Cattle futures closed higher Friday with stronger negotiated cash fed cattle prices and wholesale beef values’ continued gains. Reaction to the latest Cattle on Feed report could vary (see below).
Live Cattle futures were an average of $1.18 higher (67¢ higher toward the back to $2.52 higher in spot Feb). Feeder Cattle futures were an average of 66¢ higher.
Week to week on Friday, Live Cattle futures closed an average of $2.47 higher. Feeder Cattle futures closed an average of $3.80 higher.
Negotiated cash fed cattle prices through Friday afternoon were mainly higher with trade ranging from moderate to active on good demand in Nebraska to moderate on good demand in other regions, according to the Agricultural Marketing Service.
For the week, FOB live prices were $1-$3 higher in Nebraska at $234-$236/cwt., mostly $3 higher in the western Corn Belt at mainly $235 and unevenly steady in Kansas at mostly $233. Prices in the Texas Panhandle were $234-$236; there was no recent tests for a comparison.
Dressed delivered prices were mostly $5 higher in Nebraska at mainly $370 and $2-$3 higher in the western Corn Belt at $365-$368.
Choice boxed beef cutout value was $1.47 higher Friday afternoon at $368.92/cwt. Select was 66¢ higher at $362.39. Week to week on Friday, Choice boxed beef cutout value was $6.54 higher and Select was $2.20 higher. The Choice-Select spread was $4.34 wider week to week on Friday at $6.53
Estimated total cattle slaughter last week of 535,000 head was 27,000 head fewer than the previous week and 59,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 1.8 million head was 272,000 head fewer (-13.1%) than the same time last year. Estimated year-to-date beef production of 1.6 billion pounds was 195.5 million pounds less (-10.8%).
Grain and Soybean futures continued higher Friday, supported by export demand, weather risk in the U.S. on intensity of the current winter storm and hotter drier conditions in South America.
Corn futures were 3¢ to 6¢ higher through Mar ‘27. KC HRW Wheat futures were 9¢ to 15¢ higher. Soybean futures were 3¢ to 6¢ higher.
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Major U.S. financial indices closed mixed on Friday.
The Dow Jones Industrial Average closed 285 points lower. The S&P 500 closed 2 points higher. The NASDAQ was up 65 points.
West Texas Intermediate Crude Oil futures (CME) were $1.29 to $1.71 higher through the front six contracts.
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Markets will likely view Friday’s Cattle on Feed report as neutral to either side of even depending on the perspective.
Feedlot with 1,000 head or more capacity placed 1.6 million head in December, which was 88,000 head fewer (-5.4%) than the same time last year. Ahead of the report, various estimates pegged placements at 5-7% less, so the USDA number is either in line with estimates or placements were about 1.5% more than anticipated.
In terms of placement weights, 47% went on feed weighing 699 lbs. or less, 40% weighing 700-899 lbs. and 13% weighing 900 lbs. or more.
December marketings of 1.8 million head were 31,000 head more than the previous year (1.8%), which was in line with pre-report estimates.
The on-feed inventory Jan. 1 of 11.5 million head was 373,000 head fewer (-3.2%), also in line with the consensus of pre-report estimates.
This month’s report also included the number of steers and heifers on feed. Heifers represented 38.7% of the on-feed mix at the beginning of the year, which was the same as a year earlier.
“Shocking in these values is the percentage of heifers on feed being up from October (+0.6%) and flat with last January,” say analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor. “This inventory level has the ratio of steers to heifers at 1.58 steers per heifer on feed which is down from last year’s high of 1.66 observed in April. For context, expansion occurred following the last cycle in 2015, during which this ratio was over 2 steers observed per heifer. Increases in that value followed lows reported during 2011 when that ratio had been bouncing between 1.6 to 1.7 for the couple of years prior. While the influence of beef on dairy in the feedlot mix is unknown, at face value, the current report does not paint a large expansionary picture for the Cattle report next week.”