Cattle futures gained Tuesday, helped along by expectations of steady to higher cash fed cattle prices this week.
Feeder Cattle futures were an average of $1.78 higher. Live Cattle futures were an average of 72¢ higher, except for 22¢ lower in expiring Dec.
Negotiated cash fed cattle trade was mostly inactive on very light demand in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service.
FOB live prices last week were $192-$193/cwt. in the Southern Plains, $196-$197 in Nebraska and $195-$197 in the western Corn Belt. Dressed delivered prices were $307.
Choice boxed beef cutout value was $1.15 lower Tuesday afternoon at $324.22/cwt. Select was 24¢ lower at $294.52.
Grain and Soybean futures closed higher Tuesday with traders apparently adding South American weather risk premium as they squared year-end positions.
Soybean futures closed 14¢ to 19¢ higher. Corn futures were mostly 4¢ higher. Kansas City Wheat futures were mostly 2¢ higher.
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Major U.S. financial indices edged lower Tuesday.
The Dow Jones Industrial Average closed 29 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 175 points.
West Texas Intermediate Crude Oil futures on the CME closed 66¢ to 73¢ higher through the front six contracts.
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Although nominal feeder cattle prices reached record highs in 2024, Josh Maples, Extension livestock economist at Mississippi State University, notes that producer revenues, when adjusted for inflation, remained below those of previous record high prices in 2014-15. In other words, he says prices remain below levels required to spark herd expansion.
“Year-to-date beef cow slaughter is down by 18%, but the implied cull rate — calculated as slaughter divided by inventories — remains at 10.2% for 2024, well above the level that would indicate herd expansion,” Maples explains in the latest issue of Cattle Market Notes Weekly. “Heifer slaughter data also shows no signs of herd expansion. Year-to-date heifer slaughter is down 1.1%, with no evidence of heifer retention occurring at a rate sufficient to signal herd rebuilding … It could very well be that feeder cattle prices have not yet peaked, and the market is beginning 2025 with more optimism.”
USDA’s Cattle report Jan. 31 will offer insight on the rate of beef cow herd liquidation last year.