Cattle Current Daily—Feb. 5, 2024

Cattle Current Daily—Feb. 5, 2024

Cattle futures were narrowly mixed Friday as traders paused at the end of a significantly positive week, fueled by gains in cash fed cattle prices and supported by the friendly Cattle report.

For the week, FOB live prices were $3 higher in the Texas Panhandle at $178/cwt., $4 higher in Kansas at $178-$179, steady to $1 higher in Nebraska at $176-$177 and steady to $5 higher in the western Corn Belt at $177-$179. Dressed delivered prices were $3 higher at $280.

Feeder Cattle futures closed an average of 44¢ lower. Week to week, there were an average of $3.99 higher.

Live Cattle futures closed an average of 39¢ higher, except for unchanged in away Feb. Week to week, they were an average of $2.36 higher.

Choice boxed beef cutout value was $1.86 lower Friday afternoon at $293.08/cwt. Select was 22¢ higher at $283.47/cwt. Week to week, Choice was $7.45 lower and Select was down $5.66.

Estimated total cattle slaughter last week of 637,000 head was 19,000 more than the previous week and the same as a year earlier. Year-to-date estimated total cattle slaughter of 2.9 million head was 215,000 head fewer (-6.8%) than the same period a year ago. Year-to-date estimated beef production of 2.5 billion pounds was 125.7 million pounds less (-4.8%).

Soybean futures closed 14¢ to 15¢ lower through Sep ’25.

Corn futures closed mostly 1¢ to 4¢ lower.

KC HRW Wheat futures closed mostly 3¢ to 5¢ higher.   

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Major U.S. financial indices rose Friday, buoyed by tech stocks. That was despite significantly more employment in January than expected.

Total non-farm payroll employment rose by 353,000 in January, according to the U.S. Bureau of Labor Statistics. The unemployment rate remained at 3.7%. In January, average hourly earnings for all employees on private non-farm payrolls rose by 19¢ to $34.55. Over the past 12 months, average hourly earnings have increased by 4.5%.

The Dow Jones Industrial Average closed 134 points higher. The S&P 500 closed 52 points higher. The NASDAQ was up 267 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.25 to $1.54 lower through the front six contracts.

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Higher cattle prices and reduced feeding costs will continue to improve margins for cow-calf producers for the next several years, as reduced cattle numbers and beef production return more leverage to the sector, according to CattleFax.

“Though drought conditions did improve in many regions, over a third of the cow herd was affected by drought in 2023, causing limited heifer retention and more liquidation in some regions. This will limit growth to the cow herd near-term,” Kevin Good, CattleFax vice president of market analysis, explained during the annual CattleFax Outlook Seminar at last week’s Cattle Industry Convention and NCBA Trade Show.

Despite record prices, CattleFax analysts say beef cow herd expansion will likely be delayed again this year with lingering drought, high input costs, limited labor availability, high interest rates, and market uncertainty as headwinds. Overall, they expect cyclical herd expansion to slower and more prolonged this time around with expected lows in fed slaughter by 2026.

Cow and bull slaughter is forecast to be 6.5 million head in 2024, down around 800,000 head, from 2023. CattleFax predicts feeder cattle and calf supplies outside of feedlots will be 1 million head fewer than 2023 at 24.1 million head.

Commercial fed slaughter in 2024 is forecast to decline by 750,000 to 24.8 million head. “Though inventories may remain somewhat elevated for a few months, they are expected to decline significantly through the second half of the year,” according to Good.

CattleFax projects beef production to be 1 billion pounds less than last year. It was about 1.3 billion pounds less year over year in 2023.

Prices for all classes of cattle are forecast to be higher this year, according to Mike Murphy, CattleFax chief operating officer.

CattleFax pegs this year’s annual average price for fed steers $9 higher than last year at $184/cwt. As for other classes:

  • Feeder steers (800 lbs.) — $240/cwt.
  • Steer calves (550 lbs.) — $290/cwt.
  • Utility cows — $115/cwt.
  • Bred cows — $2,600/head

Peak cattle prices are likely to come in 2025-26, according to Randy Blach, CattleFax chief executive officer.

2024-02-04T18:46:30-06:00

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