Cattle Current Daily—Dec. 20, 2023

Cattle Current Daily—Dec. 20, 2023

Cattle futures eased lower Tuesday, awaiting cash direction and with some potential positioning ahead of Friday’s monthly Cattle on Feed report. Depending on whose numbers you follow, estimates are for November placements to be about 4% less year over year with November marketings down about 7% and the Dec. 1 on-feed inventory about 2% higher.

Feeder Cattle futures closed an average of 62¢ lower (20¢ to $1.27 lower), except for 65¢ higher in the back contract.

Live Cattle futures closed an average of 33¢ lower (2¢ to 85¢ lower) except for unchanged in away Feb.

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

Last week, FOB live sales were $1 lower in the Southern Plains at $170/cwt., $1-$3 lower in Nebraska at $168 and $1-$2 lower in the western Corn Belt at $167-$169. Dressed delivered prices were steady to $4 lower in Nebraska at $267-$268 and $1-$3 lower in the western Corn Belt at $267.

Choice boxed beef cutout value was 82¢ lower Tuesday afternoon at $288.83/cwt. Select was 56¢ lower at $263.16/cwt.

Corn futures closed 4¢ to 6¢ lower.

KC HRW Wheat futures closed 10¢ to 13¢ higher on short covering and chatter about more exports to China.

Soybean futures closed mostly 12¢ to 17¢ lower, as traders removed some South American weather premium.

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Major U.S. financial indices edged higher Tuesday with the most support from tech stocks, further supported by the Federal Reserve’s dovish interest rate outlook.

The Dow Jones Industrial Average closed 251 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 98 points.

West Texas Intermediate Crude Oil futures (CME) closed 97¢ to $1.12 higher through the front six contracts.

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If cash calf and feeder cattle prices this week can maintain last week’s stronger momentum, then it could set the stage for higher prices next month, according to Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly comments. He believes cash prices will be a more telling indicator over the next two holiday weeks, as the cash market has not consistently followed Feeder Cattle futures this year.

“Given the rapid decline in Feeder Cattle futures since the middle of September, the market is ready for a correction of some sort on the futures market side,” Griffith says. “Prices may not challenge previous contract highs for a while, but the market will offer producers an opportunity to hedge cattle for summer and fall of 2024 moving through the next several months.”

Moreover, Griffith suggests keeping an eye on the market for breeding females.

“The thought here is that bred female prices will escalate in the spring if forage production gets off to a good start and will continue to increase if forage production persists through summer,” Griffith says.

2023-12-19T18:34:34-06:00

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