Cattle futures closed lower Thursday, retracing some of the gains from the previous two sessions amid light trade, declining open interest, likely month-end position squaring, lower cash fed cattle prices.
Feeder Cattle futures closed an average of $1.74 lower ($1.20 to $2.25 lower).
Live Cattle futures closed an average of $1.27 lower (95¢ to $1.65 lower).
Negotiated cash fed cattle trade ranged from slow on light demand to moderate on moderate demand through Thursday afternoon, according to the Agricultural Marketing Service
So far this week, FOB live prices are $174-$175/cwt. in all regions which is $2-$3 lower in the Southern Plains, $1-$2 lower in Nebraska and steady to $4 lower in the western Corn Belt.
Dressed delivered prices are $275, which is $5 lower in Nebraska and $3-$5 lower in the western Corn Belt.
Choice boxed beef cutout value was $1.99 higher Thursday afternoon at $299.02/cwt. Select was 66¢ higher at $264.75/cwt.
Grain futures closed higher Thursday, supported by positive export sales. Net weekly U.S. 2023-24 Corn export sales were a marketing year high, 35% more than the previous week and up 54% from the prior four-week average.
Corn futures closed mostly 2¢ to 6¢ higher.
KC HRW Wheat futures closed mostly 6¢ to 8¢ higher.
Soybean futures closed 2¢ to 4¢ lower through Aug ’24 and then 1¢ higher.
Major U.S. financial indices closed mainly higher Thursday as investor confidence seemed to grow concerning inflation.
The Dow Jones Industrial Average closed 520 points higher. The S&P 500 closed 17 points higher. The NASDAQ was down 32 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.90 to $2.01 lower through the front six contracts.
Higher animal protein production costs and tighter supplies will push animal protein prices higher and constrain global consumption in 2024, according to Rabobank’s annual Global Animal Protein Outlook report.
Input costs and inflation are likely to decline, but will remain higher than pre-pandemic levels, according to the report. As well, structural changes will challenge supply chains. For instance, Rabobank analysts say demographic shifts will tighten the labor market, increasing production costs, while less population growth will slow consumption.
“Not all structural changes in the market are detrimental – many present new opportunities for businesses to improve their processes and products,” explains Justin Sherrard, Rabobank global strategist for animal protein. “Those companies that can demonstrate agility in adapting to the new environment and navigate consumer willingness to pay for certain preferences will be able to take advantage of the tighter market and come out on top.”
Closer to home, Rabobank expects U.S. beef production to be 4.5% less in 2024, compared to this year, as beef cow liquidation continues, and herd rebuilding remains on hold. This will challenge the margins of existing and developing beef packing capacity.