WLI

Cattle futures were sharply lower Thursday, weighed down by wobbly cash trade, technical selling, bearish outside markets and lower wholesale beef values.

Before settlement, Live Cattle futures closed an average of $1.84 lower. Feeder Cattle futures were an average of $4.97 lower.

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

Although too few to trend, there were some early FOB live trades in the Southern Plains at $188/cwt.

Last week, FOB live prices were $190 in the Southern Plains, $198 in Nebraska and $196-$198 in the western Corn Belt. Dressed delivered prices were $312/cwt.

Choice boxed beef cutout value was $1.98 lower Thursday afternoon at $312.79/cwt. Select was $2.70 lower at $297.46/cwt.

Net U.S. beef export sales of 17,700 metric tons (2024) the week ending July 25 were 32% more than the previous week and 35% more than the prior four-week average, according to USDA’s weekly report. Increases were primarily for South Korea, Japan, Mexico and China.

Grain and Soybean futures were mixed Thursday.  

Heading into the close, through Jly ’25 contracts, Corn futures were fractionally mixed. Kansas City Wheat futures were 5¢ to 7¢ higher on likely short covering. Soybean futures were 6¢ to 10¢ lower.

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Major U.S. financial indices fell hard Thursday, pressured by investor worries about a potential recession.

Weekly initial unemployment claims were higher than expected at 249,000. As well, the ISM manufacturing index was lower than expected in July, pointing to further economic contraction.

The Dow Jones Industrial Average closed 494 points lower. The S&P 500 closed 75 points lower. The NASDAQ was down 405 points.

Heading toward the close, West Texas Intermediate Crude Oil futures on the CME were 68¢ to $1.02 lower through the front six contracts.

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Although beef cow slaughter is 16% less year over year through the first 28 weeks of the year, the rate of slaughter is comparable to last year, relative to beef cow inventories, says James Mitchell, Extension livestock economist at the University of Arkansas, in the latest issue of Cattle Market Notes Weekly.

“One reason for the large decrease in beef cow slaughter is we started with fewer beef cows this year,” Mitchell explains. “Through 28 weeks, beef cow slaughter reflects 5.5% and 6.4% of beef cow inventories in 2024 and 2023, respectively. Beef cow slaughter is down 294,000 head, but we started the year with 716,000 fewer beef cows compared to 2023.”

Mitchell adds that lower beef cow slaughter this year also reflects improved forage conditions and higher cattle prices.

Cattle futures were narrowly mixed Wednesday, awaiting the week’s cash direction.

Before settlement, Live Cattle futures were an average of 34¢ lower. Feeder Cattle futures were narrowly mixed, from an average of 55¢ lower to an average of 29¢ higher with the most support in nearby months.

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 $190/cwt. in the Southern Plains, $198 in Nebraska and $196-$198 in the western Corn Belt. Dressed delivered prices were $312/cwt.

Choice boxed beef cutout value was 29¢ higher Wednesday afternoon at $314.77/cwt. Select was $1.22 lower at $300.16/cwt.

Grain and Soybean futures were narrowly mixed Wednesday.  

Heading into the close, through Jly ’25 contracts, Corn futures were 3¢ to 6¢ lower. Kansas City Wheat futures were fractionally lower to 2¢ lower. Soybean futures were 1¢ to 4¢ higher.

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Major U.S. financial indices closed higher Wednesday supported by doveish Fed comments suggesting interest rate cuts could be on the table in September as inflation moderates and economic growth slows.

The latest, closely watched ADP^® National Employment Report™ pointed to slowing job and wage growth. Private sector employment increased by 122,000 jobs in July, less than expected, and annual pay was up 4.8% year-over-year, according to the report.

“With wage growth abating, the labor market is playing along with the Federal Reserve’s effort to slow inflation,” says Nela Richardson, ADP chief economist. “If inflation goes back up, it won’t be because of labor.”

The Dow Jones Industrial Average closed 99 points higher. The S&P 500 closed 85 points higher. The NASDAQ was up 451 points.

Heading toward the close, West Texas Intermediate Crude Oil futures on the CME were $2.90 to $3.76 higher through the front six contracts, supported by rising geopolitical tensions in the Middle East.

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The overall Rural Mainstreet Index (RMI) sank below growth neutral for the 11th consecutive month, according to the July survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Specifically, the region’s overall reading for July sank to 41.3, its lowest reading since November 2023. The June reading was 41.7.  The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.

Weak agriculture commodity prices, sinking agriculture equipment sales and declining farm exports drove the decline, according to Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Among survey highlights:

• The farm equipment sales index for July plummeted to 19.0, its lowest level in more than seven years, and down from June’s 31.8. “This is the 12th straight month that the index has fallen below growth neutral. Higher borrowing costs, tighter credit conditions and weak grain prices are having a negative impact on the purchases of farm equipment,” Goss says.
• On average, bankers expect farmland prices to drop by 3.4% over the next 12 months.
• Rural bankers remain very pessimistic about economic growth for their area over the next six months. The July confidence index slumped to 28.3, its lowest level this year, and down from June’s 29.2.

Cattle futures were narrowly mixed but mainly higher Tuesday.

Before settlement, Live Cattle futures were an average of 41¢ higher, except for 12¢ lower in three contracts.

Feeder Cattle futures were an average of 39¢ higher, except for 31¢ lower in three contracts.

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 $190/cwt. in the Southern Plains, $198 in Nebraska and $196-$198 in the western Corn Belt. Dressed delivered prices were $312/cwt.

Choice boxed beef cutout value was 33¢ lower Tuesday afternoon at $314.48/cwt. Select was 14¢ lower at $301.38/cwt.

Grain and Soybean futures were lower Tuesday with continued pressure from the favorable weather outlook.

Heading into the close, through Jly ’25 contracts, Corn futures were 6¢ to 7¢ lower. Kansas City Wheat futures were 3¢ to 5¢ lower. Soybean futures were mostly 16¢ to 30¢ lower.   

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Major U.S. financial indices closed mixed Tuesday with the main pressure from tech stocks. 

The Dow Jones Industrial Average closed 203 points higher. The S&P 500 closed 27 points lower. The NASDAQ was down 222 points.

West Texas Intermediate Crude Oil futures on the CME were 41¢ to 69¢ lower through the front six contracts.

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National pasture and range conditions continued on par year over year for the week ending July 28, according to the most recent USDA Crop Progress report, with 39% rated as Good (32%) or Excellent (7%). Likewise, 29% were rated as Poor (17%) or Very Poor (12%), which was the same as last year.

States with 45% or more of pasture in Poor or Very Poor condition included: New Mexico (50%), Oregon (49%), Virginia (64%), Washington (59%), West Virginia (65%) and Wyoming (57%).

“Drought in certain areas and improved conditions in other areas creates uncertainty to the feeder cattle and calf price outlook for this fall,” says Will Secor, Extension livestock economist at the University of Georgia, in the latest issue of In the Cattle Markets. “If drought incentivizes producers to bring more calves to market compared to normal, calf prices may see a more pronounced seasonal dip this fall in those areas, while still remaining high compared to recent history. However, in areas with good conditions, calf supplies may remain tight this fall, pushing prices higher than expected.”

Cattle futures stepped lower Monday with apparent technical selling.

Before settlement, Live Cattle futures were an average of $1.20 lower. Feeder Cattle futures were an average of $2.75 lower.

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 $1.50-$2 higher in the Texas Panhandle at $190/cwt., $2-$3 higher in Kansas at $190, $2 higher in Nebraska at $198 and steady to $2 higher in the western Corn Belt at $196-$198. Dressed delivered prices were $2 higher at $312/cwt.

Last week’s weighted average five area direct FOB live steer price was $1.54 higher at $195.21/cwt. The weighted average dressed delivered steer price was $1.30 higher at $311.34.

Choice boxed beef cutout value was $1.04 higher Monday afternoon at $314.81/cwt. Select was $4.06 higher at $301.52/cwt.

Grain and Soybean futures closed mixed Monday.

Heading into the close, through Jly ’25 contracts, Corn futures were 2¢ to 3¢ higher. Kansas City Wheat futures were 5¢ to 7¢ higher. Soybean futures were mostly 5¢ to 10¢ lower.

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Major U.S. financial indices closed little changed Monday.

The Dow Jones Industrial Average closed 49 points lower. The S&P 500 closed 4 points higher. The NASDAQ was up 12 points.

West Texas Intermediate Crude Oil futures on the CME were 91¢ to $1.28  lower through the front six contracts.

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Although Choice boxed beef prices have declined seasonally by 5.4% since July 4, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University notes they are 3.4% higher year over year.

“Beef tenderloin is the highest value beef cut and the price has been quite flat and lower year over year for much of 2024,” Peel explains in his weekly market comments. “This weakness is a bit concerning but the fall may provide an important indicator of tenderloin demand going into cooler weather and the seasonal pick up in restaurant traffic. In contrast, the other steak cuts have values that are generally at or above year-ago levels, including ribeye, strip loin, and top sirloin.”

While the majority of Chuck products are currently priced on par with last year or less, Peel says overall Chuck primal values are 6.6% higher year over year in July and Round primal values are nearly 21% higher, driven by less lean trim derived from non-fed beef production. He notes non-fed beef production is down about 13% so far this year.

“The current wholesale price of 90% lean trimmings is at a record level,” Peel says. “The market is attempting to make up for the shortage of lean beef in the non-fed market by pulling more lean beef from fed beef supplies. This mostly comes from several round cuts but also likely from the chuck mock tender (one of the few lean cuts in the Chuck). Markets always attempt to balance supply and demand and the increased arbitrage between fed and non-fed beef markets today is an indication of a very unusual market situation.”

Cattle futures closed mixed to higher Friday, buoyed by higher cash fed cattle prices and firmer wholesale beef values.

Live Cattle futures closed narrowly mixed from 13¢ lower to 28¢ higher.

Feeder Cattle futures closed an average of $1.13 higher with added support from lower Corn futures.

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

For the week, FOB live prices were $1.50-$2 higher in the Texas Panhandle at $190/cwt., $2-$3 higher in Kansas at $190 and $2 higher in the North at $198. Dressed delivered prices were $2 higher at $312/cwt.

Choice boxed beef cutout value was $1.31 higher Friday afternoon at $313.77/cwt. Select was $2.35 higher at $297.46/cwt.

Estimated total cattle slaughter last week of 600,000 head was 16,000 head more than the previous week but 16,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 17.9 million head was 833,000 head fewer (-4.5%) than the same period last year. Estimated year-to-date beef production of 15.1 billion pounds was 236.9 million pounds less (-1.5%).

Grain futures closed lower Friday with likely profit taking, producer selling and a more favorable weather outlook.

Soybean futures closed 22¢ to 38¢ lower. Corn futures closed 9¢ to 11¢ lower through Jly ’25 and then mostly 6¢ to 8¢ lower. KC HRW Wheat futures closed 10¢ to 16¢ lower.

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Major U.S. financial indices closed higher Friday, supported by a favorable inflation reading.

The personal consumption expenditures price index rose 0.1% month to month in June was and was 2.5% higher year over year, according to the U.S. Bureau of Economic Analysis. That was in line with expectations.

Between cooling inflation and stronger economic growth than expected, investors are growing more confident in interest rate cuts.

The Dow Jones Industrial Average closed 654 points higher. The S&P 500 closed 59 points higher. The NASDAQ was up 176 points.

West Texas Intermediate Crude Oil futures on the CME closed 79¢ to $1.12 lower through the front six contracts.

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Besides their ongoing willingness to pay for beef at historically high retail prices, consumers also continue demanding higher quality.

“This point has been demonstrated and made evident the past couple of months when Prime grade beef prices have increased week over week, when other quality grades of beef declined the same week or when Prime grade beef price only experienced a small price decline when other grades of beef experienced larger price declines,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “To some degree, packers purchasing higher grading cattle tends to be a natural insulation or insurance to price changes in wholesale beef prices. Prime beef prices will still tend to move in the same direction as other beef prices, but they do not appear to have the same downside risk as other grades in the current market. As a reference point, the Prime beef cutout has averaged trading $22/cwt. higher than the Choice cutout the past three months.”