Daily Market Highlights

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.

Cattle futures softened Thursday with the lack of direction in weekly cash fed cattle prices and perhaps with some positioning ahead of Friday’s monthly Cattle on Feed report.

Feeder Cattle futures closed an average of 82¢ lower (2¢ lower toward the back to $1.40 lower near the front), except for 35¢ higher in the back contract.

Live Cattle futures closed an average of 75¢ lower.

Corn futures continued to soften — mostly 4¢ to 5¢ lower — with the wetter outlook for Argentina.

Soybean futures closed 8¢ to 10¢ lower through Jan ‘24. And then mostly 2¢ to 5¢ lower.

Negotiated cash fed cattle trade was limited on light demand through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. There were some early live trades in Kansas at $155/cwt., as well as some early dressed sales at $248-$249 in Nebraska and $248 in the western Corn Belt.

Last week were $156/cwt. on a live basis in the Southern Plains, $156-$157 in Nebraska and $158 in the western Corn Belt. Dressed prices were $250-$252.

Choice boxed beef cutout value was $2.57 lower Thursday afternoon at $271.51/cwt. Select was $1.83 higher at $255.69/cwt.

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Major U.S. financial indices continued lower Thursday as investors fretted over the Fed maintaining its hawkish stance on interest rates, despite recent signs of easing inflation. Strong employment reflected in weekly initial jobless claims added to their angst. The advance figure for seasonally adjusted initial unemployment insurance claims for the week ending Jan. 14 was 190,000, which was 15,000 fewer than the previous week.

The Dow Jones Industrial Average closed 252 points lower. The S&P 500 closed 30 points lower. The NASDAQ was down 104 points.

West Texas Intermediate Crude Oil futures (CME) closed 81¢ to 85¢ higher through the front six contracts.

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USDA’s Economic Research Service (ERS) increased projected feeder steer prices (750-800 lbs., Oklahoma City) for the first two quarters of the year, based on more November feedlot placements than expected, and tighter anticipated supplies available for placement early this year.

In the monthly Livestock Dairy and Poultry Outlook, ERS increased the projected first-quarter price by $5 to $182/cwt. and the second-quarter price by $2 to $192. Projected prices are $214 in the third quarter and $224 in the fourth quarter for an annual average of $203.

ERS also increased projected 2023 beef production 170 million lbs. to 26.4 billion lbs. based on the temporal shift in fed cattle marketings and an outlook for higher cow slaughter.

“The anticipated cow slaughter outlook for 2023 was raised on early January slaughter data and persistent poor forage conditions,” ERS analysts say. “Lighter carcass weights in fourth-quarter 2022 are carried over into early 2023. As a result, the increase in expected marketings and cow slaughter in 2023 more than offset lighter anticipated weights.”

Estimated beef production this year would be 1.8 billion lbs. less (-6.6%) than last year’s projected total.

As reported in Cattle Current last week, ERS projected the annual average five-area direct fed steer price for this year at $158.50/cwt., in the January World Agricultural Supply and Demand Estimates. That was $2.50 more than the previous month’s estimate, based on expected demand strength. By quarter and compared to the previous month, ERS increased projected prices by $4 to $157 in the first quarter, by $3 to $157 in the second quarter and by $2 to $157 in the third quarter.

Weaker Corn futures — mostly 1¢ to 4¢ lower — helped lift Feeder Cattle futures an average of 95¢ higher Wednesday (42¢ to $1.55 higher), except for 15¢ lower in spot Jan.

Live Cattle futures closed an average of 17¢ higher, except for an average of 10¢ lower in three contracts.

Soybean futures closed 13¢ to 19¢ lower.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on very light demand in the North through Wednesday afternoon, with too few transactions to trend. Trade was at a standstill in the Southern Plains, according to the Agricultural Marketing Service.

Last week, prices were $156/cwt. on a live basis in the Southern Plains, $156-$157 in Nebraska and $158 in the western Corn Belt. Dressed prices were $250-$252.

Choice boxed beef cutout value was $2.58 lower Wednesday afternoon at $274.08/cwt. Select was 67¢ lower at $253.86/cwt.

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Major U.S. financial indices closed lower Wednesday. Profit taking and less of a decline in wholesale prices than expected were likely part of the pressure

The Producer Price Index for final demand declined 0.5% in December, seasonally adjusted, according to the U.S. Bureau of Labor Statistics.

The Dow Jones Industrial Average closed 613 points lower. The S&P 500 closed 62 points lower. The NASDAQ was down 138 points.

West Texas Intermediate Crude Oil futures (CME) closed 40¢ to 70¢ lower through the front six contracts.

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Recent moisture is helping dial back dryness and drought in some areas.

According to the latest U.S. Drought Monitor (USDM-Jan. 10), abnormally dry and drought conditions impacted 66.5% of the lower 48 states. That’s the least since the week of Sept. 13 last year when those same conditions covered 66.2% of the country. Current conditions are also more favorable than the same week last year when abnormally dry conditions and drought covered 71.8% of the nation.

Approximately 57% of the nation’s cattle inventory was in areas experiencing drought versus about 69% a year earlier.

“A series of atmospheric rivers led to heavy rain and high-elevation snow across parts of the West, especially across California. Precipitation totals exceeding 4 inches (liquid-equivalent) were widespread, and several areas in and near the Sierra Nevada, Cascades, and coastal ranges recorded over one foot of precipitation,” according to the weekly Drought Summary.

USDM analysts note, “Precipitation totals generally exceeded 1.5 inches along the coast and in the higher elevations of the Pacific Northwest, some higher elevations in the central and northern Rockies, part of the upper Midwest, portions of the lower Mississippi Valley, the interior Southeast, and scattered locales across the Ohio Valley and the Northeast.

“Much of the precipitation fell on areas experiencing dryness and drought, so across the country, improvement was much more common than deterioration.” 

The latest La Niña Advisory from the National Weather Service Climate Prediction Center says there is an 82% chance North America transitions from La Niña to ENSO-neutral during February to April this year.

Cattle futures closed lower to start the trading week, pressured by last week’s softer cash fed cattle prices, the lack of direction so far this week and stronger Corn futures.

Live Cattle futures closed an average of 35¢ lower.

Feeder Cattle futures closed an average of $1.08 lower (70¢ to $1.60 lower).

Corn futures closed mostly 3¢ to 5¢ higher.

Soybean futures closed 6¢ to 12¢ higher through Aug ‘23 and then mostly unchanged to 3¢ lower.

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

Last week prices were $156/cwt. on a live basis in the Southern Plains, $156-$157 in Nebraska and $158 in the western Corn Belt. Dressed prices were $250-$252.

Choice boxed beef cutout value was 77¢ lower Tuesday afternoon at $276.66/cwt. Select was $2.02 lower at $254.53/cwt.

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Major U.S. financial indices closed mixed Tuesday. Pressure included less than expected fourth-quarter earnings from Goldman Sachs.

The Dow Jones Industrial Average closed 391 points lower. The S&P 500 closed 8 points lower. The NASDAQ was up 15 points.

West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 35¢ higher through the front six contracts.

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Estimated feedlot returns are positive through September for both steers and heifers, according to the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University.

For steers, estimated net returns range from $27.73 per head in February to $212.49 in May. Feeding cost of gain ranges from $117.78/cwt. in September to $141.13 in January.

On the heifer side of the fence, estimated net returns range from $27.35 per head in July to $189.79 in May. Feeding cost of gain ranges from $128.89/cwt. in September to $147.39 in February.

Projections reflect a cash market situation without implementation of price risk management strategies.