Cattle futures extended gains Wednesday, supported by firmer cash prices and the beef supply and price outlook provided by the World Agricultural Supply and Demand Estimates (see below).
Live Cattle futures closed an average of $1.04 higher (30¢ higher at the back to $1.65 higher toward the front).
Feeder Cattle futures closed an average of 71¢ higher.
Negotiated cash fed cattle trade was slow on light demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices were steady in the Texas Panhandle at $140/cwt. and steady to $1 higher in Kansas at $140.
Elsewhere, trade was limited on light demand with too few transactions to trend. Last week, live prices were $140 on a live basis in Nebraska and the western Corn Belt. Dressed prices were $222 in Nebraska and $220-$222 in the western Corn Belt.
Choice Boxed beef cutout value was $1.67 lower Wednesday afternoon at $275.79/cwt. Select was $1.79 lower at $272.05.
Corn futures closed 10¢ to 14¢ higher in old-crop contracts and then mostly 6¢ to 9¢ higher.
Soybean futures closed 20¢ to 25¢ higher in the front eight contracts and then mostly 14¢ higher.
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Major U.S. financial indices closed sharply higher Wednesday, led by tech stocks and on positive quarterly corporate earnings reports.
The Dow Jones Industrial Average closed 305 points higher. The S&P 500 closed 65 points higher. The NASDAQ was up 295 points.
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USDA’s Economic Research Service (ERS) left corn prices unchanged and raised expectations for fed cattle prices in the monthly World Agricultural Supply and Demand Estimates (WASDE).
ERS increased the expected annual average five-area direct fed steer price 50¢ from the previous month to $137.50/cwt., on firm packer demand.
Prices are projected at $139 in the first quarter, $136 in the second quarter, $135 in the third quarter and $140 in the fourth quarter.
Beef production this year is projected to be 27.4 billion lbs., slightly higher than the previous month. The total would be 562 million lbs. less (-2.0.%) than last year.
“The beef production forecast is raised from the previous month as larger expected placements during first-half 2022 are marketed in the latter half of the year,” explain ERS analysts. “However, the increase in fed cattle slaughter is partly offset by lower non-fed cattle slaughter.”
Total red meat and poultry production this year is forecast to be 106.6 billion lbs., which would be 183 million lbs. less than last year (-0.2%).
Corn
U.S. corn supply and use (2021-22) was unchanged from the previous month.
The season-average farm price was unchanged at $5.45/bu.
Soybeans
The 2021-22 U.S. soybean outlook is for increased soybean crush and lower ending stocks.
The U.S. season-average soybean price was forecast at $13.00/bu., up 40¢ from last month, partly reflecting the impact of drought in South America. The soybean meal price was forecast at $410.00/short ton, up $35. The soybean oil price forecast was raised 1¢ to 66.0¢/lb.
Wheat
The outlook for 2021-22 U.S. wheat was for stable supplies, lower domestic use, reduced exports, and higher ending stocks.
Projected 2021-22 ending stocks were raised 20 million bu. to 648 million but they still would be 23% lower than last year. The projected season-average farm (SASP) price for wheat was raised 15¢/bu. to $7.30 on NASS prices reported to date and expectations for cash and futures prices for the remainder of 2021-22. This would be the highest SAFP since 2012-13.