WLI

Cattle futures closed sharply lower Thursday in an outside day with apparent technical pressure.

Live Cattle futures closed an average of $2.18 lower ($1.85 to $2.97 lower).

Feeder Cattle futures closed an average of $3.89 lower ($2.80 to $4.67 lower).

Negotiated cash fed cattle trade was slow on light to moderate demand in the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. FOB live prices were $2-$3 higher at $188.00. Dressed delivered prices were steady at $292.

Elsewhere, trade ranged from mostly inactive on light demand to a standstill with too few transactions to trend. Last week, FOB live prices were $185 in the Southern Plains and $185-$186 in Nebraska where dressed delivered prices were $292-$300.

Choice boxed beef cutout value was 96¢ higher Thursday afternoon at $310.78/cwt. Select was 65¢ higher at $301.69/cwt.

Corn futures closed 4¢ to 7¢ lower through Jly ’25 and then mostly 2¢ lower, with pressure from wheat.

KC HRW Wheat futures closed 9¢ to 12¢ lower, pressured by more bullish domestic weather, poor exports and China’s recent cancellation of purchases from the U.S. and other countries.

Soybean futures closed mixed, from 1¢ lower to 1¢ higher.

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Major U.S. financial indices closed lower Thursday with a hotter inflation reading than expected. The Producers Price Index for final demand rose 0.6% in February, seasonally adjusted, according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 137 points lower. The S&P 500 closed 14 points lower. The NASDAQ was down 49 points lower.

West Texas Intermediate Crude Oil futures (CME) closed $1.14 to $1.54 higher through the front six contracts.

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Compared to the previous month, USDA’s Economic Research Service (ERS) increased the forecast feeder steer price (750-800 lbs., Oklahoma City) by $5 for the remainder of year in the March Livestock, Dairy and Poultry Outlook.

Based on lower projected corn prices and higher expected fed cattle prices, ERS increased the feeder steer price to $239/cwt. in the first quarter, $247 in the second quarter, $261 in the third quarter and $267 in the fourth quarter for an annual average price of $253.50.

As mentioned recently in Cattle Current, compared to the previous month, ERS increased the forecast weighted average five-area direct fed steer price for the remainder of this year, in the March World Agricultural Supply and Demand Estimates.

Compared to the previous month, ERS increased projected prices $3 in the first quarter to $179/cwt., $3 in the second quarter to $183, $2 in the third quarter to $182 and $2 in the fourth quarter to $186. ERS increased the forecast annual average price $3 to $183. Prices were forecast higher on recent prices and firm demand for fed cattle.

“Packers are anticipated to pay more for fed cattle as the year progresses, when market-ready supplies tighten further,” ERS analysts say.

Cattle futures closed higher Wednesday with prospects of higher cash trade again this week.

Live Cattle futures closed an average of $1.42 higher ($1.17 to $2.10 higher) amid heavy volume.

Feeder Cattle futures closed an average of $1.84 higher ($1.30 higher at the front to $2.17 higher at the back).

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

Last week, FOB live prices were $185-$186/cwt. Dressed delivered prices were $292-$300 in Nebraska and $292 in the western Corn Belt.

Choice boxed beef cutout value was 77¢ lower Wednesday afternoon at $309.82/cwt. Select was $1.44 higher at $301.04/cwt.

Corn futures closed mostly fractionally higher.

KC HRW Wheat futures closed 4¢ to 9¢ lower.

Soybean futures closed mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed mixed Wednesday, led by tech stocks.

The Dow Jones Industrial Average closed 37 points higher. The S&P 500 closed 9 points lower. The NASDAQ was 87 points lower.

West Texas Intermediate Crude Oil futures (CME) closed $1.69 to $2.16 higher through the front six contracts.

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Concentration in the cattle feeding sector continues to increase with fewer feedlots overall while the largest feedlots account for more annual sales, according to the recently published 2022 Census of Agriculture.

“Only 22,613 farms had cattle on feed in inventory at the start of 2022, down from 25,776 farms in 2017,” says Matthew Diersen, risk and business management specialist at South Dakota State University in the latest issue of In the Cattle Markets. “Farms with 1 to 19 head on feed stayed constant in number, likely retained ownership for local consumption instead of a budding enterprise. The number of farms in the other small inventory levels, 20 to 999 head, all had significant declines, similar to or driving the overall decline in farms with cattle on feed.

On the other end of the spectrum, Diersen says feedlots with the largest inventory levels (1,000-2,499 head and 2,500 head or more) were relatively constant with more cattle on feed than in 2017.

Diersen points out the Census also provides a breakdown of custom fed cattle by state.

“While the U.S. saw fewer feedlots with custom feeding — 853 in 2022 versus 1,070 in 2017 — the aggregate number sold was higher at 10.1 million head in 2022,” Diersen says. “Kansas feedlots had the most head custom fed, followed by Nebraska, then Texas. Iowa led states with 155 farms with custom feeding.”

Cattle futures gained Tuesday with support from higher-trending wholesale beef prices and last week’s stronger cash trade.

Live Cattle futures closed an average of 64¢ higher.

Feeder Cattle futures closed an average of 92¢ higher (57¢ to $1.32 higher).

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 prices were $185-$186/cwt. Dressed delivered prices were $292-$300 in Nebraska and $292 in the western Corn Belt.

Choice boxed beef cutout value was $1.71 higher Tuesday afternoon at $310.79/cwt. Select was 72¢ higher at $299.60/cwt.

Corn futures closed unchanged to fractionally mixed.

KC HRW Wheat futures closed mostly fractionally lower.

Soybean futures closed mostly 13¢ to 17¢ higher, supported by lower estimated production in Brazil and a hotter forecast in South America.

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Major U.S. financial indices closed sharply higher Tuesday, led by tech stocks and despite a slightly hotter inflation reading than traders expected.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4% in February on a seasonally adjusted basis, after rising 0.3% in January, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 3.2% before seasonal adjustment.

The Dow Jones Industrial Average closed 235 points higher. The S&P 500 closed 57 points higher. The NASDAQ was up 246 points.

West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 37¢ lower through the front six contracts.

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Lean beef trimming prices are on a tear, driving cull cow prices higher.

In this weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says 90% lean beef trimmings (90s) were $317.36/cwt. the first week of March, which was record high for data since 1978.

“The supply of non-fed beef (cow + bull) is down 12.7% year over year thus far in 2024, the result of a 13.1% year-to-date decrease in cow slaughter,” Peel says. “Dairy cow slaughter is down 15.0% and beef cow slaughter is down 11.4% year over year, while bull slaughter so far in 2024 is down 9.4% from one year ago.” 

As domestic lean beef supplies decrease, and prices increase, Peel explains the market responds with increased U.S. beef imports — primarily lean beef trimmings — to moderate domestic prices.

“Accordingly, beef imports in 2023 increased 9.9% year over year. In the latest data for January, beef imports were up 38.1% year over year,” Peel says. “Beef imports are typically front-loaded in the new year as countries, especially Brazil, scramble to fill the unassigned ‘Other Country’ import quota. Monthly imports will moderate later in the year and total imports for 2024 are projected to increase 12-13% year over year.”

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

Last week, FOB live prices were $2 higher in the Southern Plains at $185/cwt., $1.50-$2.00 higher in Nebraska at $185-$186 and $2 higher in the western Corn Belt at $185-$186. Dressed delivered prices were $2-$8 higher in Nebraska at $292-$300 and $2 higher in the western Corn Belt at $292.

Choice boxed beef cutout value was $1.84 higher Monday afternoon at $308.88/cwt. Select was $1.45 higher at $298.88/cwt.

Cattle futures drifted mainly lower Monday.

Live Cattle futures closed an average of 27¢ lower, except for an average of 16¢ higher in the back two contracts.

Feeder Cattle futures closed an average of 85¢ lower (12¢ to $1.37 lower), except for an average of 36¢ higher in the last two contracts.

Corn futures closed fractionally higher to 2¢ higher.

KC HRW Wheat futures closed 9¢ to 13¢ higher.

Soybean futures closed mostly fractionally lower to 5¢ lower.

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Major U.S. financial indices settled narrowly mixed Monday as investors apparently waited for direction from Tuesday’s Consumer Price Index.

The Dow Jones Industrial Average closed 46 points higher. The S&P 500 closed 5 points lower. The NASDAQ was down 65 points.

West Texas Intermediate Crude Oil futures (CME) closed 8¢ lower to 26¢ higher through the front six contracts.

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Nationwide last week, feeder steers and heifers sold $2-$4 higher, according to the Agricultural Marketing Service. Compared to a year earlier, the regional weighted average feeder steer price (600-700 lbs.) was 65.67/cwt. higher in the Southeast to $79.09 higher in the North Central region, according to USDA’s National Weekly Feeder and Stocker Cattle Summary.

Total trade at auction, video-internet and via direct trade last week was 306,200 head compared to about 280,000 head the previous week and about 260,000 the same week last year. Year-to-date auction receipts are higher year over year.

“Feeder cattle supplies are the tightest they have been in a decade and are expected to tighten further this year,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest Cattle Market Notes Weekly. “Higher levels of cow-culling and lower retention of heifers as beef cow replacements in recent years have likely set the stage for a smaller calf crop in 2024.” He explains the estimated number of calves produced in 2023 was 33.6 million head, which was similar to the 2014 level and down more than 3 million head since 2018.

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

For the week, FOB live prices were $2 higher in the Southern Plains at $185/cwt., $1.50-$2.00 higher in Nebraska at $185-$186 and $2 higher in the western Corn Belt at $185-$186. Dressed delivered prices were $2-$8 higher in Nebraska at $292-$300 and $2 higher in the western Corn Belt at $292.

Estimated total cattle slaughter last week of 583,000 head was 16,000 head fewer than the previous week and 48,000 head fewer than the same week last year. Year-to-date estimated cattle slaughter of 5.9 million head was 349,000 head fewer (-5.5%) than the same time last year. Year-to-date estimated beef production of 4.9 billion pounds was 231.3 million pounds less (-4.5%).

Choice boxed beef cutout value was 43¢ higher Friday afternoon at $307.04/cwt. Select was $1.17 higher at $297.43/cwt.

Cattle futures closed lower Friday despite the week’s higher cash trade and the supportive outlook in the monthly World Agricultural Supply and Demand Estimates (see below).

Live Cattle futures closed an average of 83¢ lower.

Feeder Cattle futures closed an average of $1.33 lower (62¢ to $2.20 lower).

Grain and Soybean futures closed higher with likely short covering despite neutral to bearish World Agricultural Supply and Demand Estimates.

Corn futures closed 2¢ to 3¢ higher.

KC HRW Wheat futures closed 10¢ to 14¢ higher.

Soybean futures closed 16¢ to 19¢ higher.

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Major U.S. financial indices closed lower Friday, led by tech stocks and with mixed economic data.

Total non-farm payroll employment rose by 275,000 in February, according to the U.S. Bureau of Labor Statistics, which was more than expected. However, the unemployment rate increased to 3.9%.

In February, average hourly earnings for all employees on private non-farm payrolls increased 5¢ to $34.57.

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 33 points lower. The NASDAQ was down 188 points.

West Texas Intermediate Crude Oil futures (CME) closed 61¢ to 92¢ lower through the front six contracts.

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USDA’s Economic Research Service (ERS) increased the forecast weighted average five-area direct fed cattle price for the remainder of this year, in the March World Agricultural Supply and Demand Estimates.

Compared to the previous month, ERS increased projected prices $3 in the first quarter to $179/cwt., $3 in the second quarter to $183, $2 in the third quarter to $182 and $2 in the fourth quarter to $186. ERS increased the forecast annual average price $3 to $183. Prices were forecast higher on recent prices and firm demand for fed cattle.

Beef production was projected 140 million pounds more than the previous month at 26.3 billion pounds. If so, it would be 638 million pounds less (-2.4%) than last year. Forecast production was raised with higher expected slaughter for the remainder of the year offsetting lower expected production in the first quarter.