Daily Market Highlights

Cattle futures rebounded Thursday after the previous day’s breather, buoyed by the bullish Cattle report, positive weekly exports and notions this week’s cash fed cattle prices will be higher.

Feeder Cattle futures closed an average of $2.03 higher ($1.80 to $2.68 higher).

Live Cattle futures closed an average of $1.12 higher (80¢ to $1.325 higher).

Negotiated cash fed cattle trade was limited on light demand in the Western Corn Belt through Thursday afternoon, with a few live sales at $154/cwt., according to the Agricultural Marketing Service. Elsewhere, trade ranged from standstill to mostly inactive.

Last week, live prices were $156/cwt. in the Southern Plains, $153-$156 in Nebraska and $152-$157 in the western Corn Belt. Dressed prices were $248.

Choice boxed beef cutout value was 3¢ higher Thursday afternoon at $265.10/cwt. Select was 88¢ higher at $253.66/cwt.

Corn futures closed 1¢ to 5¢ lower through Jly ’24.

KC HRW Wheat closed mostly fractionally lower to 3¢ lower.

Soybean futures closed 3¢ to 17¢ higher.

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Major U.S. financial indices closed mixed on mixed economic news.

The Dow Jones Industrial Average closed 39 points lower. The S&P 500 closed 61 points higher. The NASDAQ was up 385 points.

West Texas Intermediate Crude Oil futures (CME) closed 39¢-53¢ lower through the front six contracts.

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Prices and profitability will favor cattle producers this year, according to CattleFax Analysts at Thursday’s Outlook Seminar, during the 2023 Cattle Industry Convention and NCBA Trade Show in New Orleans.

Kevin Good, vice president of industry relations and analysis at CattleFax forecast the average 2023 fed steer price at $158/cwt., up $13 from 2022, with a range of $150 to $172/cwt. CattleFax projects feeder steers (800 lbs.) to average $195/cwt. with a range of $175 to $215/cwt. Steer calves (550 lbs.) are forecast to  average $225/cwt., with a range of $200 to $245/cwt.

“Drought affected nearly half of the beef cow herd over the last year, exacerbating the liquidation in 2022,” Good says. “Drought improvement and higher cattle prices should drastically slow beef cow culling through 2023.”

Good forecast utility cows at an average of $100/cwt. with a range of $75 to $115/cwt. CattleFax projects bred cow prices an average of $2,100 per head for load lots of quality, running age cows; a range of $1,900 to $2,300.

Cattle futures paused and retraced Tuesday following the previous day’s gains and awaiting cash direction.

Feeder Cattle futures closed an average of $1.72 lower ($1.35 to $2.90 lower).

Live Cattle futures closed an average of 45¢ lower (35¢ to 80¢ lower).

Negotiated cash fed cattle trade was at a standstill through Wednesday afternoon in the Southern Plains and Nebraska, according to the Agricultural Marketing Service. In the Western Corn Belt, trading was inactive on very light demand with too few trades for a trend.

Last week, live prices were $156/cwt. in the Southern Plains, $153-$156 in Nebraska and $152-$157 in the western Corn Belt. Dressed prices were $248.

Choice boxed beef cutout value was $1.02 lower Wednesday afternoon at $265.07/cwt. Select was 14¢ lower at $252.78/cwt.

Corn futures closed mostly 1¢ to 5¢ higher.

KC HRW Wheat closed mostly 3¢ to 5¢ higher through May ’24 and then mostly 2¢ lower

Soybean futures closed fractionally lower to 17¢ lower through Jan’24, then mixed.

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Major U.S. financial indices rallied Wednesday as Fed Chairman Jerome Powell announced a quarter percentage point interest rate increase, notching another slowdown in the Fed’s rate hikes. In a press conference, Powell said, “We can now say for the first time that the disinflationary process has started.” 

Inflation numbers have been easing for the past three months but are still higher than the 2% target the Fed would like to see.

The Dow Jones Industrial Average closed 6 points higher. The S&P 500 closed 42 points higher. The NASDAQ was up 231 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.38 to $2.46 lower through the front six contracts.

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Consumer demand for beef remains strong overall with more than two-thirds of consumers reportedly eat beef on a weekly basis, or more, according to the Today’s Beef Consumer report from the National Cattlemen’s Beef Association (NCBA), a contractor to the Beef Checkoff.

“During the pandemic consumers were forced to cook at home and many have continued to do so as it has become a popular way to make a dollar stretch and combat inflation,” according to the report, which was released Wednesday. The report found 76% of meals are now cooked at home and 94% of consumers who are cooking more at home say they will continue to do so.

“In 2022 fresh ground beef accounted for 50% of volume of beef sales, likely due to the lower price point as well as a renewed consumer interest in comfort foods and nostalgic recipes, like meatloaf,” according to the report.

Report analysts explain inflation is top of mind with 78% of consumers noticing an increase in the price of food whether at retail or foodservice. However, beef has experienced far lower levels of inflation when compared to other proteins in the “food at home” category.

As for food service, beef sales in both dollars and volume rebounded to surpass the pre-pandemic level of 2019.

Feeder Cattle futures closed higher Monday in anticipation of the USDA Cattle report (see below).

Feeder Cattle futures closed an average of $1.36 higher (93¢ to $2.23 higher).

Live Cattle futures closed mixed, from 33¢ down to 45¢ higher.

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

Last week, live prices were $156/cwt. in the Southern Plains, $153-$156 in Nebraska and $152-$157 in the western Corn Belt. Dressed prices were $248.

Choice boxed beef cutout value was $2.01 lower Tuesday afternoon at $266.09/cwt. Select was $1.40 higher at $252.92/cwt.

Corn futures closed mixed,  unchanged to down 4¢ through Sept. 23, then up 1¢ to 3¢.

KC HRW Wheat closed mostly down 2¢.

Soybean futures closed mixed, up fractionally to 2¢ higher in spot March and May respectively, then mostly down 1¢ to 4¢.

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Major U.S. financial indices closed higher Tuesday with signs of continuing cooling inflation. The housing market saw prices drop 2.5% from June highs and unemployment costs rose but less than expected at the end of 2022.

The Dow Jones Industrial Average closed 369 points higher. The S&P 500 closed 59 points higher. The NASDAQ was up 191 points.

West Texas Intermediate Crude Oil futures (CME) closed 97¢ to $1.07 higher through the front six contracts.

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As expected, beef cattle numbers were significantly fewer at the beginning of this year compared to a year earlier, according to USDA’s Cattle report that came out Tuesday afternoon. As of Jan. 1, year over year:

The nation’s beef cow inventory of 28.92 million head was 1.06 million fewer (-3.5%). That is among the fewest recorded in the United States.

Beef cow-calf states with 5% to 7% year-over year declines included: Kansas (-7%); Kentucky (-7%); Nebraska (-5%); North Dakota (-6%); Oklahoma (-7%).

Beef replacement heifers of 5.16 million head were 317,800 head fewer, down 5.8%.

Cattle on feed of 14.16 million head were down 537, 000 head (-3.6%).

The calculated number of feeder cattle outside of feedlots of 25.27 million head was 722,900 fewer (-2.8%).

Total cattle and calves in the U.S. of 89.27 million head were 2.80 million head fewer (-3.04%).

Cattle futures gained Monday, supported by higher cash trade in the South at the end of last week, as well as likely positioning ahead of Tuesday’s Cattle inventory report (see below).

Live Cattle futures closed an average of $1.26 higher (80¢ to $2.52 higher).

Feeder Cattle futures closed an average of 80¢ higher.

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

Last week, live prices were $1 higher in the Southern Plains at $156/cwt., from $2 lower to $1 higher in Nebraska at $153-$156 and $1-$4 lower in the western Corn Belt at $152-$157.

Dressed prices were steady in Nebraska at $248 and steady to $2 lower in the western Corn Belt at $248.

The weighted average five-area direct fed steer price last week was near steady with the previous week on a live basis at $155.25/cwt. The average steer price in the beef was 50¢ lower at $247.72.

Choice boxed beef cutout value was 34¢ higher Monday afternoon at $268.10/cwt. Select was 98¢ higher at $251.52/cwt.

Soybean futures led grains higher Monday, supported by recently more positive U.S. exports.

Soybean futures closed 21¢ to 25¢ higher through Aug ‘23, and then 10¢ to 17¢ higher.

Corn futures closed mostly 2¢ to 5¢ higher.

KC HRW Wheat futures closed mostly 4¢ to 6¢ higher through Mar ‘24 and then mostly 2¢ lower to 8¢ higher.

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Major U.S. financial indices closed lower Monday, pressured by tech stocks and perhaps positioning ahead of the Fed’s interest rate decision this week.

The Dow Jones Industrial Average closed 260 points lower. The S&P 500 closed 52 points lower. The NASDAQ was down 227 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.67 to $1.78 lower through the front six contracts.

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The USDA Cattle report scheduled for release Tuesday afternoon will provide some insight to the drastic level of beef cow liquidation over the last year.

Depending on the analysts you follow, and how you run your own abacus, odds suggest Jan. 1 beef cow numbers will be at least 3.5% less year over year and perhaps as high as the 4% range.

Conservatively, if cow numbers are 3% less, that would mean 2.5 million fewer cows since the most recent peak.

Bottom line is that beef cow numbers at the beginning of this year were likely among the fewest, if not the fewest, ever recorded. If the beef cow inventory is under 29 million head, it will be only the third time in 60 years, according to the Agricultural Marketing Service.

Likewise, heifers retained for replacement are expected to be significantly fewer.

Cattle futures mostly edged higher Friday with support from weaker Corn futures.

Feeder Cattle futures closed an average of 40¢ higher, except for an average of 15¢ lower in the back two contracts.

Live Cattle futures closed an average of 15¢ higher, except for unchanged in spot Feb.

Corn futures closed mostly 1¢ to 3¢ lower.

KC HRW Wheat futures closed 1¢ to 5¢ higher through May ‘24 and then mostly 2¢ lower to 1¢ higher.

Soybean futures closed 2¢ to 14¢ lower through Sep ‘23, and then mostly 3¢ higher.

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

For the week dressed prices were steady in Nebraska at $248/cwt. and steady to $2 lower in the western Corn Belt at $248, where live prices were $1-$4 lower at $152-$157.

The previous week, live prices were $155 in the Southern Plains and Nebraska.

Choice boxed beef cutout value was 99¢ lower Friday afternoon at $267.76/cwt. Select was 94¢ lower at $250.54/cwt.

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Major U.S. financial indices closed higher Friday with follow-through support from the previous day’s read on domestic economic growth.

The Dow Jones Industrial Average closed 28 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 109 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.30 to $1.33 lower through the front six contracts.

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Andrew P. Griffith, agricultural economist at the University of Tennessee, says calf prices are expected to firm through February and into March.

“The primary driver of how quickly prices increase and to what degree prices increase will be determined by how quickly certain regions experience spring green up,” Griffith explains in his weekly market comments. “Many cattle producers in Tennessee are short on hay as are many other regions of the country. The inability to feed animals will keep a lid on prices…If there are signs of an early jump in forage this spring, then prices will escalate earlier and move higher. If the opposite is true, then calf prices will still increase but not at the same speed or reach the same level.”

Negotiated cash fed cattle trade was slow on light to moderate demand in Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service.

Dressed prices were steady in Nebraska at $248/cwt. and steady to $2 lower in the western Corn Belt at $248.

Last week, live prices were $155/cwt. in the Southern Plains and Nebraska, and $156-$158 in the western Corn Belt.

Choice boxed beef cutout value was 47¢ higher Thursday afternoon at $268.75/cwt. Select was 32¢ lower at $251.48/cwt.

Cattle futures faltered Thursday with weaker early cash fed cattle trade and firmer Corn futures.

Feeder Cattle futures closed an average of $1.09 lower, except for 17¢ higher in expiring Jan.

Live Cattle futures closed an average of 68¢ lower.

Corn futures closed 4¢ to 7¢ higher through the front three contracts, and then mostly 1¢ to 2¢ higher.

KC HRW Wheat futures closed mostly 12¢ to 16¢ higher.

Soybean futures closed 13¢ to 21¢ higher through the front six contracts, and then mostly 5¢ to 7¢ higher.

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Major U.S. financial indices rose Thursday, supported by more domestic economic growth than expected.

Real gross domestic product (GDP) increased at an annual rate of 2.9% in the fourth quarter of 2022, after increasing 3.2% in the third quarter, according to the U.S. Bureau of Economic Analysis. The increase in the fourth quarter primarily reflected increases in inventory investment and consumer spending that were partly offset by a decrease in housing investment.

The Dow Jones Industrial Average closed 205 points higher. The S&P 500 closed 44 points higher. The NASDAQ was up 199 points.

West Texas Intermediate Crude Oil futures (CME) closed 64¢ to 86¢ higher through the front six contracts.

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The Creighton University Rural Mainstreet Index (RMI) rose to 53.8 — above growth neutral — in January from 50.1 the previous month. The index was below growth neutral the previous six months. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. 

“The Rural Mainstreet economy continues to experience improving, but slow, economic growth,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. “Almost 85% of bankers ranked rising input prices as the top economic challenge or threat to farmers in their area.”

The RMI is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

The region’s farmland price index climbed to 66.0 in January from December’s 65.4. This was the 28th straight month that the index registered above 50.0.

“Higher input costs are the only major problem on the near time horizon,” says James Brown, CEO of Hardin County Savings Bank in Eldora, Iowa.

Cattle futures edged higher Wednesday with fundamental support and simmering ahead of cash direction.

Feeder Cattle futures closed an average of 40¢ higher, except for 5¢ lower in the back contract.

Live Cattle futures closed an average of 23¢ higher, except for 25¢ lower in spot Feb.

Corn futures closed mostly 2¢ to 3¢ lower.

KC HRW Wheat futures closed 5¢ to 9¢ higher.

Soybean futures closed mostly 5¢ to 9¢ higher.

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, live prices were $155/cwt. in the Southern Plains and Nebraska, and $156-$158 in the western Corn Belt. Dressed prices were $248-$250.

Choice boxed beef cutout value was $1.36 lower Wednesday afternoon at $268.28/cwt. Select was 59¢ lower at $251.80/cwt.

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

The Dow Jones Industrial Average closed 9 points higher. The S&P 500 closed fractionally lower. The NASDAQ was down 20 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts, from 10¢ lower to 2¢ higher.

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Total pounds of beef in freezers Dec. 31 were 4% more than the previous month and 7% more than the previous year, according to the monthly Cold Storage report from USDA’s National Agricultural Statistics Service.

Frozen pork supplies were up 1% from the prior month and up 16% from last year.

Combined, total red meat supplies in freezers were 2% more than the previous month and 11% more than last year.

Total frozen poultry supplies were up 7% from the prior month and up 23% from a year earlier.

Cattle futures closed narrowly mixed Tuesday in the face of higher grain futures and the lack of cash direction.

Feeder Cattle futures closed an average of 18¢ lower, except for unchanged and 32¢ higher toward the front.

Live Cattle futures closed an average of 35¢ higher.

Corn and Wheat futures rebounded Tuesday with likely short covering.

Corn futures closed 5¢ to 10¢ higher through Jly ‘24 and then mostly 2¢ higher.

KC HRW Wheat futures closed mostly 14¢ higher.

Soybean futures firmed, too, closing fractionally lower to 2¢ lower through Sep ‘24 and then 1¢ to 5¢ 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, live prices were $155/cwt. in the Southern Plains and Nebraska, and $156-$158 in the western Corn Belt. Dressed prices were $248-$250.

Choice boxed beef cutout value was $1.80 lower Tuesday afternoon at $269.64/cwt. Select was $2.10 lower at $252.39/cwt.

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Major U.S. financial indices wobbled to a mixed close Tuesday amid up-and-down quarterly earnings reports.

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 2 points lower. The NASDAQ was down 30 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.45 to $1.49 lower through the front six contracts, from 2¢ lower to 37¢ higher.

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With the national hay supply 9% less year over year Dec. 1, and 6% less than the previous record low, analysts with the Livestock Marketing Information Center (LMIC) say record and near-record hay prices will likely continue through most of this year.

“Hay prices have reached record levels in the last two years, outpacing the last drought. The hay stock data confirmed supplies are now tighter than they were back in 2012,” LMIC analysts say, in the latest Livestock Monitor. “Absent an exceptional early hay crop, prices are expected to hold near or above record levels through most of 2023. This will add to the decision of cow-calf producers and affect their ability to maintain/expand/contract their breeding herds. Our assessment is that forage/feed availability conditions are unlikely to allow for expansion in 2023.”

As it is, LMIC analysts explain hefty feedlot placements last year, may have left relatively few cattle to place after winter grazing, which could create a significant hole in supplies.

“During the last major drought season in 2011, cattle on feed dropped 1.2 million head over the summer compared to January 1 levels, and in 2012, cattle on feed numbers dropped about 800,000 head. If cattle on feed this year drops similar to those years, that would put the summer low between 9.0-9.4 million head on feed,” according to the LMIC folks.

Cattle futures extended gains Monday, buoyed by sharply lower Corn futures, and an apparently neutral view of Friday’s Cattle on Feed report.

Feeder Cattle futures closed an average of $1.47 higher (85¢ to $2.30 higher).

Live Cattle futures closed an average of 63¢ higher.

Corn and Soybean futures eroded Monday, apparently mostly due to moisture in South America over the weekend.

Corn futures closed 8¢ to 10¢ lower through Jly ‘24 and then mostly 2¢ to 3¢ lower.

Soybean futures closed mostly 10¢ to 13¢ lower.

KC Wheat on the CME closed 22¢ to 29¢ lower.

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

Last week, live prices were $155/cwt. in the Southern Plains and Nebraska, and $156-$158 in the western Corn Belt. Dressed prices were $248-$250.

Choice boxed beef cutout value was 28¢ lower Monday afternoon at $271.44/cwt. Select was $1.94 lower at $254.49/cwt.

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Major U.S. financial indices bounced higher Monday with more investor speculation that the Fed may be ready to begin easing interest rate increases.

The Dow Jones Industrial Average closed 254 points higher. The S&P 500 closed 47 points higher. The NASDAQ was up 223 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts, from 2¢ lower to 37¢ higher.

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Reflecting on Friday’s Cattle on Feed report, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out the feedlot heifer inventory Jan. 1 was 0.5% less year over year, the first decrease since July 2021.

“Large heifer numbers in feedlots supported the 4.8% year over year increase in heifer slaughter in 2022 and was the largest heifer slaughter total since 2004,” Peel says. “The decrease in feedlot heifers does not, at this point, reflect heifer retention but simply a lack of heifers due to large heifer slaughter the past two years.”

Peel also notes feedlot inventories have declined four consecutive months. The Jan. 1 inventory for feedlots with 1,000 head or more capacity was 11.68 million head, which was 2.9% less than the prior year.

“It looks increasingly like the early November seasonal peak will hold,” Peel says. “If so, the November total was 4.1% below the previous seasonal peak in February 2022 and suggests sharply tighter feedlot numbers going forward.”

Cattle futures mainly gained Friday helped along by higher outside markets.

Feeder Cattle futures closed an average of 74¢ higher (30¢ to $1.42 higher), except for 17¢ lower in spot Jan.

Live Cattle futures closed an average of 48¢ higher (12¢ higher at the back to 80¢ higher near the front).

Corn futures firmed and closed fractionally mixed with stronger weekly U.S. export sales.

Soybean futures were down again — mostly 12¢ to 13¢ lower — with more favorable moisture in Argentina.

Negotiated cash fed cattle trade was slow on light demand through Friday afternoon, according to the Agricultural Marketing Service.

For the week, live prices were $1 lower in the Southern Plains at $155/cwt. and $1-$2 lower in Nebraska at $155. Dressed sales in Nebraska were $2-$4 lower at $248. Live and dressed sales in the Western Corn Belt the previous week were $158 and $250-$252, respectively.

Choice boxed beef cutout value was 21¢ higher Friday afternoon at $271.72/cwt. Select was 74¢ higher at $256.43/cwt.

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Major U.S. financial indices rebounded Friday, perhaps with some bargain hunting.

The Dow Jones Industrial Average closed 330 points higher. The S&P 500 closed 73 points higher. The NASDAQ was up 288 points.

West Texas Intermediate Crude Oil futures (CME) closed 94¢ to $1.04  higher through the front six contracts.

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Markets could view Friday’s monthly Cattle on Feed report as neutral, to a touch bearish with slightly more placements and cattle on feed than expected and slightly fewer cattle marketed. The report reflects feedlots with 1,000 head or more one-time capacity.

Placements in December of 1.80 million head were 156,000 head fewer (-7.9%) than the previous year. That was 0.6% more than pre-report estimates.

In terms of placement weights, 49% went on feed weighing 699 lbs. or less, 40% weighing 700-899 lbs. and 11% weighing 900 lbs. or more.

Marketings in December of 1.74 million head were 113,000 head fewer (-6.1%). That was 0.8% fewer than expectations ahead of the report.

Cattle on feed Jan. 1 of 11.68 million head were 355,000 head fewer (-2.9%) than the prior year, but 0.3% more than estimates ahead of the report.