Cattle futures softened Friday with continued pressure by the week’s decline in Choice wholesale beef prices. Choice boxed beef cutout value was $1.26 higher Friday afternoon at 277.16/cwt. and Select was 71¢ higher at $259.53/cwt. Week to week, however, Choice was down $12.55, while Select was 80¢ lower.
Feeder Cattle futures closed an average of $1.26 lower. Week to week, they were an average of 88¢ higher (22¢ to $1.40 higher).
Live Cattle futures closed an average of 73¢ lower (47¢ to $1.30 lower). They were an average of 77¢ higher week to week (2¢ to $2.07 higher).
Pressure may also have stemmed from disappointment that stronger cash fed cattle prices faded at the end of the week.
Negotiated cash fed cattle trade was slow on light demand in all regions through Friday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
For the week, FOB live prices were steady to $3 higher in Nebraska at $173-$175/cwt. and $3 higher in the western Corn Belt at $175. Dressed delivered prices were $1-$2 higher at $274-$275. The previous week, FOB live prices were $172-$173 in Kansas and $172 in the Texas Panhandle.
Weekly U.S. beef export sales were positive. Net U.S. beef export sales for 2023 the week ending Dec. 28 (9,500 metric tons) were up noticeably from the previous week and up 69% from the prior four-week average. Increases primarily were for China, Japan, Mexico, and South Korea.
Net U.S. beef export sales of 7,100 metric tons for 2024 were primarily for Taiwan, Mexico, South Korea and Hong Kong.
Total cattle slaughter last week of 556,000 head was 48,000 more than the previous week but 9,000 head fewer than the same week last year. Beef production for the first week of 2024 of 470.3 million pounds was 40.9 million pounds more than the previous week and 3.6 million pounds more than the same week last year.
Turning to row crops, rains in South America continued to pressure Soybean futures Friday. Export sales also applied pressure to grains. Sales were a marketing year low for corn and soybeans, while wheat export sales were 52% less than the previous week and 79% less than the prior four-week average.
Soybean futures closed mostly 11¢ to 14¢ lower.
Corn futures closed mostly 5¢ to 7¢ lower.
KC HRW Wheat futures closed 2¢ to 4¢ higher.
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Major U.S. financial indices edged higher Friday with support including the positive employment outlook. Total non-farm payroll employment increased by 216,000 in December, and the unemployment rate was unchanged at 3.7%, according to the U.S. Bureau of Labor Statistics Friday.
In December, average hourly earnings for all employees on private non-farm payrolls rose by 15¢ (0.4%) to $34.27. Over the past 12 months, average hourly earnings have increased by 4.1%.
The Dow Jones Industrial Average closed 25 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 13 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.16 to $1.62 higher through the front six contracts.
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Although the number of cattle on feed remains elevated, Andrew P. Griffith points out those cattle will wend their way through the market during the first half of this year, leaving snugger numbers in their wake.
“Calf and feeder cattle numbers will tighten in the first half of 2024 and will tighten even more the second half of the year if climatic conditions allow cattle producers to retain heifers and rebuild the cattle herd,” Griffith explains in his weekly market comments. “With that being said, the current market is set up for strong prices on all classes of cattle. The determinant of how high prices will go will eventually come down to consumer demand for beef, but there is no doubt every margin operator up and down the supply chain will be competing for a smaller quantity of cattle this year than last year.”
Griffith notes snugger numbers will include slaughter cows.
“ … there are fewer cows in general and many cow-calf producers will be trying to get one more calf to capitalize on strong calf prices in 2024 and 2025,” he explains.