Cattle Current Daily—Nov. 23 and 24, 2023

Cattle Current Daily—Nov. 23 and 24, 2023

Cattle futures closed lower Wednesday, following early support, amid light pre-holiday trade and positioning.

Feeder Cattle futures closed an average of $1.14 lower (67¢ to $1.22 lower).

Live Cattle futures closed an average of 48¢ lower.

Negotiated cash fed cattle trade was light to moderate on light to moderate demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. FOB live prices were $1 lower at $177/cwt.

In Nebraska, trade was slow on light demand with dressed delivered prices $2 lower at $282. FOB live prices last week were $178.

Trade was also slow on light demand in the western Corn Belt with too few transactions to trend. Last week, FOB live prices were $178 and dressed prices were $282.

Choice boxed beef cutout value was $1.19 higher Wednesday afternoon at $297.00/cwt. Select was $1.15 lower at $267.62/cwt.

Soybean futures closed 15¢ to 20¢ lower through Aug ’24 and then 8¢ to 12¢ lower on likely profit taking.

Corn futures closed mostly 1¢ lower.

KC HRW Wheat futures closed narrowly mixed — unchanged to 1¢ lower through Sep ’24 and then mostly 1¢ to 2¢ higher.

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Major U.S. financial indices closed higher Wednesday, bolstered by softer Treasury yields.

The Dow Jones Industrial Average closed 184 points higher. The S&P 500 closed 18 points higher. The NASDAQ was up 65 points.

West Texas Intermediate Crude Oil futures (CME) closed 65¢ to 67¢ lower through the front six contracts. 

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Although historically high, cattle prices have yet to yield enough profit to trigger national herd expansion, according to James Mitchell, Extension livestock economist at the University of Arkansas in a recent issue of Cattle Market Notes Weekly.

Mitchell explains relative profitability is one of the key differences between low cattle numbers currently and the similar situation in 2014-15.

“The Livestock Marketing Information Center (LMIC) estimates 2023 cash costs at $1,088 per cow, which implies a breakeven price of $218/cwt. for a 500-pound steer. In 2014, cow costs were $879, resulting in a breakeven price of $176/cwt.,” Mitchell explains. “Enterprise budgets and cattle markets in 2023 are projecting a profit for cow-calf producers. However, relative profitability still needs to improve before seeing herd expansion on a noticeable scale.”

Moreover, Mitchell points to drought as perhaps the most important difference between today and 2014-2015. Back then, 20% of the nation’s cattle inventory were in drought areas at the end of October. This year, he notes 37% were impacted by drought.

“Other differences are due to a cattle industry that has undergone significant structural change since 2014,” Mitchell says.

2023-11-22T17:47:24-06:00

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