WLI

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

For the week, FOB live prices were steady to $1 higher in the Southern Plains at $183/cwt., steady to $1.50 higher in Nebraska at $183-$184.50 and steady to $1 higher in the western Corn Belt at $183-$184. Dressed delivered prices were $2 lower in Nebraska at $290 and steady to $2 lower in the western Corn Belt at $290.

Choice boxed beef cutout value was $1.08 higher Friday afternoon at $305.28/cwt., the highest level since October. Choice was $4.67 higher week to week on Friday. Select was $1.56 higher at $295.74/cwt., up $9.43 week to week.

Total estimated cattle slaughter last week of 599,000 head was 6,000 head more than the previous week but 27,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 5.4 million head was 298,000 head less (-5.3%) than the same period last year. Year-to-date estimated beef production of 4.5 billion pounds was 194.2 million pounds less (-4.2%).

Cattle futures rebounded Friday, supported by higher wholesale beef prices and strong fundamentals.

Live Cattle futures closed an average of $1.90 higher ($1.30 to $3,10 higher), except for 30¢ higher in newly minted away-Aug. They were narrowly mixed week to week.

Feeder Cattle futures closed an average of $3.35 higher ($2.77 to $4.27 higher). They were an average of $1.40 lower week to week. Besides higher Corn futures and technical correction, some of the mid-week pressure may have stemmed from concerns about the massive Texas wildfires pushing more cattle to market.

Corn futures closed 3¢ to 5¢ lower through Dec ’14 and then 1¢ to 2¢ lower. Week to week on Friday, Corn futures closed an average of 10’5¢ higher through the front six contracts.

KC HRW Wheat futures closed mostly 14¢ to 22¢ lower.

Soybean futures closed 8¢ to 14¢ higher through Aug ’24 and then mostly 6¢ to 7¢ higher.

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Major U.S. financial indices closed higher Friday, led by tech stocks.

The Dow Jones Industrial Average closed 90 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 183 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.23 to $1.71 higher through the front six contracts.

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U.S. beef exports for fiscal year 2024 were projected $700 million higher than the previous quarterly forecast, in February’s Outlook for U.S. Agricultural Trade from USDA’s Economic Research Service (ERS) and Foreign Agricultural Service (FAS). The increase was based on tight domestic supplies and rising unit values.

U.S. agricultural exports were projected $1.0 billion higher at $170.5 billion. Exports of livestock and dairy, as well as grains and feeds, led the increase, offsetting reductions in oilseeds and products.

China was forecast to remain the largest market for U.S. agricultural exports at $28.7 billion. The figure is $800 million less than the previous forecast, largely due to strong South American competition for soybeans and corn.

“Global economic activity continues to moderate in response to ongoing tight monetary policies and weak global trade growth,” according to ERS and FAS analysts. “However, most of the global economy remains resilient due to gradual disinflation and steady growth. As a result, the global economy is expected to avoid a significant economic slowdown in calendar year (CY) 2024.”

For CY 2024, global real Gross Domestic Product (GDP) growth was forecast at 3.1%. Projected real GDP growth for the United States was forecast at 2.1% for CY 2024.

Cattle futures continued a downward correction Thursday.

Live Cattle futures closed an average of 60¢ lower.

Feeder Cattle futures closed an average of 93¢ lower (37¢ to $1.85 lower).

Negotiated cash fed cattle trade ranged from slow on light demand to moderate on moderate demand through Thursday afternoon, according to the Agricultural Marketing Service.

So far this week, FOB live prices are steady to $1 higher in the Southern Plains at $183/cwt., steady in Nebraska at $183 and steady to $1 higher in the western Corn Belt at $183-$184. Dressed delivered prices are $2 lower in Nebraska at $290 and steady to $2 lower in the western Corn Belt at $290.

Choice boxed beef cutout value was $1.17 higher Thursday afternoon at $304.20/cwt. Select was $1.24 higher at $294.18/cwt.

Corn futures closed mostly fractionally higher to 2¢ higher.

KC HRW Wheat futures closed 2¢ to 7¢ higher.

Soybean futures closed 1¢ to 5¢ lower.

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Major U.S. financial indices closed higher Thursday, buoyed by tech stocks and a friendly inflation reading. The Consumer Price Expenditures Index was in line with expectations, increasing 0.4% month to month, excluding food and energy.

The Dow Jones Industrial Average closed 47 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 144 points.

West Texas Intermediate Crude Oil futures (CME) closed 28¢ to 40¢ lower through the front six contracts.

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Creighton University’s overall Rural Mainstreet Index (RMI) sank below growth neutral for the sixth consecutive month in February. The index is based on a survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Specifically, the February index declined month to month from 48.1 to 46.2. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.

“Higher interest rates, weaker agriculture commodity prices and a credit squeeze are having a significant and negative impact on Rural Mainstreet businesses and on Rural Mainstreet farmers,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Almost three-fourths of bank CEOs named low farm commodity prices as the biggest risk for farms in 2024.

“Commodity prices that are $1.50 to $2.00 per bushel (corn) less than break-even are obviously not sustainable,” says Jeff Bonnett, CEO of Havana National Bank in Havana, Ill.

First today, a special prayer for all of those being affected by wildfires in the Texas Panhandle and in Oklahoma. So far, one of five active fires has burned more than 850,000 acres, according to the Texas Department of Agriculture. On Tuesday, the Texas governor issued a disaster declaration in 60 counties. If you’re wondering how to help, the Texas Cattle Feeders Association always does an amazing job tracking needs and opportunities.

Now, for your market update…

Cattle futures softened Wednesday with pressure including likely profit taking and month-end positioning.

Live Cattle futures closed an average of $1.13 lower (80¢ to $1.60 lower).

Feeder Cattle futures closed an average of $2.80 lower ($2.12 to $3.85 lower).

Negotiated cash fed cattle trade was slow on light demand in the Southern Plains, through Wednesday afternoon, according to the Agricultural Marketing Service. FOB live prices were steady in the Texas Panhandle at $183/cwt. and steady to $1 higher in Kansas at $183.

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

Last week, FOB live prices were $183 in Nebraska and $182-$183 in the western Corn Belt. Dressed delivered prices were $292 in Nebraska and $290-$292 in the western Corn Belt.

Slower beef packer production continued to support wholesale beef values. Choice boxed beef cutout value was $1.29 higher Wednesday afternoon at $303.03/cwt. Select was $2.54 higher at $292.94/cwt.

Turning to row crops, Corn and Soybean futures received some support from chatter about bearish weather in South America.

Corn futures closed 1¢ to 5¢ higher, with most of the support in the front contracts.

Soybean futures closed mostly 3¢ to 4¢ higher.

KC HRW Wheat futures closed 4¢ to 6¢ lower, except for 2¢ higher in spot Mar.

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Major U.S. financial indices edged lower Wednesday.

The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 87 points.

West Texas Intermediate Crude Oil futures (CME) closed 33¢ to 43¢ lower through the front six contracts.

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Global beef demand is likely to remain steady this year despite economic challenges and consumer shifts toward lower-priced proteins, according to the recent Rabobank Global Beef Quarterly.

“While there was some channel shifting and movement to lower-priced options for beef, overall demand held up relatively well in 2023, supporting consumption levels,” says Angus Gidley-Baird, Rabobank senior analyst, animal protein.

Across most markets, beef retail prices have risen since 2019, and the impact of inflation in 2022 and 2023 added to the cost of living, pressuring consumers’ budgets and changing spending patterns, according to the report. With consumers trending toward cheaper options in 2023, foodservice and retail companies began promoting value-based propositions more frequently, some of which outperformed.

Still, Rabobank expects GDP growth rates to slow and unemployment rates to rise in many countries this year. Rising unemployment suggests that upward pressure on wages should ease, and if inflation remains high, real wages should decline, putting more pressure on household income. Rabobank forecasts 2024 GDP growth in the U.S. at less than 1%.

“With limited or negative real wage growth expected in 2024, coupled with the higher cost environment, we believe global beef consumption will at best remain steady and possibly decline through 2024, with some notable regional variations,” according to Gidley-Baird.

On the other side of the scale, Rabobank maintains a neutral outlook for global beef production, with increases in Australia and Brazil offsetting declines in Europe and the US.

Trade flows are also shifting. For instance, according to the report,

due to its reasonable economic outlook and lower domestic supplies, the U.S. is likely to lead the beef price-setting market and to draw increased volumes from Australia, New Zealand, Brazil, Canada, and Mexico, according to the report.

“Value will become the predominant theme across most markets in order to retain consumers faced with balancing the tighter economic conditions,” Gidley-Baird says.

Cattle futures basically paddled in place Tuesday, awaiting the week’s cash direction.

Live Cattle futures closed an average of 33¢ lower.

Feeder Cattle futures closed narrowly mixed, from an average of 14¢ lower in three contracts to an average of 16¢ higher.

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

Last week, FOB live prices were $183 in the Texas Panhandle, $182-$183 in Kansas, $183 in Nebraska and $182-$184 in the western Corn Belt. Dressed delivered prices were $292 in Nebraska and $290-$292  in the western Corn Belt.

Choice boxed beef cutout value was 5¢ lower Tuesday afternoon at $301.74/cwt. Select was $2.41 higher at $290.40/cwt.

Corn futures closed fractionally higher to 3¢ higher.

KC HRW Wheat futures closed mostly 8¢ to 9¢ higher.

Soybean futures closed 2¢ to 4¢ higher through near Aug and then mostly unchanged to fractionally lower.

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Major U.S. financial indices closed narrowly mixed on Tuesday.

The Dow Jones Industrial Average closed 96 points lower. The S&P 500 closed 8 points higher. The NASDAQ was up 59 points.

West Texas Intermediate Crude Oil futures (CME) closed 81¢ to $1.29 higher through the front six contracts.

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Beef in cold storage continues to decline, according to USDA’s most recent Cold Storage report.

Total pounds of beef in freezers Jan. 31 were 1% less than the previous month and 11% less than the same time a year earlier.

Frozen pork supplies were up 10% from the prior month but down 10% from the previous year.

Total red meat supplies in freezers were 4% more than the previous month but 11% less than last year.

Total frozen poultry supplies were 1% more than the previous month but 4% less than a year earlier. Chicken supplies were down and turkey supplies were up.

Overall, futures traders seemed to look past the bearish placement number in Friday’s monthly Cattle on Feed report, seeming instead to focus on strong fundamentals, including last week’s higher cash fed cattle trade. However, the bounce higher in Corn futures helped dampen Feeder Cattle futures.

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

Feeder Cattle futures closed an average of $1.07 lower, (50¢ to $1.52 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 $3 higher in the Texas Panhandle at $183/cwt., $2-$3 higher in Kansas at $182-$183, $2 higher in Nebraska at $183 and $2-$4 higher in the western Corn Belt at $182-$184. Dressed delivered prices in Nebraska were $5 higher at $292 and $5-$7 higher in the western Corn Belt at $290-$292.

The five-area direct weighted average FOB live steer price last week was $2.60 higher at $182.95/cwt. The average dressed delivered steer price was $5 higher at $291.61.

Choice boxed beef cutout value was $1.18 higher Monday afternoon at $301.79/cwt. Select was $1.68 higher at $287.99/cwt.

Grain futures bounced back Monday, still trying to carve a bottom.

Corn futures closed 6¢ to 8¢ higher through Jly ’25 and then 1¢ to 3¢ higher.

KC HRW Wheat futures closed 7¢ to 15¢ higher through Mar ’25 and then mostly 4¢ higher.

Soybean futures closed 1¢ to 3¢ higher through near Aug and then mostly fractionally lower to 2¢ lower.

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Major U.S. financial indices ended little changed but to the downside on Monday.

The Dow Jones Industrial Average closed 63 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 20 points.

West Texas Intermediate Crude Oil futures (CME) closed 80¢ to $1.09 higher through the front six contracts.

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Beef demand was down slightly year over year in 2023, according to the demand index calculated by the Livestock Marketing Information Center (LMIC). Even so, in the latest Livestock Monitor, analysts say retail beef demand the last four years was the highest since 2000. Demand last year was still above index levels for 2000-19.

LMIC’s meat demand index is based on the Consumer Price Index level of 2000.

On the other side of the fence, LMIC analysts say retail pork demand had been gaining ground for several years after seeing a low point around 2012. However, it also faltered a touch last year.