Cattle futures climbed higher Thursday, led by the surge in cash fed cattle prices. Live Cattle futures were an average of $2.15 higher. Feeder Cattle futures were an average of $4.78 higher.
Negotiated cash fed cattle trade ranged from moderate on moderate demand in Kansas to light to moderate on moderate demand in the North through Thursday afternoon, according to the Agricultural Marketing Service.
So far this week, based on the latest established trade, FOB live prices are $230/cwt., which is $5 higher in Kansas, $5-$10 higher in Nebraska, and $10 higher in the western Corn Belt. Dressed delivered prices in Nebraska are $10 higher at $350-$355.
Last week, dressed delivered prices in the western Corn Belt were $340-$345. The previous week, FOB live prices in the Texas Panhandle were $215-$220.
Choice boxed beef cutout value was $1.25 lower Thursday afternoon at $358.11/cwt. Select was $1.42 lower at $343.46.
Grain and Soybean futures were mixed on Thursday.
Corn futures were mostly fractionally higher to 2¢ higher. KC HRW Wheat futures were fractionally lower to 1¢ lower. Soybean futures were 1¢ to 3¢ higher.
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Major U.S. financial indices closed mostly higher Thursday with follow-through support from the Fed cutting interest rates.
The Dow Jones Industrial Average closed 646 points higher. The S&P 500 closed 14 points higher. The NASDAQ was down 60 points.
West Texas Intermediate Crude Oil futures (CME) closed 75¢ to 86¢ lower through the front six contracts.
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While increased uncertainty tied to political rhetoric and actions fueled the recent cattle market price decline, Stephen Koontz, Colorado State University agricultural economist, says cattle prices were well-above levels implied by market fundamentals through much of this late summer and into fall.
“A reasonable set of demand elasticities and supply information from the Cattle on Feedreports suggested fed animal prices closer to $215/cwt. this fall and not the better than $240 observed,” Koontz explains in an early-December issue of In the Cattle Markets. “Similarly, with the calculated boxed beef composite value often above $370/cwt., and occasionally above $400/cwt., then packers needed to pay less than $230 to break even. This did not happen and has not for a while – that is, fed cattle trading below packer breakeven. It looks to me as if the packing industry hasn’t made any money for better than two years – and I know cattlemen don’t care – but it’s not reasonable to expect losses to continue for the foreseeable future. Fed cattle prices had to retreat, and smaller animal prices with them. The seasonal timing is not a surprise.”
Although long-term price uptrends in Cattle futures prices were challenged, briefly broken in some instances, Koontz says they remain mostly intact.
“Fed cattle numbers, as seen in Commercial Slaughter, will be down 6.9% for the year. These numbers will also be down something like 6% in 2026 and 5% in 2027,” Koontz says. “Animal numbers will have to tighten further before any increase in numbers is seen. There will be some offset with higher weights, and from feeder cattle placed from Mexico with any reopening of the southern border. But not enough to change the fact of tightening supplies, reduced production, more imports and fewer exports and lower beef consumption. The plant closings and plant operational reductions announced recently are, in my mind, just the beginning. The supply fundamentals don’t change for the next 2-3 years. Only the volume of completing meats is in question.”