MARKETS

Market Dynamics Create the Perfect Storm for Cattle Prices

Fri, 11 Apr 2025 20:36:54 GMT

As a cattle feeder and commodity broker for 45 years, Brad Kooima of Kooima Kooima Varilek in Sioux Center, Iowa, says he’s never seen a time like this, or even a close second, in the cattle market.

“I also know either you adapt or you get run over,” Kooima says. “I think we have to embrace the idea there’s going to be a lot of volatility.”

He encourages producers to figure out a way to use the extreme volatility to their advantage.

“Don’t forget, you can sell options,” he explains. “These deep-out-of-the-money calls are worth a lot of money.”

Feeder Cattle Migrate North
Cattle-on-feed numbers for the last year and a half have transitioned to Iowa and Nebraska at the expense of Texas and Kansas. Kooima credits the ethanol industry for supporting cattle feeding and dairies, thus impacting the markets.

“The ability to feed the byproduct has made [Iowa] extremely competitive when it compares to places in Texas and Kansas,” he explains. “It’s not unusual for the basis here to be anywhere from 70¢ to 90¢ better, just on corn. When you throw in that dynamic of the DDGs, and the ability to feed the byproduct here, it’s real.”

The lower cost of gains has contributed to the northern migration of cattle on feed as well as negotiated trade.

“I’m a big proponent and a big believer that it’s very important to maintain at least a certain percentage of negotiated trade,” Kooima said during a recent conversation with Chip Flory on AgriTalk.

“We’ve seen a consistent premium in the north ... but when you’ve got leverage, which is what we’ve had [in Iowa] for a long time, I believe the cash negotiator is going to get more money,” he explains.

In recent months, the shift in cattle on feed has accelerated because of the Mexico border closing and screw worms.

Kooima also points out there is an 87% correlation between the cattle futures and the stock market. The only commodity that is higher is crude oil.

He explains cattle are lower when the stock market breaks because of inflation, recession or an economic slowdown.

“Beef demand is viewed as being elastic, a discretionary purchase,” he says.

Short term Kooima says there will be more uncertainty in the cattle market.

“Be careful,” he summarizes. “I’m a supply side fundamentalist guy, too, and where I sit, we don’t have a lot of cattle. We don’t hardly have any cattle ready right now. In a few weeks, there’s a tremendous chance to rally this thing going into May, but I worry the uncertainty might take a little longer than that, and Washington, D.C., can pivot at a moment’s notice.”

Your Next Read: What Four Questions Will Cattle Market Need to Answer in 2025?

USDA's Rollins: 'Let's Go Barnstorm The World And Find New Partners' For Trade

Tue, 18 Feb 2025 18:48:49 GMT

On Brooke Rollins’ first full week on the job as Secretary of Agriculture, she addressed the 600 farmers, ranchers and industry leaders in Kansas City for the 2025 Top Producer Summit.

High on Rollins’ list of priorities was the topic of trade and President Donald Trump’s vision for U.S. agriculture moving forward.

While Rollins did not shy away from addressing the administration’s decision to implement trade tariffs, noting “farmer and rancher concerns are legitimate,” she focused on what she sees as her role ahead.

“My job is to ensure that as President Trump and our trade representatives are making their decisions that I am in the room and advocating on behalf of our people, on behalf of all of you,” she told Top Producer Summit attendees.

One of her key objectives, she says, is to find and expand market access for U.S. agricultural products domestically and abroad.

“Let’s go barnstorm the world, and let’s go find some more trade partners and access [to market opportunities],” she says.

Rollins says her goals for trade are a reflection of Trump’s vision and his determination to make agriculture part of the “golden age” he sees ahead for the U.S.

Trump is the consummate deal maker, Rollins notes, able to side-step bureaucracy and red tape in the process to work with world leaders.

“I don’t know that in the last 250 years, we’ve had anyone in office like President Trump,” she says. “He is a very unusual, remarkable and fearless man, and he wants to make a deal, and in the best way, and put America first.”

Agriculture Secretary Brooke Rollins spoke to a crowd of 600 farmers, ranchers and industry leaders at the 2025 Top Producer Summit.

(Jim Barcus)

Making Headway With Trade
Sen. Roger Marshall of Kansas, who moderated the conversation with Rollins, highlighted Trump’s work to build trade during his first term.

“He redid USMCA, and now that’s our largest ag partnership, with Mexico and Canada,” Marshall says. “He gave us South Korea and Japan, which has been so important to Kansas and our cattle industry, as well as trade 1.0 with China.”

Marshall then mentioned the headway he believes Trump and team have made with India.

“I see India replacing China as our major trade partner, as well that China is growing right now,” Marshall says. “I think there’s huge opportunities in India.”

U.S. ethanol, cotton and tree nuts are three of the top agricultural exports to India, a country that has in the past impeded agricultural trade with tariffs and non-tariff barriers alike. Trump called out the barriers to trade following recent conversations with India’s Prime Minster Modi.

A joint statement after the Trump-Modi meeting said Washington welcomed New Delhi’s recent steps to lower tariffs on select U.S. products and increase market access to U.S. farm products, while seeking to negotiate the initial segments of a trade deal by the fall of 2025.

Rollins says the progress underway with India was just one step forward to address what she described as a trade crisis for the U.S.

“Our exports are down $37 billion this year and likely to be down $42 billion in the months to come. This is a crisis, and this is something that I understand inherently,” Rollins says.

“We have a tremendous amount of work to do,” she adds. “But my promise to you is this, and my commitment will never waver, that every minute of every day for the next four years, I will do everything within my power with hopefully God’s hand on all of us and our work to ensure that we are not just entering the golden age for America, as my boss, President Trump, likes to say, but that we are entering the golden age for agriculture.”

Secretary Rollins joined Chip Flory on AgriTalk. Listen to their discussion about trade policy and tariffs; avian flu; and disaster and economic aid.

Your next read: Senate Overwhelmingly Confirms Brooke Rollins as 33rd Secretary of Agriculture

U.S. Cattle Industry Will Expand as Drought Eases

Fri, 20 Nov 2020 05:42:12 GMT

Lower feed costs, record meat prices and an easing drought point to expansion in the U.S. cattle industry, even as the pace may be restrained by reduced grazing land and high entry costs for new producers, Rabobank International said.

The U.S. cattle herd as of Jan. 1 grew 1.4 percent from the prior year to 89.8 million head, marking the first increase in herd size since 2007, the U.S. Department of Agriculture said on Friday. The numbers reflect a “more aggressive rebuilding curve” than expected, said Don Close, Rabobank International’s vice president of food and agribusiness research for animal protein in St. Louis.

“With the market signals that have been out there and the recovery to pasture conditions that we’ve seen in so many areas, I think it’s very likely that we’ll see a short-term spike in growth,” Close said in a telephone interview on Friday, before today’s release of a Rabobank beef report. “Weather’s going to return to be a factor somewhere and market conditions are going to change. Once we get into year three, four, five, this could be a much slower growth curve.”

Beef production is forecast to fall 1.7 percent this year to a 22-year low, as producers hold back females for breeding to expand herds, the USDA estimates. Fed-cattle steer cash prices will average $1.50 to $1.70 a pound this year, Close said. That compares with last year’s average of $1.5456 a pound, according to the USDA. Feeder-cattle steer prices will average from $2.15 to $2.30, Close said.

The amount of U.S. grazing land has fallen 6.3 percent in the past decade, according to Close’s report.

Demand for beef is expected to continue to be “extremely good” this year, even amid record prices, he said.

“The benefits for consumers with the reduction in gasoline prices provides the opportunity to spend more at the grocery store,” Close said. “We see a very solid base for all animal proteins into the future.”

To contact the reporter on this story: Megan Durisin in Chicago at mdurisin1@bloomberg.net To contact the editors responsible for this story: Millie Munshi at mmunshi@bloomberg.net; Joe Richter at jrichter1@bloomberg.net Joe Richter

Cargill Beef Recalled in Canada on E.coli Contamination Concerns

Fri, 20 Nov 2020 05:41:29 GMT

Cargill Inc., one of the largest beef processors in North American, is recalling ground-beef products sold in western Canada because of possible contamination with E.coli O157 bacteria.

The beef was sold under the Your Fresh Market brand at Wal- Mart Stores Inc. in Alberta, British Columbia, Manitoba and Saskatchewan, the Canadian Food Inspection Agency said in a statement on its website yesterday.

The recall follows tests results and there have been no reported illnesses, the agency said. It’s carrying out a food- safety investigation.

No one at Minneapolis-based Cargill immediately responded to requests for comment. Its Cargill Meat Solutions unit employs more than 32,000 people at locations across the U.S. and Canada, according to the company’s website.

JBS Beats Profit Forecasts as Cattle Prices Jump and Costs Fall

Fri, 20 Nov 2020 05:41:21 GMT

JBS SA, the world’s biggest meat producer, exceeded analysts’ estimates to post record quarterly profit on surging cattle prices and lower feed costs.

Net income rose to 1.09 billion reais ($481 million) from 220 million reais a year ago, the Sao Paulo-based company said in a statement yesterday. Adjusted earnings per share of 37.8 centavos exceeded the 24-centavo average estimate of three analysts tracked by Bloomberg.

JBS, which spent $17 billion on acquisitions in the past decade, benefited from export demand for beef and poultry as well as declining costs for corn and soybeans used as feed. Cattle shortages pushed up prices for livestock that JBS processes at its slaughterhouses, helping earnings before interest, taxes, depreciation and amortization to more than double. The Brazilian real’s 9.5 percent slump during the quarter boosted exports revenue.

“The ongoing operating improvements made by the JBS units in Brazil and worldwide throughout 2014 also allowed the company to significantly reduce its degree of leverage,” the company said in a statement accompanying the results.

Pilgrim’s Pride, the Greeley, Colorado-based poultry and processed-food company controlled by JBS, reported on Oct. 29 a 95 percent jump in third-quarter Ebitda to $442 million, the highest on record according to data compiled by Bloomberg.

Keep Stockers Primed

Fri, 20 Nov 2020 05:33:26 GMT

Risk management goes beyond hedges to animal health

This year’s stocker and backgrounder segment will see great opportunities in a market with upward momentum. So far, the cattle market this year has been almost unbelievable, with many producers asking, How long will it last?

Derrell Peel, Oklahoma State University livestock economist, says the higher prices we’ve been seeing in recent months aren’t just a flash in the pan. “These conditions have been building for years, and there are solid reasons why we are where we are with prices. I just don’t see a big bust coming in terms of pricing.”

Stockers and backgrounders will need to be on watch this spring and summer if drought conditions force a premature market glut as cattle move into feedyards earlier. That could create a temporary price glitch, but if you can spread out the marketing of the calves, you can also reduce some of the risk from a temporary price shrink.

In an upward momentum market, it is important to formulate a risk management plan that puts in a price floor without limiting profit potential.

Peel says that a risk management plan in this kind of market is as difficult to deal with as one during a declining market. The challenge is to not overhedge.

“Some lenders may require a level of hedging in order to obtain a loan,” he says. It’s up to cattle producers to make sure the lender is involved, understands the current market and doesn’t tie a producer’s hands too much with hedging requirements as long as the market is moving up.

“The best risk management strategy for backgrounders and stockers this year is to manage cost of production and keep calves alive and healthy,” Peel says. Making sure that cattle stay alive and healthy will enable stockers and backgrounders to maximize gains and ensure that every animal purchased makes it to market.

Protect early.

Tim Spiva knows the benefits of a good animal health program, especially in this market climate. He backgrounds 10,000 to 15,000 stockers each year. Keeping death loss below 2% is a challenge, especially with commingled groups of 400-lb. calves.

Spiva, owner of Triangle Calf Growers in Wildor-ado, Texas, meets the challenge with an animal health protocol that boosts the animals’ immunity on arrival. He works with his veterinarian to establish the right program given the type of cattle he purchases and the region of the country he lives in.

“We treat all our cattle the day after they arrive,” Spiva says. Since most of the cattle come from unknown backgrounds and are commingled, building immunity right away is essential. In the chute, the calves receive vaccines and an antibiotic treatment to help fight infections.

This year, Spiva is using an intranasal vaccine to build immunity to respiratory diseases more quickly. He says the intranasal administration takes only a few more seconds compared to an injection.

“We try to keep death loss under 2%, but there’s no guarantee,” he says. That’s why he puts so much effort into arrival treatments and follows up with revaccinations 10 to 14 days later, when cattle are castrated.

Pasture conditions.

Nutrition is also key to getting stockers primed for pastures. Getting cattle to eat and drink on arrival is important, and having good-quality hay in the pens is necessary to get the rumen functioning again after cattle have been transported.

This year, due to drought in some areas, stockers may need backgrounding rations or supplemental feed sooner than expected. On arrival, get calves used to a bunk. “The majority of calves sold have no idea what a feedbunk looks like, let alone a processing facility,” says Zeb Prawl, a ruminant nutritionist with Great Plains Livestock Consulting, Inc., in Eagle, Neb.

To get them used to the bunk, he says, put hay in the bunk rather than a bale ring in the receiving pen. “By having it in the bunk, you know how much the cattle eat and can limit hay to make sure they eat the high-quality total mixed ration provided to them.”

When a ration is needed, provide the right amount. “One of the most common mistakes is to provide them with too much feed,” Prawl says. “With distillers’ grains, it is easy to put together diets that are high in protein [16% to 18% crude protein on a dry matter basis], moderate in energy [46 to 48 Mcal/cwt. NEg] and still be cost-effective. These rations can be fed at moderate amounts [up to 2% of body weight] and perform exceptionally well.”

Somewhat Negative Cattle on Feed Report

Fri, 20 Nov 2020 05:31:33 GMT

Top Producer Editors

Steve Kay, Cattle Buyer’s Weekly: August Cattle on Feed Report

Slightly Positive Cattle Reports

Fri, 20 Nov 2020 05:31:33 GMT

Sara Schafer , Top Producer Business & Crops Online Editor

Steve Kay, Cattle Buyer’s Weekly: July Cattle on Feed Report

For More Information
July 1 Cattle Inventory Down 1%

U.S. Cattle on Feed Down 5%

You can e-mail Sara Schafer at sschafer@farmjournal.com .

June 2009 Cattle on Feed Report

Fri, 20 Nov 2020 05:31:33 GMT

Gabcast! Top Producer Marketing Reports #144 - Glenn Grimes, U. Mo.

(Click Second Report.)

Steve Kay of Cattle Buyer’s Weekly (click Top Report)

Cattle On Feed: Postive Report

Fri, 20 Nov 2020 05:31:29 GMT

Sara Schafer , Top Producer Business & Crops Online Editor

USDA released their January Cattle on Feed report this afternoon ( U.S. Cattle on Feed Down 2% ). Listen to some audio analysis from these experts.

Steve Kay, Cattle Buyers Weekly editor and publisher

For More Information
More TP Radio

U.S. Cattle on Feed Down 2%

You can e-mail Sara Schafer at sschafer@farmjournal.com .

Cattle On Feed: Bullish Report

Fri, 20 Nov 2020 05:31:29 GMT

Sara Schafer , Top Producer Business & Crops Online Editor

USDA released their November Cattle on Feed report this afternoon (U.S. Cattle on Feed Down 1%). Listen to some audio analysis from these experts.

Ron Plain, University of Missouri extension economist

Steve Kay, Cattle Buyers Weekly editor and publisher

For More Information
More TP Radio

U.S. Cattle on Feed Down 1%

You can e-mail Sara Schafer at sschafer@farmjournal.com .

Cattle On Feed: Neutral Report

Fri, 20 Nov 2020 05:31:29 GMT

Sara Schafer , Top Producer Business & Crops Online Editor

USDA released their November Cattle on Feed report this afternoon ( U.S. Cattle on Feed Up 1% ). Listen to some audio analysis from these experts.

Ron Plain, University of Missouri extension economist

Steve Kay, Cattle Buyers Weekly editor and publisher

For More Information
More TP Radio

You can e-mail Sara Schafer at sschafer@farmjournal.com .

Market Outlook

Fri, 13 Nov 2020 02:20:10 GMT

By Greg Henderson

Cattle-Feeding Margins Reverse Course

The cattle industry’s profitability pendulum has swung dramatically toward cattle feeders. The cyclical nature of cattle supplies left feedyard closeout ledgers covered in red ink just 15 months ago. Now, it’s cow-calf operations that are struggling to keep margins positive.

Feedlots recorded average profits of $370 per head for animals sold during the first week of March this year, according to the Sterling Beef Profit Tracker published by Vale, Ore.-based Sterling Marketing. It represented the 15th consecutive week of positive margins. That price amounts to an improvement of more than $1,000 per head over the $700-per-head average losses recorded during the third week of December 2015.

Cash prices paid for market-ready cattle were nearly the same during the first week of March this year and the third week of December 2015, at $124.66 and $123.48, respectively. Yet the cost of finishing a steer fell dramatically this year to $1,364. That compares to $2,221 in December 2015. The variation can be explained by significantly lower costs for yearling feeder cattle—$974 this year versus $1,702 in 2015.

Ranchers have expanded their herds since 2014. Increasing supplies of feeder cattle and calves brought 2016 prices as much as 50% lower, on average, compared to those seen two years ago.

On an annual basis, feedyard margins will average $144 per head this year, Sterling Marketing projects. Net returns to cow-calf operations are projected at $78 per cow this year, down from $177 in 2016 and $438 in 2015.

By Chip Flory

Headline Risk Is A Real Risk In Ag Markets

Since Donald Trump became president Nov. 8, grain and livestock traders have been on high alert for a price-negative headline emerging from the Trump camp. The reason? Our president’s tough talk on immigration and trade relations with countries such as Canada, Mexico and China. It took until Feb. 28 to get such a market-jarring headline. To the surprise of most, the rumors about changes to federal ethanol-blending requirements triggered a price-positive market reaction.

These events show ag markets are ultra-sensitive to anything originating (or thought to originate) from the White House. It has ratcheted up the difficulty of risk management.

You need to be prepared for the future. Establish sell orders above the market on a portion of old-crop stocks, new-crop stocks or both to capture short-lived rallies like the one we saw in late February. Conversely, if prices reach the upper half of clearly defined trading ranges, draw a line in the sand under the market that will increase downside price protection in a down draft. Consider using hedge-in futures or hedge-to-arrive contracts; purchasing puts; or making a cash sale if basis is at normal levels.

Cattle Outlook: Prices Continue to Rise

Fri, 13 Nov 2020 02:19:10 GMT

By: Ron Plain and Scott Brown, University of Missouri Extension

Fed cattle prices were higher this week on very heavy sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $114.14/cwt, up $3.08 from last week’s average, but down $9.27 from a year ago. The 5-area dressed steer price averaged $174.95/cwt, up $1.96 from the week before, but down $19.49 from a year ago. These are the highest fed cattle prices since late August.

Beef cutout value was higher this week. This morning, the choice boxed beef cutout value was $190.29/cwt, up $2.50 from the previous Friday, but $13.08 lower than a year ago. The select carcass cutout this morning was $173.59/cwt, up $2.32 from last week.

There were 532 million pounds of beef in cold storage at the end of October. That was 2.6% more than the month before and 4.6% more than a year ago. Stocks of frozen pork were down 0.9% and chicken stocks were down 9.9% compared to October 31, 2015.

In good news for meat demand, the latest jobs report says the economy added 178,000 jobs during November. That is in line with the recent trend and helped push the unemployment rate down to 4.6%, the lowest since August 2007. The bad news in the report is that average hourly wages declined three cents in November to $25.89/hour.

This week’s cattle slaughter totaled 616,000 head, up 11.8% from last week (which was low because of Thanksgiving) and up 10.8% from a year ago. Year-to-date cattle slaughter is up 5.6% and beef production is up 5.7% compared to the same period last year.

The average steer dressed weight for the week ending on November 19 was 918 pounds, unchanged from the week before, down 7 pounds from a year ago, and below the year-ago level for the 29th consecutive week.

Cattle prices were steady to higher this week at the Oklahoma City auction. Feeder steer prices were $1 to $4 higher and stocker calves were steady compared to the week before Thanksgiving week. Prices for medium and large frame #1 steers by weight group were: 400-450# $165-181, 450-500# $160-$174, 500-550# $139-$166, 550-600# $136-$157, 600-650# $127-$143, 650-700# $123-$138, 700-750# $129-$137.35, 750-800# $121-$139, 800-900# $125.50-$138, and 900-1000# $122-$131.50/cwt.

Cattle futures were lower this week. The December live cattle futures contract settled at $108.22/cwt today, down $2.53 for the week. February live cattle lost $3.33 this week and closed at $108.87/cwt. The April contract settled at $109.05.

The January feeder cattle futures contract ended the week at $124.60/cwt, down $2.60 from a week earlier. March feeder cattle lost $1.83 this week to settle at $121.52/cwt. April feeder cattle settled at $121.25/cwt.

France Seeks to Wean Cows Off Soybeans as China Dominates Demand

Fri, 13 Nov 2020 02:05:01 GMT

France will pay farmers to grow faba beans and other crops that can add protein to livestock rations as Europe’s largest beef producer seeks to cut its dependence on imported soybeans, where China’s rising demand threatens supply.

The government will allocate 49 million euros ($61 million) a year to pay a premium for sowing protein sources such as peas or sweet lupine, Agriculture Minister Stephane Le Foll said at a news conference in Paris today.

“We need to develop a plant-protein strategy for France,” Le Foll said. “The flow of protein feed to Asia is becoming greater and greater. For Europe, security of supply is not guaranteed in the long term.”

France grows about 60 percent of the protein crops eaten by its cows, pigs and poultry, importing the rest, while Europe is about 35 percent self-sufficient, according to the agriculture ministry. China gobbles up about 60 percent of global soybean exports, driving up prices, the ministry said.

The European Union will import 12.75 million metric tons of soybeans and 19.8 million tons of soybean meal in the year through September 2015, the U.S. Department of Agriculture predicts. China may take 74 million tons of soybeans, or 66 percent of global imports, and 50,000 tons of meal, the data show.

“In time, the import flows originating from the Americas that now benefit Europe could be diverted to the advantage of Asia,” the ministry wrote.

Faba Beans
The government will pay growers 100 to 200 euros a hectare ($51-102/acre) for sowing protein crops such as beans and 100 to 150 euros for alfalfa, according to Le Foll’s presentation. The annual budget includes 35 million euros for peas, lupine and faba beans, 6 million euros for soybeans and 8 million euros for alfalfa, clover and similar crops.

The aid could boost the protein-crop area to 750,000 hectares (1.85 million acres) from about 278,000 hectares, according to the ministry. The plan runs until 2020, with the first payment available for crops planted by May 15, 2015.

Planting of faba beans, peas and lupine doubled to about 400,000 hectares in 2010 from a year earlier when a temporary aid measure was in place, according to Antoine Gautier, a feed analyst at Offre & Demande Agricole in Bourges, France.

“The area will probably increase,” Gautier said. “Also because the prices of grains and oilseeds are relatively low, particularly for rapeseed.”

The government plan will lower the cost of protein in feed for French livestock breeders, according to Gautier. Still, soybean growers in France have a hard time competing with U.S. farmers because they’re limited to non-biotech soybeans that produce lower yields, he said.

Protein Content
Soybeans have higher protein content than peas or faba beans, meaning France’s poultry and pig producers will continue to rely on imports to augment their feed rations, he said.

Using protein plants as cover crops can also increase productivity per hectare, for example as an additional crop in corn mono-culture, according to Le Foll. France is the EU’s biggest corn grower.

“We have a large potential in France because we have long seasons,” the minister said. “I don’t know if we’ll reach self-sufficiency, what I know is that we have to increase our autonomy.”

Le Foll announced a 10-year research program to boost protein-crop yields and select varieties. An additional 98 million euros is available to boost production of pulses for fodder by livestock breeders, mainly for cattle, according to the ministry.

Don't Be Aggressive on Feed Needs

Fri, 13 Nov 2020 01:49:46 GMT

With corn, wheat and soybeans putting in short-term lows, we asked a few analysts if it is time to lock in feed needs now. The consensus: don’t be too aggressive until you have a better feel for the actual crop. Normal weather would mean lower prices this fall. The possible exception: feed wheat. Here are their comments:

Brian Grete, Pro Farmer Senior Market Analyst: While short-term lows appear to be in place in both the corn and soybean meal markets, there’s no strong urgency to lock in extended feed coverage at this time. Meal supplies are snug, but not tight, and there isn’t a shortage of corn.

The exception: If livestock producers can lock in profits by covering feed needs, they should most definitely do so now. Otherwise, the post-July 4 timeframe will give livestock producers a better idea of the summer price trend. If, at that time, it appears prices are bound for a period of extended price strength, it will be a signal to get more aggressive on booking feed needs through summer and into fall. Unless there’s significant crop risk, however, new-crop supplies will be plentiful through winter. That argues against getting too aggressive on long-term feed coverage, from a supply perspective.

Overall, corn and meal futures remain in long-term choppy patterns – choppy to lower for corn; sideways for meal. In general, buy weakness (but don’t extend coverage too far) and don’t chase markets at the highs—unless there are signs that futures are breaking out from the overall choppy trend.

Marty Foreman, Doane Feed Grains Specialist: Corn prices are showing signs of having reached a pre-pollination low in mid-June. But whether the lows hold beyond early July hinges on how weather unfolds. We think just the risk of a weather pattern change to hot/dry justifies covering a portion (20% to 30%) of second-half 2010 feed needs now. However, assuming we actually experience normal weather the rest of the season, prices are likely to work lower into late summer or fall so we would defer more aggressive feed coverage for that timeframe.

Bill Nelson, Doane Oilseeds Specialist: In the short term, meal prices are subject to upward price shocks from tightness of supplies versus good demand, led by exports. We’ve recommended coverage through mid-July and would cover the balance of that month if July meal dropped to the $275/ton area. Longer-term over the next several months, if soybeans retain their above-average condition with high-yield potential, cash prices should be expected to erode. That argues against more aggressive forward coverage. But should crop conditions begin to deteriorate by mid-summer, then we’d advise stepping up coverage toward 50% of second-half 2010 needs.

Dan Manternach, Doane Wheat Specialist: Now is a very good time for buying feed wheat in the southern Plains. Basis levels have utterly collapsed to their worst discounts (to futures) in several years on the glut of old crop, a big new crop, lower-than-normal protein and weak merchant demand. That weak basis is an opportunity for feed buyers, particularly where wheat is priced at less than 90% of the price of corn, bushel for bushel, when it’s generally considered by animal nutritionists to be worth 105% the price of corn in feed value.

First Thing Today: Flooding a Threat in Brazil and Argentina This Weekend

Fri, 13 Nov 2020 01:17:24 GMT

Soybeans remain under pressure at week’s end... Corn futures are narrowly mixed as of 6:30 a.m. CT after a quiet overnight session. Soybeans are down 2 to 4 cents on followthrough selling, with the market likely headed for its fifth week of decline -- the longest losing streak in 30 months. SRW wheat futures are fractionally lower, while HRW and HRS wheat futures are narrowly mixed. The U.S. dollar index is slightly higher, while crude oil futures are posting moderate gains.

Another solid jobs report expected... Economists expect today’s March jobs report to show around 175,000 nonfarm payrolls were added last month, with the unemployment rate holding steady at 4.7%. Yesterday’s ADP data showed 263,000 private jobs were added in March, easily topping expectations and spurring talk that today’s report could do the same. Job growth has been impressive since the start of the year, which was one of the reasons the Federal Reserve raised interest rates at its March meeting.

Senate expected to clear Gorsuch as new Supreme Court justice today... President Donald Trump’s first nominee for the Supreme Court is set today to be confirmed by the Senate after Republicans changed Senate rules to allow for a simple majority vote, ending the filibuster option. Neil Gorsuch’s approval will restore the generally conservative majority that existed before Justice Antonin Scalia’s death last year.

Flooding a threat in Brazil and Argentina this weekend... Flooding will remain a concern for far southern Brazil and southern Paraguay Saturday through Tuesday, says World Weather Inc., which adds that heavy rains are expected for Rio Grande do Sul. It says this could cause some quality issues with the region’s bean crop, though it adds the crop “is not mature enough to suffer greatly.” The corn crop is expected to weather the wet conditions fairly well. Moderate to heavy rainfall is also expected Friday through Monday for much of Argentina’s main production areas, which could also lead to some flooding, the weather group says. But no major crop damage is anticipated.

Buenos Aires exchange says harvest advanced, despite rains... Farmers in Argentina have harvested 5.9% of their soybean crop as of Thursday, despite heavy rains and floods in western growing areas, reports the Buenos Aires Grains Exchange. “Despite the rains that interrupted harvest ... the soy harvest is beginning to gain momentum,” the exchange detailed in its weekly crop report. It also says that just light rain is expected for western areas of the Buenos Aires province, which should allow excess water to drain. But the exchange notes low-lying areas will likely lose some acres. It estimates Argentina’s bean crop at 56.5 MMT.

Think tank doubles forecast for Chinese corn imports... China National Grain and Oils Information Center (CNGOIC) doubled its forecast for China’s corn imports in 2016-17 MMT from last month to 2 MMT. The think tank did so in response to bookings of nearly 600,000 MT of corn in March, as domestic corn prices climbed back above international ones. CNGOIC also raised its 2016-17 soybean import estimate 1.5 MMT to 86.5 MMT.

Russian wheat shipments down from year-ago... Russia exported roughly 3.207 MMT of wheat during the first two months of 2017, which was down 3788,600 MT from last year at this point. The rise in its currency has slowed shipments, plus Turkey, a major market for its wheat, has essentially banned wheat imports from the country. Russia’s deputy ag minister says the two countries will hold talks on the import restrictions in two weeks, adding that they are not logical.

French exports outside the EU running well below year-ago... Ninety percent of France’s soft wheat crop is in good to excellent condition as of Monday, unchanged from week-ago and just slightly below 92% last year, according to FranceAgriMer. So far this marketing year France has exported 3.041 MMT of soft wheat outside the EU, which is a drop of 55% from the 2015-16 marketing year.

Boost in production expected to trim Pakistan’s cotton buys in 2017-18... Pakistan will likely produce an 8.5 million 480-lb. bale cotton crop in 2017-18, which would be a 10% surge from year-ago thanks to an uptick in acreage, according to a USDA ag attaché there. However, the post goes on to note that acreage is still historically low as farmers have shifted attention to sugarcane and increasingly to corn. Due to the increase in production, the attaché projects Pakistan will import 2.3 million bales of cotton in 2017-18, down 400,000 bales from its estimate for 2016-17. The post also points out that a Pakistani funding package aimed at expanding its textile sector cuts its cotton import tariff from 9% to 0%.

Cotton AWP moves lower... The Adjusted World Price (AWP) for cotton will be 67.41 cents per pound, effective today, down from 68.03 cents per pound the prior week. This is lowest the AWP has been since it was at 66.59 cents per the week of March 3 and came after three out of the last four weeks have seen the AWP at 68 cents per pound or more.

Cash cattle negotiations stretch late into the week... Cattle futures enjoyed a break from the selling yesterday as traders recognize that futures’ wide discount to the cash market is likely overdone, especially with grilling season close at hand. We are still waiting for cash cattle trade to get underway in earnest. Yesterday, around 100 head changed hands in the Iowa/Minnesota market at $125 and nearly 1,000 head traded in Nebraska at $123.

Marked slowdown in pork movement... The pork cutout value slipped 95 cents yesterday and movement slowed to just 256.31 loads, delivering more negative news to the lean hog market. But while cash and product market action of late has given bulls little to get excited about, the downside has likely been overdone.

Overnight demand news... Algeria bought between 400,000 MT and 570,000 MT of wheat, with traders expecting the bulk of the grain to be sourced from the EU. Jordan purchased 50,000 MT of hard milling wheat from optional origins.

Pro Farmer's After the Bell: Cattle Surge

Fri, 13 Nov 2020 01:17:21 GMT

Corn: Corn futures ended the day near its daily lows with losses of 2 1/4 to 2 1/2 cents. Funds sold an estimated 6,500 corn contracts (32.5 million bu.) today. Early pressure came on followthrough from yesterday’s losses and spillover from soybeans, but corn extended losses even though soybeans came off their lows. A weaker tone in the U.S. dollar index somewhat helped limit losses, but traders’ focus was on favorable weather for the pollinating safrinha crop in Brazil.

Soybeans: Soybean futures faced pressure for most of the day, but the market was able to pare losses at the close to end narrowly mixed. Of note, the front-month settled 1/4 cent below the $10.00 level. Soybean futures faced pressure for much of the session as traders remain aware that a whopper of a crop is being harvested in Brazil, which will eventually slow demand for the U.S. oilseed.

Wheat: Winter wheat futures closed 4 1/4 to 5 3/4 cents lower, while spring wheat futures finished mixed. The winter wheats closed near their lows of the day and HRW futures led the decline. Wheat futures were under pressure through the day due to continuing forecasts for much-needed precipitation later this week for the parched HRW area. Weakness in the corn market added to today’s negative trade. Traders shrugged off the positive news Saudi Arabia overnight purchased 120,000 MT of U.S. HRW wheat for 2016-17.

Cotton: Cotton futures closed 12 to 50 points higher through the December contract. The May contract led gains. Cotton futures bounced higher today on largely technical trading. Futures moved higher after failing to punch through support at yesterday’s low, prompting short-covering. A slightly weaker U.S. dollar was supportive but crude oil futures were slightly weaker as well.

Cattle: Live cattle futures ended high-range with gains of $1.82 1/2 to $2.72 1/2 through the October contract, with nearbys leading gains. Futures opened slightly higher but quickly surged as traders turned their focus to narrowing the discount nearby futures hold to the cash market. Traders are also reacting to news that more countries are banning beef from Brazil due to its scandal surrounding its meat inspectors.

Hogs: While the April lean hog contract enjoyed slight gains, the May through August contracts settled 22 1/2 to 57 1/2 cents lower and far-deferred months posted slight gains. Momentum clearly favors market bears, which kept most contracts under pressure for most of the day. Adding to the negative tone was a drop in the pork cutout value, though this encouraged better movement of 186.15 loads this morning.