WLI

Cattle futures softened Thursday with pressure including the recent free-fall in Choice wholesale beef values and relatively light volume.

Feeder Cattle futures closed an average of $1.08 lower.

Live Cattle futures closed an average of 44¢ lower.

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

So far this week, FOB live prices are $2-$3 higher in Nebraska at $175/cwt. and $3 higher in the western Corn Belt at $175. Dressed delivered prices in Nebraska are $2 higher at $275.

Last week, FOB live prices were $172 in the Southern Plains. Dressed delivered prices in the western Corn Belt were $273.

Choice boxed beef cutout value was $2.13 lower Thursday afternoon at 275.90/cwt. Select was 3¢ lower at $258.82/cwt.

Wheat futures closed higher on thoughts the bottom might be in, helping Corn futures edge higher.

Corn futures closed mostly fractionally mixed to 1¢ higher.

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

Soybean futures closed 4¢ to 9¢ lower through Jan ’26.

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Major U.S. financial indices closed little changed and narrowly mixed Thursday, following strong early support.

The Dow Jones Industrial Average closed 10 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 81 points.

West Texas Intermediate Crude Oil futures (CME) closed 51¢ to 69¢ lower through the front six contracts.

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Lower expected fed cattle prices than earlier expectations have helped pushed projected cattle feeding returns firmly into the red for the next five months, according to Kansas State University’s Historical and Projected Kansas Feedlot Net Returns. Keep in mind the following projections do not include price risk management.

Projected net returns for steers range from -$154.46 per head in May to -$273.56 in current January. Estimated feedlot cost of gain ranges from $110.83/cwt. in May to $122.96 in January.

The story is similar for heifers with projected net returns ranging from -$44.29 per head in May to -$240.28 in February. Estimated feedlot cost of gain ranges from $116.57/cwt. in May to $131.28 in January.

Cattle futures struggled to a narrowly mixed close Wednesday, pressured by lower outside markets and falling wholesale beef values through much of the session. Stronger cash fed cattle prices added support later.

Feeder Cattle futures closed mixed, from an average of 19¢ lower to an average of 43¢ higher.

Live Cattle futures closed mixed, from an average of 12¢ lower in three contracts to an average of 25¢ higher.

Negotiated cash fed cattle trade was slow on light demand in the North through Wednesday afternoon, according to the Agricultural Marketing Service.

FOB live prices were $2-$3 higher in Nebraska at $175/cwt., where dressed delivered prices were $2 higher at $275.

FOB live prices in the western Corn Belt were $3 higher at $175. Dressed delivered prices there last week were $273.

Trade was at a standstill in the Southern Plains where FOB live prices last week were $172.

Choice boxed beef cutout value was $6.31 lower Wednesday afternoon at 278.03/cwt. Select was 1¢ lower at $258.85/cwt.

Corn futures closed mostly fractionally mixed to 1¢ higher.

KC HRW Wheat futures closed 4¢ to 7¢ lower through May ’25 and then 1¢ higher.

Soybean futures closed mostly 1¢ to 4¢ higher.

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Major U.S. financial indices closed lower Wednesday. Part of the pressure appeared to be investor disappointment in the latest Fed minutes offering no clarity about the timing of interest rate cuts.

The Dow Jones Industrial Average closed 284 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 173 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.00 to $2.32 higher through the front six contracts.

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Overall drought conditions continue to improve, according to the last U.S. Drought Monitor of 2023 (Dec. 26). At the time, 45.7% of the continental United States was free of abnormal dryness or drought conditions. That was true of 26% of the nation a year earlier. Spun differently 34% of cattle were in areas affected by drought at the end of 2023. A year earlier, 61% of cattle were in drought areas.

At the end of December, there was a 54% chance of a historically strong El Niño during the current November-January season, according to the National Weather Service Climate Prediction Center. As well, current conditions suggest it could be among the five strongest El Niños recorded since 1950, according to the most recent El Niño advisory. There is a 60% chance the current El Niño will transition to neutral conditions in the April-June timeframe.

Cattle futures rallied on Tuesday, supported by last week’s stronger cash fed cattle prices and more trade volume.

Feeder Cattle futures closed an average of $3.10 higher.

Live Cattle futures closed an average of $1.79 higher, ($1.15 to $3.42 higher), except for 82¢ lower in newly minted away Jun.

Negotiated cash fed cattle trade ranged from slow on light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early FOB live sales in the western Corn Belt at $175/cwt.

Last week, FOB live prices were $172 in the Southern Plains, $172-$173 in Nebraska and $172-$172.50 in the western Corn Belt. Dressed delivered prices were $273.

The five-area weighted average FOB live fed steer price last week was $1.73 higher at $172.24/cwt. The average dressed delivered price was $2.49 higher at $272.87.

Choice boxed beef cutout value was $5.37 lower Tuesday afternoon at 284.34/cwt. Select was $1.47 lower at $258.86/cwt.

The positive outlook for South America and likely technical selling helped shove Soybean futures lower, dragging Grain futures along.

Corn futures closed mostly 5¢ to 10¢ lower.

KC HRW Wheat futures closed mostly 9¢ to 13¢ lower.

Soybean futures closed 19¢ to 26¢ lower.

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Major U.S. financial indices closed mixed Tuesday with pressure on tech stocks.

The Dow Jones Industrial Average closed 25 points higher. The S&P 500 closed 27 points lower. The NASDAQ was down 245 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.03 to $1.27 lower through the front six contracts.

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Although U.S. agricultural producer expectations for inflation subsided, producer sentiment declined slightly in December, according to the Purdue University/CME Group Ag Economy Barometer.

The overall reading was 1 point lower month to month in December at 114.

Both subindices of the barometer, the Index of Current Conditions and the Index of Future Expectations, mirrored the slight decline, settling one point below their respective November figures at 112 and 115.

The Farm Financial Performance Index increased 2 points. Since late summer, the index has climbed 11 points. At year-end, it was 21 points above the low point for 2023, which occurred in May.

“The shift in farmers’ perception of financial performance during the fall quarter corresponds with USDA’s more optimistic 2023 farm income outlook released in late November, which was $10 billion higher than their previous forecast,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Producers’ inflation expectations moderated, with 70% expecting inflation in 2024 to be less than 4%. By comparison, 50% of the producers anticipated an inflation rate of 6% or higher a year ago. When asked about interest rates, 34% of respondents said they anticipate rates declining in 2024 while 22% expect no change in interest rates in the upcoming year.

Farmers concerned about the risk of lower prices for crops and livestock decreased from 26% of respondents in December to 16% in January.

This month’s Ag Economy Barometer survey was conducted from Dec. 4-8.

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

For the week, FOB live prices were $1 higher in the Texas Panhandle at $172/cwt., $1-$2 higher in Kansas at $172, $1 higher in Nebraska at $172-$173 and mostly $2 higher in the western Corn Belt at $172-$172.50. Dressed delivered prices were $3 higher at $273.

Choice boxed beef cutout value was $1.57 lower Friday afternoon at 289.71/cwt. Select was $1.09 higher at $260.33/cwt. Week to week on Friday, Choice boxed beef cutout value was $3.22 lower and Select was 82¢ lower .

Year-to-date estimated total cattle slaughter of 32.2 million head was 1.4 million head fewer (-4.2%) than the same time last year. Estimated year-to-date beef production of 26.6 billion lbs. was 1.3 billion pounds less (-4.6%).

Cattle and grain futures closed mainly narrowly mixed as traders closed the books on 2023.

Feeder Cattle futures closed mixed, from an average of 7¢ lower in the front three contracts to an average of 78¢ higher (12¢ to $1.82 higher). Week to week, they closed mixed, from an average of 80¢ lower in the front three contracts to an average of $2.15 higher.

Live Cattle futures closed narrowly mixed, from an average of 15¢ lower to an average of 37¢ higher, except for expiring Dec closing $2.47 higher. Week to week on Friday, after $3.62 higher in expiring Dec, Live Cattle futures closed an average of 80¢ higher (2¢ to $1.50 higher), except for an average of 5¢ lower in two contracts. 

On Friday, Corn futures closed 1¢ to 3¢ lower through Jly ’25 and then unchanged to fractionally lower.

KC HRW Wheat futures closed fractionally lower to 1¢ lower through Dec ’24 and then fractionally higher.

Soybean futures closed mostly 11¢ to 14¢ lower.

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I had just one weekly Friday auction to report…for Dunlap Livestock Auction in Iowa, where Compared to two weeks earlier, steers weighing 550-650 lbs. sold mostly steady and Steers weighing 700-800 lbs. sold $5-$8 higher. Heifers weighing 500-600 lbs. traded mostly steady to $3 higher and then mostly $4-$7 higher at 700 lbs. There were 1,443 head on offer.

Remember, you can get a weekly market summary and highlights in the CalfNews Price Point podcast that comes out each Tuesday. You’ll find it at CalfNews.net

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Major U.S. financial indices edged lower Friday on likely year-end position squaring.

The Dow Jones Industrial Average closed 20 points lower. The S&P 500 closed 13 points lower. The NASDAQ was down 83 points.

West Texas Intermediate Crude Oil futures (CME) closed 12¢ to 18¢ lower through the front six contracts.

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Steer by product value in 2023 was the highest last January at $14.28/cwt. It never reached that level again, dropping below $12 in December.

“In July, the steer, hide and offal value began to trend higher, reaching about $13.70/cwt. by late September, but the value has moderated lower over the last two months,” explain analysts with the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor. LMIC analysts say recently lower values are due to declines for livers, tripe, tongues and tallow.

The third week of September, when steer by product value was near $13.70, Andrew P. Griffith, agricultural economist at the University of Tennessee reminded in his weekly market comments that the price was significantly higher than the $8-$9 range from 2018-2020.

“Thus, prices today contribute an additional $50 of value per head compared to 2018 through 2020, which directly translates to higher prices for finished cattle,” Griffith explained. “The driver of the byproduct value tends to be the export market as many of these products have a higher value in the international market than the domestic market. As interest rates and inflation continue to negatively influence consumers across the world, there could be some softening in byproduct values.”

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

FOB live prices were $1 higher in the Texas Panhandle at $172/cwt., $1-$2 higher in Kansas at $172 and mostly $2 higher in the western Corn Belt at $172-$172.50.

Last week, FOB live prices were $171-$172 in Nebraska. Dressed delivered prices were $270.

Choice boxed beef cutout value was 20¢ lower Thursday afternoon at 291.28/cwt. Select was $1.08 lower at $259.24/cwt.

Cattle futures softened Thursday amid light trade once again and perhaps with some year-end position squaring.

Feeder Cattle futures closed an average of $1.42 lower (72¢ to $2.27 lower).

Live Cattle futures closed an average of 44¢ lower, except for an average of 34¢ higher at either end of the board.

Corn futures closed mostly 1¢ to 2¢ lower.

KC HRW Wheat futures closed mostly 4¢ to 5¢ higher, helped along by increased tensions in the Black Sea.

Soybean futures closed mostly 4¢ to 8¢ lower.

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Major U.S. financial indices closed little changed Thursday.

The Dow Jones Industrial Average closed 53 points higher. The S&P 500 closed 1 point higher. The NASDAQ was down 4 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.24 to $2.37 lower through the front six contracts.

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Food price increases are expected to moderate further in 2024, according to the recently updated Food Price Outlook from USDA’s Economic Research Service (ERS).

“The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, decreased 0.2% from October 2023 to November 2023 and was up 3.1% from November 2022,” according to ERS. “The CPI for all food decreased 0.2% from October 2023 to November 2023, and food prices were 2.9% higher than in November 2022.”

More specifically, the food-at-home CPI decreased 0.5% month to month in November and was up 1.7% year over year. Conversely, the CPI for food purchased away from home increased 0.4% from October through November was 5.3% higher than a year earlier.

Next year, ERS predicts all food prices to increase 1.2%, compared to this year’s projection of a 5.8% increase. Prices for food at home were projected to decrease 0.6% while prices for food away from home were expected to increase 4.9%.