WLI

Cattle futures stretched higher Thursday, led by Feeder Cattle. Recently higher wholesale beef prices and growing prospects of steady to higher cash fed cattle prices this week added support. There was also likely some positioning ahead of the monthly Cattle on Feed report scheduled for release Friday. Analyst estimates ahead of the report peg December placements about 4% lower year over year, December marketings about 0.5% less and the Jan. 1 feedlot inventory about 2% higher.

Feeder Cattle futures closed an average of $2.21 higher ($1.65 to $2.77 higher).

Live Cattle futures closed an average of $1.41 higher (1.00 to $2.02 higher).

Negotiated cash fed cattle trade ranged from inactive on light demand to a standstill through Thursday afternoon, according to the Agricultural Marketing Service. Last week, FOB live prices were $172/cwt. in the Southern Plains, $173 in Nebraska and $175 in the western Corn Belt. Dressed delivered prices were $272-$275 in Nebraska and $275 in the western Corn Belt.

Choice boxed beef cutout value was $2.16 lower Thursday afternoon at 296.29/cwt. Select was 74¢ higher at $283.76/cwt.

Grain and Soybean futures firmed on apparently oversold conditions and positive outside markets.

Soybean futures closed 1¢ to 7¢ higher through Mar ’25 and then 1¢ to 5¢ lower.

Corn futures closed mostly 1¢ higher through Jly ’25 and then mostly 1¢ to 2¢ lower.

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

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Major U.S. financial indices closed higher Thursday, led tech stocks. Pressure early in the day came from indicators of a tighter labor market.  

Seasonally adjusted weekly initial unemployment insurance claims were 187,000 for the week ending Jan. 13, according to the U.S. Department of Labor. That was less than the trade expected, pointing to further tightness in the labor market.

The Dow Jones Industrial Average closed 201 points higher. The S&P 500 closed 41 points higher. The NASDAQ was up 200 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.16 to $1.52 higher through the front six contracts.

Cattle futures faded early pressure to close mostly higher Wednesday with help from resurgent wholesale beef values.

Feeder Cattle futures closed an average of 83¢ higher.

Live Cattle futures closed an average of 45¢ higher, except for 2¢ lower in spot Feb.

Negotiated cash fed cattle trade ranged from inactive on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. Last week, FOB live prices were $172/cwt. in the Southern Plains, $173 in Nebraska and $175 in the western Corn Belt. Dressed delivered prices were $272-$275 in Nebraska and $275 in the western Corn Belt.

Choice boxed beef cutout value was $3.46 higher through Wednesday afternoon at 298.45/cwt. Select was $3.04 higher at $283.02/cwt.

Soybean futures closed mostly 11¢ to 21¢ lower on weak economic news in China.

Corn futures closed mostly fractionally lower to 2¢ lower.

KC HRW Wheat futures closed mostly 5¢ to 7¢ lower.

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Major U.S. financial indices continued lower Wednesday with pressure including the rise in bond yields.

The Dow Jones Industrial Average closed 94 points lower. The S&P 500 closed 26 points lower. The NASDAQ was down 88 points.

West Texas Intermediate Crude Oil futures (CME) closed 4¢ to 24¢ lower through the front six contracts except for 16¢ higher in spot Feb.

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Although current cattle markets and the surrounding economics are obviously different than in 2014-15, when cattle numbers were similarly snug, Andrew P. Griffith, agricultural economist at the University of Tennessee says prices are poised to push higher.

“One clear price expectation from a supply and demand standpoint and a seasonal standpoint is that calf prices will increase from today through April,” Griffith says in his weekly market comments. “Despite the seasonal trend, calf prices are expected to be steady or move even higher following the grass cattle run in March and April. This will be simply due to fewer calves on the market.”

Moreover, Griffith notes higher calf prices tend to lead to higher prices for most classes of cattle.

“For instance, production sales have demonstrated a strong price for herd sires to start the year,” he says. “This will likely mean strong prices for bred females moving throughout the year, which will lead to stronger prices for slaughter cows.”

Cattle futures strengthened Tuesday, helped along by recently higher wholesale beef values and likely lower fed cattle carcass weights in the near term due to the severe winter weather.

Feeder Cattle futures closed an average of $1.16 higher.

Live Cattle futures closed an average of 74¢ higher (22¢ higher at the back to $1.75 higher in spot Feb).

Negotiated cash fed cattle trade was at a standstill through Tuesday afternoon, according to the Agricultural Marketing Service. Last week, FOB live prices were $172/cwt. in the Southern, Plains $173 in Nebraska and $175 in the western Corn Belt. Dressed delivered prices were $272-$275 in Nebraska and $275 in the western Corn Belt.

Choice boxed beef cutout value was $3.57 higher Tuesday afternoon at 294.99/cwt. Select was $7.42 higher at $279.98/cwt.

The higher dollar helped pressure Wheat futures, leading Corn futures along.

The higher U.S. dollar helped pressure Wheat futures, pulling Corn along.

Corn futures closed mostly 3¢ to 4¢ lower.

KC HRW Wheat futures closed mostly 10¢ to 14¢ lower.

Lower South American production estimates helped support Soybean futures. They closed 1¢ to 3¢ higher through near Aug and then mostly 1¢ to 2¢ lower.

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Major U.S. financial indices closed lower Tuesday as yield for the 10-year U.S. Treasury note climbed.

The Dow Jones Industrial Average closed 231 points lower. The S&P 500 closed 17 points lower. The NASDAQ was down 28 points.

West Texas Intermediate Crude Oil futures (CME) closed 27¢ to 37¢ lower through the front six contracts.

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Perhaps the more domestic retail beef consumers change the more they stay the same. Consider recent research conducted by Kansas State University (K-State) with partial funding from the Kansas Beef Council. More than 3,000 consumers responded to a nationally representative survey aimed at determining the current importance of specific beef attributes to consumers.

Freshness (51% of respondents), price (51%) and food safety (49%) were overwhelmingly ranked as the top three attributes by consumers overall. Flavorful, juicy and tender ranked fourth.

“On the other end of our ranking spectrum were 1) supporting local farmers, 2) nutritious content, and 3) low carbon beef. Less than one‐quarter of respondents indicated any of these three were among the most important,” according to K-State researchers. “A surprising 57% of our respondents placed low carbon beef as least important. Given elevating importance of public concerns about greenhouse gas emissions and contributions of beef cattle production to greenhouse gases, as well as branded products being developed in this space, we expected more consumers to rank this attribute important.”

With that said, researchers note each of the nine attributes consumer could choose were among the most important to some and the least important to others.

“This illustrates heterogeneous preferences of consumers for beef product attributes,” according to the report. “Furthermore, it indicates a variety of beef product claims can potentially be successful in attracting consumers. For example, roughly one‐quarter of consumers indicate animal welfare, no hormone/antibiotic use, supports local farmers, and nutritious content are among their three most important beef purchase decision determinants.”

These are the nine beef attributes consumers were asked to rank: price; freshness; flavorful, juicy, tender; nutritious content; safety of food; supports local farmers; low carbon beef; animal welfare; produced without use of hormones or antibiotics.

Futures and equity markets were closed Monday in observance of Martin Luther King, Jr.

Negotiated cash fed cattle prices were at a standstill through Monday afternoon, according to the Agricultural Marketing Service. Last week, they wobbled on either side of steady. FOB live prices were steady to $1 lower in the Southern Plains at $172/cwt., steady to $2 lower in Nebraska at $173. and steady in the western Corn Belt at $175. Dressed delivered prices were 50¢ to $2 lower in Nebraska at $272-$275 and steady to $1 higher in the western Corn Belt at $275 on a light test.

Last week’s weighted average five-area direct FOB live steer price was 54¢ lower at $173.47. The weighted average dressed delivered fed steer price was $1.08 lower at $273.70.

Choice boxed beef cutout value was $2.16 higher Monday afternoon at 291.42/cwt. Select was 71¢ higher at $272.56/cwt.

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All hay production last year of 118.8 million tons was 7.1 million tons (+6.4%) more than the previous year, according to USDA’s recent annual Crop Production summary.

However, that was 7.8% less than the 10-year average for 2012-21, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

“Total Dec. 1, 2023 hay stocks were 6.9% higher than one year earlier but were 10.8% below the 10-year average,” Peel says, in his weekly market comments. “Hay stocks in the top 10 beef cow states were up 18.5% year over year but were 7.3% below the 2012-2021 average for these states. Total Dec. 1 hay stocks in these states represented 52.8% of total U.S. hay stocks.” He adds that hay stocks were higher year over year in eight of the 10 top beef cow states. Year-over-year production was less in Kansas and Kentucky.

Although the hay situation is more positive this winter than last, Peel emphasizes hay stocks remain below the 10-year average, and current severe winter weather will significantly increase hay usage.

Feeder Cattle futures closed an average of 49¢ higher Friday, helped by falling Corn futures, which were pressured by the latest World Agricultural Supply and Demand Estimates (see below). Week to week on Friday, Feeder Cattle closed an average of $3.25 higher.

Live Cattle futures closed an average of 26¢ lower, except for unchanged and 22¢ higher in the back two contracts. Week to week on Friday, they were an average of 61¢ higher (2¢ to $1.07 higher), except for unchanged and 37¢ lower in two away contracts.

Negotiated cash fed cattle trade ranged from mostly inactive on light demand to slow on light demand through Friday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few FOB live trades in the Southern Plains at $172/cwt. Established prices the previous week were $172-$173.

Established FOB live prices last week were steady to $2 lower in Nebraska at $173 and steady in the western Corn Belt at $174. Dressed delivered prices were 50¢ to $2 lower in Nebraska at $272-$275 and steady to $1 higher in the western Corn Belt at $275 on a light test.

Through Thursday, the weighted average five-area direct FOB live steer price was 33¢ lower at $174.32. The weighted average dressed delivered fed steer price was $1.11 lower at $273.63.

Choice boxed beef cutout value was $3.37 higher Friday afternoon at 289.26/cwt. Select was $1.91 higher at $271.85/cwt. Week to week, Choice was $12.10 higher and Select was $12.32 higher.

Corn and Soybean futures fell Friday in response to higher than expected yield and production estimates in the monthly WASDE. Kansas City Wheat futures followed along, despite a reduction in expected planted area.

Corn futures closed mostly 7¢ to 10¢ lower through Jly ’25 and then mostly 4¢ to 5¢ lower. Week to week on Friday, Corn futures an average of 13’3¢ lower through the front six contracts.

Soybean futures closed 11¢ to 25¢ lower through Aug ’24 and then mostly 2¢ to 5¢ lower.

KC HRW Wheat futures closed mostly 1¢ to 3¢ lower through May ’25 and then unchanged.

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Major U.S. financial indices were mixed Friday. Support included a more favorable inflation reading than expected in the monthly Producer Price Index for final demand, which declined 0.1% in December (seasonally adjusted), according to the U.S. Bureau of Labor Statistics. Final demand prices were 0.1% lower in November and 0.4% lower in October.

The Dow Jones Industrial Average closed 118 points lower. The S&P 500 closed 3 points higher. The NASDAQ was up 2 points.

West Texas Intermediate Crude Oil futures (CME) closed 66¢ to 73¢ higher through the front six contracts.

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The projected five-area direct weighted average fed steer price was unchanged, compared to the previous month, in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). USDA’s Economic Research Service (ERS) projects an average price of $175/cwt. in the first quarter, $177 in the second quarter, $178 in the third quarter and $183 in the fourth quarter for an annual average price of $178.

That’s with beef production this year estimated 120 million pounds more than the previous forecast at 26.1 billion pounds, based on higher expected cattle slaughter in the first half of the year, as well as higher dressed weights. The total would be 857 million pounds less (-3.2%) than the estimated 2023 total of 27 billion pounds.

Among other WASDE highlights…

USDA surprised some with higher projected corn and soybean production.

U.S. 2023-24 corn production was estimated at a record 15.3 billion bushels — 108 million bushels more than the previous estimate — based on an increase in yield to a record 177.3 bushels per acre. With supply rising more than use, 2023-24 corn stocks were projected 31 million bushels higher. The season-average corn price received by producers was lowered 5¢ to $4.80 per bushel.

USDA also projected the U.S. 2023-24 soybean production 35 million bushels more than the previous month at 4.2 billion bushels. Yield was estimated at 50.6 bushels per acre, up 0.7 bushels. With increased supplies and slightly lower residual, ending stocks were projected 35 million bushels higher at 280 million bushels.

The U.S. season-average soybean price for 2023-24 was projected 15¢ lower at $12.75 per bushel. The soybean meal price was projected $10 less at $380 per short ton. The soybean oil price was forecast 3¢ lower at 54¢ per pound.

Finally, projected 2023-24 U.S. wheat ending stocks were lowered 11 million bushels on decreased supplies more than offsetting less use.

The 2023-24 season-average farm price was forecast 10¢ lower per bushel at $7.20, based on prices received to date and expectations for futures and cash prices for the remainder of 2023-24.