WLI

Negotiated cash fed cattle trade had a firmer feel through Friday afternoon.

Live prices in the Texas Panhandle were $1 higher at $156/cwt.

Although too few to trend, there were some live sales in Kansas at $156 and at $157 in the western Corn Belt. Prices the previous week were $155 in Kansas and $155-$157 in the western Corn Belt where dressed prices were $248.

For the week, dressed prices in Nebraska were $1 higher at $249. Live prices there the previous week were $155-$157.

Choice Boxed beef cutout value was $6.74 higher Friday afternoon at $271.95/cwt. Select was $3.66 higher at $245.47/cwt. Both were helped by packers throttling back production.

Total weekly estimated cattle slaughter was 562,000 head, which was 63,000 head fewer than the previous week. However, the estimated total was 75,000 head more than the same week last year. Year-to-date total estimated cattle slaughter of 33.13 million head was 479,000 head more (+1.5%) more than a year earlier. Year-to-date estimated beef production of 27.40 billion lbs. was 363 million lbs. more (+1.3%) than the same time last year.

Cattle futures closed mainly higher Friday, supported by the higher tone to cash prices and the bounce in wholesale beef prices.

Live Cattle futures closed an average of 51¢ higher (20¢ to $1.00 higher), except for unchanged and 17¢ lower in the back two contracts.

Feeder Cattle futures closed an average of 24¢ higher, except for an average of 18¢ lower in the back two contracts.

Grain and Soybean futures found some technical support Friday with positive export news and positioning ahead of the holiday.

Corn futures closed 3¢ to of 5¢ higher through the front three contracts and then mostly fractionally higher.

Soybean futures closed 10¢ to of 14¢ higher through Jan ‘24 and then mostly 6¢ to 8¢ higher.

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Major U.S. financial indices recovered some lost ground Friday with likely week-end positioning and despite another gauge suggesting more work lies ahead to curb inflation.

The personal consumption expenditures (PCE) index increased 0.1% in November, compared to the previous month, according to the U.S. Bureau of Economic Analysis. That was more than expected. Year over year, the index was up 5.5%. Excluding food and energy, the index was 0.2% higher month to month.

The Dow Jones Industrial Average closed 176 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 21 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.07 to $2.46 higher through the front six contracts, supported by chatter that Russia will cut production.

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Markets will likely view Friday’s Cattle on Feed report as neutral to a touch bearish, with slightly more feedlot placements than analysts expected ahead of the report. Keep in mind the report accounts for feedlots with 1,000 head or more one-time capacity.

Placements in November of 1.92 million head were 42,000 head less (-2.1%) than the previous year. Average expectations ahead of the report were for a decline of about 4%.

In terms of placement weights, 52% went on feed weighing 699 lbs. or less, 36% weighing 700-899 lbs. and 12% weighing 900 lbs. or more.

Marketings in November of 1.89 million head were 22,000 head more (+1.2%), which was in line with estimates. Marketings were the most for the month since the series began in 1996, according to USDA’s National Agricultural Statistics Service.

Cattle on feed Dec. 1 of 11.67 million head were 312,000 head less (-2.6%) than the same time last year, which was close to pre-report projections.

Negotiated cash fed cattle trade was limited on light demand through Thursday afternoon, according to the Agricultural Marketing Service.

Although too few to trend, there were some live sales in the Southern Plains at $155/cwt. and in the western Corn Belt at $157. There were a few dressed trades in Nebraska at $249.

Last week, live prices were $155/cwt. in the Southern Plains and $155-$157 in Nebraska and the western Corn Belt. Dressed prices were $248.

Choice Boxed beef cutout value was 35¢ higher Thursday afternoon at $265.21/cwt. Select was $5.52 higher at $241.81/cwt.

Cattle futures mostly maintained the previous session’s strong gains.

Live Cattle futures closed an average of 18¢ higher, except for an average of 36¢ lower in the front two contracts.

Feeder Cattle futures closed an average of 35¢ higher.

Corn futures closed mostly 1¢ lower.

Soybean futures closed 10¢ to 13¢ lower through Aug ‘23 and then mostly 5¢ to 6¢ lower.

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Major U.S. financial indices closed lower Thursday, led by tech stocks, amid renewed market bearishness.

The Dow Jones Industrial Average closed 348 points lower. The S&P 500 closed 56 points lower. The NASDAQ was down 233 points.

West Texas Intermediate Crude Oil futures (CME) closed 80¢ to 83¢ lower through the front six contracts.

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Farm and ranch operators paid hired workers an average gross wage of $17.72/hour during the October 2022 reference week (Oct. 9-15), up 7% from the October 2021 reference week, according to the latest Farm Labor report from USDA’s National Agricultural Statistics Service (NASS).

Livestock workers earned $16.52/hour during the period, which was 7% more. Field workers received an average of $17.04/hour, up 6%.

Farm and ranch operators hired 785,000 workers during the period, which was 2% more than the October 2021 reference week.

Cattle futures surged higher Wednesday, led by Live Cattle, supported by recent wholesale boxed beef strength, performance-depressing winter weather forecast across the Northern Plains, as well as bullish expectations for Friday’s Cattle on Feed report. Evidence of tightening cattle numbers also continues to grow (see below).

Live Cattle futures closed an average of 98¢ higher (25¢ higher at the back to $2.12 higher toward the front).

Feeder Cattle futures closed an average of 56¢ higher.

That was with Corn futures closing mostly 6¢ to 10¢ higher through Jly ‘24, supported by the drier outlook in South America. Soybean futures closed 1¢ to 4¢ higher through Nov ‘23 and then mostly 2¢ to 5¢ lower.

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

Last week, live prices were $155/cwt. in the Southern Plains and $155-$157 in Nebraska and the western Corn Belt. Dressed prices were $248.

Choice Boxed beef cutout value was 19¢ lower Wednesday afternoon at $264.86/cwt. Select was $2.39 higher at $236.29/cwt.

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Major U.S. financial indices climbed Wednesday amid positive economic news that included strong earnings reports from bellwethers Nike and FedEx, as well as stronger consumer confidence.

The Conference Board Consumer Confidence Index^® increased 6.9 points in December to 108.3, following back-to-back monthly declines.

“Consumer confidence bounced back in December, reversing consecutive declines in October and November to reach its highest level since April 2022,” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation and Expectations Indexes improved due to consumers’ more favorable view regarding the economy and jobs. Inflation expectations retreated in December to their lowest level since September 2021, with recent declines in gas prices a major impetus. Vacation intentions improved but plans to purchase homes and big-ticket appliances cooled further. This shift in consumers’ preference from big-ticket items to services will continue in 2023, as will headwinds from inflation and interest rate hikes.”

The Dow Jones Industrial Average closed 526 points higher. The S&P 500 closed 56 points higher. The NASDAQ was up 162 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.63 to $2.06 higher through the front six contracts.

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Auction market volume in Oklahoma during the past few months suggest declining cattle numbers are adding lift to feeder cattle prices.

“Weekly volumes were larger year over year from July through mid-October and have been mostly smaller since,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in is weekly market comments.  “From July to mid-October, the cumulative additional weekly feeder volume was up an average of 18%, totaling over 71,000 additional head of feeder cattle marketed in auctions during this period. The year-over-year decreases since mid-October have reduced the cumulative total by about half, meaning that the total feeder cattle auction volume in the second half of 2022 is up over 35,000 head at the end of the year, with all of that increase occurring prior to mid-October. Smaller auction volumes since mid-October are no doubt contributing to the strong feeder prices at the end of the year.”

Peel also points to the fact that average prices for Medium and Large #1 steers reached their annual high in mid-December at weights less than 550 lbs. and weights heavier than 850 lbs.

“Prices for steers from 550-850 lbs. were at the maximum in August/September but are above the annual average at the end of the year,” Peel says.  “In general, feeder cattle markets are finishing 2022 strong with momentum going into the new year.”

Looking ahead, Peel notes the number of stocker cattle on wheat pasture are significantly fewer than typical, well below normal suggesting a muted run of wheat-pasture feeder cattle into March and for graze-out into May. 

You can watch Peel sharing some of his market outlook here.

Feeder Cattle futures retraced the previous session’s losses, perhaps with support from early positioning ahead of Friday’s monthly Cattle on Feed report (see below). They closed an average of 96¢ higher (60¢ to $1.52 higher).

Live Cattle futures softened an average of 21¢ lower, except for an average of 17¢ higher in the back three contracts. Pressure included reduced packer production last week and likely again this week, diluting some opportunity for cash prices to advance.

Corn futures closed 1¢ to 4¢ higher through May ‘24 and then mostly 1¢ to 2¢ lower.

Soybean futures closed 11¢ to 17¢ higher through Sep ‘23 and then mostly 7¢ to 8¢ higher.

Choice wholesale beef prices continued their recent surge higher, due in part to the aforementioned reduction in packer production. Choice Boxed beef cutout value was $1.22 higher Tuesday afternoon at $265.05/cwt. However, Select was $4.67 lower at $233.90/cwt.

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

Last week, live prices were $155/cwt. in the Southern Plains and $155-$157 in Nebraska and the western Corn Belt. Dressed prices were $248.

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Major U.S. financial indices firmed Tuesday, ending the recent losing streak. Perhaps bargain hunting was part of the support, given the Bank of Japan’s surprise decision to let its 10-year government bond interest rate to rise — fueling the yen higher.

The Dow Jones Industrial Average closed 92 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 1 point.

West Texas Intermediate Crude Oil futures (CME) closed 72¢ to 90¢ higher through the front six contracts.

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Many analysts expect this Friday’s monthly Cattle on Feed report to be decidedly bullish.

“Early pre-report estimates have placements ranging from 94% to 98% of a year ago,” says David Anderson, Extension livestock economist with Texas A&M AgriLife Extension Service. “Lower placements are driven by fewer feeder cattle available than last year and seasonal declines. The feeder cattle index, calf and feeder cattle sales data, and cattle imports from Mexico all indicate smaller placements than last year.”

With November marketings pegged to be 1% more year over, year, Anderson says the Dec. 1 on-feed inventory is estimated at about 97.5% of last year.

“That would be the fewest December on-feed numbers since 2017,” Anderson says, in the latest issue of In the Cattle Markets. “Supplies for next year and beyond are tightening.”

Recently stronger wholesale beef prices and last week’s mostly steady-to-firmer cash fed cattle trade helped Live Cattle futures edge an average of 15¢ higher Monday.

Despite lower Corn futures, Feeder Cattle futures meandered to a mostly lower close Monday, presumably pressured in part by the lack of cash direction with many auction barns closed for the holidays. Feeder Cattle futures closed an average of 84¢ lower (15¢ to $1.67 lower), except for an average of 35¢ higher in the back two contracts.

Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were $155/cwt. in the Southern Plains and $155-$157 in Nebraska and the western Corn Belt. Dressed prices were $248.

Choice Boxed beef cutout value was $1.00 higher Monday afternoon at $263.83/cwt. Select was $3.12 higher at $238.57/cwt.

Corn futures weakened on positive South American moisture. They closed 2¢ to 5¢ lower through May ‘24 and then mostly fractionally mixed.

Soybean futures closed 12¢ to 20¢ lower through Sep ’23 and then mostly 2¢ to 8¢ lower.

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Major U.S. financial indices closed lower again Monday with carry-over pressure from continued recessionary fears. 

The Dow Jones Industrial Average closed 162 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 159 points.

West Texas Intermediate Crude Oil futures (CME) closed 75¢ to 90¢ higher through the front six contracts.

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Although steer byproduct values softened recently, they remain significantly higher than the five-year average, according to the Livestock Marketing Information Center (LMIC).

“Last week it was $14.67/cwt., down 2% from the same week last year but 49% above the five-year average,” according to LMIC analysts, in the latest Livestock Monitor. “Since September, the value has averaged $14.73/cwt., slightly lower than the same period last year, which ranged from $15-16. The five-year average is typically below $10/cwt. during the latter part of the year.”

According to the LMIC folks, prices for livers, tongues and cheek meats provided support during the last several months. They add that hide prices held relatively steady over the same period.

The cow byproduct price remains elevated, too.

“Last week, the cow by-product value was $13.59/cwt., down 6% from last year but 51% higher than the five-year average. During the last year, the weekly cow by-product value has ranged from $12.54 to $15.19 with an average of $13.55/cwt.,” say LMIC analysts.