarely and spontaneously in all cattle populations.

Except for $1.37 higher in nearly spent spot Aug, Live Cattle futures closed an average of 19¢ higher across the front half of the board and then an average of 26¢ lower.

Feeder Cattle futures closed an average of 17¢ lower across the front half of the board, and then an average of 84¢ lower.

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

Choice boxed beef cutout value was 28¢ higher Wednesday afternoon at $212.68/cwt. Select was 73¢ lower at $203.55.

*******************************

Major U.S. financial indices closed higher again Wednesday, led by rallying tech stocks, including Amazon and Apple. Reports that Canada is rejoining the NAFTA talks also provided support.

The Dow Jones Industrial Average closed 60 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 79 points.

*******************************

One downside to the nation’s strong economy and purportedly higher average wages is that it’s making it tougher to hire agricultural workers, which was already a vexing challenge.

According to a new study from CoBank’s Knowledge Exchange Division, manual laborers are chasing higher wages offered in industries like transportation, construction, hospitality and mining, forcing agriculture employers to increase wages at a faster rate to compete.

“Wages have historically been higher in these other industries compared to most farm labor,” says Ben Laine, a senior economist with CoBank. “The difference now is that these jobs are much more widely available and are more in line with the background of workers coming from Mexico.”

The shrinking number of migrant workers from Mexico also exacerbates the scarcity of farm labor. In addition to immigration controls like tightening borders and increased immigration enforcement, birthrates in Mexico are falling and populations are moving toward urban areas, leaving fewer people with agricultural backgrounds who would be interested in U.S. farm work.

The CoBank study, Help Wanted, is broken into two sections: Wage Inflation and Worker Scarcity; U.S. Agribusiness Experience Hiring Headaches.

“Labor accounts for a significant share of overall operational costs for many types of farms, particularly specialty crops and dairies,” Laine says. “In 2016, labor costs on all farms made up about 10% of gross income while in the specialty crop sector, that share was closer to 27%.” 

By | August 29th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 29, 2018

Cattle futures broke hard from the outset Tuesday, following the previous session’s strong rally. Apparent short covering by the end lifted futures well off of session lows. Overall, it was the same continued light trade and lack of open interest mired in a months-old range.

Live Cattle futures closed an average of 70¢ lower (40¢ to $1.05 lower).

Feeder Cattle futures closed an average of 88¢ lower.

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

Choice boxed beef cutout value was $1.10 lower Tuesday afternoon at $212.53/cwt. Select was 44¢ lower at $204.41.

*******************************

Major U.S. financial indices edged higher Tuesday, following the previous session’s steep gains. Continued support seemed mostly due to optimism from Monday’s announced trade deal between the U.S. and Mexico.

The Dow Jones Industrial Average closed 14 points higher. The S&P 500 closed fractionally higher. The NASDAQ was up 12 points.

*******************************

It might be time to order new earflaps, if the 2019 Farmers’ Almanac (FA) winter forecast is close to reality.

“Contrary to some stories floating around on the internet, our time-tested, long-range formula is pointing towards a very long, cold, and snow-filled winter,” says FA editor, Peter Geiger. FA long-range forecasts are based on a mathematical and astronomical formula developed in 1818.

The Farmers’ Almanac forecasts the coldest weather of this winter season to pour south from Canada and blow into the Northeast, New England, Great Lakes, Ohio Valley, and Southeast during mid-February. Above-normal snowfall is predicted for the Great Lakes states, Midwest, and central and northern New England. The Pacific Northwest and Mid-Atlantic regions of the country are also forecast to have an abundance of snow and wet/icy conditions this winter.

By | August 28th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 28, 2018

Logic suggested follow-through selling in Cattle futures to start the week, given Friday’s Cattle on Feed report showing about 2% more feedlot placement in July than expected. Instead, they roared higher, helped along by news that the U.S. and Mexico reach a new trade agreement (see below).

Besides which, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out in his weekly market comments, feedlots remain current in marketing, despite the increased cattle numbers.

Live Cattle futures closed an average of $2.04 higher (95¢ to $2.60 higher).

Feeder Cattle futures closed an average of $2.58 higher ($1.02 to $3.60 higher).

The weighted average fed steer price (5-area Direct) was $1.22 lower last week on a live basis at $108.77/cwt. It was 32¢ lower in the beef at $172.94.

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

Choice boxed beef cutout value was 31¢ higher Monday afternoon at $213.63/cwt. Select was $1.03 higher at $204.85.

*******************************

The U.S. and Mexico reached a free trade agreement Monday, which should bolster the price outlook for some commodities and could smooth the way for trade talks with Canada.

“After a year of tough negotiations, the United States and Mexico reached a trade agreement that is fair and reciprocal and will strengthen both nations’ economies,” according to a statement from U.S. Vice President Mike Pence. “The U.S.–Mexico Trade Agreement is a win for American ranchers, manufacturers, and auto workers. Our nations have agreed to new rules that will maintain duty free access for agricultural goods on both sides of the border. In addition, we have agreed to eliminate non-tariff barriers and take other steps to encourage more agriculture trade between our two countries. Unlike any previous bilateral trade deal, this agreement includes the strongest labor standards, and these requirements are fully enforceable. The President and our entire Administration are grateful to President Peña Nieto and his negotiating team for their good faith efforts to get this deal done. Today is a win for the American people and we look forward to working with members of Congress in both parties to swiftly approve this new trade agreement.”

“This is nothing short of a great victory for farmers and ranchers, because locking in our access to Mexican markets is critical to supporting farm income and strengthening rural communities. Mexico has historically been a great customer and partner and we are happy to have this resolved for our agricultural producers,” said U.S. Agriculture Secretary Sonny Perdue. “We now hope that Canada will see the need to settle all of the outstanding issues between our two nations as well, and restore us to a true North American Free Trade Agreement.”

*******************************

Major U.S. financial indices jumped higher Monday, with news of the trade deal between the U.S. and Mexico.

The Dow Jones Industrial average closed 259 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 71 points.

By | August 27th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 27, 2018

Negotiated cash fed cattle trade was $1-$2 lower last week at $108/cwt. (western Corn Belt) to $109.50. Dressed trade was steady to $2 lower at $171-$174.

Softer cash fed cattle prices, the lack of open interest and anxiety about Friday’s monthly Cattle on Feed report (see below) pressured Cattle futures sharply lower to end the week.

Except for 57¢ and 7¢ lower in the back two contracts, Live Cattle futures closed an average of $1.51 lower.

Except for 17¢ higher in soon-spent spot Aug and 95¢ lower in the back contract, Feeder Cattle futures closed an average of $1.71 lower.

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

Choice boxed beef cutout value was $1.05 lower Thursday afternoon at $213.32/cwt. Select was 17¢ lower at $203.82.

*******************************

Major U.S. financial indices closed higher Friday, amid broad economic optimism.

The Dow Jones Industrial average closed 133 points higher. The S&P 500 closed 17 points higher. The NASDAQ was up 67 points.

*******************************

USDA’s monthly Cattle on Feed report will likely be viewed as bearish by the trade with more placements than many expected and the most cattle on feed Aug. 1 since the data series began in 1996.

Placements in July—in feedlots with 1,000 head or more capacity—were 1.74 million head, which was 7.86% more (+127,000 head) than the previous year. That’s about 2% more than popular expectations. In terms of weight distribution, 40.19% went on feed weighing 699 lbs. or less; 44.89% weighing 700-899 lbs.; 14.93% weighing more than 900 lbs.

Marketings in July of 1.87 million head were 4.99% more (+89,000 head) than last year.

Cattle on feed Aug. 1 of 11.09 million head were 4.61% more (+489,000 head) than last year.

By | August 25th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 24, 2018

At $109/cwt. Thursday, negotiated cash fed cattle trade in the Southern Plains was $1.50 lower than the previous week, amid moderate trade and light to moderate demand. Live trade in other regions this week was generally steady to $1 lower at $108-$110, but mostly $109.00-$109.50. Dressed sales were steady to $1 either side of even at $172-$174.

Cattle futures closed narrowly mixed to lower Thursday, pressured by softer cash prices and perhaps some positioning ahead of Friday’s monthly Cattle on Feed report. Trade continued sluggish and open interest continued to decline.

Live Cattle futures closed an average of 35¢ lower.

Feeder Cattle futures closed 25¢ lower to 32¢ higher.

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

Choice boxed beef cutout value was 33¢ higher Thursday afternoon at $214.37/cwt. Select was 2¢ higher at $203.99.

*******************************

Major U.S. financial indices closed lower Thursday, pressured by trade worries and White House legal issues.

The Dow Jones Industrial average closed 76 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 10 points.

*******************************

Unsurprisingly, given drought-forced cattle movement, there’s plenty of range in expectations for Friday’s monthly Cattle on Feed report. Depending on the analyst or survey considered, July placements will be 5-8% more than the prior year, July marketings will be from 2% less to 5% more and the Aug. 1 cattle on feed number will be 4-5% more.

For instance, according to Allendale, Inc., “July Placements are expected to be 8.7% over last year at 1.756 million head. This is the largest July placement in six years. It would also mark three months in a row of higher than last year placements. High placements have been seen despite profitability concerns.”

Allendale anticipates a July marketing total of 1.2% less than the previous year for a total of 1.763 million. The firm expects total cattle on feed Aug. 1 of 11.224 million head, which would be 5.8% more than last year and a record high since the current data-series began in 1996.

*******************************

U.S. beef production, was 6% more than the previous July at 2.23 billion lbs., according to the monthly USDA Livestock Slaughter report released Thursday. Total cattle slaughter of 2.77 million head was also 6% higher. The average live weight was 3 lbs. lighter at 1,330 lbs. Keep in mind, there was one more workday this July. Accumulated beef production for January through July was 4% more than the same period last year at 15.42 billion lbs.

Likewise, pork production was 6% more year over year at 1.99 billion lbs. Hog slaughter totaled 9.60 million head, up 6% from July 2017. The average live weight was unchanged from the previous year, at 277 lbs.

In July, U.S. commercial red meat production was 6% more than the previous year at 4.24 billion lbs. For January through July, commercial red meat production was 4% more at 30.5 billion lbs.

By | August 23rd, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 23, 2018

There were only 359 head offered—two lots of Kansas heifers—in the weekly Fed Cattle Exchange Auction, but 280 head sold for a weighted average price of $109.50 (delivery at 1-9 days). That’s 50¢ lower than most of the country trade in the region last week.

“Packers are buying cattle in the country at $109.00-$109.50 and were not willing to push any higher than that at the auction,” said the AMS reporter on hand at Sioux Falls Regional Livestock in South Dakota. Choice 2-4 steers brought $108-$109.25 at the auction with estimated dressed cost of $173-$175, some to $176.

Likewise, Ch 2-4 steers brought $109.41-$110.44 at Tama Livestock Auction in Iowa.

Though too few to trend, USDA reported country trade in the region at $108-$110, which was steady to $1 lower than the previous week. Trade in the Northern Plains continued 50¢ to $1.00 lower at $109.00-$109.50.

Although closing above session lows, Cattle futures sagged lower from the outset Wednesday. Commodities had a rough day, in general. Some chalked pressure up to lower outside markets and uncertainty surrounding trade. Others suspect it was mostly algo-trading in the driver’s seat.

Live Cattle futures closed an average of $1.25 lower (67¢ to $1.57 lower).

Except for 47¢ lower in spot Aug, Feeder Cattle futures closed an average of $2.03 lower.

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

Choice boxed beef cutout value was 47¢ higher Wednesday afternoon at $214.04/cwt. Select was 11¢ lower at $203.97.

*******************************

Major U.S. financial indices closed mixed Wednesday with continued strong quarterly earnings providing a counterweight to concerns about the President’s legal troubles.

The Dow Jones Industrial average closed 88 points lower. The S&P 500 closed 1 point lower. The NASDAQ was up 29 points.

*******************************

Projected feedlot returns continue on the negative side (cash to cash basis) through the rest of the year, but are significantly more robust than expectations just a few months ago, according to the August Historical and Projected Kansas Feedlot Net Returns.

For instance, projected steer closeouts increase from an estimated -$109.31 per head in July ($82.95/cwt. FCOG*) to -$10.31 in December ($83.94 FCOG).

Likewise, projected heifer closeouts increase from an estimated -$79.18 in July ($88.80 FCOG) to -$11.75 in December ($90.46 FCOG).

“Returns for August-October improved from last month, mainly reflecting increased fed cattle price expectations,” says Glynn Tonsor, agricultural economist at Kansas State University, author of the report.

*Feeding Cost of Gain

By | August 22nd, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 22, 2018

Cattle futures closed narrowly mixed to slightly lower Tuesday amid sluggish action and participation as the trade awaits direction from the cash market.

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

Choice boxed beef cutout value was 41¢ lower Tuesday afternoon at $213.57/cwt. Select was $1.79 higher at $204.08.

Except for 2¢ to 20¢ higher in the front three contracts, Live Cattle futures closed an average of 28¢ lower.

Feeder Cattle futures closed an average of 39¢ lower.

*******************************

Major U.S. financial indices continued to rise Tuesday amid positive economic news, higher crude oil prices and chatter about the longest bull market in history.

The Dow Jones Industrial average closed 63 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 38 points.

*******************************

“Looking at the rest of 2018, feeder prices are expected to be a little lower than during the same period of 2017,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest issue of In the Cattle Markets. “We typically see seasonal feeder price declines heading into September and October, and the large supplies of calves this year provide some reasoning for that seasonal pattern to hold this year. Looking beyond 2018, the slower herd growth numbers begin to paint a brighter price picture for 2019 and 2020. If the strong domestic economy maintains or grows and exports continue to gain steam, it is not difficult to project higher prices in the Fall of 2019 compared to fall 2018.”

In the meantime, Maples says increasing beef production will pressure prices. He explains beef production increased 6.4% in 2016 and 3.8% last year.

“Current forecasts suggest about a 4% increase in 2018, and 1.5% in 2019,” Maples says. “Put it all together and that would be about a 16% increase in beef production in just four years. This would be the fastest four-year growth since 1973-1977. The increases are slowing, though. All signs are pointing to slower herd expansion in 2018 and 2019. With respect to the cattle cycle, recent cowherd trends suggest 2020 could potentially mark the end of the current U.S. cattle inventory build-up. It is important to note that this would not be the end of a cycle, just the increasing segment of the cycle.”

By | August 21st, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 21, 2018

Negotiated cash fed cattle trade ended up mostly 50¢ to $1 lower last week at mostly $110/cwt. Dressed sales were $1-$3 lower at mostly $173. The weekly 5-area fed steer price was $1.07 lower week to week on Monday at $109.91 live.

Cattle futures edged lower, but firmed after early-session pressure from last week’s softer cash fed cattle prices. Support included sharply higher wholesale beef prices, reaching their highest levels since June.

Choice boxed beef cutout value was $2.60 higher Monday afternoon at $213.98/cwt. Select was $1.37 higher at $202.29.

Except for unchanged to 7¢ higher in the middle of the board, Live Cattle futures closed an average of 21¢ lower.

Except for 2¢ higher in the back contract, Feeder Cattle futures closed an average of 44¢ lower (5¢ lower to $1.32 lower).

*******************************

Major U.S. financial indices extended gains Monday, with a decline in Treasury yields and higher hopes that trade issues between the U.S. and a number of countries will find resolution.

Mergers and acquisition news were also supportive, including news that Tyson Foods will purchase Keystone Foods—a major meat supplier to leading Quick Service restaurants—from Marfrig Global Foods for $2.16 billion.

According to Tom Hayes, president and CEO of Tyson Foods, “…Keystone provides a significant foundation for international growth with its in-country operations, sales and distribution network in high growth markets in the Asia Pacific region, as well as exports to key markets in Europe, the Middle East and Africa.

The Dow Jones Industrial average closed 89 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 4 points.

*******************************

African Swine Fever (AFS) is threatening China’s swine industry, the world’s largest hog population. Three cases have been confirmed so far—in three provinces with a fourth implicated—according to the Swine Health Information Center (SHIC). The first was confirmed Aug. 3 and the latest Aug. 20.

AFS is a highly contagious hemorrhagic disease that affects pigs of all ages, according to the World Organization for Animal Health Organization (WHO).

“With high virulence forms of the virus, ASF is characterized by high fever, loss of appetite, haemorrhages in the skin and internal organs, and death in 2-10 days on average. Mortality rates may be as high as 100%,” according to a WHO fact sheet.

Although some pork production systems in China are similar to those in the U.S., SHIC explains much of domestic consumption in China comes from small production units—family or neighborhood—with pigs fed human food scraps.

“The swine industry has never seen an ASF outbreak in such a production landscape, and control measures are untested,” according to the SHIC Monitoring Report. “The Chinese industry has had difficulties in controlling FMD (Foot and Mouth Disease) and CSF (Classical Swine Fever), and has relied heavily on the use of vaccines. As a vaccine is not available for ASF, the industry is thus reliant on heightened biosecurity, rapid diagnosis, complete isolation, and then elimination of infected pigs and contaminated materials.”

By | August 20th, 2018|Daily Market Highlights|

Cattle Current daily-Aug. 20, 2018

Negotiated cash fed cattle sales were at $109.00-$110.50/cwt. in Nebraska through Friday afternoon. That was steady to $2 less than previous week. Dressed trade was at mostly $173, which was $2 less than the prior week. Elsewhere, trade remained undeveloped for the week, based on USDA reports.

Despite that, Cattle futures gained ground, supported by extended gains in Lean Hog futures and strengthening wholesale beef values.

Live Cattle futures closed an average of 97¢ higher (47¢ higher at the back of the board to $1.60 higher in near Oct).

Feeder Cattle futures closed an average of $1.13 higher (67¢ higher to $1.70 higher).

Boxed beef cutout values were higher on Choice and weaker on Select with moderate to fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.28 higher Friday afternoon at $211.38/cwt. Select was 54¢ lower at $200.92.

*******************************

Major U.S. financial indices extended gains from the previous session, buoyed by reports that President Trump and Chinese leader Xi Jinping are working on plans to discuss trade issues.

The Dow Jones Industrial average closed 110 points higher. The S&P 500 closed 9 points higher. The NASDAQ was up 9 points.

*******************************

“In the recent past, price movements in the cattle markets and most agricultural commodity markets, for that matter, have been attributed to weather events, trade issues or some other newsworthy disgruntlement,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, the softening that is taking place in today’s market seems to have more to do with the seasonal price patterns established through supply and demand factors.”

Although prices for feeders and fed cattle continue higher than many expected, Griffith points out feeder cattle prices typically peak in August and then soften heading into fall.

“Softer prices on calves and feeder cattle this week may be a sign that the market is beginning its seasonal decline, which is fully evident in the slaughter cow market,” Griffith says. “Calves and slaughter cows tend to take a larger hit in the fall than do feeder cattle. There are sure to be producers who try to time the market during the fall months, which may result in $10 to $15 more per head on a certain week, but the strategy of trying to time the market when prices are heading lower does little to improve profitability.”

By | August 18th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 17, 2018

Cattle futures edged higher again Thursday, with even lighter trade and less open interest than in the previous session. Support for the day included Lean Hog futures—limit up in the front months, on possible resumption of trade talks with China.

Except for unchanged in spot Aug and 17¢ lower in the back contract, Live Cattle futures closed an average of 37¢ higher.

Feeder Cattle futures closed an average of 68¢ higher (7¢ higher at the back of the board to $1.22 higher in spot Aug).

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

Choice boxed beef cutout value was 85¢ lower Thursday afternoon at $209.10/cwt. Select was 85¢ higher at $201.46.

*******************************

Major U.S. financial indices, especially the DJIA climbed higher Thursday on the reports that the U.S. and China agreed to resume trade talks. Strong quarterly earnings also provided support.

The Dow Jones Industrial average closed 396 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 32 points.

*******************************

“The strength in prices (feeder) may be supported by moderate feed costs and the prospect of higher fed cattle prices in 2019,” say analysts with USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook. “The feeder steer price forecasts for the third quarter and fourth quarter of 2018 were revised higher from last month to $147-$151/cwt. and $143-$151. The 2019 full-year price forecast was raised to $138-$150/cwt.”

Fed cattle price estimates were unchanged from the previous month at $115-$117 for 2018 and $113-$122 for 2019.

“Fed cattle marketings appear to be a reflection of meatpackers managing slaughter cattle volumes, and feedlots responding to potentially better margins in the near future,” say ERS analysts. “This will likely keep pressure on fed steer prices in third-quarter 2018.”

By | August 16th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 16, 2018

Choice 2-4 steers brought $112.16 to $112.83/cwt. at Tama Iowa Wednesday. At Sioux Falls Regional in South Dakota, however, they sold steady to $1 lower than the previous week at $108.50-$109.50. That was the upper end of the range paid a day earlier in Nebraska on light trade.

There were 488 head offered in the weekly Fed Cattle Exchange Auction—none sold.

Cattle futures edged higher Wednesday, amid extremely light trade and declining open interest—range-bound with no conviction one way or the other.

Live Cattle futures closed an average of 29¢ higher.

Feeder Cattle futures closed an average of 45¢ higher.

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

Choice boxed beef cutout value was 31¢ higher Wednesday afternoon at $209.95/cwt. Select was 66¢ lower at $200.61.

*******************************

Major U.S. financial indices gave back more than the previous session’s gains on Wednesday. Pressures included tech stocks and lingering concerns about the financial crisis in Turkey.

The Dow Jones Industrial average closed 137 points lower. The S&P 500 closed 21 points lower. The NASDAQ was down 96 points.

By | August 15th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 15, 2018

Live Cattle futures closed a touch higher Tuesday, supported by stronger wholesale beef values. Feeder Cattle futures mostly leaked lower, perhaps helped along by the surge in grain markets. However, trade was extremely light in both pits.

Live Cattle futures closed an average of 36¢ higher.

Except for an average of 25¢ higher in the front two contracts, Feeder Cattle futures closed an average of 32¢ lower (5¢ to 80¢ lower).

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

Choice boxed beef cutout value was $1.21 higher Tuesday afternoon at $209.64/cwt. Select was $1.61 higher at $201.27.

*******************************

Major U.S. financial indices closed higher Tuesday, supported by a rebound in Turkey’s currency, quelling some concerns about that nation’s economy, at least for a day. Tech stocks and robust quarterly earnings from the likes of Home Depot added support.

The Dow Jones Industrial average closed 112 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 51 points.

*******************************

With Labor Day approaching—the last beef-boosting holiday for several months—Stephen Koontz, agricultural economist at Colorado State University sees little potential for cattle and beef price improvement. That has mostly to do with bountiful supplies.

In the latest issue of In the Cattle Markets, Koontz notes the seasonal increase in beef volume, as well as increased cow slaughter due to drought.

“Events in substitute meat markets and trade demand also appear unlikely to provide substantial relief for beef prices,” Koontz says. “Pork production will be up a solid 5% this coming fourth quarter, with consumption up a likely 2.5%. Poultry production and consumption are forecasted to be up moderately but the main word to focus on is, ‘up’ from the prior year.

“Beef exports have been solid through the summer. If they continue through the fall, then this could result in about an additional 40 million lbs. per month removed from the domestic markets this year compared to last. This is a little less than 2% of typical monthly production during fourth-quarter months. Forecasts of beef production during the fourth quarter are to be up better than 3%.”

By | August 14th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 14, 2018

Last week’s 5-area direct fed steer price was $2.00 lower on a live basis at $110.98/cwt. and $2.23 lower dressed at $175.73.

Softer cash prices helped pressure Cattle futures closed lower Monday, especially nearby contracts, while stronger wholesale beef values offered support.

Live Cattle futures closed an average of $1.08 lower through the front three contracts and then an average of 48¢ lower.

Feeder Cattle futures closed an average of $1.16 lower in the front two contracts and then an average of 43¢ lower.

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

Choice boxed beef cutout value was $1.82 higher Monday afternoon at $208.43/cwt. Select was $1.89 higher at $199.66.  

*******************************

Major U.S. financial indices closed lower Monday, pressured once again by Turkey’s financial crisis and fears or rippling economic turbulence.

The Dow Jones Industrial average closed 125 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 19 points.

*******************************

Stocker demand will be the key to calf prices this fall, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. He points out forage conditions will determine the degree to which stockers can demand calves, while economic conditions will dictate their willingness to do so. That could be the difference between seasonal declines in calf prices or steeper reductions based on more cattle numbers.

“Prices for feeder cattle typically decline seasonally for all weight classes after August,” Peel explains. “Calves and stockers up to 600 lbs. (which peak in March) typically have a seasonal low price in October, while heavier feeder cattle decline from an August peak lower through the end of the year. On average, feeder cattle prices decline 4-5% from August to lows in the fourth quarter.”

All indications are that more cattle will be available through the fall this year than last. For instance, Peel points to the mid-year Cattle report indicating a calf crop this year nearly 2% more than in 2017 and estimated feeder supplies 0.5% larger.

That’s why the importance of price-supporting stocker will be magnified this year. So far, value of gain suggests stocker operators have economic incentive to buy calves.

Peel ran the numbers for Oklahoma the first week of August and came up with a value of gain of $1.19/lb. for adding 319 lbs. to a steer calf weighing 465 lbs. and purchased at $171.59/cwt. and then selling at 774 lbs. for $150.65.

“Value of gain for added feeder cattle weight is largely a reflection of feedlot demand for feeder cattle of various weights,” Peel says. “A value of gain at this level indicates relatively less feedlot demand for lightweight feeders and is an economic signal for increased stocker production. If feeder cattle prices maintain a similar price relationship into the fall and forage conditions are good, fall feeder markets may follow seasonal price patterns rather closely.”

By | August 13th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 13, 2018

Negotiated cash fed prices were mainly $2-$3 lower last week on a live basis at mostly $110-$111/cwt. Dressed prices were generally $3-$4 lower at $174-$176.

Cattle futures steadied Friday, helped along by light trade volume and sharply lower cash grain prices, tied to the monthly World Agricultural Supply and Demand Estimates.

Live Cattle futures closed narrowly mixed (12¢ lower to 20¢ higher).

Except for unchanged in Jan, Feeder Cattle futures closed an average of 27¢ higher.

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

Choice boxed beef cutout value was 55¢ higher Friday afternoon at $206.61/cwt. Select was 32¢ lower at $197.77. 

*******************************

Major U.S. financial indices closed sharply lower Friday, with global markets rattled by the blooming financial crisis in Turkey.

The Dow Jones Industrial average closed 196 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 52 points.

*******************************

Beef production for this year was reduced 56 million lbs. from the previous month’s forecast to 27.09 billion lbs. in August World Agricultural Supply and Demand Estimates (ERS) released Friday.

“The decline in beef production largely reflects a slower pace of marketings in the third quarter,” say analysts with USDA’s Economic Research Service (ERS). “Cow slaughter is raised, but recent carcass weight data and a larger proportion of cows in the slaughter mix led to a reduction in expected carcass weights during the second half of the year.”

Fed steer prices (5-area Direct) were unchanged at the midpoint, though. The third-quarter price is forecast at $107-$111/cwt. Estimates for the fourth quarter are $109-$115; $116-$126 for the first quarter next year.

Total red meat and poultry production for this year was raised 27 million lbs. to 103.12 billion lbs. based on increased broiler production.

Corn prices should continue on the lower end of the scale.

“Corn production is forecast at 14.6 billion bu., down less than 1% from last year. Based on conditions as of August 1, yields are expected to average 178.4 bu./acre, up 1.8 bu. from 2017,” said analysts with the National Agricultural Statistics Service (NASS), in the monthly Crop Production report. “If realized, this will be the highest yield on record for the United States. Area harvested for grain is forecast at 81.8 million acres, unchanged from the June forecast, but down 1% from 2017.”

The season-average corn price received by producers is down 20¢ at the midpoint at a range of $3.10 to $4.10/bu.

By | August 11th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 10, 2018

Apparently, negotiated cash fed cattle trade will continue the trend of recent weeks: move-ahead one week with strong volume and then retreat the next.

Fed cattle sold mainly $3-$4 lower on a dressed basis yesterday at $174-$175/cwt. in Nebraska and the western Corn Belt; a few up to $179 in both regions for the week. Live trade in the western Corn Belt was mostly $2 lower at $109-$112.

Cattle futures started out sharply lower, but were able to pare some of the losses by session’s end. The notion of lower cash prices could have been part of the pressure. Likewise, chatter about the unwinding of hog and cattle spreads may have played a role. More than anything, though, it had the feel of one of those piling-on algo-trading days.

Live Cattle futures closed an average of $1.69 lower through the front three contracts and then an average of 42¢ lower.

Feeder Cattle futures closed an average of $1.02 lower (72¢ to $1.30 lower).

Boxed beef cutout values were firm for Choice and lower for Select on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 33¢ higher Thursday afternoon at $206.06/cwt. Select was 77¢ lower at $198.09.    

*******************************

Major U.S. financial indices closed mixed Thursday, once again supported by tech stocks and capped by trade worries.

The Dow Jones Industrial average closed 74 points lower. The S&P 500 closed 4 points lower. The NASDAQ was up 3 points.

*******************************

Most bankers in the Eighth Federal Reserve District expect farm income to continue to decline in the third quarter, based on the second-quarter survey of 24 agricultural banks in the region.

“Bankers have reported lower comparative income levels since the fourth quarter of 2013, reaching a low point in the second quarter of 2016,” according to the Agricultural Finance Monitor published by the Federal Reserve Bank of St. Louis. “This correlates with an extended period of depressed prices for commodities.”

The Eighth District includes all or parts of seven Midwest and Mid-South states: Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

The outlook varies across and within regions, of course.

“Farm income in our region is not as volatile as it is in row crop areas. We are mostly contract poultry and animal production. Independent cattle producers make up the balance of our agriculture production; those prices are off the highs but have stabilized,” says an Arkansas lender.

Similarly, a Missouri lender explained demand for recreational and low-income producing properties is increasing, as buyer confidence grows in the economy.

Quality farmland values in the district declined 3.5% in the second quarter but cash rents increased by 0.4% compared with a year ago.

Conversely, ranchland or pastureland values increased 1.6% relative to a year ago, while cash rents declined by 9%. The drop in cash rents for ranchland or pastureland was the largest percentage drop recorded since the fourth quarter of 2016.

By | August 9th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 9, 2018

Only 464 head—four lots from Kansas—were offered in the weekly Fed Cattle Exchange Auction Wednesday. None sold, but two lots were passed out at $112/cwt.

Country trade remained undeveloped, although there were a handful of cash trades in Nebraska, but too few to trend. A few traded live at $112/cwt. and a few in the beef at $179.

After early follow-through pressure, especially for Feeder Cattle, Cattle futures firmed, closing mostly marginally higher.

Except for 25¢ and 27¢ lower in two contracts, Live Cattle futures closed an average of 10¢ higher.

Except for 12¢ lower in March, Feeder Cattle futures closed an average of 38¢ higher (5¢ to $1.02 higher).

Boxed beef cutout values were steady to firm on fairly good to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 24¢ higher Wednesday afternoon at $205.73/cwt. Select was 35¢ higher at $198.86.       

*******************************

Major U.S. financial indices closed mixed Wednesday, supported by tech stocks and capped by trade war angst. Crude Oil futures (WTI-CME) were also sharply lower.

The Dow Jones Industrial average closed 45 points lower. The S&P 500 closed fractionally lower. The NASDAQ was up 4 points.

*******************************

Low commodity prices and worries about trade helped drive the Purdue University-CME Group Ag Economy Barometer 26 points lower in July to 117.

“This summer we’ve seen tariffs placed on imports of U.S. ag products by China and Mexico that are impacting producers’ bottom line,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “This month, we asked producers whether they expect to see their net income decline as a result of trade war conflicts. Over two-thirds of respondents indicated they expect to see lower income because of trade conflicts, with over 70% of them expecting a net income decline of 10% or more.”

Sharp declines were also recorded for the Index of Current Conditions, which fell from 138 to 99, and the Index of Future Expectations, which fell from 146 to 126 in July. The Ag Economy barometer is based on a monthly survey of 400 agricultural producers from across the country.

“Commodity prices dropped sharply in June and July, and there is real concern among producers that those prices will remain low and, possibly, fall even further,” Mintert says.

Approximately 4 out of 10 producers responding to the July survey believe it’s likely that near Dec corn futures will trade below $3.25/bu. and that near Nov soybean futures will trade below $8/bu., between mid-July and this fall.

“Prices in that range would result in a significant cash flow squeeze for many farm operators,” Mintert explains. “While prices at those levels would cover variable production expenses, it would leave some farmers falling far short of covering fixed and overhead expenses.”

By | August 8th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 8, 2018

Cattle futures took a solid step lower Tuesday, led by Feeder Cattle, apparently mostly due to heavier trade and continued profit taking. However, prices at the close remained in the long-established, sideways channel.

Live Cattle futures closed an average of $1.07 lower (32¢ lower in spot Aug to $1.55 lower).

Feeder Cattle futures closed an average of $1.91 lower (62¢ to $3.12 lower).

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

Choice boxed beef cutout value was 19¢ lower Tuesday afternoon at $205.49/cwt. Select was 18¢ higher at $198.51.

*******************************

Major U.S. financial indices continued higher Tuesday, driven by quarterly earnings reports that continue more positive than expected.

The Dow Jones Industrial average closed 126 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 23 points.

*******************************

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

June beef exports of 115,718 metric tons (mt), including variety meats, were 6% more than the previous year. The value of June beef exports was 19% more year over year at $722.1 million, just slightly less than the new record set the previous month.

Beef exports for the first half of this year are also record large in both volume and value. Export volume for the first two quarters was 9% more than the same period last year at 662,875 mt. Export value was up 21% at just over $4 billion.  In previous years, export value never topped the $4 billion mark before August.

“It’s remarkable to think that as recently as 2010, beef exports for the entire year totaled $4 billion, and now that milestone has been reached in just six months,” says Dan Halstrom, USMEF president and CEO. “This should be a source of great pride for the beef industry, which has remained committed to expanding exports even when facing numerous obstacles. And with global demand hitting on all cylinders, there is plenty of room for further growth.”

Beef export value averaged $313.56 per head of fed slaughter in June, up 19% from a year ago. The first-half average was $316.94 per head, up 18%.

U.S. pork exports, though, are beginning to sag beneath the weight of trade issues.

Export volume trended lower the past two months, mainly due to lower exports to the China/Hong Kong region. June pork exports were 4.5% less than a year earlier and 3% less for value at $510.4 million. Due to strength before then, U.S. pork exports are 2% more in volume for the first six months of the year—compared to the same period last year—and 5% more in value at $3.36 billion.

“Pork exports–and especially variety meats–face a very challenging environment in China/Hong Kong due not only to retaliatory duties but also because of increasing domestic production in China,” Halstrom explains. “On the positive side, exports are achieving solid growth in most other markets and reached new heights in destinations such as Korea and Latin America.”

By | August 7th, 2018|Daily Market Highlights|

Cattle Current-Aug. 7, 2018

When last week’s tally was complete, negotiated cash fed cattle trade was mostly $1-$2 higher at $112 to $114/cwt. Dressed trade was mostly steady to $4 higher at mostly $178.

Cattle futures were a touch lower Monday, presumably on profit taking and retrenching in light of recent strength, stronger cash prices and firmer wholesale beef values.

Except for unchanged in the back two contracts, Live Cattle futures closed an average of 28¢ lower.

Feeder Cattle futures closed an average of 83¢ lower (65¢ to $1.17 lower).

At $149.74, the CME Feeder Cattle Index closed at the highest level since January.

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

Choice boxed beef cutout value was 93¢ higher Monday afternoon at $205.68/cwt. Select was $1.24 higher at $198.33.      

*******************************

Major U.S. financial indices continued higher Monday, buoyed by more positive quarterly earnings reports from the likes of Berkshire Hathaway and Tyson Foods.

The Dow Jones Industrial average closed 39 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 47 points.

*******************************

“Agricultural markets are caught in a whirlwind of trade disruptions. Direct market shocks will lead to ripple effects and are likely to affect most agricultural markets worldwide in the coming months,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “In some cases, global market shares may be affected in the short run and possibly long term as well.”

In order to anticipate how markets may be impacted, Peel suggests considering global supply and demand profiles. Among those he highlights, based on current USDA estimates:

Beef—the U.S. produces 20% of the global beef supply. Brazil is second largest at 15.7%, followed by the European Union at 12.5% and China at 11.6%.

Brazil accounts for 19.3% of global beef exports, followed by India (18.1%), Australia (15.4%) and the U.S. (13.1 percent).

The U.S. is the world’s largest beef importer (16.6%), followed by China (14.4%), Japan (10.0%), Hong Kong (7.0%) and South Korea (6.7%).

Pork—China is the largest pork producer, accounting for 48.2% of the global supply. The European Union is next at 21.2%, followed by the U.S. at 10.7%.

The EU accounts for 34.8% of global pork exports, followed by the U.S. (32.1%) and Canada (16.2%).

China is the largest pork importer (19.2%), followed by Japan (18.9%) and Mexico (15.1%).

Corn—The U.S. produces 35.9% of the world’s corn. China accounts for 20.9%, followed by Brazil (8.1%) and the EU (6.0%).

The U.S. exports 40.5% of total global corn exports, ahead of Brazil (17.3%), Argentina (15.9%) and the Ukraine (13.0%).

The European Union (12.3%) and Mexico (11.1%) are the two largest corn importers.

Soybeans—The U.S. and Brazil each produce 35.5% of the global soybean supply, followed by Argentina at 11.0%. China accounts for 62.9% of global soybean imports, followed by the European Union (9.1%) and Mexico (3.0%).

By | August 6th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 6, 2018

Weekly negotiated cash fed cattle trade was late again on Friday, but at prices reportedly $1-$2 higher than the previous week on a live basis at $113-$114/cwt. and as much as $4 high in the beef at $178.

Notions of stronger cash prices and technical buying helped Cattle futures close solidly higher.

Live Cattle futures closed an average of $1.29 higher (82¢ to $2.07 higher).

Feeder Cattle futures closed an average of $1.41 higher

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

Choice boxed beef cutout value was 95¢ higher Friday afternoon at $204.75/cwt. Select was 1¢ lower at $197.09.      

*******************************

Major U.S. financial indices closed higher Friday.

The Dow Jones Industrial average closed 136 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 9 points.

*******************************

“Amidst trade tariff and retaliation tariff cycles, one of the big takeaways in cold storage is how little pork inventories changed,” say analysts with the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor.  “Total pork in cold storage remained unchanged in the month of June compared to the previous year and was below the prior month by 10%. Of the 12 categories of pork tracked, bellies and trimmings were the only two categories to show worrisome year-over-year gains, up 130% and 38%, respectively.  Although bellies are still building back from historically low levels of the prior year, both cuts also declined relative to May inventories, providing some comfort that the market is continuing to work through large pork supplies and changing trade landscapes.”

As reported previously in Cattle Current, total pounds of beef in freezers June 30 were 3% less than the previous month, but 8% more than the same time a year earlier, according to USDA’s July Cold Storage report.

Total red meat supplies in freezers were down 7% from the previous, month but up 5% from last year.

Total frozen poultry supplies were 3% more than the previous month and 6% more than the previous year.

“As much as trade is weighing in the current market, the most recent cold storage and trade data does not reflect the full weight of what has happened or will happen in the export markets,” LMIC analysts say. “Poultry products did make the list of retaliatory actions by China. The U.S. exports very little poultry meat to China, but about 25% of total poultry meat exports go to Mexico. Larger production is the majority of what is driving the current levels in cold storage, but that could change in the coming months for poultry and pork.”

By | August 6th, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 3, 2018

After follow-through support early in the session, continued erosion in Lean Hog futures, along with light trade and declining open interest, helped pressure Cattle futures Thursday, especially Feeder Cattle. Cattle futures did close well off of session lows.

Except for 2¢ higher in away Aug, Live Cattle futures closed an average of 16¢ lower.

Feeder Cattle futures closed an average of 56¢ lower across the front half of the board and then and average of 17¢ lower.

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

Choice boxed beef cutout value was 5¢ higher Thursday afternoon at $203.80/cwt. Select was 48¢ lower at $197.10.      

*******************************

Major U.S. financial indices closed mixed Thursday, amid lingering trade worries on one hand, and continued positive quarterly earnings on the other.

The Dow Jones Industrial average closed 7 points lower. The S&P 500 closed 13 points higher. The NASDAQ was up 95 points.

*******************************

Pastureland values increased 3% year over year—up $40 per acre—for an average of $1,390 per acre, according to the 2018 Land Values Summary released by the National Agricultural Statistics Service (NASS) yesterday. Increases were steepest in the Southern Plains region—up 5.6%.

At $4,130 per acre, cropland value also increased an averaged of $40 per acre from the previous year. It was up 4.7% in the Southern Plains region.

U.S. farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,140 per acre for 2018, up $60 per acre (1.9%) from 2017 values.

“Regional changes in the average value of farm real estate ranged from an 8.3% increase in the Southern Plains region to a 1.4% decrease in the Northern Plains region,” say NASS analysts. “The highest farm real estate values were in the Corn Belt region at $6,430 per acre. The Mountain region had the lowest farm real estate value at $1,140 per acre.”

By | August 2nd, 2018|Daily Market Highlights|

Cattle Current Daily-Aug. 1, 2018

Feeder Cattle futures took another step lower Tuesday, presumably pressured mostly by surging grain prices (see below) and month-end positioning. Live Cattle followed along, to a lesser degree.

Except for 7¢ higher in away Aug, and unchanged in Feb and June, Live Cattle futures closed an average of 38¢ lower (5¢ to 75¢ lower).

Feeder Cattle futures closed an average of $1.76 lower through the front half of the board and then an average of 46¢ lower.

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

Choice boxed beef cutout value was 45¢ lower Tuesday afternoon at $204.27/cwt. Select was 40¢ higher at $198.38.   

*******************************

Major U.S. financial indices closed higher Tuesday, about gaining back what was given in the previous session. Support included chatter about global economic powers wanting to figure out how to avoid a trade war. Crude oil futures (WTI-CME) were $1.17 to $1.37 lower through the rest of the year.

The Dow Jones Industrial average closed 108 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 41 points.

*******************************

“This calendar year, calf and yearling prices are projected to be similar to 2016’s and 2017’s. In the fourth quarter of this year, calf prices may average slightly below 2017’s, but substantially above 2016’s,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “If the general trends of the first half of 2018 persist, as of January 1, 2019, the U.S. cowherd likely will be up well less than 1.0% year over year. That suggests cyclically stronger calf prices are ahead (e.g., calf prices in the fall of 2020). Pre-planning may position a cattle operation to take advantage of this market transition.”

Bottom line, those analysts explain the clearest signal in the current market resides on the supply side of the equation, with the national beef cowherd a good ways down the expansion phase of the current cattle cycle.

The recent mid-year Cattle report from USDA underscored the point with just less than 1% more beef cows year to year, along with 2.1% fewer beef replacement heifers.

“The NASS survey largely confirmed that the national herd is still growing, but importantly, at a moderating pace compared to that of recent years,” LMIC analysts say. “Looking ahead, smaller herd growth rates will translate into the rather modest year-over-year increase in beef production in 2019. If recent cowherd trends persist, 2020 could mark the end of the current U.S. cattle inventory build-up.”

By | July 31st, 2018|Daily Market Highlights|

Cattle Current Daily-July 31, 2018

Negotiated cash fed cattle trade ended last week mostly $1 lower on a live basis at $112/cwt. It was $2 lower in the western Corn Belt at $110. Dressed trade was $2-$4 lower at mostly $174-$178.

That helped dampen enthusiasm in Cattle futures Monday, with Feeder Cattle receiving extra pressure from the continued uptick in Corn prices.

Except for 15¢ higher in the back contract, Live Cattle futures closed an average of 46¢ lower.

Feeder Cattle futures closed an average of 86¢ lower.

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

Choice boxed beef cutout value was 42¢ lower Monday afternoon at $204.72/cwt. Select was 29¢ lower at $197.98.      

*******************************

Major U.S. financial indices closed lower Monday, pressured once again by sliding tech stocks and trade jitters. Crude oil futures were solidly higher, though.

The Dow Jones Industrial average closed 144 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 107 points.

*******************************

Setting aside current trade disputes, and acknowledging the considerable potential for U.S. beef in China, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says it will take time, patience and persistence.

Peel spent part of this summer in China teaching and researching.

“Building markets for U.S. beef in China will face several challenges. Price is one of those challenges,” Peel explains, in his weekly market comments. “Beef is expensive in China relative to other meats, even more so than in the U.S.  Although growing beef demand in China is the result of a rapidly growing urban middle-class population, beef remains expensive for many consumers. Imported beef from the U.S. is especially expensive.”

Although beef consumption is growing in China, Peel explains another formidable challenge is the role of beef in Chinese cuisine.

“Chinese cuisine is characterized by hot pot, stir-fry dishes and Chinese barbeque that use small amounts of beef in pieces or thinly sliced, rather than large cuts of beef,” Peel says. “Beef offals are very popular and more affordable for many consumers. For example, Chinese barbeque is not large quantities of brisket or other beef cuts, but is various meat products prepared on skewers.

Consequently, Peel explains highly marbled U.S. beef does not necessarily represent additional quality in many Chinese dishes, which adds to the price gap between U.S. beef and domestic Chinese beef or beef imported from most other countries.

“This is not to say that there isn’t potential for U.S. beef in China. However, it does illustrate that accessing the larger Chinese market is not simply a matter of shipping U.S. steaks to China,” Peel says.

By | July 30th, 2018|Daily Market Highlights|

Cattle Current Daily-July 30, 2018

Cattle futures closed narrowly mixed on Friday. Support in the front months appeared to be a product of short covering and month-end position squaring, as much as anything. Pressure included uncertainty regarding the cash market, as well as the continued slide in Lean Hog futures, tied to trade disputes with China and Mexico.

Live Cattle futures closed an average of 58¢ higher in the front four contracts (5¢ higher to $1.10 higher), and then an average of 21¢ lower.

Except for 87¢ higher and 35¢ higher in the front two contracts, Feeder Cattle futures closed an average of 31¢ lower.

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

Choice boxed beef cutout value was 23¢ higher Friday afternoon at $205.14/cwt. Select was unchanged at $198.27. 

*******************************

Major U.S. financial indices closed lower Friday, led by tech stocks, including Intel and Twitter. That was despite robust second-quarter GDP of 4.1% reported by the U.S. Bureau of Economic Analysis. GDP was up 2.2% in the first quarter.

The Dow Jones Industrial average closed 76 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 114 points.

*******************************

“Boxed-beef values are sitting at the crossroads, as it appears they have put in a summer low,” say analysts with USDA’s Agricultural Marketing Service. 

If so, it ends nine consecutive weeks of declining Choice boxed beef cutout values.

During that time, Choice boxed beef cutout values declined more than $27/cwt., according to Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

“Current prices are still slightly below prices from the same week one year ago, but they have shown considerable strength compared to last year,” Griffith says. “Looking at prices from 2017, the Choice cutout peaked at nearly $251 in the middle of June and collapsed to $191 in the middle of September, which is a loss of $60. Thus, the decline in 2018 has only been 45% of the summer decline in 2017. Historical price data would imply there is still potential for downside price risk in the wholesale beef market. However, if packers can hold current prices or push them higher next week, then the risk may be very small.”

By | July 28th, 2018|Daily Market Highlights|

Cattle Current Daily-July 27, 2018

After support early, Cattle futures dropped hard Thursday before paring some of the loss. Technical selling, pushed into overdrive by algo trading could have been part of the slide. Some pointed to pressure on commodities, in general, stemming from fewer month-to-month exports of all U.S. goods in June and the widening trade deficit. The U.S. Commerce Department said yesterday that the nation’s international trade deficit was $3.6 billion more in June than May at $68.3 billion.

Live Cattle futures closed an average of $1.16 lower (97¢ higher to $1.40 lower).

Feeder Cattle futures closed an average of $1.42 lower ($1.17 to $1.60 lower).

Boxed beef cutout values were firm on moderate to fairly good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 27¢ higher Thursday afternoon at $204.91/cwt. Select was 69¢ higher at $198.27.           

*******************************

Major U.S. financial indices closed mixed Thursday. Pressure included a steep slide in Facebook on poor quarterly earnings.

The Dow Jones Industrial average closed 112 points higher. The S&P 500 closed 8 points lower. The NASDAQ was down 80 points.

*******************************

David Anderson, Extension livestock economist with Texas A&M, offers some insights to last week’s Cattle on Feed and Cattle inventory reports in the latest issue of In the Cattle Markets.

Noting the 2.01 million head marketed in June by feedlots with 1,000 head or more capacity, Anderson explains, “…the marketings rate is holding up well given the large supplies of cattle. That we are moving these large supplies of cattle is a tribute to good demand from retail and export markets and demand for fed cattle from packers. Continued good movement will be critical to cattle prices over the next six weeks approaching Labor Day.”

The number of cattle marketed last month was 0.85% more than last year. However, according to the Livestock Marketing Information Center, daily average marketing in June (adjusting for one less slaughter day than a year earlier) was 5.7% higher year over year (see graph).

Anderson points out the number of heifers on feed July 1 (4.454 million head) was nearly 8% more than a year earlier. He adds the mid-year Cattle report indicates 2.1% fewer beef replacement heifers, year over year.

“When combined with beef cow and heifer slaughter, the data continues to indicate a drastically slowing rate of herd growth,” Anderson says.

By | July 26th, 2018|Daily Market Highlights|

Cattle Current Daily-July 26, 2018

There were 1,249 head offered in the weekly Fed Cattle Exchange Auction Wednesday. None were sold, but one lot of steers from Kansas was passed out at $111/cwt., which was $2 less than last week’s price in the Southern Plains. Likewise, there was too little country trade to establish a market.

Cattle futures traded on both sides of even Wednesday, amid light trade and little direction. Other than spot Live Cattle, most contracts in both pits meandered to marginal gains or losses.

Except for unchanged in Feb, Live Cattle futures closed an average of 38¢ higher (15¢ higher to 97¢ higher in spot Aug).

Except for 7¢ higher in spot Aug and 2¢ higher in Jan, Feeder Cattle futures closed an average of 10¢ lower.

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

Choice boxed beef cutout value was 1¢ lower Wednesday afternoon at $204.64/cwt. Select was 37¢ lower at $197.58.     

*******************************

Major U.S. financial indices closed higher Wednesday, with extra support coming late in the session on reports that President Trump garnered trade concessions from the EU, including that bloc agreeing to import more U.S. soybeans.

The Dow Jones Industrial average closed 172 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 91 points.

*******************************

U.S. consumers are increasingly eating and preparing their meals at home, contrary to recent news reports that they are eating at restaurants more based on an uptick in foodservice spending, according to The NPD Group (NPD), a leading global information company.

Through its daily research of U.S. consumers’ eating behaviors, NPD shows that four out of five meals are prepared at home, and although the relationship of in-home prepared meals versus those sourced away from home has been stable for a few years, Americans still prepare more meals at home than they did a decade ago. Last year over 80% of meals were prepared and eaten in home.

Although foodservice spending has been increasing—up 2% in the year ending May 2018—foodservice visits were flat in the period compared to year ago. Foodservice spending is up primarily because the cost of a restaurant meal is increasing faster than the cost of a home-prepared meal, according to NPD. Additionally, a restaurant meal has historically cost more than an in-home meal, typically as much as three times more. So, NPD analysts say restaurant visits, whether onsite, drive-thru, or ordered for delivery, are more indicative of foodservice growth than spending, reports NPD.

While U.S. consumers might not be dining out more, they do turn to foodservice for a shortcut in their in-home meal preparation. Close to half of dinners purchased from a restaurant are consumed at home and a growing number of in-home meals are a blend of dishes prepared and items purchased ready-to-eat from a foodservice establishment. NPD’s recently published Future of Dinner study forecasts that blended meals, which include a restaurant or prepared food, will grow over the next five years.

By | July 25th, 2018|Daily Market Highlights|

Cattle Current Daily-July 25, 2018

Cattle futures edged lower Tuesday, apparently pressured more by technical selling and rally fatigue than anything else.

Live Cattle futures closed an average of 33¢ lower.

Feeder Cattle futures closed an average of 49¢ lower.

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

Choice boxed beef cutout value was 17¢ lower Tuesday afternoon at $204.65/cwt. Select was 8¢ lower at $197.95.           

*******************************

Major U.S. financial indices closed mostly higher Tuesday, with quarterly earnings beating estimates across a variety of sectors, from Alphabet-Google, to  John Deere, to Eli Lilly.

The Dow Jones Industrial average closed 197 points higher. The S&P 500 closed 13 points higher. The NASDAQ was up 1 point.

*******************************

U.S. Secretary of Agriculture Sonny Perdue announced yesterday that the U.S. Department of Agriculture (USDA) will take several actions to assist farmers in response to trade damage from unjustified tariff retaliation.

Specifically, USDA will authorize up to $12 billion in programs, which is in line with the estimated $11 billion impact of the unjustified retaliatory tariffs on U.S. agricultural goods.

“This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy,” Secretary Perdue said. “The President promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong. Unfortunately, America’s hard-working agricultural producers have been treated unfairly by China’s illegal trading practices and have taken a disproportionate hit when it comes to illegal retaliatory tariffs. USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations. The programs we are announcing today help ensure our nation’s agriculture continues to feed the world and innovate to meet the demand.”

USDA will use the following programs to assist farmers:

The Market Facilitation Program, authorized under The Commodity Credit Corporation (CCC) Charter Act and administered by Farm Service Agency, will provide payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs. This support is aimed at helping farmers manage disrupted markets, deal with surplus commodities, and expand and develop new markets at home and abroad.

USDA will use the CCC Charter Act and other authorities to implement a Food Purchase and Distribution Program through the Agricultural Marketing Service to purchase unexpected surplus of affected commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs.

Finally, the CCC will use its Charter Act authority for a Trade Promotion Program administered by the Foreign Agriculture Service in conjunction with the private sector to assist in developing new export markets for our farm products.

By | July 24th, 2018|Daily Market Highlights|

Cattle Current Daily-July 24, 2018

When all was said and done last week, negotiated cash fed cattle prices moved higher. Live sales in the Southern Plains and Nebraska were $2.00-$3.50 higher than the previous week at mostly $113/cwt. Dressed trade in Nebraska was $5-$6 higher at $178-$181. Compared to two weeks earlier, live trade in the western Corn Belt was mostly steady at $112. Dressed trade was steady to $3 higher at $178-$180.

Higher cash prices and firmer to stronger wholesale beef values helped Cattle futures move mostly higher to start the week.

Except for 20¢ lower in spot Aug, Live Cattle futures closed an average of 52¢ higher.

Except for 42¢ and 22¢ lower in the front two contracts, Feeder Cattle futures closed an average of $1.00 higher.

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

Choice boxed beef cutout value was 65¢ higher Monday afternoon at $204.82/cwt. Select was $1.03 higher at $198.03.        

*******************************

Major U.S. financial indices closed narrowly mixed Monday, with support coming from tech stocks.

The Dow Jones Industrial average closed 13 points lower. The S&P 500 closed 5 points higher. The NASDAQ was up 21 points.

*******************************

“The modest increase in beef cows, combined with a smaller inventory of beef replacement heifers, suggests that herd expansion is slowing even more in 2018 after slowing in 2017,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “However, the ratio of July 1 to Jan. 1 beef cow inventory is 102.4, a level that historically implies positive herd expansion in the current year. The ratio is down from 2015 and 2017 levels (no 2016 July Cattle report was issued), again indicating slow expansion for the current year and perhaps a peak in the cow herd inventory in 2019.” 

He’s referencing the mid-year Cattle inventory report issued by USDA Friday, showing 0.03% more beef cows than last year, but 2.13% fewer beef replacement heifers. Friday’s monthly Cattle on Feed report also underscored further increased placement of heifers.

“The July 1 quarterly inventory of heifers in feedlots was up 7.7% from last year, a large enough value to suggest further slowing in heifer retention, but down compared to the double-digit year over year increases of the previous four quarters,” Peel says.

By | July 23rd, 2018|Daily Market Highlights|

Cattle Current Daily-July 23, 2018

For another week, negotiated cash fed cattle trade remained undeveloped through Friday afternoon. Though way too few to trend, there were a few dressed trades in the western Corn belt Friday at $180, which was steady to $5 higher than the last established market in the region two weeks ago.

Lack of cash direction, and perhaps some defensive positioning ahead of the Cattle on Feed report (see below) applied some pressure to Cattle futures.

Live Cattle futures closed mixed, an average of 26¢ lower across the front half of the board, except for 2¢ higher in spot Aug, and then an average of to 36¢ higher in the back four contracts.

Feeder Cattle futures closed an average of 32¢ lower (5¢ to 77¢ lower).

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

Choice boxed beef cutout value was 32¢ lower Friday afternoon at $204.17/cwt. Select was 8¢ higher at $197.00. 

*******************************

Major U.S. financial indices closed slightly lower Friday, with strong quarterly earnings providing a counterweight to more trade worries.

The Dow Jones Industrial average closed 6 points lower. The S&P 500 closed 2 points lower. The NASDAQ was down 5 points.

*******************************

Traders should view Friday’s monthly Cattle on Feed report as neutral, coming in about dead-on with most pre-report estimates.

For feedlots with 1,000 head or more capacity, there were 1.79 million head placed on feed in June, which was 1.30% more than last year. By weight, 41.55% were placed at 699 lbs. or lighter; 42.48% at 700-899 lbs.; 15.90% at weights of 900 lbs. or heavier.

Marketings in June of 2.01 million head were 0.85% more than last year.

Cattle on feed July 1 of 11.28 million head was 4.26% (461,00 head) more than the previous year, and the most for the month since the data series began in 1996. The mix included 2% more steers than last year and 8% more heifers.

USDA also released the mid-year Cattle inventory report Friday. Depending on your leanings, there were no surprises.

All cattle and calves July 1 was estimated at 103.2 million head, which is 0.98% more (+1 million head) than the same time last year.

Beef cows of 32.5 million head are 0.93% more (+300,000 head ) than last year.

Beef replacement heifers of 4.6 million head are 2.13% less (-100,000 head) than last year.

This year’s calf crop is estimated at 36.5 million head, which would be 1.93% more (+691,800 head) than last year.

By | July 21st, 2018|Daily Market Highlights|

Cattle Current-July 20, 2018

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon, which helped encourage Cattle futures to wobble along in sideways fashion.

Except for unchanged in near Oct and 60¢ lower at the back of the board, Live Cattle futures closed narrowly mixed (22¢ lower to 22¢ higher).

Except for unchanged in spot Aug, Feeder Cattle futures closed narrowly mixed (32¢ lower to 20¢ higher).

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

Choice boxed beef cutout value was 31¢ lower Thursday afternoon at $204.39/cwt. Select was 17¢ lower at $196.92.          

*******************************

Major U.S. financial indices settled lower Thursday, pressured  by bank stocks.

The Dow Jones Industrial average closed 134 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 29 points.

*******************************

Commercial red meat production so far this year is 4% more than the same period a year ago at 26.3 billion lbs., according to the latest Livestock Slaughter report from USDA.

Accumulated beef production for January through June was 4% more than last year at 13.19 billion lbs. In June, beef production of 2.30 billion lbs. was 1% more than the previous year. Cattle slaughter for the month of 2.88 million head was also 1% more than the previous year. The average live weight was unchanged from the previous year, at 1,321 lbs.

Pork production in June totaled 2.01 billion lbs., 2% less than the previous year. That was with hog slaughter of 9.61 million head, down 3% from June last year. The average live weight was 1 lb. more than the previous year at 280 lbs.

For January through June, pork production was 3% more than last year.

By | July 19th, 2018|Daily Market Highlights|

Cattle Current Daily-July 19, 2018

There were only 428 head offered—all from Kansas—in the weekly Fed Cattle Exchange Auction on Wednesday, but 142 sold for a weighted average price of $112/cwt. That’s $1 higher than country prices in the region last week.

That and surging Cattle futures buoy hopes for stronger negotiated trade yet this week.

Recent stability and firming wholesale beef values helped fuel Cattle futures sharply higher Wednesday. There was also chatter about snugger supplies heading through the fall, based on demand strength.

Live Cattle futures closed an average of $1.62 higher ($1.22 higher at the back of the board to $2.52 higher in spot Aug). The spot contract closed $5 higher week to week.

Feeder Cattle futures closed an average of $2.31 higher ($1.55 higher in the back contract to $3.17 higher in spot Aug).

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

Choice boxed beef cutout value was 41¢ higher Wednesday afternoon at $204.80/cwt. Select was 23¢ higher at $197.09.

*******************************

Major U.S. financial indices closed mostly higher Wednesday, supported by positive quarterly earnings in bell-weather banks and industrials.

The Dow Jones Industrial average closed 79 points higher. The S&P 500 closed 6 points higher. The NASDAQ was fractionally lower.

*******************************

“Despite firm feeder cattle prices in June and early July, the projected feedlot margin for feeding out a 750-lb. calf that is purchased today appears to have improved, and with lower corn price forecasts for the current and following marketing years, demand for calves for finishing may increase, supporting higher feeder calf prices,” say analysts with USDA’s Economic Research Service, in the latest monthly Livestock, Dairy and Poultry Outlook.

This year’s average feeder cattle price for steers weighing 750-850 lbs. (basis Oklahoma City) is estimated at $141-$144/cwt., compared to last year’s average of $145.08, according to ERS. The July LDPO pegs feeder prices in the third quarter at $140-$144. That’s $6 more on the lower end of the range than the previous month’s estimate and $4 more on the upper end. The fourth-quarter estimate is $136-$144, compared to the previous month’s projections of  $134-$142. First-quarter feeder steer prices next year are projected at $133-$143.

Cattle placed in feedlots earlier than normal through the spring also lends price support.

“Throughout the winter and extending into the summer months, drought conditions have plagued the Great Plains area, squeezing hay and roughage supplies,” say ERS analysts. “During the winter, many calves directed to feedlots might have otherwise stayed on pastures until the spring. This limited the expectation for strong cattle placements in feedlots this spring. However, as the drought expanded into the intermountain region, available summer pastures may have become restricted as well. As a result, some stocker operations may have placed cattle in the second quarter instead of waiting until third quarter. This is likely observed in the year-over-year increase in both volume and percentage of total placements of calves weighing under 600 lbs. in May 2018.”

By | July 18th, 2018|Daily Market Highlights|

Cattle Current Daily-July 18, 2018

Cattle futures closed narrowly mixed to lower Tuesday, unable to sustain gains from the previous session. Trade was paltry and the range skinny.

Live Cattle futures closed an average of 21¢ lower, except for unchanged in the back three contracts.

Feeder Cattle futures closed an average of 48¢ lower through the front five contracts (12¢ lower to $1.10 lower) and then 5¢ to 30¢ higher.

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

Choice boxed beef cutout value was 63¢ higher Tuesday afternoon at $204.39/cwt. Select was $1.19 higher at $196.86.  

*******************************

Major U.S. financial indices closed higher Tuesday, buoyed by tech stocks and positive quarterly earnings.

The Dow Jones Industrial average closed 55 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 49 points.

*******************************

Given increased fed cattle supplies, Brenda Boetel, Extension agricultural marketing specialist at the University of Wisconsin-River Falls expects year-over-year fed cattle prices for the remainder of the year to be 5-6% less.

“Prior to any trade war, expectations were that finished cattle prices would be approximately 5% lower in 2018 than 2017,” says Boetel, in the latest issue of In the Cattle Markets. “Given the current trade situation, lower wholesale beef prices and large pork production, prices may dip even lower, but the year-over year decreases should not be at the levels seen in the second quarter of 2018.”

For perspective, Boetel says first-quarter fed cattle prices (5-area Direct) were 2.8% above 2017, but second-quarter prices were 12% less.

By | July 17th, 2018|Daily Market Highlights|

Cattle Current Daily-July 17, 2018

Cash fed cattle prices softened last week, on light volume with neither packers nor cattle feeders apparently feeling any urgency. Trade volume (5 area direct) was about a third as much as the previous week and half as much as the same week a year earlier. The average live steer price of $110.50/cwt. was $2.13 less than last week; $4.72 less in the beef at $174.05.

After pressure early in Monday’s session, though, traders pushed Live Cattle futures sharply higher, amid thin trade and led by nearby contracts and followed by Feeder Cattle. There was no change in fundamentals. Factors of support likely included continued sings of feedlot currentness, another step through heavy supplies with more success than anticipated, as well as technical buying.

Live Cattle futures closed an average of $1.10 higher (55¢ higher to $2.37 higher in spot Aug).

Feeder Cattle futures closed an average of $1.06 higher (45¢ higher in the back contract to $1.65 higher in spot Aug).

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

Choice boxed beef cutout value was 38¢ lower Monday afternoon at $203.76/cwt. Select was 70¢ lower at $195.67.

*******************************

Major U.S. financial indices closed narrowly mixed Monday, on pressure that included lower oil prices and mixed quarterly earnings reports. Crude Oil futures (WTI-CME) were down about $3 for the remainder of the year with the notion that global trade tensions will reduce overall economic activity.

The Dow Jones Industrial average closed 44 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 20 points.

*******************************

Higher acreage for corn and soybeans forecast in last week’s monthly World Agricultural Supply and Demand Estimates should help support cattle prices. Although hay acres increased, too, price impacts are likely to be regional, at least for alfalfa, according to the Livestock Marketing Information Center (LMIC).

For perspective, LMIC analysts say estimated hay acreage increased by more than 1.2 million acres, with alfalfa representing 800,000 acres of the increase.

“Nationally, the bump in alfalfa acres is not expected to have a large impact on prices, but regionally there could be lower prices compared to that of recent years,” LMIC analysts say. “The bulk of acres added in alfalfa are not from high yielding alfalfa states. States with the largest gains came from Montana, South Dakota, North Dakota, and Idaho, which are susceptible to high rates of winterkill and shorter growing seasons. Out of 47 states reporting yields, Montana, South Dakota, and North Dakota are in the bottom 10 for alfalfa yields.”

By | July 16th, 2018|Daily Market Highlights|

Cattle Current Daily-July 16, 2018

Negotiated cash fed cattle trade remained mostly undeveloped through Friday afternoon, with no trends from USDA. But, the Texas Cattle Feeders Association reported its members in the Southern Plains trading cattle at $111/cwt., which was $2 less than the previous week.

Cattle futures basically treaded water on Friday, after stronger pressure earlier in the session, with the  lack of cash direction, continued light trade and some apparent positioning ahead of the weekend.

Live Cattle futures closed an average of 35¢ lower.

Except for 30¢ lower in spot Aug and 5¢ lower in Nov, Feeder Cattle futures closed 7¢ to 35¢ higher.

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

Choice boxed beef cutout value was $2.44 lower Friday afternoon at $204.14/cwt. Select was 64¢ lower at $196.37.   

******************************      

Major U.S. financial indices held firm to higher Friday, supported by continued strength in quarterly earnings.

The Dow Jones Industrial average closed 94 points higher. The NASDAQ was up 2 points. The S&P 500 closed 3 points higher.

*****************************

“Analysis of annual yearling price volatility going back to 1992 shows that price swings this year are on track to be the smallest since 2012,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

For perspective, yearling steer prices (750-800 lbs., basis Oklahoma City) averaged $145.13/cwt. during the first six months of the year, according to LMIC. That’s $6.45 more than the same time period last year. Steer calves in the same market averaged $176.98 for the first six months, $9.61 more than a year ago.

“Based on monthly average prices, annual price swings from 1992-2002 never topped $20/cwt. Since 2012, annual price swings have been greater than $30/cwt. every year. In 2011 and 2012, the high-to-low price swings were $19.49 and $18.34, respectively,” LMIC analysts say. “Annual price swings greater than $70.00 a year were encountered in 2014 and 2015. During the last 25 years, the most frequent annual price range was $15-$20 (6 years). So far this year, the swing in monthly average prices has been $9.39. The difference in the magnitude of price swings based on weekly versus monthly data makes a statement about how much price volatility has been experienced within some of the months, even though price volatility has been less than in past years.”

By | July 14th, 2018|Daily Market Highlights|

Cattle Current Daily-July 13, 2018

Cattle futures bounced back Thursday, about as much and fast as they fell in the previous session, on the same fundamentals. Initial fear—and kneejerk reaction—over the new U.S. tariffs on Chinese imports, fueled by algo trading, provide as apt an explanation as any.

Except for unchanged in the back contract, Live Cattle futures closed an average of 96¢ higher (60¢ to $1.35 higher).

Except for unchanged in April, Feeder Cattle futures closed an average of 97¢ higher (32¢ higher to $1.62higher in spot Aug).

Wholesale values were lower for Choice and steady for Select, with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 86¢ lower Thursday afternoon at $206.58/cwt. Select was 13¢ lower at $197.01.

******************************

Major U.S. financial indices closed sharply higher Thursday, erasing losses from the previous session. Rather than ponder the potential trade war with China, investors seemed content to cheer positive quarterly earnings.

The Dow Jones Industrial Average closed 224 points higher. The S&P 500 closed 24 points higher. The NASDAQ closed 107 points higher.

********************************

Beef production for this year was estimated slightly higher in July (27.15 billion lbs.) than the previous month (27.13 billion lbs.) on expectations of increased cow slaughter in the third quarter, according to analysts with USDA’s Economic Research Service (ERS), in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). 

For next year, though, estimated beef production was reduced to 27.69 billion lbs. from 27.72 billon lbs. the previous month. That’s on anticipation of lighter steer and heifer carcasses through the first half of the year.

5-area direct steer prices are projected at $107-$111 in the third quarter and at $108-$116 in the fourth, for an annual price of $114-$117. That’s $1 lower on the top end of the range compared to last month. The annual price for next year is projected at $113-$122, the same as the previous month.

“For 2019, the red meat and poultry production forecast is raised as increases in pork and broiler production more than offsets expected declines in beef production,” ERS analyst say.

By | July 12th, 2018|Daily Market Highlights|

Cattle Current Daily-July 12, 2018

There were only four lots—all from Kansas—offered in the weekly Fed Cattle Exchange auction Wednesday. None sold.

Choice 2-4 steers sold for just a touch higher than $111/cwt. at Tama, IA. The same grades brought $108.00-$111.50 at Sioux Falls Regional in South Dakota.

Cattle futures followed outside markets and other commodities—including hogs, soybeans and corn—sharply lower Wednesday, in anticipation of more tariffs from China, following the Trump administration publishing a list of $200 billion worth of Chinese imports that will be subject to 10% tariffs (see below).

Except for 50¢ lower in the back contract, Live Cattle futures closed an average of $1.32 lower (97¢ to $1.60 lower).

Feeder Cattle futures closed an average of $1.50 lower (62¢ to $2.62 lower)

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

Choice boxed beef cutout value was 12¢ higher Wednesday afternoon at $207.44/cwt. Select was $1.25 lower at $197.14.          

******************************

At the end of June, U.S. Agriculture Secretary Sonny Perdue said President Trump instructed him to develop a strategy to support U.S. agriculture producers in the face of retaliatory tariffs. Although no details were provided, odds are increasing for the testing of that strategy.

Late Tuesday night, Robert Lighthizer of the U.S. Trade Representative released a statement saying, that given China’s retaliation to U.S. tariffs, when they were imposed at the end of last week, the President has ordered the U.S Trade Representative to begin the process of imposing tariffs of 10% on an additional $200 billion of Chinese imports…” That’s in addition to the previously announced 25% tariff on $34 billion worth of Chinese imports to the U.S.

As with most commodity markets, the news pressured Major U.S. financial indices sharply lower Wednesday.

The Dow Jones Industrial Average closed 219 points lower. The S&P 500 closed 19 points lower. The NASDAQ closed 42 points lower.

*****************************

“Until the trade disputes are resolved, expect cattle and other livestock price volatility to continue,” says Tim Petry, Extension livestock economist at North Dakota State University (NDSU).

In an NDSU Spotlight on Agriculture column published yesterday, Petry explains cattle price volatility in recent months revolves around uncertainty created by several factors.

There’s the drought, for one.

“By the end of June, expanding drought conditions caused about 26% of the U.S. beef cowherd to be in an area experiencing drought,” Petry says. “Last year, only 6% of the beef herd was in drought, with the far northern Plains the hardest hit…Drought conditions pose the threat of forced beef cowherd liquidation and early movement of calves to market. Beef cow slaughter was up more than 12% from last year during the first six months of 2018.”

Those same drought conditions, inducing earlier feedlot placements since last fall, contributed to the seasonal surge in fed cattle supplies this summer.

On the other side of the coin, feed is getting cheaper with a near-perfect start to the growing season for major crops, and with trade concerns pressuring those markets.

“Record highs also create market uncertainty,” Petry says. “U.S. pork, broiler (chicken) and total meat production were all record high in 2017. Those three categories are projected to be record high again in 2018. U.S. beef production likely will follow suit in 2018 with record high production, so record amounts of meat will be available to consume domestically or in the export market. The previous record high beef production occurred in 2002.”

Then throw in the simmering trade issues between the U.S. and what seems like the rest of the world.

“A major reason for increased market volatility in the livestock and grain markets in the last few months revolves around seemingly ever-changing trade negotiations with several important trade countries,” Petry explains. “Positive outcomes with trade agreements are important to the U.S. beef industry so record beef exports, along with robust exports of competing meats, can continue.

By | July 11th, 2018|Daily Market Highlights|

Cattle Current Daily-July 11, 2018

Firmer wholesale beef values helped Cattle futures close mostly higher on Tuesday, after follow-through pressure early in the session.

Live Cattle futures closed an average of 72¢ lower through the front three contracts and then unchanged to 50¢ higher.

Feeder Cattle futures closed an average of 41¢ higher.

Boxed beef cutout values were steady to firm on fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 40¢ higher Tuesday afternoon at $207.32/cwt. Select was 23¢ lower at $198.39.           

******************************

Major U.S. financial indices closed higher Tuesday, buoyed by strong quarterly earnings, including better than expected results from Dow DuPont and Proctor & Gamble.

The Dow Jones Industrial Average closed 143 points higher. The S&P 500 closed 9 points higher. The NASDAQ closed 3 points higher.

********************************

When all was said and done last week, the 5-area weighed average steer price was $5.76 higher at $112.63/cwt. on a live basis; $8.87 higher in the beef at $178.77.

“The higher prices may not pull closeouts completely out of the red, but it will reduce losses significantly and may make a few cattle profitable,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This price resurgence does not necessarily mean fed cattle prices have hit their summer low, as the potential to move to the $105 area re-mains feasible. However, higher prices may be shedding some light that moving that low is not as likely as previously thought. The stronger live cattle prices have also strengthened cattle feeders’ outlook which means strong demand for feeder cattle.”

Pressure on grain prices is helping, too.

“The weakening feed market has translated into strengthening calf prices relative to the fed cattle and beef markets,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “The overall protein market outlook is much the same as the beginning of summer: there is a lot of protein to come to market through the summer and fall—and no end to the potential trade gymnastics—but the calf market outlook is holding strong largely because of cheapening feed.”

By | July 10th, 2018|Daily Market Highlights|

Cattle Current Daily-July 10, 2018

Despite the surge in cash fed cattle prices late week, Cattle futures softened some on Monday, pressured by overall bearishness in commodities, tied to trade concerns. Seasonally limping wholesale beef values added to the negative tone.

Live Cattle futures closed an average of 44¢ lower (12¢ to $1.00 lower).

Except for 12¢ higher in Apr, Feeder Cattle futures closed an average of 44¢ lower (15¢ to 75¢ lower).

Boxed beef cutout values were lower on Choice and steady on Select with light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.11 lower Monday afternoon at $206.92/cwt. Select was 9¢ lower at $198.62.    

******************************

Major U.S. financial indices closed higher Monday, extending gains from the previous session. Support included Friday’s strong employment report, and apparently high hopes heading into quarterly earnings.

The Dow Jones Industrial Average closed 320 points higher. The S&P 500 closed 24 points higher. The NASDAQ closed 67 points higher.

******************************

U.S. beef exports set a new monthly value record in May at $722.1 million, which was 24% more than a year earlier and 4% more than the previous record, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). In terms of volume, May beef exports of 117,871 metric tons (mt) were the sixth most on record.

“Despite the intense competition U.S. beef faces in Japan and Korea, these markets continue to display a terrific appetite for a growing range of cuts,” says Dan Halstrom, USMEF President and CEO. “Beef items that are traditionally popular in Asia continue to perform and other items more suitable for thick-cut steaks and barbecue concepts are gaining more traction, resulting in exceptional growth opportunities. But the enthusiasm for U.S. beef extends well beyond these two leading markets, and that’s how exports have reached this record-breaking pace.”

Export volume to Japan in May was 19% more year over year, with value 22% higher at $196.8 million. Exports to Korea for the month were 46% more in terms of volume and 64% more in value at a record $146.2 million.

Through the first five months of this year, total U.S. beef exports were up 10% in volume to 547,157 mt, while export value was 21% more than last year’s record pace at $3.32 billion.

Beef export value averaged $313.39 per head of fed slaughter in May, up 18% from a year ago. The January-May average was $317.69 per head, also up 18%.

For U.S. pork exports, though, the weight of recent tariffs is beginning to take a toll.

For instance, pork exports to the China/Hong Kong region were 31% less than a year earlier for volume and 25% less for value. According to USMEF, the decline was due in part to the additional 25% tariff increase imposed by China in April.

“Exports to China will face an even steeper challenge in the second half of 2018, as China recently hiked the duty rate on U.S. pork by another 25%,” according to USMEF. “This means U.S. pork cuts and pork variety meat entering China now face a duty rate of 62%, compared to 12% for China’s other suppliers, including the European Union, Brazil and Canada.”

Moreover, Mexico’s retaliatory duties on U.S. pork took effect in June, so these January-May results were not directly impacted.

By | July 9th, 2018|Daily Market Highlights|

Cattle Current Daily-July 9, 2018

Apparently, beef packers over-played their hand of bought-ahead cattle last week. Cash fed cattle tore sharply higher on Friday. Live trade was $5-$6 higher in the Southern Plains at mostly $112-$113/cwt. In Nebraska and the western Corn Belt, it was $3-$7 higher at $112-$114. Dressed trade was $5-$11 higher at $175-$180.

Higher cash prices helped Cattle futures surge higher for much of Friday’s session. Futures closed slightly lower, though, likely on profit taking and week-end positioning.

Except for unchanged in spot Aug, Live Cattle futures closed an average of 22¢ lower.

Other than 2¢ and 15¢ higher in the back two contracts, Feeder Cattle futures closed an average of 33¢ lower.

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

Choice boxed beef cutout value was 40¢ lower Friday afternoon at $208.03/cwt. Select was 1¢ higher at $198.71.         

******************************

Major U.S. financial indices closed higher Friday, buoyed by more jobs than expected in the monthly national employment report. Total non-farm employment increased by 213,000 in June, according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 99 points higher. The S&P 500 closed 23 points higher. The NASDAQ closed 101 points higher.

******************************

“Young bred cow prices have been under more pressure than mid-aged cows this spring. Prices have declined by more than $200 from last spring and have averaged a discount of $40 compared to mid-aged bred cows,” say analysts with the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor. “Over the last 15 years, discounts have occurred only about 20% of the time and $40-$45 is as big as the discounts tend to get. The year of the biggest premiums for young bred cows was 2015 (when feeder cattle prices peaked) at $165.”

Regionally, LMIC analysts explain the value of young bred cows in the Northern Plains has been at a premium to those in the Southern Plains for the last six years.

“Prices for young bred cows in Montana markets have held steady with a year ago this spring after declining $100 from 2016 to 2017,” LMIC analysts say. “A $400 premium for Montana young bred cows versus the Oklahoma City market this year rivals the euphoric Montana premium of 2015, even though actual prices are $1,000 lower than three years ago.”

For perspective, the LMIC folks say mid-aged bred cows (1,200-1,300 lbs.) at Oklahoma City averaged $1,082 per head during April and May. That $112 less than the same period last year.

“These prices tend to follow the trend set by feeder cattle prices, but with a bit of a time lag,” explain LMIC analysts. “This spring’s mid-age bred cow price was 6.11 times the price of steers (500-550 lbs.) at Oklahoma City. Last year, the ratio was 6.74, and in 2016 the ratio peaked out at 8.06 for the 2004-2018 interval.”

By | July 7th, 2018|Daily Market Highlights|

Cattle Current Daily-July 6, 2018

Cattle futures closed mainly a touch higher Thursday, supported by follow-through buying and expectations for firm to higher cash fed cattle prices this week. Trade and volume continued to be sluggish, though.

Except for 7¢ lower in spot Aug, Live Cattle futures closed an average of 19¢ higher.

Other than 22¢ and 2¢ lower in the front two contracts, and 12¢ lower at the back of the board, Feeder Cattle futures closed an average of 40¢ higher.

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

Choice boxed beef cutout value was $1.83 lower Thursday afternoon at $208.43/cwt. Select was $1.01 lower at $198.70. 

******************************       

Major U.S. financial indices closed higher Thursday, boosted by tech stocks and positive economic news. Optimism was capped by worries about the impact of U.S. and China counter-tariffs scheduled to begin Friday.

The Dow Jones Industrial Average closed 181 points higher. The S&P 500 closed 23 points higher. The NASDAQ closed 83 points higher.

*****************************

Despite pressure on commodity prices and concerns about trade, producer sentiment crept 2 points higher in June to 143, according to the Purdue University/CME Group Ag Economy Barometer. The barometer is based on a monthly survey of 400 agricultural producers from across the country.

 “In June, we saw a sizeable drop in commodity prices that caught many observers by surprise,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Despite the price decline, producers’ appraisal of current economic conditions improved compared to May. However, it was clear from survey responses that uncertainty regarding the agricultural outlook increased considerably.”

The barometer’s rise was underpinned by an increase in the Index of Current Conditions, which climbed to 138 compared to a reading of 132 a month earlier. The Index of Future Expectations remained nearly unchanged with a reading of 146 in June, 1 point higher than in May.

The June barometer survey asked producers how much their crop acreage changed in 2018 and whether or not they use flexible cash rental leases to rent farmland. As expected, most farmers’ crop acreage did not change in 2018 compared to a year earlier, but the survey revealed that some farms were expanding crop acreage rapidly. For example, 8% of farms increased their crop acreage by more than 10%, and 6% of farms increased their crop acreage by up to 10% in 2018, compared to last year. Among farms in the survey that rent cropland, 36% reported they plan to use a flexible cash rent lease on some of their acreage.

“Flexible cash rent leases provide a way for farm operators to share some risk with land owners, while also providing landowners some of the stability that comes with a cash rental agreement,” Mintert explains. “The increase in volatility in crop agriculture could be stimulating interest in flexible cash rent leases.

By | July 5th, 2018|Daily Market Highlights|

Cattle Current Daily-July 4 and 5-2018

Cattle futures mostly held within a narrowly mixed range on Tuesday, amid extremely light pre-holiday trade.

Except for 45¢ lower in spot Aug, Live Cattle futures closed an average of 30¢ higher.

Other than 87¢ higher in spot Aug, Feeder Cattle futures closed narrowly mixed, from an average of 24¢ lower to an average of 27¢ higher.

Futures markets will open again on Thursday.

Boxed beef cutout values were lower for Choice and higher for Select with light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.62 lower Tuesday afternoon at $210.26/cwt. Select was 94¢ higher at $199.71.  

******************************         

Major U.S. financial indices closed lower Tuesday, pressured by tech stocks and worries about the tariffs set to go into effect Friday.

The Dow Jones Industrial Average closed 132 points lower. The S&P 500 closed 13 points lower. The NASDAQ closed 65 points lower.

******************************

“Trade concerns pose the single greatest risk to the projected global economic growth of 3-4%,” says Tanner Ehmke, manager of CoBank’s Knowledge Exchange Division (KED). “The U.S. and China have been driving the growth, benefitting emerging markets around the globe. A trade war between the two is dangerous for economies around the world.”

Moreover, according to the most recent Rural Economic Review from CoBank’s KED, uncertainty around trade presents escalating concern to U.S. agriculture, with 70% of U.S. agriculture exports going to destinations that are in current negotiation or trade disputes.

“Aside from potentially losing market share in emerging markets, the U.S. may face shake-ups in historical supply chain commitments, as competitors seek new trade relationships amid current trade disputes,” according to the report.

Although the pork sector is at greatest of risk of trade impacts as the industry expands—with tariffs set to increase in Mexico and China—the report emphasizes total domestic red meat production this year is forecast to increase 3-4%.

“Overall current market conditions including rising interest rates, high fuel costs, relatively high land rental rates and little price relief from other inputs point to a decline in net farm cash income in 2018, continuing the trend from the past few years” says Ehmke. “This indicates the potential for increased debt load as the Federal Reserve considers three more interest rate hikes.”

By | July 3rd, 2018|Daily Market Highlights|

Cattle Current Daily-July 3, 2018

The weekly 5-area weighted average steer price last week was $1.87 lower on a  live basis at $106.87/cwt. On a dressed basis the 5-area weighted average steer price was $3.31 lower at $169.90.

Firmer cash prices at the end of the week, along with follow-through support and sharply lower front-month Corn futures helped Feeder Cattle futures surge higher on Monday. Live Cattle mostly edged slightly higher.

Except for 17¢ lower in near Oct, Live Cattle futures closed an average of 39¢ higher (7¢ to 60¢ higher).

Other than 60¢ higher in spot Aug, Feeder Cattle futures closed an average of $1.98 higher ($1.17 to $3.15 higher). That’s an average of almost $5 higher over the last two sessions.

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

Choice boxed beef cutout value was 8¢ lower Monday afternoon at $211.88/cwt. Select was 20¢ higher at $198.77.  

******************************    

Major U.S. financial indices closed higher to start the week, but were capped by continued uncertainty about trade issues.

The Dow Jones Industrial Average closed 35 points higher. The S&P 500 closed 8 points higher. The NASDAQ closed 57 points higher.

******************************

“Despite beef production up nearly 4% so far this year, beef demand has been quite strong and has limited beef and cattle price pressure in the first half of the year,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.  “Domestic beef demand has been buoyed by strong macroeconomic performance, including a declining unemployment rate. Foreign demand for U.S. beef has boosted total beef demand with a 13% year-to-date increase in beef exports through April. Strong year-to-date beef export increases have been led by South Korea, Mexico, Hong Kong, and Taiwan with number one Japan up slightly this year.”

Looking ahead to the second half of the year, though, the bevy of trade issues shadowing U.S. trade could pressure beef prices.

“In some cases tariffs include beef and will have a direct impact on beef markets.  The bigger impacts are likely to be indirect in a range of impacts on other markets,” Peel explains. “Other meats, especially pork, are more directly impacted among the wide range of U.S. products subject to tariffs. Negative impacts on exports of other meats means that more total meat must be absorbed in the domestic market. Total U.S. red meat and poultry production is expected to increase nearly 3% year over year to a record level over 102 billion lbs. Any slowdown in meat exports will undoubtedly add pressure to domestic meat prices.”

Overall, Peel explains tariffs on U.S. exports will impact domestic GDP, slow macroeconomic growth and reduce domestic spending. Concurrently, tariffs applied by other nations to goods imported to the U.S. will increase prices of some domestic products.

“Tariffs on U.S. imports are largely paid by consumers as higher retail prices in the U.S.,” Peel explains. “All of this will negatively impact domestic spending and employment with likely negative consequences on domestic beef demand.”

By | July 2nd, 2018|Daily Market Highlights|

Cattle Current Daily-July 2, 2018

Though still lower than the previous week, negotiated cash prices paid for fed cattle Friday were $1-$2 more than earlier in the week at $107-$108/cwt. in the Texas Panhandle and $107.50 in Nebraska.

Heading into Friday, plenty of folks figured negotiated cash fed cattle trade was pretty much done for the week, at mainly $105-$106/cwt. on a live basis and $170 in the beef.

Stronger cash trade helped Cattle futures surge higher Friday, presumably supported by technical buying, as well as short covering and profit taking for the end of the month and quarter.

The surge came despite an announcement during trading hours that Canada will assess surtaxes on $16.6 billion worth of U.S. imports—including beef products—in retaliation for U.S. tariffs on Canadian steel and aluminum imports (see below).

Except for $1.20 lower in expiring Jun, Live Cattle futures closed an average of $2.15 higher ($1.65 higher to limit up $3.00 in near Aug and Oct—the highest close since March).

Feeder Cattle futures closed an average of $2.92 higher ($1.55 higher to limit up $4.50 in spot Aug, the highest since March).

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

Choice boxed beef cutout value was $1.28 lowerFriday afternoon at $211.96/cwt. Select was $2.09 lower at $198.57. 

******************************

Major U.S. financial indices gained some ground on Friday, but not as much was had earlier in the session, with continued angst over trade issues.

The Dow Jones Industrial Average closed 55 points higher. The S&P 500 closed 2 points higher. The NASDAQ closed 6 points higher.

******************************

On Friday, the Canadian government announced, “…in direct, measured and proportional response to U.S. tariffs on Canadian steel and aluminum, reciprocal surtaxes on $16.6 billion of imports of steel, aluminum and other products from the United States will come into effect July 1, 2018.”

That’s in retaliation for new tariffs imposed by the U.S. on steel and aluminum imported from Canada.

The “other” products include U.S. beef products, according to the National Cattlemen’s Beef Association (NCBA).

“For the past few weeks Canada has threatened to retaliate against the United States by slapping a tariff on $170 million worth of U.S. beef products in direct response to the steel and aluminum tariffs,” explained Kent Bacus, NCBA Director of International Trade and Market Access on Friday. “Today, they made good on that threat. These retaliatory tariffs were and still are clearly avoidable, and the unfortunate casualties will be Canadian consumers and America’s cattlemen and cattlewomen. We may not know the extent of the damage these tariffs may have on our producers, but we believe that cooperation is a better path forward than escalation.”

By | June 30th, 2018|Daily Market Highlights|

Cattle Current Daily-June 29, 2018

Negotiated cash fed cattle trade continued the week’s trend in the western Corn Belt Thursday at $105-$106/cwt. on a live basis. So far this week, live prices there and in Kansas and Nebraska are mostly $2-$3 lower at mainly $106. Dressed trade is $2-$3 lower at mostly $170.

Even so, Cattle futures edged higher, amid light trade and little conviction one way or the other.

Live Cattle futures closed an average of 58¢ higher (25¢ higher to $1.17 higher in expiring spot June).

Except for 12¢ and 20¢ lower in the back two contracts, Feeder Cattle futures closed an average of 66¢ higher (10¢ higher to $1.05 higher in spot Aug).

Boxed beef cutout values were sharply lower for Choice and steady for Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.06 lower Thursday afternoon at $213.24/cwt. Select was 22¢ lower at $200.66.

******************************

Although trade uncertainty lingers, bank and tech stocks, along with higher oil prices, helped lift major U.S. financial indices Thursday.

The Dow Jones Industrial Average closed 98 points higher. The S&P 500 closed 16 points higher. The NASDAQ closed 58 points higher.

******************************

Here’s another compelling reason to hope the U.S. irons out trade wrinkles sooner rather than later: the most hogs and pigs June 1 since the data series began in 1964.

There were 73.5 million hogs and pigs June 1, according to USDA’s Hogs and Pigs report issued Thursday. That’s 3% more than a year earlier and 1% more than Mar. 1. 

Likewise, the 67.1 million market hogs on inventory June 1 was 3% more than the previous year and the most since the data series began in 1964.

The March to May pig crop of 33.2 million head was 4% more than last year and the most since estimates began in 1970.

Production came from a breeding herd of 6.32 million head, which was 3% more than last year and 2% more than the previous quarter. About half of the breeding herd (3.12 million head) farrowed in the March to May period. The average pigs saved per litter was a record high 10.63, compared to 10.55 last year.

U.S. hog producers intend to farrow 3.17 million sows between June and August this year, and 3.18 million sows between September and November.

In the latest World Agricultural Supply and Demand Estimates (WASDE) analysts with USDA’s Economic Research Service (ERS) peg pork production 4% more year over year for the April-June quarter; almost 6% more in the fourth quarter. Pork production this year is estimated at 26.72 billion lbs. with expectations of 3.3% more in 2019.

By | June 28th, 2018|Daily Market Highlights|

Cattle Current Daily-June 28, 2018

Only 306 head (two lots, one from Kansas and one from Nebraska) were offered in the weekly Fed Cattle Exchange Auction. All sold for a weighted average price of $106/cwt., which was $2-$3 less than country trade in those regions last week.

That $106 also matched country prices in those regions on Wednesday. There were a few early dressed sales in Nebraska at $169-$170, which was also $2-$3 less than the previous week.

Despite that and technical pressure, Cattle futures mostly paddled in place, on an average basis.

After $1.10 higher in spot June, Live Cattle futures closed narrowly mixed, from an average of 18¢ higher to an average of 12¢ lower.

Feeder Cattle futures closed an average of 38¢ lower (12¢ to 85¢ lower).

Boxed beef cutout values were weak to lower on light demand and light to moderate offerings through Wednesday afternoon, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.53 lower at $215.30/cwt. Select was 69¢ lower at $200.88.

******************************

After surging sharply higher early in the session, major U.S. financial indices closed sharply lower Wednesday. Support included another day of strengthening oil prices. Drag came with ongoing trade tensions, a stronger U.S. Dollar and renewed fears of rising interest rates. 

The Dow Jones Industrial Average closed 165 points lower. The S&P 500 closed 23 points lower. The NASDAQ closed 116 points lower.

******************************

For cow-calf producers with access to cost-effective forage and feed, the current value of gain provides incentive to retain calves and add some pounds, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

In his neck of the woods, projecting the forward price of steers purchased last week at 525 lbs. and carried to 600-800 lbs., Griffith says, the value of gain was 95¢ to $1.10/lb.

“The value of gain on the heifers appears to be slightly higher than the steers, which is largely due to less of a discount relative to steers as heifers add weight,” Griffith says.

By | June 27th, 2018|Daily Market Highlights|

Cattle Current Daily-June 27, 2018

After follow-through pressure, Feeder Cattle futures closed higher, able to claw back some of the losses from the previous day, although trade continued light amid range-bound chop. Live Cattle drifted to a mixed close.

Live Cattle futures closed an average of 42¢ lower through the front four contracts, (5¢ to 52¢ lower) and then an average of 26¢ higher.

Feeder Cattle futures closed an average of 52¢ higher across a broad range of 17¢ higher to $1.07 higher, with most of the support in deferred contracts.

Boxed beef cutout values were weak to lower on moderate demand and offerings through Tuesday afternoon, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 86¢ lower at $216.83/cwt. Select was 32¢ lower at $201.57.

******************************

Major U.S. financial indices closed slightly higher Tuesday, following the previous day’s steep decline. Support included surging oil prices with the U.S. State Department telling U.S. companies they must cease all purchases of crude oil from Iran by the beginning of November.

The Dow Jones Industrial Average closed 30 points higher. The S&P 500 closed 5 points higher. The NASDAQ closed 29 points higher.

******************************

Pasture and range conditions held about steady last week, according to the latest weekly Crop Progress report (week ending June 24).

49% of pasture and range is in Good (41%) or Excellent (8%) condition, compared to 48% a week earlier, and 60% a year earlier. 20% is rated as Poor (14%) or Very Poor (6%), the same as a week earlier and 13% last year.

States with 30% or more pasture and range rated as Poor or Very Poor include: Arizona (89%), California (40%), Colorado (53%), Missouri (35%), New Mexico (68%), Texas (41%) and Utah (36%). 

Overall, crop progress and conditions continue to be favorable.

5% of the corn is silking, compared to 4% last year and 3% for average.

77% is in Good (58%) or Excellent (19%) condition, compared to 67% last year. 5% is in Poor (4%) or Very Poor (1%) condition, compared to 8% last year.

95% of soybeans have emerged, which is 2% more than last year and 6% more than average. 12% are blooming, which is 4% more than last year and 7% more than the average. 73% is in Good (58%) or Excellent (15%) condition, compared to 66% last year. 5% is in Poor (4%) or Very Poor (1%) condition, compared to 8% a year earlier.

95% of sorghum is planted, which is 1% more than last year and 4% more than average. 20% is headed, which is even with last year but 1% behind the average. 56% is rated in Good (51%) or Excellent condition (5%), compared to 65% last year. 12% is in Poor (9%) or Very Poor (3%) condition, compared to 4% last year.

41% of winter wheat is harvested, which is 2% more than last year, but 8% ahead of the average. 37% is rated in Good (28%) or Excellent condition (9%), compared to 49% last year. 34% is in Poor (19%) or Very Poor (15%) condition, compared to 16% last year.

By | June 26th, 2018|Daily Market Highlights|

Cattle Current Daily-June 26, 2018

When all was said and done after late trade last week, live sales were $3-$5 lower at $108-$110/cwt. in the South and $108-$109 in the North. Dressed trade was $4-$9 less at $172-$173.

Lower cash fed cattle trade, more feedlot placements in May than expected and sharply lower outside markets all pressured Cattle futures significantly lower to start the week.

Live Cattle futures closed an average of $2.61 lower through the front four contracts, and then an average of $1.74 lower.

Feeder Cattle futures closed an average of $2.70 lower ($1.57 lower to $3.42 lower in spot Aug).

Boxed beef cutout values were steady to firm on moderate demand and offerings through Monday afternoon, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 53¢ higher at $217.69/cwt. Select was 13¢ lower at $201.89.

******************************

Major U.S. financial indices closed sharply lower Monday, shoved down by increasing trade tensions with China. Apparently, the driver was a rumor that President Trump would restrict U.S. investment in Chinese technology companies—no official word, although the White House released an op-ed by Agriculture Secretary, Sonny Perdue, indicating a strategy to protect American agricultural producers from downturns in commodity markets, tied to trade disruptions (see below).

The Dow Jones Industrial Average closed 328 points lower. The S&P 500 closed 37 points lower. The NASDAQ closed 160 points lower.

******************************

Although May feedlot placements were slightly more year over year, and more than expected, Derell Peel, Extension livestock marketing specialist at Oklahoma State University, points out in his weekly market comments, “May feedlot placements included a 9.8% year-over-year increase in placements under 700 lbs., likely augmented by poor summer grazing conditions in some areas that likely deflected some cattle into feedlots. At the same time, placements of cattle over 700 lbs. were down 4.6% from last year. This suggests that feedlot cattle supplies will tighten relatively in the third quarter. Fed cattle prices are expected to be lower year over year in the second half of the year, but the timing of fed cattle marketings will reduce the price pressure relative to the second quarter.”

Peel emphasizes early placements don’t change the number of cattle available, just the timing of when they hit the market.

“Longer term, cattle numbers are still increasing and a general trend of growing feedlot inventories is expected for several more months at least,” Peel says. “Placement patterns the last few months have impacted the timing of feedlot production and the fed cattle market has been struggling a bit under the weight of bunched fed cattle supplies in the second quarter.”

As it is, Peel explains feedlot inventories increased 26 of the last 28 months.

“Using a 12-month moving average of feedlot inventories (which removes seasonality and allows month to month comparisons of feedlot totals) shows that the current monthly average feedlot inventory is the highest since November, 2012.”

As for marketings, Peel points out average monthly feedlot marketings for the last 12 months are at the highest level since November of 2011.

“Increased beef production in the second half of the year will depend on the how much cattle slaughter increases and on how much carcass weights rebound from last year’s decline,” Peel says. “At the current time, annual beef production is projected to be up 4.0-4.5% year over year.”

By | June 25th, 2018|Daily Market Highlights|

Cattle Current Daily-June 25, 2018

Cash fed cattle trade ended up being another last-hour affair, with potentially another week of light volume. Through late Friday afternoon, the only reported prices from USDA were $109-$110/cwt. in the Texas Panhandle, which was $3 less than the previous week.

Other than 37¢ and 22¢ lower in the front two contracts, Live Cattle futures closed an average of 32¢ higher, except for 15¢ lower in the back contract.

Except for unchanged in the back contract, Feeder Cattle futures closed an average of 46¢ higher.

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

Choice boxed beef cutout value was 25¢ lower in the afternoon at $217.16/cwt. Select was 41¢ higher at $202.02.

******************************

Major U.S. financial indices closed mostly higher Friday, buoyed by oil and energy stocks. Crude Oil futures (WTI-CME) closed $2.18 to $3.04 higher through the next year with uncertainty about increased OPEC production.

Stocks were held in check by continued worries about the impact of a trade war with China.

The Dow Jones Industrial Average closed 118 points higher. The S&P 500 closed 5 points higher. The NASDAQ closed 20 points lower.

******************************

Markets will likely view Friday’s monthly Cattle on Feed report as a touch bearish, with a few more year-over-year placements in May rather than the expected decline.

There were 2.124 million head placed in feedlots (capacity of 1,000 head or more) in May, which was 0.24% more (+5,000 head) than the previous May. Heading into the report, most analysts were expecting a third consecutive month of declines, projecting a decrease of 1-4%.

In terms of placement weights: 20.95% were placed at weights lighter than 600 lbs.; 16.01% at 600-699 lbs.; 22.60% at 700-799 lbs.; 24.67% at 800-899 lbs.; 11.06% at 900-999 lbs.; 4.71% weighing more than 1,000 lbs.

Marketings for May were in line with expectations: 2.056 million head, which was 5.38%  more (+105,000 head) than last year.

All told, the on-feed inventory June 1 was 11.553 million head, which was 4.12% more (457,000 head) than the same time a year ago. That’s the heftiest June 1 inventory since the data series began in 1996.

Total frozen poultry supplies were 4% more month-to-month and 7% more than last year.

By | June 23rd, 2018|Daily Market Highlights|

Cattle Current Daily-June 22, 2018

Cattle futures leaked lower in light trade on Thursday as traders awaited direction from the cash market. Negotiated cash fed trade remained undeveloped through Thursday afternoon.

Except for 12¢ higher in the back contract, Live Cattle futures closed an average of 25¢ lower.

Feeder Cattle futures closed an average of 55¢ lower.

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

Choice boxed beef cutout value was 88¢ lower in the afternoon at $217.41/cwt. Select was 56¢ higher at $201.61.

******************************

Major U.S. financial indices closed lower Thursday, pressured by ongoing worries about the impact of a trade war with China.

The Dow Jones Industrial Average closed 196 points lower. The S&P 500 closed 17 points lower. The NASDAQ closed 68 points lower.

******************************

“While feeder prices have been on an uptrend over the past month, it can’t be simply attributed to lower corn prices alone,” says Josh Maples, a livestock economist at Mississippi State University. “However, we know that cattle prices are certainly paying attention to the corn market and research suggests that any continued corn price weakness can help to provide support for feeder cattle prices.”

Between historically favorable early-season crop conditions, trade uncertainty and other factors, corn prices began heading south in mid-May.

“Both nearby and new-crop corn futures prices tumbled by over 40¢ or approximately 10%,” Maples explains, in the most recent In the Cattle Markets. “The December 2018 corn futures contract price hit $4.26 May 23—its highest level since July 2017. Just 18 trading days later, it closed at a contract low of $3.77.”

During the same approximate period, both cash feeder cattle prices and Feeder Cattle futures increased. The CME Feeder Cattle Index reached its recent low May 22 at 133.43 and then began to edge higher; 142.21 on Wednesday. Spot Aug Feeder Cattle futures reached a contract low May 16 at 136.725. It increased since then, trading at 149.425 on Wednesday this week.

The reality of declining corn prices supporting calf and feeder cattle prices, and vice versa, is nothing new, of course. However, Maples also points to research from Kansas State University (KSU) that suggests feeder cattle prices since 2008 are even more sensitive to corn prices and fed cattle prices than previously. The study, Price Relationships between Calves and Yearlings: An Updated Structural Change was conducted by KSU agricultural economist, Glynn Tonsor and Emily Mollohan, a former KSU graduate student, who is now an instructor at Northeastern Junior College in Sterling, CO.

“Using monthly data, they found that a 1% increase in corn price reduces feeder cattle prices by about 0.18%,” Maples explains. “To put their findings into a current context, what might a 10% decline in corn prices imply for feeder cattle prices? It would suggest a 1.8% increase in feeder cattle prices. So, a decline from $4.00/bu. corn to $3.60 would suggest a feeder price increase from $150/cwt. to $152.70.”

Keep in mind, according to the KSU study, “The impact of live cattle price expectations on feeder cattle prices is three or more times larger than the same proportional impact of corn price, and this relative impact has increased since 2008.”

By | June 21st, 2018|Daily Market Highlights|

Cattle Current Daily-June 21, 2018

If yesterday’s weekly Fed Cattle Exchange auction is any indication, cash fed cattle prices this week should be at least steady. There were seven lots of heifers (1,469 head) from Nebraska selling for a weighted average price of $110/cwt. (1-9 day delivery). That was steady with the previous week’s country trade in that region. There were no sales of the other 656 head offered, although one lot was passed out at $112.

Cattle futures closed mostly slightly higher Wednesday with increased open interest in Feeder Cattle, but continued contraction in open interest for Live Cattle. Despite trade worries and a limit-down move in Lean Hogs, there appears a growing sense that Cattle futures are turning the corner past the bottom. Perhaps notions that feedlot placements were lower again last month (see below) added some firmness.

Except for 5¢ lower and 2¢ lower in Feb and Apr, respectively, Live Cattle futures closed an average of 30¢ higher (12¢ to 77¢ higher).

Except for 20¢ lower in spot Aug, Feeder Cattle futures closed an average of 32¢ higher (5¢ to 97¢ higher).

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

Choice boxed beef cutout value was $1.41 lower in the afternoon at $218.29/cwt. Select was $1.25 lower at $201.05.

******************************

Major U.S. financial indices closed mixed Wednesday, buoyed by tech stocks, but pressured by lingering trade wonderments.

The Dow Jones Industrial Average closed 42 points lower. The S&P 500 closed 4 points higher. The NASDAQ closed 55 points higher.

******************************

Heading into Friday’s monthly Cattle on Feed report, most analysts are expecting to see May placements 1-4% less year over year, May marketings 5% more and the June 1 on-feed inventory 3-4% more than last year.

For instance, analysts with Allendale, Inc. estimate May Placements 1.4% lower than last year at 2.089 million head. That would be the third consecutive month of year over year declines.

“Concerns over cattle feeding margins have limited interest in new placements,” say Allendale analysts. “May and June finished cattle have a $128 breakeven according to Kansas State University. The remainder of the year is set to be unprofitable with breakevens from $118 to $122. May placements supply the September through December slaughter period.”

Allendale projects May marketings to be 5.2% more than last year at 2.052 million head. “This would be the largest May marketing in 10 years,” say Allendale analysts.

For the Allendale folks, that would leave an estimated 11.519 million head on feed June 1, which would be 3.8% more than last year and the most for the month in the history of the current data series that began in 1996.

By | June 20th, 2018|Daily Market Highlights|

Cattle Current Daily-June 20, 2018

Despite sharply lower outside markets, Cattle futures renewed gains on Tuesday, buoyed, in part, by notions that last week’s anemic trade volume of fed cattle means packers must step up to the plate this week. Moreover, all indications suggest cattle feeders remain plumb current in marketing.

Except for 22¢ higher and 37¢ higher on either end of the board, Live Cattle futures closed an average of 77¢ higher.

Feeder Cattle futures closed an average of $1.08 higher; an average of 79¢ higher across the front half and then an average of $1.37 higher.

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

Choice boxed beef cutout value was $1.01 lower in the afternoon at $219.70/cwt. Select was $1.90 lower at $202.30.

******************************

Major U.S. financial indices closed sharply lower Tuesday, in the wake of President Trump doing exactly what he said he would do: apply more tariff pressure to China if that nation retaliated against tariffs levied last week.

“On Friday, I announced plans for tariffs on $50 billion worth of imports from China. These tariffs are being imposed to encourage China to change the unfair practices identified in the Section 301 action with respect to technology and innovation. They also serve as an initial step toward bringing balance to our trade relationship with China,” said President Trump, in a White House Statement. “However and unfortunately, China has determined that it will raise tariffs on $50 billion worth of United States exports. China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology. Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong…Therefore, today, I directed the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10%. After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced. If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another $200 billion of goods. The trade relationship between the United States and China must be much more equitable.”

The Dow Jones Industrial Average closed 287 points lower. The S&P 500 closed 11 points lower. The NASDAQ closed 21 points lower.

******************************

“The weekly average fed steer price in the 5-area marketing region likely reached a second-quarter peak of $124.81/cwt. for the week ending May 6,” says analysts with USDA’s Economic Research Service, in the latest monthly Livestock, Dairy and Poultry Outlook. “During that week, the price was nearly $20 above the asking price of the June Live Cattle contract. Although the spread narrowed during the month, the prospect of lower prices during June likely influenced feedlot operations to promptly market their cattle.”

Although marginally improved, by at least one measure, feedlots will face heavy economic pressure for the remainder of the year.

“Currently, the net returns projected for closeouts in May are minus-$118.09/head for steers and minus-$80.18/head for heifers,” according to the most recent Historical and Projected Kansas Feedlot Net Returns from Kansas State University (KSU). “Current projections indicate losses spanning the rest of 2018, with some improvement from last month’s expectations. If realized fed cattle basis continues to be stronger than projected, then that will further improve returns.”

Analysts emphasize these estimated returns are on a cash-to-cash-basis, assuming no price risk management.

Estimated net returns for fed steers in Kansas feedlots decline from minus-$249.05/head in June to minus-$64.00 in December. Net returns for heifers decline from minus-$162.54 in June to minus-$37.41 in December.

By | June 19th, 2018|Daily Market Highlights|

Cattle Current-June 19, 2018

When all was said and done in last week’s light volume of negotiated fed cattle trade, live sales were $2-$3 lower in the Southern Plains at $112-$113/cwt., $4-$5 less in Nebraska at $110 and $3-$5 less in the western Corn Belt at $110-$112. Dressed sales were $3-$6 lower at $176-$181.

Week to week on Monday, the 5-area weekly weighted average was $3.18 lower on a live basis at $111.28 and $5.20 lower in the beef at $177.55.

Cattle futures closed mixed on Monday, amid light trade and declining open interest in Live Cattle. Support in the front months included the surge to end last week. Pressure included lower fed cattle prices and wonderments about the impact of the U.S.-China tariff battle.

Live Cattle futures closed mixed from 45¢ lower to 55¢ higher.

Feeder Cattle futures closed an average of 77¢ higher across the front half of the board (47¢ higher to $1.00 higher in spot Aug) and then an average of 26¢ lower.

Boxed beef cutout values were lower for Choice and higher for Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 88¢ lower in the afternoon at $220.71/cwt. Select was $1.47 higher at $204.20.

******************************

Major U.S. financial indices closed mainly lower Monday, with pressure continuing from the brewing trade war between the U.S. and China.

The Dow Jones Industrial Average closed 103 points lower. The S&P 500 closed 5 points lower. The NASDAQ closed fractionally higher.

********************************

“In 2017, unexpectedly strong domestic and international beef demand provided extra support for cattle and beef prices in the face of growing beef supplies. To some extent, that has continued in 2018, though not as pronounced as a year ago,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “After holding quite firm through May, boxed beef prices were under pressure into mid-June with Choice boxed beef price dropping about $5/cwt. last week…Fed cattle prices have declined seasonally but are holding generally better than expected. Remember in early April when June Live Cattle futures dropped under $100/cwt. and have since traded as high as $110/cwt. and now are trading about $108.”  

A silver lining to the seasonal decline in fed cattle prices, is that wider packer margins provide ongoing incentive to keep harvesting cattle aggressively.

Year-to date cattle slaughter is 3.8% more than last year, driven by increases in female slaughter, according to Peel. He explains, “Heifer slaughter is up 8.0% year over year and cow slaughter is up 8.1%. Beef cow slaughter is up 12.2% and dairy cow slaughter is 4.5% more than last year. Steer slaughter is up a scant 0.1% year over year.”

Beef production is 3.6% more so far this year, but lighter year-to-year carcass weights, in part due to the aggressive marketing, mean slightly less production that originally anticipated.

“There are a variety of supply and demand factors to watch in the second half of the year,” Peel says. “Beef production will be determined by slaughter rates, but even more by carcass weights moving forward. Drought conditions do not appear to be causing significant herd liquidation at this time, but the threat is still there. Further, slowing of heifer retention and herd growth (in part due to drought conditions) continues to add to female slaughter and could continue through the end of the year.”

Ultimately, the outcome of current trade trials will also have plenty to say about beef’s fortunes.

“The uncertainty, volatility and reality of a trade war will likely have greater negative impacts on beef and other markets in the second half of the year,” Peel says. “Beef trade in early 2018 has been very supportive to cattle and beef markets, but this could change going forward. Beef markets may be directly impacted in terms of exports, but significant, if not bigger impacts, may be the indirect result, for example, of reduced pork exports and increased domestic supplies of competing meats.”

By | June 18th, 2018|Daily Market Highlights|

Cattle Current Daily-June 18, 2018

Cattle futures surged higher Friday, recovering much of the week’s decline. Perhaps bears are finally convinced the bad news of stout summer supplies took the last train out a while back.

Live Cattle futures closed an average of $2.34 higher through the front four contracts and then an average of $1.45 higher.

Negotiated cash fed cattle trade remained undeveloped through late Friday afternoon. The previous week’s stronger prices, as well as the surge in Cattle futures Friday likely added to seller reluctance. On the other end of the trade, it could be that heavy out-front purchases in recent weeks enabled packers to be more patient.

Except for 82¢ higher in the back contract, Feeder Cattle futures closed an average of $3.12 higher ($2.62 higher to $4.30 higher in spot Aug).

Boxed beef cutout values were weak on Choice and higher for Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 49¢ lower in the afternoon at $221.59/cwt. Select was 76¢ higher at $202.73.

******************************

Major U.S. financial indices closed lower Friday, but well off of session lows. Primary pressure was attributed to President Trump saying the U.S. will impose a 25% tariff on up to $50 billion of Chinese imports, followed by Chinese officials vowing retaliation in kind.

The Dow Jones Industrial Average closed 84 points lower. The S&P 500 closed 2 points lower. The NASDAQ was down 14 points.

******************************

Odds of an all-out trade war between the U.S. and China spiked higher Friday with the White House saying it will impose new tariffs—first threatened in April—on Chinese imports beginning July 6.

“In light of China’s theft of intellectual property and technology and its other unfair trade practices, the United States will implement a 25% tariff on $50 billion of goods from China that contain industrially significant technologies,” said President Trump Friday. “The United States will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China.”

The news contributed to strong pressure on domestic grain markets Friday, especially soybeans.

By Saturday morning, China did retaliate. Citing a statement from the Ministry of Finance of the People’s Republic of China, various reports explained China is imposing new tariffs on about $50 billion worth of U.S. imports, including soybeans and pork.

“We must take strong defensive actions to protect America’s leadership in technology and innovation against the unprecedented threat posed by China’s theft of our intellectual property, the forced transfer of American technology, and its cyber attacks on our computer networks,” said Ambassador Robert Lighthizer. 

In the meantime, hopefully negotiators will heed market comments made in early April by Derrell Peel, Extension livestock marketing specialist at Oklahoma State University: “As we work through the escalating trade tensions that are currently roiling markets, it will be beneficial if all sides remember that trade adds value and is not a zero-sum game.”

Domestically, Andrew P. Griffith, agricultural economist the University of Tennessee points out in his weekly market comments that consumer beef demand was 3.2% more year over year in the first quarter this year.

Although beef production continues to increase, Griffith explains retail beef prices continue at similar levels to last year.

Beef production year to date is 3.7% higher than the same time period in 2017 and 8.3% greater than the same 23-week period in 2016, according to Griffith.

“The all-fresh beef retail price for May was $5.68/lb., which is 7¢ lower than April and 5¢ higher than May one year ago. In the past 24 months, the all-fresh beef retail price has averaged $5.66/lb., with a low of $5.49 in January 2017 and a high of $5.85 in June 2016,” Griffith says.

By | June 17th, 2018|Daily Market Highlights|

Cattle Current Daily-June 15, 2018

Cattle futures closed solidly lower Thursday amid trade worries, pressure on commodities overall, lower wholesale beef prices and the lack of cash direction.

Live Cattle futures closed an average of $1.60 lower (92¢ at the back of the board to $2.12 lower).

Feeder Cattle futures closed an average of $1.61 lower.

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

Choice boxed beef cutout value was $1.82 lower in the afternoon at $222.08/cwt., the lowest since the end of April. Select was 33¢ lower at $201.97.

******************************

Major U.S. financial indices closed mixed Thursday. Support came from media and tech stocks, including Comcast’s announced bid for major portions of Twenty-First Century Fox.

The Dow Jones Industrial Average closed 25 points lower. The S&P 500 closed 6 points higher. The NASDAQ was up 65 points.

******************************

Convenience is trumping some of the concerns consumers previously had about shopping online for groceries, such as higher costs, fees or waiting for delivery, according to the NPD Group (NPD).

In early 2017, NPD reported that 6% of U.S. consumers shopped online for groceries. That’s now up to 16%, or over 52 million people, shopping online for groceries, using either delivery or click-and-collect. 

Keep in mind that it was about a year ago when Amazon announced its plans to acquire Whole Foods, ultimately pressing brick-and-mortar national grocery retailers to move faster toward offering online delivery and pickup services.

Amazon Prime members, men, and young adults and those who find grocery shopping a necessary evil were among the first groups to shop for their groceries online, according to NPD. At the same time, growth in click-and-collect and speedy delivery options launched by major grocery chains expanded the appeal of online shopping to the broader population.

“This past year has been a game of one-upmanship among the major grocery chains,” says Darren Seifer, NPD food and beverage industry analyst. “We went from two-day delivery, to one-day, to same-day, to two-hour delivery; with the speed of delivery being defined in superlatives, like fast to ultra-fast. It’s been a fascinating year and the best part about it is that in the end, consumers are the winners of the game.”    

The NPD folks point out that online grocery shoppers take an omnichannel approach and still shop at brick-and-mortar grocers, too.   

By | June 14th, 2018|Daily Market Highlights|

Cattle Current Daily-June 14, 2018

Only 596 head were offered in the weekly Fed Cattle Exchange Auction. There were no sales, but two lots of heifers (287 head) passed out at $110 and $112/cwt.

Cattle futures edged lower amid light trade and uncertainty about the week’s cash direction.

Live Cattle futures closed an average of 38¢ lower.

Feeder Cattle futures closed an average of 62¢ lower (15¢ to $1.30 lower).

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

Choice boxed beef cutout value was $1.02 lower in the afternoon at $223.90/cwt. Select was $1.09 lower at $202.30.

******************************

Major U.S. financial indices closed lower Wednesday, under pressure from the notion that the Fed will increase interest rates two more times this year, rather than one, as previously expected. That’s after the widely anticipated hike in interest (+0.25%) Wednesday.

“Information received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate,” according to a statement from the Fed. “Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2%. Indicators of longer-term inflation expectations are little changed, on balance.”

The Dow Jones Industrial Average closed 119 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 8 points.

******************************

“The seasonality of heifer slaughter is likely changing as the herd size has recovered from the drought and expansion is slowing,” says David Anderson, Extension economist with Texas A&M AgriLife Extension Service.

In the most recent issue of In the Cattle Markets, Anderson explains, over the lasy several years, heifer slaughter tended to be seasonally low from about May-July, as herd expansion meant more heifer retention and fewer heading to the feedlot. Now, fewer heifers are being retained.

“Fed heifer slaughter is up about 17% over the last six weeks, using the daily slaughter data and estimating the first two weeks of June. Going back to the first of April, fed heifer slaughter is up about 16% compared to a year ago,” Anderson says. “Cattle slaughter surged over the last six weeks with weekly slaughter over 650,000 head every week since the first of May, except the Memorial Day- shortened week. Total cattle slaughter is up about 9% compared to the same period a year ago. Much of the year-over-year increase in slaughter is from heifers.” He adds that total weekly slaughter levels in May were the most for the month since May 2013.

Although there are more heifers on feed this year, Anderson says, “It is about the same as the number on feed, on average, over the 2007-2012 period before the drought and during the herd adjustments to ethanol-fueled feed costs.”

By | June 13th, 2018|Daily Market Highlights|

Cattle Current Daily-June 13, 2018

Cattle futures moved solidly lower Tuesday after early follow-through support. The surge higher in corn prices helped Live Cattle eke out a mostly positive close but kept pressure on Feeder Cattle. Keep in mind that trade was light in both pits.

Except for 12¢ lower and 25¢ lower on either end of the board, Live Cattle futures closed an average of 26¢ higher.

Except for unchanged in the back two contracts, Feeder Cattle futures closed an average of 57¢ lower (15¢ to 82¢ lower).

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

Choice boxed beef cutout value was 21¢ lower in the afternoon at $224.92/cwt. Select was 59¢ higher at $203.39.

******************************

Major U.S. financial indices closed mostly narrowly mixed Tuesday, with the NASDAQ receiving a boost from a U.S. District Court ruling in favor of the proposed merger between Time Warner and AT&T.

The Dow Jones Industrial Average closed 1 point lower. The S&P 500 closed 4 points higher. The NASDAQ was up 43 points.

******************************

Projected beef production for this year was lowered by 90 million lbs. in the most recent World Agricultural Supply and Demand Estimates (WASDE), on lower carcass weights more than offsetting increased steer, heifer and cow slaughter in the second quarter. Estimated beef production for this year is 27.125 billion lbs. Estimated beef production next year is 27.175 billion lbs.

The average 5-area Direct fed steer price is projected at $116-$119/cwt. for the second quarter, $106-$112 for the third quarter and $108-$116 for the fourth quarter. The annual price was reduced $1 on the upper end of the range to $114-$118; the projection for 2019 is $113-$122.

WASDE projects ending corn stocks 105 million bu. lower to 1.577 billion bu. If realized, that would be the lowest level since 2013-14. The season-average farm price for corn was raised 10¢ at the midpoint with a range of $3.40 to $4.40/bu. 

Projected ending stocks for wheat are 9 million bu. lower than the previous month to 946 million bu. The projected season-average farm price for wheat is up 10¢/bu. with the midpoint at $5.10/bu., compared to the revised 2017-18 price of $4.75.

Soybean ending stocks were projected 25 million bu. less for 2017-18 and 30 million bu. less for 2018-19, but the price forecast was unchanged. The 2018-19 season-average price for soybeans is forecast at $8.75 to $11.25/bu. Soybean meal prices are projected at $330 to $370/short ton. Soybean oil prices are projected at 29.5¢ to 33.5¢/lb. 

By | June 12th, 2018|Daily Market Highlights|

Cattle Current Daily-June 12, 2018

Negotiated cash fed cattle trade ended up sharply higher last week: $5 higher on a live basis in the Southern Plains at $115/cwt., $3-$5 higher in the western Corn Belt at $115 and $3-$4 higher in Nebraska at $114-$115. Dressed trade was $5-$7 higher at $182-$184.

Cattle futures moved higher through much of the session Monday, buoyed by follow-through support from last week’s higher cash fed cattle trade. By the end of the day, though, futures closed solidly lower, most likely on profit taking.

Except for 12¢ higher in the back contract, Live Cattle futures closed an average of $1.12 lower (75¢ to $1.25 lower).

Except for an average of $1.25 lower in the front two contracts, Feeder Cattle futures closed an average of 50¢ lower.

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

Choice boxed beef cutout value was $1.08 lower in the afternoon at $225.13/cwt. Select was 38¢ lower at $202.80.

******************************

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

The Dow Jones Industrial Average closed 5 points higher. The S&P 500 closed 2 points higher. The NASDAQ was up 14 points.

******************************

“In the U.S. wholesale meat marketplace, robust exports have been a factor cushioning beef prices against large supplies,” notes Jim Robb, director of the Livestock Marketing Information Center (LMIC), in this week’s Cow-Calf Corner. “In the World Agricultural Supply and Demand Estimates (WASDE) issued last month by USDA, their forecast was for U.S. beef exports in 2018 to be 3.03 billion lbs., 6% above 2017’s. That would be the first time for foreign sales to exceed 3 billion pounds. Year-to-date trends are on the path to reach that level.”

Of course, assorted trade issues percolating currently will have plenty to say about ultimate export reality.

“More than just insights into actual policy changes and tariff rates are required to forecast exports,” Robb explains. “For example, in the current world economic environment, exchange rates adjustments can have a significant impact on the price paid by a foreign buyer for U.S. agricultural products. Exchange rates are determined by macroeconomic forces and by sectors much bigger than the agriculture and food trade sphere. That is, exchange rates are realistically exogenous, using an economics term, to the trade of agricultural and food products. The value of the Mexican peso could drop versus the U.S. dollar, mitigating, at least partially, the short-term impacts of any new tariffs on U.S. exports to that country.”

By | June 11th, 2018|Daily Market Highlights|

Cattle Current Daily-June 11, 2018

By late Friday afternoon, cash fed cattle trade remained mostly undeveloped. Although too few transactions to trend, higher money was reported in Nebraska at $114/cwt. on a live basis, which was $2.50-$3.00 higher than the previous week. Early live sales in the western Corn Belt were at $114-$115 ($3-$4 higher); early dressed sales were $4-$6 higher at $182. Late in the day, the Texas Cattle Feeders Association reported its members trading live cattle at $115, which was $5 higher than the previous week.

Expectations for stronger cash trade helped boost Cattle futures Friday, extending the week’s gains.

Live Cattle futures closed an average of $1.44 higher through the front three contracts and then an average of 28¢ higher (7¢ to 62¢ higher).

Feeder Cattle futures closed an average of 69¢ higher (27¢ higher to $1.20 higher in spot Aug). 

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

Choice boxed beef cutout value was 20¢ lower in the afternoon at $226.21/cwt. Select was 23¢ lower at $203.18.

****************************

Major U.S. financial indices closed higher Friday, amid generally positive economic news.

The Dow Jones Industrial Average closed 75 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 10 points.

******************************

Brazilian interests now own a substantial chunk of the U.S. beef packing business.

That comes with last week’s announcement that Marfrig Global Foods received final authorization for its acquisition of a 51% interest in National Beef Packing Company, LCC. The pending sale was announced in April, with the Brazilian company paying $969 million (U.S.) for the controlling interest.

According to a statement from National Beef at the time, “The operations and management of National Beef will remain unchanged with Tim Klein continuing as National Beef President and Chief Executive Officer upon completion of the transaction. The current owners of National Beef will continue as owners under the new structure.” At the time, Leucadia National Corp. was the majority owner, having acquired a majority interest in National Beef at the end of 2011.

With the sale, Brazilian interests now own a substantial chunk of the U.S. beef packing business.

Brazilian-owned JBS USA is the nation’s second largest beef packer in terms of sales, according to data compiled by CattleFax and presented in Directions statistics from the National Cattlemen’s Beef Association. National is fourth largest in terms of beef sales. Based on net sales (all meats), according to the National Provisioner, JBS was second largest in the U.S. last year, and National Beef was seventh largest (Tyson was largest and Cargill was third largest).

By | June 10th, 2018|Daily Market Highlights|

Cattle Current Daily-June 8, 2018

Early follow-through support faded in Cattle futures yesterday, leading to a marginally lower close. The week’s negotiated cash fed cattle trade remained undeveloped through late afternoon.

Except for 7¢ higher in spot Jun and 2¢ higher in Apr, Live Cattle futures closed an average of 14¢ lower.

Other than 50¢ and 10¢ higher at the back of the board, Feeder Cattle futures closed an average of 39¢ lower

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

Choice boxed beef cutout value was 56¢ lower in the afternoon at $226.41/cwt. Select was 24¢ lower at $203.41.

******************************

Major U.S. financial indices closed mixed Thursday.

The Dow Jones Industrial Average closed 95 points higher. The S&P 500 closed 1 point lower. The NASDAQ was down 54 points.

******************************

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

Beef export volume in April (111,213 mt) was 11% more than a year earlier. Export value was 23% higher at $676.7 million, the fourth-highest on record. Through the first four months of 2018, exports were up 10% in volume (429,286 mt). Export value was 20% more than last year’s record pace at $2.59 billion.

Beef export value averaged $328.46 per head of fed slaughter in April, up 16% from a year ago. Through April, per-head export value averaged $318.91, up 17%.

Even with growth in red meat production, both pork and beef exports accounted for a larger share and contributed more dollars per head, indicating strong international demand, according to USMEF.

U.S. pork exports set a new volume record in April (230,049 mt), which was 13% more than a year ago. Export value was also 13% more ($584.1 million).

While Japan maintained its position as the leading volume and value market for U.S. beef, momentum continued to build in South Korea, where April exports were up 62% from a year ago in volume (19,185 mt) and 72% in value ($134.8 million).

“The enthusiasm for U.S. beef in these markets may be at the highest level I’ve ever seen,” says Dan Halstrom USMEF President and CEO. “In nearly every segment of the retail and restaurant sectors, U.S. beef is attracting new customers with a wider range of cuts and menu items. It’s an exciting trend that’s not just limited to Japan and Korea, with U.S. beef’s popularity also strengthening in other Asian markets and in the Western Hemisphere.”

By | June 7th, 2018|Daily Market Highlights|

Cattle Current Daily-June 7, 2018

Strong follow-through buying in Cattle futures ran out of steam by the end of the session Wednesday, though markets were able to retain the previous day’s gains and add a bit. Trade tensions and lingering uncertainties about burgeoning beef supplies continue to help limit advances.

Except for 2¢ lower in away Aug, Live Cattle futures closed an average of 32¢ higher ($1.10 higher in spot Jun).

Feeder Cattle futures closed an average of 77¢ higher (from 62¢ to $1.47 higher).

Support came from growing notions that cash fed cattle can trade higher this week.

For instance, slaughter steers sold mostly $2 higher at Sioux Falls Regional in South Dakota; $111-$115/cwt. for Ch 2-3.

There were only 568 head offered in Wednesday’s weekly Fed Cattle Exchange auction, for delivery at 1-9 days. There were no takers; two lots (155 steers and 51 heifers) were passed on at $110/cwt.

Boxed beef cutout values were weak to lower Wednesday on light demand and light to moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 61¢ lower in the afternoon at $226.97/cwt. Select was $2.20 lower at $203.65.

******************************

Major U.S. financial indices closed sharply higher Wednesday, driven by rallying bank stocks, tied to higher interest rates.

The Dow Jones Industrial Average closed 346 points higher. The S&P 500 closed 23 points higher. The NASDAQ was up 51 points, closing at a record high.

******************************

“It’s clear by the growth in plant-based protein case shipments to foodservice and restaurant operators that this category has mainstreamed beyond those who choose a meatless diet,” says David Portalatin, industry advisor for The NPD Group’s (NPD) Food Sector. Case shipments from broadline foodservice distributors to independent and micro-chain restaurant operators  were 19% higher for the year ending in March.

In a recent NPD survey, 14% of U.S. consumers (more than 43 million consumers) regularly use plant-based alternatives such as almond milk, tofu, and veggie burgers, and 86% of them don’t consider themselves vegan or vegetarian. The heaviest users of plant-based foods are those who are more likely to be on a diet or to have a medical condition, and consumers who tend to think of food as fuel, are more convenience-oriented than others and less confident in their cooking skills.

Beef alternatives are driving growth in the category. Specifically, according to NPD, beef alternatives make up 44% of the plant-based categories being shipped to independent and micro-chain restaurant operators. Burgers are the largest beef alternative category but ball products, like meatless meatballs, used as ingredients have outpaced burgers and all other plant-based protein formats in terms of growth.

By | June 6th, 2018|Daily Market Highlights|

Cattle Current Daily-June 6, 2018

Cattle futures bounced higher Tuesday, perhaps helped along by continuing indications that cattle feeders remain current in marketing as supplies increase. Given light negotiated fed cattle trade the last two weeks, there was also the notion that packers likely need to be more aggressive buyers this week.

Live Cattle futures closed an average of $1.59 higher ($1.00 to $2.47 higher in spot Jun).

Feeder Cattle futures closed an average of $1.71 higher (from $1.27 higher in spot Aug to $2.00 higher).

Boxed beef cutout values were steady for Choice and weak for Select Tuesday on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 1¢ higher in the afternoon at $227.58/cwt. Select was 40¢ lower at $205.85.

******************************

Major U.S. financial indices closed mostly narrowly mixed on Tuesday, buoyed by tech stocks for the second consecutive day. Pressure included lingering trade worries.

The Dow Jones Industrial Average closed 13 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 31 points, closing at a record high.

******************************

Agricultural producer sentiment rose last month to its highest level since January 2017, according to the Purdue University/CME Group Ag Economy Barometer—a sentiment index derived from a monthly survey of 400 agricultural producers across the U.S.

“Over the last month there’s been a relaxation in international trade tensions with China, and that seems to be playing a role in how producers are viewing their financial future,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The May barometer reading of 141 was 16 points higher than April. The Index of Current Conditions increased to 132 during May, 9 points higher than in April, while the Index of Future Expectations climbed to 145, up 19 points compared to a month earlier, making it the highest future expectations reading since February 2017.

Despite the improvement in sentiment, only 27% of respondents said now is a good time to make large farm investments.

By | June 5th, 2018|Daily Market Highlights|

Cattle Current Daily-June 5, 2018

Cattle futures moved lower again Monday, amid up-and-down, choppy trade. Declining open interest suggests current uncertainty is keeping some folks off the field.

Except for 10¢ higher in the back contract, Live Cattle futures closed an average of 55¢ lower (15¢ lower in spot Jun to $1.17 lower).

Feeder Cattle futures closed an average of 73¢ lower (from 30¢ lower at the back of the board to $1.47 lower in spot Aug).

Boxed beef cutout values were steady for Choice and higher for Select Monday on moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 4¢ higher in the afternoon at $227.57/cwt. Select was $1.45 higher at $206.25.

******************************

Major U.S. financial indices closed higher on Monday, with follow-through buying from Friday’s rally and boosted by tech stocks, including Apple and Amazon. The tech-based NASDAQ closed up 52 points and at a record high. The Dow Jones Industrial Average closed 178 points higher. The S&P 500 closed 12 points higher.

******************************

Notwithstanding simmering trade tensions and current trade negotiations, U.S. beef exports in 2019 are forecast at 3.15 billion pounds, a new record volume, according to last months Livestock, Dairy and Poultry Outlook. That would be 3.8% more than estimated for this year.

U.S. beef exports increased 12% from year-earlier levels in the first quarter of this year, according to USDA’s Economic Research Service (ERS).

“Global meat and poultry demand continues to fuel the growth in U.S. production (see below), driven, in part, by economic expansion in the developing world,” say ERS analysts (Jones, Haley and Melton) in a recent Amber Waves article. “While U.S. meat and poultry imports have remained fairly stable since 2000, U.S. exports of the same goods have grown at an average of 4% per year. An increase in global demand has likely contributed to favorable conditions for U.S. exports. As a result, net exports have increased by an average of 7.2% since 2000 and are expected to increase a further 5% in 2018, or more than 600 million lbs.”  

By | June 4th, 2018|Daily Market Highlights|

Cattle Current Daily-June 4, 2018

Negotiated cash fed cattle trade for the week ended up steady to either side of steady with extremely light trade.

There were some live sales at $111/cwt. in Nebraska, compared to $109.00-$110.50 the previous week. A few sold in the beef at $177, compared to $176-$180 the previous week. Scattered sales in the Southern Plains were generally steady at $110. In the western Corn Belt, dressed sales were mostly $2-$4 lower than the previous week at $178.

Cattle futures meandered lower.

Except for 2¢ higher in away Jun, Live Cattle futures closed an average of 54¢ lower (15¢ lower in spot Jun to $1.12 lower).

Feeder Cattle futures closed an average of 60¢ lower (22¢ lower at the back of the board to $1.07 lower in spot Aug).

Boxed beef cutout values were weak for Choice and firm for Select Friday on light to moderate demand and offerings, according to the Agricultural Marketing Service (AMS).

Choice boxed beef cutout value was 67¢ lower in the afternoon at $227.53/cwt. Select was 33¢ higher at $204.80.

“Beef demand seems to be hitting on all cylinders with retailers featuring beef, which is promising. With the large supply of fed cattle, demand is exceeding expectations,” say AMS analysts. “The actual federally inspected cattle slaughter for week ending May 19 totaled 667,613, the largest weekly cattle slaughter since August 2011. Steer and heifer slaughter was also running at a pretty good clip for that week as near 540,000 were harvested, the largest total for those classifications since June 2011.” 

******************************

Major U.S. financial indices rebounded Friday from steep losses in the previous session. Support included a monthly employment report that was stronger than expected. Total non-farm payroll employment increased by 223,000 in May, according to the U.S. Bureau of Labor Statistics. The unemployment rate edged lower to 3.8%.

The Dow Jones Industrial Average closed 219 points higher. The S&P 500 closed 29 points higher. The NASDAQ closed 112 points higher.

******************************

“Today’s consumer is a ‘pro-sumer,’ which means they are going to co-create their story and it’s about ‘Brand Me,’” explains Jeff Fromm, a partner at Barkley, a company that assists with establishing and enhancing brands and helping businesses identify emerging consumer trends. Fromm says consumers expect to have a seat at the table. If you’ve heard in the past that it’s just about being transparent, he says, our research suggests that’s going to get you a ‘C’ on your report card. In ‘Tomorrowland,’ you’re going to have to offer proof that the story you are living is real – which is a step beyond transparency.”

Fromm—the best-selling author of books that include Marketing to Millennials, Millennials with Kids and Marketing to Gen Z—spoke to an international audience at last week’s World Meat Congress in Dallas.

He explained that food has become more than just a category of products consumers buy and enjoy – it is also a means of expression.

“Today’s modern consumer expresses themselves through food,” Fromm says. “Discretionary purchases on food have increased at a dramatic rate, at a time when discretionary purchases on fashion haven’t. So they are trading ‘fashion’ for ‘food’ as a way to express themselves.”

Fromm emphasized that Farmers and ranchers, and those in meat processing and merchandising, absolutely must better connect with consumers by sharing details of the story behind their products.

By | June 3rd, 2018|Daily Market Highlights|

Cattle Current Daily-June 1, 2018

Cattle futures weakened Thursday, following the previous day’s rally. Month-end positioning and lack of direction from undeveloped cash fed cattle trade seemed to be primary drivers. Reaction to the latest U.S. tariffs on NAFTA partners appeared muted until more is known about potential retaliation (more below).

After $1.07 lower in spot Jun, Live Cattle futures closed an average of 50¢ lower (30¢ to 70¢ lower).

Feeder Cattle futures closed an average of 56¢ lower—(from 22¢ lower at the back of the board to $1.15 lower in spot Aug).

Boxed beef cutout values were steady to weak Thursday on moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 48¢ lower in the afternoon at $228.20/cwt. Select was 9¢ higher at $204.47.

******************************

Major U.S. financial indices closed sharply lower Thursday after President Trump implemented a 25% tariff on steel imports and a 10% tariff on aluminum imports from NAFTA partners, Canada and Mexico, as well as the EU.

Those nation’s responded swiftly.

“Mexico intends to impose tariffs on some U.S. pork cuts and pork products,” according to a statement from the U.S. Meat Export Federation (USMEF). “Full details – such as the tariff rate and the exact products to which the tariffs could apply – are not entirely clear at this time…In 2017, Mexico was the largest volume market for U.S. pork exports at more than 800,000 metric tons, valued at $1.51 billion.”

“In response to these measures, Canada intends to impose tariffs on imports of steel, aluminum and other products from the United States—representing the total value of 2017 Canadian exports affected by the U.S. measures,” said Chrystia Freeland, Canadian Minister of Foreign Affairs. “That is $16.6 billion. We are imposing dollar-for-dollar tariffs for every dollar levied against Canadians by the United States.”

“The EU will use the possibility under WTO rules to rebalance the situation by targeting a list of US products with additional duties,” said EU Commissioner for Trade, Cecilia Malmström. “The level of tariffs to be applied will reflect the damage caused by the new U.S. trade restrictions on EU products.” 

Whether or not U.S. beef ends up being a direct target of retaliation, the situation adds a new layer of market uncertainty, including the impact on current NAFTA negotiations.

The Dow Jones Industrial Average closed 251 points lower. The S&P 500 closed 18 points lower. The NASDAQ closed 20 points lower.

By | May 31st, 2018|Daily Market Highlights|

Cattle Current Daily-May 31-2018

Buyers stormed into Cattle futures early in yesterday’s session, though, pushing prices limit and near-limit higher in front-month Live contracts. There’s no definitive reason for the aggressive surge, but psychology surely got a lift from the weekly National Comprehensive Boxed Beef Cutout report indicating retailers intend to be aggressive in featuring and marketing beef. There were 7,589 loads reported for the week ending May 25—the most since the first week of September—with 6,072 loads for delivery up to 21 days. Perhaps there’s some compensatory gain to be had from latent and pent up grilling demand.

Live Cattle futures closed an average of $2.06 higher—an average of $2.97 higher in the front three contracts. 

Feeder Cattle futures closed an average of $2.98 higher

There were only 449 head offered in the weekly Fed Cattle Exchange auction—all from Kansas—but 225 head sold: two lots of heifers and one lot of steers for a weighted average price of $110/cwt. for delivery at 1-9 days. That price mirrored last week’s country trade in that region.

Boxed beef cutout values were firm to higher Wednesday on moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service (AMS).

Choice boxed beef cutout value was $1.12 higher in the afternoon at $228.68/cwt. Select was 73¢ higher at $204.38.

****************************

Major U.S. financial indices closed sharply higher Wednesday, basically erasing steep losses from the previous session and for similar but opposite reasons. In this case, the Euro recovered some lost ground as fears about Italy exiting the EU subsided for the day. Crude oil prices bounced back, on speculation the OPEC countries and Russia will not raise production.

The Dow Jones Industrial Average closed 306 points higher. The S&P 500 closed 34 points higher. The NASDAQ closed 65 points higher.

******************************

“Feeder cattle prices are in the process of making a spring low. Prices have been pressured by forced early movement of cattle due to weather, escalating feed costs and weakness in deferred Live Cattle futures,” according to Rabobank’s Beef Quarterly for the second quarter. “Prices are expected to make a seasonal low, and the early forced placements of calves has reduced available supplies of cattle outside feedyards, which should be price supportive for summer and the second half of the year.”

Dry conditions continue as a primary market driver and wildcard.

Analysts with RaboResearch explain 34% of the U.S. cowherd resides in eight states currently amid Extreme or Exceptional drought; 70% of the cows are in 20 states under some level of measurable drought stress.

“The increased usage of hay for feeding—-following dry conditions and a moderate to severe winter—is driving hay prices higher, making forced feeding more expensive,” explain RaboResearch analysts. “…cow slaughter is already higher than previous years and the likelihood of some degree of forced liquidation during the coming grazing season is very high.”

Pasture conditions improved for the second consecutive week, according to the latest weekly Crop Progress report (week ending May 27).

49% of pasture and range is in Good (42%) or Excellent (7%) condition, compared to 63% last year. 17% is rated as Poor (12%) or Very Poor (5%) compared to 10% last year.

By | May 30th, 2018|Daily Market Highlights|

Cattle Current Daily-May 30, 2018

Sluggish negotiated cash fed cattle trade last week ended up lower across a broad range. Live sales were $4-$7 lower in Kansas at $110; $3.00-$3.50 lower in Nebraska at $109.00-$111.50; $2-$3 lower in Colorado at mostly $110; $2-$4 lower in the western Corn Belt at $110-$114. Likewise, dressed trade was $4-$5 lower in Nebraska at $176-$178; $2-$4 lower in the western Corn Belt at $180-$182.

More than anything, it seemed to be significantly lower outside markets (see below) that weighed on cattle futures Tuesday, increasing uncertainty and putting a halt to follow-through support early in the session.

Live Cattle futures closed an average of 79¢ lower (52¢ lower to $1.52 lower in spot Jun).

Feeder Cattle futures closed from 27¢ higher to 40¢ lower

Boxed beef cutout values were steady to weak Tuesday on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service (AMS).

Choice boxed beef cutout value was 13¢ higher in the afternoon at $227.56/cwt. Select was 97¢ lower at $203.65.

**************************

Major U.S. financial indices closed sharply lower Tuesday, but off of session lows. Political turmoil in Italy was the primary source of pressure as investors fretted that upheaval in the third largest EU economy (GDP) could lead to that nation exiting the EU and the Euro, perhaps unraveling both. Never mind wonderments about Italy’s enormous debt. Softer crude oil prices added to the angst.

The Dow Jones Industrial Average closed 391 points lower. The S&P 500 closed 31 points lower. The NASDAQ closed 37 points lower.

****************************

“The recent trend of declines in animal placed into feedlots suggests that the number of animals in feedlots will decline seasonally until September,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Importantly, the percentage increase compared to 2017’s is projected to continue dropping through the summer months. This year, the seasonal drop could be larger than normal. By Sept. 1, the number of cattle on feed could be only 1% to 3% above 2017’s.”

As noted in the last Cattle Current, according to Friday’s monthly Cattle on Feed report, total cattle on feed May 1—feedlots with 1,000 head or more capacity—of 11.558 million head were 5.09% more than the previous year. That’s the second most cattle on feed May 1 since the series began in 1996, according to the National Agricultural Statistics Service.

“Year-over-year increases in the on-feed count have been in place since early 2016; the percentage increase surged beginning in late 2017 as a result of more animals placed into feedlots, largely due to drought,” LMIC analysts explain. “Many of those lightweight animals have been in feedlots for 8-10 months. In the last two months that picture has been changing, with head placed significantly below a year ago.”

Placements in April were 8.28% less than a year earlier. In March, placements were 9.26% less. That was the first year-over-year decline for placements since February 0f 2017.

“The marketings of fed cattle throughout most of 2017 were strong, especially when compared to 2016’s,” LMIC analysts say. “Daily average marketings have remained above year-ago levels every month so far this year. Typically, the biggest months for fed cattle marketed are May and June; that is expected to be the situation again this year.”

By | May 29th, 2018|Daily Market Highlights|

Cattle Current Daily-May 28 and 29, 2018

Other than a few live trades reported in Nebraska at $109/cwt.—too few to trend—negotiated cash fed cattle trade remained undeveloped through late Friday afternoon.

Cattle futures found some traction late in the session, though, perhaps tied to confirmation of fewer year-over-year feedlot placements. The monthly Cattle on Feed report (see below), came out during trading hours. Overall, trade was sluggish ahead of the holiday weekend.

Other than 25¢ and 2¢ higher at either end of the board, Live Cattle futures closed an average of 58¢ higher.

Feeder Cattle futures closed an average of $1.28 higher

Boxed beef cutout values were weak to lower Friday on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service (AMS).

Choice boxed beef cutout value was $1.57 lower in the afternoon at $227.43/cwt. Select was 31¢ lower at $204.62.

******************************

Major U.S. financial indices closed mostly lower Friday, pressured by softer oil prices, tied to reports that OPEC will increase production. CME Crude Oil futures (WTI) closed $2.15 Lower (May ’19) to $2.83 lower (spot Jul). There was also ongoing uncertainty, following President Trump cancelling the meeting with North Korea’s leader.

The Dow Jones Industrial Average closed 58 points lower. The S&P 500 closed 6 points lower. The NASDAQ closed 9 points higher.

******************************

Logic suggests the market will view Friday’s Cattle on Feed report as neutral to perhaps a touch bearish, with numbers mostly in line with expectations ahead of the report.

Placements in April of 1.695 million head were 8.28% less than the previous year (153,000 head fewer). That’s about 1% more than estimates ahead of the report. In terms of weights, 42.45% were placed at weights of 699 lbs. or less; 50.73% at weights of 700-899 lbs.; 16.81% weighing 900 lbs. or more.

Marketings in April of 1.803 million head were 5.87% more than last year (100,000 head more).

Total cattle on feed May 1—feedlots with 1,000 head or more capacity—of 11.558 million head were 5.09% more than the previous year (560,000 head more). That’s the second most cattle on feed May 1 since the series began in 1996, according to the National Agricultural Statistics Service.

By | May 26th, 2018|Daily Market Highlights|

Cattle Current-May 24, 2018

There were only 225 head—two lots of steers—offered in the weekly Fed Cattle Exchange auction on Wednesday and no takers. Likewise, country trade remained undeveloped through the afternoon.

Cattle futures took another step higher on Wednesday, though, building on early-week gains. Besides follow-through support, perhaps some of it was positioning ahead of the monthly Cattle on Feed report due out Friday, and the long holiday weekend ahead.

Live Cattle futures closed an average of $1.49 higher (55¢ higher in spot Jun to $2.15 higher).

Feeder Cattle futures closed an average of $2.01 higher (95¢  higher in spot May to $2.62 higher).

Wholesale beef values were mixed on Wednesday. 

Choice boxed beef cutout value was 73¢ higher in the afternoon at $230.08/cwt. Select was 82¢ lower at $205.04. The Choice-Select spread widened to $25.04, the most since last June.

Select and Choice rib and chuck cuts sold steady to firm, while round cuts traded steady to weak, according to the Agricultural marketing Service. Choice loin cuts sold higher, weak for Select. Beef trimmings sold mostly moderately lower on light to moderate demand and moderate offerings.

******************************

Major U.S. financial indices closed higher on Wednesday, after early follow-through pressure. Reportedly, much of the support was tied to release of minutes from the Federal Open Market Committee (FOMC) indicating a willingness to let inflation run a little past its objective of 2% without applying more brake via more aggressive interest rate hikes.

Consumer price inflation, as measured by the 12-month percentage change in the price index for personal consumption expenditures, was 2% in March, according to the minutes.

The Dow Jones Industrial Average closed 52 points higher. The S&P 500 closed 8 points higher. The NASDAQ closed 47 points higher.

********************************

“…heifer carcass weights in 2018 are the same size as steer carcasses were in 2005,” notes Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

In his weekly market comments, Peel provides insights regarding the impact of heifer slaughter, relative to overall fed beef production. It has to do with both the percentage of heifers in the slaughter mix and their average carcass weight.

“During periods of herd expansion, the heifer percentage of yearling slaughter drops to roughly 31%. During periods of herd liquidation, heifers will contribute about 40% to total yearling slaughter,” Peel explains. “Most recently, heifer slaughter has increased to an annual average of 34.3% of yearling slaughter as heifer retention slows down.”

As for weight, both steer and heifer carcass weights continue to trend higher, as they have for the past 50 years, Peel says. However, heifer carcass weights continue to grow more, relative to steers.

Heifer carcasses averaged 564 lbs. in 1967, according to Peel. The average weight last year was 811 lbs. Looking from another angle, he explains heifer carcasses averaged 84% of steer carcass weights until the mid 1970s. By 2010, heifer carcass weights were 92.3% of steer carcass weights. The percentage continues to edge higher since then—92.5% for the 12-month moving average.

“Heifer carcass weights appear to have provided a buffer against big steer carcasses for the past decade or more, but that may be coming to an end,” Peel says. “It may be that cattle and carcass weights can physically continue to get bigger, but there is a very real question of the demand implications and economic consequences of continued growth in steer and heifer carcass weights.”

By | May 23rd, 2018|Daily Market Highlights|

Cattle Current Daily-May 23, 2018

Cattle futures edged marginally higher on Tuesday, able to hold on to the previous day’s strong gains, after early pressure and amid light trade.

Except for 2¢ lower in spot Jun, Live Cattle futures closed an average of 20¢ higher.

Feeder Cattle futures closed an average of 10¢ higher.

Wholesale beef values continued to unwind Tuesday. 

Choice boxed beef cutout value was $1.47 lower in the afternoon at $229.35/cwt. Select was $1.66 lower at $205.86. Demand was light to moderate on moderate offerings.

Select and Choice rib, chuck, round, and loin cuts sold steady to weak, according to the Agricultural marketing Service. Beef trimmings sold sharply higher on moderate to good demand and moderate offerings.

******************************

Major U.S. financial indices gave back a majority of the previous day’s gains on Tuesday, reportedly on President Trump commenting that he’s dissatisfied with Chinese trade talks thus far. Of course, it was the weekend joint statement from the two nations—placing new tariffs on hold—that boosted stocks on Monday.

The Dow Jones Industrial Average closed 178 points lower. The S&P 500 closed 8 points lower. The NASDAQ closed 15 points lower.

****************************

Total pounds of beef in freezers edged up last month, according to the monthly Cold Storage report released yesterday.

As of Apr. 30, there were 471.5 million lbs. of beef in freezers, which was 1.6% more than the previous month and 2.9% more than the previous year.

Frozen pork supplies were 5.0% more than the previous month and 8.7% more than the same time a year ago.

Total red meat supplies in cold storage were 3.9% more than the previous month and 6.8% more than the previous year.

Frozen poultry supplies were 1.9% more than the previous month and 7.2% more than the previous year.

By | May 22nd, 2018|Daily Market Highlights|

Cattle Current Daily-May 22, 2018

Cattle futures blasted from the weekly blocks with a sharply higher close on Monday, presumably tied to oversold conditions, short covering and the cash premium for fed cattle.

Live Cattle futures closed an average of $1.93 higher ($1.47 higher to $2.52 higher in spot Jun).

Feeder Cattle futures closed an average of $2.47 higher.

That’s more than welcome, considering the plunge last week, led by fed cattle prices. Looking at the weekly report—5-area Weekly Weighted Average Direct Slaughter—fed steer prices declined $6.92 on a live basis to an average of $114.73/cwt. Fed heifers were $7.31 lower at $114.08. On a dressed basis, steers were $7.97 lower at $184.02 and heifers were $9.35 less at $182.99.

Cattle markets were also buoyed by higher outside markets, which rose on increasing optimism about simmering trade issues between the U.S. and China.

According to a joint U.S. and China statement issued by the White House on Saturday, “There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China. To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services. This will help support growth and employment in the United States.

“Both sides agreed on meaningful increases in United States agriculture and energy exports. The United States will send a team to China to work out the details…”

******************************

Wholesale beef value softened on Monday amid moderate offerings and demand, according to the Agricultural Marketing Service. Choice boxed beef cutout value was $1.39 lower Monday afternoon at $230.82/cwt. Select was 94¢ lower at $207.52.

Select and Choice chuck, round, and loin cuts sold steady to weak, according to AMS. Choice rib cuts sold lower, while Select traded steady. Beef trimmings sold sharply lower on light demand and moderate offerings.

******************************

Major U.S. financial indices surged Monday on the weekend news that the U.S. and China were making progress toward reducing the U.S. trade deficit in goods with China.

The Dow Jones Industrial Average closed 298 points higher. The S&P 500 closed 20 points higher. The NASDAQ closed 39 points higher.

******************************

“The packer margin is strong, as are net exports of beef. Saturday and total slaughter volumes have been strong, slaughter weights continue their seasonal decline and boxed beef composite values have been relatively high,” says Stephen Koontz, agricultural economist at Colorado State University, citing current bullish market fundamentals, in the latest issue of In the Cattle Markets. “The Choice-Select spread is also very strong, indicating excellent demand going into summer. All of these indicate strong beef movement and good demand in the face of high production.”

On the other side of the scale, Koontz point to increasing supplies of market-ready fed cattle, the looming seasonal increase in carcass weights, dismal byproduct values and retail beef prices so high that they could limit some demand.

“Strong margins incentivize the packer to buy aggressively and continue to move large volumes of beef,” Koontz says of key factors to monitor. “We need to see continued heavy marketings, slaughter, and a pull-down in the number of market-ready cattle. Aggressive marketings will also limit the seasonal growth in slaughter weights. It would not hurt to see continued strong exports and some softening of retail beef prices. But, the market has very limited upside potential based on fundamental supply and demand. A lot has to happen to see a market similar to that of 2017. One or two things going wrong have the potential to seriously weaken fed and feeder cattle prices.”

By | May 21st, 2018|Daily Market Highlights|

Cattle Current-May 21, 2018

Negotiated cash fed cattle trade finished the week generally $7-$10 lower, depending on the region, at $112 to $117/cwt. Dressed prices were $4 to $10 lower than the previous week at $180-$185.

Choice wholesale beef value softened a bit on Friday with moderate offerings and light to moderate demand, according to the Agricultural Marketing Service. Choice boxed beef cutout value was 47¢ lower Friday afternoon at $232.21/cwt. Select was 22¢ higher at $208.46.

Select and Choice rib, chuck, and round cuts traded steady to weak, while loin cuts sold firm to higher. Beef trimmings sold generally steady on moderate demand and offerings.

Cattle futures closed lower on Friday, but choppiness early suggested a plumbing for bottom rather than free-fall. Profit taking likely added pressure, overall, while surging corn prices added squeeze to Feeder Cattle.

Other than 12¢ lower in the back two contracts, Live Cattle futures closed an average of 56¢ lower

Feeder Cattle futures closed an average of $1.17 lower (87¢ to $1.42 lower).

******************************

Major U.S. financial indices closed little changed on Friday, amid ongoing pressure from rising interest rates and ongoing uncertainty surrounding trade talks between the U.S. and China.

The Dow Jones Industrial Average closed 1 point higher. The S&P 500 closed 7 points lower. The NASDAQ closed 28 points lower.

******************************

“With the expansion of the cattle herd in 2016 and 2017, heifers were being retained at a higher rate than normal,” say analysts with the Agricultural Marketing Service (AMS). “The 2018 January to April heifer slaughter compared to total fed cattle slaughter is calculated at near 35.5%, while the same calculation for 2016 and 2017 was 33.2-34.0%. This would generally indicate a stable herd size. This indicator could change if the heart of cattle country gets encompassed by more drought conditions this summer.”

Based on the most current data from the World Agricultural Outlook Board, AMS analysts say about 23% of the nation’s cattle inventory is in areas currently experiencing drought.

According to the season’s first rating, pasture and range is off to a poorer year-over-year start.

For the week ending May 13, according to USDA’s Crop Progress report, 43% of pasture and range was rated in Good (37%) or Excellent (6%) condition, compared to the previous year’s historically higher 72%. 20% is rated as Poor (15%) or Very Poor (5%) compared to 10% last year. That’s the worst first week of the reporting season since 2014, according to the Livestock Marketing Information Center (LMIC).

States with the most pastures and range in Poor or Very Poor condition include: Arizona (100%); New Mexico (66%); Kansas (31%); Virginia (31%); Missouri (30%); Colorado (29%); North Dakota (28%); Texas (28%); California (25%); Oklahoma (23%); West Virginia (22%); Florida (21%).

By | May 20th, 2018|Daily Market Highlights|

Cattle Current Daily-May 18, 2018

Choice wholesale beef value bounced higher Thursday with moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service. Choice boxed beef cutout value was $1.65 higher Thursday afternoon at $232.68/cwt., the highest level since last June. Select was 26¢ lower at $208.24. Select and Choice chuck, round, and loin cuts sold steady to firm. Rib cuts traded higher for Choice and weaker for Select. Beef trimmings sold mostly moderately lower on light demand and heavy offerings. At $24.44, the Choice-Select spread was also the widest since last June.

The firmer beef values helped Cattle futures come up for air on Thursday, along with apparent short covering.

Other than unchanged in Oct and 25¢ lower in the back contract, Live Cattle futures closed an average of 65¢ higher (5¢ to $1.22 higher in spot Jun).

Feeder Cattle futures closed an average of $1.28 higher (37¢ to $2.00 higher).

******************************

Major U.S. financial indices closed lower on Thursday, giving back some of the previous session’s gains. Pressures included rising interest rates and negative rhetoric from the White House regarding trade talks with China.

The Dow Jones Industrial Average closed 54 points lower. The S&P 500 closed 2 points lower. The NASDAQ closed 15 points lower.

******************************

“Greater U.S. production and continued strength in demand from Asian markets are expected to boost beef exports to a consecutive record high in 2019,” say analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook.

Specifically, ERS forecasts a 3.8% year-over-year increase next year to 3.150 billion lbs.

Overall, ERS expects strong domestic and international demand for U.S. beef to support slightly higher fed cattle prices next year.

By | May 17th, 2018|Daily Market Highlights|

Cattle Current Daily-May 17, 2018

Cash fed cattle prices continued to tick lower on Wednesday at $115/cwt. in the Southern Plains, which was $7 less than last week. The same price and week-to-week decline defined trade in Nebraska a day earlier.

There were 2,586 head offered in the weekly Fed Cattle Exchange auction, but no takers.

Cattle futures continued lower, perhaps partly due to technical positioning, but there was at least a sense of trying to find some stable ground.

Other than 47¢ and 15¢ lower in the back two contracts, Live Cattle futures closed an average of 91¢ lower

Feeder Cattle futures closed an average of $1.07 lower (45¢ to $1.72 lower).

Choice boxed beef cutout value was 61¢ lower Wednesday afternoon at $231.03/cwt. Select was $1.01 lower at $208.50. Select and Choice rib cuts sold steady to firm, while chuck, round, and loin cuts traded steady to weak, according to the Agricultural Marketing Service. Beef trimmings traded mostly sharply lower on light demand and heavy offerings.

******************************

Major U.S. financial indices closed higher on Wednesday, regaining some of the ground lost the previous day. Support included a bounce in retailer stocks, led by stronger than expected quarterly earnings from Macy’s, according to various analysts.