USDA Jan. 1 Cattle Inventory Report - Cattle Inventory Down 2%

OMAHA (DTN) -- All cattle and calves in the United States as of Jan. 1, 2024, totaled 87.2 million head, 2% below the 88.1 million head on Jan. 1, 2023, USDA NASS reported on Wednesday.

All cows and heifers that have calved, at 37.6 million head, were 2% below the 38.3 million head on January 1, 2023. Beef cows, at 28.2 million head, were down 2% from a year ago. Milk cows, at 9.36 million head, were down slightly from the previous year.

All heifers 500 pounds and over as of January 1, 2024, totaled 18.5 million head, 1% below the 18.8 million head on January 1, 2023. Beef replacement heifers, at 4.86 million head, were down 1% from a year ago. Milk replacement heifers, at 4.06 million head, were down slightly from the previous year. Other heifers, at 9.57 million head, were 2% below a year earlier. Steers weighing 500 pounds and over as of January 1, 2024, totaled 15.8 million head, down 2% from January 1, 2023.

Bulls weighing 500 pounds and over as of January 1, 2024, totaled 2.02 million head, down slightly from January 1, 2023.

Calves under 500 pounds as of January 1, 2024, totaled 13.3 million head, down 3% from January 1, 2023.

Cattle and calves on feed for the slaughter market in the United States for all feedlots totaled 14.4 million head on January 1, 2024. The inventory is up 2% from the January 1, 2023, total of 14.2 million head. Cattle on feed in feedlots with capacity of 1,000 or more head accounted for 82.7 % of the total cattle on feed on January 1, 2024, up slightly from the previous year. The combined total of calves under 500 pounds and other heifers and steers over 500 pounds (outside of feedlots), at 24.2 million head, was 4 % below January 1, 2023.

CALF CROP DOWN 2 PERCENT

The 2023 calf crop in the United States was estimated at 33.6 million head, down 2% from the previous year's calf crop. Calves born during the first half of 2023 were estimated at 24.7 million head, down 2% from the first half of 2022. Calves born during the second half of 2023 were estimated at 8.89 million head, 26% of the total 2023 calf crop.

Revisions

All inventory and calf crop estimates for July 1, 2022, January 1, 2023, and July 1, 2023, were reviewed using calf crop, official slaughter, import and export data, and the relationship of new survey information to the prior surveys. Based on the findings of this review, July 1, 2022, all cattle and calves decreased by 0.3%. January 1, 2023, all cattle and calves decreased by 0.5% and 2022 calf crop decreased by 0.1%. July 1, 2023, all cattle and calves decreased by 0.5% and 2023 calf crop decreased by 0.6%.

DTN ANALYSIS

"Wednesday's Cattle Inventory report came with no surprises as the industry expected the report to showcase fewer numbers," said DTN Livestock Analyst ShayLe Stewart. "But what the report did do, however, is carve out yet another new low in the US beef cowherd, at 28.2 million head, down 2% from a year ago. The Cattle Inventory report data first began being reported in 1972, and based on the data since then, never has the US cowherd been this low before.

"Even though new, all-time high feeder cattle prices were achieved in 2023, extremely high input costs along with regional drought kept producers from keeping replacement females and kept the liquidation phase in this cycle alive.

"The top ten states with the most beef cows are Texas, Oklahoma, Missouri, Nebraska, South Dakota, Kansas, Montana, Kentucky, North Dakota and Florida. Only one of those states (Kentucky) showed a year-over-year increase in beef cows, while all the other states saw a decrease in their beef cow herds by anywhere from 2% to 6%.

"The report also disclosed that the 2023 calf crop was estimated at 33.6 million head, which is also down 2% from a year ago.

"In conclusion, today's report comes as a bullish announcement to the industry and market alike. Tight supplies amid strong demand beckons for prices to become higher across all sectors of the industry. Until we see that the liquidation phase in this cycle is done, feeder cattle prices and fed cattle prices should remain incredibly strong as limited supplies will support robust prices."

Class	2023	2024	% of previous year
	(1,000 head)	(1,000 head)	(percent)
All cattle and calves	88,841.0	87,157.4	98
All cows and heifers
that have calved	38,336.8	37,579.8	98
-- Beef cows	28,939.3	28,223.0	98
-- Milk cows	9,397.5	9,356.8	100
All heifers 500 lbs. and over	18,760.7	18,483.0	99
-- For beef cow replacement	4,929.6	4,858.3	99
Expected to calve*	3,110.2	3,051.5	98
-- For milk cow replacement	4,073.6	4,059.2	100
Expected to calve*	2,623.4	2,593.4	99
-- Other heifers	9,757.5	9,565.5	97
Steers 500 pounds and over	16,056.5	15,789.2	98
Bulls 500 pounds and over	2,029.0	2,020.7	100
Calves under 500 pounds	13,658.0	13,284.7	97
All cattle on feed	14,195.8	14,423.3	102
	2022	2023	% of previous year
Calf crop	34,439.5	33,593.0	98

Wednesday Closing Livestock Market Update - Cattle Lower as Traders Patiently Waited for the Inventory Report

GENERAL COMMENTS:

The market moved slowly ahead of the afternoon's Cattle Inventory report, but the wait was worth the time as today's report showcased bullish findings for the cattle market. Still no cash cattle trade has developed but today's report should help feedlots secure higher prices as bullish attitudes summarize the market's demeanor. Hog prices closed higher on the Daily Direct Morning Hog Report, up $3.16 with a weighted average price of $62.56 on 5,677 head. March corn is up 1/2 cent per bushel and March soybean meal is up $5.30. The Dow Jones Industrial Average is down 317.01 points.

LIVE CATTLE:

Traders may have been apprehensive about overly supporting the market ahead of seeing what Wednesday's Cattle Inventory report amounted to, but thankfully the report was rather bullish for the industry and should merit higher trade on Thursday. February live cattle closed $0.67 lower at $177.35, April live cattle closed $1.05 lower at $180.70 and June live cattle closed $0.35 lower at $178.87. The only question that the market/traders have left to answer regarding nearby trading behavior is whether or not optimism surrounding the Inventory report has already been built into the market or if there's still more upward potential left in this move. Time will tell but the fact that supplies remain incredibly thin should garnish higher prices. The cash cattle market still hasn't traded this week but it's likely that by Thursday packer interest will increase. There were some light scattered sales reported in Kansas at $176 and in Iowa at $175 live and $275 dressed but those were only on a small sampling. Wednesday's slaughter is estimated at 127,000 head -- 1,000 head more than a week ago and 2,000 head more than a year ago.

Boxed beef prices closed lower: choice down $1.53 ($294.54) and select down $2.88 ($284.17) with a movement of 113 loads (68.06 loads of choice, 17.76 loads of select, 12.97 loads of trim and 14.28 loads of ground beef).

THURSAY'S CATTLE CALL: Higher. Given that slaughter speeds have been aggressive this week, it's likely that packers will have to become more aggressive in procuring cattle in order to ensure that they're not short bought moving forward.

FEEDER CATTLE:

Traders weren't willing to take much more risk ahead of seeing what Wednesday's Cattle Inventory report unveiled. To feeder's benefit, the report showed fewer cows in the market and a smaller calf crop as well.

It's likely that trade will be higher on Thursday as traders will then have an opportunity to react to the report's findings. March feeders closed $1.17 lower at $240.15, April feeders closed $0.85 lower at $246.15 and May feeders closed $0.42 lower at $251.80. At Kingsville Livestock Auction in Kingsville, Missouri compared to last week steer calves under 700 pounds sold $5.00 to $15.00 higher and the heavier calves and yearlings sold $5.00 to $8.00 stronger. Feeder sold $5.00 to $10.00 higher. The feeder cattle supply over 600 pounds was 61%. The CME feeder cattle index 1/30/2024: up $0.04, $236.32.

LEAN HOGS:

The spot April contract closed slightly lower but the rest of the lean hog market was able to rally on through the day's close. February lean hogs closed $0.50 higher at $76.35, April lean hogs closed $0.07 lower at $84.82 and June lean hogs closed $0.15 higher at $97.90. The pork cutout carcass price again fell lower as there were steady losses seen across all the cuts except the belly which dropped dramatically Tuesday afternoon. Slaughter has been more aggressive this past week, which has helped encourage packers to be slightly more active in the cash market. Pork cutouts totaled 310.86 loads with 272.33 loads of pork cuts and 38.53 loads of trim. Pork cutout values: down $0.99, $87.56. Wednesday's slaughter is estimated at 491,000 head – 2,000 head less than a week ago and 5,000 head more than a year ago. The CME lean hog index 1/29/2024: up $0.88, $71.48.

THURSDAY'S HOG CALL: Lower. Given that packers bought more hogs and saw prices increase throughout Wednesday's trade likely means that they'll be less aggressive in Thursday's market.

Wednesday Midday Livestock Market Summary - Traders Cautiously Wait to See What Cattle Inventory Report Presents

GENERAL COMMENTS:

Time seems to be passing extremely slowly for the cattle complex as both the live cattle and feeder cattle markets are cautious ahead of Wednesday's Cattle Inventory report. Meanwhile, the lean hog complex is seeing ample support from fundamentals (higher cash, higher cutouts) so it is continuing to trade higher with ease. March corn is down 1/2 cent per bushel and March soybean meal is down $0.40. The Dow Jones Industrial Average is up 44.23 points.

LIVE CATTLE:

Traders have their alarm clocks set and are ready for the release of this afternoon's Cattle Inventory report, which is expected to be bullish. The deferred contracts are still trading mildly higher, but the nearby contracts are modestly lower as a cautious buffer ahead of the report's release. There was a handful of trade reported late Tuesday afternoon at $176 in Kansas and $175 live and $275 dressed in Iowa, but not enough to really say any sort of trend has been established for the week. The vast majority of the week's trade will likely be delayed until Thursday. February live cattle are down $0.27 at $177.75, April live cattle are down $0.47 at $181.27 and June live cattle are down $0.02 at $179.20.

Boxed beef prices are higher: choice up $0.09 ($296.16) and select up $0.31 ($287.36) with a movement of 65 loads (33.42 loads of choice, 8.82 loads of select, 12.93 loads of trim and 9.91 loads of ground beef).

FEEDER CATTLE:

Traders have eased their aggressive tone in the feeder cattle market as they patiently wait to see what comes of this afternoon's Cattle Inventory report. It's likely the report will showcase fewer beef cows, indicating the 2024 calf crop will be smaller too -- both of which should help strengthen the feeder cattle market. March feeders are down $0.80 at $240.52, April feeders are down $0.50 at $246.50 and May feeders are down $0.22 at $252.00.

LEAN HOGS:

It's been an easy decision for traders to continue to support the lean hog contracts as pork cutout values are higher and even cash prices are stronger Wednesday morning. February lean hogs are up $0.67 at $76.52, April lean hogs are up $0.30 at $85.20 and June lean hogs are up $0.50 at $98.25. Given the cash market has already seen over 2,000 head traded this morning, it's likely packers could continue to actively procure hogs throughout the day and finish up the majority of their cash buying for the week.

The projected CME Lean Hog Index for 1/30/2024 is up $0.90 at $72.38, and the actual index for 1/29/2024 is up $0.88 at $71.48. Hog prices are higher on the Daily Direct Morning Hog report, up $2.06 with a weighted average price of $62.36, ranging from $55.00 to $62.36 on 2,437 head and a five-day rolling average of $59.67. Pork cutouts total 189.00 loads with 160.63 loads of pork cuts and 28.37 loads of trim. Pork cutout values: up $0.33, $88.88.

Wednesday Morning Livestock Market Update - Some Profit-Taking Could Surface

GENERAL COMMENTS:

There have been no cash sales so far this week and none will likely develop Wednesday. The Biannual Cattle Inventory report will be a large focus. It is anticipated inventory will be below a year ago. If that is what the report shows, it will support the market but may not propel the market higher. Futures are in a solid uptrend with the report causing a possible kneejerk reaction, but likely not a substantial move of the market. Boxed beef prices did not perform well Tuesday, which may be a cause for concern. Choice fell $3.35 with select down $1.17. Weakness in boxed beef may keep packers from becoming too anxious to pay more for cattle.

Hog futures continue to find strong buying interest. The April through August contracts pushed through and closed above chart resistance Tuesday. The change in cash has not been evident as packers again did not release the information with the National Daily Direct Afternoon Hog report not showing a price change but a weighted average price of $59.40. Cutouts did not perform well with values declining by $0.52. It is the end of the month and some selling pressure could take place Wednesday as recent profits might be taken.

	BULL SIDE		BEAR SIDE
1)	Some feeder cattle contracts have yet to close the chart gaps above the market. This may take place Wednesday.	1)	The cattle market is overbought, which could trigger technical selling at any time.
2)	The expectation is for the cattle inventory report to confirm tighter cattle numbers and reduced heifer inventory.	2)	Boxed beef is showing some weakness, which may impact the willingness of packers to be aggressive in the cash market.
3)	Hog futures pushed through and closed above price resistance in some contracts. This may provide further technical support for prices.	3)	Traders have not been able to obtain solid information on what cash is doing in the hog market. However, cutouts have been showing weakness.
4)	There is strong optimism that an increase in demand will take place over the next months in both domestic and international markets.	4)	Hog futures are overbought and could see some selling pressure into the end of the month.

Tuesday Closing Livestock Market Update - Contracts Walk Higher Yet Again

GENERAL COMMENTS:

The livestock complex again walked away with higher prices through the day's end. Wednesday is an important day for the market as the highly awaited Cattle Inventory report will be released. Hog prices averaged $59.40 on the Daily Direct Afternoon Hog Report, with 6,793 head selling and the five-day rolling average now sitting at $56.61. March corn is up 7 1/2 cents per bushel and March soybean meal is up $8.70. The Dow Jones Industrial Average is up 133.86 points.

LIVE CATTLE:

The live cattle complex wasn't as aggressive as the feeder cattle contracts were but its market still was able to close higher which is always a win in cattlemen's eyes. February live cattle closed $0.65 higher at $178.02, April live cattle closed $0.52 higher at $181.75 and June live cattle closed $0.75 higher at $179.22. No cash cattle trade developed throughout the day as everyone seems to be waiting to see what Wednesday's Cattle Inventory report amounts to before they do much business. 

Tuesday's slaughter is estimated at 127,000 head -- 2,000 head more than a week ago and 1,000 head more than a year ago.

Boxed beef prices closed lower: Choice down $3.35 ($296.07) and select down $1.77 ($287.05) with a movement of 134 loads (82.01 loads of choice, 32.00 loads of select, 2.89 loads of trim and 17.28 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Higher. It's unlikely that trade will develop much before the afternoon's Cattle Inventory report is released but afterward trade could begin to pick up and once it does, prices are expected to be higher.

FEEDER CATTLE:

Even though nearby corn prices closed $0.06 to $0.08 higher, the feeder cattle complex ran $1 to $2 higher through the day's end. March feeders closed $2.70 higher at $241.32, April feeders closed $2.40 higher at $247.00 and May feeders closed $2.17 higher at $252.22. The market's big rally likely came as traders are anxious to see Wednesday's Cattle Inventory report as it's fully expected to be supportive of the cattle market given that inventories are anticipated to be lighter than a year ago.

At Oklahoma National Stockyard in Oklahoma City, Oklahoma, compared to last week feeder steers and heifers sold $5 to $10 higher and steer and heifer calves traded $10 to $20 higher. Demand was noted to be extremely good for all classes of cattle with very active bidding. Feeder cattle supply over 600 pounds was 61%. The CME feeder cattle index Jan. 29, 2024: up $2.13, $236.28.

LEAN HOGS:

The lean hog complex continues to run higher as the hope of better demand in the months to come is a saving grace to the industry. February lean hogs closed $0.57 higher at $75.85, April lean hogs closed $1.47 higher at $84.90 and June lean hogs closed $1.47 higher at $97.75. The cash hog market finally saw a little better interest as over 6,000 head were sold this afternoon. Unfortunately, the same good news can't be noted about pork cutout prices as the sharp $9.35 decline in the belly pulled carcass prices lower. Pork cutouts totaled 389.58 loads with 338.17 loads of pork cuts and 51.41 loads of trim.

Pork cutout values: Down $0.52, $88.55. Tuesday's slaughter is estimated at 492,000 head -- 13,000 head more than a week ago and 10,000 head more than a year ago. The CME lean hog index Jan. 26, 2024: Up $0.70, $70.60.

WEDNESDAY'S HOG CALL: Steady/somewhat higher. Pork cutout values were slightly lower Tuesday afternoon but at some point, packers are going to have to get more aggressive and procure some hogs.

Tuesday Midday Livestock Market Summary - Contracts Launch Higher

GENERAL COMMENTS:

What a day it's already been for the livestock contracts and it's not even noon! Wednesday's Cattle Inventory report continues to be the cattle market's biggest focus and the report will likely influence the market as it's expected that data will show fewer beef cows and the continuation of liquidation. March corn is up 5 1/4 cents per bushel and March soybean meal is up $6. The Dow Jones Industrial Average is up 52.30 points.

LIVE CATTLE:

The live cattle complex is the most cautious livestock market heading into Tuesday's noon hour. All the contracts are trading higher except April and June 2024 contracts, but the rest are only trading mildly higher. Traders have largely accepted that Wednesday's Cattle Inventory report will likely be supportive long-term for the market, but given that it's a big-hitting report, there is still some hesitancy throughout the marketplace. February live cattle are up $0.12 at $177.50, April live cattle are down $0.20 at $181.02 and June live cattle are steady at $178.47. No cash cattle trade has been reported and trade is likely delayed until late Wednesday or Thursday.

Boxed beef prices are mixed: Choice down $0.96 ($298.46) and select up $0.38 ($289.20) with a movement of 70 loads (37.37 loads of choice, 20.53 loads of select, zero loads of trim and 12.14 loads of ground beef).

FEEDER CATTLE:

Even though corn prices are $0.04 to $0.05 higher this morning, feeders are living up to the old saying, "feeders are the leaders," as feeder cattle contracts are trading anywhere from $1 to $2.15 higher. The market grew cold ahead of Monday's close and both the live cattle and feeder cattle contracts closed lower which was likely a knee-jerk reaction from traders as they are aware Wednesday's Cattle Inventory report could be a market influencer.

It's also likely that traders were pleased to see continued feeder cattle demand in sale barns as Monday's CME feeder cattle index closed $2.09 higher at $234.15. March feeders are up $2.07 at $240.70, April feeders are up $1.72 at $246.32 and May feeders are up $1.37 at $251.42.

LEAN HOGS:

The lean hog complex is taking a more cautious approach to Monday's start as contracts are still trading mostly higher even though a few of the nearbys are trading lower. The cash hog market is about as disappointing as it gets -- only 35 head of hogs were reported as sold in the cash market Monday morning. Traders are going to need to see follow-through demand in order for them to comfortability continue to support the contracts. Demand both here domestically and internationally will be crucial in the months ahead. February lean hogs are down $0.42 at $74.47, April lean hogs are down $0.05 at $83.20 and June lean hogs are up $0.02 at $96.02.

The projected CME Lean Hog Index for 1/26/2024 is up $0.68 at $70.58, and the actual index for 1/25/2024 is up $0.23 at $69.90. Hog prices are unavailable on the Daily Direct Morning Hog Report due to confidentiality. However, we can see that 35 head have traded (yes, I reported that correctly, only 35 head have traded) and the five-day rolling average now sits at $50.49. Pork cutouts total 180.42 loads with 150.77 loads of pork cuts and 29.65 loads of trim. Pork cutout values: down $0.02, $89.49.

Tuesday Morning Livestock Market Update - Hog Buyers Should Be More Aggressive

GENERAL COMMENTS:

Cattle traders did not have much direction Monday. There was no interest in the cash market and boxed beef prices were not providing much support. Boxed beef was mixed on the midday report and closed the day lower with choice down $1.11 and select down $0.31. Fundamentally, the market seems to be supported, but some traders took some profits, and hedgers sold at these higher prices. Slaughter is back on track with packers seeming to be light on supplies. This may make them more aggressive in procuring cattle this week. The Biannual Cattle Inventory report will be released Wednesday. May feeder cattle futures closed the chart gap remaining from Oct. 23, 2023. The March and April contracts have gaps that have yet to be closed.

Hog futures drifted throughout Monday's trade. Traders could not find much to provide direction. More of the same may be seen Tuesday. The National Daily Direct midday and afternoon reports provided no direction as cash was not posted due to packer confidentiality issues. This was likely due to very limited cash activity in the country. The report was that only 75 head of hogs were traded. Pork cutouts showed some weakness with prices declining by $0.44. Slaughter was strong, indicating good demand is taking place.

	BULL SIDE		BEAR SIDE
1)	Cattle futures made higher highs again Monday, which keeps the uptrend intact even though contracts closed lower.	1)	Cattle futures will need to find buyer support, or the market could be in for a larger price retracement.
2)	Packers had not purchased many cattle ahead last week, which may require them to be more aggressive this week.	2)	Lower boxed beef may keep some pressure on the market Tuesday as weekend demand may not have been as good as hoped. Choice cuts are back below $300.
3)	April hog futures closed above chart resistance Monday, which may trigger further buying Tuesday.	3)	Hog futures are overbought and may be ripe for a price retracement as positions are liquidated. The end of the month could see some selling pressure.
4)	If the report of very limited hog purchases Monday is correct, packers will need to be more aggressive Tuesday and may pay more to get them.	4)	The weakness of cutouts Monday may put some initial pressure on trading activity Tuesday.

Monday Closing Livestock Market Update - Cattle Back Peddles

GENERAL COMMENTS:

The livestock complex closed mixed through Monday's end as cattle contracts backpedaled and closed lower while hog contracts kept their gains through the day's end. Heading into Tuesday's market, the cattle complex may remain sheepish as traders patiently wait to see what Wednesday's Cattle Inventory report says.

Hog prices are unavailable in the Daily Direct Afternoon Report due to confidentiality issues. However, we can see that only 75 head traded and the five-day rolling average now sits at $52.43. March corn is down 6 cents per bushel and March soybean meal is up $5.30. The Dow Jones Industrial Average is up 224.02 points.

LIVE CATTLE:

The live cattle complex ran into Monday's market full of momentum, almost like a runner eagerly looking forward to stretching their legs. But as the day neared closing time and boxed beef prices didn't necessarily lend the support hoped for, traders quickly reverted to a cautious mindset and let the market round out the day on a weaker note.

February live cattle closed $1.07 lower at $177.37, April live cattle closed $0.45 lower at $181.22 and June live cattle closed $0.37 lower at $178.47. The market's recent surge has been aggressive, but so long as fundamental support continues to keep cash prices steady/somewhat higher and boxed beef values elevated, the market should be able to maintain these levels. New show lists appear to be mixed, somewhat higher in Nebraska/Colorado, somewhat lower in Texas and lower in Kansas. Monday's slaughter is estimated at 125,000 head -- 10,000 head more than a week ago and 6,000 head more than a year ago.

Last week's negotiated cash cattle trade totaled 83,353 head. Of that, 89% (74,496 head) were committed to nearby delivery and the remaining 11% (8,857 head) were committed to deferred delivery. Last week, Southern live cattle sold for $174 to mostly $175, which is $2 higher than last week's weighted average. Northern dressed cattle sold for $277, which is $3 higher than last week's weighted average.

Boxed beef prices closed lower: Choice down $1.11 ($299.42) and select down $0.31 ($288.82) with a movement of 68 loads (42.82 loads of choice, 12.15 loads of select, zero loads of trim and 13.37 loads of ground beef).

TUESDAY'S CATTLE CALL: Higher. The week's cash cattle trade is likely delayed until the second half of the week and after the Cattle Inventory report is shared. Prices will likely be higher as front-end supplies are current.

FEEDER CATTLE:

Without the support of the live cattle market, the feeder cattle complex grew leery of leading its own market higher. From a fundamental standpoint, the feeder cattle market continues to sit in a strong position as feed remains relatively affordable, demand for both calves and feeders is strong and the closer time gets to turn our season and green grass, the more demand there should be from buyers.

March feeders closed $1.07 lower at $238.62, April feeders closed $1 lower at $244.60 and May feeders closed $1.12 lower at $250.05. At Joplin Regional Stockyards in Carthage, Missouri, at the midsession point and when compared to last week, feeder steers and heifers were trading $7 to $15 higher with instances of $20 higher. Feeder cattle supply over 600 pounds was 67%. The CME feeder cattle index 1/26/2024: Up $2.09, $234.15.

LEAN HOGS:

The lean hog complex managed to keep its contracts higher through the day's end, but the market wasn't free of headaches. For starters, the cash market only saw 75 head traded.

Only 75 head? I will forever be a cash market supporter as it's the only way to keep transparency and price discovery within the marketplace. This is why I'm bewildered to only see this afternoon's report print that only 75 head of hogs were traded.

Pork cutout values closed slightly lower as prices were hit-and-miss all across the board. The belly did manage to close $5.18 higher, but the significant losses in the butt (down $5.15), the loin (down $1.50) and the ham (down $1.55) pulled the carcass prices lower.

February lean hogs closed $0.35 higher at $75.27, April lean hogs closed $0.17 higher at $83.42 and June lean hogs closed $0.27 higher at $96.27. Pork cutouts totaled 315.13 loads with 278.46 loads of pork cuts and 36.67 loads of trim.

Pork cutout values: Down $0.44, $89.07. Monday's slaughter is estimated at 490,000 head -- 7,000 head more than a week ago and 16,000 head more than a year ago. The CME lean hog index 1/25/2024: Up $0.23, $69.90.

TUESDAY'S HOG CALL: Steady. With pork cutout values lower and virtually no interest in the cash market whatsoever throughout Monday's trade, packers likely remain distant buyers in Tuesday's market, too.

Monday Midday Livestock Market Summary - Cattle Continue to Charge Higher

GENERAL COMMENTS:

Both the live cattle and feeder cattle futures are rallying as traders see ample support from the market's technical and fundamental factors. The big line item to watch for this week will be Wednesday's Cattle Inventory report. March corn is down 7 1/4 cents per bushel and March soybean meal is up $4.40. The Dow Jones Industrial Average is up 5.71 points.

LIVE CATTLE:

Traders are continuing to aggressively support the live cattle complex as tight fed cattle supplies and relatively strong beef demand continue to be active drivers in this market. February live cattle are up $0.95 at $179.40, April live cattle are up $1.60 at $183.30, and June live cattle are up $1.52 at $180.37. So long as cash market support remains ample, traders should be able to continue to advance the market with ease. But the next resistance level traders will have to tackle is around $184.50. This week's Cattle Inventory report could launch the market sharply higher as the U.S. beef cow herd is expected to carve out another new low; the report will be released Wednesday. New showlists appear to be mixed, somewhat higher in Nebraska/Colorado, somewhat lower in Texas, and lower in Kansas.

Last week's negotiated cash cattle trade totaled 83,353 head. Of that 89% (74,496 head) were committed for nearby delivery, while the remaining 11% (8,857 head) were committed to deferred delivery. Last week, Southern live cattle sold for $174 to mostly $175, which is $2.00 higher than last week's weighted average. Northern dressed cattle sold for $277, which is $3.00 higher than last week's weighted average.

Boxed beef prices are mixed: choice up $0.97 ($301.50) and select down $0.20 ($288.93) with a movement of 29 loads (18.25 loads of choice, 5.22 loads of select, zero loads of trim and 5.91 loads of ground beef).

FEEDER CATTLE:

With the corn complex trading $0.05 to $0.07 lower in nearby contracts, and the live cattle market still lending plenty of support and ambition, it's been an easy call for traders to boldly support feeder cattle contracts again this week. March feeders are up $1.97 at $241.67, April feeders are up $1.92 at $247.52, and May feeders are up $1.67 at $252.85. With good weather is expected for much of the country this week and feeder cattle demand should stay strong.

LEAN HOGS:

The lean hog complex is taking a more cautious approach to Monday's start as contracts are still trading mostly higher even though a few of the nearbys are trading lower. The cash hog market is about as disappointing as it gets -- only 35 head of hogs were reported as sold in the cash market Monday morning. Traders are going to need to see follow-through demand in order for them to comfortability continue to support the contracts. Demand both here domestically and internationally will be crucial in the months ahead. February lean hogs are down $0.42 at $74.47, April lean hogs are down $0.05 at $83.20 and June lean hogs are up $0.02 at $96.02.

The projected CME Lean Hog Index for 1/26/2024 is up $0.68 at $70.58, and the actual index for 1/25/2024 is up $0.23 at $69.90. Hog prices are unavailable on the Daily Direct Morning Hog Report due to confidentiality. However, we can see that 35 head have traded (yes, I reported that correctly, only 35 head have traded) and the five-day rolling average now sits at $50.49. Pork cutouts total 180.42 loads with 150.77 loads of pork cuts and 29.65 loads of trim. Pork cutout values: down $0.02, $89.49.

Monday Morning Livestock Market Update - Traders May Begin With Uncertainty

GENERAL COMMENTS:

Higher cash cattle last week supported the gains in futures contracts. Trade in the South was mostly $2.00 higher on a weighted average of $175 with Northern dressed cattle at $277, up $3.00 for the week. Packers still seem to be light on cattle supply, which will increase the resolve of feedlots to hold for higher cash. Traders may continue to buy into the market as supply and demand fundamentals are positive. Slaughter weights for the week ended Jan. 13 showed all live cattle at 1,396 pounds, down 15 pounds. The steer carcass weights were down 10 pounds at 927 pounds. Further decreases should develop as the impact of the harsh weather is seen. Boxed beef was higher Friday with choice up $1.85 and select up $1.28. The Commitment of Traders report showed funds adding 3,962 long futures positions to live cattle, bringing their net-long positions to 17,372 contracts. Feeder cattle futures showed traders buying 3,298 futures contracts, bringing their net-long positions to 1,561 contracts.

Hogs had a strong week for cash, which provided substantial support to futures. The April and June futures contracts easily pushed through price resistance Friday with stronger cash and cutouts possibly providing further support Monday. The National Daily Direct Afternoon Hog report showed cash up $1.64 with the weighted average at $56.27. Slaughter is back on track again with demand being supportive. Cutouts gained $0.60 on Friday. The combination of higher cash and cutouts should provide further support to begin the week. The Commitment of Traders report showed funds as net buyers of 4,591 futures contracts, bringing their net long positions to 2,492 contracts.

	BULL SIDE		BEAR SIDE
1)	Packers need cattle and they may need to increase bids this week as feedlots will hold for higher cash.	1)	Cattle traders may be cautious to begin the week as futures already have higher cash factored in.
2)	Feeder cattle are poised to move higher and close the chart gaps that remain in the February, April, and May contracts.	2)	Cattle futures are becoming overbought technically, which could trigger some profit-taking.
3)	Hog futures have pushed through and closed above chart resistance, which may increase the confidence of traders to buy into the market.	3)	Packers may not be as aggressive this week as hog slaughter is back on track and hogs are available.
4)	Higher cash and cutouts should provide support for futures as traders have become more optimistic.	4)	Hog futures might be ripe for a price retracement after the large increase last week

Friday Closing Livestock Market Update - Stronger Tones Keep Livestock Higher

GENERAL COMMENTS:

What a week it was for the livestock complex! Gains were seen consistently throughout all three of the livestock contracts but the biggest contributing factor to the contracts' upward run was demand. Boxed beef prices were well supported this past week and pork cutout values traded higher too with the hope that more international demand picks up. Hog prices closed higher on the Daily Direct Afternoon Hog report, up $1.64 with a weighted average price of $56.27 on 3,058 head. March corn is down 5 1/2 cents per bushel and March soybean meal is down $9.20. The Dow Jones Industrial Average is up 60.30 points.

From Friday to Friday livestock futures scored the following changes: February live cattle up $4.08, April live cattle up $4.30; March feeder cattle up $7.75, April feeder cattle up $8.13; February lean hogs up $4.18, April lean hogs up $5.10; March corn up $0.01, May corn steady.

LIVE CATTLE:

This past week was an absolute victory for the live cattle market. There's the old saying, "the cattle market loves a storm," and even though the market is reacting on the backside of the storm's arrival, it's darn sure rallying. February live cattle closed $0.72 higher at $178.45, April live cattle closed $0.97 higher at $181.67 and Juen live cattle closed $1.25 higher at $178.85. The cash cattle market didn't see any more trade develop, although bids were offered up once again in the North. Throughout the week Southern live cattle sold for $174 to mostly $175 which is $2.00 higher than last week's weighted average, and Northern dressed cattle sold for $277 which is $3.00 higher than last week's weighted average.

Friday's slaughter is estimated at 121,000 head -- steady with a week ago but 1,000 head less than a year ago. Saturday's slaughter is expected to be around 5,000 head. The week's totaled slaughter is estimated at 618,000 head -- 1,000 head more than a week ago but 35,000 head less than a year ago.

Boxed beef prices closed higher: choice up $1.85 ($300.53) and select up $1.28 ($289.13) with a movement of 76 loads (50.73 loads of choice, 11.71 loads of select, 4.34 loads of trim and 9.00 loads of ground beef). Throughout the week choice cuts averaged 299.81 (up $4.48 from the previous week) and select cuts averaged $287.84 (up $7.36 from the previous week) and the week's total movement of cuts, grinds, and trim totaled 526 loads.

MONDAY'S CATTLE CALL: Higher. It's unlikely that trade will develop on Monday, but when cattle do trade next week prices will likely be higher.

FEEDER CATTLE:

The feeder cattle market rallied through Friday's end as traders were gifted support from nearly every segment of the industry. With both the live cattle and cash cattle markets trading higher, buyer interest strong throughout the countryside for both feeders and calves, and the corn market rounding out the week lower -- traders didn't feel the need to be cautious given that support was so widespread. March feeders closed $1.52 higher at $239.70, April feeders closed $1.67 higher at $245.60 and May feeders closed $1.92 higher at $251.17. The CME feeder cattle index 1/25/2023: not available at this time.

LEAN HOGS:

The lean hog complex kept with its ambitious nature through Friday's close thanks to the support of pork demand and the hopes that more export opportunities will arise in the near future. The spot April contract was able to close at the highest price-point in which it's traded at since last October. Pork cutout values closed evenly across the board with the only decline seen today being in the rib, and the biggest gain being in the butt. February lean hogs closed $0.62 higher at $74.92, April lean hogs closed $0.70 higher at $83.25 and June lean hogs closed $0.75 higher at $96.00. Pork cutouts totaled 269.79 loads with 234.03 loads of pork cuts and 35.76 loads of trim. Pork cutout values: up $0.60, $89.51. Friday's slaughter is estimated at 490,000 head -- 13,000 head more than a week ago and steady with a year ago. Saturday's slaughter is projected to be around 294,000 head. The CME lean hog index 1/24/2024: up $0.28, $69.67.

MONDAY'S HOG CALL: Steady. Packers barely supported the cash market this past week which likely means that they'll need to be more aggressive next week but they'll likely wait until the middle of the week to do so.

Friday Midday Livestock Market Summary - Demand Keeps Contracts Running Higher

GENERAL COMMENTS:

As the market nears Friday's noon hour, the livestock contracts continue to trade higher as demand continues to be a supportive factor. No new cash cattle trade has been reported at this point and it's likely the week's business is essentially done. March corn is down 6 cents per bushel and March soybean meal is down $6.20. The Dow Jones Industrial Average is up 105.65 points.

LIVE CATTLE

Packers may have kept a lid on the cash cattle market by managing supplies through January, but consequences of the storms throughout most of January have been significant for the fed cattle in feedyards across the country. As cattle continue to sit in pens filled with mud, feed conversions aren't faring well and packers may end up paying more money for cattle in the weeks ahead.

The simple fact is packers buy by the head and sell by the pound -- and in conditions like these, it's easy for cattle to lose anywhere from 60 to 100 pounds until pen conditions improve. Traders are aware of this scenario, which is partly why the market is seeing such tremendous support. February live cattle are up $0.97 at $178.70, April live cattle are up $1.02 at $181.77 and June live cattle are up $1.52 at $179.12.

There hasn't been any more cash cattle trade reported at this point, but some late clean-up sales could still develop. Thus far throughout the week, Southern live cattle have sold for $174 to mostly $175, which is $2 higher than last week's weighted average. Northern dressed cattle sold at mostly $277 which is $3.00 higher than last week's weighted average.

Boxed beef prices are higher: Choice up $1.87 ($300.55) and select up $1.29 ($289.14) with a movement of 55 loads (37.71 loads of choice, 8.70 loads of select, zero loads of trim and 8.29 loads of ground beef).

FEEDER CATTLE

The feeder cattle complex hasn't had a change of heart as the corn complex's $0.04 to $0.05 regression amid a relentless run in the live cattle contracts all bodes well for feeders. March feeders are up $2.75 at $240.95, April feeders are up $2.47 at $246.35 and May feeders are up $2.25 at $251.50. It's likely that traders will continue to support the feeder cattle through Friday's end and consequently drive the spot March contract back above the market's 100-day moving average.

LEAN HOGS

The lean hog complex isn't being left in the dust today as the nearby contracts continue to support higher prices while some of the deferred contracts are trading slightly lower. February lean hogs are up $0.75 at $75.05, April lean hogs are up $0.87 at $83.45 and June lean hogs are up $0.80 at $96.07. The cash hog market has seen so little interest from packers thus far today that prices can't even be published because of confidentiality issues. It is supportive, however, that midday pork cutout values are higher with the largest gains being seen in ham at this point.

Hog prices are unavailable in the Daily Direct Morning Hog Report due to confidentiality. However, we can see that only 571 head have traded and the five-day rolling average now sits at $49.43. Pork cutouts total 153.43 loads with 141.97 loads of pork cuts and 11.46 loads of trim. Pork cutout values: Up $2.84, $91.75.

Friday Morning Livestock Market Update - Cattle Futures May Take a Breather

GENERAL COMMENTS:

Cattle futures floundered during the first hour of trade Thursday, eventually uncovering buying interest and pushing contracts significantly higher. Both live and feeder cattle futures closed at the highest level since early November. Stronger cash trade developed Thursday with cash in the South up $2 at $175 while Northern dressed trade was $3 higher at $277. Price strength may temper somewhat Friday ahead of the weekend, but cash strength potentially indicates higher cattle prices may unfold. Packer margins are tighter than a year ago, but they need to purchase cattle to fill demand and to purchase ahead. Boxed beef prices were mixed with choice down $0.82 while select increased $0.61.

Nearby hog futures pushed to the highest close since Nov. 20, 2023. The bullish implications of cash have provided strong support over the past three days. The National Daily Direct Afternoon Hog report showed a cash gain of $1.53 with a weighted average of $54.63, about $10.00 higher than it was not too long ago. Cutouts only gained $0.05, but it is a gain, nevertheless. This should support the market again Friday, although gains may be limited ahead of the weekend. The earlier optimism over better demand has now become a reality supported by fundamentals. Saturday slaughter is estimated at 289.000 head.

	BULL SIDE		BEAR SIDE
1)	Stronger cash will provide feedlots with greater confidence in the potential for further gains next week.	1)	It is the end of the week and higher cash is already factored in. Some liquidation of cattle futures may take place Friday.
2)	Higher prices are being paid for calves and feeder cattle at auctions, which will support feeder cattle futures.	2)	Boxed beef demand has been struggling recently, which may indicate demand may be slowing somewhat. This could limit the aggressiveness of the packers next week.
3)	Hog futures are trending higher, supported by stronger cash. Market-ready hog supplies seem to have tightened.	3)	April and June hog futures closed near price resistance and may have a difficult time breaking above that level Friday.
4)	April and June contracts closed near price resistance. A break above that level would trigger further short-covering.	4)	Packers may be caught up with immediate slaughter needs and some purchased ahead. They may not be as aggressive in the cash market Friday.

Thursday Closing Livestock Market Update - Higher Cash Prices Rally Cattle Contracts

GENERAL COMMENTS:

It was a tremendous day again for livestock contracts as all three markets closed higher. Cattle contracts closed sharply higher as strong advancements in the cash market grabbed traders' attention. Hog prices closed higher on the Daily Direct Afternoon Hog report, up $1.53 with a weighted average price of $54.63 on 2,538 head. March corn is down 1/2 cent per bushel and March soybean meal is down $5.10. The Dow Jones Industrial Average is up 242.74 points.

Thursday's export report shared that beef net sales of 22,400 metric tons (mt) for 2024 were primarily for South Korea (9,600 mt), China (3,100 mt) and Japan (2,800 mt). Pork net sales of 24,100 mt were primarily for Mexico (9,700 mt), Japan (3,100 mt) Australia (2,200 mt).

LIVE CATTLE:

What a day for the live cattle market! There are times when I believe true price discovery is all but dead and a thing of the past in the live cattle/fat cattle market, but it's days like today I'm thankfully proven wrong.

Feedlot managers deserve a pat on the back for waiting the week out and being disciplined enough to wait for higher prices that eventually came their way. Trade was scarce this morning, but as time passed, packers got more and more anxious and eventually ended up upping their bids. Throughout the day, Southern live cattle traded for $74 to mostly $175 which is $2 higher than last week's weighted average. Northern dressed cattle sold for $277, which is $3 higher than last week's weighted average. Asking prices for cattle left to sell remain firm at $278 in the North and $176 in the South.

The cash cattle market's exhilarating trade sparked the interest of traders, and this is what drove the contracts higher ahead of today's close. February live cattle closed $2.37 higher at $177.72, April live cattle closed $2.35 higher at $180.70 and June live cattle closed $2.15 higher at $177.60. 

Thursday's slaughter is estimated at 126,000 head -- 5,000 head more than a week ago and 2,000 head more than a year ago. Thursday's actual slaughter data shared that for the week ending Jan. 13, 2024. Steers averaged 927 pounds, which is 10 pounds less than the previous week but 13 pounds more than a year ago. For the same week, heifers averaged 849 pounds, which is two pounds less than last week but 16 pounds more than a year ago.

Boxed beef prices closed mixed: Choice down $0.82 ($298.68) and select up $0.61 ($287.85) with a movement of 146 loads (116.05 loads of choice, 12.36 loads of select, 9.62 loads of trim and 8.07 loads of ground beef).

FRIDAY'S CATTLE CALL: Steady with the week's trend. Given that cattle have sold in both regions now, it's likely that any more sales will be steady with the week's trend.

FEEDER CATTLE:

The feeder cattle complex caught wind of the exciting trading in today's cash cattle market, and all but looked at one another and said, "It's time to let 'er rip boys," before sending the contracts $3 to $4 higher. The stronger the cash cattle market, the more excitement and opportunity grow and expand throughout the feeder cattle complex. March feeders closed $4.40 higher at $238.17, April feeders closed $4.12 higher at $243.92 and May feeders closed $4.15 higher at $249.25.

At the Winter Livestock Auction in Pratt, Kansas, and at the midsession point, compared to last week, feeder steers were selling $2 to $6 higher, and although an accurate test wasn't established, heifers were noted to be selling with a stronger undertone, too. Feeder cattle supply over 600 pounds was 91%. The CME feeder cattle index 1/24/2024: Up $0.47, $230.68.

LEAN HOGS:

The lean hog market kept with its rallying nature through Thursday's end as once again contracts closed higher. The cash hog market has been lousy this week, but that hasn't seemed to worry traders. Pork cutout values closed slightly higher again Thursday afternoon with the rib and belly doing most of the heavy lifting to keep the carcass price trending higher.

February lean hogs closed $0.40 higher at $74.30, April lean hogs closed $0.52 higher at $82.55 and June lean hogs closed $0.40 higher at $95.25. Pork cutouts totaled 336.65 loads with 279.12 loads of pork cuts and 57.53 loads of trim.

Pork cutout values: Up $0.05, $88.91.

Thursday's slaughter is estimated at 480,000 head -- 4,000 head less than a week ago and 7,000 head less than a year ago. The CME lean hog index Jan. 23, 2024: Up $0.64, $69.39.

FRIDAY'S HOG CALL: Steady. Given that packers have shown this week's market virtually no interest, it's likely that Friday will be no different.

Thursday Midday Livestock Market Summary - Hogs Continue to Trek Higher

GENERAL COMMENTS:

The livestock complex is seeing mixed interest from traders as the hog and live cattle contracts trade mostly higher, but the feeder cattle contracts are reverting backward. The cash cattle market remains mostly quiet as only a few more cattle have traded in the South. March corn is down 1 3/4 cents per bushel and March soybean meal is down $3.50. The Dow Jones Industrial Average is up 48.30 points.

Thursday's export report shared that beef net sales of 22,400 mt for 2024 were primarily for South Korea (9,600 mt), China (3,100 mt) and Japan (2,800 mt). Pork net sales of 24,100 mt were primarily for Mexico (9,700 mt), Japan (3,100 mt) Australia (2,200 mt).

LIVE CATTLE

The live cattle complex is trading mixed as traders continue to support the nearby contracts but are letting the later 2024/early 2025 contracts drift lower. Traders are hopeful that the cash cattle market will stand firm and add another $1.00 or $2.00 to its current market and given that only a handful more of cattle have traded this morning in the South, that wish could come true. A few more cattle have sold this morning in Kansas at $174 which is fully steady with yesterday's trade but $1.00 higher than last week's weighted average. Bids are being offered in the North at $275, but with asking prices firm at $276 to $278, Northern cattle have yet to trade. Choice boxed beef prices are seeing some resistance as the market quickly scampered back from $300.00. This doesn't come as much of a surprise given that consumers are financially strained, and that strong beef demand doesn't usually spark the market until late in the Spring when grilling season perks up. The recent uptick in boxed beef prices has largely stemmed from the fact that packers were short supply after having reduced kill speeds during the January storms. February live cattle are up $0.22 at $175.57, April live cattle are up $0.37 at $178.72 and June live cattle are up $0.40 at $175.85.

Boxed beef prices are mixed: choice down $1.66 ($297.84) and select up $0.68 ($287.92) with a movement of 67 loads (56.38 loads of choice, 6.18 loads of select, zero loads of trim and 4.07 loads of ground beef).

FEEDER CATTLE

The feeder cattle complex is waving its white flag as traders are letting most of the contracts drift lower into the noon hour. March feeders are down $0.37 at $233.40, April feeders are down $0.17 at $239.62 and May feeders are up $0.22 at $245.32. The spot March contract is currently trading at the highest price point in which the market has entertained since last November. After supporting the contracts robustly over the last two weeks, traders are now wanting to see continued fundamental demand to justify trading any higher in the near term.

LEAN HOGS

With adequate export demand and slightly higher midday pork cutout values, the lean hog contracts are continuing to trade higher. February lean hogs are up $0.45 at $74.35, April lean hogs are up $0.42 at $82.45 and June lean hogs are up $0.27 at $95.15. The cash hog market has yet to see any substantial trade develop, and at this point one has to wonder if the market will see any day this week where trade tops over 10,000 head.

The projected lean hog index for 1/24/2024 is up $0.28 at $69.67, and the actual index for 1/23/2024 is up $0.63 at $69.39. Hog prices are higher on the Daily Direct Morning Hog Report, up $4.12 with a weighted average price of $55.47, ranging from $45.00 to $60.00 on 1,778 head and a five-day rolling average of $49.01. Pork cutouts total 149.93 loads with 124.30 loads of pork cuts and 25.64 loads of trim. Pork cutout values: up $1.51, $90.37.

Thursday Morning Livestock Market Update - Strong Cash Hogs Provide Price Support

GENERAL COMMENTS:

Live cattle futures continue to trend higher, fueled by the strong possibility of higher cash. Some light trade took place in Kansas and Texas at $174, which is $1 higher than last week. Cash trade should increase Thursday as packers will need to procure the cattle they need even if they need to pay more. However, there is uncertainty developing due to the recent weakness of boxed beef. Choice declined $2.16 with select down $1.14 on Wednesday. This may increase the caution of traders as the second half of the week unfolds. The December Cold Storage report showed frozen beef supply closing the year 11% below the end of 2022. Weekly export sales Thursday may provide some direction for the market.

Hogs had a very strong Wednesday in the cash market with the National Daily Direct Afternoon Hog report showing a gain of $5.76. It has been quite some time since we have seen a daily cash increase of this magnitude. It is not so much that hog numbers have tightened, but packers need to make up for lost slaughter time and are seeing better pork demand. Pork in cold storage at the end of the year was down 6% from a year ago with bellies 11% lower. Cutout values were up $0.83 on Wednesday. The combination of higher cash and cutouts should provide traders with the confidence to continue to buy futures.

	BULL SIDE		BEAR SIDE
1)	The trend is up for cattle and the potential for higher cash this week should keep the trend intact.	1)	Cattle futures have already factored in higher cash. This may limit further upside movement for the rest of this week.
2)	There is a chart gap above the market in both live cattle and feeder cattle futures that may be filled at some point.	2)	The recent weakness of boxed beef may indicate retail demand has been replenished after a few weeks of lower slaughter and tighter supplies of boxed beef.
3)	Strong cash and higher cutouts should provide further support to hog futures Thursday as traders gain more confidence.	3)	Hog weights averaged 292.1 pounds last week, up 0.8 pounds from the previous week and 3.0 pounds above a year ago.
4)	Further fund short-covering should provide support to the hog market Thursday as fundamentals have turned positive.	4)	April and June hog futures are nearing price resistance, which may be difficult to penetrate in the near term. Sell orders may be waiting at those levels.

Wednesday Closing Livestock Market Update - Traders Continue to Push Livestock Contracts

GENERAL COMMENTS:

It was another powerful day for the livestock complex as traders pushed all three of the livestock markets higher through closing. A few cattle traded in the South for $174, but the cash cattle market still needs to trade more before the week's end. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $5.76 with a weighted average price of $53.10 on 3,665 head. March corn is up 5 3/4 cents per bushel and March soybean meal is up $2.20. The Dow Jones Industrial Average is down 98.93 points.

Wednesday's Cold Storage report shared that total red meat supplies in freezers were up 4% from the previous month but down 9% from a year ago. Total pounds of beef in freezers were up 6% from the previous month but down 11% from last year. Frozen pork supplies were down 3% from last month but down 6% from last year. Stocks of pork bellies were up 16% from last month but down 11% from last year.

LIVE CATTLE:

The live cattle complex rounded out Wednesday's close with higher prices yet again. As the market moves into the later part of the week amid a weaker close in box prices, the question traders are pressed to answer is: how much higher, if higher at all? Thankfully the cash cattle market is lending some support as it's beginning to trade at $174 in the South, which is $1 higher than last week's weighted average, but the North has yet to trade. Asking prices in the North are firm at $276 plus and in the South at $176 plus. More cattle will need to trade before the week's over. February live cattle closed $0.70 higher at $175.35, April live cattle closed $0.52 higher at $178.35 and June live cattle closed $0.50 higher at $175.45. Wednesday's slaughter is estimated at 126,000 head -- 8,000 head more than a week ago and steady from a year ago.

Boxed beef prices closed lower: Choice down $2.16 ($299.50) and select down $1.14 ($287.24) with a movement of 126 loads (77.54 loads of choice, 26.42 loads of select, 4.93 loads of trim and 17.32 loads of ground beef).

THURSDAY'S CATTLE CALL: Steady to $1 higher. Given that higher notes have been already established in this week's market, cattle likely will continue to trade for at least $1 higher than last week's weighted average, but there is the chance they could trade even higher as packers bought very few cattle last week.

FEEDER CATTLE:

Even though the corn complex closed $0.04 to $0.05 higher in most contracts, the feeder cattle market was unfazed as it found strength in the demand for feeders in the countryside and continues to see excellent support from the live cattle market. The simple fact is that there aren't many calves/feeders to be had as so many cattle were marketed early this year and are already in feedlots. March feeders closed $0.12 higher at $233.77, April feeders closed $0.25 higher at $239.80 and May feeders closed $0.35 higher at $245.10.

At Winter Livestock Auction in La Junta, Colorado, feeder steers under 500 pounds traded unevenly steady but steers over 500 pounds sold $6 to $12 higher. Feeder heifers sold $5 to $14 higher in all weight divisions. Feeder cattle supply over 600 pounds was 47%. The CME feeder cattle index 1/23/2024: Up $1.74, $230.21.

LEAN HOGS:

The lean hog market hasn't slowed down whatsoever as the market charged through Wednesday's end even after Tuesday's big jump. The hog market's biggest excitement is that there could be more export opportunities soon given that China is cutting back on its domestic pork production. Pork cutout values closed higher this afternoon, but the cutout price was slightly skewed as the belly jumped over $7 higher. February lean hogs closed $0.60 higher at $73.90, April lean hogs closed $1.70 higher at $82.02 and June lean hogs closed $1.50 higher at $94.85.

Pork cutouts totaled 284.81 loads with 255.99 loads of pork cuts and 28.81 loads of trim. Pork cutout values: Up $0.83, $88.86. Wednesday's slaughter is estimated at 493,000 head -- 4,000 head more than a week ago and 5,000 head more than a year ago. The CME lean hog index 1/22/2023: up $0.35, $68.75.

THURSDAY'S HOG CALL: Higher. Given that packers haven't bought many hogs in this week's cash market, it's likely they'll be slightly more aggressive on Thursday.

12-month outlook for cattle suggests profitable returns for cow-calf producers and slightly profitable returns for cattle feeders

Strong calf and feeder cattle prices made 2023 one of the most profitable years for Northwest cattle producers. Despite record retail beef prices, domestic demand has remained robust. Cow-calf producers will likely enjoy record cattle prices and lower production costs in 2024.

12-Month Profitability Outlook

High open rates

Across the Northwest, cattle producers are reporting higher open rates (the cows that did become pregnant during the breeding season), with some areas experiencing open rates as high as 20%. Higher open rates are likely a lingering effect from the drought, which reduced the amount of pasture cattle have available for grazing. This could be attributed to cows that calved late in 2022 who had less time to re-breed in 2023, potentially missing the breeding window to re-breed with a 2024 pregnancy.

Prices end the year on a low

Feeder cattle futures prices steadily climbed higher for the first nine months of 2023, before dropping sharply in the fourth quarter following a bearish October Cattle on Feed report. Feeder futures fell more than $9 per cwt during the month of October, taking some producers by surprise and leaving some analysts to comment that speculators were potentially driving the sharp price declines. However, cattle future prices tend to experience a seasonal decline in the fall when feedlots are full. Fewer cattle were shipped in December, down 7.4% year over year as feedlots were fairly full and fed cattle prices were lower in December. Once feedlots work through their current cattle, lower live cattle prices will lower live-cattle prices will likely be temporary. Producers who can market their cattle in the summer typically benefit from higher prices; 2023 was the second most profitable year in history for the beef industry across all sectors and second highest in terms of calf prices.

Looking ahead to 2024, cattle prices are trending higher. The upcoming USDA Cattle report (released on January 31, 2024) is expected to show another year of a shrinking national herd. Rebuilding is not expected to begin until 2025 at the soonest. Demand for available cattle will benefit producers, supporting strong prices.

Demand a driving concern for beef prices

One of the challenges facing the U.S. beef industry is the price sensitivity of consumers. There is a limit to how much consumers are willing to pay for high-quality beef, especially when prices have increased significantly in recent years. From 2018 to 2020, the average retail price for Choice Beef was around $5.50 to $6.50 per pound, but it rose to over $8.30 by mid-2023. Ground beef prices reached an all-time high of $5.35 per pound in November 2023. The main factors behind rising prices are inflation, supply constraints and lower production. The national cattle herd is at its lowest level since 2015 and will shrink further in 2024, meaning less beef will be available and wholesale prices will likely reach new highs. Demand must hold for retail beef prices to continue increasing. As beef prices rise through 2024, consumers may opt for lower-cost meats. There is some evidence this is already happening.

Profitability

Producers should benefit from favorable prices and strong returns over the next two to three years. The national cattle herd is still undergoing contraction and is not expanding fast enough to meet market demand due to continued difficulty with drought and low replacement rates. A tighter beef supply along with robust domestic and export demand has supported strong cattle prices. Cow-calf returns will benefit from lower feed costs and reductions in fuel costs. El Niño should favor areas in the U.S. that have been impacted by drought to promote herd expansion. However, interest rates may hold back herd expansion as they are nearly twice as high as in the previous expansion cycle (2013-2015). A tightening national cattle herd and lower costs will benefit cow-calf operations with 2024 margins forecasted at over $500 per head. If achieved, these would set a record. Until the cattle cycle can rebuild the national herd, cow-calf producers can enjoy strong prices, likely to last through 2025.

For cattle feeders, the year ended on a more somber note with five consecutive weeks of lower prices. Higher cattle prices and an increase of nearly 20% in the cost of finishing a steer have weighed on cattle feeders’ and packers’ margins. Increased interest and input costs put a strain on cattle feeders’ capital and operating lines.

Packers’ margins were pressured by strong cattle prices leading packers to reduce slaughter rates. Since these rates slowed in July and August, packers’ margins improved, but many will continue to limit slaughter rates to protect their profits. This might be good for the beef industry as some feedlots are struggling to obtain feeder cattle. In the face of high retail prices, strong demand has been a key driver of cattle industry optimism. Should beef demand decline, it could dampen the profits of both cattle feeders and packers. Even with looming concerns of a global slowdown, analysts predict cattle industry profits will remain strong.

Wednesday Midday Livestock Market Summary - Traders Keep Pushing the Contracts Higher

GENERAL COMMENTS:

With both the live cattle and feeder cattle markets breaking past resistance, monitoring this afternoon's close will be insightful as it could indicate how serious traders are on advancing the contracts. Bids are currently on the table in Texas and Kansas, but thus far no cattle have traded hands. March corn is up 5 cents per bushel and March soybean meal is up $2.50. The Dow Jones Industrial Average is up 117.10 points.

LIVE CATTLE

The cattle complex is leaning into Wednesday's trade and continues to trade higher even though the market is fully aware that midday boxed beef prices are lower and that corn prices are posting a subtle $0.03 to $0.04 rally. A couple bids are on the table in the South at $174, but with Southern feedlots asking $176 this week, no cattle have traded yet. Asking prices in the North are posted at $276, but no bids are currently on the table in the North. It will be interesting to see how packers play their cards this week given that boxed beef prices have added more of an incentive for packers to increase processing speeds – which means that they'll need to be more aggressive in their cattle procurement. Today's slight regression in boxed beef prices could be seen as worrisome, but with choice prices still above $300.00, there is still plenty of money for packers to have at that price point. February live cattle are up $0.65 at $175.30, April live cattle are up $0.37 at $178.17 and June live cattle are up $0.32 at $175.27.

Boxed beef prices are lower: choice down $1.12 ($300.54) and select down $1.54 ($286.84) with a movement of 80 loads (49.42 loads of choice, 13.83 loads of select, 4.83 loads of trim and 12.20 loads of ground beef).

FEEDER CATTLE

Seeing that it still has the support of the live cattle market, the feeder cattle contracts continue to trade higher despite corn prices being up slightly. Demand continues to remain strong this week in the countryside for feeder cattle as sales have been tough to get to thus far in 2024 and buyers know that there aren't many calves/feeders left to be had, and the closer time gets to turn out and green grass, the more expensive these cattle are likely to become. March feeders are up $0.82 at $234.47, April feeders are up $0.67 at $240.22 and May feeders are up $0.65 at $245.40.

LEAN HOGS

The lean hog complex is keeping with its ambitious nature as the contracts again trade higher today. Fueled by strong demand and the hopes that there will be more pork demand in the future with China culling down on its sows, the market has much to be excited about. February lean hogs are up $0.25 at $73.52, April lean hogs are up $1.27 at $81.60 and June lean hogs are up $1.15 at $94.50.

The projected lean hog index for 1/23/2024 is up $0.63 at $69.39, and the actual index for 1/22/2024 is up $0.35 at $68.75. Hog prices are higher on the Daily Direct Morning Hog Report, up $3.94 with a weighted average price of $51.35, ranging from $43.00 to $55.00 on 944 head and a five-day rolling average of $47.40. Pork cutouts total 142.67 loads with 119.58 loads of pork cuts and 23.09 loads of trim. Pork cutout values: up $2.19, $90.22.