WLI

Live Cattle futures closed an average of 84¢ higher Thursday (5¢ higher at the back to $1.77 higher toward the front), supported by friendly World Agricultural Supply and Demand Estimates (see below) and prospects of higher cash prices this week.

Feeder Cattle futures closed mixed, from an average of 53¢ higher through the front five contracts (2¢ to $1.30 higher) to an average of 27¢ lower.

Negotiated cash fed cattle trade was slow on light demand in the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few early FOB live trades at $179/cwt.

Elsewhere, trade was at a standstill.

Last week, FOB live prices were $178 in the Texas Panhandle, $178-$179 in Kansas,  $176-$178.75 in Nebraska and $177-$179 in the western Corn Belt. Dressed delivered prices were $280.

Choice boxed beef cutout value was 3¢ higher Thursday afternoon at $295.01/cwt. Select was $1.30 lower at $284.13/cwt.

Corn futures closed 1¢ lower.

KC HRW Wheat futures closed 13¢ to 17¢ lower.

Soybean futures closed mostly 2¢ to 8¢ higher.

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Major U.S. financial indices edged higher Thursday, buoyed by more strong quarterly earnings reports.

The Dow Jones Industrial Average closed 49 points higher. The S&P 500 closed 2 points higher. The NASDAQ was up 37 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.82 to $2.36 higher through the front six contracts.

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USDA increased the forecast annual five-area direct average fed steer price for this year by $2 to $180/cwt., in the February World Agricultural Supply and Demand Estimates (WASDE). Prices were projected at $176 in the first quarter, $180 in the second and third quarters and $184 in the fourth quarter.

USDA analysts say prices were raised on expected strength in first-half demand for fed cattle in the face of tightening feedlot numbers.

At the same time, estimated beef production for this year was estimated slightly higher, up 75 million pounds from the previous report to 26.2. billion pounds. The total would be 778 million pounds less than last year (-2.9%).

“Slaughter is lowered for the first half, reflecting a slower pace of cattle slaughter,” say USDA analysts. “For the second half, steer and heifer slaughter is raised as USDA’s January Cattle report implied a smaller decline in cattle outside feedlots than previously expected and to the extent these cattle are placed on feed in the first half, they will likely be marketed and slaughtered in the second half.”

Among other WASDE highlights…

Corn

U.S. corn ending stocks were projected 10 million bushels more than last month. The season-average corn price received by producers was unchanged at $4.80 per bushel.

Wheat

Projected ending stocks were raised 10 million bushels to 658 million. The 2023/24 season-average farm price forecast was unchanged at $7.20 per bushel.

Soybeans

Ending stocks were forecast at 315 million bushels, up 35 million from the prior month.

The U.S. season-average soybean price for 2023/24 was forecast at 10¢ less at $12.65 per bushel. The soybean meal price forecast was unchanged at $380 per short ton. The soybean oil price was forecast 3¢ less at 51¢ per pound.

Cattle futures took a breather Wednesday with traders apparently waiting for the week’s cash direction.

Feeder Cattle futures closed an average of 47¢ lower (17¢ lower toward the back to $1.12 lower in the spot month).

Live Cattle futures closed an average of 76¢ lower (27¢ lower at the back to $1.27 lower toward the front).

Negotiated cash fed cattle trade ranged from mostly inactive on light demand in the western Corn Belt to a standstill elsewhere through Wednesday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $178/cwt. in the Texas Panhandle, $178-$179 in Kansas, $176-$178.75 in Nebraska and $177-$179 in the western Corn Belt. Dressed delivered prices $280.

Choice boxed beef cutout value was 91¢ higher Wednesday afternoon at $294.98/cwt. Select was 82¢ higher at $285.42/cwt.

Apparent fund selling helped pressure Corn and Soybean futures. Positioning ahead of Thursday’s World Agricultural Supply and Demand Estimates could have played a role, too.

Corn futures closed mostly 2¢ to 4¢ lower.

Soybean futures closed 5¢ to 10¢ lower through Sep ’25 and then mostly 1¢ to 2¢ lower.

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

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Major U.S. financial indices closed higher Wednesday, buoyed by strong quarterly earnings reports.

The Dow Jones Industrial Average closed 156 points higher. The S&P 500 closed 40 points higher. The NASDAQ was up 147 points.

West Texas Intermediate Crude Oil futures (CME) closed 52¢ to 55¢ higher through the front six contracts.

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After several months watching El Niño’s influence on the global weather pattern, Meteorologist Matt Makens said the El Niño event that placed moisture on the South and Southeast is fading away and La Niña is showing signs of making a rapid return.

“During the next several weeks, we will continue to see strong and wet storm systems move across the central and southern states. Increased odds for snow and cold as far south as Texas will mean possible impacts on calving and wheat,” Makens explained during the annual CattleFax Outlook Seminar at the recent Cattle Industry Convention and NCBA Trade Show. “Take this moisture now and make the most of it; look for a good start to this grazing season overall but be mindful that drought conditions will increase for the Southern Plains during summer and fall as we see our pattern change quickly.”

As La Niña’s influence grows, increased heat and drought-related issues are expected for the Central and Southern Plains. The moisture pattern will favor the northern tier of states and the Ohio to Tennessee Valleys.

Cattle futures roared back Tuesday with apparent fund buying.

Feeder Cattle futures closed an average of $2.78 higher (from $1.95 higher at the back to $3.92 higher at the front).

Live Cattle futures closed an average of $2.04 higher (from $1.05 higher near the back to $3.72 higher toward the front).

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

Last week, FOB live prices were $178/cwt. in the Texas Panhandle, $178-$179 in Kansas, $176-$178.75 in Nebraska and $177-$179 in the western Corn Belt. Dressed delivered prices $280.

Choice boxed beef cutout value was 59¢ higher Tuesday afternoon at $294.07/cwt. Select was 83¢ higher at $284.60/cwt.

Soybean futures closed fractionally higher to 3¢ higher through Sep ’25 and then mostly 1¢ lower.

Corn futures closed fractionally mixed after the first three contracts.

KC HRW Wheat futures closed mostly fractionally lower after the first few contracts.

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Major U.S. financial indices closed higher Tuesday.

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 11 points.

West Texas Intermediate Crude Oil futures (CME) closed 38¢ to 53¢ higher through the front six contracts.

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U.S. agriculture producers were less optimistic than the previous month in January, according to the latest Purdue University-CME Group Ag Economy Barometer.

Month to month, the overall Ag Economy barometer declined 8 points to 106. The Current Conditions Index fell 9 points, and the Future Expectations Index dropped by 7.

“The number of producers pointing to lower commodity prices and lower farm income in 2024 significantly influenced the decline across all indices,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

In January, 31% of respondents anticipated a decline in their operation’s performance this year, compared to 20% in December.

“For the first time, the percentage of producers choosing lower commodity prices as a top concern matched the percentage of producers who chose higher input costs,” Mintert says. “This alignment indicates that U.S. producers are worried about a possible cost/price squeeze leading to lower incomes.”

The latest Ag Economy Barometer survey was conducted from Jan. 15-19.

Cattle futures closed lower Monday on oversold conditions and likely profit taking as traders await this week’s cash direction.

Feeder Cattle futures closed an average of $1.89 lower.

Live Cattle futures closed an average of $1.19 lower.

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

For the week, FOB live prices were $3 higher in the Texas Panhandle at $178/cwt., $4 higher in Kansas at $178-$179, $1 to $1.75 higher in Nebraska at $176-$178.75 and steady to $5 higher in the western Corn Belt at $177-$179. Dressed delivered prices were $3 higher at $280.

Choice boxed beef cutout value was 40¢ higher Monday afternoon at $293.48/cwt. Select was 30¢ higher at $283.77/cwt.

Soybean futures closed 4¢ to 7¢ higher through Nov ’25.

Corn futures closed mostly fractionally higher to 1¢ higher.

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

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Major U.S. financial indices closed lower as Treasury yields climbed in response to expectations the Fed will be slower to cut interest rates amid the strong employment outlook.

The Dow Jones Industrial Average closed 274 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 31 points.

West Texas Intermediate Crude Oil futures (CME) closed 50¢ to 64¢ higher through the front six contracts.

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All cattle and calves in the U.S. inventory at the beginning of this year of 87.15 million head was the least since 1951, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. He lends historical perspective of last week’s USDA Cattle report, in his weekly market comments.

The Jan. 1 beef cow inventory of 28.2 million head was 3.47 million head less (-10.9%) than the cyclical peak in 2019. Peel says, It’s the smallest beef cow herd since 1961.

As well, he explains, The top 10 beef cow states, represent 57.3% of total beef cows and accounted for 79.4% of the year over year decrease in total beef cow numbers. They accounted for 67.7% of the decrease from 2019 to 2024.

Beef replacement heifers on Jan.1 of 4.86 million head were 1.4% less year over year. However, Peel notes, “The 2023 beef replacement heifer inventory was revised down by 4.5% from the initial value reported one year ago.”

Estimated supply of feeder cattle outside feedlots of 24.2 million head was 4.2% less, representing the fewest in the 53 years, according to Peel, who explains

“The smaller cattle inventory is projected to result in a decrease of about 5% in total beef production to roughly 25.5 billion pounds in 2024.

Although That’s three times as much beef as was produced in 1951, the last time the total cattle inventory was this small; Peel says, the current ability to produce beef is smaller than market potential today and the industry will look to rebuild numbers and increase beef production when conditions allow.”  

Cattle futures were narrowly mixed Friday as traders paused at the end of a significantly positive week, fueled by gains in cash fed cattle prices and supported by the friendly Cattle report.

For the week, FOB live prices were $3 higher in the Texas Panhandle at $178/cwt., $4 higher in Kansas at $178-$179, steady to $1 higher in Nebraska at $176-$177 and steady to $5 higher in the western Corn Belt at $177-$179. Dressed delivered prices were $3 higher at $280.

Feeder Cattle futures closed an average of 44¢ lower. Week to week, there were an average of $3.99 higher.

Live Cattle futures closed an average of 39¢ higher, except for unchanged in away Feb. Week to week, they were an average of $2.36 higher.

Choice boxed beef cutout value was $1.86 lower Friday afternoon at $293.08/cwt. Select was 22¢ higher at $283.47/cwt. Week to week, Choice was $7.45 lower and Select was down $5.66.

Estimated total cattle slaughter last week of 637,000 head was 19,000 more than the previous week and the same as a year earlier. Year-to-date estimated total cattle slaughter of 2.9 million head was 215,000 head fewer (-6.8%) than the same period a year ago. Year-to-date estimated beef production of 2.5 billion pounds was 125.7 million pounds less (-4.8%).

Soybean futures closed 14¢ to 15¢ lower through Sep ’25.

Corn futures closed mostly 1¢ to 4¢ lower.

KC HRW Wheat futures closed mostly 3¢ to 5¢ higher.   

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Major U.S. financial indices rose Friday, buoyed by tech stocks. That was despite significantly more employment in January than expected.

Total non-farm payroll employment rose by 353,000 in January, according to the U.S. Bureau of Labor Statistics. The unemployment rate remained at 3.7%. In January, average hourly earnings for all employees on private non-farm payrolls rose by 19¢ to $34.55. Over the past 12 months, average hourly earnings have increased by 4.5%.

The Dow Jones Industrial Average closed 134 points higher. The S&P 500 closed 52 points higher. The NASDAQ was up 267 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.25 to $1.54 lower through the front six contracts.

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Higher cattle prices and reduced feeding costs will continue to improve margins for cow-calf producers for the next several years, as reduced cattle numbers and beef production return more leverage to the sector, according to CattleFax.

“Though drought conditions did improve in many regions, over a third of the cow herd was affected by drought in 2023, causing limited heifer retention and more liquidation in some regions. This will limit growth to the cow herd near-term,” Kevin Good, CattleFax vice president of market analysis, explained during the annual CattleFax Outlook Seminar at last week’s Cattle Industry Convention and NCBA Trade Show.

Despite record prices, CattleFax analysts say beef cow herd expansion will likely be delayed again this year with lingering drought, high input costs, limited labor availability, high interest rates, and market uncertainty as headwinds. Overall, they expect cyclical herd expansion to slower and more prolonged this time around with expected lows in fed slaughter by 2026.

Cow and bull slaughter is forecast to be 6.5 million head in 2024, down around 800,000 head, from 2023. CattleFax predicts feeder cattle and calf supplies outside of feedlots will be 1 million head fewer than 2023 at 24.1 million head.

Commercial fed slaughter in 2024 is forecast to decline by 750,000 to 24.8 million head. “Though inventories may remain somewhat elevated for a few months, they are expected to decline significantly through the second half of the year,” according to Good.

CattleFax projects beef production to be 1 billion pounds less than last year. It was about 1.3 billion pounds less year over year in 2023.

Prices for all classes of cattle are forecast to be higher this year, according to Mike Murphy, CattleFax chief operating officer.

CattleFax pegs this year’s annual average price for fed steers $9 higher than last year at $184/cwt. As for other classes:

• Feeder steers (800 lbs.) — $240/cwt.
• Steer calves (550 lbs.) — $290/cwt.
• Utility cows — $115/cwt.
• Bred cows — $2,600/head

Peak cattle prices are likely to come in 2025-26, according to Randy Blach, CattleFax chief executive officer.