WLI

Cattle futures eased lower Tuesday, awaiting cash direction and with some potential positioning ahead of Friday’s monthly Cattle on Feed report. Depending on whose numbers you follow, estimates are for November placements to be about 4% less year over year with November marketings down about 7% and the Dec. 1 on-feed inventory about 2% higher.

Feeder Cattle futures closed an average of 62¢ lower (20¢ to $1.27 lower), except for 65¢ higher in the back contract.

Live Cattle futures closed an average of 33¢ lower (2¢ to 85¢ lower) except for unchanged in away Feb.

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

Last week, FOB live sales were $1 lower in the Southern Plains at $170/cwt., $1-$3 lower in Nebraska at $168 and $1-$2 lower in the western Corn Belt at $167-$169. Dressed delivered prices were steady to $4 lower in Nebraska at $267-$268 and $1-$3 lower in the western Corn Belt at $267.

Choice boxed beef cutout value was 82¢ lower Tuesday afternoon at $288.83/cwt. Select was 56¢ lower at $263.16/cwt.

Corn futures closed 4¢ to 6¢ lower.

KC HRW Wheat futures closed 10¢ to 13¢ higher on short covering and chatter about more exports to China.

Soybean futures closed mostly 12¢ to 17¢ lower, as traders removed some South American weather premium.

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Major U.S. financial indices edged higher Tuesday with the most support from tech stocks, further supported by the Federal Reserve’s dovish interest rate outlook.

The Dow Jones Industrial Average closed 251 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 98 points.

West Texas Intermediate Crude Oil futures (CME) closed 97¢ to $1.12 higher through the front six contracts.

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If cash calf and feeder cattle prices this week can maintain last week’s stronger momentum, then it could set the stage for higher prices next month, according to Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly comments. He believes cash prices will be a more telling indicator over the next two holiday weeks, as the cash market has not consistently followed Feeder Cattle futures this year.

“Given the rapid decline in Feeder Cattle futures since the middle of September, the market is ready for a correction of some sort on the futures market side,” Griffith says. “Prices may not challenge previous contract highs for a while, but the market will offer producers an opportunity to hedge cattle for summer and fall of 2024 moving through the next several months.”

Moreover, Griffith suggests keeping an eye on the market for breeding females.

“The thought here is that bred female prices will escalate in the spring if forage production gets off to a good start and will continue to increase if forage production persists through summer,” Griffith says.

Cattle futures rallied higher Monday with follow-through support, including renewed buying interest, especially in Feeder Cattle, and firming cash fed cattle prices at the end of last week.

Feeder Cattle futures closed an average of $2.40 higher ($1.97 to $2.85 higher).

Live Cattle futures closed an average of 68¢ higher (27¢ to 97¢ higher).

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 sales were $1 lower in the Southern Plains at $170/cwt., $1-$3 lower in Nebraska at $168 and $1-$2 lower in the western Corn Belt at $167-$169. Dressed delivered prices were steady to $4 lower in Nebraska at $267-$268 and $1-$3 lower in the western Corn Belt at $267.

Last week’s weighted average five-area direct FOB live steer price was $1.23 lower at $168.71/cwt. The weighted average steer price in the beef was $2.10 lower at $267.53.

Choice boxed beef cutout value was $2.71 lower Monday afternoon at $288.93/cwt. Select was $2.90 higher at $263.72/cwt.

Corn futures closed 3¢ to 6¢ lower through Jly ’25 and then 1¢ higher.

KC HRW Wheat futures closed mostly 13¢ to 15¢ lower.

Soybean futures closed mostly 5¢ to 8¢ higher.

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Major U.S. financial indices edged higher Monday with the most support from tech stocks.

The Dow Jones Industrial Average closed fractionally higher. The S&P 500 closed 21 points higher. The NASDAQ was up 90 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.02 to $1.05 higher through the front six contracts.

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With the apparent beef cow culling rate this year of 12.1%, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says the herd likely contracted 2.0-2.5% in 2023. If so, he explains in his weekly market comments that the cow inventory at the beginning of 2024 would be about 28.2 million head, the fewest since 1961.

“The level of heifer slaughter in 2023, down just 2.8% year over year, doesn’t indicate a likelihood of many ‘extra’ heifers bred in 2023,” Peel says. “The pool of bred beef heifers is likely to remain low going into 2024, keeping the prospects of beef cow herd growth minimal in the coming year.”

You can hear more of Peel’s insights here.

Cattle futures continued higher Friday, supported by friendlier outside markets and oversold conditions.

Feeder Cattle futures closed an average of $2.24 higher ($1.55 to $2.57 higher). They were an average of $6.68 higher week to week ($4.95 to $7.98 higher).

Live Cattle futures closed an average of $1.12 (72¢ to $1.42 higher). They were an average of $3.71 higher week to week on Friday ($2.77 to $4.27 higher).

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

Although too few to trend, there were some FOB live sales in the Southern Plains at $170/cwt. and in the western Corn Belt at $167-$168 where early dressed delivered prices were $267.

The only established trade for last week was in Nebraska with FOB live prices $1-$3 lower at $168/cwt. and dressed delivered prices steady to $4 lower at $267-$268.

The previous week, FOB live prices were $171 in the Southern Plains and $168-$171 in the western Corn Belt where dressed delivered prices were $268-$270.

Choice boxed beef cutout value was 68¢ lower Friday afternoon at $291.64/cwt. Select was $2.56 higher at $260.82/cwt.

Estimated total cattle slaughter last week of 649,000 head was 14,000 head more than the previous week and 27,000 head more than the same week last year. Estimated total year-to-date cattle slaughter of 31.1 million head was 1.5 million head fewer (-4.5%) than the same period last year. Estimated year-to-date beef production of 25.6 billion pounds was 1.3 billion pounds less (-5.0%).

Grain futures closed higher on likely short covering.

KC HRW Wheat futures closed mostly 6¢ to 8¢ higher.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 2¢ to 5¢ lower.

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Major U.S. financial indices closed narrowly mixed Friday.

The Dow Jones Industrial Average closed 56 points higher. The S&P 500 closed fractionally lower. The NASDAQ was up 52 points.

West Texas Intermediate Crude Oil futures (CME) closed 12¢ to 16¢ lower through the front six contracts.

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 “The proportion of heifers reported in weekly federally inspected slaughter data and in weekly sales data for feeder and stocker cattle remain quite strong, particularly given historically high nominal price levels recorded this year,” say analysts with USDA’s Economic Research Service (ERS), in the recent monthly Livestock, Dairy and Poultry Outlook. “Possible impediments to cow/calf producers retaining heifers in their herds may be a lack of forage and continued relatively high operating expenses.”

For perspective, when accounting for inflation, ERS analysts note the average price for 750-800 lb. feeder steers at Oklahoma City this year are 16% less than the record levels of 2014-15.

Several factors are likely contributing to lower reported feeder calf prices,” ERS analysts say. “Wholesale beef prices have been trending lower since the shorter-than-expected seasonal uptick in late October. This has encouraged packers to try to minimize the prices paid for fed cattle by managing throughput. This is likely putting a squeeze on feedlot returns for calves purchased at higher levels in the summer, and coupled with declining futures prices for fed cattle, may be affecting feedlots’ willingness to pay higher prices for feeders. Further, less heifer retention is probably helping support supplies available for placement.”

Cattle futures, especially Feeder Cattle bounced back Thursday with positive weekly export sales and supported by a rally in Lean Hog futures.

Feeder Cattle futures closed an average of $2.09 higher ($1.07 to $2.52 higher).

Live Cattle futures closed an average of 65¢ higher.

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

The only established trade so far this week is in Nebraska, albeit on a light test. FOB live prices are $1-$3 lower at $168/cwt. and dressed delivered prices are steady to $4 lower at $267-$268.

Last week, FOB live prices were $171 in the Southern Plains and $168-$171 in the western Corn Belt where dressed delivered prices were $268-$270.

Choice boxed beef cutout value was 68¢ higher at $292.32/cwt. Select was 95¢ lower at $258.26/cwt.

Net U.S. beef export sales for 2023 were 10,600 metric tons (mt) the week ending Dec. 7. Sales were noticeably higher than the previous week and 67% more than the prior four-week average, according to USDA’s weekly Export Sales report.

Increases were primarily for South Korea, Japan, Mexico, China and Canada. Net sales for 2024 were primarily for Japan, South Korea, Canada, Mexico and Chile.

Grain and Soybean futures closed little changed to higher, bolstered by weekly export sales.

Corn futures closed unchanged to fractionally mixed.

KC HRW Wheat futures closed mostly 2¢ higher.

Soybean futures closed 4¢ to 7¢ higher.

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Major U.S. financial indices rose Thursday with follow-through support and lower Treasury yields.

The Dow Jones Industrial Average closed 158 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 27 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.11 to $2.23 higher through the front six contracts.

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 Compared to the previous month’s projections, USDA’s Economic Research Service (ERS) sliced anticipated feeder steer prices (750-800 lbs., Oklahoma City) in the latest monthly Livestock, Dairy and Poultry Outlook (LDPO).

“Estimated steer and heifer slaughter was slower than expected in November and early December, suggesting a slower pace of marketings for the month and lowering expectations for the quarter,” ERS analysts say. “On the other hand, placements of cattle were above a year ago for the month of October, and November weekly sales data, as well as weekly import data for feeder cattle, suggest November placements could also be relatively strong.” They note less heifer retention is likely supporting heavier placements.

ERS reduced the expected fourth-quarter price for this year by $10 to $230/cwt. and the annual average price by $2.50 to $218.61. For next year, projected prices were forecast $15 lower in the first quarter at $225, $12 lower in the second at $235 and $10 lower in the third at $250. The 2024 annual average price was reduced $10.50 to $241.75.

Cattle futures softened Wednesday, amid likely positioning and pressured by the commodity-wide weakness tied to Argentina’s currency devaluation.

Feeder Cattle futures closed an average of $1.46 lower.

Live Cattle futures closed an average of 89¢ lower (47¢ to $1.45 lower).

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

Last week, FOB live were $171/cwt. in the Southern Plains, $169-$171 in Nebraska and $168-$171 in the western Corn Belt. Dressed delivered prices were $267-$272 in Nebraska and $268-$270 in the western Corn Belt.

Choice boxed beef cutout value was $1.14 lower Wednesday afternoon at $291.64/cwt. Select was 55¢ higher at $259.21/cwt.

KC HRW Wheat futures closed 16¢ to 24¢ lower through Jly ’25.

Corn futures closed mostly 3¢ to 5¢ lower.

Soybean futures closed 10¢ to 16¢ lower through Sep ’24, and then 4¢ to 7¢ lower.

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Major U.S. financial indices charged ahead Wednesday, fueled by comments from the Federal Reserve that it may begin cutting interest rates next year.

The Dow Jones Industrial Average closed 512 points higher. The S&P 500 closed 63 points higher. The NASDAQ was up 200 points.

West Texas Intermediate Crude Oil futures (CME) closed 86¢ to 99¢ higher through the front six contracts.

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All else being equal, cattle prices should remain strong through 2026, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. That’s based on supply fundamentals.

“Cow slaughter and heifer slaughter have continued at a rapid pace, which means the beef cow herd and heifers held for beef cow replacement are going to be extremely low to begin 2024 compared to 2023,” Griffith says.

USDA will issue Jan. 1 cattle numbers January 31.