WLI

Cattle futures mainly extended gains Tuesday with hopes the near bottom has been carved, supported by ongoing relative demand strength.

Heading into the close, Live Cattle futures were an average of $1.35 higher. Feeder Cattle futures were an average of 55¢ higher, except for an average of 25¢ lower in the front two contracts.

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

Last week, FOB live prices were $183/cwt. in the Texas Panhandle, $183-$184 in Kansas, $184 in Nebraska and $184-$188 in the western Corn Belt. Dressed delivered prices were $293-$295.

Choice boxed beef cutout value was $3.93 lower Tuesday afternoon, at $311.97/cwt. Select was 6¢ higher at $300.25.

Grain futures were higher Tuesday, with apparent recent producer selling and the cheaper U.S. dollar providing support.

Toward the close and through Jly ’25 contracts, Corn futures were 4¢ to 6¢ higher. Kansas City Wheat futures were 7¢ to 12¢ higher. Soybean futures were 6¢ to 9¢ higher.

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Major U.S. financial indices closed little changed but to the upside Tuesday.

The Dow Jones Industrial Average closed 9 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 29 points.

At late afternoon, West Texas Intermediate Crude Oil futures on the CME were $1.20 to $1.66 lower through the front six contracts.

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Compared to the previous quarterly report, USDA’s Economic Research Service and Foreign Agricultural Service increased projected U.S. beef export value $300 million higher to $9.4 billion for fiscal year 2024 (FY24), driven by higher unit values and strong demand in Japan, Mexico, and Taiwan.

However, the latest Outlook for U.S. Agricultural Trade forecast beef export value $1 billion less than this year to $8.4 billion in fiscal year 2025 (FY25), as lower U.S. production reduces exportable supplies. 

Overall FY25 livestock, poultry, and dairy exports were projected at $38.6 billion, down $100 million from FY24, as the decline in beef exports is mostly offset by higher exports of pork, poultry, variety meats, and dairy products.

U.S. FY25 agricultural exports were forecast at $169.5 billion, down $4.0 billion from the revised forecast for FY24. This decline is primarily driven by lower unit values of soybeans, corn, and cotton, as well as lower volumes of beef.

For context, world per capita Gross Domestic Product (GDP) growth is expected to reach 3.2% percent in calendar year 2024 (CY24) and continue at that pace through CY25.

“Much of the global economy sees easing inflation in goods and increasing wages supporting consumer spending,” according to the report. “However, global GDP growth is subdued by continued strong inflation for services and continuing tight monetary policy as many central banks wait on the United States before relaxing interest rates to avoid shocks to investment that could adversely affect exchange rates.”

U.S. GDP is expected to rise 2.7% in CY24 and then slow to 1.9% percent in CY25 2025.

Cattle futures moved higher Monday, although many thought traders might see bearishness in more placements than expected in Friday’s Cattle on Feed report.

Heading into the close, Live Cattle futures were an average of 89¢ higher. Feeder Cattle futures were an average of $2.59 higher.

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

Last week, FOB live prices were $2 lower in the Texas Panhandle at $183/cwt., $1-$2 lower in Kansas at $183-$184, $6 lower in Nebraska at $184 and $3 lower in the western Corn Belt at $184-$188. Dressed delivered prices were $5-$6 lower in Nebraska at $293-$295 and $3 lower in the western Corn belt at $293-$295.

The weighted average five-area direct FOB live steer price last week was $3.60 lower at $185.54/cwt. The weighted average dressed delivered steer price was $4.11 lower at $293.93.

Choice boxed beef cutout value was $1.44 lower Monday afternoon, at $315.90/cwt. Select was 27¢ lower at $300.19.

Grain futures were mixed Monday. Toward the close and through Jly ’25 contracts, Corn futures were 4¢ to 5¢ lower. Kansas City Wheat futures were fractionally lower to 3¢ higher. Soybean futures were 4¢ to 8¢ higher.

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Major U.S. financial indices closed mixed Monday, with follow-through support from expected interest rate cuts but pressure from tech stocks.

The Dow Jones Industrial Average closed 65 points higher. The S&P 500 closed 17 points lower. The NASDAQ was down 152 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.28 to $2.25 higher through the front six contracts.

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Inventory-based fed cattle supplies appear rather bearish through the third quarter and then bullish, according to Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets.

“The weakening feed grain market through this spring and summer incentivized feedlots to grow larger animals – costs of gain were dropping, and prices remained strong. And feedlots responded,” Koontz says. He explains the inventory of cattle on feed more than 150 days was modestly lower July but still more than the prior four years. He adds cattle on feed more than 120 days was sharply lower.

Referencing the recent Cattle on Feed report, Koontz also notes July feedlot placements of 1.70 million head — on the top side of expectations — points to market bullishness down the road.

“The number suggests early placement of animals from regions with drought-pressured forage, and perhaps tighter numbers later into the fall,” Koontz says. “Thus, the heavy placements are actually a bit bullish. The futures for feeder cattle reacted strongly with up moves on the fall run contracts.”

Cattle futures were narrowly mixed Friday as traders waited the monthly Cattle on Feed report, which will likely be viewed as neutral to slightly bearish (see below).

Live Cattle futures closed an average of 29¢ lower except for 2¢ higher in spot Aug. Feeder Cattle futures closed mixed, from an average of 49¢ higher in the front three contracts to an average of 62¢ lower.

Week to week on Friday, Live Cattle futures were an average of $1.69 lower (22¢ to $2.92 lower). Feeder Cattle futures were an average of $2.17 lower week to week (20¢ to $3.37 lower).

Negotiated cash fed cattle trade was mostly inactive on light demand through Friday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.

For the week, FOB live prices were $2 lower in the Texas Panhandle at $183/cwt. and generally steady to $3 lower in the western Corn Belt at $187.50. Dressed delivered prices were $3-$6 lower in Nebraska at mostly $295 and $3 lower in the western Corn belt at $293-$295 in a light test.

The previous week, FOB live prices were $185 in Kansas and $190 in Nebraska.

Choice boxed beef cutout value was $1.35 higher Friday afternoon, at $317.34/cwt. Select was $1.57 lower at $300.46.

Estimated total cattle slaughter last week of 608,000 head was 6,000 head more than the previous week, but 18,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 20.3 million head was 893,000 head fewer (-4.2%) than the same time last year. Estimated year-to-date beef production of 17.1 billion pounds was 226.2 million pounds less (-1.3%).

Grain futures continued to leak lower Friday, while Soybean futures gained on increasing export demand.

Soybean futures were 8¢ to 11¢ higher. Corn futures closed fractionally lower to 3¢ lower through Sep ’25 and then unchanged to 1¢ higher. Kansas City Wheat futures closed 6¢ to 10¢ lower.

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Major U.S. financial indices closed higher Friday, buoyed by comments from Federal Reserve Chair, Jerome Powell, pointing to interest rate cuts.

“The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” according to Powell, who was speaking at the closely watched economic symposium in Jackson Hole, Wyo.

“Four and a half years after COVID-19’s arrival, the worst of the pandemic-related economic distortions are fading,” Powell explained. “Inflation has declined significantly. The labor market is no longer overheated, and conditions are now less tight than those that prevailed before the pandemic. Supply constraints have normalized. And the balance of the risks to our two mandates has changed.”

The Dow Jones Industrial Average closed 462 points higher. The S&P 500 closed 63 points higher. The NASDAQ was up 258 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.45 to $1.82 higher through the front six contracts.

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Markets will likely view Friday’s Monthly Cattle on Feed report as neutral to slightly bearish with more placements than expected. Feedlots with 1,000 head or more capacity placed 1.7 million head in July, which was 94,000 head more (+5.8%) than the previous year, about 2% more than the average of analyst expectations ahead of the report.

In terms of placement weights, 38% went on feed weighing less than 699 lbs., 46% weighing 700-899 lbs. and 16% weighing 900 lbs. or more.

Marketings in August of 1.9 million head were 133,000 head more (+7.7%) year over year, but 0.5% less than expectations.

Cattle on Feed Aug. 1 of 11.1 million head were 31,000 head more (+0.3%) more than the previous year, which was in line with expectations.

Short covering on Thursday, ahead of Friday’s monthly Cattle on Feed report appeared to be the main driver of firming Cattle Futures. Heading into the close Live Cattle futures were an average of $1.22 higher. Feeder Cattle futures were an average of $1.89 higher.

Negotiated cash fed cattle trade ranged from inactive on light demand to a standstill through Thursday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.

So far this week, FOB live prices are $2 lower in the Texas Panhandle at $183/cwt. and generally steady to $3 lower in the western Corn Belt at $187.50. Dressed delivered prices are $3-$6 lower in Nebraska at mostly $295 and $3 lower in the western Corn belt at $293-$295 in a light test.

Last week, FOB live prices were $185 in Kansas and $190 in Nebraska.

Choice boxed beef cutout value was 78¢ higher Thursday afternoon, at $315.99/cwt. Select was 95¢ higher at $302.03.

Grain and soybean futures were lower Thursday pressured by positive weather and yield estimates.

Heading into the close, through Jly ’25 contracts, Corn futures were 4¢ to 6¢ lower. Kansas City Wheat futures were mostly were 8¢ lower. Soybean futures were 18¢ to 22¢ lower.

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Major U.S. financial indices closed lower Thursday, pressured by tech stocks and rising treasury bond yield rates.

The Dow Jones Industrial Average closed 177 points lower. The S&P 500 closed 50 points lower. The NASDAQ was down 299 points.

At late afternoon, West Texas Intermediate Crude Oil futures on the CME were 72¢ to $1.05 higher through the front six contracts.

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USDA’s Economic Research Service (ERS) lowered the expected third-quarter feeder steer price (750-800 lbs., Oklahoma City) by $2 to $261/cwt. in the August Livestock, Dairy and Poultry Outlook. That was based on recent price weakness. This year’s projected average also declined by $2 to $256.50. However, the estimated fourth-quarter average price of $268 was unchanged, as was next year’s projected average of $262.50.

As mentioned recently in Cattle Current USDA increased the projected the average five-area direct fed steer price for this year, based on recent demand for fed cattle that was stronger than expected. Compared to the previous month’s estimates, in the August World Agricultural Supply and Demand Estimates. ERS increased projected prices by $3 in the third quarter to $193/cwt. and by $2 in the fourth quarter to $190 for an annual average of $188.11, which was $1.25 higher.

This year’s beef production was projected 81 million pounds more than the previous month at 26.7 billion pounds, based on higher steer and heifer and cow slaughter, which more than offset lighter dressed weights.

ERS projected fed steer prices next year at $188 in the first quarter and $190 in the second quarter with an annual average price of $191.

Beef production for 2025 was lowered by 20 million pounds to 25.4 billion pounds, reflecting reduced steer and heifer slaughter in the first quarter. Next year’s projected total would be 1.3 billion pounds less (-4.8%) than this year’s projected total.