WLI

Cattle futures faded early pressure Thursday to close higher with support including the bounce higher in Choice wholesale beef prices.

Feeder Cattle futures closed an average of $1.24 higher.

Live Cattle futures closed an average of 62¢ higher (32¢ to $1.05 higher).

Choice boxed beef cutout value was $2.82 higher Thursday afternoon at 285.89/cwt. Select was $3.00 higher at $269.94/cwt.

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

So far this week, FOB live trades in the western Corn Belt are steady at $175/cwt. and dressed delivered sales are steady to $1 higher at $274-$275.

Action in grain futures Thursday appeared to be tied mainly to positioning ahead of Friday’s monthly World Agricultural Supply and Demand Estimate and quarterly Grain Stocks report.

Soybean futures closed mostly 1¢ higher.

Corn futures closed mostly 1¢ to 2¢ lower.

KC HRW Wheat futures closed 7¢ to 8¢ lower.

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Major U.S. financial indices faltered Thursday with slightly higher inflation than expected.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% in December on a seasonally adjusted basis, after rising 0.1% in November, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the-all items index increased 3.4% before seasonal adjustment.

The Dow Jones Industrial Average closed 15 points higher. The S&P 500 closed 3 points lower. The NASDAQ was fractionally higher.

West Texas Intermediate Crude Oil futures (CME) closed 63¢ to 67¢ higher through the front six contracts.

Negotiated cash fed cattle trade ranged from slow on light demand to mostly a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few early FOB live trades in the western Corn Belt at $175/cwt. and a few dressed delivered sales at $274-$275.

Last week, FOB live prices were $172-$173/cwt. in the Southern Plains, $173-$175 in Nebraska and $175 in the western Corn Belt. Dressed delivered prices were generally $274-$275.50.

Choice boxed beef cutout value was $2.91 higher Wednesday afternoon at 283.07/cwt. Select was $4.11 higher at $266.94/cwt.

Cattle futures consolidated to the upside Wednesday.

Live Cattle futures closed an average of 24¢ higher, except for 2¢ lower in spot Feb.

Feeder Cattle futures closed an average of $1.01 higher.

Soybean were down on South American production forecasts Wednesday. They closed 8¢ to 12¢ lower through Aug ’24 and then mostly 1¢ to 2¢ lower.

Grain futures mainly held ground ahead of Friday’s World Agricultural Supply and Demand Estimates.

Corn futures closed mostly fractionally lower. KC HRW Wheat futures closed 1¢ to 2¢ lower.

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Major U.S. financial indices closed higher Wednesday ahead of key inflation data.

The Dow Jones Industrial Average closed 170 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 111 points.

West Texas Intermediate Crude Oil futures (CME) closed 62¢ to 87¢ lower through the front six contracts.

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U.S. beef exports slowed in November, recording the third lowest value of 2023, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 99,029 metric tons (mt) in November, down 14% from a year ago and the second lowest of the year, while value fell 7% to $786.2 million. For the first 11 months of the year, beef exports were 13% below the record pace of 2022 at 1.18 million mt, while value declined 17% to $9.11 billion.

November beef export value equated to $380.54 per head of fed slaughter, down slightly year-over-year. The January-November average fell 13% to $394.07 per head but was still the third highest on record, trailing only 2021 and 2022.

“There are certainly bright spots for U.S. beef, with exports rebounding in Mexico and demand in several Western Hemisphere markets the strongest we’ve seen in years,” says Dan Halstrom, USMEF president and CEO. “But economic conditions in our largest Asian markets and the sharp rebound in Australian production and exports have been persistent obstacles over the past year, making it a sharp contrast with the tremendous 2022 performance for U.S. beef exports. Despite these challenges, we still see sustained demand for chilled U.S. beef, and the U.S. remains the dominant supplier of chilled beef entering Korea, Japan and Taiwan.”

Cattle futures moved higher early in the day, supported by last week’s stronger cash fed cattle prices, looming performance-depressing weather and some thoughts that the bottom is in or near for Choice wholesale beef values. By the end, Feeder Cattle closed mostly higher with help from lower Corn futures, while Live Cattle finished lower, perhaps with technical pressure tied to the broader commodity sell-off.

Feeder Cattle futures closed an average of 48¢ higher, except for an average of 21¢ lower in two contracts.

Live Cattle futures closed an average of 51¢ lower.

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

Last week, FOB live prices were steady to $1 higher in the Southern Plains at $172-$173/cwt., $3 higher in Nebraska at $173-$175/cwt. and $3 higher in the western Corn Belt at $175. Dressed delivered prices were generally $1-$2 higher at $274-$275.50.

The weighted average five-area direct fed steer price last week was $1.77 higher at $174.01/cwt. The weighted average dressed steer price was $1.91 higher at $274.78.

Choice boxed beef cutout value was $1.67 higher Monday afternoon at 278.83/cwt. Select was 17¢ lower at $259.36/cwt.

Turning to row crops, rains in South America continued to pressure Soybean futures Monday, helping lead grain futures lower.

Soybean futures closed 8¢ to 10¢ lower through Jly ’24 and then mostly 3¢ to 6¢ lower.

Corn futures closed mostly 4¢ to 5¢ lower through Jly ’25 and then mostly 2¢ lower.

KC HRW Wheat futures closed 9¢ to 14¢ lower.

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Major U.S. financial indices bounced higher Monday, led by tech stocks.

The Dow Jones Industrial Average closed 216 points higher. The S&P 500 closed 66 points higher. The NASDAQ was up 319 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.54 to $3.04 lower through the front six contracts, with chatter about Saudi Arabia selling at lower prices outside of OPEC.

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The semiannual USDA Cattle report, scheduled for release Jan. 31, will provide quantification of how much the beef cow herd contracted last year but will be unable to say anything about rebuilding plans this year.

“Beef cow herd liquidation will likely slow, perhaps stop in 2024; though there is little chance of any significant rebuild for a year or more. It will, of course, depend on weather and forage conditions in the coming year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The heifer retention needed to rebuild the herd will squeeze feeder supplies, feedlot production, cattle slaughter and beef production going forward. However, it is unclear how aggressive that process will be.”

Although production costs are easing, and drought conditions have improved in many regions, Peel points out producers in these regions need time for forage recovery, and in some cases, water recovery. At the same time, drought continues for some.

“With considerable uncertainty remaining about moisture and forage conditions for the coming growing season, many producers are logically taking a very cautious approach to animal stocking,” Peel says.

Cattle futures softened Friday with continued pressure by the week’s decline in Choice wholesale beef prices. Choice boxed beef cutout value was $1.26 higher Friday afternoon at 277.16/cwt. and Select was 71¢ higher at $259.53/cwt. Week to week, however, Choice was down $12.55, while Select was 80¢ lower.

Feeder Cattle futures closed an average of $1.26 lower. Week to week, they were an average of 88¢ higher (22¢ to $1.40 higher).

Live Cattle futures closed an average of 73¢ lower (47¢ to $1.30 lower). They were an average of 77¢ higher week to week (2¢ to $2.07 higher).

Pressure may also have stemmed from disappointment that stronger cash fed cattle prices faded at the end of the week.

Negotiated cash fed cattle trade was slow on light demand in all regions through Friday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

For the week, FOB live prices were steady to $3 higher in Nebraska at $173-$175/cwt. and $3 higher in the western Corn Belt at $175. Dressed delivered prices were $1-$2 higher at $274-$275. The previous week, FOB live prices were $172-$173 in Kansas and $172 in the Texas Panhandle.

Weekly U.S. beef export sales were positive. Net U.S. beef export sales for 2023 the week ending Dec. 28 (9,500 metric tons) were up noticeably from the previous week and up 69% from the prior four-week average. Increases primarily were for China, Japan, Mexico, and South Korea.

Net U.S. beef export sales of 7,100 metric tons for 2024 were primarily for Taiwan, Mexico, South Korea and Hong Kong.

Total cattle slaughter last week of 556,000 head was 48,000 more than the previous week but 9,000 head fewer than the same week last year. Beef production for the first week of 2024 of 470.3 million pounds was 40.9 million pounds more than the previous week and 3.6 million pounds more than the same week last year.

Turning to row crops, rains in South America continued to pressure Soybean futures Friday. Export sales also applied pressure to grains. Sales were a marketing year low for corn and soybeans, while wheat export sales were 52% less than the previous week and 79% less than the prior four-week average.

Soybean futures closed mostly 11¢ to 14¢ lower.

Corn futures closed mostly 5¢ to 7¢ lower.

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

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Major U.S. financial indices edged higher Friday with support including the positive employment outlook. Total non-farm payroll employment increased by 216,000 in December, and the unemployment rate was unchanged at 3.7%, according to the U.S. Bureau of Labor Statistics Friday.

In December, average hourly earnings for all employees on private non-farm payrolls rose by 15¢ (0.4%) to $34.27. Over the past 12 months, average hourly earnings have increased by 4.1%.

The Dow Jones Industrial Average closed 25 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 13 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.16 to $1.62 higher through the front six contracts.

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Although the number of cattle on feed remains elevated, Andrew P. Griffith points out those cattle will wend their way through the market during the first half of this year, leaving snugger numbers in their wake.

“Calf and feeder cattle numbers will tighten in the first half of 2024 and will tighten even more the second half of the year if climatic conditions allow cattle producers to retain heifers and rebuild the cattle herd,” Griffith explains in his weekly market comments. “With that being said, the current market is set up for strong prices on all classes of cattle. The determinant of how high prices will go will eventually come down to consumer demand for beef, but there is no doubt every margin operator up and down the supply chain will be competing for a smaller quantity of cattle this year than last year.”

Griffith notes snugger numbers will include slaughter cows.

“ … there are fewer cows in general and many cow-calf producers will be trying to get one more calf to capitalize on strong calf prices in 2024 and 2025,” he explains.