WLI

Cattle futures closed higher for the third consecutive trading session, helped along by a couple of days of higher Choice boxed beef cutout value and chatter about steady cash fed cattle trade this week.

Feeder Cattle futures closed an average of $1.40 higher.

Live Cattle futures closed an average of $1.18 higher (70¢ to $1.50 higher).

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

Last week, FOB live were $171/cwt. in the Southern Plains at $171/cwt., $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 $2.35 higher Tuesday afternoon at $292.78/cwt. Select was 88¢ lower at $258.66/cwt.

Kansas City Wheat futures closed 20¢ to 24¢ higher on likely short covering.

Corn futures closed fractionally higher to 3¢ higher through Jly ’25.

Soybean futures closed 6¢ to 12¢ lower, likely pressured by profit taking.

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Major U.S. financial indices closed higher Tuesday, with further evidence of cooling inflation.

The Dow Jones Industrial Average closed 173 points higher. The S&P 500 closed 21 points higher. The NASDAQ was up 100 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.43 to $2.71 lower through the front six contracts.

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 Approximately 84% of all U.S. farm and ranch households earn the majority of

their total household income from off-farm sources, often using off-farm income to cover a portion of the operation’s expenses, according to the recently published 2023 edition of America’s Farms and Ranches at a Glance from USDA’s Economic Research Service (ERS).

Among highlights, based on 2022…

• 97% of U.S. farms were family farms, accounting for 90% of farm production.
• Small family farms (gross cash farm income — GCFI — less than $350,000) made up 88% percent of the farm count, operated 46% of the farmland and generated 19% of the total value of production.
• Large-scale family farms (GCFI of $1 million or more) accounted for 7.1% of operations, 25% of the farmland and 52% of the total value of production.
• 26% of the value of beef production occurred on small family farms; 50% on large-scale operations.
• Small family farms produced 53% of hay.

Cattle futures closed higher for the second consecutive trading session with apparently more confidence the bottom might be established.

Live Cattle futures closed an average of $1.74 higher ($1.30 to $2.20 higher).

Feeder Cattle futures closed an average of $2.40 higher ($1.20 to $2.80 higher).

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

Last week, FOB live prices were $3-$4 lower in the Southern Plains at $171/cwt., $4-$5 lower in Nebraska at $169 to $171 and $4-$5 lower in the western Corn Belt at $168-$171. Dressed delivered prices were $3-$8 lower in Nebraska at $267-$272 and $5-$6 lower in the western Corn Belt at $268 to $270.

Choice boxed beef cutout value was $2.42 higher Monday afternoon at $290.43/cwt. Select was $1.64 higher at $259.54/cwt.

Corn futures closed mostly 2¢ to 5¢ lower through Sep ’24 and then mostly 1¢ lower.

KC HRW Wheat futures closed 26¢ to 29¢ lower on likely profit taking.

Soybean futures closed 23¢ to 32¢ higher through Aug ’24 and then mostly 14¢ to 15¢ higher, supported by a drier forecast in South America.

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Major U.S. financial indices closed higher Monday, with follow-through support from recent indicators of cooling inflation.

The Dow Jones Industrial Average closed 157 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 28 points.

CME WTI Crude Oil futures closed 9¢ to 34¢ higher through the front six contracts.

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 National beef cow slaughter so far this year is 11% less year over year but remains above the five-year average (2017-21), according to Josh Maples, Extension livestock economist at Mississippi State University. He notes wide variation among regions, in the latest Cattle Market Notes Weekly.

For instance, year-to-date beef cow slaughter in Region 4 — representing most Southeastern states — is 3% less that the same period last year but is 2% higher since Sept. 1, according to Maples. In Region 6 (AR, LA, NM, OK and TX) he says year-to-date beef cow slaughter is 17% less year over year but 11% less since Sept. 1.

“The data suggests that cow culling in the South has not decreased by as much as it has in other parts of the country,” Maples says. “Drought is likely the key culprit for this difference, especially for the higher culling totals the past few months. Cull cow prices have been above 2022 levels for most of the year – driven in part by tighter supplies of cull cows. Cull prices have increased in recent weeks despite this being a time of year when prices would seasonally decrease. Dry conditions, high input costs, and strong cull cow prices are a few factors contributing to relatively high culling levels in the Southern U.S. in 2023.”

Cattle futures rallied Friday with the oversold conditions, apparently expected data in the monthly World Agricultural Supply and Demand Estimates (see below) and chatter that the bottom might finally be etched.

Feeder Cattle futures closed an average of $4.65 higher ($4.15 to $5.07 higher).

Live Cattle futures closed an average of $2.56 higher ($1.97 to $3.35 higher).

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

For the week, FOB live prices were $3-$4 lower in the Southern Plains at $171/cwt., mostly $3-$4 lower in Nebraska at mainly $171 and $4 lower in the western Corn Belt at $169-$171. Dressed delivered prices were $4-$8 lower in Nebraska at $267-$271 and $4-$5 lower in the western Corn Belt at mostly $270.

Choice boxed beef cutout value was $1.83 lower Friday afternoon at $288.01/cwt. Select was 93¢ lower at $257.90/cwt. Week to week, Choice was down $9.45 and Select was down $7.59.

Grain and soybean futures closed lower on likely profit taking.

Corn futures closed mostly fractionally lower to 2¢ lower.

KC HRW Wheat futures closed mostly fractionally lower to 1¢ lower, except for 3¢ to 6¢ lower in the front three contracts.

Soybean futures closed 3¢ to 7¢ lower through Sep ’25 and then mostly 1¢ lower.

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Major U.S. financial indices closed higher Friday, supported by consumer expectations for easing inflation, as well as a national employment report that underscored the economy’s resilience.

Total non-farm payroll employment increased by 199,000 in November, more than the trade expected, and the nation’s unemployment rate edged lower to 3.7%, according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 130 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 63 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.55 to $1.89 higher through the front six contracts.

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 USDA’s Economic Research Service (ERS) reduced the expected five-area direct fed steer price for the remainder of this year and next, in the December World Agricultural Supply and Demand Estimates (WASDE). Based on increased expected feedlot placements in late 2023 that will be marketed next year and current prices, compared to the previous month, ERS reduced the expected fourth quarter price this year by $7 to $178/cwt. The projected annual price was $1.75 lower at $175.55. For next year, prices were sliced by $10 in the first quarter to $175, $9 in the second quarter to $184 and $5 in the third quarter to $177. The forecast annual average price for 2024 was reduced $7 to $178.

Cattle futures found support early in Thursday’s session but ended lower with pressure from cash fed cattle prices and wholesale beef values. Export news was also negative with net 2023 sales of 200 metric tons for the week ending Nov. 30. That was a marketing year low, down 98% from the previous week and down 98% from the prior four-week average.

Feeder Cattle futures closed an average of $1.75 lower (57¢ to $2.50 lower), except for 12¢ higher in spot Jan.

Live Cattle futures closed an average of 93¢ lower (62¢ to $1.35 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 $3-$4 lower in the Southern Plains at $171/cwt., mostly $3-$4 lower in Nebraska at mainly $171 and $4 lower in the western Corn Belt at $169-$171. Dressed delivered prices are $4-$8 lower in Nebraska at $267-$271 and $4-$5 lower in the western Corn Belt at mostly $270.

Choice boxed beef cutout value was 72¢ lower Thursday afternoon at $289.84/cwt. Select was $1.07 lower at $258.83/cwt.

Grain and soybean futures closed higher with a mix of export news and likely some positioning ahead of Friday’s monthly World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 2¢ to 3¢ higher.

Kansas City Wheat futures closed mostly 3¢ to 11¢ higher.

Soybean futures closed 10¢ to 16¢ higher.

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Major U.S. financial indices closed higher Thursday, led by tech stocks.

Dow 62 points higher. S&P 500 36 points higher and NASDAQ up 193 points.

WTI Crude oil futures on the CME closed 4¢ to 14¢ lower through the front six contracts.

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 Although stronger than the previous month, U.S. beef exports continued lower year over year in October, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 104,446 metric tons (mt) in October, down 17% from a year ago but 6% more the low volume posted in September. Export value was $836 million, down 11% year-over-year but 5% higher than September. Beef export value equated to $389.90 per head of fed slaughter in October, down 9% from a year ago.

“Economic headwinds in our largest Asian markets continue to weigh on demand, as consumers trade down to lower-priced proteins,” says Dan Halstrom, USMEF President and CEO. “The recovery in Asia’s foodservice sector has been limited, but we remain hopeful that it will accelerate in 2024. Recent efforts to jump-start economic activity in these countries and address weakened currencies could also improve the business climate.”

However, October exports posted significant year-over-year increases in Mexico, Central America, Taiwan, Europe and Africa, but continued to trend lower to Japan, South Korea and China.

January-October exports of U.S. beef reached 1.08 million mt, down 13% from the record pace of 2022, while value fell 17% to $8.32 billion. During the same period, beef export value equated to $395.40 per head of fed slaughter down 14%.

On the pork side of the fence, for the first 10 months of 2023, U.S. exports increased 9% year over year to 2.38 million mt, value was up 6% to $6.66 billion.

The previous session’s soft rally proved to be another false start as Cattle futures unraveled Wednesday with pressure from eroding Choice wholesale beef values and declining negotiated cash fed cattle prices.

Feeder Cattle futures closed an average of $5.36 lower.

Live Cattle futures closed an average of $3.79 lower ($3.07 to $5.42 lower).

Negotiated cash fed cattle trade ranged from moderate on moderate demand in Kansas to slow on light demand in all other regions, through Wednesday afternoon, according to the Agricultural Marketing Service.

So far this week, FOB live prices are $3-$4 lower in the Southern Plains at $171/cwt. Dressed delivered prices are $4 lower in Nebraska at $271.

Last week, dressed delivered prices were $174-$175 in Nebraska and $173-$175 in the western Corn Belt. Dressed delivered prices in the western Corn Belt were $274-$275.

Choice boxed beef cutout value was $3.19 lower Wednesday afternoon at $290.56/cwt. Select was 77¢ higher at $259.90/cwt.

Corn futures closed mostly 3¢ to 6¢ lower.

Kansas City Wheat futures closed 6¢ to 9¢ lower.

Soybean futures closed 10¢ to 14¢ lower through Aug ’25 and then 6¢ to 7¢ lower.

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Major U.S. financial indices declined Wednesday, fading early support forged by another indication of cooling inflation.

Private sector employment increased by 103,000 jobs in November and annual pay was up 5.6% year-over-year, according to the November ADP^® National Employment Report^™. Job-stayers saw a 5.6% pay increase in November, the slowest pace of gains since September 2021. Job-changers, too, saw slowing pay growth, posting pay gains of 8.3%, the smallest year-over-year increase since June 2021. The premium for switching jobs is at its smallest in three years of data.

“Restaurants and hotels were the biggest job creators during the post-pandemic recovery,” says Nela Richardson, ADP chief economist. “But that boost is behind us, and   return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.”

Dow 70 points lower. S&P 500 17 points lower and NASDAQ down 83 points.

WTI Crude oil futures on the CME closed $2.50 to $2.94 lower through the front six contracts.

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 Global economic growth is set to remain modest, with the impact of the necessary monetary policy tightening, weak trade and lower business and consumer confidence being increasingly felt, according to the latest Economic Outlook from the Organization for Economic Cooperation and Development (OECD).

The Outlook projects global GDP growth at 2.9% this year, 2.7% next year and 3.0% in 2025. Asia is expected to continue to account for the bulk of global growth in 2024-25, as it has in 2023.

“The global economy continues to confront the challenges of both low growth and elevated inflation, with a mild slowdown next year, mainly as a result of the necessary monetary policy tightening over the past two years. Inflation has declined from last year’s peaks. We expect that inflation will be back at central bank targets by 2025 in most economies,” explains OECD Secretary-General Mathias Cormann. “Over the longer term, our projections show a significant rise in government debt, in part as a result of a further slowdown in growth…”

The OECD projects GDP growth in the United States at 2.4% this year, 1.5% in 2024 and 1.7% in 2025 as monetary policy is expected to ease.

In the euro area, which had been relatively hard hit by Russia’s war of aggression against Ukraine and the energy price shock, GDP growth is projected at 0.6% in 2023, before rising to 0.9% in 2024 and 1.5% in 2025, according to the OECD Outlook. China is expected to grow at a 5.2% rate this year, before growth drops to 4.7% in 2024 and 4.2% in 2025 on the back of ongoing stresses in the real estate sector and continued high household saving rates.