Negotiated cash fed cattle trade was moderate on moderate demand in Kansas through Thursday afternoon, according to the Agricultural Marketing Service. FOB live prices were $10-$11 lower at $237-$238/cwt.
Trade in the North ranged from limited on moderate demand in the western Corn Belt to inactive on light to moderate demand in Nebraska, with too few transactions to trend. So far this week, FOB live prices are mostly $8 lower at mainly $240 and dressed delivered prices in Nebraska are $10-$13 lower at mostly $380. Dressed delivered prices in the western Corn Belt last week were $393.
Choice boxed beef cutout value was $2.90 lower Thursday afternoon at $368.38/cwt. Select was $3.49 lower at $355.69.
Traders continued long liquidation in Cattle futures on Thursday as negotiated cash fed cattle prices took another steep step lower this week and wholesale beef values continue lower. Apparently, packers have regained some leverage now, while strong basis encourages sellers.
Live Cattle futures were an average of $2.29 lower. Feeder Cattle futures were an average of $3.94 lower.
Grain and Soybean futures were lower Thursday with likely profit taking from the previous session’s gains and perhaps increased farmer selling.
Kansas City HRW Wheat futures were 1¢ to 2¢ higher, except for fractionally lower to 3¢ lower in the front three contracts.
Corn futures were mostly 3¢ to 6¢ lower.
Soybean futures were mostly 6¢ to 8¢ lower.
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Major U.S. financial indices closed lower Thursday, pressured by chip stocks.
The Dow Jones Industrial Average closed 105 points lower. The S&P 500 closed 38 points lower. The NASDAQ was down 387 points.
West Texas Intermediate Crude Oil futures (CME) were 34¢ to 84¢ lower through the front six contracts.
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USDA’s Economic Research Service raised the forecast third-quarter feeder steer price by $2, compared to the previous month, to $380/cwt., in the July Livestock, Dairy and Poultry Outlook. Prices were unchanged for the fourth quarter at $382, while the projected annual average price increased about $1 to $376.26. The price is a basis a Medium and large #1 steer weighing 750-800 lbs., selling at Oklahoma National Stockyards.
As mentioned in Cattle Current last week, compared to the previous month, the ERS increased the third-quarter weighted average five-area direct fed steer by $3 to $255/cwt. in the July World Agricultural Supply and Demand Estimates (WASDE). The projected fourth-quarter price was unchanged at $255, while the forecast annual average price was slightly higher at $251.10.
That was with beef production this year estimated 150 million pounds lower (-0.6%) than the previous month at 25.3 billion pounds, which would be 715 million pounds less than last year (-2.7%).
Looking at potential herd expansion, ERS analysts say heifer and cow retention in several areas could be in focus as pasture conditions are generally weaker than last year and are similar to levels seen during previous droughts that increased beef cow slaughter.
Based on data from the U.S. Drought Monitor on July 7, they explain approximately 46% of the cattle inventory was in an area experiencing at least moderate drought compared to just 16% last year. “Although extreme and exceptional levels of drought are not as widespread as in past years’ droughts, several large cattle producing regions are receiving the brunt of the drought,” they say.