Cattle futures closed mostly lower Wednesday, apparently with spillover pressure from apparent long liquidation in grain futures.
Feeder Cattle futures closed an average of 88¢ lower (32¢ to $1.15 lower).
Live Cattle futures closed an average of 27¢ lower, except for an average of 58¢ higher in the front three contracts.
Negotiated cash fed cattle trade was limited on light to moderate demand in all regions through Wednesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, live prices were $170/cwt. in the Southern Plains, mostly $176 in Nebraska and $175-$177 in the western Corn Belt. Dressed prices were $280.
Choice boxed beef cutout value was $1.32 lower Wednesday afternoon at $298.15/cwt. Select was $1.46 lower at $282.89/cwt.
Grain and Soybean futures tumbled Wednesday. At least from a psychologic perspective, widespread selling appeared to be tied to the U.N. Secretary General’s announcement that Russia agreed to extend the Black Sea Grain initiative for another 60 days (see below). As well, private exporters reported the cancellation of sales of 272,000 metric tons of corn for delivery to China during the 2022/2023 marketing year.
Corn futures closed mostly 5¢ to 9¢ lower.
KC HRW Wheat closed mostly 12¢ to 20¢ lower.
Soybean futures closed mostly 15¢ to 19¢ lower.
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Major U.S. financial indices closed higher Wednesday, supported by gains in regional bank stocks and apparent optimism about debt ceiling talks.
The Dow Jones Industrial Average closed 408 points higher. The S&P 500 closed 48 points higher. The NASDAQ was up 157 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.97 to $2.16 higher through the front six contracts.
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You might recall one reason Russia continues to threaten withdrawing from the aforementioned Black Sea Grain Initiative is that it says economic sanctions imposed by the West — in response to the Russian invasion of Ukraine — are limiting its ability to export agricultural goods.
“Russia complains that its exports of food and fertilizers are hampered by sanctions. Let me be clear: Russia is exporting just fine. It is exporting grain and fertilizer at the same levels, if not higher, than before the full-scale invasion,” said Ambassador Linda Thomas-Greenfield, U.S. Representative to the United Nations, during a Foreign Press Center news briefing last week. “Russia’s threats are about money and power. The more Russia obstructs Ukraine’s exports, the higher prices go, and with Russian exports moving well, they’re making more profits.”
Despite Russia’s claims of export challenges, that nation’s grain and oilseed exports have thrived during the current marketing year, according to analysts with USDA’s Foreign Agricultural Service (FAS).
“Throughout 2022/23, Russia has benefited from large supplies, both beginning stocks and record production,” FAS analysts explain, in a report published last week. “Russia has exported significant quantities of both grains and oilseeds, despite its lack of transparent trade data. Additional sources of data validate the strong export volumes amid low prices.”
In fact, Russian wheat exports are forecast to hit a record 45.0 million tons in 2022/23, up 36% from the prior year and 3.5 million tons above its previous record in 2017/18, according to the report.
“While recent Russian government statements have claimed that economic sanctions have hampered Russia’s ability to export, in the case of grains and oilseeds, the Russian government itself has applied export taxes and quotas that affect its prices and export volumes,” FAS analysts say.