WLI

Futures and equity markets were closed on Friday, in observance of Good Friday.

Although Cattle futures firmed at the end of weekly trade, they ended sharply lower week to week, due in part to the previous Friday’s monthly Cattle on Feed report. As mentioned in Cattle Current, feedlot placements in February were 9.7% more year over year and 3.4% more than expected.

Futures also suffered from panic selling earlier in the week that stemmed from confirmation of Highly Pathogenic Avian Influenza in dairy cows (see below).

Week to week on Thursday, Live Cattle futures closed an average of $4.22 lower ($3.37 to $5.07 lower).

Negotiated cash fed cattle prices softened, too. For the week, FOB live prices were $2 lower in the Southern Plains at $186/cwt., steady to $1 lower in Nebraska at $189-$190 and $1-$2 lower in the western Corn Belt at $188-$190. Dressed delivered prices were steady to $3 lower in Nebraska at $299-$302. Dressed delivered prices in the western Corn Belt the previous week were $302.

Choice boxed beef cutout value was $4.00 lower week to week on Friday at $306.72/cwt. Select was $1.96 higher at $303.43. Friday’s Choice-Select spread of $3.29 was the lowest in about two years.

Estimated total cattle slaughter last week of 586,000 head was 12,000 head fewer than the previous week and 59,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 7.7 million head was 473,000 head fewer (-5.8%). Estimated year-to-date beef production of 6.5 billion pounds was 284.5 million pounds less (-4.2%).

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Calves and feeder cattle sold mixed last week amid struggling futures prices and as this year’s grass cattle orders begin to end.

With that said, the only weekly Friday auction I had to report was for Ft. Pierre Livestock Auction in South Dakota where prices were strongly higher compared to two weeks earlier. Steers weighing 700-749 lbs. sold $10-$12 higher and then $3-$6 higher at 750-849 lbs. Heifers weighing 600-699 lbs. sold $8-$12 higher and then $3 higher at 700-799 lbs. There were 4,318 head on offer.

Week to week on Thursday, Feeder Cattle futures closed an average of $7.70 lower ($3.12 to $9.57 lower). Added pressure came from a bounce in Corn futures tied to USDA’s Prospective Plantings report.

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Animal health officials continue to investigate an illness among dairy cows that is causing decreased lactation, low appetite, and other symptoms.

Last Monday, USDA, the Food and Drug Administration (FDA) and Centers for Disease Control and Prevention (FDC) confirmed cases of Highly Pathogenic Avian Influenza (HPAI) in dairy cows exhibiting these symptoms. Confirmed cases include two dairy herds in Kansas and two dairy herds in Texas. Later in the week, HPAI was also confirmed in a Michigan dairy herd that recently received cows from Texas. Presumptive positive test results have also been received for additional herds in New Mexico, Idaho, and Texas.

USDA’s National Veterinary Services Laboratories (NVSL) confirmed that the strain of the virus found in Michigan is very similar to the strain confirmed in Texas and Kansas, which appears to have been introduced by wild birds. Initial testing found no changes to the virus that would make it more transmissible to humans. While cases among humans in direct contact with infected animals are possible, this indicates that the current risk to the public remains low.

“There continues to be no concern about the safety of the commercial milk supply because products are pasteurized before entering the market, or that this circumstance poses a risk to consumer health,” according to a statement issued by the Animal and Plant Health Inspection Services (APHIS) on Friday. “Dairies are required to send only milk from healthy animals into processing for human consumption; milk from impacted animals is being diverted or destroyed so that it does not enter the human food supply. In addition, pasteurization has continually proven to inactivate bacteria and viruses, like influenza, in milk. Pasteurization is required for any milk entering interstate commerce for human consumption.”

Spread of symptoms among the Michigan herd also indicates that HPAI transmission between cattle cannot be ruled out, according to the agencies. USDA and partners have advised veterinarians and producers to practice good biosecurity, test animals before necessary movements, minimize animal movements, and isolate sick cattle from the herd. Among the dairies whose herds are exhibiting symptoms, the affected animals have recovered after isolation with little to no associated mortality reported.

“Milk loss resulting from symptomatic cattle to date is too limited to have a major impact on supply and there should be no impact on the price of milk or other dairy products,” according to the APHIS statement.

Cattle futures gained Thursday, recovering more of the early-week losses as traders positioned for the end of the week and quarter, and ahead of a long weekend.

Live Cattle closed an average of $1.49 higher.

Feeder Cattle futures closed an average of 89¢ higher, except for 30¢ lower in expiring Mar.

Negotiated cash fed cattle trade was moderate on moderate demand in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. FOB live prices were $2 lower at $186/cwt.

A day earlier FOB live prices were $3 lower in Kansas at $185.

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

Last week, FOB live prices were $190 in Nebraska and $190-$191 in the western Corn Belt. Dressed delivered prices were $302.

Choice boxed beef cutout value was 22¢ lower Thursday afternoon at $308.36/cwt. Select was $2.74 higher at $301.17/cwt.

Net U.S. beef export sales of 12,700 metric tons (mt) for 2024 were 15% more than the previous week and 4% more than the prior four-week average, according to USDA’s weekly U.S. Export Sales report for the week ending Mar. 21. Increases were primarily for South Korea, Japan, China, Mexico and Taiwan.

Turning to row crops, Corn futures climbed higher, up mostly 10¢ to 15¢, fueled by USDA’s Prospective Plantings report (see below).

KC HRW Wheat futures closed mostly 4¢ to 5¢ higher.

Soybean futures closed mixed: 1¢ lower to 3¢ higher through Jan ’25 and then mostly 8¢ to 10¢ higher.

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Major U.S. financial indices closed little changed Thursday as investors wrapped up the trading week and quarter.

The Dow Jones Industrial Average closed 47 points higher. The S&P 5 closed 5 points higher. The NASDAQ was down 20 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.17 to $1.89 higher through the front six contracts.

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USDA’s Prospective Plantings report surprised some with estimated corn acres this year projected at 90 million acres, about 2 million acres less than expectations. That would be 4.6 million acres less than last year (-4.9%).

Corn stocks Mar. 1 were estimated to be 8.4 billion bu., which was 950.1 million bushels more than a year earlier (+12.9%), according to the latest Grain Stocks report. Of the total stocks, 5.1 billion bushels were stored on farms, up 24% from a year earlier. Projected off-farm stocks of 3.3 billion bushels were down 1% from a year ago.

Markets likely viewed the soybean outlook as neutral.

Soybean acres were projected at 86.5 million acres, which would be 2.9 million acres more than last year (+3.5%).

Soybean stocks were estimated at 1.8 billion bushels, up 158.4 million bushels (+9.4%) from a year earlier. Soybean stocks stored on farms were estimated at 933 million bushels, up 24% from a year ago. Off-farm stocks of 912 million bushels were 3% less than last March.

All wheat acres were projected at 47.5 million acres, which was 2.1 million acres less than last year (-4.2%) for comparable states. The projected 2024 winter wheat planted area of 34.1 million acres was 7% less than last year and 1% less than the previous estimate for comparable states.

Wheat stocks were estimated at 1.1 billion bushels, which was 146.2 million bushels more than a year earlier (+15.5%). On-farm stocks were estimated at 272 million bushels, up 20% from last March. Off-farm stocks of 816 million bushels were 14% more than a year ago.

All hay acres were projected to be 1.3 million acres less (-2.4%) than last year.

Cattle futures firmed Wednesday.

Feeder Cattle futures closed an average of 91¢ higher (32¢ to $1.42 higher).

Live Cattle closed an average of 27¢ higher, except for 15¢ lower in the back contract.

Negotiated cash fed cattle trade on Wednesday ranged from a standstill to slow on light demand in Kansas where FOB live prices were $3 lower at $185/cwt. in a light test, according to the Agricultural Marketing Service.

Last week, FOB live prices were $188/cwt. in the Southern Plains, $190 in Nebraska and $190-$191 in the western Corn Belt. Dressed delivered prices were $302.

Choice boxed beef cutout value was $2.51 lower Wednesday afternoon at $308.58/cwt. Select was $1.83 lower at $298.43/cwt.

Grain and Soybean futures mostly meandered lower as traders geared up for Thursday’s Prospective Plantings and Grain Stocks report from USDA.

Corn futures closed mostly 4¢ to 5¢ lower.

KC HRW Wheat futures closed mostly 1¢ lower.

Soybean futures closed mostly 6¢ to 7¢ lower.

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Major U.S. financial indices closed higher Wednesday with little economic news.

The Dow Jones Industrial Average closed 377 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 83 points.

West Texas Intermediate Crude Oil futures (CME) closed 16¢ to 27¢ lower through the front six contracts.

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As mentioned in Cattle Current last week, cattle prices are expected to strengthen this year and next, according to the recently released annual agricultural market baseline outlook from the Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI). The outlook provides projections through 2033.

More specifically, FAPRI projects the five-area direct fed steer price at $178.57/cwt. this year, $184.59 next year and peaking in 2026 at $185.38. Prices then decline to $154.76 in 2033.

As for calves, basis 600-650-pound steers selling at Oklahoma City, prices are projected at $270.70/cwt. this year, $284.74 next year and peaking in 2026 at $286.19. Prices then decline to $224.71 in 2033.

Net return per beef cows are projected to be $387.30 this year, $469.07 next year and $479.92 in 2026 and $426.31 in 2027. From there, returns decline to $218.71 in 2031 and the declining further to $182.06 in 2033.

Cattle futures sank Tuesday amid uncertainty spun by negative and potentially negative news.

Closest to home, Monday’s announced confirmation of highly pathogenic avian influenza (HPAI) in dairy cattle from herds in Kansas and Texas likely drew the attention of funds and algorithms. The infections appear to be tied to wild birds. There is no threat to the milk or food supply, according to USDA.

The National Cattlemen’s Beef Association (NCBA) issued a statement also emphasizing HPAI has not been detected in beef cattle. However, NCBA encourages producers to implement enhanced biosecurity measures on their farms and ranches to help protect their herds.”

For broader context, according to NCBA, “Detections of avian influenza in birds are common in the United States. While it is uncommon for HPAI to affect mammals, USDA’s Animal and Plant Health Inspection Service has been tracking some limited detections of HPAI in mammalian wildlife for many years in the United States.”

So, the fundamental consequences of the HPAI finding depend on consumers.

Live Cattle closed an average of $3.22 lower.

Feeder Cattle futures closed an average of $4.48 lower ($1.72 to $5.37 lower).

Choice boxed beef cutout value was 20¢ higher Tuesday afternoon at $311.09/cwt. Select was $1.70 lower  at $300.26/cwt.

There was no AMS cash fed cattle report available at press time.

Last week, FOB live prices were $188/cwt. in the Southern Plains, $190 in Nebraska and $190-$191 in the western Corn Belt. Dressed delivered prices were $302.

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Grain and Soybean futures closed lower Tuesday with pressure from apparent farmer selling, month-end and quarter-end positioning as well as positioning ahead of Thursday’s Prospective Plantings and Grain Stocks report from USDA.

There was also likely some knee-jerk selling related to the closure of Baltimore Harbor after a cargo ship struck and caused the collapse of Francis Scott Key Bridge. Maryland Governor, Wes Moore, declared a state of emergency and vessel traffic into and out of the harbor was suspended indefinitely. It’s not that Baltimore Harbor is a huge point of arrival or departure for agricultural commodities. The concern is how the closure of a busy port for other goods could impact other supply chains which could ultimately impact agricultural commodities.

Corn futures closed mostly 4¢ to 6¢ lower.

KC HRW Wheat futures closed mostly 7¢ to 12¢ lower.

Soybean futures closed 7¢ to 10¢ lower.

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Major U.S. financial indices eased lower Tuesday.

The Dow Jones Industrial Average closed 31 points lower. The S&P 500 closed 14 points lower. The NASDAQ was down 68 points.

West Texas Intermediate Crude Oil futures (CME) closed 25¢ to 34¢ lower through the front six contracts.

Cattle futures closed lower Monday, with pressure including Friday’s bearish monthly Cattle on Feed report.

Live Cattle closed an average of $1.09 lower (67¢ to $1.52 lower).

Feeder Cattle futures closed an average of $1.60 lower (50¢ to $2.37 lower).

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

Last week, FOB live prices were $2 higher in the Southern Plains at $188/cwt., $2-$3 higher in Nebraska at $190 (a few up to $191) and $2-$3 higher in the western Corn belt at $190-$191 (a few up to $191.50). Dressed delivered prices were $2-$7 higher in Nebraska at $302 and $4 higher in the western Corn Belt at $302.

The weighted average five-area direct FOB live steer price last week was $2.09 higher at $189.56/cwt. The dressed delivered steer price was $4.07 higher at $302.13.

Choice boxed beef cutout value was 17¢ higher Monday afternoon at $310.89/cwt. Select was 49¢ higher at $301.96/cwt.

Corn futures closed mostly unchanged to fractionally lower.

KC HRW Wheat futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed 10¢ to 16¢ higher through Jly ’25, and then mostly 8¢ to 9¢ higher, supported by edible oils.

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Major U.S. financial indices softened Monday, with investors appearing to take a breath after last week’s strong gains, while looking toward month-end and quarter-end positioning this week.

The Dow Jones Industrial Average closed 162 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 44 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.02 to $1.32 higher through the front six contracts.

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More days on feed, increased feeder cattle imports from Mexico and pulling cattle forward are among the factors underpinning persistently high feedlot inventories despite declining cattle numbers overall, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

“One of the primary reasons that feedlot inventories have remained as high thus far is due to the continued placement and feeding of heifers,” Peel says. “At some point, increased heifer retention will lead to more pronounced decreases in feedlot inventories, perhaps to levels similar to the 2014 low. It’s not clear when that will happen as herd rebuilding appears to be progressing slowly and drought continues to be a threat to the size of the beef cow herd.”

As mentioned in yesterday’s Cattle Current, cattle on feed March 1 (feedlots with 1,000 head or more capacity) was 1.3% more than a year earlier at 11.8 million head, according to the latest Cattle on Feed report. Placements in February were 9.7% more than the previous year and the most for the month since the data series began in 1996.

“Average monthly feedlot inventories continued to climb until the September 2022 peak of 11.8 million head,” Peel explains. “The 12-month moving average of monthly feedlot inventories declined from October 2022 through October 2023 before increasing to the current level of 11.6 million head in March 2024, down 1.8% from the peak.”