Daily Market Highlights

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

For the week, live prices were $1 lower in the Southern Plains at $163/cwt., steady to $1 higher in Nebraska at $164-$165 and steady to $2 higher in the western Corn Belt at $164-$166. Dressed prices are $1 higher at $265.

Choice boxed beef cutout value was $2.90 lower Friday afternoon at $279.88/cwt. Select was 14¢ lower at $268.75/cwt.

Estimated total cattle slaughter last week was 626,000 head, which was 5,000 head fewer than the previous week and 31,000 head fewer than the same week last year. Total estimated year-to-date cattle slaughter of 7.5 million head was 202,000 head fewer (-2.6%) than the same period a year earlier. Total estimated year-to-date beef production of 6.2 billion pounds was 282.9 million pounds less (-4.3%).

Cattle futures were mixed as declining open interest continued.

Live Cattle futures closed an average of 53¢ higher (30¢ to 85¢ higher), except for 20¢ lower in away Jun.

Feeder Cattle futures closed an average of 76¢ lower (20¢ to $1.05 lower), except for 62¢ higher in spot Mar. Pressure included a surge in Corn Futures — 11¢ to 12¢ higher in old-crop contracts and then mostly 4¢ to 8¢ higher — lifted by flash export corn sales to China.

Chatter about Russia limiting wheat exports buoyed Kansas City Wheat futures, which closed 20¢ to 28¢ higher.

Soybean futures firmed but the overall outlook remains bearish with reports from South America that Brazil’s crop is expected to override any deficits in Argentina.

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Major U.S. financial indices closed higher Friday amid another volatile trading session as investors try to make sense of overall banking health.

The Dow Jones Industrial Average closed 132 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 36 points.

West Texas Intermediate Crude Oil futures (CME) closed 66¢ to 71¢ lower through the front six contracts. 

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Although the Choice-Select spread continues to decline seasonally it remains higher year over year, as does the percentage of carcasses grading Choice and higher.

“The Choice-Select spread started the year on a high note of $27/cwt., a continuation of

the 2022 trends that capped off the year above $30,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Since the opening week of 2023, the Choice-Select spread has fallen almost every week and bottomed around $10/cwt. two weeks ago. The first quarter is only a few weeks shy of completion and the spread has averaged $15/cwt. over 11 weeks, even though the spread has been rapidly shrinking. Last year, the spread averaged just under $7/cwt., similar to the five-year average.”

LMIC analysts explain the spread is usually narrowest in the first quarter, widens through the second quarter before declining and then maintains a spread of approximately $15 through the last two quarters of the year. Last year, they say the spread followed the five-year average until June and then stayed at high levels through the remainder of the year with considerable volatility. From June through December last year, the average Choice-Select spread ranged between $20 and $32/cwt.

“Today’s spreads are still large for this time of year, but we are approaching the time of year where they should be widening. Starting at a higher base may give the summer peak in the spread more height,” according to LMIC analysts. “The feed cost structure and tightening cattle supplies may encourage shorter days on feed over the summer which may curb the availability of Choice product. This spring, the percent of beef grading Choice has been similar to 2022 and in recent weeks has been a higher proportion, topping 75%, compared to a five-year average of 73%.”

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

So far this week, live prices are $1 lower in the Southern Plains at $163/cwt., steady to $1 higher in Nebraska at $164-$165 and steady to $2 higher in the western Corn Belt at $164-$166. Dressed prices are $1 higher at $265.

Choice boxed beef cutout value was $1.48 higher Thursday afternoon at $282.78/cwt. Select was 93¢ lower at $268.89/cwt.

Net U.S. beef export sales gained ground for the week ending Mar. 16, according to the U.S. Export Sales report. Net sales of 18,600 metric tons (mt) were 5% more than the previous week and 59% more than the prior four-week average. Increases primarily were for South Korea, Japan, China, Taiwan and Hong Kong.

Cattle futures wavered in their range-bound path Thursday.

Feeder Cattle futures closed mixed, from an average of 21¢ lower in three contracts to an average of 33¢ higher.

Live Cattle futures closed an average of 26¢ lower, except for an average of 7¢ higher in the back two contracts.

Corn futures closed mostly 1¢ to 2¢ lower through Jly ‘24 and then mostly 1¢ higher.

KC HRW Wheat closed 4¢ to 8¢ higher through May ’24 and then mostly 1¢ higher.

Soybean futures closed 9¢ to 29¢ lower.

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Major U.S. financial indices closed slightly higher Thursday amid volatile trading.

The Dow Jones Industrial Average closed 75 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 117 points.

West Texas Intermediate Crude Oil futures (CME) closed 73¢ to 94¢ lower through the front six contracts. 

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Total pounds of beef in freezers Feb. 28 were 6% less than the previous month and 6% less year over year, according to USDA’s latest Cold Storage report.

Frozen pork supplies were up slightly from the previous month and up 9% from last year.

Total red meat supplies in freezers were 3% less than the previous month but 2% higher than a year earlier.

Total frozen poultry supplies were up 3% from the previous month and up 10% from a year ago.

Negotiated cash fed cattle trade was moderate to active on good demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Market Service, with live prices $1 lower at $163/cwt.

Trade was moderate on good demand in Nebraska where live prices were steady at $164 and dressed prices were $1 higher at $265.

In the western Corn Belt, trade was slow on moderate demand. Although too few to trend, early live sales were $165.00-$165.50 and early dressed sales were $265. Prices there last week were $164-$165 and mostly $264, respectively.

Choice boxed beef cutout value was $1.38 higher Wednesday afternoon at $281.30/cwt. Select was $1.73 lower at $269.82/cwt.

Futures traders continued their commodities selling mode Wednesday with bearish outside markets.

Feeder Cattle futures closed an average of 51¢ lower.

Live Cattle futures closed an average of 39¢ lower.

Corn futures closed mostly 1¢ to 3¢ lower through Jly ‘24 and then mostly fractionally higher.

KC HRW Wheat closed 7¢ to 12¢ lower.

Soybean futures closed mostly 18¢ to 25¢ lower.

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Major U.S. financial indices closed lower Wednesday. Although the Fed’s decision to increase interest rates by 25 basis points was expected, apparently investors continue to gauge the stance hawkish, in light of recent bank troubles.

The Dow Jones Industrial Average closed 530 points lower. The S&P 500 closed 65 points lower. The NASDAQ was down 190 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.11 to $1.25 higher through the front six contracts. 

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Food inflation at retail and foodservice last year exceeded levels reached during the Great Recession. Food inflation for the 12 months ending February 2023 was 10.2% at home and 8.4% away from home, according to Circana, formerly known as IRI and the NPD Group. Of the $2.9 trillion in consumer retail spending Circana tracks, food and foodservice spending represents the largest share, nearly $1.5 trillion.

Although the rate of away-from-home inflation isn’t as high as at home, foodservice costs are more than four times those of at-home eating occasions, with the absolute dollar gap widening, according to Circana food and beverage and foodservice industry analysts, at the company’s recent Growth Summit. 

David Portalatin, Circana food and foodservice industry advisor, explained to Growth Summit attendees that higher food costs have had an impact on discretionary spending, assome of the declines in discretionary retail spending last year were due to the need to fund higher spending on food and beverage. 

When faced with higher prices, Circana analysts say consumers will use multiple tactics to reduce or reallocate at- and away-from-home food spending. Those tactics include trading down to private label, buying in bulk, using more leftovers, or choosing a quick-service restaurant over a full-service restaurant.

“One of the behaviors consumers have historically used to manage higher food costs is trading down,” says Cara Loeys, Circana principal of CPG client engagement. “Consumers gravitate to larger pack sizes in the grocery store for a lower price per volume. They’ve also traded from premium to mainstay and value brands to get as much as possible without spending more. These behaviors are a correction from the pandemic when consumers, flushed with cash, purchased premium grocery items.”

While 2022 was about value pricing to manage budgets, Portalatin explains that 2023 will be about the other attributes that play into value.

“Price will always be important, but consumers define value differently. For example, consumers who visit a restaurant aren’t necessarily looking for the cheapest meal,” Portalatin explains. “They’re looking for the menu items they crave or foodservice outlets that offer quality and variety and enable them to treat themselves.”

Cattle futures firmed in cautious trade Tuesday, helped along by more optimistic outside markets.

Feeder Cattle futures closed an average of 38¢ higher, except for an average of 9¢ lower in the back two contracts.

Live Cattle futures closed mixed, from an average of 44¢ higher in the front three contracts to an average of 25¢ lower.

Lower grain and Soybean futures helped.

Corn futures closed mostly 2¢ to 4¢ lower.

KC HRW Wheat closed mostly 5¢ to 8¢ lower.

Soybean futures closed mostly 13¢ to 19¢ lower.

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

Last week, live prices were mainly $1 lower in the Southern Plains and Nebraska at $164/cwt., and steady to $2 lower in the western Corn Belt at $164-$165. Dressed prices were $1 lower at $264.

Choice boxed beef cutout value was $1.10 lower Tuesday afternoon at $279.92/cwt. Select was $2.39 lower at $271.55/cwt.

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Major U.S. financial indices closed higher again Tuesday, supported by comments from U.S. Treasury Secretary, Janet Yellen that the federal government was ready to provide more support to smaller lenders if needed.

In prepared remarks at Tuesday’s American Bankers Association Washington, D.C. Summit, Yellen explained actions taken to protect FDIC-insured deposits at recently failed lenders, Silicon Valley Bank and Signature Bank.

“The situation is stabilizing. And the U.S. banking system remains sound. The Fed facility and discount window lending are working as intended to provide liquidity to the banking system. Aggregate deposit outflows from regional banks have stabilized,” Yellen explained.

Apparently, investors are also speculating the banking fiasco will bring a close to monetary tightening sooner rather than later.

The Dow Jones Industrial Average closed 316 points higher. The S&P 500 closed 51 points higher. The NASDAQ was up 184 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.55 to $1.85 higher through the front six contracts. 

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Despite softer Cattle futures trade and mixed cash prices last week, calf prices at auction remain on an upward trajectory, buoyed by demand for summer-grazing cattle, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. He explains value of gain on forage should be strong through the spring and summer, given the high cost of feedlot gain.

“Feeder cattle prices are likely to continue increasing as the CME Feeder Cattle Index price has gained $8 to $9/cwt. since the beginning of February. However, the increase in the cash price of feeder cattle has slowed, which may be part of the reason feeder cattle futures experienced weakness,” Griffith says. “Feeder cattle prices will increase further moving through spring, summer, and fall, but their ability to reach current expectations in the futures market is uncertain.”

On the other side of the equation, Griffith says the anticipated hole in cattle supplies will come eventually but likely later than expected as there is little evidence of additional heifer retention currently.

“Cattle on feed numbers will slowly dwindle as heifer retention picks up and as fewer calves are born, which is certain to be the case this year,” Griffith says. “There remains upside potential in the finished cattle market this spring, but there may not be enough to meet my lofty expectations of $170 cattle.”

Cattle futures leaked lower Monday amid recently declining open interest and uncertainty about the health of the banking structure, and despite Friday’s friendly Cattle on Feed report.

Feeder Cattle futures closed an average of 46¢ lower, except for an average of 20¢ higher in the back two contracts.

Live Cattle futures closed an average of 41¢ lower, except for an average of 22¢ higher in the back two contracts.

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

Last week, live prices were mainly $1 lower in the Southern Plains and Nebraska at $164/cwt., and steady to $2 lower in the western Corn Belt at $164-$165. Dressed prices were $1 lower at $264.

The five-area direct weighted average steer price last week was $1.23 lower on a live basis at $164.17. The average steer price in the beef was $1.50 lower at $263.82.

Choice boxed beef cutout value was $2.33 lower Monday afternoon at $281.02/cwt. Select was $1.50 higher at $273.94/cwt.

Corn futures closed mostly 1¢ to 2¢ lower through Jly ‘24 and then mostly 1¢ higher.

KC HRW Wheat closed 6¢ to 8¢ lower.

Soybean futures closed mostly 1¢ to 4¢ lower.

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Major U.S. financial indices closed higher Monday, apparently buoyed by the forced takeover of troubled Credit Suisse over the weekend, though plenty of questions remain for the banking sector.

The Dow Jones Industrial Average closed 382 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 45 points.

West Texas Intermediate Crude Oil futures (CME) closed 79¢ to 90¢ higher through the front six contracts. 

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Considering declining feedlot supplies before herd rebuilding begins, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says 2012-17 appear to provide a useful analog to help understand how low feedlot inventories may decline and when they might turn the corner to higher levels.

“The current state of cattle inventories, especially the cow herd size, replacement heifer inventories and expected calf crops are generally analogous to the previous period beginning in late 2012,” Peel explains, in his weekly market comments. “In fact, the current situation reflects a more severe depletion of female inventories compared to the 2012-2017 period. Based on the analog period, feedlot inventories will likely decline from the feedlot inventory (12-month) moving-average peak (MA) in September 2022 to a level similar to the 2014 low in the coming months and remain relatively low for the next four years or longer.”

Peel points out feedlot inventories declined year over year for six consecutive months through March 1. Specifically, he explains the MA peaked in September 2022 at 11.8 million head. It was11.63 million head in Friday’s Cattle on Feed report, the lowest level since October 2020.

“The previous multi-year low in the feedlot inventory MA was in October 2014, after drought-forced herd liquidation in 2011-2013. The current beef cow herd is slightly smaller that the 2014 herd level,” Peel explains. “The beef cow herd is likely to drop a bit more in 2023. It is reasonable to expect that average feedlot inventories will drop close to the 2014 low of 10.375 million head or possibly even lower at some point in the coming months … The smallest calf crop of the next few years will be in 2024 at the earliest.  Feedlot inventories will decline through 2023 with the low in 2024 or beyond.”

Cattle futures closed mixed Friday amid some likely positioning ahead of the ultimately friendly Cattle on Feed report (see below), lower cash fed cattle prices and uncertain outside markets.

Feeder Cattle futures closed mixed, from an average of 49¢ lower in the front three contracts to an average of 16¢ higher. They closed an average of $1.84 lower week to week on Friday, giving back about half of the previous week’s gains.

Live Cattle futures closed narrowly mixed, from an average of 22¢ lower in the front three contracts to an average of 6¢ higher.

Corn futures closed mostly fractionally higher to 2¢ higher.

KC HRW Wheat closed 10¢ to 16¢ higher through May ‘24 and then 6¢ to 7¢ higher.

Soybean futures closed 8¢ to 15¢ lower, pressured by declining Oil futures.

Negotiated cash fed cattle trade was mostly limited on light demand in all regions through Friday afternoon, according to the Agricultural Marketing Service.

For the week, live prices were mainly $1 lower in the Southern Plain and Nebraska at $164/cwt., and steady to $2.50 lower in the western Corn Belt at $164.00-$164.50. Dressed prices were $1 lower in Nebraska at $264 and $1-$2 lower in the western Corn Belt at $263-$264.

Choice boxed beef cutout value was 60¢ lower Friday afternoon at $283.35/cwt. Select was 68¢ lower at $272.44/cwt.

Estimated total cattle slaughter last week of 631,000 head was 3,000 head fewer than the previous week and 5,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 6.1 million head was 169,000 head fewer (-2.4%). Estimated year-to date beef production of 5.7 billion lbs. was 250.6 million pounds less (-4.2%) less than the same time last year.

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So much for market confidence provided by the infusion of uninsured deposits to First Republic Bank last Thursday. Major U.S. financial indices sank lower again on Friday as investors grappled with the recent spate of banking woes, tied in part to devalued bond assets as interest rates continue higher.

The Dow Jones Industrial Average closed 384 points lower. The S&P 500 closed 43 points lower. The NASDAQ was down 86 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.29 to $1.61 lower through the front six contracts. 

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Markets likely will view USDA’s monthly Cattle on Feed Report as neutral to a touch bullish with about 1% fewer placements than analysts expected ahead of the report, but also slightly fewer marketings. The report is for feedlots with 1,000 head or more one-time capacity.

Placements in February of 1.73 million head were 134,000 head less (-7.2%) than last year. In terms of placements weights, 38% went on feed weighing 699 pounds or less, 51% weighing 700-899 pounds and 10% weighing 900 pounds or more.

Marketings in February of 1.74 million head were 90,000 head fewer (-4.9%) than a year earlier.

Cattle on feed March 1 of 11.65 million head were 548,000 head fewer (-4.5%) than the same time last year.

Stronger outside markets helped Cattle futures recover some recent losses Thursday.

Feeder Cattle futures closed an average of $1.63 higher.

Live Cattle futures closed an average of 39¢ higher, except for 2¢ lower in the back contract.

Weekly U.S. beef export sales also provided some support. Net U.S. beef export sales for the week ending March 9 were 17,700 metric tons (mt), according to USDA’s Export Sales report. That was noticeably higher than the previous week and 24% more than the previous four-week average.

Corn futures closed mostly 1¢ to 2¢ higher.

KC HRW Wheat closed mostly 1¢ to 2¢ lower.

Soybean futures closed mostly fractionally lower to 1¢ lower.

Negotiated cash fed cattle trade was limited on light demand in all regions through Thursday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are mainly $1 lower in the Southern Plains and Nebraska at $164/cwt., and $1-$2 lower in the western Corn Belt at $163-$165. Dressed prices are $1 lower at $264.

Choice boxed beef cutout value was 32¢ lower Thursday afternoon at $283.95/cwt. Select was 87¢ lower at $271.76/cwt.

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Major U.S. financial indices bounced back Thursday. Presumably, much of the support was due to First Republic Bank (FRB) — the fourteenth largest bank in the U.S. and apparently another one on the cash ropes — receiving $30 billion in uninsured deposits from some of the nation’s largest banks.

“Their collective support strengthens our liquidity position, reflects the ongoing quality of our business, and is a vote of confidence for First Republic and the entire U.S. banking system…” according to Jim Herbert, FRB executive chairman and Mike Roffler, FRB president and CEO, in a statement.

The Dow Jones Industrial Average closed 371 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 283 points.

West Texas Intermediate Crude Oil futures (CME) closed 74¢ to 84¢ higher through the front six contracts. 

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With Choice boxed beef cutout value hovering around $285/cwt. and beef production declining, Andrew P. Griffith, agricultural economist at the University of Tennessee says, the question is how much resistance $300 will pose.

“The $250 price point has proven to be a strong support price, and it is difficult to believe Choice boxed beef will be rangebound between $250 and $300 per hundredweight,” Griffith explains in his weekly market comments. “The immediate thought is that Choice boxed beef has greater potential to exceed $300 than to decline below $250. This will primarily be supply-driven, compared to being demand-driven. The consumer has done about everything possible to demonstrate strong demand for beef. Thus, the declining quantity of beef available will be what pushes prices higher.”

For perspective, Griffith points out the market topped at just less than $350 on two occasions in 2021.

“This likely means it will be difficult to push past that mark in 2023. It is probably safer to assume the market will do well to challenge $325 in the next 12 months,” Griffith says.

Too many black swans in too little time tends to make folks cautious. That seems to be as apt an explanation as any for eroding Cattle futures and then cash fed cattle prices in the face of such positive market fundamentals.

In this case, the next feared black swan appears to be a potential contagion of bank failures. Silcon Valley Bank failed last week. Signal bank followed suit quickly after — the third largest bank failure in U.S. history, according to various sources. Then came speculation/news yesterday that Credit Suisse, across the pond, was on the ropes with its largest investor unwilling to provide more funding.

Major U.S. financial indices fell sharply before regaining some lost ground later yesterday when the Swiss Financial Market Supervisory Authority (FINMA) and Swiss National Bank (SNB) — the nation’s central bank — issued a joint statement, saying in part: “The Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank assert that the problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets … In addition, the SNB will provide liquidity to the globally active bank if necessary.”

By the time the statement was issued, the die was cast for Cattle futures.

Feeder Cattle futures closed an average of $2.04 lower.

Live Cattle futures closed an average of $1.15 lower.

Corn futures closed mostly 2¢ lower.

KC HRW Wheat closed fractionally higher to 2¢ higher.

Soybean futures closed mostly 12¢ to 13¢ lower.

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

So far this week, live prices are mainly $1 lower at $164/cwt. in the Southern Plain and Nebraska, where dressed sales were $1 lower at $264.

Although too few to trend, there have been some sales in the western Corn Belt at $164.00-$164.50 on a live basis and $263-$264 in the beef. Prices there last week were $164-$167 and $265, respectively.

Choice boxed beef cutout value was $1.64 lower Wednesday afternoon at $284.27/cwt. Select was $1.93 lower at $272.63/cwt.

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As mentioned above, worries about failing banks cast a pall over major U.S. financial indies Wednesday.

The Dow Jones Industrial Average closed 280 points lower. The S&P 500 closed 27 points lower. The NASDAQ was up 5 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.63 to $3.75 lower lower through the front six contracts. 

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Americans are buying more fresh meat than before the COVID-19 pandemic and are seeking value in terms of price, convenience and better-for attributes in meat purchases, according to the 18th annual Power of Meat report released by the Meat Institute and FMI—The Food Industry Association.

Self-described “meat eaters” comprise 78% of Americans, compared to just 7% who describe themselves as vegan or vegetarian. Shoppers spend more than $15 in the meat department per trip and average nearly one trip to the meat department per week (up nearly 5% since 2019). While 50% of shoppers get their meat from a supermarket, many turn to supercenters (35%), club stores (4%) and hard discounters (5%) for their meat purchases.

Despite rising food and beverage prices over the past year, consumers did not significantly change the amount of meat they buy (down just 2.5% by volume compared to 2021). Product quality and appearance continue to be the top factors driving meat purchase decisions, followed by price per pound and total package price.

To save money, a large majority of consumers (76%) report they made changes to the amount, type, cut, and/or brand of meat they purchase or changed where they shop. Consumers’ top strategies to save money include: buying only the amount needed (42%), looking for coupons (35%), and stocking up when meat is on sale (35%). Seventeen percent said they buy less meat with organic, grass-fed, or other claims. Only 16% of meat shoppers said they cook more meatless meals to save money. Of the 33% of Americans who said they are looking to eat less meat or chicken, 52% cite cost as the reason (up from 16% in 2020).

Cattle futures closed mainly lower Tuesday, pressured in part by the lack of cash direction for fed cattle and firmer nearby Corn futures.

Feeder Cattle futures closed an average of 71¢ lower (32¢ to $1.32 lower).

Live Cattle futures closed an average of 40¢ lower, except for an average of 24¢ higher in the back two contracts.

Corn futures gained Tuesday, with support from further erosion in Argentina’s crop.

Corn futures closed mostly 1¢ to 2¢ higher.

KC HRW Wheat closed mostly 9¢ to 17¢ 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 $164-$167/cwt. but mostly $165. Dressed prices were $265.

Choice boxed beef cutout value was $1.05 higher Tuesday afternoon at $285.91/cwt. Select was 94¢ higher at $274.56/cwt.

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Major U.S. financial indices closed higher Tuesday, finding some footing after the recent selloff due to the closure of Silcon Valley Bank. Support included the monthly Consumer Price Index meeting trader expectations.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in February on a seasonally adjusted basis, after increasing 0.5% in January, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 6.0% before seasonal adjustment, which was the smallest 12-month increase since the period ending September 2021.

The Dow Jones Industrial Average closed 336 points higher. The S&P 500 closed 63 points higher. The NASDAQ was up 239 points.

West Texas Intermediate Crude Oil futures (CME) closed $3.16 to $3.47 lower through the front six contracts, with continued pressure from worries that banking woes will further slow economic growth.  

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USDA’s Economic Research Service (ERS) increased expected average feeder steer prices (basis 750-800 lbs., Oklahoma City) by $1 in the first quarter to $183/cwt. and by $1 in the second quarter to $193, in the March Livestock, Dairy and Poultry Outlook. Prices are forecast at $214 in the third quarter and $224 in the fourth quarter for an annual average of $204, which would eclipse the record-high average of 2014.

“The outlook for feeder calf prices is improved, given existing tight supplies of cattle, a projection for lower market-year average corn prices, and higher expected fed cattle prices, as well as recent price data,” according to ERS analysts.

As mentioned recently in Cattle Current, ERS forecast the annual average weighted average five-area direct fed steer price at $162/cwt. Support includes historically high seasonal composite boxed beef cutout values, underpinned by declining cattle numbers and lighter winter carcass weights.

“For the week ending February 18, steer and heifer carcass weights were lower by 15 and 21 pounds, respectively, from the same period last year,” ERS analysts say. “Further, cow and bull carcass weights are down 10 and 30 pounds, respectively. The anticipated share of cows in the slaughter mix is raised in 2023, which will contribute to lighter expected average carcass weights. The results have lowered the outlook for cattle weights the rest of year.”

Cattle futures softened further Monday. Aside from taking a pause and potentially profits from last week’s up-move in Feeder Cattle, and steady money for fed cattle, perhaps traders also were wondering about the floor for recently lower wholesale beef prices. As much as anything, though, bearish outside markets, tied to the failure of Silcon Valley Bank and worries about wider repercussions cast a pall over equity and commodity markets.

Feeder Cattle futures closed an average of 53¢ lower (32¢ to $1.17 lower).

Live Cattle futures closed an average of 41¢ lower.

Corn futures closed mostly fractionally lower to 3¢ lower through Jly ‘24 and then 3¢ higher.

KC HRW Wheat closed 1¢ to 3¢ higher.

Soybean futures closed 13¢ to 18¢ lower through Aug ‘24 and then mostly 7¢ 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 steady at $165/cwt., except for $1 lower to $2 higher in the western Corn Belt at $164-$167. Dressed prices were steady to $3 higher in the western Corn Belt at $265 and steady in Nebraska at $265.

The five-area direct weighted average steer price last week was 38¢ higher at $165.40/cwt. The weighted average steer price in the beef was 89¢ higher at $265.32.

Choice boxed beef cutout value was 5¢ lower Monday afternoon at $284.86/cwt. Select was $2.08 higher at $273.62/cwt.

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Major U.S. financial indices closed mixed after a volatile session Monday as investors continued to assess fallout from the failure of Silicon Valley Bank (SVP).

The Dow Jones Industrial Average closed 90 points lower. The S&P 500 closed 5 points lower. The NASDAQ was up 49 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.76 to $1.88 lower through the front six contracts. 

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Nationwide, steers sold $2-$6/cwt. higher, according to the Agricultural Marketing Service. Heifers traded $1-$4 higher in the North Central and South Central regions, except for $1 lower in the South Central region for heifers at 800 lbs. Heifers in the Southeast sold $7-$10 higher.

First-quarter cattle prices are higher than originally forecast by the Livestock Marketing Information Center (LMIC), but those analysts caution there could be some correction depending on how weather and forage develop heading into spring.

In the latest Livestock Monitor, LMIC analysts note steers weighing 500-600 lbs. last week sold for $250/cwt. in Montana, $242 in South Dakota and at a combined auction average of $226 in Texas, the highest price of the year.

“These auction prices, by our estimation, are very high, given the spring forage situation is very much unknown, and hay is expensive,” LMIC analysts say. “The big concern in the short term is how spring shapes up. Will all of the country have great early grass growth? Are these buyers able to source and feed reasonably priced feedstuffs until grass shows up? The outlook for the spring contains the probability that La Niña may not withdraw until summer, which may point to a cool wet spring in the Northern Plains and continued dryness in the Southern Plains.”

At the same time, LMIC analysts point out Dec corn futures prices are significantly lower than current cash prices.