WLI

Cattle futures took a breather from the steamy rally and closed lower Monday on likely profit taking.

Feeder Cattle futures closed an average of $2.34 lower ($1.70 lower at the back to $3.52 lower toward the front).

Live Cattle futures closed an average of 84¢ lower (25¢ to $1.40 lower).

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

Last week, FOB live prices were $182-$183/cwt. in the Southern Plains, $184-$185 in Nebraska and $185 in the western Corn Belt. Dressed delivered prices were $292.

Choice boxed beef cutout value was 39¢ lower Monday afternoon at $305.32/cwt. Select was 29¢ higher at $283.41/cwt.

Corn futures closed mostly 3¢ to 4¢ lower.

KC HRW Wheat closed 8¢ to 12¢ lower through Sep ‘25 and then 1¢ higher.

Soybean futures closed 15¢ to 23¢ lower.

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Major U.S. financial indices trickled higher Monday as investors wait for this week’s FOMC meeting. 

The Dow Jones Industrial Average closed 6 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 1 point.

West Texas Intermediate Crude Oil futures (CME) closed mixed, from 15¢ lower to 71¢ higher  through the front six contracts.

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Based on current price strength, USDA’s Economic Research Service left the third-quarter feeder steer price unchanged at $250/cwt. but increased the expected fourth-quarter price by $4 to $259/cwt., in the latest Livestock, Dairy and Poultry Outlook. Prices were raised by $1 in the first and second quarter of next year at $249 and $248, respectively. The annual average price is projected at $225.99 this year and $253.75 next year.

“Over the last four weeks, wholesale boxed beef values have bounced back after retracting from this year’s highs set in June. However, fed cattle prices have not responded similarly,” say ERS analysts. “The August average price for fed steers in the five-area marketing region was $184.85/cwt., nearly flat since June but $41 higher year over year. This situation has allowed packer margins to improve during this time and coupled with expected higher seasonal beef demand and tightening fed cattle supplies, prices are not expected to fall further. As a result, the fed steer price forecast is unchanged at $178.50 and unchanged for next year at $186.”

Commercial beef production was forecast at 26.941 billion lbs. for this year, 40 million lbs. less than last month’s projection, based on a lower production outlook for the second half of the year.

“This is based on a slower expected pace of fed cattle marketing in September that is partially offset by higher expected cow slaughter for the rest of the year,” ERS analysts say. “As a result, the outlook for 2024 production remains unchanged from last month at 25.2 billion lbs.”

Cattle futures rallied sharply higher Thursday, despite the lack of weekly cash fed cattle direction as traders seemed to focus on looming tighter fourth-quarter supplies.

Feeder Cattle futures closed an average of $3.24 higher ($1.67 higher in spot Sep to $4.02 higher).

Live Cattle futures closed an average of $2.54 higher, in active trade.

Negotiated cash fed cattle trade ranged from slow on light to moderate demand to a standstill through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few live delivered trades in Nebraska at $186.50/cwt.

The only established trade for the week is $184/cwt. for FOB live prices in the western Corn Belt, the upper end of last week’s range.

Last week, FOB live prices were $180/cwt. in the Southern Plains and $183-$184 in Nebraska. Dressed delivered prices were $290 in Nebraska and $288-$290 in the western Corn Belt.

Choice boxed beef cutout value was $1.18 lower at $306.37/cwt. Select was 33¢ lower at $286.86/cwt.

Corn futures softened mostly fractionally lower to 1¢ lower on likely profit taking.

KC HRW Wheat closed mostly 3¢ to 6¢ lower.

Soybean futures closed mostly 7¢ to 11¢ higher.

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Major U.S. financial indices rose Thursday, buoyed by positive economic data including robust monthly retail sales.

The Dow Jones Industrial Average closed 331 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 112 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.46 to $1.73 higher through the front six contracts.

Cattle futures sauntered lower Wednesday with traders awaiting weekly cash fed cattle direction.

Feeder Cattle futures closed an average of $1.03 lower (20¢ to $2.20 lower).

Live Cattle futures closed an average of 32¢ lower, (2¢ to $1.00 lower).

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few live trades in the western Corn Belt at $184/cwt.

Last week, FOB live prices were $180/cwt. in the Southern Plains and $183-$184 in the North.

Dressed delivered prices were $290 in Nebraska and $288-$290 in the western Corn Belt.

Choice boxed beef cutout value was 48¢ lower Wednesday afternoon at $307.55/cwt. Select was $3.41 higher at $287.19/cwt.

Corn futures closed mostly 4¢ to 5¢ higher Wednesday with apparent technical buying and support from wheat.

KC HRW Wheat closed 10¢ to 14¢ higher.

Soybean futures closed mostly 3¢ to 6¢ higher.

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Major U.S. financial indices closed mixed Wednesday.

The Dow Jones Industrial Average closed 70 points lower. The S&P 500 closed 5 points higher. The NASDAQ was up 39 points.

West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 32¢ lower through the front six contracts.

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Even if you take drought recovery out of the equation, there’s no clear indication about how aggressive producers will retain heifers and begin herd rebuilding this fall.

“On one hand, we have the higher feeder cattle prices, current and deferred, which incentivizes the desire to retain cows and heifers to get profits in the future,” explains Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln. “However, there are also atypically seasonal incentives to sell both cull cows and heifers at higher current market values than previously experienced and forgo profits next year.”

Dennis says declining cow numbers and strong ground beef demand are keeping cutter cow and slaughter cow prices significantly higher than both the five-year average and 2022 with general price support for cutter cows at $90/cwt.

“Higher and stronger ground beef prices and boxed beef cutter cow cutout will only keep these prices high or increase them into the fall. These seasonally higher prices should continue to impact the beef cow slaughter rate,” Dennis explains in the most recent issue of In the Cattle Markets from the Livestock Marketing Information Center.

As it is, even though weekly beef cow slaughter rates are declining, beef cow slaughter continues above the five-year average, according to Dennis. He adds heifers, as a percentage of total cattle on feed remains at the highest level in 20 years at about 40%.

Ultimately, Dennis says the tradeoff this fall will be between cashing in on cows and heifers at high prices or chasing after $310 per cwt. values on 500-600 lb. feeder cattle in 2024.

“Producers need to be extremely diligent about calculating how much they can pay for replacement heifers, as well as how much value that heifer has when she is retained rather than sold under current market conditions,” Dennis says. “Understanding what needs to go right and what can go wrong for heifers and bred cows to pay for themselves will be extremely important this fall.”

Cattle futures crept mostly higher Tuesday.

Feeder Cattle futures closed an average of 54¢ higher, except for an average of 55¢ lower in the front two contracts.

Live Cattle futures closed an average of 18¢ higher, except for an average of 8¢ lower in two contracts.

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

Last week, FOB live prices were $180/cwt. in the Southern Plains and $183-$184 in the North.

Dressed delivered prices were $290 in Nebraska and $288-$290 in the western. Corn Belt.

Choice boxed beef cutout value was $2.08 lower Tuesday afternoon at $308.03/cwt. Select was $1.66 lower at $283.78/cwt.

Corn futures faltered Tuesday, closing mostly 6¢ to 9¢ lower on the monthly World Agricultural Supply and Demand Estimates (see below), which pegged harvested acres and production higher than the trade expected.

KC HRW Wheat closed 4¢ to 7¢ higher.

Soybean futures closed 12¢ to 22¢ lower.

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Major U.S. financial indices eased lower Tuesday, led by tech stocks.

The Dow Jones Industrial Average closed 17 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 144 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.20 to $1.55 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) left expected fed steer prices unchanged for this year, in the September World Agricultural Supply and Demand Estimates (WASDE).

The weighted average five-area direct fed steer price was projected at $184/cwt. in the third quarter and $190 in the fourth quarter for an annual average price of $178.50. The annual average price next year was forecast at $186 with prices in the first and second quarters $188 and $186, respectively.

Beef production was estimated to be 26.9 billion pounds this year, which would be 1.4 billion pounds less (-4.8%) than last year. Beef production for next year was forecasted to be 1.8 billion pounds less (-6.6%) than this year at 25.2 billion pounds.

Estimated beef production for this year was revised slightly lower, compared to the previous month’s WASDE, on a slower pace of marketings in the third quarter. “This decline is only partly offset by higher expected carcass weights in the quarter and higher expected cow slaughter in the third and fourth quarters,” ERS analysts say.

Corn

The 2023/24 U.S. corn outlook was for slightly larger supplies and ending stocks. Corn production for 2023/24 was forecast 23 million bushels higher than the previous month at 15.1 billion bushels, as greater harvested area more than offset a reduction in yield. The national average yield was forecast at 173.8 bushels per acre, down 1.3 bushels. Harvested area for grain was forecast at 87.1 million acres, up 0.8 million.

The forecast season-average corn price received by producers was unchanged at $4.90 per bushel.

Cattle futures rallied higher Monday, bolstered by higher cash fed cattle prices at the end of last week, as well as the bullish extended outlook.

Feeder Cattle futures closed an average of $2.16 higher (87¢ higher in spot Sep to $2.65 higher toward the back).

Live Cattle futures closed an average of 95¢ higher amid active trade.

Negotiated cash fed cattle trade was mostly inactive on light demand 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 $180/cwt., $1-$2 higher in Nebraska at $183-$184 and steady to $1 lower in the western Corn Belt at $183-$184.

Dressed delivered prices were steady to $2 lower in Nebraska at $290 and steady to $2 lower in the western. Corn belt at $288-$290.

The weighted average five-area direct fed steer price last week was 22¢ lower at $182.28/cwt. The average dressed steer price was 91¢ lower at $289.48.

Choice boxed beef cutout value was $2.79 lower Monday afternoon at $310.11/cwt. Select was 61¢ lower at $285.54/cwt.

Corn futures firmed Monday, closing 2¢ to 3¢ higher with positioning ahead of Tuesday’s monthly World Agricultural Supply and Demand Estimates.

Soybean futures closed mostly 5¢ to 7¢ higher.

KC HRW Wheat closed mostly 7¢ to 9¢ lower.

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

The Dow Jones Industrial Average closed 87 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 156 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts.

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“Regardless of other fundamentals, the price of replacement female beef animals has moved significantly higher in the last month. These transactions are on the order of 50% higher than this time last year for the same regions,” says Stephen Koontz, agricultural economist at Colorado State University, in a recent issue of In the Cattle Markets from the Livestock Marketing Information Center. “There is not much trade yet and this is a counter-seasonal trade. But there is some evidence of herd building albeit minor.”

In the meantime, Koontz says dwindling cattle numbers and high wholesale beef values make it unlikely for markets to succumb to typical seasonal pressure this fall.

“Boxed beef values are well above $300/cwt and the Choice-Select spread is $25/cwt. These are strong values compared to the current and past year and are also seasonally strong,” Koontz explains. “The crux of the immediate outlook is where will boxed beef values head and how hard will feedlot push? Currently, the feedlot cash return is excellent and has been for the past four months.”