WLI

Cattle futures closed mixed Wednesday in light holiday trade.

Feeder Cattle futures closed an average of 57¢ higher (7¢ to 92¢ higher).

Live Cattle futures closed an average of 34¢ lower (12¢ to $1.12 lower), except for 15¢ higher in waning spot Dec.

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

Last week, FOB live prices were $171/cwt. in the Texas Panhandle, $170-$171 in Kansas, $171-$172 in Nebraska and $170 in the western Corn Belt. Dressed delivered prices were $270.

Choice boxed beef cutout value was $1.83 lower Wednesday at 291.48/cwt. Select was 87¢ lower at $260.32/cwt.

Grain futures closed lower Wednesday on likely profit taking.

Corn futures closed mostly 2¢ to 3¢ lower.

KC HRW Wheat futures closed mostly 11¢ lower

Soybean futures closed unchanged to 3¢ higher through Nov ’24 and then 1¢ to to 2¢ lower.        

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Major U.S. financial indices closed higher Wednesday with continued optimism tied to the lower inflation and interest rate outlook.

The Dow Jones Industrial Average closed 111 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 24 points.

West Texas Intermediate Crude Oil futures (CME) closed 99¢ to $1.46 lower through the front six contracts.

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Although Creighton University’s Rural Mainstreet Index (RMI) edged higher month to month in December to 41.7, it remained below growth neutral for the fourth consecutive month. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. 

“Higher interest rates and a credit squeeze are having a significant and negative impact on Rural Mainstreet businesses,” according to Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “Approximately 13.3% of bank CEOs indicated that their local economy was already in a recession while another 43.3% expect a recession in early 2024.”

When asked to name the greatest 2024 economic threat for community banks, approximately four of 10 identified a downturn in farm income as the chief hazard.

Even though the RMI confidence index climbed to 43.3 from November’s record low 21.2, higher interest rates, deposit outflows and a slowing farm economy over the past several months continued to constrain business confidence.

The Rural Mainstreet Index is a unique index covering 10 regional states dependent on agriculture and/or energy. It focuses on approximately 200 rural communities with an average population of 1,300.

Cattle futures faded early pressure Tuesday to close higher amid light holiday trade. Support included last week’s higher cash fed cattle prices and the weekend’s harsh weather in parts of cattle feeding country. Stronger outside markets helped, as did the fact that traders had apparently already factored in last week’s Cattle on Feed Report, which showed more placements than analyst expectations ahead of the report.

Feeder Cattle futures closed an average of $1.34 higher (17¢ to $2.20 higher).

Live Cattle futures closed an average of $1.11 higher (52¢ to $1.87 higher).

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

Last week, FOB live prices were $1 higher in the Texas Panhandle at $171/cwt., steady to $1 higher in Kansas at $171, $3-$4 higher in Nebraska at $171-$172 and $1-$3 higher in the western Corn Belt at $170. Dressed delivered prices were $2-$3 higher in Nebraska at $270 and $3 higher in the western Corn Belt at $270.

Last week’s five-area direct weighted average FOB live steer price was $1.80 higher at $170.51/cwt. The weighted average dressed delivered steer price was $2.85 higher at $270.38.

Choice boxed beef cutout value was 38¢ higher Tuesday afternoon at $293.31/cwt. Select was 4¢ higher at $261.19/cwt.

Grain futures closed higher Tuesday, helped along by competitive pricing in the global market, as well as the recently weaker U.S. dollar.

Corn futures closed mostly 3¢ to 6¢ higher.

KC HRW Wheat futures closed 18¢ to 21¢ higher.

Soybean futures closed 7¢ to 13¢ higher.

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Major U.S. financial indices closed higher Tuesday with follow-through support from last week.

The Dow Jones Industrial Average closed 159 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 81 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.78 to $2.01 higher through the front six contracts.

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Although Friday’s Cattle on Feed report revealed the Dec. 1 feedlot inventory was 2.7% more than a year earlier, total feedlot placements from June through November were 0.3% less than the same period last year, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

“This means that the larger feedlot inventory now is due to a slower feedlot turnover rate and not because of increased total feedlot production,” Peel says in his weekly market comments. “This is reflected in November feedlot marketings that were down 7.4% year over year. A slower feedlot marketing rate raises concerns that feedlots may not be staying current in marketings.”

Peel also points out weekly average steer carcass weights were record large over the past month at 940 pounds. However, he says, “Indications are that the heavier carcass weights reflect deliberate marketing intentions (feeding cattle longer) rather than a systemic lack of currentness in feedlots.”

Cattle futures were mixed on Friday, ahead of the monthly Cattle on Feed report (see below) and amid light holiday trade.

Feeder Cattle futures closed an average of $1.39 higher (97¢ to $2.07 higher). Week to week on Friday, Feeder Cattle futures closed an average of $3.91 higher ($1.85 higher at the front to $5.45 higher at the back). That’s an average of $10.59 higher over the past two weeks.

Live Cattle futures closed narrowly mixed, from an average of 23¢ lower in the front three contracts to an average of 18¢ higher. Week to week on Friday, they closed an average of 56¢ higher (7¢ to $1.83 higher), except for an average of 78¢ lower in near Feb and Apr. 

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

For the week, FOB live prices were $1 higher in the Southern Plains at $171/cwt., $3-$4 higher in Nebraska at $171-$172 and $1-$3 higher in the western Corn Belt at $170. Dressed delivered prices were $2-$3 higher in Nebraska at $270 and $3 higher in the western Corn Belt at $270.

Choice boxed beef cutout value was $1.80 higher Friday afternoon at $292.93/cwt. Select was 12¢ lower at $261.15/cwt.

Turning to row crops, the U.S. reopened key rail bridges connecting the nation and Mexico, which should support grain futures next week.

Corn futures closed mostly fractionally higher to 1¢ higher.

KC HRW Wheat futures closed mostly fractionally higher, except for 1¢ to 3¢ lower in the front three contracts.

Soybean futures closed mostly 3¢ to 5¢ higher through Sep ’25 and then mostly 7¢ to 8¢ higher.

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

The Dow Jones Industrial Average closed 18 points lower. The S&P 500 closed 8 points higher. The NASDAQ was up 29 points.

West Texas Intermediate Crude Oil futures (CME) closed 33¢ to 46¢ lower through the front six contracts.

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Depending on what the markets factored in ahead of time, Friday’s monthly Cattle on Feed report could be viewed as bearish with more placements than expected once again.

For feedlots with 1,000 head or more capacity, November placements of 1.9 million head were 1.9% less than a year earlier (-37,000 head), but that was 2.2% more than estimates ahead of the report.

In terms of placement weights, 53% went on feed weighing 699 lbs. or less, 35% weighing 700-899 lbs. and 12% weighing 900 lbs. or more.

Marketings in November of 1.8 million head were 7.4% less year over year (140,000 head), compared to pre-report estimates of 6.7% less.

Cattle on feed Dec. 1 of 12.0 million head were 2.7% more than last year (+313,000 head), which was 0.5% more than expectations ahead of the report.

Cattle futures closed mostly lower amid light trade Thursday, perhaps also pressured by positioning ahead of Friday’s Cattle on Feed report that will come out after tomorrow’s close.

Feeder Cattle futures closed an average of $1.83 lower.

Live Cattle futures closed an average of $1.36 lower (90¢ to $1.65 lower), except for 52¢ higher in spot Dec.

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

So far this week, FOB live prices are $1-$3 higher in the western Corn Belt at $170/cwt. Dressed, delivered prices of $270 are $2-$3 higher in Nebraska and $3 higher in the western Corn Belt.

Last week, FOB live prices were $170/cwt. in the Southern Plains and $168 in Nebraska.

Choice boxed beef cutout value was $2.00 higher Thursday afternoon at $291.13/cwt. Select was 33¢ lower at $261.27/cwt.

Net 2023 U.S. beef export sales of 9,700 metric tons (mt) for the week ending Dec. 14 were 8% less than the previous week, but 44% more than the prior four-week average, according to USDA’s weekly Export Sales report. Increases primarily were for South Korea, Japan, Mexico, Canada and China.

Net U.S. beef export sales of 6,400 mt for 2024 were primarily for Japan, Mexico, China, Hong Kong and Taiwan.

Turning to row crops, this week’s U.S. closure of key rail bridges connecting the nation and Mexico — hampering transport of goods and commodities — continued to cap and pressure to grain futures.

Corn futures closed 2¢ higher through Jly ’25 and then unchanged to fractionally higher.

KC HRW Wheat futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed 8¢ to 14¢ lower.

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Major U.S. financial indices rebounded Thursday with investors apparently retrenching following the previous day’s profit taking.

The Dow Jones Industrial Average closed 322 points higher. The S&P 500 closed 48 points higher. The NASDAQ was up 185 points.

West Texas Intermediate Crude Oil futures (CME) closed 33¢ to 57¢ lower through the front six contracts.

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Annual domestic U.S. commercial beef production through November of 24.8 billion pounds was 1.3 billion pounds less (-5.0%) than the same time a year earlier, according to USDA’s monthly Livestock Slaughter report. Total commercial cattle slaughter through November of 30.2 million head was 1.4 million less (-4.4%).

Total commercial red meat production for the same period of 49.9 billion pounds was 1.1 billion pounds less (-2.2%). Pork production was 1% more year over year. In addition to the 5% decline in beef production, veal production was down 11%, and lamb and mutton production was down 1%.

Cattle futures gained strength late in yesterday’s session, albeit amid light pre-holiday trade. Support included chatter that beef packers appear to be short-bought and may have to advance cash prices this week.

Feeder Cattle futures closed an average of $2.40 higher.

Live Cattle futures closed an average of 98¢ higher (45¢ to $1.57 higher).

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

Although too few to trend, there were some FOB live sales at $170/cwt. in the western Corn Belt, and a few dressed delivered sales in Nebraska at $270.

Last week, FOB live prices were $170/cwt. in the Southern Plains, $168 in Nebraska and $167-$169 in the western Corn Belt. Dressed delivered prices were $267-$268 in Nebraska and $267 in the western Corn Belt.

Choice boxed beef cutout value was 30¢ higher Wednesday afternoon at $289.13/cwt. Select was $1.56 lower at $261.60/cwt.

Corn futures closed 1¢ to 3¢ lower through Jly ’25 and then mostly fractionally lower.

KC HRW Wheat futures closed 9¢ to 16¢ lower.

Soybean futures closed 4¢ to 7¢ lower.

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Major U.S. financial indices closed lower Wednesday on likely profit taking.

The Dow Jones Industrial Average closed 475 points lower. The S&P 500 closed 70 points lower. The NASDAQ was down 225 points.

West Texas Intermediate Crude Oil futures (CME) closed little changed through the front six contracts.

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Although there is no clear bottoming pattern in Cattle futures, from a technical standpoint, Stephen Koontz, agricultural economist at Colorado State University notes the downtrend appears to be weakening.

“Cash prices for fed and feeder cattle did not have the same strength during the up move as futures did and are weakening but also not with the same strength as futures,” Koontz explains in the most recent issue of In the Cattle Markets from the Livestock Marketing Information Center. “Regardless, 2023 is finishing up the year offering a case study of proper risk management practices and perspective. Before mid-September, there was nothing but optimism and higher – record high – prices. And after mid-September, it was the opposite during the sharp decline. Producers that purchased LRP or hedged in the third quarter of this year will realize some of those excellent returns.”

On the other end of the supply chain, Koontz explains consumer beef demand remains relatively strong but moderated in 2023. He adds that further moderation in 2024 will impact beef prices.

“The demand side will likely have important interactions with changes in supplies as cattle producers consider and eventually commit to herd building,” Koontz says.