Cattle futures closed narrowly mixed Friday, closing out a dynamically positive week, fueled by the bullish Cattle inventory report.
Week to week on Friday, Feeder Cattle futures closed an average of $5.17 higher ($4.57 higher toward the back to $6.47 higher in spot Mar). The CME Feeder Cattle Index closed $1.51 higher week to week on Thursday at $160.17/cwt.
During the same period, Live Cattle futures closed an average of $3.28 higher and open interest grew by about 15,000 contracts.
On Friday, however, Feeder Cattle futures closed an average of 28¢ lower, except for an average of 32¢ higher in the back two contracts.
Live Cattle futures closed an average of 27¢ higher, except for 15¢ lower in near Jun and unchanged in the back contract.
Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on very light demand through Friday afternoon, according to the Agricultural Marketing Service (AMS).
For the week, Live sales were $3 higher in the Texas Panhandle at $140, $3-$4 higher in Kansas at $139-$140, $2-$3 higher in Nebraska at $138-$140 and $2-$3 higher in the western Corn Belt at $140. Dressed trade was $4 higher at $222.
Estimated total cattle slaughter last week of 639,000 head was 4,000 head fewer than the previous week and 13,000 head fewer than the same week last year. So far this year, estimated total cattle slaughter of 3.16 million head is 185,000 head fewer (-5.5%) than the same time last year.
Corn futures closed mostly 5¢ higher through Jly ’23 and then 1¢ to 2¢ higher.
Soybean futures closed 9¢ to 11¢ higher in the front four contracts and then 3¢ to 6¢ higher through Aug. ’23, followed by mostly 1¢ lower.
Week to week on Friday, Corn futures closed an average of 11.6¢ lower in old-crop contracts and Soybean futures closed an average of 68.8¢ higher through the front six contracts.
******************************
Major U.S. financial indices closed mixed Friday, although tech stocks, such as Amazon, blossomed on strong quarterly earnings.
The monthly Employment Situation Summary also revealed stronger results than expected.
Total non-farm payroll employment rose by 467,000 in January, according to the U.S. Bureau of Labor Statistics. The unemployment rate was little changed at 4.0%.
Average hourly earnings in January for all employees on private non-farm payrolls increased by 23¢ to $31.63. Over the past 12 months, average hourly earnings have increased by 5.7%.
The Dow Jones Industrial Average closed 21 points lower. The S&P 500 closed 23 points higher. The NASDAQ was up 219 points.
******************************
La Niña remains firmly in control of the ocean-atmosphere system, and that is unlikely to change this spring, said meteorologist Matt Makens, during the CattleFax Outlook Seminar in Houston last week.
Barring any change to the La Niña outlook or sudden warming in the Gulf of Alaska, Makens explained that likely means dryness continues across the Southwest and South with warm temperatures. The Northern Plains and Corn Belt are expected to have wetness farther east this spring and drier conditions for this summer, with temperatures closer to normal versus last year.
With that weather outlook in mind, CattleFax expects planted corn acres this coming season to be 91.8 million, with a trend-line yield of 180 bu./acre. CattleFax expects soybean acres to remain near steady at 87.2 million acres.
“Exceptional demand from China is leading U.S. corn exports to new records and expanded interest could easily push exports higher in 2022,” according to Mike Murphy, CattleFax vice president of research and risk management services.
Murphy noted that weather is likely to continue influencing hay prices with much of the Central Plains and the West battling some level of dryness or drought. He explains, on-farm hay stocks Dec. 1 were 6% less year over year at 79 million tons.
“Expect current-year hay prices to average near $186/ton, $10 higher than 2021 prices due to tighter supplies and stronger demand,” Murphy said.