Cattle futures closed sharply lower Thursday with lower cash fed cattle prices and likely positioning ahead of Friday’s Monthly Cattle on Feed report.
Feeder Cattle futures closed an average of $3.59 lower, except for 5¢ lower in expiring Nov.
Live Cattle futures closed an average of $2.85 lower ($2.25 to $3.45 lower).
Negotiated cash fed cattle trade ranged from light on light to moderate demand to light on moderate demand through Thursday afternoon, according to the Agricultural Marketing Service.
FOB live prices were $178/cwt. in all regions, which was $3 lower in the Texas Panhandle, mostly $2 lower in Kansas, $3.50 lower in Nebraska and steady to $2 lower in the western Corn Belt.
So far this week, dressed delivered prices are $5 lower in Nebraska at $282. Dressed prices in the western Corn Belt last week were $283-$287.
Choice boxed beef cutout value was $1.61 lower Thursday afternoon at $294.72/cwt. Select was 20¢ lower at $267.65/cwt.
Net U.S. beef export sales for 2023 of 8,900 metric tons the week ending Nov. 9 were 35% less than the previous week and 27% less than the prior four-week average. Increases were primarily for South Korea, Mexico, China, Japan and Taiwan.
Turning to row crops, Corn futures closed mostly 3¢ to 4¢ higher. KC HRW Wheat closed mostly 10¢ to 12¢ lower. Soybean futures closed 19¢ to 24¢ lower through Jan ‘25 and then mostly 14¢ to 17¢ low.
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Major U.S. financial indices were little changed Thursday.
The Dow Jones Industrial Average closed 45 points lower. The S&P 500 closed 5 points higher. The NASDAQ was up 9 points.
West Texas Intermediate Crude Oil futures (CME) closed $3.17 to $3.76 lower through the front six contracts.
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USDA’s Economic Research Service (ERS) lowered expectations for feeder steer prices for the remainder of this year and the first half of next year, based on recent prices and expectations for more fed cattle and beef production.
ERS estimated beef production for next year 535 million pounds higher than last month at 25.8 billion pounds, in the November Livestock, Dairy and Poultry Outlook.
“With the addition of more heifers on feed than a year ago and higher forecast cattle imports from last month, expectations for fourth-quarter 2023 placements are raised from last month, and anticipated placements in first-half 2024 are also raised,” say ERS analysts. “This reflects an increase in expected fed cattle marketings next year, in addition to greater cow and bull slaughter.”
ERS reduced the fourth-quarter feeder steer price (750-800 lbs., Oklahoma City) by $14 to $240/cwt., and the annual average price for this year by $3.50 to $221.11. Prices were forecast $9 less in the first quarter of next year at $240, $1 less in the second quarter at $247 and $2 higher in the third quarter at $260. The annual average price for 2024 was lowered by $1.50 to $252.25.
Expectations for increasing feeder cattle prices in the second half of next year is based in part on fewer cattle available as time unfolds.
“The larger than expected level of placements during September has led to about 4% or 1.1 million head fewer cattle outside feedlots on Oct. 1 that are available for placements in the coming months,” ERS analysts say. “Since the Cattle on Feed series began in 1996, this is a record low for supplies outside feedlots estimated on October 1.”