WLI

The bearish monthly Cattle on Feed report ravaged Cattle futures Monday.

Feeder Cattle futures closed an average of $6.51 lower ($4.20 to $7.35 lower).

Live Cattle futures closed an average of $5.44 lower ($3.92 to $6.75 lower).

Through mid-morning Tuesday, Cattle futures were recovering some of the losses.

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

FOB live prices last week were $184-$185/cwt. in the Southern Plains and $186-$187 in the North. Dressed delivered prices were $294.

Choice boxed beef cutout value was 84¢ lower Monday afternoon at 304.54/cwt. Select was $2.32 higher at $281.02/cwt.

Corn futures xlosed mostly 1¢ to 5¢ lower.

Soybean futures closed 9¢ to 15¢ lower through Sep ‘24 and then 5¢ to 8¢ lower.

KC HRW Wheat closed fractionally higher to 2¢ higher.

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Major U.S. financial indices closed mostly lower Monday, with follow-through pressure from rising U.S. Treasury yields.

The Dow Jones Industrial Average closed 190 points lower. The S&P 500 closed 7 points lower. The NASDAQ was up 34 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.63 to $2.59 lower through the front six contracts.   

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Based on the recent Cattle on Feed report, Josh Maples, Extension livestock economist at Mississippi State University points out the percentage of heifers on feed is the highest in 20 years at 40%.

“There are two sides of this,” Maples explains in the latest Cattle Market Notes Weekly. “Heifers are helping to boost inventories now which could be viewed somewhat negatively for prices in the short term but also fewer heifers retained means a smaller calf crop next year which can be viewed as supporting high price levels in the longer term. To me, this report shut down any ideas that herd expansion is happening or will happen in 2023 and that discussion will shift toward whether expansion occurs in 2024.”

Maples also notes the increase in feedlot placements, which surprised many.

“It likely reflects producers selling now to take advantage of strong markets but also some producers being forced to sell feeder cattle a little earlier than expected due to expanding drought in many areas. This is especially true for swaths of the Southeast when drought conditions have gotten severe,” Maples says. “Looking ahead at price expectations, it is worth noting that the current strong market prices have not really reflected herd rebuilding efforts yet. The rebuilding phase will include holding back more heifers which will mean fewer heifers sold as feeder cattle. Combined with smaller calf crops as a whole, this will be the point when feeder cattle supplies get really tight and that prices have the strongest supply-side support.”

Feeder Cattle futures continued lower Friday, under pressure from positioning ahead of the monthly Cattle on Feed report (see below) and eroding outside markets. They were trending sharply lower on Monday

On Friday, Feeder Cattle futures closed an average of $2.48 lower.

Live Cattle futures closed an average of $1.05 lower (12¢ lower at the front to $1.62 lower at the back).

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.

Based on the latest established trade, the week’s FOB live prices were $2 higher in the Texas Panhandle at $185/cwt., $1-$2 higher in Kansas at $184-$185 and $1-$2 higher in Nebraska and the western Corn Belt at $186-$187. Dressed delivered prices were $2 higher in Nebraska at $294 and $2-$4 higher in the western Corn Belt at $294.

Choice boxed beef cutout value was $1.26 higher Friday afternoon at 305.38/cwt. Select was $1.22 higher at $278.70/cwt.

Total estimated cattle slaughter last week of 638,000 head was 21,000 head more than the previous week but 37,000 head fewer (-5.5%) than last year. Total estimated year-to-date cattle slaughter of 26.1 million head was 1.3 million head fewer (-4.6%) than the same time last year. Year-to-date estimated beef production of 21.4 billion pounds was 1.2 billion pounds less (-5.3%).

Corn futures mostly 4¢ to 9¢ lower.

Soybean futures closed 6¢ to 13¢ lower through Jly ‘24 and then mostly fractionally higher to 2¢ higher.

KC HRW Wheat closed mostly 4¢ lower.

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Major U.S. financial indices closed sharply lower Friday, once again bowing to rising U.S. Treasury yields.

The Dow Jones Industrial Average closed 286 points lower. The S&P 500 closed 53 points lower. The NASDAQ was down 202 points.

West Texas Intermediate Crude Oil futures (CME) closed 23¢ to 62¢ lower  through the front six contracts.  

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Markets viewed Friday’s monthly Cattle on Feed report as bearish, with prescient positioning ahead of the report and follow-through pressure at the outset Monday.

September placements in feedlots with 1,000 head or more capacity of 2.2million head were 6.1% more than last year and significantly more than expectations.

In terms of placement weights, 37% went on feed weighing 699 lbs. or less, 46% weighing 700-899 lbs. and 17% weighing 900 lbs. or more.

Marketings in September of 1.7 million head were 10.6% less than the previous year and less than expected.

On-feed inventory Oct. 1 of 11.6 million head were 0.6% more than last year — more than expected — and the second largest inventory for the date since the data series began in 1996.

Feeder Cattle futures plunged Thursday, carrying Live Cattle along. Primary pressure appeared to be the surge in Corn futures, skittishness about consumer beef demand with lower outside markets and Friday’s Cattle on Feed report.

Feeder Cattle futures closed an average of $4.83 lower ($3.55-$5.52 lower).

Live Cattle futures closed $1.77 lower ($1.45 to $2.12 lower).

Negotiated cash fed cattle trade ranged from slow on light to moderate demand to slow on light demand through Thursday afternoon, according to the Agricultural Marketing Service. FOB live prices were $1-$2 higher in the western Corn Belt at $186-$187, where dressed delivered prices were $2 higher at $292-$294 in a light test.

Although too few transactions to trend, there was some live trade in Kansas at $184 and at $186 in Nebraska, where there were a few in the beef at $294.

Last week, FOB live prices were $183/cwt. in the Southern Plains and $185 in Nebraska, where dressed prices were $292.

Choice boxed beef cutout value (p.m.): 26¢ higher at 304.12/cwt. Select was 87¢ lower at $277.48/cwt.

Grain and soybean futures closed higher Thursday, in part buoyed by thoughts that the harvest low has been established.

Corn futures closed 9¢ to 13¢ higher through the front four contracts and then mostly 4¢ to 7¢ higher.

Soybean futures closed mostly 2¢ to 4¢ higher.

KC HRW Wheat closed mostly 3¢ to 5¢ higher

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Major U.S. financial indices closed lower again Wednesday, pressured once again by rising yields for the 10-year Treasury note.

The Dow Jones Industrial Average closed 250 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 128 points.

West Texas Intermediate Crude Oil futures (CME) closed 54¢ to $1.10 higher through the front six contracts.  

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Even with continued reduction in beef production next year — forecast 6% lower year over year—  USDA expects the U.S. to remain the world’s largest beef producer in 2024.

“However, the U.S. is forecast to be only the fourth-largest exporter of beef in 2024, behind Brazil, Australia, and India,” says analysts with the Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook.“Australian beef is considered to be one of the biggest competitors for U.S. beef on the global market; total beef exports from Australia are forecast to increase 5% in 2024. Beef exports from Brazil are expected to increase 4%.”

ERS analysts note that after the U.S., China, Japan and South Korea are the largest beef importing countries in the world and are the top three destination for U.S. beef exports, accounting for 60% of U.S. exports through August of this year.

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

Last week, FOB live prices were $183/cwt. in the Southern Plains and $185 in the north.  Dressed delivered prices were $290-$292.

Choice boxed beef cutout value was $1.28 lower Wednesday afternoon at $303.86/cwt. Select was 28¢ lower at $278.35/cwt.

Cattle futures wobbled Wednesday amid slack interest, the wait for the week’s cash fed cattle direction and Friday’s Cattle on Feed report.

Feeder Cattle futures closed an average of $1.38 lower.

Live Cattle futures closed narrowly mixed from unchanged to an average of 21¢ higher in the front four contracts to an average of 31¢ lower.

Soybean futures closed 8¢ to 14¢ higher through Aug ‘24. and then 4¢ to 6¢ higher, helped along by an export announcement for China.

Corn futures closed fractionally higher to 3¢ higher.

KC HRW Wheat closed 1¢ to 3¢ higher.

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Major U.S. financial indices closed lower Wednesday on the surge in bond yields.

The Dow Jones Industrial Average closed 332 points lower. The S&P 500 closed 58 points lower. The NASDAQ was down 219 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.52 to $1.83 higher through the front six contracts. 

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USDA’s Economic Research Service (ERS) increased expected third-quarter feedlot placements in the latest monthly Livestock, Dairy and Poultry Outlook.

“Most of these placements are expected to come from those previously anticipated in the fourth quarter,” ERS analysts say. “Further, anticipated placements in first-half 2024 are raised. This assumption of feedlot demand and availability of feeder calves results in a net increase of anticipated fed cattle marketings next year.”

Compared to projections the previous month, ERS lowered the expected feeder steer price (750-800 lbs., Oklahoma City) by $5 in the fourth quarter to $254/cwt. This year’s forecast annual price of $253.75 was unchanged. Expected prices in the first and second quarters of next year were also unchanged at $249 and $248, respectively.

ERS also lowered the projected fourth-quarter five-area direct fed steer price by $5 to $190/cwt., and the annual average price by $1.19 to $177.30. Price expectations were lowered $1 in the first and second quarter of next year to $187 and $185, respectively.

Fourth-quarter beef production was forecast 60 million pounds more with estimated higher cow and bull slaughter more than offsetting a slight decline in expected average carcass weights. Total 2023 beef production was forecast 35 million pounds more than the previous month at 26.98 billion pounds.

Cattle futures firmed Tuesday, helped along by recently higher cash fed cattle prices.

Feeder Cattle futures closed an average of 98¢ higher.

Live Cattle futures closed an average of 43¢ higher.

Negotiated cash fed cattle trade ranged from mostly inactive on very 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 $183/cwt. in the Southern Plains and $185 in the north.  Dressed delivered prices were $290-$292.

Choice boxed beef cutout value was 47¢ higher Tuesday afternoon at $305.14/cwt. Select was $1.43 higher at $278.63/cwt.

Corn futures closed mostly 1¢ lower.

KC HRW Wheat closed 2¢ to 3¢ lower.

Soybean futures closed 7¢ to 10¢ higher through Sep ‘24 and then 3¢ to 6¢ higher.

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Major U.S. financial indices faltered Tuesday with pressure from higher yield rates tied to heftier monthly U.S. retail and food service sales than expected.

The Dow Jones Industrial Average closed 13 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 34 points.

West Texas Intermediate Crude Oil futures (CME) closed unchanged to 39¢ higher through the front six contracts.

Recent negotiated cash fed cattle prices reflect the push and pull of tight supplies while packers attempt to slow production and build live cattle inventory.

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Recent negotiated cash fed cattle prices reflect the push and pull of tight supplies while packers attempt to slow production and build live cattle inventory.

The ability to hold par on finished cattle prices during the fall lull bodes well for cattle feeders as finished cattle prices moving toward end-of-the-year holidays are expected to be supported as are wholesale beef prices, says Andrew P. Griffith, agricultural economist at the University of Tennessee says, in his weekly market comments. “The market may not experience as large a typical seasonal price increase this year as in previous years, but the failure to achieve the same percentage increase is because prices have remained strong moving from summer into the fall period.”