Improving packer production — 117,000 head Tuesday — helped boost Live Cattle futures an average of $1.11 higher on Wednesday.
The uptick in Live Cattle, helped boost Feeder Cattle futures an average of 73¢ higher, except for 50¢ lower in spot Jan, despite surging Corn futures prices.
Grain futures surged on Wednesday, led by soybeans on weather concerns in South American and wheat based on mounting tension between Russia and Ukraine.
Soybean futures closed mostly 18¢ to 30¢ higher.
Corn futures closed mostly 7¢ to 11¢ higher.
Negotiated cash fed cattle trade was slow on light to moderate demand in the Southern Plains and Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service.
So far this week, live prices are steady to $1 higher in the Texas Panhandle at $137, $1-$2 higher in Kansas at $137. Prices are steady in Nebraska at $137 and in the western Corn Belt at $138. Dressed prices are steady at $218.
Choice Boxed beef cutout value was $2.11 higher Wednesday afternoon at $291.60/cwt. Select was $2.04 higher at $280.43.
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Major U.S. financial indices continued to step lower Wednesday amid worries about inflation, higher input costs and higher interest rates.
The Dow Jones Industrial Average closed 339 points lower. The S&P 500 closed 44 points lower. The NASDAQ was down 166 points.
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USDA’s Economic Research Service (ERS) increased the projected annual feeder steer price (750-800 lbs., Oklahoma City) for this year to $160/cwt., in the latest monthly Livestock, Dairy and Poultry Outlook. That’s $1 higher than the previous month’s estimate and would be $13.05 more than last year’s annual estimate. ERS analysts note the feeder steer price for the week ending Jan. 10 was $156.65/cwt., up 14.2%, or $19.13.
Feeder steer prices are projected at $159 in the first quarter, $156 in the second quarter, $160 in the third quarter and $165 in the fourth quarter.
On the other end of the scale, the five-area direct average fed steer price in December was $30.31 more (+27.8%) than a year earlier at $139.36/cwt. From August through December the average price was $14.91 (+12.0%) more than the same period a year earlier, according to ERS. The trend continued into the new year with the average price the week ending Jan. 9 up $27.14 (+24.4%) from a year earlier at $138.41.
As mentioned in Cattle Current recently, based on expected continued packer demand strength, ERS increased the forecast annual five-area direct average fed steer price for this year to $136.75/cwt.
The average fed steer price was forecast at $139 in the first quarter, $136 in the second quarter, $134 in the third quarter and $138 in the fourth quarter.
Keep in mind the more optimistic price projections come with slightly higher expectations of beef production.
“Given the anticipated rise in fourth-quarter net placements, fed cattle marketings and fed cattle slaughter expectations are raised in the second quarter, and coupled with a stronger expected pace of marketings in the second half of the year, the beef production forecast is raised for 2022. The forecast for 2022 beef production was raised to 27.165 billion lbs., up 165 million lbs. from last month,” say ERS analysts.