WLI

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

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

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

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

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

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

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

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

Soybean futures closed 3¢ to 17¢ higher.

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

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

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

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

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

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

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

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

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

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

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

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

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

Corn futures closed mostly 1¢ to 5¢ higher.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

KC HRW Wheat closed mostly down 2¢.

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

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

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

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

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

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

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

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

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

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

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

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

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

Feeder Cattle futures closed an average of 80¢ higher.

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

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

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

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

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

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

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

Corn futures closed mostly 2¢ to 5¢ higher.

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

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

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

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

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

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

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

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

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

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

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

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

Corn futures closed mostly 1¢ to 3¢ lower.

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

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

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

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

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

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

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

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

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

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

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