WLI

Cattle futures surged higher Monday, supported by Friday’s friendly Cattle on Feed report, which indicated fewer March placements than expected.

At the close and before final settlement, Live Cattle futures were an average of $2.56 higher and Feeder Cattle futures were an average of $3.71 higher.

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

Last week, FOB live prices were steady in the Southern Plains at $182/cwt., mostly $1 lower in Nebraska at mainly $183 and $1 lower in the western Corn Belt at $184. Dressed delivered prices were steady to $1 lower in Nebraska at $292-$293 and $1 lower in the western Corn Belt at $292 in a light test.

The weighted average five-area direct FOB live steer price last week was $1.17 lower at $182.67/cwt. The weighted average dressed delivered steer price was 74¢ lower at $292.35.

Choice boxed beef cutout value was 26¢ higher Monday afternoon at $295.93/cwt. Select was $1.04 higher at $291.87/cwt.

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Major U.S. financial indices closed higher Monday, supported by tech stocks and easing tension in the Middle East.

The Dow Jones Industrial Average closed 253 points higher. The S&P 500 closed 43 points higher. The NASDAQ was up 169 points.

Heading into the close West Texas Intermediate Crude Oil futures on the CME were 12¢ to 32¢ lower through the front six contracts.

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The latest Cattle on Feed report might be pointing toward moderating beef heifer liquidation.

“Heifers made up 38.5% of total feedlot inventories (April 1), down from 39.7% in January,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. “While the heifer percentage in feedlots remains above the average of the past 10 years, the decline from January to April is an encouraging sign that heifer feeding is perhaps slowing. During rapid herd expansion in 2015-2017, the heifer percentage of feedlot inventories dropped below 34% and averaged below 33% for 10 consecutive quarters. Heifer feeding is expected to decrease significantly more in the coming months.”

Reflecting on Friday’s report in his weekly market comments, Peel also explains stubbornly high feedlot inventories stem more from the slower pace of marketings than placements.

In fact, Peel says monthly average feedlot placements (12-month moving average) in March were the least since April 2017. Total placements during the last six months are 2.3% less than the same period last year.

At the same time, the pace of marketing has declined faster than placements as dwindling numbers of cattle are being fed for longer periods.

“Feedlots have an incentive to keep inventories as close to capacity as possible. One way is to slow down the turnover rate, effectively making fewer cattle turn into larger inventories,” Peel explains. “The result is more days on feed and heavier carcass weights. Steer carcass weights have averaged 25 pounds heavier year over year for the past four weeks, with heifer carcasses over 21 pounds heavier. There are limits to how much feedlots can slow marketings, but feedlots are expected to push carcass weights as far as possible in the coming months. Feedlot inventories are expected to decline in the next few months despite feedlot actions to delay the inevitable.” 

Cattle futures were narrowly mixed Friday with uncertainty about the Cattle on Feed report, which ultimately proved to be likely supportive (see below).

Live Cattle futures closed an average of 12¢ higher, except for unchanged to an average of 5¢ lower in three contracts. They were an average of $4.20 higher week to week on Friday.

Feeder Cattle futures closed an average of 57¢ lower. They were an average of $6.82 higher week to week on Friday.

Negotiated cash fed cattle trade was moderate on moderate demand in the Southern Plains and Nebraska through Friday afternoon, according to the Agricultural Marketing Service. Trade in the western Corn Belt was slow on light to moderate demand.

FOB live prices were steady in the Southern Plains at $182/cwt., mostly $1 lower in Nebraska at $183 and $1 lower in the western Corn Belt at $184. Dressed delivered prices were $1 lower at $292.

Choice boxed beef cutout value was 13¢ lower Friday afternoon at $295.67/cwt. Select was $1.56 higher at $290.83/cwt.

Last week, estimated total cattle slaughter of 620,000 head was 17,000 head more than the previous week but 5,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 9.5 million head was 486,000 head fewer (-4.7%). Estimated year-to-date beef production of 8 billion pounds was 233.9 million pounds less (-2.8%). For broader context, estimated total year-to-date red meat production is 1.3% less.

Turning to row crops, Grain and Soybean futures rallied Friday with likely short covering.

Corn futures closed mostly 4¢ to 6¢ higher, with added support from the Environmental Protection Agency’s emergency fuel waiver to allow E15 gasoline — gasoline blended with 15% ethanol — to be sold during the summer driving season. 

KC HRW Wheat futures closed mostly 6¢ to 7¢ higher.

Soybean futures closed 11¢ to 16¢ higher through Jan ’25.

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Major U.S. financial indices closed mixed Friday with pressure from tech stocks and geo-political concerns about the Mideast conflict.

The Dow Jones Industrial Average closed 211 points higher. The S&P 500 closed 43 points lower. The NASDAQ was down 319 points.

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Markets will likely view Friday’s monthly Cattle on Feed report as neutral to supportive with fewer feedlot placements than expected.

For feedlots with 1,000 head or more capacity, March placements of 1.7 million head were 246,000 head fewer than the same time last year, which was 12.3% less and about 4% fewer than expectations ahead of the report.

In terms of placement weights, 34% went on feed weighing 699 lbs. or less, 53% weighing 700-899 lbs. and 13% weighing 900 lbs. or more.

Marketings in March of 1.7 million head were 271,000 head fewer (-13.7%) than last year. That was about 2% less than estimates ahead of the report.

Cattle on feed April 1 of 11.8 million head were 174,000 head more (+1.5%) than a year earlier, which was in line with expectations.

Heifers on feed April 1 0f 4.6 million head were 39% of the mix and 1% more than the same time last year.

Cattle futures gained Thursday with likely positioning ahead of Friday’s monthly Cattle on Feed report. Export sales also provided support.

Net U.S. beef export sales for the week ending April 11 were 17,700 metric tons for 2024, according to the weekly U.S. Export Sales report. That was 30% more than the previous week and 27% more than the prior four-week average. Increases were primarily for South Korea, China, Japan, Taiwan and Mexico.

At the close and before final settlement, Live Cattle futures were an average of $1.46 higher. Feeder Cattle futures were an average of $1.65 higher.

Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $182/cwt. in the Southern Plains, $184 in Nebraska and $185 in the western Corn Belt. Dressed delivered prices were $293.

Choice boxed beef cutout value was $1.01 lower Thursday afternoon at $295.80/cwt. Select was $1.61 lower at $289.27/cwt.

Turning to row crops before the close, Corn futures mostly 4¢ lower. Kansas City Wheat futures were 4¢ to 5¢ higher through Jly ’25. Soybean futures were 10¢ to 16¢ lower through Jly ’25.

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Major U.S. financial indices drifted to a narrowly mixed close Thursday.

The Dow Jones Industrial Average closed 22 points higher. The S&P 500 closed 11 points lower. The NASDAQ was down 81 points.

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An estimated 42% of cattle were in areas affected by abnormal dryness or drought the week ending April 16, according to the latest U.S. Drought Monitor. That was 15% less than the same week last year. That was with 38.6% of the U.S. experiencing abnormal dryness or drought, compared to 46.5% a year earlier.

“Over the next five days (April 19-23), more heavy precipitation is expected in the Plains and Midwest,” according to the latest U.S. Drought Monitor Summary. “Iowa, Nebraska and South Dakota could see upwards of 2.5 inches of precipitation. Northeast Texas, southeastern Oklahoma, and western Arkansas could see 1.5 to 2 inches of precipitation. Areas of higher elevation in the Rockies of Colorado and Wyoming are also expected to see between 1-2 inches.

“The National Weather Service Climate Prediction Center’s six to 10-day outlook (Valid April 22) favors above-normal precipitation for southern parts of the U.S., particularly along the eastern Gulf Coast from Texas and Louisiana into parts of Arkansas and Oklahoma. Florida is also favoring above-normal precipitation.”

Looking further ahead, there is an 85% chance the current El Niño transitions to neutral by April to June, according to the Climate Prediction Center. There is a 60% chance of La Niña developing by June-August and an 85% chance of La Niña conditions in the northern hemisphere by this fall and early winter.

Cattle futures drifted Wednesday as traders awaited cash direction. Likely, there was added hesitancy ahead of Friday monthly Cattle on Feed report. Estimates see placements being 8% less year over year and marketings down 12% for an April 1 inventory about 2% higher.

At the close and before final settlement, Live Cattle futures mixed, from an average of 28¢ lower in the front four contracts to an average of 27¢ higher. Feeder Cattle futures were an average of 24¢ lower, except for 15¢ higher in spot Apr.

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

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

Dressed delivered prices were $3-$4 lower in Nebraska at $293 and $4 lower in the western Corn Belt at $293.

Choice boxed beef cutout value was $1.24 lower Wednesday afternoon at $296.78/cwt. Select was $1.76 lower at $290.88/cwt.

Turning to row crops toward the close, Corn futures were mostly 2¢ lower through Dec ‘25. Kansas City Wheat futures were mostly 8¢ to 13¢ lower through Jly ’25. Soybean futures were 1¢ to 4¢ higher through Jan ’25. 

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Major U.S. financial indices closed lower Wednesday, led by tech stocks.

The Dow Jones Industrial Average closed 45 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 181 points.

West Texas Intermediate Crude Oil futures (CME) was 5¢ to 20¢ higher through the front six contracts.

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USDA’s Economic Research Service (ERS) raised the expected second-quarter feeder steer price by $3 to $250/cwt. in the latest monthly Livestock, Dairy and Poultry Outlook. The increase was based on recent price data and stronger first-quarter placements leaving fewer calves available for placement in the second quarter.

Compared to the previous month, price expectations (basis 750-800 lbs., Oklahoma City) were little changed for the rest of this year: $261 in the third quarter and $267 in the fourth quarter for an annual average price of $254.46.

As mentioned in Cattle Current last week, ERS increased projected five-area direct average fed steer prices for the remainder of this year in the monthly World Agricultural Supply and Demand Estimates.

Compared to the previous month, based on recent data and expected strength in demand, forecast prices increased $2 in the second quarter to $185/cwt., $2 in the third quarter to $184 and $4 in the fourth quarter to $190. The annual average price increased $2 to $185.

That was with beef production estimated 130 million pounds more at 26.5 billion pounds. Forecast production was raised on heavier weights and increased slaughter.

“Despite concerns in the futures market, cash prices remain strong, and prices may have peaked sooner than normal, but fundamentals remain for slaughter to increase in the second quarter,” ERS analysts say.

Cattle futures continued higher Tuesday for the second consecutive session, perhaps establishing a bottom.

At the close and before final settlement, Live Cattle futures were an average of $1.59 higher. Feeder Cattle futures were an average of $2.38 higher.

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $182/cwt. in the Southern Plains, $184 in Nebraska and $185 in the western Corn Belt. Dressed delivered prices were $293.

Choice boxed beef cutout value was $2.86 lower Tuesday afternoon at $298.02/cwt. Select was $1.30 higher at $292.64/cwt.

Turning to row crops, heading into the close, Corn and Soybean futures were lower again with likely pressure from positive weather and the early planting pace. According to USDA’s weekly Crop Progress report, 6% of corn was in the ground, which was 1% more than the five-year average; and 3% of soybeans were planted, which was 2% more than average.

Corn futures were mostly 1¢ to 2¢ lower through Dec ‘25. Soybean futures were 8¢ to 13¢ lower through Jly ’25. However, Kansas City Wheat futures were mostly 1¢ to 3¢ higher through Jly ’25.

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Major U.S. financial indices closed little changed Tuesday as investors wrestle with sticky inflation and the prospects of a longer period before the Fed can reduce interest rates.

The Dow Jones Industrial Average closed 63 points higher. The S&P 500 closed 10 points lower. The NASDAQ was down 19 points.

West Texas Intermediate Crude Oil futures (CME) were little changed through the front six contracts.

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Although Choice boxed beef cutout values are a touch higher than this time last year, David Anderson, Extension livestock economist with Texas A&M AgriLife Extension Service says some see weakness compared to higher year-over-year calf and fed cattle prices.

“Several factors are at work in cutout value,” Anderson says in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center (LMIC). “In some ways, the market is in the winter-to-spring transition period, moving from winter-time roasts and other end cuts to steaks for grilling season. Primal cut values for chucks and rounds have been declining while the primal loin has been increasing. The rib and wholesale ribeye values have not increased seasonally heading into grilling season. Lean beef for ground beef has soared in value while 50% lean has remained depressed.”

Anderson notes counter-seasonally heavier carcass weights fostered by positive weather, cheaper feed and longer feeding periods.

“Beef grading Choice has increased by more than one percentage point, to over 74%, about the same as last year, while Prime is 1.5 percentage points higher than a year ago, at 11.5%,” Anderson says. “When combined with larger beef production, the grading percentages mean that we have more Prime and Choice beef than this time last year. Increased Choice supplies and fewer Select supplies are helping to pressure the Choice-Select spread to under $5 per cwt.”