WLI

Cattle futures gained Tuesday, helped along by expectations of steady to higher cash fed cattle prices this week.

Feeder Cattle futures were an average of $1.78 higher. Live Cattle futures were an average of 72¢ higher, except for 22¢ lower in expiring Dec. 

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

FOB live prices last week were $192-$193/cwt. in the Southern Plains, $196-$197 in Nebraska and $195-$197 in the western Corn Belt. Dressed delivered prices were $307.

Choice boxed beef cutout value was $1.15 lower Tuesday afternoon at $324.22/cwt. Select was 24¢ lower at $294.52.

Grain and Soybean futures closed higher Tuesday with traders apparently adding South American weather risk premium as they squared year-end positions.

Soybean futures closed 14¢ to 19¢ higher. Corn futures were mostly 4¢ higher. Kansas City Wheat futures were mostly 2¢ higher.

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Major U.S. financial indices edged lower Tuesday.

The Dow Jones Industrial Average closed 29 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 175 points.

West Texas Intermediate Crude Oil futures on the CME closed 66¢ to 73¢ higher through the front six contracts.

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Although nominal feeder cattle prices reached record highs in 2024, Josh Maples, Extension livestock economist at Mississippi State University, notes that producer revenues, when adjusted for inflation, remained below those of previous record high prices in 2014-15. In other words, he says prices remain below levels required to spark herd expansion.

“Year-to-date beef cow slaughter is down by 18%, but the implied cull rate — calculated as slaughter divided by inventories — remains at 10.2% for 2024, well above the level that would indicate herd expansion,” Maples explains in the latest issue of Cattle Market Notes Weekly. “Heifer slaughter data also shows no signs of herd expansion. Year-to-date heifer slaughter is down 1.1%, with no evidence of heifer retention occurring at a rate sufficient to signal herd rebuilding … It could very well be that feeder cattle prices have not yet peaked, and the market is beginning 2025 with more optimism.”

USDA’s Cattle report Jan. 31 will offer insight on the rate of beef cow herd liquidation last year.

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

FOB live prices last week were $1-$2 higher at $192-$193/cwt. in the Southern Plains, $196-$197 in Nebraska and $195-$197 in the western Corn Belt. Dressed delivered prices were $2 higher at $307.

Choice boxed beef cutout value was $2.99 higher Monday afternoon at $325.37/cwt., supported by slower packer production. Select was $3.63 higher at $294.76.

Cattle futures mostly edged higher Monday.

Toward the close, Feeder Cattle futures were an average of 37¢ higher, except for an average of 28¢ lower in the back two contracts. Live Cattle futures were an average of 25¢ higher, except for an average of 28¢ lower in two contracts. 

Grain and Soybean futures were mixed on Monday.

Toward the close and through Sep ’25 contracts, Soybean futures were 2¢ to 4¢ higher. Corn futures were 1¢ lower. Kansas City Wheat futures were 1¢ higher.

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Major U.S. financial indices closed lower again Monday, pressured in part by likely year-end profit taking.

The Dow Jones Industrial Average closed 418 points lower. The S&P 500 closed 63 points lower. The NASDAQ was down 235 points.

Toward the close, West Texas Intermediate Crude Oil futures on the CME were 47¢ to 51¢ higher through the front six contracts

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Even though cattle and beef prices achieved record-high levels in 2024, cattle markets represented a similar chapter in the story that began in 2022, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

Despite a sixth consecutive year of declining U.S. calf crops, Peel points out feedlots held average monthly inventories fractionally higher compared to the year before by continued feeding of more heifers and by feeding cattle for longer.

Peel notes heifers still represented 39.7% of feedlot inventories as of Oct. 1, near the upper end of historical levels and well above levels that would indicate heifer retention.

“Although final data for the year are still coming, it appears that total beef production in 2024 was down just 0.6% year over year. This is significantly less than earlier expectations of a 4+% year-over-year decrease,” Peel explains in his weekly market comments. “In fact, fed beef production was up 2.2% due to larger than expected steer and heifer slaughter and a sharp increase in carcass weights in 2024.”

Average steer carcass weights increased 22 pounds year over year and average heifer carcass weights averaged 18 pounds more, according to Peel. Even so, he says Choice boxed beef prices averaged 2.8% more year over.

On the other hand, Peel explains non-fed beef production was 13.2% less year over, driven by sharp reductions in cow slaughter. 

“Beef cow slaughter was down 19.0% year over year and dairy cow slaughter was down 12.2% from the previous year,” Peel says. “Reduced supplies of processing beef led to record wholesale trimmings prices, increased demand for imported beef, strong lean demand for end meats, and record cull cow prices.”

Bottom line, Peel says USDA’s Jan. 1 Cattle report (scheduled for release Jan. 31) will likely confirm that cattle inventories continued to decline in 2024. 

“Much of 2024 was occupied with producers looking for indications of heifer retention that would lead to eventual herd rebuilding. With no indications of heifer retention at the end of 2024, the new year starts with the same question,” Peel says. 

Cattle futures extended gains Friday, supported by another day of stronger wholesale beef values and higher cash fed cattle prices.

Feeder Cattle futures were an average of 97¢ higher. Live Cattle futures were an average of 69¢ higher. Week to week on Friday, Feeder Cattle futures closed an average of $4.23 higher. Live Cattle futures closed an average of $2.96 higher ($2.12 to $3.97 higher).

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

FOB live prices were $1-$2 higher in the Southern Plains at $192-$193/cwt.

There were some early live FOB trades in the western Corn Belt at $196 and a few dressed delivered trades in Nebraska at $307, but too few to trend.

The previous week, FOB live prices were $195-$195.50 in Nebraska and $195-$196 in the western Corn Belt. Dressed delivered prices were $305.

Choice boxed beef cutout value was $1.99 higher Friday afternoon at $322.38/cwt. Select was $2.36 higher at $291.13. Week to week on Friday, Choice was $6.53 higher and Select was $5.22 higher.

Estimated total cattle slaughter last week of 434,000 head was 67,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 31 million head was 1.2 million head less (-3.7%) than the same time a year earlier. Year-to-date estimated beef production of 26.4 billion pounds was 169.1 million pounds less (-0.6%).

Grain and Soybean futures were mixed Friday.

Corn futures closed mixed, from fractionally higher to 1¢ higher in old-crop contracts and then fractionally lower to 1¢ lower. They were an average of 6’3¢ higher through the front six contracts week to week, supported by demand. Net weekly U.S. export sales of corn were 46% more than the previous week and 39% more than the prior four-week average.

Kansas City Wheat futures were 3¢ higher helped along by stronger recent demand. Net weekly U.S. export sales were 34% more than the previous week and 64% more than the prior four-week average.

Soybean futures closed mostly 4¢ to 8¢ lower, giving back some of the previous session’s South American weather premium and pressured by a reminder of lagging demand. Weekly net U.S. export sales were 31% less than the previous week — a marketing year low — and 47% less than the prior four-week average.

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Major U.S. financial indices closed lower Friday, led by tech stocks and pressured by rising treasury yields.

The Dow Jones Industrial Average closed 333 points lower. The S&P 500 closed 66 points lower. The NASDAQ was down 298 points.

West Texas Intermediate Crude Oil futures on the CME closed 74¢ to 98¢ higher through the front six contracts.

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Looking to the new year, CoBank’s Knowledge Exchange provides a comprehensive outlook describing how the high level of policy uncertainty facing rural industries adds to their already long list of headwinds and challenges.

“The environment we enter in 2025 hasn’t fully defined itself yet, but many of the policies proposed by the incoming administration would likely have a negative impact on U.S. agriculture,” says Rob Fox, director of CoBank’s Knowledge Exchange. “Open access to export markets and labor availability are critically important for agricultural producers and processors. Depending on how policy plays out, those two areas could be big challenges in 2025 and beyond.”

Cattle futures were sharply higher Thursday, buoyed by stronger wholesale beef values and the prospects of steady to higher cash fed cattle trade again this week.

Toward the close, Feeder Cattle futures were an average of $3.79 higher. Live Cattle futures were an average of $2.47 higher.

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

Last week, FOB live prices were $191/cwt., in the Southern Plains on a light test, $195-$195.50 in Nebraska and $195-$196 in the western Corn Belt. Dressed delivered prices were $305.

Choice boxed beef cutout value was $4.41 higher Thursday afternoon at $320.39/cwt. Select was $2.02 higher at $288.77.

Grain and Soybean futures bounced higher Thursday, perhaps with short covering and perceived value buying.

Toward the close and through Sep ’25 contracts, Corn futures were 4¢ to 6¢ higher. Kansas City Wheat futures were 8¢ higher. Soybean futures were 12¢ to 16¢ higher.  

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

The Dow Jones Industrial Average closed 28 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 10 points.

Through late afternoon, West Texas Intermediate Crude Oil futures on the CME closed 37¢ to 50¢ lower through the front six contracts.

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The Rural Mainstreet Index (RMI) sank below growth neutral in December after advancing above growth neutral in November for the first time since July 2023. 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.

Month to month, the overall index sank 10.6 points to 39.6 in December, the 11th time this year the reading was below growth neutral. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.

“In retrospect, and based on bank CEO comments, there appears to have been a significant November upturn resulting from the surprising Trump election results,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “That positive bump disappeared in December as continuing weak grain prices and farm income losses weighed on a significant proportion of farmers in the region.”

Approximately one in four bankers reported that their local economy was either currently in a recession or would enter a downturn in 2025. The remaining three of four bankers expect slow growth but no recession for 2025.

Rural bankers remain pessimistic about economic growth for their area over the next six months, according to the RMI confidence index, which slumped to 37.5 from November’s weak 46.4.

Weak agriculture commodity prices and negative farm cash flow, combined with downturns in farm equipment sales over the past several months drove the decline in confidence, according to Goss.

The region’s farmland index fell to 41.3 from November’s weak 44.4.

Month to month, the farm equipment sales index declined 0.3 points to 14.3, its lowest level since October 2016 and the 17^th consecutive month of settling below growth neutral.

Cattle futures closed narrowly mixed Monday with traders appearing to view Friday’s Cattle on Feed report as neutral.

Toward the close, Feeder Cattle futures were an average of 31¢ higher. Live Cattle futures were narrowly mixed, from an average of 42¢ lower to an average of 11¢ 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 $191/cwt., in the Southern Plains on a light test, $195-$195.50 in Nebraska and $195-$196 in the western Corn Belt. Dressed delivered prices were $305.

The weekly weighted average five-area direct FOB live steer price was 42¢ higher at $194.73. The weighted averaged dressed delivered steer price was $2.20 higher at 305.64.

Choice boxed beef cutout value was 13¢ higher Monday afternoon at $315.98/cwt. Select was 84¢ higher at $286.75.

The grain complex was mixed Monday.

Toward the close and through Sep ’25 contracts, Soybean futures were mostly 3¢ to 5¢ lower. Corn futures were unchanged to 2¢ higher. Kansas City Wheat futures were 6¢ higher.

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Major U.S. financial indices extended gains Monday, led by tech stocks.

The Dow Jones Industrial Average closed 66 points higher. The S&P 500 closed 43 points higher. The NASDAQ was up 192 points.

Through late afternoon, West Texas Intermediate Crude Oil futures on the CME closed 15¢ to 20¢ higher through the front six contracts.

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Calves and feeder cattle traded from $2/cwt. lower to $2 higher across the nation last week, according to the Agricultural Marketing Service with prices at or near record-high levels. Trade volume at auction, video-internet and direct was 243,000 head, which was 102,300 head more than the same week last year.

“Current high prices are reminiscent of the cyclical peak prices of 2014-15 with both having been provoked by drought exaggerated herd liquidations,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “However, some very important differences mean that the current situation will play out in a much different fashion going forward.”

Peel explains the previous herd expansion from 2014 to 2019 was sharp and rapid with high prices lasting about two years. He adds the pipeline of replacement heifers was building ahead of the expansion, making its degree and speed possible.

“With two years of high prices already in 2023-2024, there is no indication that cyclically high prices will be as short-lived as a decade ago,” Peel says. “The pipeline of replacement heifers has continued to be depleted to this point. The cattle industry has shown no signs of attempting to rebuild the herd yet and the process will be slower when it does happen. The peak prices in 2014-15 coincided with increased heifer retention that squeezed feeder supplies to the tightest levels. Since no heifer retention has occurred yet, the highest prices are ahead, possibly in 2025 but more likely beyond.”