WLI

Cattle futures closed sharply lower Thursday with likely profit taking, month-end position squaring and technical wariness over the impact of steeper U.S. tariffs on Brazilian beef imports.

Toward the close, Live cattle futures were an average of $4.68 lower. Feeder Cattle futures were an average of $8.59 lower.

Negotiated cash fed cattle trade was light on moderate demand in Nebraska through Thursday afternoon, according to the Agricultural Marketing Service. There were some early dressed delivered prices $3 higher at $383/cwt. FOB live prices there last week were $242-$245.

Trade was limited on moderate demand in Kansas. Although too few to trend, there were some early FOB live sales at $235/cwt. Prices last week were $230-$232.

Elsewhere, trade was mostly inactive on moderate demand.

Last week, FOB live prices were $230-$232/cwt. in the Texas Panhandle and mostly $240 in the western Corn Belt where dressed delivered prices were $380.

Choice boxed beef cutout value was 67¢ lower Thursday afternoon at $361.32. Select was 46¢ higher at $341.37.

Grain and Soybean futures were mixed Thursday.  

Toward the close and through away Jly contracts, Corn futures were fractionally higher to 2¢ higher. Kansas City Wheat futures were fractionally lower 4¢ higher. Soybean futures were 4¢ to 5¢ lower.

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Major U.S. financial indices closed lower Thursday, despite strong quarterly earnings for tech giants like Microsoft.  

The Dow Jones Industrial Average closed 330 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 7 points.

Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 62¢ to 66¢ lower through the front six contracts.

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Reflecting on last week’s USDA Cattle and Cattle on Feed reports, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University notes the beef cow inventory of 28.65 million head was 1.5% less than two years earlier, when the previous mid-year report was published, but was 2.8% more than the beginning of this year. 

“Historically, this would indicate some herd growth in the first half of the year but there is little other data to corroborate this estimate,” Peel says. 

“Beef replacement heifers for July 1 were 3.7 million head, down 5.1% from two years ago. The comparison of July to January beef replacement heifers was about the same as two years ago and does not indicate heifer retention.” 

Likewise, Matthew Diersen, risk and business management specialist at South Dakota State University points out heifers represented 38.1% of all cattle on Feed July 1.

“The mix has been hovering around 39% for several years,” Diersen says in the most recent issue of In the Cattle Markets. “The mix bottomed out at around 31% in mid-2015 during the last cattle expansion. The mix had been getting lower, especially last quarter when it reached 37.6%. An increase from April 1 to July 1 is consistent over time. The mix is the smallest it has been on July 1 since 2019 and would be the slightest indication that some expansion is being considered.”

Considering the July Cattle on Feed and the Cattle reports together, Peel says there is no indication of significant heifer retention.

“My feeling is that some movement towards herd rebuilding may be starting but is very slow and cautious,” Peel says. “It is possible, perhaps even likely, that the January 2025 beef cow herd will be the cyclical low, but the January 2026 inventory will likely be close to unchanged showing very little, if any, growth this year.”  

You can hear more of Peel’s market insights here.

Cattle futures continued to grind higher Wednesday on bullish supply and demand fundamentals.

Toward the close, Live cattle futures were an average of $2.06 higher. Feeder Cattle futures were an average of $2.74 higher. So far this week, Live Cattle futures are $4.80 higher and Feeder Cattle futures are $7.77 higher.

Negotiated cash fed cattle trade was limited on moderate demand in Kansas through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early FOB live sales at $235/cwt. Elsewhere, trade was mostly inactive on moderate demand.

Last week, FOB live prices were $230-$232/cwt. in the Southern Plains, $242-$245 in Nebraska and mostly $240 in the western Corn Belt. Dressed delivered prices were $380.

Choice boxed beef cutout value was $2.20 lower Wednesday afternoon at $361.99. Select was $1.57 lower at $340.91.

Grain and Soybean futures were mixed Wednesday.  

Toward the close and through away Jly contracts,

Corn futures were 1¢ to 2¢ higher on likely short covering. Kansas City Wheat futures were 1¢ to 2¢ higher. Soybean futures were mainly 13¢ to 14¢ lower with pressure including demand concerns.

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Major U.S. financial indices closed mixed Wednesday, with pressure including the Fed’s decision to leave interest rates unchanged.  

The Dow Jones Industrial Average closed 171 points lower. The S&P 500 closed 7 points lower. The NASDAQ was up 31 points.

Through mid0afternoon, West Texas Intermediate Crude Oil futures (CME) were 46¢ to $1.10 higher through the front six contracts.

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Rural economies remain challenged, according to the latest reading from Creighton University. Their Rural Mainstreet Index (RMI) was above growth neutral for the second consecutive month at 50.6 but declined 1.3 points month to month. The index is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. It ranges between 0 and 100, with a reading of 50.0 representing growth neutral.

For the 14th time in the past 15 months, the RMI farmland price index slumped below growth neutral.

“Elevated interest rates, higher input costs and volatility from tariffs have put downward pressure on farmland prices,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “On average, bankers expect farmland prices to fall by 2.9% over the next 12 months.”

The farm equipment sales index slumped to a very weak 16.7 from 22.7 in June, below growth neutral for the 23^rd consecutive month.

Bankers were asked to rank the greatest threats to farm income for the next year. More than three of four (76.1%) named low farm commodity prices as the top threat, while 19.9% identified tariffs as the top risk for the farm economy over the next 12 months.

Rural bankers remain pessimistic about economic growth for their area over the next six months. The July confidence index declined to 36.0 from June’s frail 37.0.

“Weak grain prices and negative farm cash flows, combined with tariff retaliation concerns, pushed banker confidence lower,” Goss explains.

Cattle futures were higher Friday ahead of the monthly Cattle on Feed and semiannual Cattle inventory reports (see below).

Live cattle futures were an average of 67¢ higher.

Feeder Cattle futures were an average of $2.08 higher.

Week to week on Friday, Live Cattle futures were $3.80 higher and Feeder Cattle futures were $8.34 higher.

Negotiated cash fed cattle trade ranged from limited on moderate demand in the Southern Plains to light on moderate demand in the North through Friday afternoon, according to the Agricultural Marketing Service.

There were too few trades to establish a trend in any region, however there were some early FOB live trades at $230-$237.50/cwt. in the Southern Plains and $240-$242 in the North where early dressed delivered prices were $375-$380.

Last week, FOB live prices were $230/cwt. in the Texas Panhandle, $230-$231 in Kansas and $240 in the North where dressed delivered prices were $380.

Choice boxed beef cutout value was $1.41 lower Friday afternoon at $366.68. Select was $2.13 lower at $344.87. Week to week on Friday, Choice was $6.87 lower and Select was $6.62 lower.

Estimated total cattle slaughter last week of 549,000 head was 14,000 head fewer than the previous week and 56,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 16.7 million head was 1.2 million head less (-6.5%) than the same time last year. Estimated year-to-date beef production of 14.6 billion pounds was 513.2 million pounds less (-3.4%).

Grain futures were lower Friday beneath the ongoing weight of positive crop progress and weather.  

Corn futures were 1¢ to 2¢ lower. Kansas City Wheat futures were mostly 1¢ lower. Soybean futures were mainly 1¢ to 3¢ lower.

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Major U.S. financial indices closed higher Friday, supported by strong quarterly corporate earnings reports and the week’s positive trade progress.  

The Dow Jones Industrial Average closed 208 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 50 points.

West Texas Intermediate Crude Oil futures (CME) were 67¢ to 87¢ lower through the front six contracts.

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Markets will likely view Friday’s monthly Cattle on Feed report as bullish with significantly fewer placements than expected.

Feedlots with 1,000 head or more capacity placed 1.4 million head in June, which was 123,000 head fewer (-7.9%) year over year and 6% fewer than expectations ahead of the report.

In terms of placement weights, 38% went on feed weighing 699 lbs. or less, 45% weighing 700-899 lbs. and 17% weighing 900 lbs. or more.

Cattle marketed in June of 1.7 million head were 79,000 head fewer (-4.4%) than the same time last year, which was slightly less than the average of analyst estimates ahead of the report.

Cattle on feed July 1 of 11.1 million head were 180,000 head fewer (-1.6%) year over year, which was 1.6% less than expectations. The 4.2 million heifers on feed were 5% less year-over-year.

USDA also issued the mid-year Cattle inventory report Friday. The report was cancelled last year, so these comparisons for July 1 are relative to the same time in 2023.

Beef cows numbered 28.7 million, which was 350,000 head fewer (-1.2%) than two years earlier but 1% more than expectations ahead of the report. Beef replacement heifers of 3.7 million head were 100,000 head fewer (-2.6%).

All cattle and calves of 94.2 million head were 1.2 million head less (-1.3%) than the same time in 2023, slightly more than expected.

Depending on who is interpreting the two reports, and the mad dash for calves and feeder cattle, reduced cow slaughter and a declining percentage of heifers on feed, it appears herd rebuilding has begun.

Cattle futures were lower Thursday on likely profit taking and positioning ahead of Friday’s Cattle on Feed and Cattle inventory reports.

Toward the close, Live cattle futures were an average of 84¢ lower. Feeder Cattle futures were an average of $2.39 lower.

Negotiated cash fed cattle trade was limited on moderate demand in the Texas Panhandle through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early FOB live sales at $231/cwt. Elsewhere, trade was inactive on moderate demand.

Last week, FOB live prices were $230/cwt. in the Texas Panhandle, $230-$231 in Kansas and $240 in the North where dressed delivered prices were $380.

Choice boxed beef cutout value was 57¢ higher Thursday afternoon at $368.09. Select was $1.61 higher at $347.00.

Grain futures were higher Thursday but continue to be capped by positive crop progress and weather.  

Toward the close and through away Jly contracts, Corn futures were 2¢ to 3¢ higher. Kansas City Wheat futures were 2¢ to 4¢ higher. Soybean futures were mainly 1¢ to 3¢ higher.

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Major U.S. financial indices were mixed Thursday with the most support coming from tech stocks.

The Dow Jones Industrial Average closed 316 points lower. The S&P 500 closed 4 points higher. The NASDAQ was up 37 points.

Through midafternoon, West Texas Intermediate Crude Oil futures (CME) were 39¢ lower to 81¢ higher through the front six contracts.

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Declining labor force participation, lower birth rates and a collapse in net migration are combining to squeeze the U.S. labor supply. The looming labor shortage could begin to weigh on businesses and strain economic growth as soon as later this year, according to a new quarterly report from CoBank’s Knowledge Exchange. With the labor supply about to get tighter, the report suggests businesses and industries operating in rural America should be increasing their focus on technology to overcome labor availability challenges.

“Barring an unforeseen change in labor force participation rates or immigration policies, the pool of available workers is set to shrink precipitously in the next few years,” said Rob Fox, director of CoBank’s Knowledge Exchange. “The problem will be even more acute in states with lower population growth in the Upper Midwest, Corn Belt and the Central Plains. Increased adoption of technology, namely AI and robotics, will likely be at the core of any strategy to address the oncoming labor squeeze.”

The labor force participation rate has trended downward since 2000, and the trend may be accelerating. Nearly 2.5 million working-aged people dropped out of the labor force in the past eight months alone. The U.S. fertility rate has plummeted since the Great Financial Crisis in 2008, reducing the number of native-born citizens entering the workforce. The loss of those new workers coincides with baby boom generation retirements, amplifying the impact on the overall labor supply. According to the CoBank report, those two factors, combined with more restrictive immigration policies and aggressive deportation efforts, will put significant stress on the U.S. labor supply with the potential to impede economic growth.

Cattle futures gapped higher Wednesday, supported by outside markets and perhaps some early positioning ahead of the monthly Cattle on Feed and semiannual Cattle inventory reports due out Friday.

Toward the close, Live cattle futures were an average of $2.25 higher. Feeder Cattle futures were an average of $4.39 higher.

Negotiated cash fed cattle trade was mostly inactive on moderate demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $230/cwt. in the Texas Panhandle, $230-$231 in Kansas and $240 in the North where dressed delivered prices were $380.

Choice boxed beef cutout value was $4.98 lower Wednesday afternoon at $367.52. Select was $2.55 lower at $345.39.

Grain futures were lower Wednesday with the improving weather outlook.

Toward the close and through away Jly contracts, Corn futures were fractionally lower to 1¢ lower. Kansas City Wheat futures were 8¢ to 9¢ lower. Soybean futures were 1¢ to 4¢ lower.

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Major U.S. financial indices closed higher Wednesday, fueled by the announced U.S. trade deal with Japan.

The Dow Jones Industrial Average closed 507 points higher. The S&P 500 closed 49 points higher. The NASDAQ was up 127 points.

Through midafternoon, West Texas Intermediate Crude Oil futures (CME) were 11¢ to 24¢ higher through the front six contracts.