WLI

Cattle futures closed lower Monday after early strength as traders appear cautious about Friday’s next Cattle on Feed report, as well as lingering future demand concerns.

Feeder Cattle futures closed an average of $1.13 lower.

Live Cattle futures closed an average 39¢ lower, except for 7¢ higher in spot Oct.

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

Last week, FOB live prices were $1 higher in the Southern Plains at $182/cwt. and $2 higher in in the North at $185. Dressed delivered prices were $2-$4 higher in Nebraska at $292 and steady to $4 higher in the western Corn Belt at $290-$292.

The five-area direct weighted average fed steer price last week was $184.30/cwt., which was $1.58 higher than last week. The average fed steer price in the beef was $2.57 higher at $291.83.

Corn futures closed mostly 3¢ lower.

Soybean futures closed 3¢ to 6¢ higher.

KC HRW Wheat closed mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices gained Monday on positive quarterly earnings reports.

The Dow Jones Industrial Average closed 314 points higher. The S&P 500 closed 45 points higher. The NASDAQ was up 160 points.

West Texas Intermediate Crude Oil futures (CME) closed 82¢ to $1.09 lower through the front six contracts.   

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Global economic recovery from the pandemic and Russia’s war on Ukraine remains slow and uneven, according to the International Monetary Fund (IMF), in the recent World Economic Outlook (WEO).

“Risks to the outlook are more balanced than they were six months ago, on account of the resolution of U.S. debt ceiling tensions and Swiss and U.S. authorities having acted decisively to contain financial turbulence,” according to the WEO Executive Summary. “The likelihood of a hard landing has receded, but the balance of risks to global growth remains tilted to the downside.”

The IMF projects global economic growth to be 3.0% this year, down from 3.5% last year. Next year’s growth is projected to be 2.9%. IMF forecast U.S. GDP at 2.1% this year, the same as last year, and then 1.5% next year.

“Several forces are holding back the recovery,” according to the WEO. “Some reflect the long-term consequences of the pandemic, the war in Ukraine, and increasing geo-economic fragmentation. Others are more cyclical in nature, including the effects of monetary policy tightening necessary to reduce inflation, withdrawal of fiscal support amid high debt, and extreme weather events.”

Among key risks to the economy, IMF cites: a deepening real estate crisis in China; more volatile commodity markets tied to geo-political tensions and disruptions linked to climate change; uncomfortably high inflation.”

Cattle futures closed lower Friday on the previous day’s softer USDA price outlook, likely profit taking, and no support from the previous day’s export news.

Net U.S. beef export sales for the week ending Oct. 5 were 9,000 metric tons, according to USDA’s weekly Export Sales report. The volume was 32% less than the previous week and 29% less than the prior four-week average. Increases were primarily for South Korea, Japan, Mexico, Taiwan and Canada. 

Feeder Cattle futures closed an average of $1.80 lower.

Live Cattle futures closed an average of $1.11 lower (27¢ lower in spot Oct to $1.57 lower at the back).

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

For the week, based on the most recent established trade, FOB live prices were $1 higher in the Southern Plains at $182/cwt., $3 higher in Nebraska at $186 and $1-$3 higher in the western Corn Belt at $184-$186. Dressed delivered prices were $2-$4 higher in Nebraska at $292 and steady to $4 higher in the western Corn Belt at $290-$292.

Choice boxed beef cutout value was 39¢ lower Friday afternoon at $300.80/cwt. Select was 47¢ higher at $275.49/cwt.

Grain and Soybean futures eased lower Friday with likely profit taking.

Corn futures closed 1¢ to 3¢ lower.

Soybean futures closed mostly 7¢ to 11¢ lower.

KC HRW Wheat closed 4¢ to 7¢ lower.

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Major U.S. financial indices closed mainly lower Friday with pressure from surging crude oil prices in response to fears about expanding unrest in the Middle East.

The Dow Jones Industrial Average closed 39 points higher. The S&P 500 closed 21 points lower. The NASDAQ was down 166 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.70 to $4.78 higher through the front six contracts.  

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Grass season is coming to a close with mixed regional year-over year conditions, according to the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. Nationwide, based on the latest ratings, LMIC analysts point out pasture and range rated as Poor or Very Poor ranged from 32-39%, compared to 40-plus a year ago at this time but higher than the typical ~30%.

“Range and pasture conditions for the western region of the U.S. are tracking similar to last year with ratings just above 30% rated as poor and very poor,” LMIC analysts say. “Condition ratings for the Great Plains region have been doing better than a year ago and the five-year average. The last several weeks have ranged from about 16% to 26% rated as poor and very poor, compared to over 50% at this time last year.”

Rounding out key cattle regions, they explain pasture conditions improved in the Southern Plains in recent weeks but are the worst for the year in the Southeast and Corn Belt region.

“Hay supplies across the U.S. have improved though, with the national yield and production numbers increasing,” LMIC analysts say. “Stocks may still be tight by historical standards, but for the most part it seems the U.S. was able to have not only a better grazing year, but also was able to rebuild hay inventory.”

Cattle futures extended gains Thursday, supported by the weeks higher cash fed cattle prices and despite some bearishness in the monthly World Agricultural Supply and Demand Estimates (see below).

Feeder Cattle futures closed an average of $1.35 higher.

Live Cattle futures closed an average of 94¢ higher.

Negotiated cash fed cattle trade ranged from moderate on moderate demand to slow on moderate demand, according to the Agricultural Marketing Service.

So far this week, FOB live prices are $1 higher in the Southern Plains at $183/cwt., $1-$2 higher in Nebraska at $185 and $2 higher in the western Corn Belt at $185.

Dressed delivered prices were $2-$4 higher in Nebraska at $292. Prices in the western Corn Belt last week were $290.

Choice boxed beef cutout value was 91¢ higher at $301.19/cwt. Select was 28¢ lower at $275.02/cwt.

Corn futures gained on the World Agricultural Supply and Demand Estimates (see below).

Corn futures closed 5¢ to 8¢ higher through May ’25 and then 2¢ higher.

KC HRW Wheat closed mostly 8¢ higher.

Soybean futures closed 29¢ to 37¢ higher through Aug ‘24 and then 18¢ to 22¢ higher.

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Major U.S. financial indices sagged Thursday with a stouter inflation reading than expected.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in September on a seasonally adjusted basis, after increasing 0.6% in August, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 3.7% before seasonal adjustment.

The Dow Jones Industrial Average closed 173 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 85 points.

West Texas Intermediate Crude Oil futures (CME) closed 16¢ to 58¢ lower through the front six contracts.   

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USDA’s Economic Research Service (ERS) lowered expected fed steer prices (five-area direct) for this year and next, in the latest World Agricultural Supply and Demand Estimates (WASDE). The downward revision was based on September and early-October prices, and weaker expected demand for cattle during the fourth quarter of the year. Prices for next year were lowered with expectations of price pressure from larger feedlot supplies than previously projected.

The fourth-quarter price estimate was reduced $5 to $185/cwt. and the annual price was lowered $1.20 to $177.30. Next year’s annual price was projected $1 lower at $185.

Cattle futures finally found some traction Wednesday on oversold conditions and a promising start to the week’s cash fed cattle trade.

Feeder Cattle futures closed an average of $1.37 higher.

Live Cattle futures closed an average of $1.39 higher (85¢ to $1.97 higher).

Negotiated cash fed cattle trade and demand were moderate in the Southern Plains through Wednesday afternoon, with FOB live prices mostly $1 higher at mainly $183/cwt., according to the Agricultural Marketing Service.

Elsewhere, trade was limited on light demand, with too few transactions to trend.

Last week, FOB live prices were $183-$184 in Nebraska and the western Corn Belt. Dressed delivered prices were $288-$290.

Choice boxed beef cutout value was 78¢ lower Wednesday afternoon at $300.28/cwt. Select was 85¢ lower at $275.30/cwt.

Grain futures had a wait-and-see feel ahead of Thursday’s World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 2¢ to 3¢ higher.

Soybean futures closed 12¢ to 19¢ lower through Aug ‘24 and then 8¢ to 10¢ lower.

KC HRW Wheat closed 4¢ to 5¢ lower.

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Major U.S. financial indices gained Wednesday, as traders awaited more inflation data this week.

The Dow Jones Industrial Average closed 65 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 96 points.

West Texas Intermediate Crude Oil futures (CME) closed 93¢ to $2.48 lower through the front six contracts.   

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National pasture and range conditions continue ahead of last year, according to the most recent Crop Progress report from USDA’s National Agricultural Statistics Service.

For the week ending Oct. 8, 35% of pasture and range was rated as Good (30%) or Excellent (5%), which was the same as the previous week and 12% more than a year earlier. 36% was rated as Poor (21%) or Very Poor (15%), which was 1% more than a week earlier but 10% less than a year earlier.

57% of winter wheat was planted, which was 4% less than last year but the same as the average. 29% was emerged, compared to 24% a week earlier and 30% a year earlier.

Cattle futures closed mostly lower Tuesday, unable to muster much interest.

Feeder Cattle futures closed an average of 65¢ lower, except for unchanged to an average of 87¢ higher in the front three contracts.

Live Cattle futures closed an average of 53¢ lower, except for 20¢ higher spot Oct.

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 $182/cwt. in the Southern Plains and $183-$184 in the north. Dressed delivered prices were $288-$290.

Choice boxed beef cutout value was $2.36 lower Tuesday afternoon at $301.06/cwt. Select was $1.35 lower at $276.15/cwt.

Grain futures softened a touch Tuesday with likely positioning ahead of this week’s World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 1¢ to 2¢ lower.

KC HRW Wheat closed 13¢ to 14¢ lower.

Soybean futures closed 2¢ to 7¢ higher through Aug ‘24 and then fractionally lower to 1¢ lower.

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Major U.S. financial indices extended gains Tuesday, helped along by lower Treasury yields.

The Dow Jones Industrial Average closed 134 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 78 points.

West Texas Intermediate Crude Oil futures (CME) closed 7¢ to 41¢ lower through the front six contracts.  

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Although October tends to pressure cattle markets, Stephen Koontz, agricultural economist at Colorado State University says there are also signs of fundamental and technical challenges.

“Placements of cattle in feedlots were the strongest for the year in May and June, and these are the animals to be marketed soon,” Koontz explains, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center. “The inventory of cattle on feed over 120 days and over 150 days is high, as revealed by the most recent report. Exports are showing a response to the record high prices in terms of drifting lower. Fed steer and fed heifer weights continue the seasonal increase and are likely for the next month and a half.”

Further, Koontz points to negative sustained packer margins in August and at the end of September.

“There are a variety of factors that press for the slowing of cattle processing, sales, exports, and in the end, prices,” Koontz says. “The next several weeks will determine the strength of cattle buying. What is needed to satisfy forward contracts and what volume can be moved through cash market retail and food service channels? We will learn that. The strength of demand in the remainder of the fourth quarter will be a good signal for the following year’s potential. From a long-term perspective, what happens in the replacement market during the fall will be informative too.”

With all of that said, analysts with the Agricultural Marketing Service (AMS) note auction prices for calves remained impressive last week, as long as it was a premium offering.

“Plainer type calves or those coming right off the cow un-weaned and un-worked are seeing sharp discounts and are being met with light to moderate demand with health risk being the major defining component,” AMS analysts say.