WLI

Cattle futures were lower Thursday with dimming cash fed cattle price  prospects, unwinding wholesale beef values, more bearish outside markets and perhaps positioning ahead of the monthly Cattle on Feed report due out Friday. Ahead of the report, analysts see January placement 3% higher year over year, January marketings about 2% higher and the on-feed inventory Feb. 1 at about 99%.

Toward the close, Live Cattle futures were an average of 65¢ lower, except for unchanged in spot Feb. Feeder Cattle futures were an average of $1.11 lower, except 20¢ higher in Nov.

Negotiated cash fed cattle trade ranged from a standstill in the Texas Panhandle to light on light demand elsewhere through Thursday afternoon, according to the Agricultural Marketing Service. There were a few FOB live trades in Kansas at $199/cwt., and a few dressed delivered trades in Nebraska at $315, but too few transactions to trend in any region.

Last week, FOB live prices were $203/cwt. in all regions. Dressed delivered prices were $320-$321.

Choice boxed beef cutout value was $1.26 lower Thursday afternoon at $312.63/cwt. Select was 58¢ lower at $303.18.

Soybean futures led Corn futures higher Thursday amid chatter from the White House that a trade deal with China could get done.  

Toward the close and through Sep ’25 contracts, Soybean futures were 9¢ to 13¢ higher. Corn futures were unchanged to 6¢ higher. Kansas City Wheat futures were 5¢ to 6¢ lower.

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Major U.S. financial indices closed lower Thursday, pressured by retail stocks, including Walmart.

The Dow Jones Industrial Average closed 450 points lower. The S&P 500 closed 26 points lower. The NASDAQ was down 93 points.

Through mid-afternoon, West Texas Intermediate Crude Oil futures on the CME were 28¢ to 45¢ higher through the front six contracts.

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Analysts with USDA’s Economic Research Service (ERS) provide further context to the cattle inventory and beef cow herd at the beginning of this year, in the latest Livestock, Dairy and Poultry Outlook.

“The culling rate of beef cows in 2024 was over 10% of the beef cow inventory on Jan. 1, 2024, a 2% decline from last year and the lowest since 2019,” ERS analysts explains “For additional context, the number of beef cows is down 39% from the historic peak set in 1975 of 45.712 million head and is the smallest beef cow inventory since 1961. As the number of beef heifers available for addition to the herd is correlated to the size of the beef cow herd and the previous year’s calf crop, beef heifer replacements also peaked in 1975 at 8.884 million head and have since fallen 47%.”

As for expansion potential, considering the last three cattle cycles — including the beginning of the current one — ERS analysts explain the percentage of beef heifers kept for replacements in the coming year had several years of increasing proportions year-over-year, compared to the previous year’s calf crop.

“If the same pattern holds in the future, it could be several years from now before the U.S. cattle herd expands,” ERS analysts say. “Biologically speaking, many of the offspring from heifers born in 2024 would not enter the beef cow herd until the 2027. Historically high prices for calves

likely encouraged many producers to market their heifer calves to the feeder market in 2024.”

Cattle futures basically tread in place Wednesday, awaiting the week’s cash fed cattle direction.

Toward the close, Live Cattle futures were of 49¢ higher. Feeder Cattle futures were an average of 25¢ lower.

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

Last week, FOB live prices were $203/cwt. in all regions. Dressed delivered prices were $320-$321.

Choice boxed beef cutout value was $1.88 lower Wednesday afternoon at $313.89/cwt. Select was 5¢ higher at $303.76.

Grain and Soybean futures were softer Wednesday with likely profit taking and producer selling.

Toward the close and through Sep ’25 contracts, Corn futures were mixed from 4¢ lower to 3¢ higher. Kansas City Wheat futures were 10¢ to 12¢ lower. Soybean futures were 5¢ to 6¢ lower.

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Major U.S. financial edged higher again Wednesday.

The Dow Jones Industrial Average closed 71 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 14 points.

Through mid-afternoon, West Texas Intermediate Crude Oil futures on the CME were 22¢ to 33¢ higher through the front six contracts.

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USDA’s recently released Agricultural Projections to 2034 project peak cattle prices in 2026.

The five-area direct weighted average fed steer price rises to $196.49/cwt. next year from $186.50 this year in the projections and then declines to $150.65 in 2031 before increasing again.

Similarly, projections peg the average Oklahoma City feeder steer price next year at $267.26, up from $258.75 this year and then declining to $189.80 in 2031 before rebounding.

USDA analysts expect domestic cattle supplies to respond to higher prices early in the projection period, leading to expansion. Projections see the total cattle inventory at a low this year of 86 million head and then growing to 91.8 million head in 2033. However, projections call for beef cow numbers to reach a bottom next year at 27.8 million head — slightly fewer than this year — and then expanding to 30.6 million in 2031 before receding again.

Along the way, beef production declines from 25.9 billion pounds this year to 24.8 billion pounds in 2027 and then growing to 27.9 billion pounds in 2034. Analysts note, “Projections are premised on assumptions for normal weather which support improved pasture conditions following periods of widespread drought in recent years.”

Feed costs are expected to decline or remain static during the projection period.

“Corn prices are expected to start the projection period at $3.90 per bushel, or 38.0% below the recent peak of $6.54 per bushel in 2022/23,” analysts explain. “This downward trend reverses in 2026/27 and prices climb to $4.30 per bushel during the last half of the projection period. Growth in domestic corn use of 4.9% during the projection period is driven almost entirely by the feed and residual category, spurred by expanding corn supplies and meat production growth to meet domestic and export demand for beef, pork and poultry.”

Macroeconomic assumptions underpinning the projections include U.S. real GDP growth at an annual average of 1.8%. Global GDP growth is projected to average 2.7%.

Live Cattle future firmed Tuesday while Feeder Cattle futures bounced higher.

Toward the close on Tuesday, Live Cattle futures were mixed, from unchanged to an average of 7¢ lower through the front four contracts to an average of 71¢ higher. Feeder Cattle futures were an average of $2.49 higher.

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, FOB live prices were $203/cwt. in all regions. Dressed delivered prices were $320-$321.

Choice boxed beef cutout value was 7¢ higher Tuesday afternoon at $315.77/cwt. Select was $2.52 lower at $303.71.

Grain and Soybean futures were higher Tuesday with likely short covering and recent demand improvement.

Toward the close and through Sep ’25 contracts, Corn futures were 4¢ to 7¢ higher. Kansas City Wheat futures were 7¢ to 8¢ higher. Soybean futures were 2¢ to 3¢ higher.  

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Major U.S. financial indices edged higher with a late-session surge Tuesday, led by energy stocks.

The Dow Jones Industrial Average closed 10 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 14 points.

Through mid-afternoon, West Texas Intermediate Crude Oil futures on the CME were 81¢ to $1.11 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) left the expected annual price for feeder steers unchanged at $273.75/cwt., in the latest monthly Livestock, Dairy and Poultry Outlook. However, they raised the expected first-quarter price for Med. And Lg. #1 steers weighing 750-800 lbs. at Oklahoma City by $4 to $272. Expected prices were unchanged for the second quarter at $272 but declined by $2 in the third and fourth quarters to $273 and $278, respectively.

Although Oklahoma City weighted average cash prices reached a new record in January at $274.45, ERS analysts note they’ve declined about $8 since the announced resumption of feeder cattle imports from Mexico.

“In addition to incorporating the resumption of feeder cattle imports into the forecast, the Cattle report showed more head than previously expected outside feedlots on Jan. 1, albeit still less than a year ago,” ERS analysts say. “The increase in the cow/calf ratio was carried over into 2025 expectations, increasing prospects for a larger-than-previously-expected calf supply in 2025.”

There was no USDA report for Monday negotiated cash fed cattle trade at press time.

Last week, FOB live prices were $203/cwt., which was $3 lower in the Southern Plains, $5 lower in Nebraska and $2-$5 lower in the western Corn Belt.

Dressed delivered prices were $7-$8 lower in Nebraska at $320-$321. The previous week, dressed delivered prices were $328 in the western Corn Belt.

Choice boxed beef cutout value was $1.00 higher Monday afternoon at $315.70/cwt. Select was 91¢ lower at $306.23.

Futures and Equity markets were closed Monday in observance of President’s Day.

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Increased beef consumption and increased beef prices underscore beef demand strength, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“The all-fresh retail beef price for January was $8.15 per pound, up 4.3% year over year. All-fresh beef retail prices have averaged 5.2% higher month over month for the last year, leading to retail all-fresh beef prices for the past 12 months at a record average level of $8.27 per pound,” Peel explains. “Per capita beef consumption in 2024 was unexpectedly higher at 59.7 pounds as a result of constant domestic beef production and larger net imports of beef.”

Similarly, Peel points out wholesale Choice beef cutout prices have averaged 11.8% more year over year for the first six weeks of 2025.

“Prices are higher for all primals with stronger prices for end meats relative to middle meats,” Peel says. “Prices for rib primals are up 9.2% year over year with loins prices up 4.6% compared to the first six weeks one year ago.  Chuck prices are 14.8% higher and round primal prices are up 22.3% year over year.”

Moreover, Peel points out all-fresh retail beef prices continue to increase relative to pork and broiler prices.

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

Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. In the North, trade ranged from slow on moderate demand in the western Corn Belt to moderate on moderate demand in Nebraska.

For the week, FOB live prices were $203/cwt., which was $3 lower in the Southern Plains, $5 lower in Nebraska and $2-$5 lower in the western Corn Belt.

Dressed delivered prices were $7-$8 lower in Nebraska at $320-$321. The previous week, dressed delivered prices were $328 in the western Corn Belt.

Choice boxed beef cutout value was $2.70 lower Friday afternoon at $314.70/cwt. Select was $2.70 lower at $307.14. Week to week on Friday, Choice was $7.17 lower and Select was $5.76 lower.

Cattle futures closed lower Friday as wholesale beef values moved seasonally lower, cash fed cattle prices lost ground and funds likely exited more positions.

Live Cattle futures closed an average of $1.46 lower. Feeder Cattle futures closed an average of $1.24 lower.

Week to week on Friday, Live Cattle futures were an average of $1.92 lower through the front four contracts to an average of 47¢ higher. Feeder Cattle futures were an average of 1.72 higher.

Wheat led grain and Soybean futures higher Friday with likely short covering by funds.

Corn futures closed mostly 1¢ to 2¢ higher. Kansas City Wheat futures closed 20¢ to 23¢ higher through Mar ’26 and then 13¢ to 19¢ higher. Soybean futures closed 5¢ to 6¢ higher.  

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Major U.S. financial indices closed narrowly mixed Friday.

The Dow Jones Industrial Average closed 165 points lower. The S&P 500 closed fractionally lower. The NASDAQ was up 81 points.

West Texas Intermediate Crude Oil futures on the CME closed 15¢ to 55¢ lower through the front six contracts.

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With the die cast for tighter cattle supplies over the next couple of years, Stephen Koontz, agricultural economist at Colorado State University says carcass weights represent the only supply-side risk.

“Carcass weights remain substantial, and the average steer weight was 962 pounds the peak week in January. The prior high was two weeks at 960 pounds last year. The pattern in heifer weights is the same,” Koontz explains, in a recent issue of In the Cattle Markets. “It will be interesting, and important, to see the magnitude of any seasonal decline in weights through the spring … With lower corn prices and longer feeding periods then heavy weights will persist. But how heavy and what are the possible further increases? But I am doubtful there will be surprises here.”

Conversely, Koontz says the surprises will come in the margins and on the demand side.

“Packer margins have been tight for several years and there is little in the supply outlook to imply relief,” Koontz says. “The surprise will likely be reduced packing capacity sometime in the next several years. Which plants and what regions? The smallest plants in the regions with the tightest supplies. It will be interesting to see what the resiliency of the processing food system discussion transitions into. Packing capacity is overbuilt for the cattle market we will see during three to five years.”