WLI

Cattle futures closed higher Monday with the neutral to positive monthly Cattle on Feed report. However, they closed off session highs with trade likely limited by this week’s Thanksgiving holiday.

Feeder Cattle futures closed an average of $1.34 higher.

Live Cattle futures closed an average of 67¢ higher (30¢ to $1.05 higher), except for an average of 21¢ lower in the front two contracts.

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

Last week, FOB live prices were $178/cwt. in all regions, which was $3 lower in the Texas Panhandle, mostly $2 lower in Kansas, $3.50 lower in Nebraska and steady to $2 lower in the western Corn Belt. Dressed delivered prices were $5 lower in Nebraska at $282 and $1-$5 lower in the western Corn Belt at $282.

Last week’s weighted average five-area direct FOB fed steer price was $2.09 lower at $188.82/cwt. The dressed delivered steer price was $4.72 lower at $281.41.

Choice boxed beef cutout value was $1.88 higher Monday afternoon at $295.75/cwt. Select was 25¢ higher at $270.95/cwt.

Soybean futures closed 20¢ to 27¢ higher through Jan ‘25 and then 12¢ to 17¢ higher with apparently more weather premium based on the South American crop.

Corn futures closed mostly 1¢ to 2¢ higher.

KC HRW Wheat futures closed mostly 5¢ to 7¢ lower.

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Major U.S. financial indices closed higher Monday, led by tech stocks and supported by lower Treasury yields.

The Dow Jones Industrial Average closed 203 point higher. The S&P 500 closed 33 points higher. The NASDAQ was up 159 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.67 to $1.79 higher through the front six contracts.

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Increased feedlot placements the past two months have added about 200,000 head to feedlot inventories, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. However, in his weekly market comments, he emphasizes the surge mainly represents feedlots pulling cattle forward.

Ongoing drought in some areas has likely encouraged some cattle entering the market channel sooner than expected, as has the strong prices, according to Peel. As well, he explains feeder cattle imports from Mexico are 49% more year over year, boosted by drought in Mexico and price levels. He says most of those imports likely headed straight to the feedlot.

“Increased placements now will be offset by reduced placements later,” Peel says. “Total placements in the last six months, built on the recent increase and representing the majority of cattle on feed, are at the highest percentage of July 1 feeder supplies since 2011. This means that a larger percentage of available feeder supplies have already been placed in feedlots compared to recent years. Feedlot numbers will inevitably come down in the coming months, especially when heifer retention begins.”

Peel points out the estimated 2023 calf crop is 1.9% less than last year. The 2022 calf crop was down 2% from the previous year. In sum, he explains the calf crop has been decreasing since 2018 and has declined 2.5 million head (-6.9%) in the past five years.

“The recent futures market correction has reduced cash feeder prices for heavy feeder cattle and may have contributed to some fear-based sales,” Peel says. “Despite recent decreases, prices for 6-weight and heavier feeder cattle are still 30 to 40% higher compared to one year ago. In Oklahoma auctions, prices for lightweight calves and stockers have not declined and are 50+% higher year over year.”

Cattle futures closed higher Friday with likely positioning ahead of Friday’s neutral to positive monthly Cattle on Feed report (see below).

Feeder Cattle futures closed an average of $1.02 higher. They were an average of $2.64 higher week to week.

Live Cattle futures closed an average of $1.16 higher on Friday and an average of $1.55 higher week to week.

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

For the week, FOB live prices were $178/cwt. in all regions, which was $3 lower in the Texas Panhandle, mostly $2 lower in Kansas, $3.50 lower in Nebraska and steady to $2 lower in the western Corn Belt. Dressed delivered prices were $5 lower in Nebraska at $282 and $1-$5 lower in the western Corn Belt at $282.

Choice boxed beef cutout value was 85¢ lower Friday afternoon at $293.87/cwt. Select was $3.05 higher at $270.70/cwt.

Estimated total cattle slaughter last week of 636,000 head was 18,000 head more than the previous week but 36,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 28.7 million head was 1.4 million head fewer (-4.7%). Estimated year-to-date beef production of 23.5 billion lbs. was 1.3 billion lbs. less (-5.3%).

Turning to row crops, Corn futures closed mostly 4¢ to 7¢ lower. KC HRW Wheat futures closed mostly 8¢ to 10¢ lower. Soybean futures closed 15¢ to 20¢ lower through Aug ‘25 and then 7¢ to 12¢ lower.

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

The Dow Jones Industrial Average closed 1 point higher. The S&P 500 closed 5 points higher. The NASDAQ was up 11 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.61 to $2.99 higher through the front six contracts.

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Markets will likely view Friday’s Cattle on Feed report as neutral to positive, assuming traders factored in pre-report expectations.

For feedlots with 1,000 head more capacity, feedlot placements in October of 2.1 million head were 79,000 head more (+3.8%) than last year. That’s 2-3% less than various analyst expectations ahead of the report.

In terms of placement weights, 47% went on feed weighing 699 lbs. or less, 40% weighing 700-899 lbs. and 13% weighing 900 lbs. or more.

Marketings in October of 1.6 million head were 46,000 head fewer (-2.5%) than a year earlier, which was 0.5% less than pre-report estimates.

Cattle on feed Nov. 1 of 11.9 million head were 195,000 head more (+1.7%) than a year earlier, which was in line with expectations.

Cattle futures closed sharply lower Thursday with lower cash fed cattle prices and likely positioning ahead of Friday’s Monthly Cattle on Feed report.

Feeder Cattle futures closed an average of $3.59 lower, except for 5¢ lower in expiring Nov.

Live Cattle futures closed an average of $2.85 lower ($2.25 to $3.45 lower).

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

FOB live prices were $178/cwt. in all regions, which was $3 lower in the Texas Panhandle, mostly $2 lower in Kansas, $3.50 lower in Nebraska and steady to $2 lower in the western Corn Belt.

So far this week, dressed delivered prices are $5 lower in Nebraska at $282. Dressed prices in the western Corn Belt last week were $283-$287.

Choice boxed beef cutout value was $1.61 lower Thursday afternoon at $294.72/cwt. Select was 20¢ lower at $267.65/cwt.

Net U.S. beef export sales for 2023 of 8,900 metric tons the week ending Nov. 9 were 35% less than the previous week and 27% less than the prior four-week average. Increases were primarily for South Korea, Mexico, China, Japan  and Taiwan.

Turning to row crops, Corn futures closed mostly 3¢ to 4¢ higher. KC HRW Wheat closed mostly 10¢ to 12¢ lower. Soybean futures closed 19¢ to 24¢ lower through Jan ‘25 and then mostly 14¢ to 17¢ low.

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

The Dow Jones Industrial Average closed 45 points lower. The S&P 500 closed 5 points higher. The NASDAQ was up 9 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.17 to $3.76 lower through the front six contracts.

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USDA’s Economic Research Service (ERS) lowered expectations for feeder steer prices for the remainder of this year and the first half of next year, based on recent prices and expectations for more fed cattle and beef production.

ERS estimated beef production for next year 535 million pounds higher than last month at 25.8 billion pounds, in the November Livestock, Dairy and Poultry Outlook.

“With the addition of more heifers on feed than a year ago and higher forecast cattle imports from last month, expectations for fourth-quarter 2023 placements are raised from last month, and anticipated placements in first-half 2024 are also raised,” say ERS analysts. “This reflects an increase in expected fed cattle marketings next year, in addition to greater cow and bull slaughter.”

ERS reduced the fourth-quarter feeder steer price (750-800 lbs., Oklahoma City) by $14 to $240/cwt., and the annual average price for this year by $3.50 to $221.11. Prices were forecast $9 less in the first quarter of next year at $240, $1 less in the second quarter at $247 and $2 higher in the third quarter at $260. The annual average price for 2024 was lowered by $1.50 to $252.25.

Expectations for increasing feeder cattle prices in the second half of next year is based in part on fewer cattle available as time unfolds.

“The larger than expected level of placements during September has led to about 4% or 1.1 million head fewer cattle outside feedlots on Oct. 1 that are available for placements in the coming months,” ERS analysts say. “Since the Cattle on Feed series began in 1996, this is a record low for supplies outside feedlots estimated on October 1.”

Cattle futures gained on Wednesday, led by Feeder Cattle, helped along by positive outside markets and weaker Corn futures.

Feeder Cattle futures closed an average of $2.15 higher, except for 62¢ lower in spot Nov.

Live Cattle futures closed an average of $1.33 higher (90¢ to $1.92 higher).

Negotiated cash fed cattle trade was slow on light to moderate demand in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Dressed delivered prices were mostly $5 lower at $282/cwt. FOB live prices last week were $181.50.

Elsewhere, trade ranged from slow on light demand to a standstill with too few transactions to trend.

Last week, FOB live prices were $181/cwt. in the Texas Panhandle, $180 in Kansas and $178-$180 in the western Corn Belt. Dressed delivered prices were $283-$287 in the western Corn Belt.

Choice boxed beef cutout value was 66¢ higher Wednesday afternoon at $296.33/cwt. Select was 3¢ lower at $267.85/cwt.

Corn futures closed mostly 5¢ to 7¢ lower.

KC HRW Wheat closed 1¢ to 3¢ lower.

Soybean futures closed 1¢ to 4¢ lower through Jly ‘24 and then mostly 3¢ to 5¢ higher.

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Major U.S. financial indices extended gains Wednesday, buoyed by a decline in the monthly Producer Price Index, another hopeful sign of cooling inflation.

The Dow Jones Industrial Average closed 163 points higher. The S&P 500 closed 7 points higher. The NASDAQ was up 9 points.

West Texas Intermediate Crude Oil futures (CME) closed 84¢ to $1.60 lower through the front six contracts.

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Reflecting on last week’s hard selloff in Cattle futures, Stephen Koontz, agricultural economist at Colorado State University explains underlying supply and demand fundamentals did not support a continued trek higher.

“Supplies are tightening and demand has been strong but the movement to record high prices is well in advance of that which can reasonably be supported by fundamentals,” Koontz say on the latest issue of In the Cattle Markets from the Livestock Marketing Information Center.

For one thing, Koontz says it is unlikely that current marketings have reduced inventories of cattle on feed for more than 120 days and more than 150 days.

“These inventories will likely weigh on the market through the end of the year,” Koontz says. “And this perspective is confirmed by changes in steer and heifer slaughter weights. Slaughter weights have climbed six of the last eight weeks – in the face of colder weather – but also following the normal seasonal pattern. However, the overall main thing we have not observed this year is tighter supplies due to herd rebuilding. The continued marketing of heifers through fall calf sales indicates herd liquidation continues.”

Moreover, while domestic consumer beef demand remains strong, Koontz notes it is weakening quarter to quarter and year over year.

Stronger outside markets and oversold conditions helped Cattle futures extend gains Tuesday.

Feeder Cattle futures closed an average of $1.63 higher (70¢ to $2.32 higher), except for 67¢ lower in spot Nov.

Live Cattle futures closed an average of $1.24 higher.

Depending on which estimates you look at, expectations are for October placements to be about 6% higher year over year, in Friday’s monthly Cattle on Feed report. October marketing are expected to be about 2% less, leaving the on-feed inventory Nov. 1 about 2% 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 prices were $181/cwt. in the Texas Panhandle, $180 in Kansas, $181.50 in Nebraska and $178-$180 in the western Corn Belt. Dressed delivered prices were $287 in Nebraska and $283-$287 in the western Corn Belt.

Choice boxed beef cutout value was $2.18 lower Tuesday afternoon at $295.67/cwt. Select was $1.36 lower at $267.88/cwt.

Corn futures closed mostly fractionally higher to 1¢ higher.

KC HRW Wheat closed mostly 2¢ lower.

Soybean futures closed mostly 3¢ to 7¢ higher though Nov ‘25.

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Major U.S. financial indices rallied Tuesday with a cooling inflation reading from the Consumer Price Index.

The Dow Jones Industrial Average closed 489 points higher. The S&P 500 closed 84 points higher. The NASDAQ was up 326 points.

West Texas Intermediate Crude Oil futures (CME) basically unchanged through the front six contracts.

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Winter wheat condition is significantly more positive year over year, according to the latest USDA Crop Progress report for the week ending Nov. 12 — 47% rated Good (39%) or Excellent (8%), compared to 32% a year earlier. On the other end of the scale, 17% was in Poor (10%) or Very Poor (7%) condition. That’s with 93% of the crop in the ground, which was on par with the five-year average.

Corn harvest was 88% complete, which was 4% less than last year but 2% more than the average. As for soybeans, 95% was harvested, compared to 96% a year earlier and 91% for average.