USDA’s Cattle Inventory report was within analyst’s expectations, and traders reacted favorably to the supply outlook. Cash trade was slow to develop as feedlots are holding out for higher prices.
USDA released the Cattle Inventory report showing all cattle and calves in the U.S. as of Jan. 1, 2024, totaled 87.2 million head, 2% below the 88.8 million head on Jan. 1, 2023. Cattle and calves on feed for all feedlots totaled 14.4 million head on Jan. 1, 2024, up 2% from the Jan. 1, 2023, total of 14.2 million head.
Live cattle futures were higher, with the February contract up $2.03 to $179.75 and the April contract up $2.47 to $183.17.
Cash trade through Thursday was light, with 28,000 head sold. Live steers sold between $175-176, and dressed steers from $275-278.
“The excitement of Wednesday’s report encouraged feedlots to be bolder and to price their cattle higher; even though packers are offering up bids in both regions—feedlot managers aren’t satisfied with the prices just yet,” ShayLe Stewart, DTN livestock analyst, wrote in her Thursday midday comments. “Bids of $176 are being offered in the South and bids of $276-278 in the North, but with asking prices firm at $178 in the South and $280 plus in the North—the trade battle continues.”
Cash trade for the week ending Jan. 28 was 83,353 head. Live steers averaged $175.56, and dressed steers averaged $276.91, roughly $2-3 above the prior week.
The national weekly direct beef type price distribution for the week of Jan. 22-29 was the following on a live basis:
• Negotiated purchases: $175.46.
• Formula net purchases: $176.
• Forward contract net purchases: $188.24.
• Negotiated grid net purchases: $175.14.
On a dressed basis:
• Negotiated purchases: $277.18.
• Formula net purchases: $278.23.
• Forward contract net purchases: $292.65.
• Negotiated grid net purchases: $279.30.
Slaughter through Thursday was projected to be 505,000 head, 13,000 head above the prior week. Estimated slaughter for last week is 618,000 head, 1,000 head larger than the previous week and back to a normalized volume for this period in the cattle cycle.
Actual slaughter for the week ending Jan. 20 was 605,147 head. The average steer dressed weight was 918 lbs., down 9 lbs. from the prior week.
Boxed beef prices were lower, with the Choice cutout down $3.74 to $294.94 and the Select cutout down $4.6 to $283.25.
“There is downside risk in boxed beef values in the coming at least six weeks, as February and first half of March typically see sluggish beef demand,” wrote Cassie Fish, market analyst, in The Beef on Tuesday. “Packers cope with this factor by keeping harvests low to offset their need for inventory, something they’ve employed since April 2023.”
Feeder cattle
Feeder cattle were up triple digits, with the March contract up $6.70 to $244.87 and the April contract up $6.60 to $250.52. The CME Feeder Cattle Index was up $7.27 to $237.95.
“The report had a plethora of supportive figures, but the fact that all calves under 500 pounds came in at 13.28 million head is extremely supportive as that’s 3% less than a year ago and demand since then has only increased for calves and feeders alike,” Stewart wrote on Thursday.
Corn futures were lower, with the March contract down 4 cents to $4.47 and the May contract down 3 cents to $4.58.
Kansas: Winter Livestock in Dodge City sold 5,264 head on Wednesday. Compared to the previous auction, feeder steers 850-1,000 lbs. sold $2-8 higher. Steers 450-850 lbs. sold $10-20 higher, and in places $20 higher. Feeder heifers 600-800 lbs. sold $4-8 higher, and in places $10 higher. Heifers 400-600 lbs. sold $11-15 higher, with instances of $25 higher. Benchmark steers averaging 792 lbs. sold between $237.50-251, averaging $242.45.
Colorado: Winter Livestock in La Junta sold 3,857 head on Tuesday. Compared to the last auction, feeder steers sold $4-17 higher, with instances of sharply higher across all weight classes. Feeder heifers sold $2-11 higher, with instances of sharply higher across all weight classes. Benchmark steers averaging 723 lbs. sold between $235-245, averaging $242.82.
Missouri: Joplin Regional Stockyards in Carthage sold 11,315 head Monday. Compared to last auction, feeder steers sold $7-22 higher, with spots up to $27 higher. Feeder heifers under 700 lbs. sold $14-20 higher, with heavier weights steady to $3 higher. Benchmark steers averaging 731 lbs. sold between $231-250, averaging $241.46.
Nebraska: Tri-State Livestock in McCook sold 4,100 head on Monday. Compared to the last auction, steers sold $3-15 higher and heifers traded steady to $9 higher, except 500-600 lbs. were $1-2 lower. Benchmark steers averaging 735 lbs. sold between $252-262.50, averaging $255.61.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 10,051 head on Monday. Compared to last week, feeder steers and heifers sold $5-10 higher. Steer and heifer calves traded $10-20 higher. Benchmark steers averaging 714 lbs. sold between $237-253, averaging $244.51.
South Dakota: Sioux Falls Regional Cattle Auction in Worthing sold 6,337 head on Monday. Compared to the previous auction, steers 500-800 lbs. sold $5-7 higher. Heavier steers 850 lbs. sold $11 higher. Light heifers 600-750 lbs. sold $10-12 to sharply higher. Benchmark steers averaging 775 lbs. sold between $236-257, averaging $244.65. — Charles Wallace, WLJ contributing editor
