Cattle Current Daily—Jan. 30, 2024

Cattle Current Daily—Jan. 30, 2024

Cattle futures started Monday’s session with follow-through support that faded as the day wore on amid likely profit taking and positioning ahead of Wednesday’s USDA Cattle inventory report. Although another year of beef cow contraction is widely anticipated, the degree will also depend on whether USDA makes any adjustments to prior-year figures.

Feeder Cattle futures closed an average of 94¢ lower (55¢ to $1.32 lower).

Live Cattle futures closed an average of 56¢ lower.

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $175/cwt. in the Texas Panhandle, $174-$175 in Kansas (mostly $175), $175-$177 in Nebraska and $174-$177 in the western Corn Belt. Dressed delivered prices were at $277.

The five-area direct weighted average FOB live steer price last week was $1.68 higher at $175.44/cwt. The five-area direct dressed delivered price was $2.98 higher at $276.87.

Choice boxed beef cutout value was $1.11 lower Monday afternoon at $299.42/cwt. Select was 31¢ lower at $288.82/cwt.

Turning to row crops, grain and soybean futures closed lower Monday with apparent concerns about China’s economy.

Soybean futures closed 1¢ to 15¢ lower through May ’25 and then mainly fractionally higher.

Corn futures closed 1¢ to 6¢ lower through Jly ’25 and then 1¢ to 4¢ higher.

KC HRW Wheat futures closed mostly 7¢ to 8¢ lower.

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Major U.S. financial indices closed higher Monday, led by bullish tech stocks.

The Dow Jones Industrial Average closed 224 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 172 points.

West Texas Intermediate Crude Oil futures (CME) closed 96¢ to $1.23 lower through the front six contracts.

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Besides offering a glimpse of the beef cow inventory, Wednesday’s USDA Cattle report offer opportunity to corroborate notions about how the monthly feedlot inventory has exceeded year-ago levels in the face of estimated reductions in the number of cattle available for placement.

Kenny Burdine, Extension livestock economist at the University of Kentucky notes earlier marketing due to dry conditions was partly the reason, along with increased imports of heavier feeder cattle from Mexico. He also points to the counter-cyclical increase in slaughter weights during the last couple of months last year.

“Cheaper feed in the fourth quarter was likely the driving factor, but this ultimately means that cattle were on feed for a longer period of time,” Burdine explains, in the latest issue of Cattle Market Notes Weekly. “This seems to be supported by increased estimates of cattle on feed over 90 and 120 days and also partially explains the higher feedlot inventories.”

Moreover, Burdine notes the high percentage of heifers on feed, explaining

“The number of heifers on feed (Jan. 1) was higher than the last quarter and higher than January of 2023. While heifers as a percent of on-feed inventory declined slightly in January, it remained just under 40%, and Burdine says that During expansionary times, the percentage of heifers on feed tends to be in the lower to middle of the 30% range. In sum, he says A number near 40% does not suggest that heifer retention is ongoing and continues to suggest that expansion is not immediately visible on the nearby horizon.”

 

2024-01-29T20:26:09-06:00

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