WLI

Cattle futures rallied higher Friday helped along by recently stronger wholesale beef values.

Live Cattle futures closed average of $1.11 higher (65¢ to $1.95 higher).

Feeder Cattle futures closed an average of $1.67 higher (50¢ higher at the back to $3.32 higher at the front).

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

Last week, FOB live prices were $2 lower in the Southern Plains at $180/cwt., steady to $2.50 lower in Nebraska at $180 and steady in the western Corn Belt at $180-$182. Dressed delivered prices were unevenly steady in Nebraska at mostly $287 and steady in the western Corn Belt at $285.

Choice boxed beef cutout value was 90¢ higher Friday afternoon at $296.20/cwt. Select was $1.33 lower at $286.66/cwt.

Total estimated cattle slaughter last week of 608,000 head was 14,000 head fewer than the previous week and 17,000 head fewer than the same week last year. Total year-to-date estimated cattle slaughter of 4.2. million head was 246,000 head fewer (-5.6%). Year-to-date estimated beef production of 3.5 billion pounds was 153.5 million pounds less (-4.2%).

Corn futures closed mostly 1¢ to 2¢ higher.

KC HRW Wheat futures closed 8¢ to 11¢ lower.

Soybean futures closed mostly 5¢ to 10¢ higher.

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Major U.S. financial indices closed lower on Friday with another report indicating stubborn inflation.

The Producer Price Index for final demand increased 0.3% in January, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. That was more than expected.

The Dow Jones Industrial Average closed 145 points lower. The S&P 500 closed 24 points lower. The NASDAQ was down 130 points.

West Texas Intermediate Crude Oil futures (CME) closed 54¢ to $1.16 higher through the front six contracts.

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Depending on your abacus, the USDA Agricultural Projections to 2033 released last week are plumb optimistic when it comes to the timing and degree of U.S. beef cow herd growth.

USDA pegs the Jan. 1, 2025 beef cow inventory at 28.82 million head, which would be 600,000 head more than Jan. 1 this year. USDA projects the beef cow herd growing to a peak of 31.68 million head in 2031, which would be 3.5 million head more than where this year began.

“Beef production is projected to increase during much of the forecast period as assumptions of normal weather and improved pastures, coupled with strong cattle prices, sets the stage for herd rebuilding,” according to the report. “Beef production is expected to decline in 2024 reflecting tighter cattle supplies leading into the projection period. However, higher expected cattle prices in 2024 and an expected return to normal pasture conditions will likely incentivize heifer retention, after which modest herd growth is expected through the end of the projection period.”

USDA projects the annual feeder steer price (750-800 lbs., Oklahoma City) to peak this year at $253.75/cwt. and at $246.34 next year. After that prices are projected to decline to a low of $159.78 in 2030 before increasing again.

USDA forecasts the weighted average annual five-area direct fed steer price at $185.00 this year and $180.60 next year before declining to a low of $128.78 in 2030.

“Corn prices are projected to decline from the elevated levels in 2022/23 and 2023/24, and corn planted acreage is projected to fall from 94.9 million acres in 2023/24 to 91 million acres in 2024/25, according to the report. Prices start at $4.50 per bushel in 2024/25 and then level off at $4.30 per bushel the remainder of the projection period.”

U.S. real GDP growth is projected at an annual average of 1.9% during the projection period from 2024–33.

Live Cattle futures closed higher Thursday, supported by firmer wholesale beef values and more reprieve in Corn futures.

Live Cattle futures closed average of 64¢ higher (17¢ higher at the back to $1.60 higher toward the front).

Feeder Cattle futures closed an average of 57¢ lower, except for an average of 75¢ higher in the front two contracts.

Negotiated cash fed cattle trade ranged from moderate on moderate demand in the North to mostly inactive on light demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service.

So far this week, FOB live prices are $2 lower in the Southern Plains at $180/cwt., steady to $2.50 lower in Nebraska at $180 and mainly steady in the western Corn Belt at $180-$181. Dressed delivered prices are unevenly steady in Nebraska at mostly $287 and steady in the western Corn Belt at $285 on a light test.

Choice boxed beef cutout value was $1.30 higher Thursday afternoon at $295.30/cwt. Select was $3.97 higher at $287.99/cwt.

Grain and Soybean futures continued to plumb for new lows Thursday as the lack of demand faces abundant supplies.

Corn futures closed mostly 5¢ to 7¢ lower.

KC HRW Wheat futures closed 11¢ to 14¢ lower.

Soybean futures closed mostly 10¢ to 14¢ lower through Sep ’25.

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Major U.S. financial indices continued to claw back early-week losses on Thursday, led by tech stock and supported by receding bond yields.

Advance estimates of U.S. retail and food services sales for January this year were 0.6% higher year over year but 0.8% lower month to month, according to the U.S. Census Bureau. That was much weaker than the trade expected.

The Dow Jones Industrial Average closed 348 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 47 points.

West Texas Intermediate Crude Oil futures (CME) closed 85¢ to $1.39 higher through the front six contracts.

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USDA projects commercial beef production this year to be 3% less year over year at 26.19 billion pounds.

“In the first part of the year, steer and heifer slaughter will reflect higher levels of cattle in feedlots but as the year progresses, marketings will decline as feedlot numbers diminish,” according to Shayle Shagam, livestock analyst with the World Agricultural Outlook Board. He provided the Outlook for Livestock and Poultry in 2024 at the Agricultural Outlook Forum taking place in Arlington, Va.

As for non-fed slaughter, Shagam says beef and dairy cow slaughter has been lower year over year so far in 2024 but may reflect the effects of winter weather on mid-January slaughter schedules.

“Nonetheless, with a smaller cow base, cow slaughter is expected to decline during the year, but reductions may also reflect improved forage conditions and strong calf prices which would support retention of cows as a precursor to any herd rebuilding,” Shagam says.

As mentioned in yesterday’s Cattle Current, USDA projects the average prices for a 750-800 lb. feeder steer selling at Oklahoma City record high at $248.50/cwt. USDA pegs the annual five-area direct average fed steer price for this year at $180/cwt.

Overbought conditions, seasonally lower wholesale beef values, early cash fed cattle sales at lower money and the previous day’s surprisingly strong Consumer Price Index all weighed on Cattle futures Wednesday.

Feeder Cattle futures closed an average of $2.43 lower.

Live Cattle futures closed an average of $1.57 lower.

Negotiated cash fed cattle trade ranged from moderate on moderate demand to active on good demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. FOB live prices were $2 lower at $180/cwt.

Elsewhere, trade was slow on light to moderate demand with too few transactions to trend. Last week, FOB live prices were $180-$182.50 in Nebraska and $180-$182 in the western Corn Belt. Dressed delivered prices were $285-$289 in Nebraska and $285 in the western Corn Belt.

Choice boxed beef cutout value was $1.73 higher Wednesday afternoon at $294.00/cwt. Select was $1.28 lower at $284.02/cwt.

Queasiness over the release of the latest USDA projections helped take grain and Soybean futures lower.

Corn futures closed mostly 5¢ to 6¢ lower.

KC HRW Wheat futures closed mostly 7¢ to 9¢ lower.

Soybean futures closed 9¢ to 15¢ lower through Jly ’25 and then mostly 3¢ to 4¢ lower.

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Major U.S. financial indices rebounded Wednesday from the previous day’s sharp losses.

The Dow Jones Industrial Average closed 151 points higher. The S&P 500 closed 47 points higher. The NASDAQ was up 203 points.

West Texas Intermediate Crude Oil futures (CME) closed 98¢ to $1.23 lower through the front six contracts.

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Compared to prior-month projections, USDA’s Economic Research Service (ERS) increased expected feeder steer prices (750-800 lbs., Oklahoma City) for this year, in the February Livestock, Dairy and Poultry Outlook.

Based on current prices and lower anticipate feed prices, ERS increased the feeder steer price $9 in the first quarter to $234/cwt., $6 in the second quarter to $242, $5 in the third quarter to $255 and $5 in the fourth quarter to $256. ERS increased the expected annual average price for this year $6.25 to $248.50.

“Forage availability, as well as historically high prices for calves and cull cows, likely discouraged producers from retaining females in 2023,” ERS analysts say. “The culling rate of beef cows in 2023 was over 12% of the beef cow inventory on Jan. 1, 2023, the third highest rate behind 2011 and 2022.”

As reported recently in Cattle Current, ERS also increased projected five-area direct fed steer prices slightly for this year in the February World Agricultural Supply and Demand Estimates. Prices were projected at $176 in the first quarter, $180 in the second and third quarters and $184 in the fourth quarter. ERS increased the forecast annual five-area direct average fed steer price for this year by $2 to $180/cwt. Analysts say prices were raised on expected strength in first-half demand for fed cattle in the face of tightening feedlot numbers.

Cattle futures softened Tuesday with pressure from outside markets and likely profit taking.

Feeder Cattle futures closed an average of $1.07 lower.

Live Cattle futures closed an average of 73¢ lower.

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

Last week, FOB live prices were $182/cwt. in the Southern Plains, $180-$182.50 in Nebraska and $180-$182 in the western Corn Belt. Dressed delivered prices were $285-$289 in Nebraska and $285 in the western Corn Belt.

Choice boxed beef cutout value was $1.81 lower Tuesday afternoon at $292.27/cwt. Select was $1.72 lower at $285.30/cwt.

Corn futures closed mostly fractionally higher to 1¢ higher.

KC HRW Wheat futures closed 2¢ to 4¢ lower.

Soybean futures closed 3¢ to 6¢ lower.

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Major U.S. financial indices closed sharply Tuesday, under pressure from a hotter inflation reading than expected, prompting concerns the Fed would take longer to cut interest rates.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% in January on a seasonally adjusted basis, after rising 0.2% in December, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 3.1% before seasonal adjustment.

The Dow Jones Industrial Average closed 524 points lower. The S&P 500 closed 68 points lower. The NASDAQ was down 286 points.

West Texas Intermediate Crude Oil futures (CME) closed 32¢ to 95¢ higher through the front six contracts.

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Domestic and global economic growth continue to firm, according to the recent Interim Economic Outlook from the Organization for Economic Cooperation and Development (OECD).

OECD projects U.S. economic growth this year to be 2.1% and then 1.7% in 2025, helped by consumers continuing to spend savings built up during the COVID and easier financial conditions.

The Outlook projects global GDP growth of 2.9% in 2024 and 3.0% in 2025. Asia is expected to continue to account for the bulk of global growth in 2024-25, as it did in 2023. With said, OECD analysts note China’s economy is projected to grow at 4.7% this year and 4.2% in 2025 – the slowest rate in any of the 25 years before COVID, reflecting weak consumer demand and structural strains in property markets.

“The global economy has shown real resilience amid the high inflation of the past two years and the necessary monetary policy tightening. Growth has held up, and we expect inflation to be back to central bank targets by the end of 2025 in most G20 economies,” according to Mathias Cormann.  OECD Secretary-General. “Monetary policy needs to remain prudent, though central banks could start to lower interest rates this year, provided that inflation continues to ease.”

The OECD expects inflation to continue easing gradually, as cost pressures moderate. Headline inflation in G20 countries is expected to decline from 6.6% in 2024 to 3.8% in 2025. Core inflation in the G20 advanced economies is projected to fall back to 2.5% in 2024 and 2.1% in 2025.

Feeder Cattle futures continued higher Monday up an average of 87¢ with strong cash demand — 2¢ higher at the back to $1.67 higher at the front.

Live Cattle closed mixed on some likely profit taking. They were an average of 48¢ lower through the front four contracts to an average of 20¢ higher, except for unchanged in Oct.

Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $3 to $4 higher in the Southern Plains at $182/cwt., $3.75 to $4 higher in Nebraska at $180 to $182.50 and $3 higher in the western Corn Belt at $180-$182. Dressed delivered prices were $5 to $9 higher in Nebraska at $285-$289 and $5 higher in the western Corn Belt at $285.

The five-area direct weighted average FOB live steer price last week was $3.36 higher at $181.15. The weighted average dressed delivered price was $7.84 higher at $287.37.

Choice boxed beef cutout value was 4¢ higher Monday afternoon at $294.08/cwt. Select was $1.94 higher at $287.02/cwt.

Corn futures closed 1¢ to 2¢ higher.

Soybean futures closed mostly 3¢ to 7¢ higher.

KC HRW Wheat futures closed 2¢ to 4¢ lower through May ’25 and then unchanged.

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Major U.S. financial indices closed mixed Monday.

The Dow Jones Industrial Average closed 125 points higher. The S&P 500 closed 4 points lower. The NASDAQ was down 48 points.

West Texas Intermediate Crude Oil futures (CME) closed 3¢ to 8¢ higher through the front six contracts.

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Although inflation is moderating, Kevin Good, CattleFax vice president of market analysis says domestic consumer demand this year could be pressured by consumer debt and interest rates, cheaper alternative proteins, and economic uncertainty.

Speaking at the recent annual CattleFax Outlook Seminar, Good explained 2024 USDA All-Fresh Retail Beef prices are expected to average $7.90/pound. While higher beef prices may soften consumer purchasing habits, Good predicted the consumer preference for the quality, consistency and safety of U.S. beef will continue to support relatively strong demand. “Premiums for higher quality beef should remain as consumers have shown a willingness to pay for Choice grade or better beef,” he said.

From an international perspective, Good explained global protein demand has continued to increase and tighter global protein supplies should broadly support prices in 2024.

As reported in the last edition of Cattle Current, U.S. beef exports continue lower year over year, as domestic supplies decline and prices increase. CattleFax expects U.S. beef exports to decline 5% this year.

Cattle futures eased Friday as traders appeared to take a break from the week’s strong gains and awaiting cash fed cattle direction which ultimately proved positive.

Feeder Cattle futures closed an average of $1.23 lower (15¢ to $2.45 lower) except for 30¢ higher in spot Mar.

Live Cattle futures closed an average of 25¢ higher (5¢ to 85¢ higher) except for an average of 12¢ lower in three contracts.

Negotiated cash fed cattle trade ranged from mostly inactive on light demand in the Texas Panhandle to slow on light to moderate demand in the North through Friday afternoon, according to the Agricultural Marketing Service.

FOB live prices were $1.25 to $4.00 higher in Nebraska at $180/cwt. in a light test. Dressed delivered prices were $5 higher in the western Corn Belt at $285, where there were a few live trades at $180, but too few to trend.

The previous week, FOB live prices were $178 in the Texas Panhandle, $178-$179 in Kansas and $177-$179 in the western Corn Belt. Dressed delivered prices in Nebraska were $280.

Choice boxed beef cutout value was 97¢ lower Friday afternoon at $294.04/cwt. Select was 96¢ higher at $285.08/cwt. Week to week on Friday, Choice was 96¢ higher and Select was $1.61 higher.

Total estimated cattle slaughter last week of 622,000 head was 15,000 head fewer than the previous week and 6,000 head fewer than the same week a year earlier. Beef packers continue to slow production in efforts to boost wholesale beef values. Year-to-date estimated total cattle slaughter of 3.6 million head was 225,000 head fewer (-5.9%) than the same period last year. Year-to-date estimated beef production of 3 billion pounds was 133.8 million pounds less (-4.3%) than a year earlier.

Grain and soybean futures continued to be pressured by the latest World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed 9¢ to 11¢ lower.

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

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Major U.S. financial indices closed mixed Friday, with the most support from tech stocks and further confirmation of easing inflation.

The Dow Jones Industrial Average closed 54 points lower. The S&P 500 closed 28 points higher. The NASDAQ was up 196 points.

West Texas Intermediate Crude Oil futures (CME) closed 56¢ to 62¢ higher through the front six contracts.

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U.S. beef exports finished last year down 12% from the previous year’s record level at 1.29 million metric tons (mt), according to year-end data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Beef export value was 15% less year over year at just under $10 billion but was still the third highest annual value for beef exports.

“There is no question that 2023 was a challenging year for U.S. beef exports, especially in our largest Asian markets where economic conditions have weighed on foodservice demand,” says Dan Halstrom, USMEF president and CEO. “Of course, we were also challenged on the supply side, with less product available for export. Nevertheless, U.S. beef achieved excellent growth in Mexico, Central America and the Caribbean, and we are encouraged by the December uptick in demand in South Korea and China. It was also great to see such strong per-head export value in December, topping $430.”

December exports of U.S. beef totaled 108,497 mt, down 4% year-over-year but the largest since August. Export value was also the highest since August and climbed 10% year-over-year to $860.8 million.

December beef export value equated to $431.50 per head of fed slaughter, up 11% from a year ago and the highest since April. The 2023 average was $397.04 per head, down 11% from the record level ($448.57) posted in 2022.