Cattle Current Daily—Dec. 4, 2023

Cattle Current Daily—Dec. 4, 2023

Lower cash fed cattle prices helped pressure Cattle futures on Friday.

Feeder Cattle futures closed an average of $5.21 lower ($4.75 to $5.60 lower).

Live Cattle futures closed an average of $2.10 lower ($1.55 to $2.80 lower).

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

For the week, FOB live prices were $174-$175/cwt. in all regions which was $2-$3 lower in the Southern Plains, $1-$2 lower in Nebraska and steady to $4 lower in the western Corn Belt.

Dressed delivered prices were $275, which was $5 lower in Nebraska and $3-$5 lower in the western Corn Belt.

Estimated total cattle slaughter last week of 635,000 head was 97,000 head more than the previous holiday-shortened week but 25,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 29.8 million head was 1.5 million head fewer (-4.7%) than the same time last year. Estimated year-to-date beef production of 24.5 billion pounds was 1.4 billion pounds less (-5.3%).

Grain futures edged higher Friday with likely short covering.

Corn futures closed mostly 1¢ to 2¢ higher.

KC HRW Wheat futures closed mostly 2¢ to 4¢ higher.

Soybean futures closed mostly 10¢ to 17¢ lower through Aug ’24 , as traders took back some of the weather premium, given the wetter outlook in Brazil.

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Major U.S. financial indices closed higher Friday on declining Treasury yields and continued investor optimism that the Fed is done raising interest rates.

The Dow Jones Industrial Average closed 294 points higher. The S&P 500 closed 26 points higher. The NASDAQ was up 78 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.43 to $1.89 lower through the front six contracts.

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Livestock, poultry, and dairy exports for Fiscal Year (FY) 2024 were forecast $1.3 billion lower to $36.3 billion, compared to the previous quarterly report, according to USDA’s latest Outlook for U.S. Agricultural Trade.

Beef exports were projected $300 million lower to $8.2 billion based on reduced supplies as herd contraction lowers domestic production.

Total U.S. agricultural exports in FY 2024 were projected at $169.5 billion, down $2.5 billion from the August forecast. The revision was primarily driven by reductions in grain and feed, as well as livestock, poultry, and dairy exports.

On the other side of the balance sheet, FY 2024 livestock, poultry, and dairy imports were forecast $500 million higher than the August Outlook to $27.0 billion as increased beef, pork, and dairy imports far exceed lower poultry imports. Beef imports were forecast $400 million higher to $8.9 billion as tight domestic supplies are expected to encourage increased imports.

For context, global real Gross Domestic Product (GDP) growth was forecast to slow from 3.5% in calendar year (CY) 2022 to 3.0% percent in CY 2023 and 2.9% in CY 2024.

“The global and domestic economies continue to grow and recover from escalations in the cost of living. However, economic growth is hindered by wars in Ukraine and the Middle East, slower economic growth projections for China, and tight monetary policies,” according to analysts with USDA’s Economic research Service and Foreign Agricultural Service. “Despite these challenges, economic growth continues for many countries, though gains have been uneven.”

Domestically, analysts note the U.S. economy continues to outperform forecasts, lowering concerns about recession.

“Forecast growth for the United States’ real GDP in CY 2023 is 2.1%. CY 2024 growth is forecast at 1.5%, up from the previous 1.0% forecast,” analysts say. “This adjustment is supported by resilient consumer spending and a strong labor market. Inflation continues above targets set by the U.S. Federal Reserve.”

2023-12-03T18:44:32-06:00

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