Cattle futures strengthened during much of Thursday’s session but closed lower, perhaps with some defensiveness ahead of Friday’s Cattle on Feed report, as well as the Semiannual Cattle report. So far, these reversals have represented a breather rather than a top.
Live Cattle futures closed an average of 74¢ lower (35¢ to $1.05 lower).
Feeder Cattle futures closed an average of 71¢ lower (15¢ to $1.70 lower).
Negotiated cash fed cattle trade was slow to moderate in the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. Live prices were $3-$4 higher than last week at $188/cwt.
There were a few live sales in Nebraska at $188 on limited trade and light demand, but too few to trend.
Last week, live prices were $186/cwt. in Nebraska and $175-$184 in Kansas on a light test. Dressed prices were $290-$292 in Nebraska and $290-$295 in the western Corn Belt. Live prices in the Texas Panhandle the previous week were $178.
Choice boxed beef cutout value was $1.03 lower Thursday afternoon at $302.56/cwt. Select was $1.25 lower at $274.71/cwt.
Corn futures closed mostly 4¢ to 5¢ lower on likely profit taking.
KC HRW Wheat closed mixed, from 8¢ lower to 8¢ higher.
Soybean futures closed mixed, mostly 5¢ to 6¢ lower through Mar ’24 and then mostly 2¢ to 4¢ higher.
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Major U.S. financial indices closed mixed Thursday, amid mixed but mainly positive quarterly earnings reports.
The Dow Jones Industrial Average closed 163 points higher. The S&P 500 closed 30 points lower. The NASDAQ was down 294 points.
West Texas Intermediate Crude Oil futures (CME) closed 25¢ to 36¢ higher through the front six contracts.
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Friday’s semiannual USDA Cattle report should provide some insight to the degree of continued beef cow liquidation.
“Since January, slaughter data has indicated a 12% decline in beef cow slaughter,” say USDA Economic Research Service analysts, in the latest Livestock, Dairy and Poultry Outlook. “This is likely a combination of improving pasture conditions, sufficient reductions in animal units per acre on poorer pastures, and the prospect of improved profitability from selling calves. At the same time, dairy cow slaughter is up almost 6% year over year, but not by enough to offset the effect of declining beef cow slaughter on total cow slaughter. However, beef cow retention will likely cap cow slaughter for the foreseeable future.”
While beef cow slaughter is likely to decline more significantly in the second half of the year, it is unlikely to decline enough to come close to stabilizing the beef cow herd this year, according to Derrell Peel, Extension Livestock Marketing Specialist at Oklahoma State University, in his weekly market comments.
“There is no data currently to support the idea that heifer retention is under way, but it may have started with recent improvements in range and pasture conditions,” Peel says. The beef replacement heifer number in the upcoming report will be of keen interest and is likely to show a still smaller number compared to last year but could show a slight increase year over year if heifer retention has begun.”